Document:

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                                                                   Exhibit 10.10

                            INTERCONNECTION AGREEMENT

                                 BY AND BETWEEN

                     WESTERN MASSACHUSETTS ELECTRIC COMPANY

                                       AND

                          NORTHEAST GENERATION COMPANY

                                  JULY 2, 1999

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                                TABLE OF CONTENTS

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                                                                                                 PAGE
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INTERCONNECTION AND OPERATION AGREEMENT............................................................5
1. DEFINITIONS.....................................................................................6
2. TERM OF AGREEMENT..............................................................................12
   2.1  TERM AND TERMINATION OF AGREEMENT.........................................................12
3. CONTINUING OBLIGATIONS AND RESPONSIBILITIES....................................................12
   3.1 INTERCONNECTION SERVICE....................................................................12
   3.2 ACCESS, EASEMENTS, CONVEYANCES, LICENSES, AND RESTRICTIONS.................................13
   3.3 FACILITY AND EQUIPMENT MAINTENANCE.........................................................14
   3.4 EQUIPMENT TESTING..........................................................................15
   3.5 NEW CONSTRUCTION OR MODIFICATIONS..........................................................15
   3.6 INSPECTIONS................................................................................16
   3.7 TELECOMMUNICATIONS STRUCTURAL FACILITIES...................................................16
   3.8 INFORMATION REPORTING OBLIGATIONS..........................................................17
     3.8.1 In order to maintain Interconnection Service...........................................17
     3.8.2 Buyer shall supply accurate............................................................18
     3.8.3 Buyer shall gather information.........................................................18
     3.8.4 Seller shall provide information.......................................................18
   3.9 LOCAL SERVICES.............................................................................18
     3.9.1 In addition to the Interconnnection Service............................................18
     3.9.2 TEMPORARY SUSPENSION OF SECTION 3.10 AND 3.11 SERVICES.................................18
   3.10 SELLER PROVIDED LOCAL SERVICES............................................................19
     3.10.1 DELIVERY SERVICE......................................................................19
     3.10.2 BUILDING SERVICES.....................................................................19
   3.10.3 METERING................................................................................19
     3.10.4 LINE OPERATION INFORMATION............................................................20
     3.10.5 REMOTE TERMINAL UNITS.................................................................21
     3.10.6 RELAYING SYSTEMS......................................................................21
   3.11 BUYER PROVIDED LOCAL SERVICES.............................................................21
     3.11.1 SELLER'S FACILITY SUPPORT.............................................................21
     3.11.2 BUILDING SERVICES.....................................................................21
   3.12 COMMUNICATIONS SERVICES...................................................................21
     3.12.1 GENERAL...............................................................................21
     3.12.2 RADIO LICENSES........................................................................22
     3.12.3 UPGRADES..............................................................................22
     3.12.4 MAINTENANCE...........................................................................22
   3.13 SPARE PARTS...............................................................................22
   3.14 EMERGENCY PROCEDURE.......................................................................22
   3.15 INTERCONNECTION SERVICE INTERRUPTIONS.....................................................23
   3.16 NON-DISPATCHABILITY NOTIFICATION..........................................................24
   3.17 SCHEDULED MAINTENANCE NOTIFICATION AND COORDINATION.......................................24
     3.17.1 TRANSMISSION SYSTEM MAINTENANCE.......................................................24
     3.17.2 LOCAL ROUTINE INSPECTIONS AND MAINTENANCE.............................................24
   3.18 SAFETY....................................................................................25
     3.18.1  GENERAL..............................................................................25
     3.18.2  SWITCHING, TAGGING AND GROUNDING.....................................................25
     3.18.3 TRAINING..............................................................................25
   3.19 ENVIRONMENTAL COMPLIANCE AND PROCEDURES...................................................25

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   3.20 NEPOOL/ISO................................................................................26
4. OPERATIONS.....................................................................................27
   4.1 GENERAL....................................................................................27
   4.2 BUYER'S OPERATING OBLIGATIONS..............................................................27
     4.2.1 GENERAL................................................................................27
     4.2.2 VOLTAGE OR REACTIVE CONTROL REQUIREMENTS...............................................28
   4.3 SELLER'S OPERATING OBLIGATIONS.............................................................29
   4.4 AUDITING OF ACCOUNTS AND RECORDS...........................................................29
5. COST RESPONSIBILITIES AND BILLING PROCEDURES...................................................29
   5.1 BUYER'S INTERCONNECTION COST RESPONSIBILITIES..............................................29
     5.1.1 INTERCONNECTION FACILITIES CHARGE......................................................29
     5.1.2 PAYMENT ON REMOVAL FROM SERVICE........................................................30
     5.1.3 LEASED TELEPHONE LINES.................................................................30
   5.2 DELIVERY OF AC SERVICE POWER...............................................................30
   5.3 COST RESPONSIBILITIES FOR LOCAL SERVICES...................................................30
   5.4 BILLING PROCEDURES.........................................................................30
   5.5 BILLING DISPUTES, INTEREST ON UNPAID BALANCE...............................................31
   5.6 DEFAULT....................................................................................31
6. DOCUMENTATION..................................................................................31
   6.1 OBLIGATION TO PROVIDE DOCUMENTATION........................................................31
   6.2 DRAWINGS...................................................................................32
7. CONFIDENTIALITY................................................................................33
   7.1 CONFIDENTIALITY OF SELLER..................................................................33
   7.2 CONFIDENTIALITY OF BUYER...................................................................34
   7.3 CONFIDENTIALITY OF AUDITS..................................................................34
   7.4 REMEDIES...................................................................................34
8. DAMAGE TO CONTROL CABLES FROM SUBSTATIONS TO POWER PLANTS......................................35
9. PERSONAL INJURY AND PROPERTY DAMAGE............................................................35
10. INDEMNIFICATION...............................................................................35
   10.1 GENERAL...................................................................................35
   10.2 INDEMNIFICATION PROCEDURES................................................................36
11. INSURANCE.....................................................................................36
12. FORCE MAJEURE.................................................................................37
13. DEFAULT AND DISPUTE RESOLUTION................................................................38
   13.1 EVENTS OF DEFAULT.........................................................................38
   13.2 REMEDIES FOR DEFAULT......................................................................39
   13.3 ARBITRABLE CLAIMS.........................................................................40
   13.4 ARBITRATION PROCESS.......................................................................41
   13.5 REMEDIES..................................................................................42
   13.6 CONFIDENTIALITY...........................................................................42
   13.7 FERC JURISDICTION OVER CERTAIN DISPUTES...................................................42
   13.8 PRELIMINARY INJUNCTIVE RELIEF.............................................................43
14. ASSIGNMENT/CHANGE IN CORPORATE IDENTITY.......................................................43
   14.1 ASSIGNMENT................................................................................43
   14.2 ASSUMPTION................................................................................44
15. CONTRACTORS AND SUBCONTRACTORS................................................................44
   15.1...........................................................................................44
   15.2...........................................................................................44
16. LABOR RELATIONS...............................................................................45

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17. INDEPENDENT CONTRACTOR STATUS.................................................................45
18. LIMITATION OF LIABILITY.......................................................................45
19. NOTICES.......................................................................................46
20. SURVIVAL......................................................................................46
21. HEADINGS......................................................................................47
22. WAIVER........................................................................................47
23. COUNTERPARTS..................................................................................47
24. GOVERNING LAW.................................................................................47
25. EQUAL EMPLOYMENT OPPORTUNITY..................................................................48
26. SEVERABILITY..................................................................................48
27. AMENDMENTS....................................................................................48
28. ENTIRE AGREEMENT..............................................................................48
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Schedule A.  Interconnection Facilities and Associated Equipment Description

Schedule B.  Revenue Meters

Schedule C. STN Agreement

Schedule D.  Switching, Tagging and Grounding Rules

Schedule E.  CONVEX Operating Instructions

Schedule F.  CONVEX Operating Instruction--System Restoration

Schedule G.  Northeast Utilities System Companies Open Access Transmission
Service Tariff No. 9

Schedule H.  Interconnection Facilities Charges

Schedule I.  Insurance Requirements

Schedule J.  Seller's Rate 30

[Schedules will be provided to the Securities and Exchange Commission by
Northest Generation Company upon request.]
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                            INTERCONNECTION AGREEMENT

         This Interconnection Agreement (the "Agreement"), dated July 2, 1999 by
and between Western Massachusetts Electric Company ("Seller"), a Massachusetts
corporation with a principal place of business located at 107 Selden Street,
Berlin, Connecticut and Northeast Generation Company, a Connecticut corporation
("Buyer"). The Seller and the Buyer are each referred to herein as a "Party" or,
collectively, the "Parties."
                                   WITNESSETH:

         WHEREAS, Seller and Buyer have entered into a Purchase and Sale
Agreement dated July 2, 1999 (the "Purchase and Sale Agreement") for the sale of
certain of Seller's generating assets; and

         WHEREAS, Seller and/or its Affiliates intend to continue to operate
their transmission and distribution businesses from their present locations; and

         WHEREAS, in the Purchase and Sale Agreement, Seller agreed to transfer
to Buyer certain designated real and personal properties, contracts, rights and
licenses pertaining to Seller's generating assets and to retain certain
designated real and personal properties, contracts, rights and licenses related
to Seller's transmission and distribution operations; and

         WHEREAS, the Parties have agreed to enter into the Asset Demarcation
Agreement evidencing their agreement as to the demarcation between certain of
such transferred and retained assets that will not be situated wholly on real
property owned or to be owned by the respective owners of such assets after the
Closing under the Purchase and Sale Agreement ("Asset Demarcation Agreement");
and

         WHEREAS, Buyer needs Interconnection Service from Seller for the assets
it is acquiring; and

         WHEREAS, Seller and its Affiliates need access to parts of the assets
being acquired by the Buyer and the Buyer needs access to the assets that are
being acquired that are located on the property of the Seller; and

         WHEREAS, the Parties agreed in the Purchase and Sale Agreement to
execute this mutually acceptable Interconnection Agreement in order to provide
for the Seller's interconnection service to the Buyer and to define the
continuing responsibilities and obligations of each Party with respect to the
use of the other Party's property, assets and facilities.

         NOW THEREFORE, in order to carry out the transactions contemplated by
the Purchase and Sale Agreement, the Asset Demarcation Agreement, and this
Agreement, and in

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consideration of the premises and mutual promises herein made, the Seller and
the Buyer agree as follows:

1.       DEFINITIONS

         Whenever used in this Agreement as capitalized terms, the following
terms shall have the meanings specified in this section. Capitalized terms used
but not otherwise specifically defined herein shall have the meaning ascribed to
them in the Purchase and Sale Agreement.

         "Access Rights" shall mean all Easements, the Reserved Easements, the
Granted Easements, all licenses granted pursuant to Section 3.2.1 and all other
easements granted by one Party to the other.

         "Acquired Assets" has the meaning set forth in Section 2.1 of the
Purchase and Sale Agreement.

         "AC Service Power" means the AC service power purchased by the Buyer
from its suppliers for purposes of backing-up station service loads on a
generation site.

         "Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act (17 C.F.R. 240-12b-2).

         "Closing" means the closing of the transactions contemplated by the
Purchase and Sale Agreement.

         "Closing Date" means the date and time at which the Closing actually
occurs.

         "CONVEX" means the Connecticut Valley Electric Exchange or any
successor organization which operates as a satellite to or the ISO.

         "Distribution System" means those electric energy delivery facilities
not classified as Transmission System by Seller that are owned, controlled or
operated by Seller or its Affiliates and that provide delivery service to or
from the Transmission System.

         "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.

         "Environmental Laws" means all applicable Laws and any binding
administrative or judicial interpretations thereof relating to: (a) the
regulation, protection and use of the

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Environment; (b) the conservation, management, development, control and/or use
of land (including zoning laws and ordinances), 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
Substances; or (d) noise; and includes, without limitation, the following
federal statues (and their implementing regulations): the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended; the
Solid Waste Disposal Act, as amended, 42 U.S.C. Section 6901 et seq.; the
Federal Water Pollution Control Act of 1972, as amended, 33 U.S.C. Section 1251
et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. Section
2601 et. seq.; the Clean Air Act of 1966, as amended, 42 U.S.C. Section 7401 et.
seq.; the Federal Insecticide, Fungicide, and Rodenticide Act, as amended, 7
U.S.C. Section 136 et. seq.; the Coastal Zone Management Act of 1972, as
amended, 16 U.S.C. Section 1451 et seq.; the Oil Pollution Act of 1990 as
amended, 33 U.S.C. Section 2701 et seq.; the Rivers and Harbors Act of 1899, as
amended, 33 U.S.C. Section 401 et seq.; the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. Section 1801 et seq.; the Endangered Species Act of
1973, as amended, 16 U.S.C. Section 1531 et seq.; and the Safe Drinking Water
Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq.; and all analogous or
comparable state statutes and regulations, including, without limitation, the
Connecticut Transfer Act, as amended, CGS Section 22a- 134 et seq.; the
Connecticut Remediation Standard Regulations, RCSA Section 22a-133k-1 et seq.;
and the Massachusetts Oil and Hazardous Release Prevention and Response Act, as
amended, M.G.L. c. 21E.

         "Environmental Liabilities" means any Liability under or related to
Environmental Laws arising as a result of or in connection with (i) any
violation or alleged violation of Environmental Law; (ii) any Environmental
Claims caused (or allegedly caused) by the presence or Release of Hazardous
Substances; (iii) the investigation and/or Remediation of Hazardous Substances;
(iv) compliance with Environmental Laws; (v) 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 Substances; and (vi) the investigation and/or remediation of Hazardous
Substances that are generated, disposed, treated, stored, transported,
discharged, Released, recycled, or the arrangement of such activities at any
Offsite Disposal Facility.

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

         "Fossil Stations" means that portion of the Acquired Assets (subject to
the Easements and the Excluded Assets, as defined in the Purchase and Sale
Agreement) consisting of the Seller's

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Montville, Middletown, Devon, and Norwalk Harbor Facilities.

         "Good Utility Practice" means any of the practices, methods and acts
engaged in or approved by a significant portion of the electric utility industry
during the relevant time period which, in the exercise of reasonable judgment in
light of the facts known at the time the decision was made, could have been
expected to accomplish the desired result at a reasonable cost consistent with
good business practices, reliability, safety, and expedition. Good Utility
Practice is not intended to be limited to the optimum practice, method, or act
to the exclusion of all others, but rather to be acceptable practices, methods,
or acts generally accepted in the region.

         "Hazardous Substance" 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 and 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 applicable Environmental Laws; and (c) any materials or substances
defined in Environmental Laws as "hazardous", "toxic", "pollutant", or
"contaminant", or words of similar meaning or regulatory effect.

         "Hydroelectric Stations" means that portion of the Acquired Assets
(subject to the Easements and the Excluded Assets, as defined in the Purchase
and Sale Agreement) consisting of the [list hydro stations] hydroelectric
generating stations and associated dams and reservoirs.

         "Indemnifying Party" has the meaning set forth in Section 10.1.

         "Interconnection Facilities" means facilities or portions of facilities
located between each Interconnection Point and the PTF that are identified as
Interconnection Facilities and Associated Equipment in Schedule A hereto, as
amended from time to time.

         "Interconnection Facilities Charge" has the meaning set forth in
Schedule 5.1.1.

         "Interconnection Point" means the point for each Acquired Asset at
which the electric energy generated by such Acquired Asset enters the Seller's
Transmission System or Distribution System. The Interconnection Points are as
specified in Schedule A to this Agreement.

         "Interconnection Service" means all of the services necessary for the
purpose of interconnecting the Buyer's Acquired Assets with the Transmission
System or the Distribution System and delivering the output of the Acquired
Assets over the Interconnection Facilities to the PTF.

         "ISO" means ISO New England Inc., the independent system operator for
the New

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England control area, or its successor.

         "Joint Tag List" means the personnel approved by Buyer and Seller who
meet the requirements to switch, tag, and ground electrical equipment set forth
in CONVEX Operating Instruction No. 6401, Protective Switching and Tagging
Procedures, effective September 1, 1992.

         "Leased Equipment" means hardware or software leased by Seller from
various third-party suppliers which is not directly transferable or assignable
to Buyer.

         "Local Services" has the meaning set forth in Section 3.9.1.

         "Maintain" means construct, reconstruct, install, inspect, repair,
replace, operate, patrol, maintain, use, modernize, expand, upgrade, or other
similar activities.

         "NEPOOL" means the New England Power Pool, established by the NEPOOL
Agreement, or its successor.

         "NEPOOL Agreement" means the New England Power Pool Agreement dated as
of September 1971, as amended by the Restated NEPOOL Agreement filed with FERC
on July 22, 1998 as finally approved by FERC and, as further amended from time
to time.

         "NEPOOL Tariff" means the Restated NEPOOL Open Access Transmission
Tariff as filed with FERC on July 22, 1998 and as it may be amended from time to
time.

         "NERC" means the North American Electric Reliability Council, or any
successor thereto.

         "NPCC" means Northeast Power Coordinating Council, or any successor
thereto.

         "OASIS" means Open Access Same Time Information System.

         "Pool Transmission Facilities" or "PTF" means the transmission
facilities of Seller and other transmission owners in New England, as defined by
the NEPOOL Agreement.

         "Primary System" means bulk power equipment such as transformers,
circuit breakers, rigid or strain bus, conductors, cables and other equipment
operating at 2,400 volts or above.

         "Qualified Personnel" has the meaning set forth in 29 C.F.R. Section
1910.269(x).

         "Rate 30" means the rate charged by Seller attached hereto as Schedule
J, or its successor rate.

         "Release" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of any Hazardous Substance 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 Substance).

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         "Remediation" means any or all of the following activities to the
extent required to address the presence or Release of Hazardous Substances: (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 from a Governmental
Authority with competent jurisdiction under Environmental Laws or a written
opinion of a (i) Licensed Environmental Professional (as defined in C.G.S.
Section 22a - 133v) or (ii) a Licensed Site Professional as defined in M.G.L.
c21A Section 19 et seq.), as contemplated by the relevant Environmental Laws 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 Laws.

         "Revenue Meters" means all kWh, kVAh, and kVARh meters, pulse isolation
relays, pulse conversion relays, associated totalizing and Remote Access Pulse
Recorder (RAPR) equipment required to measure the transfer of energy between the
Parties.

         "Right of Way Access" means use of existing gates, roadways, paths or
other means of access to gain entry to the Transmission System and Distribution
System rights of way from the Buyer's property or facilities.

         "Routine Inspection and Maintenance" means any inspection,
measurements, meter readings and/or maintenance work deemed necessary by either
Party in the exercise of Good Utility Practice on either Party's property or
facilities to ensure reliable substation, Transmission System and Distribution
System operations and Transmission System and Distribution System integrity.

         "SCADA Equipment" means Supervisory Control and Data Acquisition
equipment.

         "Secondary Systems" means control or power circuits that operate below
600 volts, AC or DC, including but not limited to any hardware, control or
protective devices, cables, conductor, electric raceways, secondary equipment
panels, transducers, batteries, chargers, and voltage and current transformers
whose signals or energy may be used by Buyer, Seller, or their respective
Affiliates.

         "Structural Facilities" has the meaning set forth in Section 3.7.

         "Switching, Tagging, and Grounding Rules" has the meaning set forth in
CONVEX Operating Instruction #6401, Protective Switching and Tagging Procedures,
effective September 1, 1992, or relevant successor provisions as in effect from
time to time. A copy of the existing

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Switching, Tagging and Grounding Rules is attached hereto as Schedule D and
incorporated by reference as if fully set forth herein.

         "T&D Assets" means the Seller's transmission, distribution,
communication, substation and other assets which are not Acquired Assets and
which are not necessary to the operation of the Acquired Assets and/or which are
necessary to the operation of the Transmission System or the Distribution
System.

         "Transmission System" means the PTF and non-PTF facilities owned,
controlled or operated by Seller or its Affiliate for purposes of providing
point-to-point transmission service, network integration transmission service,
and Interconnection Service, including services under the NEPOOL Open Access
Tariff.

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2.       TERM OF AGREEMENT

         2.1      TERM AND TERMINATION OF AGREEMENT. The obligations of the
Parties under this Agreement shall commence on the Closing Date and shall remain
in effect until such time as both Parties mutually agree to terminate them;
provided, however, that this Agreement shall terminate (x) with respect to any
Acquired Asset , or unit thereof, upon the date such Acquired Asset is
decommissioned, or (y) in accordance with Section 13. If (i) a change in law or
other circumstance substantially affects Seller's provision of Interconnection
Service, or (ii) FERC requires a modification to this Agreement that is
unacceptable to either Party, the Parties will negotiate in good faith to amend
this Agreement in a manner acceptable to FERC.

3.       CONTINUING OBLIGATIONS AND RESPONSIBILITIES

         3.1      INTERCONNECTION SERVICE. The Seller agrees to provide
Interconnection Service to the Acquired Assets in accordance with the operating
procedures and practices set forth in Schedules E and F hereto and Good Utility
Practice. Each of the Acquired Assets for which Buyer is requesting
Interconnection Service shall require the associated Interconnection Facilities
described in Schedule A. Seller shall connect the Acquired Assets to the
Transmission System or the Distribution System at the respective Interconnection
Points specified in Schedule A. Seller agrees to permit Buyer to interconnect
the Acquired Assets for so long as Buyer continues to operate the Acquired
Assets in accordance with Good Utility Practice. Interconnection Service shall
enable Buyer to receive generating station service from Buyer's supplier at the
respective Interconnection Points if Buyer does not supply its own generating
station service to the Acquired Assets in a manner that does not use the
Transmission System or Distribution System. Buyer or its supplier shall be
responsible for making arrangements under the applicable tariffs for
transmission and ancillary services associated with the receipt of generating
station service using the Transmission System or Distribution System or the PTF.

         Seller shall operate and maintain the Interconnection Facilities in
accordance with Good Utility Practice. In the event Seller reasonably determines
that Buyer's existing generation interconnection or any modification to such
existing generation interconnection requires an addition to or modification of
the Interconnection Facilities, Seller shall notify Buyer of the necessity of
the addition or modification and the resulting change in the effective
Interconnection Facilities Charge. If Buyer agrees on the need for the addition
or modification or a dispute is resolved in accordance with Section 13 in favor
of the need therefor, Seller shall file the necessary amendments to this
Agreement with FERC, and upon FERC acceptance for filing of

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such amendment, Seller shall install the modification or addition and Buyer
shall pay the costs thereof in accordance with Section 5. Seller shall have no
responsibility for any diminution in the quality of Interconnection Service
directly attributable to the absence of such addition or modification.
Significant changes in the Acquired Assets or their capacity will require Buyer
to follow NEPOOL Section 18.4 procedures where applicable.

         3.2      ACCESS, EASEMENTS, CONVEYANCES, LICENSES, AND RESTRICTIONS.

                  3.2.1    ACCESS. (a) The Parties agree to grant to each other
access, including Right of Way Access, to such of their respective facilities,
properties, equipment and records as may be necessary to enable each Party to
Maintain its respective facilities, properties, equipment and records in a
manner consistent with Good Utility Practice. Such access shall be provided in a
manner that does not unreasonably interfere with the ongoing business
operations, rights and obligations of the other Party.

                  (b)      Buyer hereby grants to Seller and its Affiliates a
license to gain access to all of their substation equipment, Transmission System
or Distribution System, Secondary Systems and telecommunications systems and
facilities that are located on Buyer's property.

                  (c)      Seller hereby grants to Buyer a license for Buyer's
Qualified Personnel to gain access to all of the Acquired Assets located on
Seller's property at Cos Cob, Branford, Torrington Terminal, Franklin Drive,
Montague, Tunnel and Northfield Mountain Station.

                  (d)      The Access Rights are intended to be permanent and
shall not be revoked, nor shall either Party take any action that would impede,
restrict, diminish, or terminate the rights of access or use granted by such
Access Rights. Notwithstanding the foregoing, (i) should either Party or its
successor decide to permanently abandon the use of any Access Right or portion
thereof, such Party shall give the other Party written notice of its
abandonment, shall remove its properties from the area to be abandoned, perform
any remediation required by applicable Environmental Laws, and shall cause a
release of such Access Rights or any portion thereof to be recorded in the
appropriate Registry of Deeds; and (ii) the Parties may mutually agree to
relocate or expand any or all of the Access Rights locations within a Fossil or
Hydroelectric Station, provided, however, that the Party requesting the
relocation or expansion shall pay all reasonable costs and expenses associated
therewith, and the Parties shall execute or obtain, in a form reasonably
satisfactory to both Parties, all instruments necessary to establish the new
easement location. Both Parties agree to use their best efforts to establish a
mutually agreeable location if so requested.

                  (e)      Buyer shall grant Seller and Seller shall grant Buyer
such additional

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conveyances, easements, or licenses as are reasonably necessary for ownership,
possession, maintenance, operation, or repair of the respective Party's
equipment and facilities as long as such conveyances, easements or licenses do
not have a material adverse impact upon the other Party's operations and are
consistent with the purpose of this Agreement and the Purchase and Sale
Agreement.

                  3.2.2    Each Party shall provide the other Party keys, access
codes, or other means of access necessary to enter each other's facilities or
properties. Access shall be granted only to Qualified Personnel. If personnel
who are not Qualified Personnel require access, Qualified Personnel shall escort
them while on site.

                  3.2.3    Neither Party shall make changes to the site
topography or accesses, including but not limited to grading or drainage, that
could reasonably be expected to materially adversely affect the other Party's
facilities or common use drainage or pollution control systems, without the
prior written consent of the other Party, such consent not to be unreasonably
withheld.

                  3.2.4    Each Party shall have the right to use and maintain
its control cables in existing underground duct banks located on the property of
the other Party, including duct banks between Seller's substation and the first
point of termination in a Fossil Station or Hydroelectric Station.

         3.3      FACILITY AND EQUIPMENT MAINTENANCE.

                  Each Party shall Maintain its equipment and facilities and
perform its maintenance obligations that could reasonably be expected to affect
the operations of the other Party pursuant to Good Utility Practice. Buyer shall
be responsible for maintenance of all common use roadways and plant accesses in
or about the Fossil Stations and the Hydroelectric Stations. Unless otherwise
specified herein, or unless the Parties mutually agree to a different
arrangement, neither Party shall be responsible for the maintenance of the other
Party's equipment or Secondary Systems, regardless of their location.

         3.4      EQUIPMENT TESTING

                  Each Party may request, pursuant to Good Utility Practice,
that the other Party test, calibrate, verify or validate its telemetering, data
acquisition, protective relay, control equipment or systems or other equipment
or software pursuant to Good Utility Practice (which currently requires such
action on an annual basis) or for the purpose of troubleshooting problems on
interconnected facilities, consistent with the other Party's obligation to
Maintain its equipment and facilities. Each Party shall be responsible for all
costs to test, calibrate, verify or validate its

                                       14
<Page>

equipment or software at intervals required by NEPOOL, NERC or NPCC. The
requesting Party shall be responsible for all costs of the other Party
associated with more frequent requests. Each Party shall supply the Party
requesting the test, at no cost to such Party, with copies of the resulting
inspection reports, installation and maintenance documents, test and calibration
records, verifications and validations of the telemetering, data acquisition,
protective relay, or other equipment or software connected to the Transmission
System or Distribution System.

         3.5      NEW CONSTRUCTION OR MODIFICATIONS.

                  Seller may construct or modify its Transmission System and
Distribution System, including associated telecommunication facilities, pursuant
to Good Utility Practice, and Buyer may construct or modify its Acquired Assets
pursuant to Good Utility Practice. Notwithstanding the foregoing, no
modifications to or new construction of facilities or access thereto, including
but not limited to rights of way, fences or gates shall be made by either Party
which might reasonably be expected to adversely affect the other Party with
respect to its rights, obligations and responsibilities under this Agreement,
without prior written notification and without providing the other Party with
sufficient information regarding the work prior to commencement to enable such
Party to evaluate the effect of the proposed work on its operations.

         If a proposed modification would reasonably be expected to affect the
Transmission System or Distribution System, both Parties agree to comply with
Good Utility Practice in a manner that complies with NEPOOL CRS 43, the NPCC's
"Basic Criteria for Design and Operation of Interconnected Power Systems," or
any successor criteria and all applicable operating rules, regulations
procedures and interconnection standards of the Seller as each may be modified
from time to time. For all construction work, major modifications, or circuit
changes involving new or existing facilities, equipment, systems or circuits
that could reasonably be expected to affect the operation of either Party, the
Party desiring to perform such work shall provide the other Party with drawings,
plans, specifications, and other necessary documentation for review at least
sixty days prior to the beginning of construction; provided that if either Party
contemplates a modification that would require the other Party to make
associated changes at its facilities, that Party shall promptly provide written
notice thereof to the other Party and shall keep the other Party fully informed
as its plans develop. The Parties shall cooperate in good faith to coordinate
the start of construction required by each Party in connection with such
proposed modification. If Seller constructs new or upgraded transmission or
distribution facilities at the request of Buyer, Buyer shall pay the costs
thereof in accordance with Section 5.

         3.6      INSPECTIONS.

                                       15
<Page>

                  Each Party shall have the right to inspect or observe, at its
own expense, the maintenance activities, equipment tests, installation,
construction, or other modifications to the other Party's Acquired Assets or T&D
Assets and associated telecommunication facilities, as the case may be, which
might reasonably be expected to adversely affect the observing Party's
operations or liability. The Party desiring to inspect or observe shall notify
the other Party in accordance with the notification procedures set forth herein.
If the Party inspecting the equipment, systems, or facilities observes any
deficiencies or defects that might reasonably be expected to adversely affect
the operations or liability of the observing Party, that Party shall notify the
Party owning the equipment or systems, and the owning Party shall make any
corrections necessitated by Good Utility Practice.

