S-4

As filed with the Securities and Exchange Commission on July 17, 2015

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Iberdrola USA, Inc.

(Exact name of registrant as specified in its charter)

New York	4911	14-1798693
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

Durham Hall, 52 Farm View Drive, New Gloucester, Maine 04260

(207) 688-6363

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

R. Scott Mahoney, Esq.

General Counsel

Durham Hall, 52 Farm View Drive, New Gloucester, Maine 04260

(207) 688-6363

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

Juan Manuel de Remedios, Esq. John Vetterli, Esq. White & Case LLP 1155 Avenue of the Americas New York, New York 10036 (212) 819-8200 Linda L. Randell, Esq. Senior Vice President and General Counsel UIL Holdings Corporation 157 Church Street New Haven, Connecticut 06506 (203) 499-2000 Joseph B. Frumkin, Esq. Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 (212) 558-4000

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effectiveness of this registration statement and upon completion of the merger described in the enclosed proxy statement/prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ¨

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ¨

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered(1)	Amount to be registered(2)	Proposed maximum offering price per share	Proposed maximum aggregate offering price(3)	Amount of registration fee(4)
Common stock, $0.01 par value per share	57,628,297	N/A	$2,116,205,302	$245,903

(1) Relates to securities of the registrant issuable in connection with the proposed merger, or the merger, of UIL Holdings Corporation, a Connecticut corporation, with and into Green Merger Sub, Inc., a Connecticut corporation and a direct wholly-owned subsidiary of the registrant. Pursuant to Rule 416 under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, or the Securities Act, this registration statement also covers an indeterminate number of additional shares of the registrant’s common stock as may be issuable as a result of reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, stock dividends or similar transactions or events.

(2) Represents the maximum number of shares of the registrant’s common stock to be issued in connection with the merger.

(3) Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and calculated in accordance with Rule 457(f)(1)-(2) and Rule 457(c) of the Securities Act, based on the product of (A) $47.21, the average of the high and low prices per share of UIL Holdings Corporation common stock as reported on the New York Stock Exchange on July 10, 2015 and (B) 57,628,297, the maximum number of shares of UIL Holdings Corporation outstanding common stock that may be exchanged for the merger consideration, computed as of July 10, 2015, the latest practicable date prior to the date hereof for which it was possible to obtain such information. As required by Rule 457(f)(3) under the Securities Act, the estimated aggregate amount of cash to be paid by the registrant in the merger, or approximately $604,426,599, has been deducted from the proposed maximum aggregate offering price.

(4) Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $116.20 per $1,000,000 of the proposed maximum aggregate offering price calculated as described in note 3 above.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this proxy statement/prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or to any person to whom it is lawful to make any such offer or solicitation in such jurisdiction.

PRELIMINARY—SUBJECT TO COMPLETION—DATED July 17, 2015

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

                    , 2015

Dear Shareowners:

The Board of Directors of UIL Holdings Corporation cordially invites you to attend a special meeting of shareowners of UIL Holdings Corporation, a Connecticut corporation, or UIL, to be held on                     , 2015, at             Eastern time, at Quinnipiac University, Center for Medicine, Nursing and Health Sciences, 370 Bassett Road, North Haven, Connecticut 06473, or the special meeting. As previously announced, on February 25, 2015, UIL entered into a merger agreement providing for the combination of UIL and Iberdrola USA, Inc., a New York corporation, or Iberdrola USA. At the special meeting, you will be asked to consider and vote upon a proposal to approve the merger agreement.

If the merger contemplated by the merger agreement is completed, you will be entitled to receive the merger consideration for each share of UIL common stock you own. The merger consideration consists of cash in the amount of $10.50 plus one share of common stock of the combined company. At the completion of the merger, Iberdrola USA, which is currently wholly-owned by Iberdrola, S.A., a Spanish corporation, will become a publicly-traded company listed on the New York Stock Exchange, or the NYSE, under the trading symbol “             ”. Iberdrola, S.A. will own 81.5% of the newly listed company at closing, and former UIL shareowners will own the remaining 18.5% of the outstanding shares.

Your vote is very important, regardless of the number of shares you own. The merger cannot be completed unless the owners of at least a majority of the shares of UIL common stock outstanding as of the close of business on                     , 2015, the record date for the special meeting, vote to approve the merger agreement. A failure to vote or an abstention will have the same effect as a vote “AGAINST” the proposal to approve the merger agreement.