         3.7      COMMON STRUCTURAL FACILITIES.

                  The Asset Demarcation Agreement delineates certain facilities
that will be part of the Acquired Assets or the T&D Assets, which are supported
on or within structures or buildings belonging to the other Party (the
"Structural Facilities"). Each Party shall maintain the Structural Facilities
that it owns in accordance with Good Utility Practice. The Parties shall conduct
an initial inspection of all such Structural Facilities prior to Closing. Seller
shall then make any corrections necessitated by Good Utility Practice. In the
case of Structural Facilities owned by Buyer upon which Seller has installed
Transmission System or Distribution System or telecommunications equipment,
Seller shall have the right to inspect such Structural Facilities annually
pursuant to Section 3.6 and provide Buyer with a report documenting any
deficiencies. Buyer shall then make any corrections necessitated by Good Utility
Practice. In the case of Structural Facilities owned by Seller upon which Buyer
has installed Acquired Assets, Buyer shall have the right to inspect such
Structural Facilities annually pursuant to Section 3.6 and provide Seller with a
report documenting any deficiencies. Seller shall then make any corrections
necessitated by Good Utility Practice.

         3.8      INFORMATION REPORTING OBLIGATIONS.

                  Notwithstanding anything to the contrary in this Agreement,
any obligation set forth in this Agreement of Buyer to provide information,
reports, or data to Seller shall be subject to the following limitations: (a)
such information, reports, or data shall be subject to the provisions of Section
7 concerning confidentiality; (b) Buyer shall be required to provide such
information, reports or data only to the extent Seller reasonably requires such
information to operate, maintain, or plan its Transmission System or the
Distribution System pursuant to Good Utility Practice; (c) Seller shall request
information, reports, and data from Buyer on a non-

                                       16
<Page>

discriminatory basis with respect to generators interconnected to the
Transmission System or Distribution System, as necessary, in Seller's judgment,
for the purposes set forth in clause (d), below; (d) Seller shall use any
information provided by Buyer pursuant to this Agreement only for the purposes
of operating, maintaining and planning the Transmission System or the
Distribution System pursuant to Good Utility Practice; and (e) if and to the
extent that any of the functions for which Seller requires certain information,
reports, or data is no longer performed by Seller, which function has been
adequately assumed by the ISO, Buyer's provision of such information, reports,
or data to the ISO shall satisfy its corresponding obligation under this
Agreement.

                  3.8.1    In order to maintain Interconnection Service, Buyer
shall promptly provide Seller with all information which could reasonably be
expected to affect the Transmission System and which is reasonably requested by
NERC, NPCC, NEPOOL, CONVEX, the ISO, or Seller's dispatching functions. Buyer
shall also provide to Seller or to the ISO at Seller's or the ISO's request all
information regarding its generating facilities needed by the ISO to model and
study transmission system responses to system contingencies and disturbances.

                  3.8.2    Buyer shall supply accurate, complete, and reliable
information in response to data requests necessary for operations, maintenance,
regulatory requirements and analysis of the Transmission System or the
Distribution System. Such information may include metered values for MW, MVAR,
voltage, current, frequency, breaker status indication, or any other information
reasonably required by Seller for reliable operation of the Transmission System
or of the Distribution System pursuant to Good Utility Practice.

                  3.8.3    Buyer shall gather information pertaining to
generation, transmission and distribution operating parameters for transmittal
to Seller using existing remote access systems.

                  3.8.4    Seller shall provide information to Buyer concerning
the status and/or condition of the Transmission System and parts thereof in
accordance with the requirements of FERC Orders 888 and 889 and any successors
thereto, including in particular any requirements pertaining to the provision of
information affecting the availability of transmission services over an OASIS
maintained by Seller or the ISO on Seller's behalf.

         3.9      LOCAL SERVICES.

                  3.9.1    In addition to the Interconnection Service, the
Parties agree that, due to the integration of certain control schemes, revenue
metering applications, and communication networks, it is desirable to provide
each other with the services set forth in Sections 3.10 and 3.11 ("Local
Services") at no cost. The Parties shall use their best efforts to ensure that
such

                                       17
<Page>

Local Services are available at all times in the manner specified herein.
Notwithstanding the foregoing, either Party, upon notice to the other, may
change the Local Services it provides, provided that there is no cost to the
receiving Party and the quality, reliability and integrity of the replacement
Local Services are equivalent to the then existing services. If service could be
interrupted as a result of the change, the Party proposing to make the change
shall give ten working days prior written notice of the change to the other
Party. Neither Party shall terminate its Local Services without the other
Party's written consent or without at least twelve months' prior written
notification; provided, however, if either Party no longer needs or desires a
particular Local Service, such Party shall notify the other Party and the Party
providing the Local Service shall terminate such service as soon thereafter as
practicable.

                  3.9.2    TEMPORARY SUSPENSION OF SECTION 3.10 AND 3.11
SERVICES. The Party providing the Local Services set forth in Sections 3.10 and
3.11 below shall notify and obtain approval from the other Party of any
scheduled temporary suspension of Local Services at least five working days in
advance of such suspension. Such notification shall include an estimated time
duration for a return to normal conditions. In the event of any unplanned or
forced suspension of the Local Services set forth in Sections 3.10 and 3.11
below, the Party providing the Local Service shall immediately notify the other
Party first orally and then in writing. The notifying Party shall use all
reasonable efforts to minimize the duration of such suspension. The Parties
agree to use all reasonable efforts to complete any repairs, modifications or
corrections that are necessary to restore suspended Local Services pursuant to
Section 3.10 and 3.11 below to the other Party as soon as reasonably
practicable. The Party temporarily suspending the Local Services shall reimburse
the other Party for the reasonable costs incurred by the other Party in
obtaining equivalent Local Services.

         3.10     SELLER PROVIDED LOCAL SERVICES

                  3.10.1   DELIVERY SERVICE. At Seller's expense, Seller shall
maintain the facilities necessary for it to deliver to Buyer the AC Service
Power in the quantities, at the levels, and in the substation locations where
such power is provided over facilities included in the T&D Assets immediately
prior to Closing. At no cost to Buyer, Seller shall allow Buyer's relays and
controls that are currently dependent upon Seller's batteries for DC service
power to continue to take such DC service power from Seller's facilities (or
shall otherwise provide such service) in the quantities, at the levels and in
the locations where such power is provided from the Seller's facilities
immediately prior to the Closing.

                  3.10.2   BUILDING SERVICES. At Seller's expense, Seller shall
provide Buyer with

                                       18
<Page>

heating, ventilation, air conditioning, lighting, and other building services at
the levels in existence for winter and summer conditions immediately prior to
Closing, for Buyer's storage spaces, offices and relay or control equipment
within Seller's T&D Assets. If Buyer desires a higher level of service, Buyer
and Seller shall mutually agree upon the upgrade and price for such upgrade and
Buyer shall pay Seller for the upgrade.

                  3.10.3   METERING. Buyer shall acquire and own all revenue
metering equipment and Seller shall own all metering equipment for AC Service
Power if used solely for that purpose. Seller shall maintain, control and repair
all revenue meters and station service meters, conduct meter accuracy and
tolerance tests, and prepare all calibration reports required for equipment that
measures energy transfers between Buyer and Seller. Such reports shall be in
accordance with NEPOOL CRS-13, as amended from time to time, and any applicable
requirements of state public utilities commissions. The Parties agree that if
the meter equipment and the Interconnection Point are not at the same location
electrically, the meter shall be compensated to record delivery of electricity
in a manner that accounts for energy losses occurring between the meter and the
Interconnection Point, both when the generating unit is delivering energy to
Seller and when Seller is delivering AC Service Power to the Buyer.

                  If at any time any metering equipment owned by the Buyer is
found to be inaccurate by a margin of error greater than that allowed under the
applicable NEPOOL Criteria, Rules and Standards and such equipment cannot be
repaired, Seller shall cause such metering equipment to be replaced at Buyer's
expense. Meter readings for the period of inaccuracy shall be corrected so far
as corrections can be reasonably ascertained. Each Party shall comply with any
reasonable request of the other concerning the sealing of meters, the presence
of a representative of the other Party when the seals are broken and the tests
are made, and other matters affecting the accuracy of the measurement of
electricity delivered to or from each Acquired Asset. If either Party believes
that there has been a meter failure or stoppage, it shall immediately notify the
other. Revenue Meter locations at the Effective Date are set forth on Schedule B
hereto.

                  In order for Seller to meet its reporting obligations to the
ISO, Buyer shall provide Seller daily telephone access to hourly interval data
recording meters enabling Seller to derive (1) net generation at the
Interconnection Point and (2) generating station service loads when a plant is
not generating. The data recording meters may be either net generation meters or
a combination of gross generation and generation station service load meters. In
the event of telephone communication failure, Buyer shall report the hourly
interval net generation data

                                       19
<Page>

values to Seller by facsimile by 8:00 a.m. on the day following the day of
generation. In the event of meter failure, Buyer shall provide Seller informed
and intelligent estimates of the hourly net generation data by 8:00 a.m. on the
day following the day of generation.

                  3.10.4   LINE OPERATION INFORMATION. Both Parties shall
require remote access to available site specific line operation information at
Seller's facilities. Seller shall make such information available to Buyer over
OASIS in accordance with FERC Order 889 and any successor orders thereto.

                  3.10.5   REMOTE TERMINAL UNITS. Seller may continue to own and
operate remote terminal units (RTU's) that are associated with CONVEX control at
each of Buyer's Fossil Stations and Hydroelectric Stations where such RTUs are
located immediately prior to the Closing.

                  3.10.6   RELAYING SYSTEMS. Seller shall own, maintain and test
all protective relaying equipment that protects its T&D Assets. Where protective
relaying equipment protects property of both Parties, the ownership of such
equipment shall be as set forth in the Asset Demarcation Agreement.

         3.11     BUYER PROVIDED LOCAL SERVICES.

                  3.11.1   SELLER'S FACILITY SUPPORT. At no cost to Seller,
Buyer shall allow Seller's facilities that are currently dependent upon the
Acquired Assets for station service support to continue to take AC and DC
station service power from the Acquired Assets (or shall otherwise provide for
such service) in the quantities, at the levels and in the locations where such
power is provided from the Acquired Assets immediately prior to the Closing. Any
upgrade in the level of support hereafter requested by Seller shall be mutually
agreed upon by the Parties.

                  3.11.2   BUILDING SERVICES. At no cost to Seller, Buyer shall
own, repair, maintain and provide Seller with heating, ventilation, air
conditioning, lighting, and other building services at the levels in existence
for winter and summer conditions, immediately prior to Closing, for areas within
Buyer's Acquired Assets used by the Seller for relay, control and communications
equipment and cables, offices, control rooms, or other related transmission
functions. Seller shall have the right to expand its equipment and facilities
within the control room space existing at the Closing Date which it will share
with Buyer with the written consent of Buyer, which consent shall not be
unreasonably withheld. If Seller desires a higher level of service, Seller and
Buyer shall mutually agree upon the upgrade and Seller shall pay for such
upgrade

         3.12     COMMUNICATIONS SERVICES.

                                       20
<Page>

                  3.12.1   GENERAL. Buyer shall acquire and maintain appropriate
channels of communication as required by the ISO and CONVEX. Buyer may at its
option use Seller's communication equipment for necessary microwave services, on
the condition that Buyer will become a participant in the Shared
Telecommunications Network (STN) and will abide by the terms and conditions of
the STN Agreement dated June 1, 1990, a copy of which is attached hereto as
Schedule D and incorporated by reference as if fully set forth herein.

                  3.12.2   RADIO LICENSES. Existing radio licenses shall be
retained by Seller or its Affiliates. Buyer shall establish its own separate
frequencies.

                  3.12.3   UPGRADES. Seller shall, after providing notice to
Buyer in accordance with this Agreement, at its own expense, have the right to
modify, add or upgrade communication equipment including but not limited to
antennas, waveguides and cables on Buyer's Acquired Assets as required for
Transmission System or Distribution System operations, provided that such
upgrades have no adverse impact upon Buyer's operation of its Acquired Assets,
shall not require Buyer to incur any costs, unless reimbursed by Seller for such
costs, shall not result in any liability for the Buyer, and are installed,
operated and maintained by the Seller in accordance with applicable laws,
regulations, rules and permits.

                  3.12.4   MAINTENANCE. Seller shall be responsible for
maintaining equipment and cables necessary to connect its communication
equipment to other equipment in the Buyer's facility to which communication
services are provided or to access an outside facility or telecommunication
service provider for communication purposes.

         3.13     SPARE PARTS.

                  Where practicable and available, each Party shall provide the
other Party with spare parts in the event of emergencies or equipment failures.
The Parties shall mutually agree upon payment for or replacement of such spare
parts. If Buyer desires Seller to maintain spare parts that are not in Seller's
possession, and if Seller has the physical space to do so, Seller shall maintain
such parts, at Buyer's expense.

         3.14     EMERGENCY PROCEDURE

                  Seller shall provide Buyer's designee under Section 19 with
prompt oral notification of Transmission System or Distribution System
emergencies which may reasonably be expected to affect Buyer's immediate
operation of the Fossil Stations or Hydroelectric Stations, and Buyer shall
provide Seller's designee under Section 19 with prompt oral notification of
generation equipment emergencies which may reasonably be expected to affect
Seller's or its Affiliates' operations. Such oral notification shall be followed
within 24 hours by written

                                       21
<Page>

notification. The written notification shall describe the extent of damage or
deficiency, anticipated length of outage and the corrective action.

                  If, in the good faith judgment of either Party, an emergency
endangers or could endanger life or property, the Party recognizing the problem
shall take such action as may be reasonable and necessary to prevent, avoid, or
mitigate injury, danger, or loss in accordance with CONVEX Operating
Instructions, No. 6401, Section 1.D.

                  Seller may, consistent with Good Utility Practice, request
that the ISO take whatever actions or inactions it deems necessary during
emergency operating conditions to: (i) preserve public safety; (ii) preserve the
integrity of the Transmission System, (iii) limit or prevent damage, or (iv)
expedite restoration of service.

         3.15     INTERCONNECTION SERVICE INTERRUPTIONS.

                  If the ISO, CONVEX, or, with respect to portions of the
Transmission System or the Distribution System subject to Seller's dispatch,
Seller, reasonably determines that the Buyer's operation of its Acquired Assets
is inconsistent with Good Utility Practice and will have an adverse impact on
the quality of service or interfere with Seller's safe and reliable operation of
the Transmission System or the Distribution System, Seller may discontinue
Interconnection Service until the condition has been corrected. Unless the ISO,
CONVEX, or Seller determines that an emergency exists or the risk of an
emergency is imminent, Seller shall give Buyer reasonable notice of its
intention to discontinue Interconnection Service and, where practicable, allow
suitable time for Buyer to remove the interfering condition. Seller's judgment
with regard to the interruption of service under this paragraph shall be made
pursuant to Good Utility Practice. In the case of such interruption, Seller
shall immediately confer with Buyer regarding the conditions causing such
interruption and its recommendation concerning timely correction thereof. In the
event Interconnection Service is interrupted under this section due to Buyer's
failure to operate and maintain the Acquired Assets pursuant to Good Utility
Practice, Buyer shall compensate Seller for all costs reasonably incurred by
Seller directly attributable to the interruption and restoration of
Interconnection Service; provided, however that such costs shall not include the
costs of replacement energy or capacity. Seller shall restore the
Interconnection Service as it was before the interruption once the interfering
condition ceases to exist.

                                       22
<Page>

         3.16     NON-DISPATCHABILITY NOTIFICATION.

                  If any Fossil Station or Hydroelectric Station is not
dispatchable by NEPOOL or the ISO, Buyer shall notify Seller, to the extent
feasible, at least 48 hours in advance of its intent to take the unit
temporarily off-line, and it shall provide Seller with a schedule of when
generation operations will be resumed. In the event of a forced outage, Buyer
shall notify Seller of its generating unit's temporary interruption of
generation as soon as practicable; and it shall provide Seller, as soon as
practicable, with a schedule of when generation will be resumed.

         3.17     SCHEDULED MAINTENANCE NOTIFICATION AND COORDINATION

                  3.17.1   TRANSMISSION SYSTEM MAINTENANCE. Seller shall consult
with Buyer regarding timing of scheduled maintenance of the Transmission System
which might reasonably be expected to affect the Fossil Stations or
Hydroelectric Stations. Seller shall, to the extent practicable, schedule any
testing, shutdown, or withdrawal of such facilities to coincide with Buyer's
scheduled outages. To facilitate such consultation and to the extent the
information is not available from the ISO in a timely manner, in June of each
year, or on another date mutually acceptable to the Parties, Buyer shall furnish
Seller with non-binding preliminary generator maintenance schedules covering the
upcoming two years. Buyer shall furnish Seller with non-binding updates to such
schedules to reflect significant changes.

         In the event Seller is unable to schedule the outage of its
Transmission System to coincide with Buyer's schedule, Seller shall use all
reasonable efforts to notify Buyer, in advance, of the reasons for the outage,
the time scheduled for it to take place, and its expected duration. Seller shall
use due diligence to restore such facilities to operation as quickly as
possible.

                  3.17.2   LOCAL ROUTINE INSPECTIONS AND MAINTENANCE. If any
Fossil Station or Hydroelectric Station is not routinely staffed, Seller shall
provide advance notice to Buyer's designee provided in Section 19 by telephone
before Seller's personnel enter such Fossil Station or Hydroelectric Station for
Routine Inspection and Maintenance and all other non-disruptive work that does
not require equipment outages. Buyer shall provide advance notice by telephone
to Seller's dispatch personnel (or equivalent) before Buyer's personnel enter
Seller's T&D Assets for routine measurements, inspections, and meter reads. For
work that will require equipment outages or that is reasonably expected to
affect the security of the other Party's operations, the Party desiring to
perform the Routine Inspection and Maintenance shall provide the other Party
with at least 48 hours prior written notification in accordance with Section 19.

         3.18     SAFETY.

                  3.18.1   GENERAL. Subject to the provisions of Section 10,
each Party shall be solely

                                       23
<Page>

responsible for and shall assume all liability for the safety and supervision of
its own employees, agents, representatives, and subcontractors. All work
performed by either Party that could reasonably be expected to affect the
operations of the other Party shall be performed in accordance with all
applicable laws, rules, and regulations pertaining to the safety of persons or
property, including, without limitation, compliance with the safety regulations
and standards adopted under the Occupational Safety and Health Act of 1970
(OSHA) as amended from time to time, the National Electrical Safety Code (NESC)
as amended from time to time and Good Utility Practice.

                  3.18.2   SWITCHING, TAGGING AND GROUNDING. Each Party shall
comply with Seller's Switching, Tagging and Grounding Rules, as in existence on
the Closing Date and as it may be modified from time to time at all utility
Primary System and Secondary System Interconnection Points or demarcation
points. A copy of the existing Switching, Tagging and Grounding Rules is
attached hereto as Schedule D and incorporated by reference as if fully set
forth herein. Seller will notify Buyer of any changes in its Switching, Tagging
and Grounding Rules.

                  3.18.3   TRAINING. Each Party, in accordance with Schedule D,
shall be responsible for training, testing, and certifying operators for
inclusion on a Joint Tag List. Every six months, each Party shall provide the
other Party with an updated list of employees qualified for inclusion on the
Joint Tag List. Buyer shall Maintain and be responsible for all switching,
tagging and grounding on Buyer's side of the Interconnection Point and Seller
shall Maintain and be responsible for all switching, tagging and grounding at
the Interconnection Point and on Seller's side thereof.

         3.19     ENVIRONMENTAL COMPLIANCE AND PROCEDURES.

                  During the term of this Agreement, each Party shall notify the
other Party first orally and then in writing of any releases of Hazardous
Substances, asbestos or lead abatement, or requirements for or commencement of
Remediation activities within 24 hours of discovery or initiation or sooner when
necessary to permit the other Party to comply with applicable laws or
regulations. Except as required by law or any federal or state agency, neither
Party shall knowingly take any action referred to in the next preceding sentence
which might reasonably be expected to have an adverse effect upon the operations
of the Acquired Assets or T&D Assets, as the case may be, of the other Party
hereunder without prior written notification and agreement between the Parties.
Neither Party shall require the other to modify any physical structures,
including containment systems, unless required by law. The Parties agree to
coordinate with each other concerning any site regulatory required plans. Each
Party shall promptly remove any

                                       24
<Page>

oil or jet fuel remaining from any tank whose use is discontinued, except that
Seller shall have no obligation to remove oil from transformers that are
temporarily removed from service. Buyer shall operate, maintain and inspect the
cathodic protection systems installed to protect underground tanks from
corrosion and shall permit Seller to review records pertaining to those systems.
Each Party shall comply in all respects with all Environmental Laws and obtain
and maintain all Permits required under all applicable Environmental Laws with
respect to the properties that it owns. To the extent necessary, the Parties
shall cooperate in all compliance and filings under Environmental Laws.

         Each Party shall indemnify, hold harmless and defend the other Party,
its parent and Affiliates and their respective officers, directors, trustees,
employees, contractors, subcontractors and agents, from and against any claims
or liability for damage to property, injury to or death of any person or any
other liability, including all expenses and reasonable attorney's fees incurred
by such Indemnified Party, to the extent caused by any act or omission of the
Indemnifying Party, its parent and Affiliates and their respective officers,
directors, trustees, employees, contractors, subcontractors or agents that
violates the Indemnifying Party's undertakings under this Section 3.19. The
indemnification procedures set forth in Section 10.2 shall also be applicable to
this Section 3.19.

         3.20     NEPOOL/ISO

                  From and after the Closing Date, the Buyer agrees to maintain
membership in good standing in NEPOOL and to submit to the governance of the ISO
as established by the NEPOOL Agreement. From and after the Closing Date, if the
Buyer decides to effect a permanent or long-term shut-down or substantial
reduction in existing generation capacity of the Norwalk Harbor or Cos Cob
facilities, the Buyer shall give twenty-four months prior written notice of such
decision to the Seller, to the Connecticut Department of Public Utility Control,
and to the ISO. The Buyer shall fully comply with all rules and regulations of
the ISO related to shutdown of generating facilities. Other than as set forth in
this Section 3.20 or as may be required to preserve system reliability or to
comply with the requirements of the ISO or NEPOOL, the Seller shall not
interfere with Buyer's efforts to expand or modify generation capacity at any of
the Sites.

4.       OPERATIONS.

         4.1      GENERAL. The Parties agree to operate all equipment that could
reasonably be expected to have an impact on the operations of the other Party or
an Affiliate of Seller in

                                       25
<Page>

accordance with all applicable federal, state, and local laws, governmental
agency rules, regulations, and codes, and Good Utility Practice. Notwithstanding
anything to the contrary in this Agreement, any obligation of Buyer to carry out
or comply with requests, orders, or directives of Seller shall be subject to the
following limitations: (a) Seller shall issue such requests, orders or
directives to Buyer pursuant to Good Utility Practice and applicable tariffs;
(b) Seller shall issue requests, orders, or directives to Buyer on a
non-discriminatory basis, with respect to generators interconnected to the
Transmission System or the Distribution System, as necessary, in Seller's
judgment, exercised reasonably and in good faith based on information available
to Seller at the time, (i) to operate the Transmission System and the
Distribution System safely, reliably, and effectively, or (ii) to conduct
necessary inspection, testing, repair, maintenance, modification, or replacement
of Transmission System or Distribution System facilities. To the extent Seller
ceases to perform any function authorized by this Agreement to issue requests,
orders, or directives to Buyer, which function has been adequately assumed by
the ISO, Buyer's compliance with the requests, orders, and directives of the ISO
shall satisfy its corresponding obligation under this Agreement.

         4.2      BUYER'S OPERATING OBLIGATIONS.

                  4.2.1    GENERAL. Buyer shall operate the Fossil Stations and
the Hydroelectric Stations that are connected to the Distribution System in
accordance with the CONVEX Operating Instructions for each such station as
revised from time to time. Copies of the effective CONVEX Operating Instructions
for each such station are attached hereto as Exhibit E. Buyer shall carry out
all switching orders from Seller's dispatch personnel, the ISO, or CONVEX issued
pursuant to the CONVEX Operating Instructions in a reasonably timely manner.
Buyer shall keep Seller advised of its generating unit's capabilities of
participation in system restoration and if it has black start capability. The
electrical supply to the Point of Interconnection shall be in the form of three
phase 60 Hertz alternating current. Buyer's equipment shall conform to industry
standards for harmonic distortion and voltage fluctuation.

                  4.2.2    VOLTAGE OR REACTIVE CONTROL REQUIREMENTS. Unless
otherwise agreed by the Parties, Buyer shall operate its existing interconnected
Acquired Assets with automatic voltage regulators. The voltage regulators will
continuously control voltage at each of the Interconnection Points consistent
with the range of voltage set forth in Schedule E as it may be amended by
Seller, the ISO or CONVEX from time to time; provided, however, that Buyer's
conforming to such range of voltage does not cause any Fossil Station or
Hydroelectric Station to operate outside its generating capacity or to violate
any electrical constraints. Unless otherwise

                                       26
<Page>

required by CONVEX or the ISO the voltage regulator shall be in automatic mode
and continuously regulating the voltage schedules. Buyer acknowledges that the
ISO or CONVEX may direct Buyer to deactivate the automatic voltage regulator and
to supply reactive power pursuant to a schedule provided by the ISO or CONVEX.
If Buyer fails to operate a generating facility included in the Acquired Assets
in accordance with Schedule E, and to the extent the generating facility is
operating, Seller will provide written notice to Buyer to remedy that situation.
If Buyer does not commence appropriate action within seven days of receiving
such notice, Seller may then take necessary action, at Buyer's expense, to
remedy Buyer's default, including the installation of capacitor banks or other
reactive compensation equipment necessary to ensure the proper voltage or
reactive supply at the generating facility. Buyer shall notify CONVEX or the
ISO, to the extent required by CONVEX or the ISO, (i) if a generating unit
reaches a VAR limit; (ii) if there is any deviation from the assigned voltage
schedule; (iii) if the voltage regulator is placed in manual mode; or (iv) if
any voltage regulator is removed from or restored to service. In addition to
voltage regulation, Buyer shall adhere, to the extent possible within its
generating capacity, to CONVEX or the ISO's service restoration plan and black
start criteria, as amended from time to time. A copy of the plan in existence
immediately prior to Closing is attached hereto as Schedule F and is
incorporated by reference as if fully set forth herein. Buyer acknowledges that
CONVEX and the ISO may have the right to require reduced or increased generation
from the Acquired Assets in accordance with the NEPOOL Tariff and applicable
rules of NEPOOL and the ISO.

         4.3      SELLER'S OPERATING OBLIGATIONS. All operations, including
start-up, shutdown and determination of hourly generation, will be coordinated
by the ISO, or, if the ISO is not doing so, by Seller's designated agent. Seller
reserves the right, in accordance with Good Utility Practice, to reasonably
specify generator controls that affect the Transmission System or the
Distribution System, such as excitation, droop and automatic generation control
settings, as modified from time to time. Buyer agrees to comply with such
reasonable specifications at Buyer's expense to the extent consistent with Good
Utility Practices and the requirements of the ISO and NPCC.

         4.4      AUDITING OF ACCOUNTS AND RECORDS. Within two years following
each calendar year, Buyer and Seller shall have the right to audit each other's
accounts and records pertaining to the transactions under this Agreement in that
calendar year. Such audits shall take place at the offices where such accounts
and records are maintained during normal business hours. Appropriate notice
under Section 19 shall be given prior to any audit. The Party being audited will
be entitled to review the audit report and any supporting materials. Any audit
hereunder

                                       27
<Page>

shall be subject to Section 7, and, to the extent that audited information
includes confidential information, the auditing Party shall designate an
independent auditor to perform such audit.

5.       COST RESPONSIBILITIES AND BILLING PROCEDURES.

         5.1      BUYER'S INTERCONNECTION COST RESPONSIBILITIES.

                  5.1.1    INTERCONNECTION FACILITIES CHARGE. Buyer shall pay
all costs related to Buyer's use of the Interconnection Facilities through the
assessment of Interconnection Facilities Charges. The Interconnection Facilities
Charge applicable to Seller's Non-PTF Transmission Facilities shall be assessed
in accordance with the Northeast Utilities System Companies Open Access
Transmission Service Tariff No. 9, attached hereto as Schedule G, as it may be
revised from time to time. The Interconnection Facilities Charge applicable to
Seller's Distribution System Facilities shall be based on the Seller's estimated
cost of providing service based on the Seller's estimated cost of providing
service based on the classification of the Seller's Distribution System
Facilities used to provide Interconnection Service to the Hydroelectric Station
receiving such service.

         The Interconnection Facilities Charges for Distribution System
Facilities from the Closing Date through December 31, 2003 shall be deemed to be
included in the Purchase Price paid by the Buyer to the Seller set forth in the
Purchase and Sale Agreement dated July 2, 1999. After December 31, 2003, Buyer
shall pay Distribution System Interconnection Facilities Charges as approved by
the regulatory authority having jurisdiction over such charges.

         For informational purposes, Seller has calculated the current
Distribution Facilities Interconnection Charge at $28/kWyr, based on data
contained in Seller's most recent FERC Form 1. Such charge will be filed with
FERC in the joint application of the Buyer and the Seller for approval of this
Agreement under Section 205 of the Federal Power Act and is subject to such FERC
approval. The Buyer will retain all rights to participate in future FERC
proceedings and to protest any rate filing as applicable after 2003.

         The Interconnection Facilities Charge applicable to each of the Fossil
Stations and Hydroelectric Stations shall be as specified in Schedule H, a copy
of which is attached hereto and incorporated by reference as if fully set forth
herein.

                  5.1.2    PAYMENT ON REMOVAL FROM SERVICE. If Buyer permanently
removes from service a Fossil Station or a Hydroelectric Station for which it
pays Seller an Interconnection Facilities Charge, Buyer may, at its option,
terminate its obligation to pay the Interconnection Facilities Charge by paying
Seller a lump sum payment based on the cost of the Interconnection

                                       28
<Page>

Facility as shown on Seller's books of account, reduced by an allocated portion
of accumulated depreciation. Upon reasonable request by Buyer, Seller shall
furnish Buyer with an estimate of the amount of the lump sum payment that would
be due upon the retirement or mothballing of any such Fossil Station or
Hydroelectric Station, including a description of the methodology employed to
calculate such amount.

                  5.1.3    LEASED TELEPHONE LINES. Buyer and Seller shall share
equally the cost of telephone lines used by both Parties to transmit the status
of generation and transmission operations to CONVEX. Buyer and Seller shall
share the costs of telephone lines used by both Parties for other purposes in a
manner proportionate to their use of such lines.

         5.2      DELIVERY OF AC SERVICE POWER. In the event that Buyer obtains
AC Service Power for the Acquired Assets, Seller shall deliver such AC Service
Power to the Acquired Assets at Seller's Rate 30, attached hereto as Schedule J,
for demand for AC Service Power up to the maximum demand covered by such rate,
or at the appropriate rate applicable to Buyer's actual demand for AC Service
Power, plus any applicable NEPOOL charges.

         5.3      COST RESPONSIBILITIES FOR LOCAL SERVICES

                  Each Party shall bear its cost for Local Services provided to
the other Party as provided in Sections 3.10 and 3.11. For Local Services that
require reimbursement but for which price or rate schedules are not included in
this Agreement, the Parties shall agree upon the price or rate to be paid before
performing or providing such Local Services. Work performed by Seller on Buyer's
Acquired Assets shall be paid for by Buyer at applicable rates unless performed
for Seller's purpose or a joint purpose, in which case each Party shall pay its
ratable share of the cost.

         5.4      BILLING PROCEDURES. Within a reasonable time after the first
day of each month, each Party shall prepare an invoice for those reimbursable
services rendered to the other Party under this Agreement during the preceding
month. Each invoice shall state the month in which the services were rendered,
shall be itemized to reflect the nature of the services rendered, and shall
fully describe the services rendered. Each invoice shall be paid within thirty
days of receipt. All payments shall be made in immediately available funds
payable to the other Party, or by wire transfer to a bank named by such Party.

         When payments are made by mail, invoices shall be deemed paid on the
date payment is received. Payment of an invoice shall not relieve the paying
Party from any responsibilities or obligations it has under this Agreement; nor
shall it constitute a waiver of any claims arising hereunder.

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<Page>

         5.5      BILLING DISPUTES, INTEREST ON UNPAID BALANCE. In the event of
a billing dispute between Seller and Buyer, Seller and Buyer will continue to
provide services as long as the other Party (i) continues to make all payments
not in dispute, and (ii) pays into an escrow account the amount of the invoice
in dispute, pending resolution of such dispute. If Buyer fails to meet these two
requirements for continuation of Interconnection Service, then Seller may
provide notice to Buyer of its intention to suspend service in sixty (60) days,
in accordance with then applicable FERC policy. Interest on any unpaid amounts
(including amounts placed in escrow) shall be calculated in accordance with the
methodology specified for interest on refunds in FERC regulations at 18 C.F.R.
Section 35.19a(a)(2)(iii). Interest on delinquent amounts shall be calculated
from the due date for payment set forth in Section 5.3 to the date of payment.

         5.6      DEFAULT. In the event either Party fails to make payment of
the costs identified in this Section 5.0 to the other Party on or before the due
date as described above (except for amounts in dispute under Section 5.4), an
event of default by such Party under Section 13.1 shall be deemed to exist.

6.       DOCUMENTATION.

         6.1      OBLIGATION TO PROVIDE DOCUMENTATION. Whenever a Party makes a
modification to its Acquired Assets or T&D Assets, as the case may be, that
could reasonably be expected to affect the other Party's operations hereunder,
the Party making the change shall provide notice to the other party and
appropriate documentation for such changes, in the form of written test records,
operation and maintenance procedures, drawings, materials lists, or
descriptions. Before making any modification to equipment or portions of the
facilities that are identified in the Asset Demarcation Agreement, the Party
desiring to make the change shall submit the proposed change to the other Party
for review. The Party initiating the change shall allow the other Party 30 days
to review the proposed change. Upon completion of any modifications to equipment
or facilities that are identified in the Asset Demarcation Agreement, the Party
initiating the modifications shall issue "as built" drawings to the other Party.
The "as built" drawings shall be issued within 90 days of completion, unless
otherwise agreed by the Parties. Each Party shall be responsible for its own
equipment, inspections, maintenance, construction, and modifications, and the
other Party's review of or comments on any document provided by the initiating
Party shall not relieve the initiating Party of its responsibility for the
correctness and adequacy of the work to be performed.

         6.2      DRAWINGS. Before the Closing Date Seller shall identify,
number, and provide

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<Page>

Buyer with a duplicate set of the most current drawings, labeled as "Common"
that represent equipment or facilities that are identified in the Asset
Demarcation Agreement. Such drawings shall consist, at a minimum, of one or more
of the following:

System One-Lines                       Single page format drawings used for
                                       dispatch and operation purposes.

One-Line Drawings                      Prints used in conceptual design which
                                       provide detail on Interconnection
                                       Facilities and Interconnection Points.

Meter and Relay Drawings               Prints which provide a higher level of
                                       detail than one-line drawings and
                                       identify on a single line basis current
                                       and voltage transformer locations,
                                       protection relay types, and meter and
                                       control connections.

Current and Voltage Drawings           Prints which provide the highest level of
                                       detail for the facilities in a three line
                                       format with specific current and voltage
                                       transformer connections, relay and meter
                                       terminations.

Control Drawings                       Prints which provide information on
                                       apparatus controls, switch developments,
                                       etc.

Secondary Wiring Drawings              Prints which describe the physical panel
                                       layout, relay, terminal block and device
                                       locations, wiring and other construction
                                       details.

Other Physical Drawings                Prints which include information on
                                       foundations, equipment layouts,
                                       grounding, panel construction, etc.

                  Each Party shall be responsible for updating and correcting
its own drawings and shall provide copies of all updated and corrected drawings
to the other Party as soon as practicable thereafter. Except as otherwise stated
on any document or drawing, Seller makes no representations as to the accuracy,
detail, or completeness of the documents or drawings provided to Buyer at or
before the Closing; and Buyer hereby releases Seller from any liability arising
as a result of Buyer's use of such documentation or drawings. Seller shall
provide Buyer with technical maintenance or operations documentation, if
available, for protection, communications

                                       31
<Page>

and Primary electrical equipment.

7.       CONFIDENTIALITY.

         7.1      CONFIDENTIALITY OF SELLER. Seller shall hold in confidence,
unless compelled to disclose by judicial or administrative process or other
provisions of law, all documents and information furnished to it by Buyer in
connection with this Agreement. All such information shall be deemed
confidential except to the extent that such information or documents are (i)
generally available to the public other than as a result of a disclosure by
Seller, (ii) made available to Seller on a non-confidential basis prior to
disclosure to Seller by Buyer, or (iii) made available to Seller on a
non-confidential basis from a source other than Buyer, provided that such source
is not known, and by reasonable effort could not be known, by Seller to be bound
by a confidentiality agreement with Buyer or otherwise prohibited from
transmitting the information to Seller by a contractual, legal or fiduciary
obligation. Seller shall not release or disclose such confidential information
to any other person, except to its employees on a need-to-know basis in
connection with this Agreement. Each such employee shall first be advised of the
confidentiality provisions of this Section 7.1 and shall agree in writing to
comply with such provisions. In no event shall such information be disclosed in
violation of the requirements of FERC Order 889 or any other applicable
standards of conduct and any successor(s) thereto. Seller shall promptly notify
Buyer if it receives notice or otherwise concludes that the production of any
information subject to this Section 7.1 is being sought under any provision of
law. Seller may use information subject to this Section 7.1 in any arbitration
proceeding under Section 13, subject to a confidentiality agreement with the
arbitrator and other participants.

         7.2      CONFIDENTIALITY OF BUYER. Buyer shall hold in confidence,
unless compelled to disclose by judicial or administrative process or other
provisions of law, all documents and information furnished to it by Seller in
connection with this Agreement. All such information shall be deemed
confidential except to the extent that such information or documents are (i)
generally available to the public other than as a result of a disclosure by
Buyer, (ii) made available to Buyer on a non-confidential basis prior to
disclosure to Buyer by Seller, or (iii) made available to Buyer on a
non-confidential basis from a source other than Seller, provided that such
source is not known, and by reasonable effort could not be known, by Buyer to be
bound by a confidentiality agreement with Seller or otherwise prohibited from
transmitting the information to Buyer by a contractual, legal or fiduciary
obligation, Buyer shall not release or disclose such confidential information to
any other person, except its employees on a need-to-know basis in

                                       32
<Page>

connection with this Agreement. Each such employee shall first be advised of the
confidentiality provisions of this Section 7.2 and shall agree in writing to
comply with such provisions. Buyer shall promptly notify Seller if it receives
notice or otherwise concludes that the production of any information subject to
this Section 7.1 is being sought under any provision of law. Buyer may use
information subject to this Section 7.1 in any arbitration proceeding under
Section 13, subject to a confidentiality agreement with the arbitrator and other
participants.

         7.3      CONFIDENTIALITY OF AUDITS. An independent auditor performing
any audit shall enter into a confidentiality agreement with the Party being
audited. Information disclosed to the auditor subject to the confidentiality
agreement shall be treated as confidential except to the extent that its
disclosure is otherwise permitted under this Agreement. Except as provided
herein, neither Party shall disclose audit information to any third party
without the other Party's prior written consent. Audit information in the hands
of the Party not being audited shall be subject to all provisions of Section 7.1
or 7.2, as applicable.

         7.4      REMEDIES. The Parties agree that monetary damages would be
inadequate to compensate either Party for the other Party's breach of its
obligations under Section 7.1 or 7.2. Each Party accordingly agrees, subject to
Section 18, that a Party shall be entitled to equitable relief, by way of
injunction or otherwise, if the other Party breaches or threatens to breach its
obligations under Section 7.1 or 7.2.

8.       DAMAGE TO CONTROL CABLES FROM SUBSTATIONS TO POWER PLANTS

                  Costs for physical damage to or destruction of control cables
owned by Seller or its Affiliate from substations to the first point of
termination in a Fossil Station or Hydroelectric Station shall be shared equally
by Buyer and Seller for repair and/or replacement costs up to $25,000 per
incident. Costs in excess of $25,000 per incident shall be borne by the Party
causing the damage or destruction. If neither Party is at fault or if both
Parties are partially at fault for damage or destruction that costs more than
$25,000 per incident to repair or replace, the costs shall be shared by both
Parties on a pro rata basis based upon their use of such cables. The obligations
under this section shall not be limited in any way by any limitation on either
Party's insurance.

9.       PERSONAL INJURY AND PROPERTY DAMAGE.

                  As between the Parties, each Party shall be liable for any
physical damage to or destruction of equipment, facilities or property owned
solely by it or its Affiliates, and for any

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<Page>

claims for personal injury or death asserted against it or its Affiliates
arising out of equipment, facilities or property owned by it or its Affiliates,
regardless of whether the other Party or its Affiliates is responsible in whole
or in part for the event which caused the injury, except to the extent caused by
the other Party's or its Affiliates' negligence or willful or wanton acts or
omissions. The obligations under this section shall not be limited in any way by
any limitation on either Party's insurance.

10.      INDEMNIFICATION.

         10.1     GENERAL. To the extent of the responsibility and liability
assumed in Sections 8, 9 and 15 of this Agreement, each Party (the "Indemnifying
Party") shall indemnify, hold harmless and defend the other Party, its parent
and Affiliates and their respective officers, directors, trustees, employees,
contractors, subcontractors and agents, from and against any claims or liability
for damage to property, injury to or death of any person or any other liability,
including all expenses, and reasonable attorneys' fees incurred by such
indemnified Party, to the extent caused by the negligence or willful or wanton
acts or omissions of the Indemnifying Party, its parent and Affiliates and their
respective officers, directors, trustees, employees, contractors,
subcontractors, or agents, arising out of or connected with the operation of the
Indemnifying Party's or its Affiliates' facilities, equipment or properties,
Acquired Assets or T&D Assets, as the case may be, or the Structural Facilities,
or arising out of or connected with the Indemnifying Party's performance or
breach under this Agreement; provided, however the Indemnifying Party shall not
have any liability for damages or losses arising out of negligence or willful
misconduct by the other Party, its parent and Affiliates and their respective
officers, directors, trustees, employees, contractors, subcontractors or agents.

         10.2     INDEMNIFICATION PROCEDURES. If either Party intends to seek
indemnification under this Section 10 from the other Party with respect to any
claim or action, the Party seeking indemnification shall give the other Party
notice of such claim within fifteen days of the commencement of, or actual
knowledge of, such claim or action. Such notice shall describe the claim in
reasonable detail, and shall indicate the amount (estimated if necessary) of the
claim that has been or may be sustained by such Party. To the extent that the
other Party is actually and materially prejudiced as a result of failure to
provide such notice, such notice will be a condition precedent to any liability
of the other Party under the indemnification provisions of this Agreement.
Neither Party may settle or compromise any claim without the prior consent of
the other Party; provided, however, such consent shall not be unreasonably
withheld. The

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<Page>

indemnification obligations of each Party shall continue in full force and
effect regardless of whether this Agreement has expired or been terminated or
canceled and shall not be limited in any way by any limitation on insurance, on
the amount or types of damages, or by any compensation or benefits payable by
the Parties under Worker's Compensation Acts, disability benefit acts or other
employee acts.

11.      INSURANCE.

         The Parties agree to maintain, at their own cost and expense, fire,
liability, worker's compensation, and other forms of insurance relating to their
property and facilities in the manner, and amounts set forth in Schedule I
attached hereto and incorporated by reference as if fully set forth herein.
Schedule I may be amended from time to time by agreement of the Parties. The
Parties agree to furnish each other with certificates of insurance evidencing
the insurance coverage set forth in Schedule I, and to notify and provide copies
to the other of any policies maintained hereunder written on a "claims made"
basis. The Parties shall be required to maintain tail coverage for five years on
all policies written on a "claims made" basis. Every contract of insurance
providing the coverages required in Schedule I shall contain the following or
equivalent clause: "No reduction, cancellation or expiration of the policy shall
be effective until ninety (90) days from the date written notice thereof is
actually received by the insured." Upon receipt of any notice of reduction,
cancellation or expiration, each Party shall immediately notify the other Party
in accordance with Section 19. Each Party and its Affiliates shall be named as
additional insureds on the general liability insurance policies set forth in
Schedule I as regards liability under this Agreement; and each Party shall waive
its rights of recovery against the other for any loss covered by such policy.
Each Party shall have the right to inspect the original policies of insurance
applicable to this Agreement at the other Party's place of business during
regular business hours. Each Party shall have the right to self-insure all, or a
portion, of the required insurances indicated in this Schedule I, to the same
amount or extent that it does so in its other insurance programs.

         Failure of either Party to comply with the foregoing insurance
requirements, or the complete or partial failure of an insurance carrier to
fully protect and indemnify the other Party or its affiliates or the inadequacy
of the insurance, shall not in any way lessen or affect the obligations or
liabilities of each Party to the other. The Parties on behalf of themselves,
their parents, and Affiliates, each waive any right of subrogation under their
respective insurance policies for any liability each has agreed to assume under
this Agreement. Evidence of this

                                       35
<Page>

requirement shall be noted on all certificates of insurance.

12.      FORCE MAJEURE.

         Notwithstanding anything in this Agreement to the contrary, Buyer and
Seller shall not be liable in damages or otherwise or responsible to the other
for failure to carry out any of its obligations under this Agreement if and only
to the extent that it is unable to so perform or is prevented from performing by
an event of force majeure. The term "force majeure," as used herein, means those
causes beyond the reasonable control of the Party affected, which by the
exercise of reasonable diligence that Party is unable to prevent, avoid,
mitigate, or overcome, including the following: any act of God, labor
disturbance, act of the public enemy, war, insurrection, riot, fire, storm or
flood, explosion, breakage or accident to machinery or equipment, order,
regulation or restriction imposed by governmental, military or lawfully
established civilian authorities, or any other cause of a similar nature beyond
a Party's reasonable control.

         If a Party shall rely on the occurrence of an event or condition
described above, as a basis for being excused from performance of its
obligations under this Agreement, then the Party relying on the event or
condition shall: (i) provide prompt written notice of such force majeure event
to the other Party giving an estimation of its expected duration and the
probable impact on the performance of its obligations hereunder; (ii) exercise
all reasonable efforts to continue to perform its obligations under this
Agreement, (iii) expeditiously take action to correct or cure the event or
condition excusing performance; provided that settlement of strikes or other
labor disputes will be completely within the sole discretion of the Party
affected by such strike or labor dispute; (iv) exercise all reasonable efforts
to mitigate or limit damages to the other Party; and (v) provide prompt notice
to the other Party of the cessation of the event or condition giving rise to its
excuse from performance. All performance obligations hereunder shall be extended
by a period equal to the term of the resultant delay.

13.      DEFAULT AND DISPUTE RESOLUTION.

         13.1     EVENTS OF DEFAULT. Any of the following shall constitute an
event of default under this Agreement:

                  (a)      The failure to pay any amount when due (including as
set forth in Section 5.5);

                  (b)      A breach of any material term or condition of this
Agreement. Failure by a

                                       36
<Page>

Party to provide any schedule, report or notice hereunder may constitute a
material breach if such failure is not cured within thirty (30) days after
notice to the defaulting Party.

                  (c)      Either Party shall commence any voluntary case under
federal bankruptcy laws or other proceeding under any similar law of any
jurisdiction for the relief of debtors or shall petition or apply for the
appointment of a trustee or other custodian, liquidator, or receiver for such
Party or for any substantial part of the Acquired Assets or T&D Assets, as the
case may be;

                  (d)      A decree or order for relief shall be entered in
respect of either Party in an involuntary case under federal bankruptcy laws or
in any other proceeding under any similar law of any jurisdiction for the relief
of debtors or a decree or order shall be entered appointing a trustee or other
custodian, liquidator, or receiver for either Party or for any substantial part
of the Acquired Assets or T&D Assets, as the case may be;

                  (e)      Either Party shall cease its operations without
having an assignee, successor, or transferee in place; or

                  (f)      Either Party shall terminate its existence as a
corporate entity by acquisition or sale, or if all or substantially all of such
Party's assets are transferred to another person or business entity, without
complying with Section 14.

         13.2     REMEDIES FOR DEFAULT.

                  (a)      Upon the occurrence of an event of default, the party
not in default may give written notice of default to the defaulting Party. Such
notice shall set forth in reasonable detail the nature of the default and, where
known and applicable, the steps necessary to cure such default. Except with
respect to an Interconnection Facilities Charge default (as described under
Section 5.6) and a Buyer default (as described under Section 4.2.2), the
defaulting Party shall have thirty (30) days following receipt of such notice
either to (i) cure such default, or (ii) commence in good faith all such steps
as are reasonable and appropriate to cure such default in the event such default
cannot, in the reasonable judgment of such non-defaulting Party, be cured within
such thirty (30) day period. With respect to a default under Section 5.6, the
defaulting Party shall have twenty (20) days to cure such default, and with
respect to a Buyer default under Section 4.2.2, Buyer shall have seven (7) days
to cure such default.

                  (b)      If the defaulting Party fails to cure such default or
take such steps as provided under subparagraph (a) above, the following remedies
may be exercised; (i) the non-defaulting Party may terminate this Agreement,
(with respect to any Buyer's default, Seller may initiate a

                                       37
<Page>

proceeding with FERC to terminate service, but shall not terminate service until
FERC authorizes any such request), (ii) with respect to a default by Buyer under
Section 13.1(c) , (d) or (e), Seller shall be entitled to operate and/or
purchase from Buyer such DC power systems, components of protection and metering
circuits, SCADA Equipment, Secondary Systems and related components,
communication equipment and building facilities, software, documentation, and
structural components associated with the foregoing, as are necessary for Seller
or its Affiliates to operate and/or maintain its transmission and distribution
business; provided, however, that if Seller elects to exercise such rights (A)
Seller shall at all times operate such equipment in accordance with Good Utility
Practice and applicable agreements to which the Buyer is a party and (B) Seller
shall return operational control of Buyer's equipment to Buyer if the event
permitting Seller to exercise such control has ceased, or if Buyer has cured its
default, within thirty (30) days after Seller's exercise of its rights
hereunder; and (iii) with respect to a default by Buyer under Section 13.1(f) or
Section 4.2.2, Seller shall be entitled to exercise its rights set forth under
Section 4.2.2, but only to the extent necessary for Seller to maintain the
voltage supply to its Transmission System and Distribution System as such supply
was maintained prior to Buyer's default.

                  (c)      Notwithstanding the foregoing, upon the occurrence of
any event of default, the non-defaulting Party shall have the right (i) to
commence an action to enjoin the defaulting Party from continuing with the
defaulting action or to require the specific performance of the defaulting
Party' defaulted obligations hereunder, and (ii) to exercise any other rights
and remedies as it may have hereunder or at equity or law.

         13.3     ARBITRABLE CLAIMS. Any disagreement between the Parties as to
their rights and obligations under this Agreement shall first be addressed by
the Parties. In the event that representatives of Buyer and Seller are unable in
good faith to satisfactorily resolve their disagreement within 30 days, they
shall refer the matter to their respective senior management. If after using
their best efforts to resolve the dispute, senior management cannot resolve the
dispute in 30 days, independent arbitration proceedings shall be used to resolve
the dispute as set forth below Notwithstanding the foregoing, physical accidents
or events giving rise to negligence or intentional tort claims for the recovery
of property damages and/or damages for personal injury shall not be considered
"Arbitrable Claims." However, disputes regarding the interpretation or scope of
any indemnification clause in this Agreement shall be subject to arbitration,
even if the dispute relates to whether one Party must indemnify the other for
property damages and/or

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<Page>

damages for personal injury, the recovery of which was or will be determined in
a court of law.

         13.4     ARBITRATION PROCESS. Any arbitration initiated under this
Agreement shall be conducted before a single neutral arbitrator appointed by the
Parties. To the extent that the subject matter of the arbitration involves FERC
jurisdictional issues, the arbitrator shall be selected and the arbitration
shall be conducted pursuant to Section 605 of the FERC Rules of Practice and
Procedure, 18 C.F.R. Section 386.605, as amended. For purposes of this Agreement
an arbitrator shall be considered "neutral" only if the arbitrator has not
previously served as an arbitrator for a dispute involving the Parties and is
not a present or former lawyer, employee or consultant of a Party or any of its
Affiliates. Notwithstanding the foregoing, if the Parties fail to agree upon a
single, neutral arbitrator within sixty (60) days of the referral of the dispute
to arbitration, each Party shall choose one arbitrator who shall sit on a
three-member arbitration panel. The two arbitrators so chosen shall within
twenty (20) days select a third arbitrator to chair the arbitration panel. In
either case, the arbitrators shall meet the definition of a "neutral" in Section
604 (c) of the FERC Rules of Practice and Procedure, 18 C.F.R. Section
385.604(c) and in this Section 13.4 of this Agreement and shall be knowledgeable
in electric utility matters, including electric transmission and bulk power
issues, and shall not have any current or past substantial business or financial
relationships with any party to the arbitration.

         Except as provided in Section 13.7, the arbitrator(s) shall provide
each of the Parties an opportunity to be heard and, except as otherwise provided
herein, the arbitrator(s) shall conduct the arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. Any
arbitration hereunder shall be conducted in Hartford, Connecticut unless
otherwise agreed by both Parties. Unless otherwise agreed, the arbitrator(s)
shall render a decision within ninety (90) days of appointment and shall notify
the Parties in writing of such decision and the reasons therefor. The
arbitrator(s) shall be authorized only to interpret and apply the provisions of
this Agreement or any related agreements entered into under this Agreement and
shall have no power to modify or change them in any manner. The decision of the
arbitrator(s) shall be final and binding upon the Parties, and judgment on the
award may be entered in any court having jurisdiction. The decision of the
arbitrator(s) may be appealed solely on the grounds that the conduct of the
arbitrator(s), or the decision itself, violated the standards set forth in the
Federal Arbitration Act and/or the Alternative Dispute Resolution Act of 1990,
as amended. Each Party shall be responsible for its own costs incurred during
the arbitration process

                                       39
<Page>

and for the following costs, as applicable: (i) the cost of the arbitrator
chosen by the Party to sit on the three-member panel and one half of the cost of
the third arbitrator chosen; or (ii) one half the cost of the single arbitrator
jointly chosen by the Parties.

         13.5     REMEDIES. Any award of damages by the arbitration panel shall
be determined, limited and controlled by Section 18. The arbitration panel shall
not award punitive damages or multiple damages or any other damages not measured
by the prevailing Party's actual damages. The arbitrator panel may, in its
discretion, award pre-award and post-award interest on any damages award;
provided, however, that the rate of pre-award or post-award interest shall not
exceed a rate equal to the rate provided for postjudgment interest by 28 U.S.C.
Section 1961 as published from time to time by the Administrative Office of the
United States Courts based on the equivalent coupon issue yield for auctions of
52-week Treasury bills.

         13.6     CONFIDENTIALITY. The existence, contents, or results of any
arbitration hereunder may not be disclosed without the prior written consent of
both Parties; provided, however, either Party may make such disclosures as may
be necessary to fulfill regulatory or other legal obligations to any
governmental authority having jurisdiction, and may inform their lenders,
Affiliates, auditors, and insurers, as necessary, under pledge of
confidentiality, and may consult with experts as required in connection with the
arbitration under pledge of confidentiality. If any Party seeks preliminary
injunctive relief from any court to preserve the status quo or to avoid
irreparable harm pending mediation or arbitration, the Parties agree to use best
efforts to keep the court proceedings confidential, to the maximum extent
permitted by law.

         13.7     FERC JURISDICTION OVER CERTAIN DISPUTES. Nothing in this
Agreement shall preclude any Party from filing a petition or complaint with FERC
with respect to any arbitrable claim over which FERC has jurisdiction. In such
case, the other Party may request FERC to reject or to waive jurisdiction. If
FERC rejects or waives jurisdiction with respect to all or a portion of the
claim, the portion of the claim not so accepted by FERC shall be resolved
through arbitration, as provided in this Agreement. To the extent that FERC
asserts or accepts jurisdiction over the claim, the decision, findings of fact,
or order of FERC shall be final and binding, subject to judicial review under
the Federal Power Act, and any arbitration proceedings that may have commenced
prior to the assertion or acceptance of jurisdiction by FERC shall be stayed,
pending the outcome of the FERC proceedings. An arbitration panel shall have no
authority to modify, and shall be conclusively bound by, any decision, finding
of fact, or order of FERC. However, to the extent that a decision, finding of
fact, or order of FERC does not provide a final or complete remedy to the Party
seeking relief, such Party may proceed to arbitration to

                                       40
<Page>

secure such remedy, subject to the FERC decision, finding, or order.

         13.8     PRELIMINARY INJUNCTIVE RELIEF. Nothing in this Section 13
regarding arbitration shall preclude, or be construed to preclude, the resort by
either Party to a court of competent jurisdiction solely for the purposes of
securing a temporary or preliminary injunction to preserve the status quo or
avoid irreparable harm pending arbitration.

14.      ASSIGNMENT/CHANGE IN CORPORATE IDENTITY

         14.1     ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be assigned by either Party (other than by operation
of law), except by Seller to an Affiliate of the Seller that owns the T&D Assets
used in the Transmission System and Distribution System or by Buyer to an
Affiliate of the Buyer that owns the Acquired Assets, without the prior written
consent of the other Party, such consent not to be unreasonably withheld. Any
assignment of this Agreement in violation of the foregoing shall be void at the
option of the non-assigning Party. Notwithstanding the foregoing, Buyer or its
permitted assignee may assign, transfer, pledge or otherwise dispose of its
rights and interests hereunder to a trustee or lending institution(s) for the
purposes of financing or refinancing the Acquired Assets, including upon or
pursuant to the exercise of remedies under such financing or refinancing, or by
way of assignments, transfers, conveyances or dispositions in lieu thereof;
provided, however, that no such assignment or disposition shall relieve or in
any way discharge Buyer or such assignee from the performance of its duties and
obligations under this Agreement. Seller agrees to execute and deliver such
documents as may be reasonably necessary to accomplish any such assignment,
transfer, conveyance, pledge or disposition of rights hereunder for purposes of
the financing or refinancing of the Acquired Assets, so long as Seller's rights
under this Agreement are not thereby altered, amended, diminished or otherwise
impaired.

         14.2     ASSUMPTION. Except as set forth in Section 14.1 above, no
assignment or transfer of rights or obligations under this Agreement by either
the Buyer or the Seller shall relieve such Party from full liability and
financial responsibility for the performance thereof after any such transfer or
assignment unless and until the transferee or assignee shall agree in writing to
assume the obligations and duties of the assigning or transferring Party under
this Agreement and the other Party has consented in writing to such assumption,
such consent not to be unreasonably withheld.

                                       41
<Page>

15.      CONTRACTORS AND SUBCONTRACTORS.

         15.1     Nothing in this Agreement shall prevent either Party from
utilizing the services of such contractors or subcontractors as it deems
appropriate; provided, however, that all such contractors or subcontractors
shall comply with the terms and conditions of this Agreement. The creation of
any contract or subcontract relationship shall not relieve the Party retaining
the contractor or subcontractor of any of its obligations under this Agreement.
Any obligation imposed by this Agreement upon the Parties, where applicable,
shall be equally binding upon and shall be construed as having application to
any contractor or subcontractor. No contractor or subcontractor is intended to
be deemed a third party beneficiary of this Agreement.

         15.2     To the fullest extent permitted by law, each Party shall
require its contractors or subcontractors to indemnify and hold harmless and
defend the other Party, its parent and Affiliates and their officers, directors,
trustees, employees, agents, and assigns from and against any and all claims
and/or liability for damage to property, injury to or death of any person,
including such Party's employees and its Affiliates' employees, or any other
liability incurred by such Party or its parent or Affiliates including all
expenses and reasonable attorneys fees, to the extent caused by any act or
omission, negligent or otherwise, by said contractor or subcontractor and/or its
officers, directors, trustees, employees, agents, and assigns arising out of or
connected with the operation of either Party's or its Affiliates' facilities,
equipment, and property described in this Agreement, regardless of whether
caused in part by a Party indemnified hereunder. The obligations under this
section shall not be limited in any way by any limitation on any contractor's or
subcontractor's insurance.

16.      LABOR RELATIONS.

         Each Party agrees to immediately notify the other Party, orally and
then in writing, of any labor dispute or anticipated labor dispute or job action
which may reasonably be expected to affect the operations of the other Party.

17.      INDEPENDENT CONTRACTOR STATUS.

         Nothing in this Agreement shall be construed as creating any
relationship between Seller and Buyer other than that of independent
contractors.

18.      LIMITATION OF LIABILITY

                                       42
<Page>

         Except for the indemnification obligations under Section 3.19 and
Section10 hereof, to the fullest extent permitted by law and notwithstanding any
other provision of this Agreement, neither Seller nor Buyer, nor their
respective officers, directors, trustees, agents, employees, parent or
Affiliates, successors or assigns, or their respective officers, directors,
trustees, agents or employees, successors or assigns, shall be liable to the
other Party or its parent, subsidiaries, Affiliates, officers, directors,
agents, employees, successors or assigns, for claims, suits, actions or causes
of action for incidental, punitive, special, indirect, multiple or consequential
damages (including attorneys' fees or litigation costs) connected with or
resulting from performance or non-performance of this Agreement, or any actions
undertaken in connection with or related to this Agreement, including without
limitation any such damages which are based upon causes of action for breach of
contract, tort (including negligence and misrepresentation), breach of warranty,
strict liability, statute, operation of law, or any other theory of recovery.
The provisions of this Section 18 shall apply regardless of fault and shall
survive termination, cancellation, suspension, completion or expiration of this
Agreement. The remedies set forth in this Agreement are the exclusive remedies
for the liabilities of each Party arising out of or in connection with this
Agreement.

19.      NOTICES.

         At or prior to the Closing Date, each Party shall indicate to the other
Party, by notice, the appropriate person during each eight-hour work shift to
contact in the event of an emergency, a scheduled or forced interruption or
reduction in services, or Routine Inspections and Maintenance as provided in
Section 3.17.2. The notice last received by a Party shall be effective until
modified in writing by the other Party. Unless otherwise specified in this
Agreement, all notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and will be deemed to have
been duly given if so given) by hand delivery, cable, telecopy (confirmed in
writing) or telex, or by mail (registered or certified, postage prepaid) to the
respective Parties as follows:

         IF TO THE SELLER:
         The Connecticut Light and Power Company
         107 Selden Street
         Berlin, CT 06307
         Attn:  Vice President - Administration

                                       43
<Page>

         COPY TO:

         Vice President, Secretary and General Counsel
         Northeast Utilities
         107 Selden Street
         Berlin, CT 06307

         IF TO THE BUYER:

         Northeast Generation Company
         107 Selden Street
         Berlin, CT 06307
         Attn: Vice President and Treasurer

         COPY TO:

         Select Energy, Inc.
         c/o Northeast Utilities Service Company
         107 Selden Street
         Berlin, CT 06307
         Attn: Senior Vice President - Power Supply Marketing

or such other address as is furnished in writing by such Party; and any such
notice or communication shall be deemed to have been given as of the date so
mailed.

20.      SURVIVAL.

         The liabilities and obligations assumed in Section 3.19, 8, 9, 10 and
15 of this Agreement with respect to events which occur during the term of this
Agreement shall survive the termination of this Agreement.

21.      HEADINGS.

         The descriptive headings of the sections of this Agreement are inserted
for convenience only and do not affect the meaning or interpretation of this
Agreement.

22.      WAIVER.

         Except as otherwise provided in this Agreement, any failure of any
Party to comply with

                                       44
<Page>

any obligation, covenant, agreement, or condition herein may be waived by the
Party entitled to the benefits hereof only by a written instrument signed by the
Party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement, or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.

23.      COUNTERPARTS.

         This Agreement may be executed in two or more counterparts, all of
which will be considered one and the same Agreement and each of which will be
deemed an original.

24.      GOVERNING LAW.

         This Agreement and all rights, obligations, and performances of the
Parties hereunder are subject to all applicable federal and state laws and to
all duly promulgated orders and other duly authorized action of governmental
authority having jurisdiction. This Agreement will be governed by and construed
in accordance with the laws of the State of Connecticut when not in conflict
with or pre-empted by federal law, without giving effect to the conflict of law
principles thereof. Except for those matters covered in this Agreement and
jurisdictional to FERC or which must first go to arbitration pursuant to Section
13 herein, any action arising out of or concerning this Agreement must be
brought in the courts of the State of Connecticut. Both Parties hereby consent
to the jurisdiction of the State of Connecticut for the purpose of hearing and
determining any action not pre-empted by federal law; and to the jurisdiction of
FERC for those matters governed by FERC rules and regulations or by the Federal
Power Act.

25.      EQUAL EMPLOYMENT OPPORTUNITY.

         The Parties agree to comply with all applicable federal, state, and
other applicable anti-discrimination laws, the standards and regulations issued
thereunder, and the amendments thereto.

26.      SEVERABILITY.

         In the event that any of the provisions of this Agreement are held to
be unenforceable or invalid by any court of competent jurisdiction, the Parties
shall, to the extent possible, negotiate an equitable adjustment to the
provisions of this Agreement, with a view toward effecting the purpose of this
Agreement, and the validity and enforceability of the remaining provisions
hereof

                                       45
<Page>

shall not be affected thereby.

27.      AMENDMENTS.

         Seller may unilaterally make application to FERC under Section 205 of
the Federal Power Act and pursuant to the FERC rules and regulations promulgated
thereunder for a change in any rates, terms and conditions, charges,
classification of service, rule or regulation for any services Seller provides
under this Agreement over which FERC has jurisdiction. Buyer may exercise its
rights under Section 206 of the Federal Power Act and pursuant to FERC rules and
regulations promulgated thereunder with respect to any rate, term, condition,
charge, classification of service, rule or regulation for any services provided
under this Agreement over which FERC has jurisdiction. Except as provided in the
foregoing, this Agreement may be amended, modified, or supplemented only by
written agreement signed by both Seller and Buyer.

28.      ENTIRE AGREEMENT.

         This Agreement, together with the Purchase and Sale Agreement and the
Related Agreements as defined therein, and the Asset Demarcation Agreement and
the Schedules attached thereto, constitutes the entire understanding between the
Parties, and supersedes any and all previous understandings, oral or written,
which pertain to the subject matter contained herein or therein. If there is any
conflict in such documents, the Purchase and Sale Agreement shall have
precedence over the others.

                                       46
<Page>

         IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.

<Table>
<Caption>
<S>                                             <C>
Northeast Generation Company                    Western Massachusetts Electric Company

By: /s/ David R.  McHale                        By: /s/ John B.  Keane
   -------------------------------------           ----------------------------------------
Name:  David R.  McHale                         Name:  John B.  Keane
Title: Vice President and Treasurer, NGC        Title: Vice President - Generation Divestiture
</Table>

                                       47<Page>

                                                                 Exhibit 10.11

                           PURCHASE AND SALE AGREEMENT

                                     BETWEEN

                          NORTHEAST GENERATION COMPANY

                                       AND

                     THE CONNECTICUT LIGHT AND POWER COMPANY

                                  JULY 2, 1999

<Page>

                                TABLE OF CONTENTS

<Table>
<Caption>
<S>                                                                                                              <C>
1.       DEFINITIONS..............................................................................................1

2.       ACQUISITION OF ASSETS BY BUYER..........................................................................13
         2.1.     PURCHASE AND SALE OF ASSETS....................................................................13
         2.2.     EXCLUDED ASSETS................................................................................14
         2.3.     ASSUMPTION OF LIABILITIES......................................................................15
         2.4.     EXCLUDED LIABILITIES. .........................................................................16
         2.5.     PURCHASE PRICE.................................................................................17
         2.6.     ADJUSTMENTS TO INITIAL PURCHASE PRICE..........................................................17
         2.7.     ALLOCATION OF PURCHASE PRICE...................................................................19
         2.8.     PRORATION......................................................................................19
         2.9.     THE CLOSING....................................................................................20
         2.10.    DELIVERIES BY THE SELLER AT THE CLOSING........................................................20
         2.11.    DELIVERIES BY THE BUYER AT THE CLOSING.........................................................22

3.       REPRESENTATIONS, WARRANTIES AND DISCLAIMERS OF THE SELLER...............................................23
         3.1.     ORGANIZATION OF THE SELLER.....................................................................23
         3.2.     AUTHORIZATION OF TRANSACTION...................................................................23
         3.3.     NONCONTRAVENTION...............................................................................23
         3.4.     BROKERS' FEES..................................................................................23
         3.5.     TITLE TO ACQUIRED ASSETS.......................................................................23
         3.6.     LEGAL AND OTHER COMPLIANCE; PERMITS............................................................23
         3.7.     TAXES..........................................................................................24
         3.8.     CONTRACTS AND LEASES...........................................................................24
         3.9.     INSURANCE......................................................................................24
         3.10.    LITIGATION.....................................................................................25
         3.11.    EMPLOYEES......................................................................................25
         3.12.    ENVIRONMENTAL MATTERS..........................................................................25
         3.13.    CONDEMNATION...................................................................................26
         3.14.    REGULATION AS A UTILITY........................................................................26
         3.15.    BENEFIT PLANS..................................................................................26
         3.16.    ASSETS USED IN OPERATION OF THE FACILITIES.....................................................26
         3.17.    SURVEYS OF FACILITIES..........................................................................26
         3.18.    YEAR 2000 COMPUTER PROBLEM.....................................................................26
         3.19.    INTELLECTUAL PROPERTY..........................................................................26
         3.20.    DISCLAIMERS REGARDING ACQUIRED ASSETS..........................................................27

4.       REPRESENTATIONS AND WARRANTIES OF THE BUYER.............................................................28
         4.1.     ORGANIZATION OF THE BUYER......................................................................28
         4.2.     AUTHORIZATION OF TRANSACTION...................................................................28
         4.3.     NONCONTRAVENTION...............................................................................28
         4.4.     BROKERS' FEES..................................................................................28
         4.5.     LITIGATION.....................................................................................28

<Page>

         4.6.     NO KNOWLEDGE OF THE SELLER'S BREACH............................................................29
         4.7.     AVAILABILITY OF FUNDS..........................................................................29
         4.8.     "AS IS" SALE...................................................................................29
         4.9.     AFFILIATE GUARANTY.............................................................................29
         4.10.    QUALIFIED BUYER................................................................................30
         4.11.    CANDLEWOOD LAKE BEACHES SALES AND LOVER'S LEAP LAND SALE DUE DILIGENCE.........................30

5.       COVENANTS...............................................................................................30
         5.1.     GENERAL........................................................................................30
         5.2.     NOTICES, CONSENTS AND APPROVALS................................................................30
         5.3.     OPERATION OF BUSINESS..........................................................................31
         5.4.     FULL ACCESS; YEAR 2000 COMPUTER PROBLEM........................................................32
         5.5.     INTERIM PERIOD NOTICE..........................................................................33
         5.6.     FURTHER ASSURANCES.............................................................................33
         5.7.     EMPLOYEE MATTERS...............................................................................35
         5.8.     ACCESS AFTER CLOSING...........................................................................38
                  (a)  RECORDS...................................................................................38
                  (b)  EMPLOYEES.................................................................................39
         5.9.     NEPOOL.........................................................................................39
         5.10.    RISK OF LOSS...................................................................................39
         5.11.    REGULATORY APPROVAL PROCESS....................................................................40
         5.12.    CONNECTICUT TRANSFER ACT.......................................................................41
         5.13.    DISCHARGE OF ENVIRONMENTAL LIABILITIES.........................................................41

6.       CONDITIONS TO OBLIGATION TO CLOSE.......................................................................41
         6.1.     CONDITIONS TO OBLIGATION OF THE BUYER TO CLOSE.................................................41
                  (a)  REPRESENTATIONS AND WARRANTIES............................................................41
                  (b)  PERFORMANCE BY THE SELLER.................................................................41
                  (c)  BUYER'S REGULATORY APPROVALS..............................................................41
                  (d)  SELLER'S REGULATORY APPROVALS.............................................................42
                  (e)  ABSENCE OF LITIGATION.....................................................................42
                  (f)  ANTITRUST MATTERS.........................................................................42
                  (h)  DELIVERIES................................................................................42
         6.2.     CONDITIONS TO OBLIGATION OF THE SELLER TO CLOSE................................................42
                  (a)  REPRESENTATIONS AND WARRANTIES............................................................42
                  (b)  PERFORMANCE BY BUYER......................................................................42
                  (c)  SELLER'S REGULATORY APPROVALS.............................................................42
                  (d)  BUYER'S REGULATORY APPROVALS..............................................................42
                  (e)  ABSENCE OF LITIGATION.....................................................................42
                  (f)  ANTITRUST MATTERS.........................................................................43
                  (g)  DELIVERIES................................................................................43
                  (h)  NEPOOL....................................................................................43

7.       CONFIDENTIALITY.........................................................................................43

<Page>

8.       TAXES...................................................................................................44

9.       SURVIVAL OF REPRESENTATIONS AND WARRANTIES; EFFECT OF CLOSING AND INDEMNIFICATION.......................45
         9.1.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES; SURVIVAL OF COVENANTS AND AGREEMENTS...............45
         9.2.     EFFECT OF CLOSING..............................................................................45
         9.3.     INDEMNITY BY THE SELLER........................................................................45
         9.4.     INDEMNITY BY BUYER.............................................................................45
         9.5.     EXCLUSIVE REMEDY...............................................................................46
         9.6.     MATTERS INVOLVING THIRD PARTIES................................................................46
         9.7.     NET OF TAXES AND INSURANCE.....................................................................47
         9.8.     NO RECOURSE....................................................................................47

10.      TERMINATION.............................................................................................47
         10.1.    TERMINATION OF AGREEMENT.......................................................................47
         10.2.    EFFECT OF TERMINATION..........................................................................48

11.      MISCELLANEOUS...........................................................................................49
         11.1.    PRESS RELEASES AND PUBLIC ANNOUNCEMENTS........................................................49
         11.2.    NO THIRD PARTY BENEFICIARIES...................................................................49
         11.3.    NO JOINT VENTURE...............................................................................49
         11.4.    ENTIRE AGREEMENT...............................................................................49
         11.5.    SUCCESSION AND ASSIGNMENT......................................................................49
         11.6.    COUNTERPARTS...................................................................................50
         11.7.    HEADINGS.......................................................................................50
         11.8.    NOTICES........................................................................................50
         11.9.    GOVERNING LAW..................................................................................51
         11.10.   CHANGE IN LAW..................................................................................51
         11.11.   CONSENT TO JURISDICTION........................................................................51
         11.12.   AMENDMENTS AND WAIVERS.........................................................................51
         11.13.   SEVERABILITY...................................................................................51
         11.14.   EXPENSES.......................................................................................51
         11.15.   CONSTRUCTION...................................................................................51
         11.16.   INCORPORATION OF EXHIBITS AND SCHEDULES........................................................52
         11.17.   SPECIFIC PERFORMANCE...........................................................................52
         11.18.   DISPUTE RESOLUTION.............................................................................52
</Table>

<Page>

                                    EXHIBITS

Exhibit A-1                    -  Form of Deed
Exhibit A-2                    -  Form of Reserved Easement
Exhibit B                      -  Form of Bill of Sale
Exhibit C                      -  Form of Assignment and Assumption Agreement
Exhibit D                      -  Form of Property Tax Agreement
Exhibit E                      -  Form of Interconnection Agreement
Exhibit F                      -  Form of Guaranty
Exhibit G                      -  Form of Asset Demarcation Agreement
Exhibit H                      -  Form of Mortgage Indenture Release
Exhibit I                      -  Candlewood Lake Energy Storage Tables
Exhibit J                           -  Northfield Mountain Upper Reservoir
                                        Energy Storage Tables
Exhibit K                      -  Form of Environmental Consultant Reliance
                                   Letter

                                    SCHEDULES

Schedule 2.1(a)(i)             -  Real Property
Schedule 2.1(a)(ii)            -  Real Property Matters
Schedule 2.1(b)                -  Personal Property
Schedule 2.1(c)                -  Leases
Schedule 2.1(d)                -  Permits
Schedule 2.1(e)                -  Contracts
Schedule 2.1(g)                -  Names of Facilities
Schedule 2.2(a)                -  T&D and Associated Telecommunication Assets
Schedule 2.10(q)               -  Matters for Opinion from Counsel to the Seller
Schedule 2.11(j)               -  Matters for Opinion from Counsel to the Buyer
Schedule 3.3                   -  Matters of Contravention
Schedule 3.5                   -  Title Commitments/Policies, Defects In Title
Schedule 3.6                   -  Compliance
Schedule 3.8(b)                -  Exceptions to Contract Obligations
Schedule 3.9                   -  Insurance
Schedule 3.10                  -  Litigation
Schedule 3.11                  -  Collective Bargaining Agreements and Related
                                   Matters
Schedule 3.12                  -  Environmental
Schedule 3.13                  -  Condemnation
Schedule 3.15                  -  Benefit Plans
Schedule 3.16                  -  Material Asset Exception
Schedule 3.18                  -  Year 2000 Computer Problem Performance
Schedule 5.3                   -  Pre-Approved Capital Expenditures
Schedule 5.3(g)                -  Modifications to Employee Benefit Plans
Schedule 5.7(c)(iii)           -  Eligible Non-Represented Employee Benefits

[Exhibits and Schedules will be provided to the Securities and Exchange
Commission by Northeast Generation Company upon request.]
<Page>

Schedule 5.7(g)                -  Station Personnel
Schedule 6.1(c)                -  Buyer's Regulatory Approvals
Schedule 6.2(c)                -  Seller's Regulatory Approvals

<Page>

                           PURCHASE AND SALE AGREEMENT

         This Purchase and Sale Agreement (the "AGREEMENT") is entered into on
July 2, 1999, by and between Northeast Generation Company, a Connecticut
corporation (the "BUYER"), and The Connecticut Light and Power Company, a
Connecticut corporation (the "SELLER"). The Buyer and the Seller are each
referred to herein as a "PARTY" or, collectively as the "PARTIES."

         This Agreement contemplates a transaction in which the Buyer will
purchase certain assets of the Seller (as defined in Section 2.1 below) in
consideration of the Purchase Price (as defined in Section 2.5 below).

         Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:

1.       DEFINITIONS.

         "ACQUIRED ASSETS" has the meaning set forth in Section 2.1.

         "ACQUIRED ASSETS EMPLOYEES" has the meaning set forth in Section
5.7(b).

           "ACQUIRED ASSETS EMPLOYEES' RECORDS" mean all personnel records
maintained by the Seller relating to the Acquired Assets Employees to the extent
such files contain (i) names, addresses, dates of birth, job titles and
descriptions; (ii) starting dates of employment; (iii) salary and benefits
information; (iv) resumes and job applications; and (v) any other documents that
the Seller is not prohibited by Law to deliver to the Buyer. To the extent the
consent of an Acquired Assets Employee is required in order for the Seller to
deliver a document which is part of the Acquired Assets Employees' Records to
the Buyer, the Seller agrees to use reasonable efforts to secure such consent.

         "ACT" means "An Act Concerning Electric Restructuring," Public Act No.
98-28.

         "AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

         "AGREEMENT" has the meaning set forth in the preamble above.

         "ASSET DEMARCATION AGREEMENT" means the agreement between the Parties
evidencing their agreement as to the demarcation of ownership with respect to
certain assets not situated wholly on real property owned, or to be owned, by
either the Seller or the Buyer, in substantially the form attached hereto as
EXHIBIT G.

         "ASSIGNMENT AND ASSUMPTION AGREEMENT" means the agreement between the
Parties by which the Seller shall assign certain rights, liabilities and
obligations and the Buyer shall assume the Assumed Liabilities, in substantially
the form attached hereto as EXHIBIT C.

                                       1
<Page>

         "ASSUMED LIABILITIES" has the meaning set forth in Section 2.3.

         "BILL OF SALE" means the form of bill of sale by which the title to
personal property shall be conveyed to the Buyer, substantially in the form
attached hereto as EXHIBIT B.

         "BUSINESS DAY" means any day other than a Saturday, Sunday or day on
which banks are legally closed for business in Hartford, Connecticut or New
York, New York.

         "BUYER" has the meaning set forth in the preamble above.

         "BUYER MATERIAL ADVERSE EFFECT" means any material adverse change in,
or effect on, the business, financial condition, operations, results of
operations or future prospects of the Buyer, including any change or effect that
is materially adverse to the Buyer's ability to own, operate or use the Acquired
Assets as so owned, operated and used by the Seller prior to the Effective Date,
taken as a whole; PROVIDED that any change or effect that is cured prior to
Closing shall not be considered a Buyer Material Adverse Effect; and PROVIDED,
FURTHER, that any change or effect having a value of five percent of the
Purchase Price or less shall not be deemed to be a Buyer Material Adverse
Effect.

         "BUYER'S REGULATORY APPROVALS" means those approvals identified on
SCHEDULE 6.1(c) attached hereto to be obtained by the Buyer as a condition to
the Buyer's obligations under this Agreement.

         "CANDLEWOOD CONSERVATION RESTRICTION" means the Conservation
Restriction which the Seller has agreed to grant to the City of Danbury,
Connecticut and the Towns of New Fairfield, New Milford, Brookfield and Sherman,
Connecticut, pursuant to a Purchase and Sale Agreement dated April 6, 1999.

         "CANDLEWOOD LAKE BEACHES SALES" means the land and land rights conveyed
by the Seller pursuant to the respective Purchase and Sale Agreements between
the Seller and the Town of New Milford, Connecticut and the City of Danbury,
Connecticut, both dated April 15, 1999.

         "CANDLEWOOD LAKE ADDER" means an amount to compensate the Seller at the
Closing for the costs incurred by the Seller in connection with the water level
of Candlewood Lake on the Closing Date. The Candlewood Lake Adder shall be equal
to: (i) Generating Energy Available x (ii) the ECP, where

                  Generating Energy Available means the generating energy
                  available above elevation 418, measured in megawatt hours, for
                  the corresponding elevation of Candlewood Lake, as measured as
                  of 11:59 p.m. on the Closing Date, using the Candlewood Lake
                  Energy Storage Tables attached hereto as Exhibit I; and

                  ECP means the average off-peak energy clearing price reported
                  by ISO New England for the thirty day period preceding the
                  Closing Date, where the off-peak period is the hours between
                  11:00 p.m. and 7:00 a.m. each day.

         "CAPITAL COMMITMENTS" means all binding contractual commitments to make
capital

                                       2
<Page>

expenditures relating to the Acquired Assets, Facilities or Sites incurred by
the Seller during the Interim Period that extend beyond the Closing Date,
whether or not relating to the Pre-Approved Capital Expenditures.

         "CASH" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP.

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

         "CLOSING" has the meaning set forth in Section 2.9.

         "CLOSING ADJUSTMENT" has the meaning set forth in Section 2.6(c).

         "CLOSING DATE" has the meaning set forth in Section 2.9.

         "CLOSING PURCHASE PRICE" has the meaning set forth in Section 2.5.

         "CLOSING STATEMENT" has the meaning set forth in Section 2.6(d).

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COLLECTIVE BARGAINING AGREEMENT" has the meaning set forth in Section
5.7(a).

         "COMMERCIALLY REASONABLE EFFORTS" means efforts which are reasonably
within the contemplation of the Parties at the Effective Date and which do not
require the performing Party to expend any funds other than expenditures which
are customary and reasonable in transactions of the kind and nature contemplated
by this Agreement in order for the performing Party to satisfy its obligations
hereunder.

         "CONTRACTS" has the meaning set forth in Section 2.1(e).

         "DEED" means the form of deed by which the Real Property shall be
conveyed to the Buyer, substantially in the form attached hereto as EXHIBIT A-1.

         "DISCLOSING PARTY" has the meaning set forth in the definition of
Proprietary Information.

         "DPUC" means the Connecticut Department of Public Utility Control.

         "DPUC APPROVAL" means the order or orders of the DPUC approving this
Agreement and the Related Agreements and the consummation of the transactions
contemplated hereby and thereby and all related matters, including without
limitation approval of the amount of the proceeds of the sale of the Acquired
Assets, such order or orders to be in a form which is final, unconditional and
unappealable by any Person, including exhaustion of all administrative and
judicial appeals or remedies and the running of time periods and statutes of
limitation for rehearing and judicial review.

         "EFFECTIVE DATE" means the date on which this Agreement has been duly
executed and validly delivered by the Parties.

                                       3
<Page>

         "EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), (d) Employee Welfare Benefit Plan or
material fringe benefit plan or program or (e) profit sharing, bonus, stock
option, stock purchase, equity, stock appreciation, deferred compensation,
incentive, severance plan or other benefit plan.

         "EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(2).

         "EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(1).

         "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 Laws 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 LAWS" means all applicable Laws and any binding
administrative or judicial interpretations thereof 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 Substances; or (d) noise; and includes, without limitation, the
following federal statutes (and their implementing regulations): the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended; the Solid Waste Disposal Act, as amended, 42 U.S.C. Section 6901 et
seq.; the Federal Water Pollution Control Act of 1972, as amended, 33 U.S.C.
Section 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15
U.S.C. Section 2601 et. seq.; the Clean Air Act of 1966, as amended, 42 U.S.C.
Section 7401 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended, 7 U.S.C. Section 136 et seq.; the Coastal Zone Management Act of
1972, as amended, 16 U.S.C. Section 1451 et seq.; the Oil Pollution Act of 1990,
as amended, 33 U.S.C. Section 2701 et. seq.; the Rivers and Harbors Act of 1899,
as amended, 33 U.S.C. Section 401 et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Section 1801 et seq.; the Endangered
Species Act of 1973, as amended, 16 U.S.C. Secton 1531 et. seq.; the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section 651 et
seq.; and the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Section
300(f) et seq.; and all analogous or comparable state statutes and regulations,
including,

                                       4
<Page>

without limitation, the Connecticut Transfer Act, as amended, CGS Section
22a-134 et seq.; the Connecticut Remediation Standard Regulations, RCSA Section
22a-133k-1 et seq.; and the Massachusetts Oil and Hazardous Release Prevention
and Response Act, as amended, M.G.L. c. 21E.

         "ENVIRONMENTAL LIABILITIES" means any Liability under or related to
Environmental Laws arising as a result of or in connection with (i) any
violation or alleged violation of Environmental Law, prior to, on or after the
Closing Date, with respect to the ownership, operation or use of the Acquired
Assets; (ii) any Environmental Claims caused (or allegedly caused) by the
presence or Release of Hazardous Substances at, on, in, under, adjacent to or
migrating from the Acquired Assets prior to, on or after the Closing Date,;
(iii) the investigation and/or Remediation (whether or not such investigation or
Remediation commenced before the Closing Date or commences after the Closing
Date) of Hazardous Substances that are present or have been Released prior to,
on or after the Closing Date at, on, in, under, adjacent to or migrating from
the Acquired Assets; (iv) compliance with Environmental Laws on or after the
Closing Date with respect to the ownership or operation or use of the Acquired
Assets; (v) 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 Substances, on or after the
Closing Date, in connection with the ownership or operation of the Acquired
Assets; and (vi) the investigation and/or remediation of Hazardous Substances
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 ownership or operation of the Acquired
Assets, at any Offsite Disposal Facility.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "ESTIMATED ADJUSTMENT" has the meaning set forth in Section 2.6(c).

         "ESTIMATED CLOSING STATEMENT" has the meaning set forth in Section
2.6(c).

         "EVENT OF LOSS" has the meaning set forth in Section 5.10.

         "EXCLUDED ASSETS" has the meaning set forth in Section 2.2.

         "EXCLUDED LIABILITIES" has the meaning set forth in Section 2.4.

         "EXHIBITS" means the exhibits to this Agreement.

         "FACILITIES" means the generating facilities identified by name on
SCHEDULE 2.1(g) attached hereto.

         "FERC" means the Federal Energy Regulatory Commission, or its
regulatory successor, as applicable.

                                       5
<Page>

         "FERC APPLICATIONS" has the meaning set forth in Section 5.11.

         "FIRPTA AFFIDAVIT" means the affidavit to be delivered by the Parties
at Closing pursuant to Section 1445(b)(2) of the Code, to establish that each
Party is not a "foreign person" within the meaning of that Section.

         "GAAP" means United States generally accepted accounting principles as
in effect from time to time.

         "GENERATION SUPPORT SERVICES AGREEMENT" means an agreement between the
Buyer and Northeast Generation Services, Inc. under which the Buyer can
contract, at the Buyer's option, for the provision of certain services to the
Buyer after the Closing.

         "GOOD UTILITY PRACTICES" means any of the practices, methods and acts
engaged in or approved by a significant portion of the electric utility industry
during the relevant time period, or any of the practices, methods or acts which,
in the exercise of reasonable judgment in light of the facts known at the time
the decision was made, could have been expected to accomplish the desired result
at a reasonable cost consistent with good business practices, reliability,
safety and expedition. Good Utility Practices are not intended to be limited to
the optimum practice, method or act to the exclusion of all others, but rather
to be acceptable practices, methods or acts generally accepted in the region.

         "GOVERNMENTAL AUTHORITY" means any federal, state, local or other
governmental, regulatory or administrative agency, commission, department,
board, or other governmental subdivision, court, tribunal, arbitral body or
other governmental authority, but excluding the Buyer and any subsequent owner
of the Sites (if otherwise a Governmental Authority under this definition).

         "GROUP HEALTH PLAN" has the meaning set forth in Section 5000(b)(1) of
the Code.

         "GUARANTY" means the form of guaranty in substantially the form
attached hereto as Exhibit F.

         "HART-SCOTT-RODINO ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

         "HAZARDOUS SUBSTANCE" 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 and 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 applicable Environmental Laws; and (c) any materials or substances
defined in Environmental Laws as "hazardous", "toxic", "pollutant", or
"contaminant", or words of similar meaning or regulatory effect.

         "IMPROVEMENTS" means all buildings, structures (including all fuel
handling and storage

                                       6
<Page>

facilities), machinery and equipment, fixtures, construction in progress,
including all piping, cables and similar equipment forming part of the
mechanical, electrical, plumbing or HVAC infrastructure of any building,
structure or equipment, and including all generating units, located on and
affixed to the Sites.

         "INDEMNIFIED PARTY" has the meaning set forth in Section 9.6(a).

         "INDEMNIFYING PARTY" has the meaning set forth in Section 9.6(a).

         "INDEPENDENT APPRAISER" has the meaning set forth in Section 2.7.

         "INITIAL PURCHASE PRICE" has the meaning set forth in Section 2.5.

         "INSPECTIONS" means all tests, reviews, examinations, inspections,
investigations, verifications, samplings and similar activities conducted by any
Party or such Party's agents or representatives with respect to the Acquired
Assets prior to the Closing.

         "INTERCONNECTION AGREEMENT" means the agreement between the Parties in
substantially the form attached hereto as EXHIBIT E.

         "INTERIM PERIOD" means that period of time commencing on the Effective
Date and ending on the Closing Date.

         "INVENTORY" or "INVENTORIES" means fuel inventories, materials, spare
parts, consumable supplies and chemical and gas inventories located at the
Sites, in transit to the Sites or identified in any Schedule.

         "ISO NEW ENGLAND" means ISO New England, Inc., the independent system
operator as established or designated by NEPOOL.

         "KNOWLEDGE" means the actual, current knowledge, after due inquiry, of
the corporate officers charged with responsibility for the particular function
at the date of this Agreement, or, with respect to any certificate delivered
pursuant to this Agreement, the date of delivery of the certificate.

         "LAWS" means all laws, rules, regulations, codes, injunctions,
judgments, orders, decrees, rulings, interpretations, constitution, ordinance,
common law, or treaty, of any federal, state, local municipal and foreign,
international, or multinational government or administration and related
agencies.

         "LEASES" has the meaning set forth in Section 2.1(c).

         "LIABILITY" or "LIABILITIES" means any liability or obligation (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
any liability for Taxes.

         "LIEN" means any mortgage, pledge, lien, security interest, charge,
claim, equitable interest, encumbrance, restriction on transfer, conditional
sale or other title retention device or

                                       7
<Page>

arrangement (including, without limitation, a capital lease), transfer for
security for the payment of any indebtedness, or restriction on the creation of
any of the foregoing, whether relating to any property or right or the income or
profits therefrom; PROVIDED, HOWEVER, that the term "LIEN" shall not include any
of the following "PERMITTED ENCUMBRANCES": (i) Liens for Taxes or other charges
or assessments by any Governmental Authority to the extent that the payment
thereof is not in arrears or otherwise due or is being contested in good faith;
(ii) encumbrances in the nature of zoning restrictions, building and land use
laws, ordinances, orders, decrees, restrictions or any other conditions imposed
by any Governmental Authority; (iii) easements (including without limitation,
the Reserved Easements and any other easement or like right granted by an
instrument executed in connection with this Agreement or the Related Agreements
or the transactions contemplated hereby or thereby, but excluding such
encumbrances that secure indebtedness), rights, restrictions, title
imperfections and similar matters including such matters as are set forth in any
applicable FERC license or exemption on the uses of property if the same do not
materially detract from the operation or use of such property in the business of
the Seller as conducted on the Effective Date; (iv) deposits or pledges made in
connection with, or to secure payment of, worker's compensation, unemployment
insurance, old age pension programs mandated under applicable laws or other
social security regulations; (v) statutory or common law liens in favor of
carriers, warehousemen, mechanics and materialmen, statutory or common law liens
to secure claims for labor, materials or supplies and other like liens, which,
in the case of clauses (i) through (v), inclusive, secure obligations to the
extent that payment thereof is not in arrears or otherwise due and which have
been incurred under Good Utility Practices; (vi) any Lien with respect to the
Acquired Assets that arises under Good Utility Practices and is not material to
the operation or use of the Acquired Assets in the business of the Seller as
conducted on the Effective Date; (vii) any Lien or title imperfection with
respect to the Acquired Assets created by or resulting from any act or omission
of the Buyer; (viii) all exceptions set forth in the "Title Commitments" or
discoverable based on a review of an accurate survey of the Sites or the land
records of the respective towns in which the Sites are located; and (ix) matters
set forth on Schedule 2.1(a)(ii); and (x) the Candlewood Conservation
Restriction.

         "LOCALS" means the International Brotherhood of Electrical Workers,
Local Union Nos. 420 and 457.

         "LOSSES" has the meaning set forth in Section 9.3.

         "LOVER'S LEAP LAND SALE" means the sale of certain property at the
Seller's Shepaug Station by the Seller to the State of Connecticut Department of
Environmental Protection pursuant to a Purchase and Sale Agreement dated March
31, 1999.

         "MAJOR LOSS" has the meaning set forth in Section 5.10(b).

         "MATERIAL ADVERSE EFFECT" means any change in, or effect on, the
Acquired Assets that is materially adverse to the operations or condition of the
Acquired Assets as operated by the Seller on the Effective Date, taken as a
whole, other than any such change or effect resulting from (a)

                                       8
<Page>

changes in the international, national, regional or local wholesale or retail
markets for electric power or fuel used in connection with the Acquired Assets;
(b) changes in the North American, national, regional or local electric
transmission systems or the operation thereof or the costs imposed on generators
of electricity in connection with the use of such electric transmission systems;
or (c) any order of any Governmental Authority, or legislation applicable to
providers of generation, transmission or distribution of electricity generally
that imposes restrictions, regulations or other requirements thereon; PROVIDED
that any change or effect that is cured prior to Closing shall not be considered
a Material Adverse Effect.

         "MORTGAGE INDENTURE" means that certain Indenture of Mortgage and Deed
of Trust between the Seller and Bankers Trust Company, as Trustee, dated as of
May 1, 1921, as supplemented and amended.

         "MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Section 3(37).

         "NEPOOL" means the New England Power Pool, established by the NEPOOL
Agreement, or its successor.

         "NEPOOL AGREEMENT" means the New England Power Pool Agreement, dated
September 1, 1971, as amended by the Restated New England Power Pool Agreement
filed with FERC on July 22, 1998, as finally approved by FERC and as further
amended from time to time.

         "NON-REPRESENTED EMPLOYEES" has the meaning set forth in Section
5.7(b).

         "NORTHFIELD MOUNTAIN ADDER" means an amount to compensate the Seller at
the Closing for the costs incurred by the Seller in connection with the
reservoir level of the Northfield Mountain upper reservoir on the Closing Date.
The Northfield Mountain Adder shall be equal to: (i) Generating Energy Available
x (ii) 1.35 x (iii) the ECP, where

                  Generating Energy Available means the generating energy
                  available above elevation level 938 feet, measured in megawatt
                  hours, for the corresponding elevation of the Northfield
                  Mountain upper reservoir, as measured as of 11:59 p.m. on the
                  Closing Date, using the Northfield Mountain Upper Reservoir
                  Energy Storage Tables attached hereto as Exhibit J; and

                  ECP means the average off-peak energy clearing price reported
                  by ISO New England for the thirty day period preceding the
                  Closing Date, where the off-peak period is the hours between
                  11:00 p.m. and 7:00 a.m. each day.

         "OFFSITE DISPOSAL FACILITY" means a location, other than a Facility or
a Site, which receives or received Hazardous Substances for disposal by the
Seller prior to the Closing Date or by the Buyer on or after the Closing Date.

         "PARTY" and "PARTIES" have the meanings set forth in the preamble
above.

         "PERMITS" means all certificates, licenses, permits, approvals,
consents, orders, decisions and other actions of a Governmental Authority
pertaining to a particular Acquired Asset, or the ownership, operation or use
thereof.

                                       9
<Page>

         "PERMITTED ENCUMBRANCES" has the meaning set forth in the definition of
Lien.

         "PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, a limited
liability company, an unincorporated organization, or a governmental entity (or
any department, agency, or political subdivision thereof).

         "PRE-APPROVED CAPITAL EXPENDITURES" means those capital expenditures
set forth on SCHEDULE 5.3.

         "PROPRIETARY INFORMATION" means all information about either Party (the
"DISCLOSING PARTY") or its properties or operations furnished to the other Party
(the "RECEIVING PARTY") or its Representatives by the Disclosing Party or its
Representatives, after the date hereof, regardless of the manner or medium in
which it is furnished. Proprietary Information does not include information that
(a) is or becomes generally available to the public, other than as a result of a
disclosure by the Receiving Party or its Representatives in violation of this
Agreement; (b) was available to the Receiving Party on a nonconfidential basis
prior to its disclosure by the Disclosing Party or its Representatives; (c)
becomes available to the Receiving Party on a nonconfidential basis from a
Person, other than the Disclosing Party or its Representatives, who, to the
Receiving Party's actual knowledge, is not otherwise bound by a confidentiality
agreement with the Disclosing Party or its Representatives, or is not otherwise
under any obligation to the Disclosing Party or any of its Representatives not
to transmit the information to the Receiving Party or its Representatives, or
(d) the Disclosing Party discloses to others on a non-confidential basis.

         "PURCHASE PRICE" has the meaning set forth in Section 2.5.

         "PURCHASE PRICE ADJUSTMENT" has the meaning set forth in Section 2.6.

         "REAL PROPERTY" has the meaning set forth in Section 2.1(a).

         "RECEIVING PARTY" has the meaning set forth in the definition of
Proprietary Information.

         "RELATED AGREEMENTS" means the Assignment and Assumption Agreement, the
Bill of Sale, the Deed, the Property Tax Agreement, the Interconnection
Agreement, the Guaranty, the Generation Support Services Agreement, the Release
of Mortgage Indenture, the Asset Demarcation Agreement, and the Reserved
Easement.

         "RELEASE" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of any Hazardous Substance 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 Substance).

                                       10
<Page>

         "RELEASE OF MORTGAGE INDENTURE" means the form of release substantially
in the form attached hereto as Exhibit H.

         "REMEDIATION" means any or all of the following activities to the
extent required to address the presence or Release of Hazardous Substances: (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 which
is appropriately documented or memorialized) from a Governmental Authority with
competent jurisdiction under Environmental Laws or a written opinion of (i) a
Licensed Environmental Professional (as defined in C.G.S. Section 22a-133v.) or
(ii) a Licensed Site Professional (as defined in M.G.L. c21A Section 19 et
seq.), as contemplated by the relevant Environmental Laws 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 Laws.

         "REPRESENTATIVE" means, as to any Person, such Person's Affiliates and
its and their directors, officers, employees, agents, advisors (including,
without limitation, financial advisors, counsel and accountants).

         "REPRESENTED EMPLOYEES" has the meaning set forth in Section 5.7(a).

         "RESERVED EASEMENTS" means easements to be reserved by the Seller with
respect to certain T&D Assets and associated telecommunications facilities
located on the site of the Acquired Assets, as set forth in Schedule 2.1(a)
hereto, to be reserved in the Deeds by language substantially in the form
attached hereto as Exhibit A-2.

         "R.C.S.A." means Regulations of Connecticut State Agencies.

         "SCHEDULE" means a schedule to this Agreement.

         "SEC" means the Securities and Exchange Commission.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         "SELLER" has the meaning set forth in the preamble.

         "SELLER'S REGULATORY APPROVALS" means those approvals identified on
SCHEDULE 6.2(c) hereto to be obtained by the Seller as a condition to the
Seller's obligation to close under this Agreement.

         "SITE" means the Real Property and Improvements forming a part of, or
used or usable in connection with, a Facility. Any reference to a Site shall
include, by definition, the surface and subsurface elements, including the soils
and groundwater present at such Site, and any reference to items "at the Site"
shall include all items "at, on, in, upon, over, across, under and within" the
Site.

                                       11
<Page>

         "T&D" means the transmission and distribution of electricity.

         "T&D ASSETS" means the transmission, distribution, communication,
substation and other assets necessary to current or future T&D Operations of the
Seller.

         "T&D OPERATIONS" means the process of conducting and supporting T&D.

         "TAKING" has the meaning set forth in Section 5.10.

         "TAX" or "TAXES" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar, including FICA), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.

         "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.

         "THIRD PARTY" means a Person who is not a Party, an Affiliate of a
Party, a Representative of a Party, a Representative of an Affiliate of a Party
or a shareholder of any of a Party, a Party's Affiliate or a Party's
Representative.

         "THIRD PARTY CLAIM" has the meaning set forth in Section 9.6(a).

         "TITLE COMMITMENTS" has the meaning set forth in Section 3.5.

         "TRADEMARKS" means any trademarks, service marks, trade dress, and
logos, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith.

         "TRANSFERABLE PERMITS" has the meaning set forth in Section 3.6(b).

         "WARN ACT" means the Federal Worker Adjustment Retraining and
Notification Act of 1988, as amended.

         "YEAR 2000 COMPUTER PROBLEM" means the failure or inability of any
hardware, software, or firmware product (including embedded microcontrollers in
non-computer equipment) to correctly differentiate between years, in different
centuries, which years end in the same two digits, or accurately process
date/time data (including, but not limited to, calculating, comparing,

                                       12
<Page>

and sequencing) from, into and between the twentieth and twenty-first centuries,
including leap year calculations.

2.       ACQUISITION OF ASSETS BY BUYER.

         2.1.     PURCHASE AND SALE OF ASSETS. The Seller agrees to sell, assign
and transfer to the Buyer, and the Buyer agrees to purchase from the Seller at
the Closing, subject to and upon the terms and conditions contained herein, free
and clear of any Lien, all of the right, title and interest of the Seller in and
to the following properties and assets owned by the Seller constituting, or used
in and necessary for the operation of, the Facilities (collectively, the
"ACQUIRED ASSETS"):

                  (a)      the real property, Improvements thereon, easements
         and other rights in real property described in SCHEDULE 2.1(a)(i), but
         subject to the exceptions and encumbrances set forth in the Title
         Commitments and subject to the Permitted Encumbrances, including the
         matters set forth in SCHEDULE 2.1(a)(ii)(the "REAL PROPERTY");

                  (b)      the machinery, equipment, furniture, boats, vehicles,
         intellectual property and other personal property owned by the Seller
         and located at the Facilities and Inventories (including without
         limitation the items of personal property described on SCHEDULE 2.1(b),
         all applicable warranties against manufacturers or vendors, to the
         extent that such warranties are transferable without further action by
         the Seller, and all items of personal property due under applicable
         warranties), in each case as in existence on the Effective Date, but
         excluding such items disposed of by the Seller in the ordinary course
         of business during the Interim Period, and including such additional
         items as may be acquired by the Seller for use in connection with the
         Acquired Assets in the ordinary course of business during the Interim
         Period;

                  (c)      all rights with respect to leasehold interests and
         subleases and rights thereunder relating to real property set forth on
         SCHEDULE 2.1(c) (the "LEASES");

                  (d)      all Permits relating to ownership or operation of the
         Facilities including, but not limited to, the Permits listed on
         Schedule 2.1(d);

                  (e)      those contracts, agreements and personal property
         leases which are related to the ownership, use or operation of the
         Facilities and which are set forth in SCHEDULE 2.1(e) (the
         "CONTRACTS"), and all other contracts which relate directly to the
         operation of the Facilities; PROVIDED that the Seller 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 the Seller remains liable under this Agreement;

                  (f)      all books, operating records, engineering designs,
         blueprints, as-built plans, specifications, procedures, studies,
         reports and equipment repair, safety, maintenance or service records of
         the Seller relating specifically to the operation of the Facilities,
         including the Acquired Assets Employees' Records but expressly
         excluding financial records, employees records (other than the Acquired
         Assets Employees' Records) and books of account;

                                       13
<Page>

                  (g)      the rights of the Seller to the use of the names of
         the Facilities set forth in SCHEDULE 2.1(g);

                  (h)      the property covered by the Purchase and Sale
         Agreements for the Candlewood Lake Beaches Sales and the Lover's Leap
         Land Sale if the Seller gives the notice to the Buyer contemplated by
         Section 2.2(b) that some or all of such property is to be included as
         an Acquired Asset; and

                  (i)      all rights of the Seller in and to any causes of
         action against a Third Party relating to any Assumed Liability, whether
         received as a payment or credit against future liabilities, including,
         without limitation, insurance proceeds, condemnation awards and cash
         payments under warranties covering the Acquired Assets to the extent
         such payments relate to Assumed Liabilities.

         2.2.     EXCLUDED ASSETS. Notwithstanding anything to the contrary in
this Agreement, there shall be excluded from the Acquired Assets to be sold,
assigned, transferred, conveyed or delivered to the Buyer hereunder, and to the
extent in existence on the Effective Date or on the Closing Date, there shall be
retained by the Seller, any and all right, title or interest to the following
assets, properties and rights (collectively, the "EXCLUDED ASSETS"):

                  (a)      as identified on SCHEDULE 2.2(a) or in the Asset
         Demarcation Agreement, or any document or exhibit referred to or
         incorporated in the Asset Demarcation Agreement, the property
         comprising or constituting any or all of the T&D Assets located at the
         Sites (whether or not regarded as a "transmission", "distribution" or
         "generation" asset for regulatory or accounting purposes), including
         all switchyard facilities, substation facilities and support equipment,
         as well as all Permits and contracts, to the extent they relate to the
         T&D Assets, and those certain assets and facilities identified for use
         or used by the Seller or others pursuant to an agreement or agreements
         with the Seller for telecommunications purposes;

                  (b)      the interests in real property covered by the
         Candlewood Conservation Restriction, the Candlewood Lake Beaches Sale
         and the Lover's Leap Land Sale and the rights of the Seller under the
         agreements related thereto including, without limitation, the rights of
         the Seller to receive the proceeds due to it under such agreements;
         provided, however, that in the event that the Seller gives notice to
         the Buyer that any of the Purchase and Sale Agreements for the
         Candlewood Lake Beaches Sale or the Lover's Leap Land Sale is
         terminated, which notice may be delivered by the Seller to the Buyer
         either before or after the Closing, the land to be conveyed under the
         applicable Purchase and Sale Agreement(s) shall be conveyed to the
         Buyer as an Acquired Asset, which conveyance may occur prior to or
         after the Closing;

                  (c)      all Cash, accounts and notes receivable, checkbooks
         and canceled checks, bank deposits and property or income tax
         receivables or any other Tax refunds to the extent allocable to a
         period ending on or before the Closing Date;

                  (d)      all contracts, instruments or other agreements
         relating to the sale by the Seller of electric capacity or energy under
         wholesale rates, or otherwise subject to regulation by the FERC;

                                       14
<Page>

                  (e)      all rights of the Seller in and to any causes of
         action against a Third Party relating to any period through the Closing
         Date, whether received as a payment or credit against future
         liabilities, including, without limitation, any rights or interests in
         respect of any refunds relating to property Taxes paid by the Seller
         for any period prior to the Closing Date, insurance proceeds,
         condemnation awards and cash payments under warranties covering the
         Acquired Assets to the extent such payments relate to warranty claims
         made by the Seller prior to the Closing Date, but excluding any such
         rights of the Seller to the extent the associated Third Party claims
         relate to an Assumed Liability; and

                  (f)      all rights of the Seller to the words "CL&P" and "The
         Connecticut Light and Power Company" and any Trademark which is
         composed of or comprises any derivative.

         2.3.     ASSUMPTION OF LIABILITIES. On the terms and subject to the
conditions set forth herein, from and after the Closing, the Buyer will assume
and satisfy or perform all of the Liabilities of the Seller in respect of, or
otherwise arising from the operation or use of the Acquired Assets, other than
the Excluded Liabilities (as set forth in Section 2.4 below), including, without
limitation, the following Liabilities (the "ASSUMED LIABILITIES"):

                  (a)      all Environmental Liabilities, other than the
         Excluded Liabilities (as set forth in Section 2.4 below);

                  (b)      all Liabilities under (i) the Contracts, Leases, and
         the Transferable Permits in accordance with the terms thereof, (ii) the
         contracts, leases and other agreements entered into by the Seller with
         respect to the Acquired Assets which would be required to be disclosed
         on SCHEDULE 2.1(c) or 2.1(e) but for the exception provided in clause
         (iii) of Section 3.8(a), in accordance with the terms thereof, and
         (iii) the contracts, leases, commitments and other agreements entered
         into by the Seller with respect to the Acquired Assets during the
         Interim Period consistent with the terms of this Agreement (including,
         without limitation, Capital Commitments, agreements with respect to
         Liabilities for real or personal property Taxes on any of the Acquired
         Assets entered into in accordance with the provisions of Section 5.3(d)
         or, to the extent such agreements do not allocate such Tax liability
         between the Acquired Assets and the Excluded Assets, all Tax liability
         under such agreements entered into by the Seller and any local
         government); except (x) in each case, to the extent such Liabilities,
         but for a breach or default by the Seller, would have been paid,
         performed or otherwise discharged on or prior to the Closing Date, or
         to the extent the same arise out of any such breach or default, or to
         the extent the same relate to performance rendered to the Seller prior
         to the Closing Date and (y) as otherwise provided in Section 2.4(f);

                  (c)      all Liabilities under the Permitted Encumbrances
         other than under or with respect to the exercise of the Reserved
         Easements;

                                       15
<Page>

                  (d)      all Liabilities relating to Employees for which the
         Buyer is responsible under Section 5.7;

                  (e)      all other Liabilities expressly allocated to the
         Buyer in this Agreement or in any of the Related Agreements; and

                  (f)      all Liabilities relating to ownership of the property
         covered by the Purchase and Sale Agreements relating to the Candlewood
         Lake Beaches Sales and the Lover's Leap Land Sale if the Seller gives
         the notice to the Buyer contemplated by Section 2.2(b) that such
         property is to be included as an Acquired Asset.

         2.4.     EXCLUDED LIABILITIES. The Buyer shall not assume or be
responsible for the performance of any of the following Liabilities
(collectively, the "EXCLUDED LIABILITIES"):

                  (a)      any Liability of the Seller in respect of or
         otherwise arising from the operation or use of the Excluded Assets or
         any other assets of the Seller that are not Acquired Assets;

                  (b)      any Liability of the Seller including, without
         limitation, any Environmental Liability, in respect of or otherwise
         arising from the exercise of the Reserved Easements;

                  (c)      any Liability relating to the treatment, disposal,
         storage, discharge, Release, recycling or the arrangement for such
         activities at, or the transportation to, any Offsite Disposal Facility,
         by the Seller, prior to the Closing Date, of Hazardous Substances that
         were generated at the Sites, PROVIDED that for purposes of this
         Section, "Offsite Disposal Facility" does not include any location to
         which Hazardous Substances disposed of or Released at the Acquired
         Assets have migrated;

                  (d)      any Liability of the Seller arising from the making
         or performance of this Agreement or a Related Agreement or the
         transactions contemplated hereby or thereby;

                  (e)      any Liability of the Seller in respect of payment
         obligations for goods delivered or services rendered prior to the
         Closing Date or other Liabilities under contracts or leases which the
         Buyer has not assumed pursuant to Section 2.3(b);

                  (f)      any Liability which is or would be required to be
         accrued by the Seller on a balance sheet of the Seller as of the
         Closing Date prepared in accordance with GAAP, other than those
         Liabilities which are expressly set forth as Assumed Liabilities in
         Sections 2.3(a), (b) and (c) hereof;

                  (g)      any Liability of the Seller arising out of any
         Employee Benefit Plan established or maintained by the Seller or to
         which the Seller contributes or any Liability for the termination of
         any such Employee Benefit Plan;

                  (h)      any Liability of the Seller for any compensation or
         any benefits, including, without limitation, vacation pay, severance
         pay, post-retirement benefits and COBRA coverage, accruing on or prior
         to the Closing Date under the terms or provisions of any Seller
         Employee Benefit Plan, the Collective Bargaining Agreement or any other

                                       16
<Page>

         agreement, plan, practice, policy, instrument or document relating to
         any of the Acquired Assets Employees, other than the Liabilities
         expressly assumed by the Buyer under Section 5.7;

                  (i)      any Liability of the Seller relating to any cause of
         action against the Seller filed with or pending before any court or
         administrative agency on the Closing Date;

                  (j)      any Liability of the Seller for any fines or
         penalties imposed by a Governmental Authority resulting from (x) any
         investigation or proceeding pending on or prior to the Closing Date or
         (y) illegal acts or willful misconduct of the Seller on or prior to the
         Closing Date;

                  (k)      any Environmental Liability to the extent such
         Environmental Liability arises out of or relates to any Governmental
         Authority's allegation and investigation of any criminal violations of
         Environmental Laws by the Seller of which the Seller has received
         formal written notification from such Governmental Authority on or
         prior to the Closing Date;

                  (l)      any Environmental Liability to the extent such
         Environmental Liability derives from the same facts which form the
         basis of a conviction of, or plea of NOLO CONTENDERE by, the Seller for
         a violation of Environmental Laws which conviction or plea arises out
         of a Governmental Authority's investigation of criminal violations of
         Environmental Laws by the Seller of which the Seller receives formal
         written notification from such Governmental Authority on or before the
         sixth anniversary of the Effective Date; and

                  (m)      any Liability in respect of Taxes attributable to the
         Acquired Assets for taxable periods ending on or before the Closing
         Date as such Taxes are to be pro rated in accordance with Section 2.8,
         except those Taxes for which the Buyer is liable pursuant to Section 8.

         2.5.     PURCHASE PRICE. The Buyer agrees to assume the Assumed
Liabilities and pay to the Seller at the Closing an aggregate amount equal to
$681,350,000 (the "Initial Purchase Price") plus or minus amounts to account for
(i) the Estimated Adjustment to the Initial Purchase Price to be made as of the
Closing under Section 2.6(c), and (ii) the pro rations to be made as of the
Closing under Section 2.8(a), (the Initial Purchase Price, as so adjusted, shall
be referred to herein as the "Closing Purchase Price"). The Closing Purchase
Price shall be payable in cash by wire transfer to the Seller in accordance with
written instructions of the Seller given to the Buyer at least three (3)
Business Days prior to the Closing. Following the Closing, the Closing Purchase
Price shall be subject to adjustment pursuant to Sections 2.6(d) and 2.8(b), and
the Closing Purchase Price, as so adjusted pursuant to such Sections, shall be
herein referred to as the "Purchase Price." Notwithstanding anything to the
contrary herein, the Purchase Price shall not be subject to adjustment on
account of the inclusion or non-inclusion as part of the Acquired Assets of the
property covered by any of the Purchase and Sale Agreements relating to the
Candlewood Lake Beaches Sales or the Lover's Leap Land Sale.

         2.6.     ADJUSTMENTS TO INITIAL PURCHASE PRICE. The Initial Purchase
Price shall be increased or reduced as set forth in Sections 2.6(a), (b) and
(c), and the Closing Purchase Price shall be subject to adjustment as set forth
in Section 2.6(d). Such increases or reductions, as the

                                       17
<Page>

case may be, shall be referred to herein as the "PURCHASE PRICE ADJUSTMENT" and
shall be determined and paid as set forth below:

                  (a)      the Initial Purchase Price shall be increased to
         account for the following items: (i) the net book value of all
         Inventories held by the Seller as of the Closing Date; (ii) the amount
         paid by the Seller in purchasing the vehicles identified as leased
         vehicles on Schedule 2.1(b); (iii) any Pre-Approved Capital
         Expenditures paid by the Seller during the Interim Period; (iv) any
         other capital expenditures paid by the Seller during the Interim Period
         necessitated by Good Utility Practice and to which the Buyer shall have
         consented pursuant to Section 5.3(f); (v) any operations and
         maintenance expenses paid for by the Seller during the Interim Period
         that the Seller would not have actually paid but for the Buyer's
         written request; (vi) the Northfield Mountain Adder; (vii) the
         Candlewood Lake Adder; and (viii) the amounts paid by the Seller in
         having surveys of the Facilities and Real Property performed in
         connection with the transactions contemplated hereby;

                  (b)      the Initial Purchase Price shall be reduced to
         account for any Capital Commitments assumed by the Buyer that were not
         (i) Pre-Approved Capital Expenditures or (ii) capital expenditures
         necessitated by Good Utility Practice to which Buyer consented pursuant
         to Section 5.3(f);

                  (c)      at least twenty (20) Business Days prior to the
         Closing Date, the Seller shall prepare and deliver to the Buyer an
         Estimated Closing Statement (the "ESTIMATED CLOSING STATEMENT") that
         shall set forth the Seller's best estimate of all adjustments to the
         Initial Purchase Price required by Sections 2.6(a) and 2.6(b) (the
         "ESTIMATED ADJUSTMENT"). Within ten (10) Business Days following the
         delivery of the Estimated Closing Statement by the Seller to the Buyer,
         the Buyer may object in good faith to the Estimated Adjustment in
         writing. If the Buyer objects to the Estimated Adjustment, the Parties
         shall attempt to resolve such dispute by negotiation. If the Parties
         are unable to resolve such dispute before five (5) Business Days prior
         to the Closing Date (or if the Buyer fails to object to the Estimated
         Adjustment), the Initial Purchase Price shall be adjusted (the "CLOSING
         ADJUSTMENT") for the Closing by the amount of the Estimated Adjustment
         not in dispute; and

                  (d)      within thirty (30) days following the Closing Date,
         the Seller shall prepare and deliver to the Buyer a closing statement
         that shall set forth the Seller's computation of the final Purchase
         Price Adjustment based on Sections 2.6(a) and (b) and the components
         thereof taking into account actual data (the "CLOSING STATEMENT").
         Within twenty (20) days following the delivery of the Closing Statement
         by the Seller to the Buyer, the Buyer may object to the Closing
         Statement in writing. The Seller agrees to cooperate with the Buyer to
         provide to the Buyer or the Buyer's Representatives information used to
         prepare the Closing Statement and information relating thereto. If the
         Buyer objects to the Closing Statement, the Parties shall attempt to
         resolve such dispute by negotiation. If the Parties are unable to
         resolve such dispute within twenty (20) days

                                       18
<Page>

         of any objection by the Buyer, the Parties shall appoint Ernst & Young
         who shall, at the Seller's and the Buyer's joint expense, review the
         Closing Statement and determine the appropriate Purchase Price
         Adjustment under this Section 2.6. The agreed upon Closing Statement or
         the finding of such accounting firm, as the case may be, shall be the
         Purchase Price Adjustment and shall be binding on the Parties. Upon the
         determination of the Purchase Price Adjustment, the Party owing a
         balance on account of the Purchase Price Adjustment shall deliver the
         balance due to the other Party no later than two (2) Business Days
         after such determination in immediately available funds or in any other
         manner as reasonably requested by the payee. The balance due shall be
         determined by offsetting against each Party's credits and debits
         arising from the Purchase Price Adjustment the credits and debits
         accorded to each Party in the Closing Statement on account of the
         Estimated Adjustment. The acceptance by the Buyer and the Seller of the
         Purchase Price Adjustment shall not constitute or be deemed to
         constitute a waiver of the rights of such Party in respect of any other
         provision of this Agreement.

         2.7.     ALLOCATION OF PURCHASE PRICE. The Buyer and the Seller shall
use their good faith best efforts to agree upon an allocation among the Acquired
Assets of the sum of the Purchase Price and the Assumed Liabilities consistent
with Section 1060 of the Code and the Treasury Regulations thereunder within one
hundred and twenty (120) days of the Effective Date (or such later date as the
Parties may mutually agree) but in no event fewer than thirty (30) days prior to
the Closing. The Buyer and the Seller may jointly agree to obtain the services
of an independent engineer or appraiser (the "INDEPENDENT APPRAISER") to assist
the Parties in determining the fair value of the Acquired Assets solely for
purposes of such allocation under this Section 2.7. If such an appraisal is
made, both the Buyer and the Seller agree to accept the Independent Appraiser's
determination of the fair value of the Acquired Assets. The cost of the
appraisal shall be borne equally by the Buyer and the Seller. Each of the Buyer
and the Seller agrees to file Internal Revenue Service Form 8594 and all
federal, state, local and foreign Tax Returns in accordance with such agreed
allocation. Each of the Buyer and the Seller shall report the transactions
contemplated by this Agreement and the Related Agreements for federal Income Tax
and all other Tax purposes in a manner consistent with the allocation determined
pursuant to this Section 2.7. Each of the Buyer and the Seller agrees to provide
the other promptly with any other information required to complete Form 8594.
Each of the Buyer and the Seller shall notify and provide the other with
reasonable assistance in the event of an examination, audit or other proceeding
regarding the agreed upon allocation of the Purchase Price.

         2.8.     PRORATION.

                  (a)      The Buyer and the Seller agree that all of the items
         normally prorated in a sale of assets of the type contemplated by this
         Agreement, including those listed below, relating to the business and
         operations of the Acquired Assets, will be prorated as of the Closing
         Date, with the Seller liable to the extent such items relate to any
         period through the Closing Date, and the Buyer liable to the extent
         such items relate to periods after the Closing Date: (i) personal
         property, Real Property, occupancy and water Taxes, assessments and
         other charges, if any, on or associated with the Acquired Assets; (ii)
         rent, Taxes and other items payable by or to the Seller under any of
         the Contracts or Leases assigned to and assumed by the Buyer hereunder;
         (iii) any Permit, license, registration or fees with respect to any
         Transferable Permit associated with the Acquired Assets; and (iv) sewer
         rents and charges for water, telephone, electricity and other
         utilities. Subject to

                                       19
<Page>

         Section 2.8(b), below, 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 the Seller or the Buyer
         shall be entitled pursuant to this Section 2.8(a) and the Initial
         Purchase Price shall be adjusted to reflect such net amount.

                  (b)      If the amount of one or more Taxes, fees or other
         liabilities to be prorated in accordance with Section 2.8(a) is not
         known or determinable on or prior to the Closing Date, the amounts to
         be prorated upon the Closing in accordance with Section 2.8(a) shall be
         based upon the actual Taxes, fees or other liabilities for the
         preceding year (or appropriate period) for which such actual Taxes,
         fees or liabilities are available. The amount of Taxes, fees or other
         liabilities prorated upon the Closing pursuant to Section 2.8(a) shall
         be adjusted upon the request of either the Seller, on the one hand, or
         the Buyer, on the other hand, made within sixty (60) days of the date
         the actual amounts become available. The Seller and the Buyer 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 2.8.

         2.9.     THE CLOSING. Unless otherwise agreed to by the Parties, the
closing of the transactions contemplated by this Agreement (the "CLOSING") shall
take place at the offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P., 225 Asylum
Street, Hartford, CT, commencing at 9:00 a.m. Eastern time on the date that is
five (5) days (or, if the fifth day is not a Business Day, then the next
Business Day following such fifth day) following the date on which all of the
conditions set forth in Sections 6.1 and 6.2 have either been satisfied or
waived by the Party for whose benefit such condition exists, such satisfaction
or waiver to conform to Section 11.12. The date of Closing is hereinafter called
the "CLOSING DATE" and shall be effective for all purposes herein as of 11:59
p.m. Eastern time on the Closing Date.

         2.10.    DELIVERIES BY THE SELLER AT THE CLOSING. At the Closing, the
Seller shall deliver the following to the Buyer, duly executed and properly
acknowledged, if appropriate:

                  (a)      deeds for the Real Property and Improvements,
         substantially in the form attached hereto as EXHIBIT A-1 and otherwise
         in a form suitable for recording;

                  (b)      the Bill of Sale, substantially in the form attached
         hereto as EXHIBIT B, for the tangible personal property included in the
         Acquired Assets;

                  (c)      the Assignment and Assumption Agreement, in the form
         attached hereto as EXHIBIT C, in recordable form if necessary;

                  (d)      the Property Tax Agreement, substantially in the form
         attached hereto as EXHIBIT D;

                  (e)      the Interconnection Agreement, in the form attached
         hereto as EXHIBIT E;

                  (f)      the Asset Demarcation Agreement, in the form attached
         hereto as EXHIBIT G;

                  (g)      if requested by the Buyer, the Generation Support
         Services Agreement, executed by Northeast Generation Services, Inc.;

                                       20
<Page>

                  (h)      the Release of Mortgage Indenture, substantially in
         the form attached hereto as EXHIBIT H;

                  (i)      a FIRPTA Affidavit executed by the Seller;

                  (j)      certificates of title for the vehicles and boats
         which are part of the Acquired Assets;

                  (k)      all attornment agreements, notices and other
         documents and instruments required for the assignment or other transfer
         of the Leases from the Seller to the Buyer, which agreements, notices,
         documents and instruments shall, upon the reasonable request of the
         Buyer, be in recordable form;

                  (l)      copies of all consents, waivers or approvals obtained
         by the Seller with respect to the Acquired Assets, the transfer of the
         Transferable Permits or the consummation of the transactions
         contemplated by this Agreement and the Related Agreements, to the
         extent specifically required under this Agreement or the Related
         Agreements;

                  (m)      the Environmental Consultant Reliance Letter in the
         form of Exhibit K hereto, duly executed and addressed to the Buyer;

                  (n)      a certificate from an authorized officer of the
         Seller, dated the Closing Date, to the effect that, to such officer's
         Knowledge, the conditions set forth in Sections 6.1(a), (b), (e) and
         (g) and Sections 6.2(c) and (d) have been satisfied;

                  (o)      a copy, certified by the Secretary or an Assistant
         Secretary of the Seller, of corporate resolutions authorizing the
         execution and delivery of this Agreement and the Related Agreements and
         instruments attached as exhibits hereto and thereto, and the
         consummation of the transactions contemplated hereby and thereby;

                  (p)      a certificate of the Secretary or an Assistant
         Secretary of the Seller which shall identify by name and title and bear
         the signature of the officers of the Seller authorized to execute and
         deliver this Agreement and the Related Agreements and instruments
         attached as exhibits hereto and thereto;

                  (q)      an opinion or opinions from one or more counsel to
         the Seller (any of whom may be an employee of the Seller), dated the
         Closing Date and reasonably satisfactory in form to the Buyer and its
         counsel, covering substantially the matters set forth in SCHEDULE
         2.10(q);

                  (r)      all such other instruments of sale, transfer,
         conveyance, assignment or assumption as the Buyer and its counsel may
         reasonably request in connection with the sale of the Acquired Assets,
         PROVIDED HOWEVER, that this Section 2.10(r) shall not require the
         Seller to prepare or obtain any surveys relating to the Real Property
         other than those previously provided to the Buyer; and

                  (s)      copies of the Title Commitments and surveys described
         in Schedule 2.1(a)(i).

                                       21
<Page>

         2.11.    DELIVERIES BY THE BUYER AT THE CLOSING. At the Closing, the
Buyer shall deliver to the Seller, properly executed and acknowledged, if
appropriate:

                  (a)      the Closing Purchase Price;

                  (b)      the Assignment and Assumption Agreement, in the form
         attached hereto as EXHIBIT C to this Agreement, duly executed by the
         Buyer, and if necessary or desirable to the Seller, in recordable form;

                  (c)      the Property Tax Agreement, substantially in the form
         attached hereto as EXHIBIT D;

                  (d)      the Interconnection Agreement, in the form attached
         hereto as EXHIBIT E;

                  (e)      the Asset Demarcation Agreement, in the form attached
         hereto as EXHIBIT G;

                  (f)      if requested by the Buyer, the Generation Support
         Services Agreement;

                  (g)      a certificate from an authorized officer of the
         Buyer, dated the Closing Date, to the effect that, to such officer's
         Knowledge, the conditions set forth in Sections 6.1(c) and (d) and
         Sections 6.2(a), (b), (e) and (g) have been satisfied;

                  (h)      a copy, certified by the Secretary or Assistant
         Secretary of the Buyer, of resolutions authorizing the execution and
         delivery of this Agreement and the Related Agreements and instruments
         attached as exhibits hereto and thereto, and the consummation of the
         transactions contemplated hereby and thereby;

                  (i)      a certificate of the Secretary or Assistant Secretary
         of the Buyer which shall identify by name and title and bear the
         signature of the officers of the Buyer authorized to execute and
         deliver this Agreement and the Related Agreements and instruments
         attached as exhibits hereto and thereto;

                  (j)      one or more opinions from counsel to the Buyer, dated
         the Closing Date and reasonably satisfactory in form to the Seller and
         its counsel, covering substantially the matters set forth in SCHEDULE
         2.11(j);

                  (k)      evidence of the Buyer's membership in NEPOOL; and

                  (l)      all such other instruments of purchase, sale,
         transfer, conveyance, delivery, receipt, assignment or assumption as
         the Seller and its counsel may reasonably request in connection with
         the sale or purchase of the Acquired Assets or assumption of the
         Assumed Liabilities.

                                       22
<Page>

3.       REPRESENTATIONS, WARRANTIES AND DISCLAIMERS OF THE SELLER. The Seller
represents and warrants to the Buyer that the statements contained in this
Section 3 are correct and complete as of the Effective Date.

         3.1.     ORGANIZATION OF THE SELLER. The Seller is duly organized,
validly existing and in good standing under the laws of the State of
Connecticut. Copies of the charter and by-laws of the Seller, each as amended to
date, have been heretofore delivered to the Buyer and are accurate and complete.

         3.2.     AUTHORIZATION OF TRANSACTION. The Seller has the power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and the Related Agreements and, subject to receipt of all the
Seller's Regulatory Approvals, to perform its obligations hereunder and
thereunder. All corporate actions or proceedings to be taken by or on the part
of the Seller to authorize and permit the due execution and valid delivery by
the Seller of this Agreement and the Related Agreements and the instruments
required to be duly executed and validly delivered by the Seller pursuant hereto
and thereto, the performance by the Seller of its obligations hereunder and
thereunder, and the consummation by the Seller of the transactions contemplated
herein and therein, have been duly and properly taken. This Agreement and the
Related Agreements have been duly executed and validly delivered by the Seller
and constitute the legal, valid and binding obligation of Seller, enforceable in
accordance with their terms and conditions.

         3.3.     NONCONTRAVENTION. Subject to the Seller obtaining the Seller's
Regulatory Approvals, neither the execution and the delivery of this Agreement
or any of the Related Agreements, nor the consummation of the transactions
contemplated hereby and thereby (including the assignments and assumptions
referred to in Sections 2.10(r) and 2.11(l) above), will (a) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, license or other restriction of any Governmental Authority to
which the Seller or any of its property is subject or any provision of the
charter or by-laws of the Seller, or (b) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which the Seller is bound or to which any of the Acquired Assets is subject
(or result in the imposition of any Lien upon any of the Acquired Assets),
except for matters that will not have a Material Adverse Effect or as disclosed
in SCHEDULE 3.3 or any other Schedule.

         3.4.     BROKERS' FEES. The Seller has no Liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.

         3.5.     TITLE TO ACQUIRED ASSETS. Except for Permitted Encumbrances,
the Seller has title to the Real Property to the extent, and only to the extent,
specified in the title policy commitments attached hereto on SCHEDULE 3.5 (the
"TITLE COMMITMENTS"). Except as set forth in SCHEDULE 3.5 and except for
Permitted Encumbrances, the Seller has good and valid title to the other
Acquired Assets.

         3.6.     LEGAL AND OTHER COMPLIANCE; PERMITS.

                  (a)      The Seller is in compliance with all current Laws
         applicable to the Acquired

                                       23
<Page>

         Assets or the Seller's operation of the Acquired Assets the violation
         of which could have a Material Adverse Effect, other than as disclosed
         in SCHEDULE 3.6 and other than with respect to matters covered by
         SECTION 3.12 below.

                  (b)      SCHEDULE 2.1(d) sets forth all Permits which are
         material to the ownership or operation of the Facilities, and also
         identifies those material Permits which are transferable or assignable
         by the Seller to the Buyer or which will pass to the Buyer as successor
         in title to the Facilities by operation of applicable Laws (the
         "TRANSFERABLE PERMITS").

         3.7.     TAXES. The Seller has filed all Tax Returns that it was
required to file, and has paid all Taxes that have become due as indicated
thereon, where the failure so to file or pay could have a Material Adverse
Effect, except where the Seller is contesting the same in good faith by
appropriate proceedings. There is no unpaid Tax due and payable that could have
a Material Adverse Effect on the Buyer's ownership, operation or use of the
Acquired Assets for which the Buyer could become liable.

         3.8.     CONTRACTS AND LEASES.

                  (a)      Except (i) as listed in SCHEDULE 2.1(c) or 2.1(e) or
         any other Schedule, (ii) for contracts, agreements, personal property
         leases, commitments, understandings or instruments which will expire
         prior to the Closing Date, and (iii) for agreements with suppliers
         entered into in the ordinary course of business that will not by their
         terms extend more than two years beyond the Closing Date and whose
         payment obligations do not exceed more than $50,000 individually and
         $500,000 in the aggregate, the Seller is not a party to any written
         contract, agreement, personal property lease, commitment, understanding
         or instrument which (x) is material to the business or operations of
         the Acquired Assets or (y) which provides for the sale of any amount of
         capacity or energy from any of the Acquired Assets (whether or not
         entered into in the ordinary course of business).

                  (b)      Except as disclosed in SCHEDULE 3.8(b) (i) each of
         the Contracts constitutes a valid and binding obligation of the Seller,
         (ii) the Seller is not in default in any material respect under any of
         the Contracts and, to the Seller's Knowledge, the other parties to the
         Contracts are not in default in any material respect under any thereof,
         and (iii) the Contracts may be transferred to the Buyer pursuant to
         this Agreement and will continue in full force and effect thereafter,
         in each case without breaching the terms thereof or resulting in the
         forfeiture or impairment of any material rights thereunder.

         3.9.     INSURANCE. Except as set forth in SCHEDULE 3.9, all material
policies of fire, liability, worker's compensation and other forms of insurance
owned or held by the Seller insuring the Acquired Assets are in full force and
effect, all premiums with respect thereto covering all periods up to and
including the date as of which this representation is being made have been paid
(other than retroactive premiums which may be payable with respect to
comprehensive general liability and worker's compensation insurance policies),
and no written notice of cancellation or termination has been received with
respect to any such policy which was not replaced on substantially similar terms
prior to the date of such cancellation. Except as described in SCHEDULE 3.9, as
of the date of this Agreement, the Seller has not been refused any

                                       24
<Page>

insurance with respect to the Acquired Assets nor has its coverage been limited
by any insurance carrier to which it has applied for any such insurance or with
which it has carried insurance during the last twelve months.

         3.10.    LITIGATION. Except as disclosed in SCHEDULE 3.10, no action,
suit, claim, demand or other proceeding is pending or, to Seller's Knowledge,
threatened that would be reasonably likely to result in a Material Adverse
Effect or that questions the validity of this Agreement or the Related
Agreements or of any action taken or to be taken pursuant to or in connection
with the provisions of this Agreement or the Related Agreements.

         3.11.    EMPLOYEES. The Collective Bargaining Agreement referenced in
SCHEDULE 3.11 is the only collective bargaining agreement to which the Seller is
a party and which governs terms and conditions of employment of employees of the
Seller whose employment relates primarily to the Acquired Assets. A true and
correct copy of the Collective Bargaining Agreement has heretofore been
delivered to the Buyer. Except as described in SCHEDULE 3.11, and except as to
such matters as will not have a Material Adverse Effect: (i) the Seller has not
experienced any labor disputes, strikes or work stoppages by such employees due
to labor disagreements since 1971 and to the Seller's Knowledge none is
currently pending; (ii) to the Seller's Knowledge the Seller is in compliance
with all applicable Laws respecting employment and employment practices, equal
employment opportunity, occupational health and safety and affirmative action,
terms and conditions of employment and wages and hours; (iii) the Seller has not
received written notice from any Governmental Authority of any unfair labor
practice charge, complaint or proceeding against the Seller pending or
threatened before the National Labor Relations Board or any other Governmental
Authority with respect to such employees; (iv) no arbitration proceeding arising
out of or under any collective bargaining agreement with respect to the Acquired
Assets is pending against the Seller; and (v) the Seller is in compliance in all
material respects with the Collective Bargaining Agreement.

         3.12.    ENVIRONMENTAL MATTERS. During the two-year period preceding
the Effective Date, except as disclosed in SCHEDULE 3.12, and except where such
matters, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect, (i) the Seller did not receive any written
notice from any Governmental Authority that it is not in compliance with
Environmental Laws or failed to obtain material Permits required for the
ownership or operation of any Acquired Asset under Environmental Laws; (ii) the
Seller did not receive any written notice from any Governmental Authority that
any Acquired Asset is listed under the Comprehensive Environmental Response,
Compensation Liability Information Systems or any similar state list; (iii) the
Seller did not receive any written notice from any Person alleging Liability for
any Environmental Claims; and (iv) the Seller was not required by any applicable
Environmental Laws to place any use or activities restrictions or any
institutional controls on any Acquired Assets. The Seller has no Knowledge of
any matters which could give rise to Environmental Liabilities which would
reasonably be expected to have a Material Adverse Effect which are not disclosed
or identified in the Phase I and Phase II Reports referred to in SCHEDULE 3.12.

                                       25
<Page>

         3.13.    CONDEMNATION. Except as set forth in SCHEDULE 3.13, the Seller
has received no written notice from any Governmental Authority of any pending or
threatened proceeding to condemn or take by power of eminent domain or
otherwise, by any Governmental Authority, all or any part of the Acquired
Assets, which would constitute a Major Loss.

         3.14.    REGULATION AS A UTILITY. The Seller is a public service
company and an electric company under C.G.S. Sections 16-1(4) and 16-1(8), and
is subject to regulation as such by the DPUC, and is a "subsidiary company" of a
"holding company" which is registered under (and as those terms are defined in)
the Public Utility Holding Company Act of 1935, as amended.

         3.15.    BENEFIT PLANS. SCHEDULE 3.15 lists as of the Effective Date,
all Employee Benefit Plans established, sponsored, maintained or contributed to
by (or to which there is an obligation to contribute of) the Seller in respect
of the Acquired Assets Employees. Accurate and complete copies of all such
Employee Benefit Plans (excluding Multiemployer Plans) have been made available
to the Buyer. Except as disclosed on SCHEDULE 3.15, the Seller does not
contribute to, and has no obligation to contribute to, any Multiemployer Plan.
No liability under Title IV or Section 302 of ERISA or Section 412 of the Code
has been incurred by the Seller with respect to the Acquired Assets Employees
that has not been satisfied in full, and to the Seller's Knowledge no condition
exists that presents a material risk to the Seller of incurring any such
liability, other than liability for premiums due the Pension Benefit Guaranty
Corporation, which premiums have been paid.

         3.16.    ASSETS USED IN OPERATION OF THE FACILITIES. Except as set
forth in Schedule 3.16, the Acquired Assets include all material assets and
properties that are used by the Seller in the operation of the Facilities on the
Effective Date.

         3.17.    SURVEYS OF FACILITIES. The surveys of the Facilities provided
by the Seller to the Buyer show the locations of all of the material electric
generating buildings and related facilities located at such Facilities.

         3.18.    YEAR 2000 COMPUTER PROBLEM. The Seller has performed all of
the work regarding addressing the Year 2000 Computer Problem which the Seller
has advised ISO New England and NEPOOL has been performed, as more particularly
identified in SCHEDULE 3.18. The disclosures regarding the Year 2000 Computer
Problem set forth in the Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 of Northeast Utilities and in the subsequent reports filed by
Northeast Utilities under the Securities Exchange Act of 1934, as amended, prior
to the date of this Agreement, are true and correct in all material respects
insofar as such disclosures pertain to the Acquired Assets.

         3.19.    INTELLECTUAL PROPERTY. SCHEDULE 2.1(b) discloses all of the
material intellectual property owned or leased by the Seller and used for the
physical operation of the Acquired Assets. the Seller has all right, title and
interest in or valid, binding and irrevocable rights to use such intellectual
property without material limitation, Liens or royalty burdens. To the Knowledge
of the Seller, none of such intellectual property included in the Acquired
Assets is being infringed by any other Person, and the Seller, to its Knowledge,
is not infringing and has not received notice that it is infringing (or
allegedly infringing) any intellectual property of any other Person in
connection with the operation of the Acquired Assets, which in either case could

                                       26
<Page>

reasonably be expected to have a Material Adverse Effect. With respect to such
intellectual property, there are no restrictions on transfer by the Seller to
the Buyer of such intellectual property which restrictions would have a Material
Adverse Effect.

         3.20.    DISCLAIMERS REGARDING ACQUIRED ASSETS. EXCEPT FOR ANY
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 3, THE ACQUIRED ASSETS
ARE SOLD "AS IS, WHERE IS," AND THE SELLER EXPRESSLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO
LIABILITIES, OPERATIONS OF THE FACILITIES, TITLE, CONDITION, VALUE OR QUALITY OF
THE ACQUIRED ASSETS OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER
INCIDENTS OF THE ACQUIRED ASSETS INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO
THE ACTUAL OR RATED GENERATING CAPABILITY OF ANY OF THE FACILITIES OR THE
ABILITY OF THE BUYER TO SELL FROM ANY OF THE FACILITIES ELECTRIC ENERGY,
CAPACITY OR OTHER PRODUCTS RECOGNIZED BY ISO NEW ENGLAND FROM TIME TO TIME, AND
THE SELLER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF
MERCHANTABILITY, USAGE, OR SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE
WITH RESPECT TO THE ACQUIRED ASSETS, OR ANY PART THEREOF, OR AS TO THE
WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR
PATENT, OR COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR AS TO THE CONDITION OF
THE ACQUIRED ASSETS, OR ANY PART THEREOF, INCLUDING, WITHOUT LIMITATION, THE
CONDITION OF THE ACQUIRED ASSETS WITH RESPECT TO THE YEAR 2000 COMPUTER PROBLEM,
OR WHETHER THE SELLER POSSESSES SUFFICIENT REAL PROPERTY OR PERSONAL PROPERTY TO
OPERATE THE ACQUIRED ASSETS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE
SELLER FURTHER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING
THE ABSENCE OF HAZARDOUS SUBSTANCES OR LIABILITY OR POTENTIAL LIABILITY ARISING
UNDER ENVIRONMENTAL LAWS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE SELLER EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY OF ANY KIND REGARDING THE CONDITION OF THE ACQUIRED
ASSETS OR THE SUITABILITY OF THE FACILITIES FOR OPERATION AS POWER PLANTS OR AS
SITES FOR THE DEVELOPMENT OF ADDITIONAL OR REPLACEMENT GENERATION CAPACITY AND
NO SCHEDULE OR EXHIBIT TO THIS AGREEMENT OR ANY RELATED AGREEMENT, NOR ANY OTHER
MATERIAL OR INFORMATION PROVIDED BY OR COMMUNICATIONS MADE BY THE SELLER, OR BY
ANY BROKER OR INVESTMENT BANKER, INCLUDING WITHOUT LIMITATION ANY INFORMATION OR
MATERIAL CONTAINED IN THE DESCRIPTIVE MEMORANDUM DATED AS OF FEBRUARY 10, 1999
AND ANY ORAL, WRITTEN OR ELECTRONIC RESPONSE TO ANY INFORMATION REQUEST PROVIDED
TO THE BUYER, WILL CAUSE OR CREATE ANY WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, CONDITION, VALUE OR QUALITY OF THE ACQUIRED ASSETS. NOTHING IN THIS
DISCLAIMER OR THIS AGREEMENT SHALL BE DEEMED TO AFFECT THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER ANY RELATED AGREEMENT FOR A

                                       27
<Page>

BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT CONTAINED IN SUCH RELATED
AGREEMENT.

4.       REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to the Seller that the statements contained in this Section 4 are
correct and complete as of the Effective Date.

         4.1.     ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Connecticut. Copies of the organizational documents and bylaws of the Buyer,
each as amended to date, have been heretofore delivered to the Seller and are
accurate and complete.

         4.2.     AUTHORIZATION OF TRANSACTION. The Buyer has the power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and the Related Agreements and, subject to receipt of all Buyer's
Regulatory Approvals, to perform its obligations hereunder and thereunder. All
corporate actions or proceedings to be taken by or on the part of the Buyer to
authorize and permit the due execution and valid delivery by the Buyer of this
Agreement, the Related Agreements and the instruments required to be duly
executed and validly delivered by the Buyer pursuant hereto and thereto, the
performance by the Buyer of its obligations hereunder and thereunder, and the
consummation by the Buyer of the transactions contemplated herein and therein,
have been duly and properly taken. This Agreement and the Related Agreements
have been duly executed and validly delivered by the Buyer and constitute the
valid and legally binding obligations of the Buyer, enforceable in accordance
with their terms and conditions.

         4.3.     NONCONTRAVENTION. Subject to the Buyer obtaining the Buyer's
Regulatory Approvals, neither the execution and the delivery of this Agreement
or any of the Related Agreements, nor the consummation of the transactions
contemplated hereby and thereby (including the assignments and assumptions
referred to in Sections 2.10(t) and 2.11(l) above), will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any Governmental Authority to which the
Buyer is subject or any provision of the organizational documents or bylaws of
the Buyer or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject, except for matters that will not have a Buyer Material Adverse Effect.

         4.4.     BROKERS' FEES. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.

         4.5.     LITIGATION. No action, suit, claim, demand or other proceeding
is pending or, to

                                       28
<Page>

the Buyer's Knowledge, threatened that would be reasonably likely to result in a
Buyer Material Adverse Effect or that questions the validity of this Agreement
or the Related Agreements or of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement or the Related Agreements.
There are no judgments, orders, decrees, citations, fines or penalties
heretofore assessed against the Buyer that have a Buyer Material Adverse Effect
or impair, estop, impede, restrain, ban or otherwise adversely affect the
Buyer's ability to satisfy or perform any of the Assumed Liabilities under any
federal, state or local Law.

         4.6.     NO KNOWLEDGE OF THE SELLER'S BREACH. The Buyer has no
Knowledge of any breach by the Seller of any representation or warranty
contained in Section 3 hereof, or of any condition or circumstance that would
excuse the Buyer from performance of its obligations under this Agreement or the
Related Agreements.

         4.7.     AVAILABILITY OF FUNDS. The Buyer has sufficient funds
available to it to pay the Closing Purchase Price on the Closing Date.

         4.8.     "AS IS" SALE. The representations and warranties set forth in
Section 3 hereof constitute the sole and exclusive representations and
warranties of the Seller in connection with the transactions contemplated
hereby. There are no representations, warranties, covenants, understandings or
agreements among the Parties regarding the Acquired Assets or their transfer
other than those incorporated in this Agreement. Except for the representations
and warranties expressly set forth in Section 3, the Buyer disclaims reliance on
any representations, warranties or guarantees, either express or implied, by the
Seller including but not limited to any representation or warranty expressed or
implied in the Descriptive Memorandum dated as of February 10, 1999 and any
oral, written or electronic response to any information request provided to the
Buyer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE BUYER ACKNOWLEDGES AND
AGREES THAT THE ACQUIRED ASSETS ARE BEING ACQUIRED "AS IS, WHERE IS" ON THE
CLOSING DATE, AND IN THEIR CONDITION ON THE CLOSING DATE, AND THAT PRIOR TO THE
EXECUTION OF THIS AGREEMENT, THE BUYER HAS CONDUCTED TO ITS SATISFACTION ALL
NECESSARY AND SUFFICIENT EXAMINATION OF THE ACQUIRED ASSETS, AND THAT THE BUYER
IS RELYING ON ITS OWN EXAMINATION OF THE ACQUIRED ASSETS, AND IS NOT RELYING ON
ANY REPRESENTATION OR WARRANTY MADE BY THE SELLER, OR ANY BROKER OR INVESTMENT
BANKER. THE BUYER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS SET FORTH IN
SECTION 9.1, THE REPRESENTATIONS AND WARRANTIES OF THE SELLER SET FORTH IN THIS
AGREEMENT TERMINATE AS OF THE CLOSING DATE OR TERMINATION OF THIS AGREEMENT
PURSUANT TO SECTION 10.1, AND THAT FOLLOWING THE CLOSING DATE OR SUCH
TERMINATION, AS THE CASE MAY BE, THE BUYER SHALL HAVE NO RECOURSE AGAINST THE
SELLER WITH RESPECT TO ANY BREACH OF SUCH REPRESENTATIONS AND WARRANTIES.

         4.9.     AFFILIATE GUARANTY. If the Buyer assigns its rights and
interests to an Affiliate or Affiliates pursuant to Section 11.5 hereof, the
Buyer shall be deemed to have made the representations and warranties in this
Section 4 on behalf of itself and any such Affiliate as if such Affiliate were a
signatory to this Agreement.

                                       29
<Page>

         4.10.    QUALIFIED BUYER. To the Knowledge of the Buyer, the Buyer is
qualified to obtain any Permits necessary for the Buyer to own and operate the
Acquired Assets as of the Closing, to the extent such operation is either
required by any Related Agreement or this Agreement, or is contemplated by the
Buyer.

         4.11.    CANDLEWOOD LAKE BEACHES SALES AND LOVER'S LEAP LAND SALE DUE
DILIGENCE. The Buyer has been given an opportunity to evaluate all obligations
arising from ownership of the property covered by the Candlewood Lake Beaches
Sales and the Lover's Leap Land Sale.

5.       COVENANTS. The Parties agree as follows:

         5.1.     GENERAL. Prior to the Closing, each of the Parties will use
its best efforts to take all actions and to do all things necessary, proper or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement and the Related Agreements prior to January 1,
2000 (including satisfaction, but not waiver, of the closing conditions set
forth in Section 6 below).

         5.2.     NOTICES, CONSENTS AND APPROVALS.

                  (a)      The Seller and the Buyer shall each file or cause to
         be filed with the Federal Trade Commission and the United States
         Department of Justice any notifications required to be filed under the
         Hart-Scott-Rodino Act and the rules and regulations promulgated
         thereunder with respect to the transactions contemplated hereby. The
         Parties shall use Commercially Reasonable Efforts to make such filings,
         as promptly as possible after the Effective Date, to respond promptly
         to any requests for additional information made by either of such
         agencies, and to cause the waiting periods under the Hart-Scott-Rodino
         Act to terminate or expire at the earliest possible date after the date
         of filing. The Buyer will pay all filing fees under the
         Hart-Scott-Rodino Act, but each Party will bear its own costs for the
         preparation of any filing. Both Parties shall use Commercially
         Reasonable Efforts to cause any waiting period under the
         Hart-Scott-Rodino Act with respect to the transactions contemplated by
         this Agreement and the Related Agreements to expire or terminate at the
         earliest possible time.

                  (b)      Prior to the Closing, the Seller and the Buyer shall
         cooperate with each other and use all Commercially Reasonable Efforts
         to (i) promptly prepare and file all necessary documentation, (ii)
         effect all necessary applications, notices, petitions and filings and
         execute all agreements and documents, (iii) obtain the transfer or
         reissuance to the Buyer of all necessary Permits and (iv) obtain all
         necessary consents, approvals and authorizations of all other parties
         necessary or advisable to consummate the transactions contemplated by
         this Agreement or in any of the Related Agreements (including, without
         limitation, the Seller's Regulatory Approvals and the Buyer's
         Regulatory Approvals) or required by the terms of any note, bond,
         mortgage, indenture, deed of trust, license, franchise, permit,
         concession, contract, lease or other instrument to which the Seller or
         the Buyer is a party or by which any of them is bound. The Seller and
         the Buyer shall have the right to review in advance all
         characterizations of the information relating to the transactions
         contemplated by this Agreement or in any of the Related Agreements
         which appear in any filing made in connection with the transactions
         contemplated hereby or thereby. Notwithstanding the foregoing, the
         Seller is not obligated to assign or transfer

                                       30
<Page>

         any interest in any Transferable Permits, including, without
         limitation, those obtained pursuant to the applicable requirements of
         Environmental Laws, if the consent or approval of the third Person for
         such assignment or transfer cannot be obtained.

                  (c)      The Buyer shall have primary responsibility for
         securing the transfer or reissuance of the Permits (including the
         Transferable Permits) effective as of the Closing Date. The Seller
         shall cooperate with the Buyer's efforts in this regard and the Seller
         shall use each and every Commercially Reasonable Effort to assist in
         the transfer or reissuance when so requested by the Buyer. If Buyer is
         unable to secure the transfer or reissuance of one or more Permits
         effective on the Closing Date, the Seller shall continue to cooperate
         with the Buyer's efforts to secure such transfer or reissuance
         following the Closing Date.

         5.3.     OPERATION OF BUSINESS. During the Interim Period, the Seller
will operate and maintain the Acquired Assets in the ordinary course consistent
with Good Utility Practices (including the continued scheduling and performance
of regular and customary maintenance and maintenance overhauls), unless
otherwise contemplated by this Agreement or with the prior written consent of
the Buyer. Without limiting the generality of the foregoing, the Seller shall
not, without the prior written consent of the Buyer, which Buyer shall not
unreasonably withhold or delay, during the Interim Period, with respect to the
Acquired Assets:

                  (a)      sell, lease (as lessor), transfer or otherwise
         dispose of, any of the Acquired Assets, other than as used, consumed or
         replaced in the ordinary course of business consistent with Good
         Utility Practices, or encumber, pledge, mortgage or suffer to be
         imposed on any of the Acquired Assets any encumbrance other than
         Permitted Encumbrances, other than such additional financing under the
         Mortgage Indenture as shall not prevent the Seller from obtaining a
         Mortgage Indenture Release substantially in the form attached hereto as
         EXHIBIT H;

                  (b)      make any material change in the levels of Inventories
         customarily maintained by the Seller with respect to the Acquired
         Assets, except for such changes that are consistent with Good Utility
         Practices;

                  (c)      amend, terminate or otherwise modify any Contract,
         Lease or Permit other than in the ordinary course of business, or as
         may be required in connection with transferring the Seller's rights or
         obligations thereunder to the Buyer pursuant to this Agreement, or as
         may be required in connection with the renewal of FERC licenses with
         respect to certain of the Acquired Assets; provided, that the Seller
         shall not propose or agree to any change to the Draft Application for
         Relicensing of the Housatonic Project (including the Falls Village
         Project) in the form dated March 1999 in any material respect without
         the consent of the Buyer, which Buyer shall not unreasonably withhold
         or delay;

                  (d)      enter into, amend, or otherwise modify any real or
         personal property Tax

                                       31
<Page>

         agreement, treaty or settlement;

                  (e)      enter into any commitment for the purchase or sale of
         fuel (whether commodity or transportation) having a term greater than
         nine (9) months and not terminable either (i) automatically on the
         Closing Date; or (ii) by option of the Buyer in its sole discretion at
         any time after the Closing Date, where the aggregate payment under such
         fuel commitment and all other then outstanding fuel commitments would
         be expected to exceed $75 million;

                  (f)      make any capital expenditures that are not
         Pre-Approved Capital Expenditures or enter into a Capital Commitment
         with respect thereto, except for those capital expenditures or Capital
         Commitments necessitated by Good Utility Practice, with respect to
         which the Seller shall advise the Buyer of the proposed incurrence
         thereof not less than thirty days prior to the time the capital
         expenditures are to be made or a Capital Commitment with respect
         thereto undertaken (or such shorter period as may be necessitated by an
         emergency situation), and with respect to which the Buyer shall
         promptly deliver the written consent contemplated by this Section 5.3
         unless the Buyer reasonably objects thereto.

Notwithstanding anything in Section 5.3 to the contrary, the Seller may, in its
sole discretion, (i) make Pre-Approved Capital Expenditures or incur a Capital
Commitment with respect thereto and (ii) make Capital Commitments for which an
adjustment to the Initial Purchase Price will be made pursuant to Section
2.6(b).

         5.4.     FULL ACCESS; YEAR 2000 COMPUTER PROBLEM

                  (a)      During the Interim Period, the Seller will permit the
         Buyer and Representatives of the Buyer during normal business hours (i)
         to have access upon reasonable notice, in a manner so as not to
         interfere with the normal business operations of the Seller, to all
         premises, properties, management, personnel, books, records (including
         Tax records) and documents associated with the Acquired Assets; (ii)
         permit the Buyer to make such reasonable inspections thereof as the
         Buyer may reasonably request; and (iii) furnish the Buyer with a copy
         of each material report, schedule or other document filed or received
         by it with respect to the Acquired Assets with a Governmental
         Authority. Notwithstanding the foregoing, and without limiting the
         generality of the confidentiality provisions set forth in Section 7
         hereof, the Seller shall: (i) not provide any information that the
         Seller or the Seller's counsel believes constitutes or could be deemed
         to constitute a waiver of the attorney-client privilege, and (ii) not
         be required to supply the Buyer with any information or records that
         the Seller is under a legal obligation not to supply, including,
         without limitation, any Acquired Assets Employees' Records.

                  (b)      During the Interim Period, the Seller shall consult
         with the Buyer and cooperate with the Buyer's reasonable requests
         regarding modifications to any hardware, software or firmware
         (including embedded microcontrollers in non-computer equipment)
         included in the Acquired Assets so as to ensure to the extent
         practicable that on and following the Closing Date the operation of the
         Acquired Assets by the Buyer will not be interrupted or adversely
         affected due to the Year 2000 Computer Problem. Any amounts

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         expended by the Seller at the request of the Buyer under this Section
         5.4(b) shall constitute an adjustment to the Initial Purchase Price
         pursuant to Section 2.6(a) hereof.

                  (c)      During the Interim Period, at the sole cost and
         expense of the Buyer, the Seller will permit designated employees or
         Representatives of the Buyer (the "Buyer's Observers") to observe all
         operations of the Seller related to the Acquired Assets and such
         observation shall be permitted on a cooperative basis in the presence
         of personnel of the Seller during normal business hours of the Seller;
         provided, however, that the Buyer's Observers shall not unreasonably
         interfere with the operation of the Acquired Assets by the Seller.

         5.5.     INTERIM PERIOD NOTICE.

                  (a)      Each Party shall notify the other promptly if any
         information comes to its attention prior to the Closing that is likely
         (i) to excuse it from the performance of its obligations under this
         Agreement or the Related Agreements or (ii) cause any condition to
         close set forth in Sections 6.1 or 6.2 not to be satisfied.

                  (b)      The Seller shall notify the Buyer of the existence of
         any matter which would cause any of the representations or warranties
         in Section 3 above to be untrue or incorrect. Unless the Buyer has the
         right to terminate this Agreement pursuant to Section 10.1(b)(vi) below
         by reason of such notice and exercises that right within the period of
         15 days referred to in Section 10.1(b)(vi) below, the written notice
         pursuant to this Section 5.5(b) shall be deemed to have amended the
         appropriate Schedule or Schedules as of the Effective Date, to have
         qualified the representations and warranties contained in Section 3
         above as of the Effective Date, and to have cured any misrepresentation
         or breach of warranty that otherwise might have existed hereunder by
         reason of the existence of such matter.

                  (c)      The Buyer may elect at any time to notify the Seller
         of the existence of any matter, which if in existence on the Effective
         Date or the Closing Date would or might cause any of the
         representations or warranties in Section 4 above to be untrue or
         incorrect. Unless the Seller has the right to terminate this Agreement
         pursuant to Section 10.1(c)(vi) below by reason of such notice and
         exercises that right within the period of 15 days referred to in
         Section 10.1(c)(vi) below, the written notice pursuant to this Section
         5.5(c) shall be deemed to have amended the appropriate Schedule or
         Schedules as of the Effective Date, to have qualified the
         representations and warranties contained in Section 4 above as of the
         Effective Date, and to have cured any misrepresentation or breach of
         warranty that otherwise might have existed hereunder by reason of the
         existence of such matter.

         5.6.     FURTHER ASSURANCES.

                  (a)      At any time and from time to time after the Closing,
         at the request of a Party, the other Party will execute and deliver
         such instruments of sale, transfer, conveyance, assignment and
         confirmation and take such action as the Seller and the Buyer may both
         reasonably agree is necessary to transfer, convey and assign to the
         Buyer, and to confirm the Buyer's title to or interest in the Acquired
         Assets and Assumed Liabilities or to put

                                       33
<Page>

         the Buyer in actual possession and operating control of the Acquired
         Assets.

                  (b)      In the event that any asset that is an Acquired Asset
         shall not have been conveyed to the Buyer at the Closing, the Seller
         shall, subject to Sections 5.6(c), (d) and (e), use its best efforts to
         convey such asset to the Buyer as promptly as is practicable after the
         Closing.

                  (c)      To the extent that the Seller's rights under any
         Contract or Lease may not be assigned without the consent of another
         Person which consent has not been obtained by the Closing Date, this
         Agreement shall not constitute an agreement to assign the same if an
         attempted assignment would constitute a breach thereof or be unlawful,
         and the Seller, at its expense, shall use its Commercially Reasonable
         Efforts to obtain any such required consent(s) as promptly as possible.
         The Seller and the Buyer agree that if any consent to an assignment
         shall not be obtained, or if any attempted assignment would be
         ineffective or would impair the Buyer's rights and obligations under
         the Contract or Lease in question, so that the Buyer would not in
         effect acquire the benefit of all such rights and obligations, the
         Seller, to the maximum extent permitted by law and such Contract or
         Lease, shall, after the Closing, appoint the Buyer to be the Seller's
         agent with respect to such Contract or Lease, and the Seller shall, to
         the maximum extent permitted by law and such Contract or Lease, enter
         into such reasonable arrangements with the Buyer as are necessary to
         provide the Buyer with the benefits and obligations of such Contract or
         Lease. The Seller and the Buyer shall cooperate and shall each use
         their Commercially Reasonable Efforts after the Closing to obtain an
         assignment of such Contract or Lease to the Buyer; PROVIDED that
         neither the Seller nor the Buyer shall have any obligation to offer or
         pay any consideration in order to obtain any such consents.

                  (d)      To the extent that the Seller's rights under any
         warranty or guaranty described in Section 2.1(b) may not be assigned
         without the consent of another Person, which consent has not been
         obtained by the Closing Date, this Agreement shall not constitute an
         agreement to assign the same, if an attempted assignment would
         constitute a breach thereof, or be unlawful. The Seller and the Buyer
         agree that if any consent to an assignment of any such warranty or
         guaranty would be ineffective or would impair the Buyer's rights and
         obligations under the warranty or guaranty in question, so that the
         Buyer would not in effect acquire the benefit of all such rights and
         obligations, the Seller shall use Commercially Reasonable Efforts, at
         the Buyer's sole cost and expense, to the extent permitted by law and
         such warranty or guaranty, to enforce such warranty or guaranty for the
         benefit of the Buyer so as to the maximum extent possible to provide
         the Buyer with the benefits and obligations of such warranty or
         guaranty. Notwithstanding the foregoing, the Seller shall not be
         obligated to bring or file suit against any Third Party, PROVIDED that
         if the Seller shall determine not to bring or file suit after being
         requested by the Buyer to do so, the Seller shall assign, to the extent
         permitted by law or any applicable agreement or contract, its rights in
         respect of the claims so that the Buyer may bring or file such suit.

                                       34
<Page>

                  (e)      To the extent that any personal property lease cannot
         be assigned to the Buyer or is not subject to arrangements described in
         Section 5.6(c), upon the Buyer's request and at the Buyer's sole
         expense, the Seller will use Commercially Reasonable Efforts to acquire
         the assets relating to such lease and to include them in the Acquired
         Assets before the Closing Date.

                  (f)      Following the Closing, the Seller shall cooperate
         with the Buyer to effect a conveyance to the Buyer of such additional
         land and/or associated flowage rights as the Seller may own and as may
         be necessary in connection with the renewal by FERC of the current
         licenses for the Housatonic River Project (Projects 2576 and 2597)
         because of a decision by FERC to include such land within the Project
         boundary. Any such conveyance by the Seller to the Buyer shall be at a
         price equal to the fair market value of the land and/or associated
         flowage rights conveyed, as shall be determined by an appraisal
         conducted by a single appraiser selected by the Seller and reasonably
         acceptable to the Buyer. The Seller's obligations hereunder shall be
         subject to the receipt by the Seller of all necessary approvals,
         consents or waivers from all appropriate Governmental Authorities
         including, without limitation, DPUC approval pursuant to C.G.S. Section
         16-43, and waivers from any Governmental Authorities of any first
         refusal or similar rights they may have with respect to the property in
         question, and the Seller shall not be obligated to convey any land
         and/or associated flowage rights to the Buyer under this clause if any
         such Governmental Authority fails to provide any such approval, consent
         or waiver or exercises any applicable rights to purchase the property
         and/or flowage rights in question. The Seller's obligations under this
         clause shall terminate upon the issuance by FERC of license renewals
         for the Housatonic River Project.

         5.7.     EMPLOYEE MATTERS.

                  (a)      The Buyer shall offer employment, commencing as of
         midnight on the Closing Date, to all employees of the Seller who are
         represented by the Locals and who were employed in the operation of the
         Acquired Assets at any time during the three-month period prior to the
         Closing Date, at levels of wages and overall compensation not lower
         than each such employee's level of wages and overall compensation as of
         the Effective Date; provided that the Buyer shall recognize all
         increases in wages made in the ordinary course of business and in
         accordance with the Collective Bargaining Agreement (as defined
         hereinbelow) between the Effective Date and the Closing Date. Those
         employees who accept such offer of employment are hereinafter referred
         to as the "Represented Employees". All such offers of employment shall
         be made in accordance with all applicable laws and regulations and the
         Collective Bargaining Agreement between the Seller and the Locals dated
         June 1, 1998, as amended by the Memorandum of Understanding dated
         December 17, 1998 between the Locals and the Seller (the "MOU", and,
         together with the above-referenced Collective Bargaining Agreement,
         referred to herein as the "Collective Bargaining Agreement"). Effective
         as of the Closing Date, the Buyer shall agree to be bound by the terms
         of the Collective Bargaining Agreement and to thereafter comply with
         all applicable obligations thereunder, subject to changes negotiated
         with and acceptable to the Locals.

                  (b)      The Buyer agrees to offer employment, commencing as
         of midnight on the

                                       35
<Page>

         Closing Date, for a period of at least twelve months (the "Minimum
         Employment Period") to all employees of the Seller who were employed in
         the operation of the Acquired Assets at any time during the three-month
         period prior to the Closing Date, other than Represented Employees, at
         levels of wages and overall compensation not lower than each such
         employee's level of wages and overall compensation as of the Effective
         Date; provided that the Buyer shall recognize all increases in wages
         made in the ordinary course of business between the Effective Date and
         the Closing Date; and provided, further, that nothing herein shall
         prevent the Buyer from terminating any Non-Represented Employee's
         employment for cause during the Minimum Employment Period. Those
         employees who accept such offer of employment are hereinafter referred
         to as the "Non-Represented Employees, and the Non-Represented Employees
         and the Represented Employees are hereafter referred to as the
         "Acquired Assets Employees". All such offers of employment shall be
         made in accordance with all applicable laws. Notwithstanding anything
         herein to the contrary, all Non-Represented Employees will be employed
         as at-will employees whose employment may be terminated at any time
         with or without cause or reason by either the employee or the Buyer. In
         addition, the Buyer shall provide to any Non-Represented Employee who
         is furloughed during the six months following the Minimum Employment
         Period out-placement assistance and tuition reimbursement consistent
         with that provided to the Represented Employees in the Locals 420 and
         457 MOU. For purposes of this Section 5.7, the term "furloughed" shall
         refer to the termination of employment with or without possibility of
         recall, made by the Buyer without cause.

                  (c)      As soon as practical after the Effective Date, Buyer
         shall take all action necessary and appropriate to establish and
         maintain a tax qualified pension plan for the Acquired Assets Employees
         (the "Buyer's Plan").

                  (i)      The Buyer shall provide a minimum level of pension
                           benefits calculated using the pension benefit formula
                           applicable to each Acquired Asset Employee under the
                           NUSCO Retirement Plan (the "Seller's Plan") as of the
                           Effective Date. The Buyer's minimum obligation with
                           regard to this pension benefit will be calculated as
                           the difference between (a) the Acquired Assets
                           Employee's total pension benefit as calculated as of
                           the employee's retirement date using (i) the pension
                           benefit formula under the Seller's Plan applicable to
                           the employee as of the Effective Date, (ii) such
                           employee's final average earnings (as defined in the
                           Seller's Plan) as of the employee's retirement date,
                           taking into account compensation earned from the
                           Seller and the Buyer, (iii) such employee's total
                           years of service with the Seller and the Buyer as of
                           the employee's retirement date, and (iv) covered
                           compensation as of the employee's retirement date and
                           (b) the pension benefit payable to the employee by
                           the Seller at retirement as follows: the pension
                           benefit payable to each Acquired Assets Employee at
                           age 65 by the Seller shall be calculated by the
                           Seller as of the Closing Date, based upon (i) the
                           pension benefit formula under the Seller's Plan
                           applicable to the employee as of the Closing Date,
                           (ii) years of credited service with the Seller as of
                           the Closing Date, (iii) final average earnings (as
                           defined in the Seller's Plan) as of the Closing Date,
                           and (iv) covered compensation as of the Closing Date.
                           This benefit shall be a vested

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<Page>

                           terminated benefit subject to the vested terminated
                           actuarial factors applied under the Seller's Plan.

                  (ii)     The Seller shall provide each Acquired Assets
                           Employee with a vested and non-forfeitable right to a
                           benefit equal to his accrued benefit under the
                           Seller's Plan determined as of the Closing Date as
                           described in Section 5.7(c)(i) above.

                  (iii)    If the Buyer terminates the employment of any
                           Eligible Non-Represented Employee (as defined below),
                           the Buyer will provide the benefits described in
                           Schedule 5.7(c)(iii). An Eligible Non-Represented
                           Employee is an employee whose age on the date of
                           announcement of the successful bidder(s) is between
                           50 and 54 years, inclusive, and whose age plus years
                           of credited service under the Seller's Plan on the
                           same date equals or exceeds 65 years.

                  (iv)     Effective September 30, 1999, the Seller's Plan will
                           permit employees age 55 and older to retire on or
                           after January 1, 2000 with full pension benefits if
                           the sum of the employee's age and years of credited
                           service equals 85 at such employee's termination date
                           (the "Rule of 85"). The Buyer shall apply the Rule of
                           85 to all Acquired Assets Employees.

                  (d)      The Buyer shall establish and maintain for the
         Non-Represented Employees group for a period of at least twelve months
         following the Closing Date plans and programs, which in the aggregate,
         shall be generally comparable to the existing plans and programs
         provided to such employees by the Seller as of the Effective Date as
         listed on Schedule 3.15.

                  (e)      The Buyer shall apply each Acquired Assets Employee's
         prior service with the Seller toward any eligibility, vesting or other
         waiting period requirements under the Buyer's Employee Benefit Plans
         (including the Buyer's Plan) to the extent such conditions were
         satisfied under the Seller's Employee Benefit Plans prior to the
         Closing Date. In addition, the Buyer shall waive all limitations with
         respect to preexisting conditions, exclusions and waiting periods with
         respect to participation and coverage requirements under the Buyer's
         Employee Benefit Plans and credit each Acquired Assets Employee for any
         co-payments and deductibles paid prior to the Closing Date under any
         such plans in which each Acquired Assets Employee participates. The
         Buyer shall vest each Acquired Assets Employee to the extent such
         employee is vested under the Seller's Employee Benefit Plans as of the
         Closing Date.

                  (f)      Within a reasonable time prior to the Closing Date,
         the Seller shall provide the Buyer with such pertinent data or
         information as the Buyer shall reasonably require to determine each
         Acquired Assets Employee's service, compensation and accrued benefits

                                       37
<Page>

         under the Seller's Plan before the Closing Date.

                  (g)      The authorized complement of employees (by position)
         for the Acquired Assets, as of the Effective Date, is set forth on
         Schedule 5.7(g).

                  (h)      The Seller shall provide and remain liable for any
         and all continuation of coverage under the Seller's Employee Benefit
         Plans as required under Sections 601 through 608 of ERISA and Section
         4980B of the Code with respect to any person as to whom a "qualifying
         event" as defined in Section 4980 of the Code occurred on or prior to
         the Closing Date.

                  (i)      On or before the Closing Date, the Seller shall
         terminate the employment of the Acquired Assets Employees and shall be
         solely responsible for the payment of all wages and compensation
         thereupon legally owing to or with respect to the Acquired Assets
         Employees including, without limitation, accrued and payable vacation
         pay, bonuses, severance pay, overtime, and all benefits under any
         Employee Benefit Plan that became payable on account of such
         termination of employment or any other amounts to which the Acquired
         Assets Employees may be entitled for services rendered prior to their
         termination or by virtue of their termination. The Seller shall retain
         any and all liability under the Seller's Employee Benefit Plans for
         retirees of the Seller as of the Closing Date.

                  (j)      The Seller agrees to timely perform and discharge all
         requirements under the WARN Act and under applicable state and local
         Laws for the notification of its employees arising from the sale of the
         Acquired Assets to the Buyer up to and including the Closing Date,
         including those employees who will become Acquired Assets Employees
         effective as of the Closing Date. After the Closing Date, the Buyer
         shall be responsible for performing and discharging all requirements
         under the WARN Act and under applicable state and local laws and
         regulations for the notification of its employees, whether Acquired
         Assets Employees or otherwise. All severance and other costs associated
         with workforce restructuring activities associated with the Assets
         and/or the Acquired Assets Employees subsequent to the Closing Date
         shall be borne solely by the Buyer.

         5.8.     ACCESS AFTER CLOSING.

                  (a)      RECORDS. For a period of five (5) years after the
         Closing Date, each Party shall have reasonable access to all of the
         records, books and documents related to the Acquired 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
         the Seller prior to the Closing Date or the operations of Buyer after
         the Closing Date. Such access shall be afforded upon receipt of
         reasonable advance notice and during normal business hours. The Party
         seeking such access shall be solely responsible for any costs or
         expenses incurred by it pursuant to this Section 5.8(a). If a Party
         shall desire to dispose of any records, books or documents that may
         relate to operation of the Acquired Assets before the Closing prior to
         the expiration of such five-year period, such Party shall, prior to
         such disposition, give to the other Party a reasonable opportunity, at
         the other Party's expense, to segregate and remove such records, books
         or documents as the requesting Party may select.

                                       38
<Page>

                  (b)      EMPLOYEES. For a period of five (5) years after the
         Closing Date, the Seller shall have reasonable access to the Acquired
         Assets Employees and the Buyer shall have reasonable access to the
         Seller's employees, for purposes of consultation or otherwise, to the
         extent that such access may reasonably be required by the Seller or the
         Buyer in connection with matters relating to or affected by the
         operations of the Seller prior to the Closing or the operations of the
         Buyer following the Closing, so long as the duration of any employee's
         time commitment with respect thereto is not extensive and does not
         materially impair said employee's performance of his or her duties.

         5.9.     NEPOOL. At the Closing, the Buyer shall be a member in good
standing in NEPOOL. Except as required to preserve system reliability and in
compliance with the requirements of the ISO or NEPOOL, and as may be otherwise
provided in any Related Agreement, the Seller shall not interfere with the
Buyer's efforts to expand or modify generation capacity at any of the Sites.

         5.10.    RISK OF LOSS. Except as otherwise provided in this Section
5.10, during the Interim Period all risk of loss or damage to the Acquired
Assets shall be borne by the Seller. If during the Interim Period the Acquired
Assets are damaged by fire or other casualty (each such event, an "EVENT OF
LOSS"), or are taken by a Governmental Authority by exercise of the power of
eminent domain (each, a "TAKING"), then the following provisions shall apply:

                  (a)      the occurrence of (i) any one or more Events of Loss,
         as a result of which the aggregate costs to restore, repair or replace,
         less any insurance proceeds received or payable to the Seller in
         connection with such Event or Events of Loss (provided that any
         insurance proceeds received or payable in connection with an Event or
         Events of Loss are either used to restore, repair or replace such Event
         or Events of Loss or made available to the Buyer), are reasonably
         estimated to be an amount less than or equal to two percent (2%) of the
         Initial Purchase Price, and/or (ii) any one or more Takings, as a
         result of which the aggregate condemnation proceeds equal an amount
         less than or equal to two percent (2%) of the Initial Purchase Price,
         shall have no effect on the transactions contemplated hereby;

                  (b)      upon the occurrence of (i) any one or more Events of
         Loss, as a result of which the aggregate costs to restore, repair or
         replace, less any insurance proceeds received or payable to the Seller
         in connection with such Event or Events of Loss (provided that any
         insurance proceeds received or payable in connection with an Event or
         Events of Loss are either used to restore, repair or replace such Event
         or Events of Loss or made available to the Buyer), are reasonably
         estimated to be an amount in excess of two percent (2%) of the Initial
         Purchase Price, or (ii) any one or more Takings, as a result of which
         the aggregate condemnation proceeds equal an amount in excess of two
         percent (2%) of the Initial Purchase Price (a "MAJOR LOSS"), the Seller
         shall have, in the case of a Major Loss relating to one or more Events
         of Loss, the option, exercised by notice to the Buyer, to restore,
         repair or replace the damaged Acquired Assets prior to Closing. If the
         Seller elects to restore, repair or replace the Acquired Assets
         relating to a Major Loss, which election shall be made by notice to the
         Buyer within fifteen (15) days following the occurrence of the Major
         Loss, the completion of the repair, replacement or restoration will be
         a condition to the Closing and the Closing Date shall be postponed at
         the election of the Seller for the amount of time reasonably necessary
         to complete the restoration,

                                       39
<Page>

         repair or replacement, not to exceed one hundred and eighty (180) days
         without the Buyer's consent. If the Seller elects not to restore,
         repair or replace the Acquired Assets affected by a Major Loss, or such
         Major Loss is the result of one or more Takings, the provisions of
         Section 5.10(c) will apply;

                  (c)      in the event that the Seller elects not to restore,
         repair or replace a Major Loss, or in the event that the Seller, having
         elected to repair, replace or restore the Major Loss, fails to complete
         the repair, replacement or restoration within the one hundred eighty
         (180) days (or such longer period as the Buyer shall have consented
         to), or in the event that a Major Loss is the result of one or more
         Takings, then the Parties shall, within thirty (30) days following the
         Seller's election, failure to complete, or the occurrence of such
         Takings, as the case may be, negotiate in good faith an equitable
         adjustment in the Purchase Price to reflect the impact of the Major
         Loss, as mitigated by any repair, replacement or restoration work
         actually completed by the Seller, on the Acquired Assets being sold to
         the Buyer, and proceed to Closing. To assist the Buyer in its
         evaluation of any and all Events of Loss, the Seller shall provide the
         Buyer such access to the Acquired Assets and such information as the
         Buyer may reasonably request in connection therewith; and

                  (d)      in the event that the parties fail to reach agreement
         on an equitable adjustment of the Purchase Price within the thirty (30)
         days provided in Section 5.10(c), then the Buyer shall have the
         election, exercisable by notice to the Seller within fifteen (15) days
         immediately following the expiration of the thirty (30) day period, to
         either (a) proceed with the consummation of the transaction at Closing,
         with a reduction in the Purchase Price consistent with the Seller's
         last offer communicated to the Buyer, in which event the Seller shall
         assign over or deliver to the Buyer at Closing all condemnation
         proceeds or insurance proceeds which the Seller receives, or to which
         the Seller becomes entitled by virtue of the Events of Loss, less any
         costs and expenses reasonably incurred by the Seller in obtaining such
         condemnation proceeds or insurance proceeds, or (b) terminate this
         Agreement, in which event this Agreement shall terminate and neither
         Party shall thereafter have any obligation or liability to the other by
         reason of this Agreement. If the Buyer fails to make the election
         within the fifteen (15) day period, the Buyer will be deemed to have
         made the election to proceed with the Closing.

         5.11.    REGULATORY APPROVAL PROCESS. The Parties acknowledge and agree
that it is essential that the Closing occur prior to December 31, 1999, and that
the Seller may suffer certain adverse consequences if the Closing does not take
place by that time. Accordingly, the Buyer hereby covenants that it shall (x)
submit its portion of the draft applications, including all required exhibits
and attachments, under Sections 203 and 205 of the Federal Power Act
substantially in a form ready for filing with the FERC (the "FERC Applications")
to the Seller on or before August 2, 1999 for the Seller's review and (y)
cooperate with the Seller with a view to filing the FERC Applications with the
FERC in accordance with the rules and regulations of the FERC on or before
August 17, 1999 and shall not thereafter seek to amend or withdraw such

                                       40
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FERC Applications.

         5.12.    CONNECTICUT TRANSFER ACT. The Buyer agrees that certain Sites
on which some or all of the Facilities are located are "establishments" within
the meaning of the Connecticut Transfer Act (CGS Section 22a-134 et seq.), and
that it is the Buyer's sole and exclusive responsibility (i) to determine the
"establishment" status for each Site and Facility; (ii) to comply, at its sole
cost and expense, with any requirement for preparing and executing appropriate
forms and making necessary submissions in connection with the Connecticut
Transfer Act; (iii) to comply, at its sole cost and expense, with any
requirement under the Connecticut Transfer Act for investigations or
Remediations of Hazardous Substances Released at or emanating from the Sites;
and (iv) to pay any transfer fees due the Connecticut Department of
Environmental Protection and other related fees or costs; provided, however,
that the Seller shall pay to and indemnify the Buyer for any such costs or
expenses to the extent they relate to any Substation Area (as defined in the
Reserved Easements); and provided, further, that the Seller shall execute and
deliver to the Buyer and the Connecticut Department of Environmental Protection
such forms as may be required by the Connecticut Transfer Act.

         5.13.    DISCHARGE OF ENVIRONMENTAL LIABILITIES. In discharging its
Environmental Liabilities, if any, on or after the Closing Date, pursuant to
Section 2.3(a) hereof, the Buyer agrees and covenants that the Buyer will not
prejudice or impair the Seller's rights under the Environmental Laws or
interfere with the Seller's ability to contest in appropriate administrative,
judicial or other proceedings its liability, if any, for Environmental Claims or
Remediation. The Buyer further agrees to provide to the Seller draft copies of
all material plans and studies prepared in connection with any Site
investigation or Remediation associated with pre-Closing occurrences prior to
their submission to the Governmental Authority with jurisdiction under
Environmental Laws. The Seller shall have the right, without the obligation, to
attend all meetings between the Buyer, its agents or representatives, and such
Governmental Authorities. The Buyer shall promptly provide to the Seller copies
of all material written information, plans, documents and correspondence
submitted to or received from such Governmental Authorities relating to the
Buyer's discharge of any Environmental Liabilities assumed pursuant to this
Agreement associated with pre-Closing occurrences.

6.       CONDITIONS TO OBLIGATION TO CLOSE.

         6.1.     CONDITIONS TO OBLIGATION OF THE BUYER TO CLOSE. The obligation
of the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:

                  (a)      REPRESENTATIONS AND WARRANTIES. The representations
         and warranties set forth in Section 3 above shall be true and correct
         in all material respects at and as of the Closing Date;

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

                  (c)      BUYER'S REGULATORY APPROVALS. The Buyer shall have
         received the Buyer's Regulatory Approvals specified in SCHEDULE 6.1(c),
         with such terms and conditions as may be included therein except for
         such terms and conditions that, either singly or in the

                                       41
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         aggregate, are reasonably likely to have a Material Adverse Effect;

                  (d)      SELLER'S REGULATORY APPROVALS. The Seller shall have
         received the Seller's Regulatory Approvals specified in SCHEDULE
         6.2(c), with such terms and conditions as may be included therein
         except for such terms and conditions that, either singly or in the
         aggregate, are reasonably likely to have a Material Adverse Effect;

                  (e)      ABSENCE OF LITIGATION. There shall not be any
         injunction, judgment, order, decree or ruling in effect or pending
         which would prevent or inhibit consummation of the transactions
         contemplated by this Agreement or the Related Agreements;

                  (f)      ANTITRUST MATTERS. All applicable waiting periods
         (and any extensions thereof) under the Hart-Scott-Rodino Act shall have
         expired or otherwise been terminated;

                  (g)      NO MATERIAL ADVERSE EFFECT. There shall not be any
         Material Adverse Effect; and

                  (h)      DELIVERIES. The Seller shall have complied in all
         material respects with the delivery requirements of Section 2.10.

The Buyer may waive any condition specified in this Section 6.1 if it executes a
writing so stating at or prior to the Closing and such waiver shall not be
considered a waiver of any other provision in this Agreement unless the writing
specifically so states.

         6.2.     CONDITIONS TO OBLIGATION OF THE SELLER TO CLOSE. The
obligation of the Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:

                  (a)      REPRESENTATIONS AND WARRANTIES. The representations
         and warranties set forth in Section 4 above shall be true and correct
         in all material respects at and as of the Closing Date;

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

                  (c)      SELLER'S REGULATORY APPROVALS. The Seller shall have
         received the Seller's Regulatory Approvals specified in SCHEDULE
         6.2(c), in each case without terms and conditions that are reasonably
         likely to have a material adverse effect on the Seller and in the case
         of the DPUC Approval, with such terms and conditions as are acceptable
         to the Seller in its sole and absolute discretion;

                  (d)      BUYER'S REGULATORY APPROVALS. The Buyer shall have
         received the Buyer's Regulatory Approvals specified in SCHEDULE 6.1(c),
         in each case without terms and conditions that are reasonably likely to
         have a material adverse effect on the Seller;

                  (e)      ABSENCE OF LITIGATION. There shall not be any
         injunction, judgment, order, decree or ruling in effect or pending
         which would prevent or inhibit consummation of the transactions
         contemplated by this Agreement or the Related Agreements;

                                       42
<Page>

                  (f)      ANTITRUST MATTERS. All applicable waiting periods
         (and any extensions thereof) under the Hart-Scott-Rodino Act shall have
         expired or otherwise been terminated;

                  (g)      DELIVERIES. The Buyer shall have complied in all
         material respects with the delivery requirements of Section 2.11; and

                  (h)      NEPOOL. The Buyer shall be a member in good standing
         of NEPOOL

The Seller may waive any condition specified in this Section 6.2 if it executes
a writing so stating at or prior to the Closing and such waiver shall not be
considered a waiver of any other provision in this Agreement unless the writing
specifically so states.

7.       CONFIDENTIALITY.

                  (a)      Each Receiving Party and each Representative thereof
         will treat and hold as confidential all of the Proprietary Information,
         and refrain from using any of the Proprietary Information except in
         connection with this Agreement and the Related Agreements and
         transactions contemplated hereby and thereby. In the event that the
         Receiving Party or any Representative thereof is requested or required
         (including, without limitation, (i) pursuant to any rule or regulation
         of any stock exchange or other self-regulatory organization upon which
         any of the Receiving Party's securities are listed or (ii) by oral
         question or request for information or documents in any legal
         proceeding, including without limitation the Buyer's Regulatory
         Approval and the Seller's Regulatory Approval processes, interrogatory,
         subpoena, civil investigative demand, or similar process) to disclose
         any Proprietary Information, the Receiving Party will notify the
         Disclosing Party promptly of the request or requirement so that the
         Disclosing Party may seek an appropriate protective order or waive
         compliance with the provisions of this Section 7. If, in the absence of
         a protective order or the receipt of a waiver hereunder, the Receiving
         Party or any Representative thereof is, on the advice of counsel,
         compelled to disclose any Proprietary Information pursuant to any such
         request or requirement, then the Receiving Party or such Representative
         may disclose the Proprietary Information so requested or required to be
         disclosed; PROVIDED, HOWEVER, that the Receiving Party shall use its
         reasonable best efforts to obtain, at the request of the Disclosing
         Party, an order or other assurance that confidential treatment will be
         accorded to such portion of the Proprietary Information required to be
         disclosed as the Disclosing Party shall designate. If this Agreement is
         terminated pursuant to Section 10.1 hereof, then each Receiving Party
         shall deliver promptly to the Disclosing Party or destroy, at the
         request and option of the Disclosing Party, all tangible embodiments
         (and all copies) of the Proprietary Information which are in his or its
         possession

                  (b)      The obligations of the Parties contained in this
         Section 7 shall be in full force and effect for three years from the
         date hereof and will survive the termination of this Agreement, the
         discharge of all other obligations owed by the Parties to each other
         and any transfer of title to the Acquired Assets. Nothing in this
         Section 7 shall in any way alter the Buyer's obligations under the
         Confidentiality Agreement dated February 17, 1999 by and between the
         Buyer and J.P. Morgan Securities, Inc.

                                       43
<Page>

                  (c)      Upon the Disclosing Party's prior written approval
         (which will not be unreasonably withheld), the Receiving Party may
         provide Proprietary Information to the DPUC, the FERC, the SEC, the
         United States Department of Justice, the United States Federal Trade
         Commission or any other Governmental Authority with jurisdiction, as
         necessary, to obtain any consents, waivers or approvals as may be
         required for the Receiving Party to undertake the transactions
         contemplated herein. The Receiving Party will seek confidential
         treatment for such Proprietary Information provided to any such
         Governmental Authority (if such confidential treatment is available
         from the appropriate Governmental Authority) and the Receiving Party
         will notify the Disclosing Party as far in advance as is practicable of
         its intention to release to any such Governmental Authority any such
         Proprietary Information.

8.       TAXES.

                  (a)      All transfer and sales Taxes incurred in connection
         with this Agreement and the transactions contemplated hereby shall be
         borne by the Buyer, including, without limitation, Connecticut state
         sales tax, and the Buyer, at its own expense, will file, to the extent
         required by applicable Laws, all necessary Tax Returns and other
         documentation with respect to all such transfer or sales Taxes, and, if
         required by applicable Laws, the Seller will join in the execution of
         any such Tax Returns or other documentation. Prior to the Closing Date,
         the Buyer will provide to the Seller, to the extent possible, an
         appropriate certificate of no tax due from each applicable taxing
         authority.

                  (b)      With respect to Taxes to be prorated in accordance
         with Section 2.8 of this Agreement only, the Buyer shall prepare and
         timely file all Tax Returns required to be filed after the Closing with
         respect to the Acquired Assets, if any, and shall duly and timely pay
         all such Taxes shown to be due on such Tax Returns. The Buyer's
         preparation of any such Tax Returns shall be subject to the Seller's
         approval, which approval shall not be unreasonably withheld. No later
         than twenty-five (25) Business Days prior to the due date of any such
         Tax Return, the Buyer shall make such Tax Return available for the
         Seller's review and approval. The Seller shall respond no later than
         ten (10) Business Days prior to the due date for filing such Tax
         Return. With respect to such Tax Return, the Seller shall pay to the
         Buyer its appropriate share of the amount shown as due on the Tax
         Returns determined in accordance with Section 2.8 of this Agreement.

                  (c)      Each of the Buyer and the Seller shall provide the
         other with such assistance as may reasonably be requested by the other
         Party in connection with the preparation of any Tax Return, any audit
         or other examination by any taxing authority, or any judicial or
         administrative proceedings relating to liability for Taxes, and each
         will retain and provide the requesting Party with any records or
         information which may be relevant to such Tax Return, audit or
         examination, proceedings or determination. Any information obtained
         pursuant to this Section 8 or pursuant to any other Section hereof
         providing for the sharing of information or review of any Tax Return or
         other schedule relating to Taxes

                                       44
<Page>

         shall be deemed to be and shall be Proprietary Information.

9.       SURVIVAL OF REPRESENTATIONS AND WARRANTIES; EFFECT OF CLOSING AND
INDEMNIFICATION.

         9.1.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES; SURVIVAL OF
COVENANTS AND AGREEMENTS. The representations and warranties of the Seller set
forth in Sections 3.1, 3.2, 3.3, 3.4 and 3.16, and the representations and
warranties of the Buyer set forth in Sections 4.1, 4.2, 4.3 and 4.4, shall
survive the Closing for a period of twelve months; all other representations and
warranties of the Parties contained in this Agreement shall terminate at the
Closing and all representations and warranties of the Parties contained in this
Agreement shall terminate upon a termination of this Agreement pursuant to
Section 10.1. The covenants of the Parties contained in this Agreement, other
than those which by their terms survive the Closing and/or termination of this
Agreement, shall terminate at the Closing or the termination of this Agreement
pursuant to Section 10.1.

         9.2.     EFFECT OF CLOSING. Upon the Closing, any condition to the
obligations of either Party hereunder that has not been satisfied, or any
representation, warranty or covenant that has been breached or left unsatisfied
by either Party will be deemed waived by the Parties, and each Party will be
deemed to fully release and forever discharge the other Party on account of any
and all claims, demands or charges, known or unknown, with respect to the same.
Nothing in this Section 9.2 shall be deemed to affect any provision herein which
expressly survives the Closing or pertains to matters which will occur after the
Closing.

         9.3.     INDEMNITY BY THE SELLER. The Seller shall indemnify, defend
and hold harmless the Buyer against and in respect of all Liabilities,
obligations, judgments, Liens, injunctions, charges, orders, decrees, rulings,
damages, assessments, Taxes, losses, fines, penalties, damages, expenses, fees,
costs, and amounts paid in settlement (including reasonable consultants',
attorneys' and expert witness fees and disbursements in connection with
investigating, defending or settling any action or threatened action), arising
out of any claim, complaint, demand, cause of action, audit, investigation,
hearing, action, suit or other proceeding asserted or initiated or otherwise
existing in respect of any matter (collectively, the "LOSSES"), that results
from:

                  (a)      any Liability of the Seller that becomes a Liability
         of the Buyer under any bulk transfer law of any jurisdiction;

                  (b)      any Excluded Liability;

                  (c)      any breach by the Seller of any representation or
         warranty which by its terms survives the Closing or the termination of
         this Agreement under Section 10.1, provided that the Losses associated
         therewith have a Buyer Material Adverse Effect; and

                  (d)      any breach by the Seller of any of its covenants
         contained in Article V hereof.

         9.4.     INDEMNITY BY BUYER. The Buyer hereby agrees to indemnify,
defend and hold harmless the Seller and its Affiliates against and in respect of
all Losses that result from:

                  (a)      any Third Party Claim against the Seller based on or
         relating to the Buyer's ownership, operation or use of the Acquired
         Assets on or after the Closing Date;

                                       45
<Page>

                  (b)      the Assumed Liabilities;

                  (c)      any breach by the Buyer of any of its covenants
         contained in Article V hereof; or

                  (d)      the failure of the Buyer to close the transactions
         contemplated hereby within the time provided in Section 2.9, other than
         because of a failure of the Seller to perform its obligations under
         this Agreement.

         9.5.     EXCLUSIVE REMEDY. Except as provided in Section 11.17, from
and after the Closing, the remedies set forth in this Section 9 shall constitute
the sole and exclusive remedies for any and all claims, damages, complaints,
demands, causes of action, investigations, hearings, actions, suits or other
proceedings relating to this Agreement and are in lieu of any and all other
rights and remedies which the Seller or the Buyer may have under this Agreement
or otherwise for monetary relief with respect to any breach or failure to
perform or with respect to the Assumed or Excluded Liabilities. Each Party
waives any provision of law to the extent that it would limit or restrict the
agreements contained in this Section 9. Nothing herein shall prevent either
Party from terminating this Agreement in accordance with Section 10.

         9.6.     MATTERS INVOLVING THIRD PARTIES.

                  (a)      If any Third Party shall notify any Party (the
         "INDEMNIFIED PARTY") with respect to any matter (a "THIRD PARTY CLAIM")
         which may give rise to a claim for indemnification against any other
         Party (the "INDEMNIFYING PARTY") under this Section 9, then the
         Indemnified Party shall promptly notify the Indemnifying Party thereof
         in writing; PROVIDED, HOWEVER, that no delay on the part of the
         Indemnified Party in notifying the Indemnifying Party shall relieve the
         Indemnifying Party from any obligation hereunder unless (and then
         solely to the extent) the Indemnifying Party thereby is prejudiced.

                  (b)      Any Indemnifying Party will have the right to defend
         the Indemnified Party against the Third Party Claim with counsel of its
         choice reasonably satisfactory to the Indemnified Party so long as (i)
         the Indemnifying Party notifies the Indemnified Party in writing within
         fifteen days after the Indemnified Party has given notice of the Third
         Party Claim that the Indemnifying Party will indemnify the Indemnified
         Party from and against the entirety of any Losses the Indemnified Party
         may suffer resulting from, arising out of, relating to, in the nature
         of, or caused by the Third Party Claim, (ii) the Indemnifying Party
         provides the Indemnified Party with evidence acceptable to the
         Indemnified Party that the Indemnifying Party will have the financial
         resources to defend against the Third Party Claim and fulfill its
         indemnification obligations hereunder, (iii) the Third Party Claim
         involves only money damages and does not seek an injunction or other
         equitable relief, settlement of, or an adverse judgment with respect
         to, the Third Party Claim is not, in the good faith judgment of the
         Indemnified Party, likely to establish a precedential custom or
         practice adverse to the continuing business interests of the
         Indemnified Party, and (iv) the Indemnifying Party conducts the defense
         of the Third Party Claim actively and diligently.

                                       46
<Page>

                  (c)      So long as the Indemnifying Party is conducting the
         defense of the Third Party Claim in accordance with Section 9.5(b)
         above, (i) the Indemnified Party may retain separate co-counsel at its
         sole cost and expense and participate in the defense of the Third Party
         Claim, (ii) the Indemnified Party will not consent to the entry of any
         judgment or enter into any settlement with respect to the Third Party
         Claim without the prior written consent of the Indemnifying Party
         (which consent shall not unreasonably be withheld), and (iii) the
         Indemnifying Party will not consent to the entry of any judgment or
         enter into any settlement with respect to the Third Party Claim unless
         written agreement is obtained releasing the Indemnified Party from all
         liability thereunder.

                  (d)      In the event any of the conditions in Section 9.5(b)
         above is or becomes unsatisfied, however, (i) the Indemnified Party may
         defend against, and consent to the entry of any judgment or enter into
         any settlement with respect to, the Third Party Claim in any manner it
         may deem appropriate (and the Indemnified Party need not consult with,
         or obtain any consent from, any Indemnifying Party in connection
         therewith), (ii) the Indemnifying Party will reimburse the Indemnified
         Party promptly and periodically for the costs of defending against the
         Third Party Claim (including attorneys' fees and expenses,
         notwithstanding Section 9.3), and (iii) the Indemnifying Party will
         remain responsible for any Losses the Indemnified Party may suffer
         resulting from, arising out of, relating to, in the nature of, or
         caused by the Third Party Claim to the fullest extent provided in this
         Section 9.

         9.7.     NET OF TAXES AND INSURANCE. Any calculation of a Loss under
this Section 9 shall, in each case, give full effect to (i) any and all income
Tax benefits to the Indemnified Party in respect of the Loss, and (ii) any and
all insurance proceeds received or payable to the Indemnified Party in respect
of the Loss.

         9.8.     NO RECOURSE. To the extent the transfer, conveyance,
assignment and delivery of the Acquired Assets to the Buyer as provided in this
Agreement is accomplished by deeds, assignments, easements, leases, licenses,
bills of sale, or other instruments of transfer and conveyance, whether executed
at the Closing or thereafter, these instruments are made without representation
or warranty by, or recourse against, the Seller, except as expressly provided in
this Agreement or in any such instrument.

10.      TERMINATION.

         10.1.    TERMINATION OF AGREEMENT. The Parties may terminate this
Agreement as provided below:

                  (a)      the Parties may terminate this Agreement by mutual
         written consent at any time prior to the Closing;

                  (b)      the Buyer may terminate this Agreement by giving
         written notice to the Seller

                                       47
<Page>

         at any time prior to the Closing if any of the following has occurred:
         (i) the Seller has breached any representation, warranty or covenant
         contained in this Agreement in any material respect, the Buyer has
         notified the Seller of the breach, and the breach has continued without
         cure for a period of sixty (60) days after the notice of breach; (ii)
         the Closing shall not have occurred on or before June 30, 2000 by
         reason of the failure of any condition precedent under Section 6.1
         hereof (unless the failure results primarily from the Buyer itself
         breaching any representation, warranty, or covenant contained in this
         Agreement); (iii) one or more courts of competent jurisdiction shall
         have issued an order, judgment or decree permanently restraining,
         enjoining or otherwise prohibiting the Closing, which order, judgment
         or decree shall not have been terminated, lifted, vacated or otherwise
         rendered irrelevant within ninety (90) days of the issuance thereof;
         (iv) any statute, rule or regulation shall have been enacted by any
         Governmental Authority which, directly or indirectly, prohibits the
         consummation of the transactions contemplated hereby; (v) in accordance
         with Section 5.10 hereof; or (vi) (W) the Seller has within the then
         previous fifteen (15) days given the Buyer any notice pursuant to
         Section 5.5(a) above and the matter that is the subject of such notice,
         if in existence on the Effective Date or the Closing Date, would cause
         the representations and warranties of the Seller set forth in Section 3
         hereof not to be true and correct, (X) such matter would have a
         Material Adverse Effect, (Y) the Buyer has notified the Seller of its
         intent to terminate pursuant to this Section 10.1(b)(vi), and (Z) the
         matter that is the subject of such notice continues to exist for a
         period of sixty (60) consecutive days after such notice by the Buyer;
         and

                  (c)      the Seller may terminate this Agreement by giving
         written notice to the Buyer at any time prior to the Closing if any of
         the following has occurred: (i) the Buyer has breached any
         representation, warranty, or covenant contained in this Agreement in
         any material respect, the Seller has notified the Buyer of the breach,
         and the breach has continued without cure for a period of sixty (60)
         days after the notice of breach; (ii) the Closing shall not have
         occurred on or before June 30, 2000 by reason of the failure of any
         condition precedent under Section 6.2 hereof (unless the failure
         results primarily from the Seller itself breaching any representation,
         warranty, or covenant contained in this Agreement); (iii) one or more
         courts of competent jurisdiction shall have issued an order, judgment
         or decree permanently restraining, enjoining or otherwise prohibiting
         the Closing, which order, judgment or decree shall not have been
         terminated, lifted, vacated or otherwise rendered irrelevant within
         ninety (90) days of the issuance thereof; (iv) any statute, rule or
         regulation shall have been enacted by any Governmental Authority which,
         directly or indirectly, prohibits the consummation of the transactions
         contemplated hereby; (v) in accordance with Section 5.10 hereof; or
         (vi) (W) the Buyer has within the then previous fifteen (15) days given
         the Seller any notice pursuant to Section 5.5(a) above and the matter
         that is the subject of such notice, if in existence on the Effective
         Date or the Closing Date, would cause the representations and
         warranties of the Buyer set forth in Section 4 hereof not to be true
         and correct, (X) such matter would have a Material Adverse Effect, (Y)
         the Seller has notified the Buyer of its intent to terminate pursuant
         to this Section 10.1(c)(vi), and (Z) the matter that is the subject of
         such notice continues to exist for a period of sixty (60) consecutive
         days after such notice by the Seller.

         10.2.    EFFECT OF TERMINATION. If either Party terminates this
Agreement pursuant to Section 10.1 above, all rights and obligations of the
Parties hereunder shall terminate without any Liability of either Party to the
other Party (except for any Liability of any Party then in breach

                                       48
<Page>

and except as otherwise expressly provided herein).

11.      MISCELLANEOUS.

         11.1.    PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue
any press release or make any public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior approval of the other
Party; PROVIDED, HOWEVER, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will provide the other Party with the opportunity to review in
advance the disclosure).

         11.2.    NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Third Party.

         11.3.    NO JOINT VENTURE. Nothing in this Agreement 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, obligation, or liability on or with respect to
either Party. Except as provided in Section 5.6, neither Party is or shall act
as or be the agent or representative of the other Party.

         11.4.    ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules hereto), together with the Related Agreements and any other documents
referred to herein, constitute the entire agreement between the Parties and
supersede any prior understandings, agreements, or representations by or between
the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof, PROVIDED HOWEVER, that the Confidentiality Agreement
dated as of February 17, 1999 shall remain in full force and effect without
regard to any provision of this Agreement. All conflicts or inconsistencies
between the terms hereof and the terms of any of the Related Agreements, if any,
shall be resolved in favor of this Agreement.

         11.5.    SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
the Related Agreements or any of its rights, interests, or obligations hereunder
or thereunder without the prior written approval of the other Party; PROVIDED,
HOWEVER, that the Seller's written approval shall not be unreasonably withheld
if the Buyer elects to assign any or all of its rights and interests hereunder
to one or more of its Affiliates, PROVIDED that the Buyer shall deliver the
following documents before such assignment: (i) a Guaranty substantially in the
form of EXHIBIT F that guarantees the full and timely performance of all
obligations of such Affiliate under this Agreement, all Related Agreements and
all other agreements and commitments contemplated hereby or thereby or in
connection with the Closing entered into for the benefit of the Seller, as so
assigned; (ii) a copy, certified by the Secretary of the Buyer, of resolutions
authorizing the execution and delivery of such Guaranty; (iii) a certificate of
the Secretary of the Buyer identifying by name and title and bearing the
signatures of the officers of the Buyer authorized to execute and deliver the
Guaranty; (iv) an opinion from counsel to the Buyer, dated as of the date of
such assignment and reasonably satisfactory in form to the Seller and its
counsel, substantially to the effect that the Guaranty is a valid and binding
obligation of the Buyer; (v) evidence that such Affiliate is a member of NEPOOL.

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<Page>

         11.6.    COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

         11.7.    HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

         11.8.    NOTICES. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given (i) upon
confirmation of facsimile, (ii) one Business Day following the date sent when
sent by overnight delivery and (iii) five Business Days following the date
mailed when mailed by registered or certified mail return receipt requested and
postage prepaid at the following address:

         If to the Seller:

                  The Connecticut Light and Power Company
                  107 Selden Street
                  Berlin, CT 06307
                  Attn: Vice President - Administration

         Copy to:

                  Vice President, Secretary and General Counsel
                  Northeast Utilities
                  107 Selden Street
                  Berlin, CT 06307

         If to the Buyer:

                  Northeast Generation Company
                  107 Selden Street
                  Berlin, CT 06307
                  Attn:  Vice President and Treasurer

         Copy to:

                  Select Energy, Inc.
                  107 Selden Street
                  Berlin, CT 06307
                  Attn:  Senior Vice President - Power Supply Marketing

                                       50
<Page>

Either Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim or other communication 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, requests, demands, claims and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.

         11.9.    GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Connecticut
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Connecticut or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Connecticut.

         11.10.   CHANGE IN LAW. If and to the extent that, during the Interim
Period, any laws or regulations that govern any aspect of this Agreement shall
change, so as to make any aspect of this transaction unlawful, then the Parties
agree to make such modifications to this Agreement as may be reasonably
necessary for this Agreement to accommodate any such legal or regulatory
changes.

         11.11.   CONSENT TO JURISDICTION. Each of the Seller and the Buyer
consents to the nonexclusive jurisdiction of any local, state or federal court
located within the City of Hartford, Connecticut, for adjudication of any suit,
claim, action or other proceeding at law or in equity relating to this
Agreement, or to any transaction contemplated hereby. The Seller and the Buyer
each accept, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and waive any objection as to venue, and any defense of FORUM
NON CONVENIENS.

         11.12.   AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

         11.13.   SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

         11.14.   EXPENSES. Each of the Buyer and the Seller will bear its own
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including legal and accounting fees and
expenses, except as otherwise provided in Section 9 above), except that the
Buyer shall bear the entire cost of (i) all filings by both the Seller and the
Buyer under the Hart-Scott-Rodino Act and (ii) the Joint Application for
authorization pursuant to Sections 203 and 205 of the Federal Power Act.

         11.15.   CONSTRUCTION. Ambiguities or uncertainties in the wording of
this Agreement will

                                       51
<Page>

not be construed for or against any Party, but will be construed in the manner
that most accurately reflects the Parties' intent as of the Effective Date. The
Parties acknowledge that they have been represented by counsel in connection
with the review and execution of this Agreement, and, accordingly, there shall
be no presumption that this Agreement or any provision hereof be construed
against the Party that drafted this Agreement.

         11.16.   INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.

         11.17.   SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter in addition to any other remedy to which it may be
entitled, at law or in equity.

         11.18.   DISPUTE RESOLUTION. Prior to instituting any litigation or
dispute resolution mechanism, the Parties will attempt in good faith to resolve
any dispute or claim promptly by referring any such matter to their respective
chief executive officers for resolution. Either Party may give the other Party
written notice of any dispute or claim. Within ten (10) days after delivery of
said notice, the executives will meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary to exchange
information and to attempt to resolve the dispute or claim within thirty (30)
days.

                            [SIGNATURE PAGE FOLLOWS]

                                       52
<Page>

         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.

                                  NORTHEAST GENERATION COMPANY

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

                                  THE CONNECTICUT LIGHT AND POWER
                                  COMPANY

                                  By: /s/ John B. Keane
                                     ---------------------------------
                                  Title: Vice President - Generation Divestiture

                                       53

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