Whether or not you plan to attend the special meeting, I urge you to vote your shares before the meeting over the Internet or via the toll-free telephone number, as described in the accompanying materials. You may also vote by mail by completing, signing and dating the enclosed proxy card and returning it in the pre-addressed, postage-prepaid envelope accompanying the proxy card. YOUR PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF UIL. AFTER CAREFUL CONSIDERATION, UIL’S BOARD OF DIRECTORS HAS UNANIMOUSLY ADOPTED THE MERGER AGREEMENT, APPROVED AND DETERMINED THAT IT IS IN THE BEST INTERESTS OF UIL FOR UIL TO CONSUMMATE THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND TO EXECUTE AND DELIVER THE MERGER AGREEMENT AND PERFORM UIL’S OBLIGATIONS THEREUNDER, AND RESOLVED TO RECOMMEND THAT UIL SHAREOWNERS APPROVE THE MERGER AGREEMENT AND RELATED TRANSACTIONS. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL TO APPROVE THE MERGER AGREEMENT AND “FOR” THE OTHER MATTERS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. THE BOARD OF DIRECTORS MADE ITS DETERMINATION AFTER CONSULTATION WITH ITS LEGAL AND FINANCIAL ADVISORS AND AFTER CONSIDERING A NUMBER OF FACTORS. In considering the recommendation of the board of directors of UIL, you should be aware that certain directors and executive officers of UIL may have interests in the merger that are different from, or in addition to, the interests of UIL shareowners generally. See the section entitled “Interests of UIL’s Directors and Executive Officers in the Merger” beginning on page 108 of the accompanying proxy statement/prospectus.

In particular, I urge you to read carefully the section entitled “Risk Factors ” beginning on page 37 of the accompanying proxy statement/prospectus. If you have any questions regarding the accompanying proxy statement/prospectus, you may call Okapi Partners of New York, or Okapi, UIL’s proxy solicitor, by calling toll-free at (855) 208-8902.

I urge you to read carefully and in its entirety the accompanying proxy statement/prospectus, including the annexes and the documents incorporated by reference.

James P. Torgerson

President and Chief Executive Officer

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER OR OTHER TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS OR THE SECURITIES TO BE ISSUED PURSUANT TO THE MERGER UNDER THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS NOR HAVE THEY DETERMINED IF THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This proxy statement/prospectus is dated                     , 2015 and is first being mailed or otherwise delivered to UIL shareowners on or about                     , 2015.

ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information about UIL from other documents that UIL has filed with the U.S. Securities and Exchange Commission, or the SEC, and that are contained in or incorporated by reference into this proxy statement/prospectus. For a listing of documents incorporated by reference into this proxy statement/prospectus, please see the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus. This information is available for you to review at the SEC’s public reference room located at 100 F Street, N.E., Room 1580, Washington, DC 20549, and through the SEC’s website at www.sec.gov.

You may request copies of this proxy statement/prospectus and any of the documents incorporated by reference into this proxy statement/prospectus, without charge, by written request directed to UIL Holdings Corporation, Attention: Sigrid E. Kun, Vice President, Corporate Secretary and Assistant General Counsel, 157 Church Street, P.O. Box 1564, New Haven, Connecticut 06506, Telephone (203) 499-2000; or Okapi Partners of New York, UIL’s proxy solicitor, by calling toll-free at (855) 208-8902.

In order for you to receive timely delivery of the documents in advance of the special meeting of UIL shareowners to be held on                     , 2015, you must request the information no later than five business days prior to the date of the special meeting, by                     , 2015.

ABOUT THE PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by Iberdrola USA (File No. 333-             ), constitutes a prospectus of Iberdrola USA under Section 5 of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, or the Securities Act, with respect to post-merger Iberdrola USA, or the combined company, common stock to be issued to UIL shareowners pursuant to the merger agreement. The term “combined company” as used in this proxy statement/prospectus refers to Iberdrola USA following the completion of the merger. This document also constitutes a proxy statement of UIL under Section 14(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Additionally, this document constitutes a notice of meeting with respect to the special meeting, at which UIL shareowners will be asked to consider and vote upon a proposal to approve the merger agreement and related matters.

UIL has supplied all information contained in or incorporated by reference into this proxy statement/prospectus relating to UIL, and Iberdrola USA has supplied all information contained in this proxy statement/prospectus relating to Iberdrola USA.

You should rely only on the information contained in or incorporated by reference into this proxy statement/prospectus. Iberdrola USA and UIL have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this proxy statement/prospectus. This proxy statement/prospectus is dated                     , 2015, and you should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than such date. Further, you should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this proxy statement/prospectus to UIL shareowners nor the issuance by the combined company of shares of common stock of the combined company pursuant to the merger agreement will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or to any person to whom it is lawful to make any such offer or solicitation in such jurisdiction.

UIL Holdings Corporation

157 Church Street, P.O. Box 1564

New Haven, Connecticut 06506

NOTICE OF SPECIAL MEETING OF SHAREOWNERS TO BE HELD ON                     , 2015

Dear Shareowner,

You are cordially invited to attend a special meeting of shareowners of UIL Holdings Corporation, a Connecticut corporation, or UIL. The special meeting will be held on                     , 2015, at              Eastern time, at Quinnipiac University, Center for Medicine, Nursing and Health Sciences, 370 Bassett Road, North Haven, Connecticut 06473, to consider and vote upon the following matters:

1. a proposal to approve the Agreement and Plan of Merger, dated as of February 25, 2015, as it may be amended from time to time, or the merger agreement, by and among UIL, Iberdrola USA and Green Merger Sub, Inc., a Connecticut corporation and a wholly-owned subsidiary of Iberdrola USA, or merger sub. A copy of the merger agreement is attached as Annex A to the accompanying proxy statement/prospectus;

2. a proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger contemplated by the merger agreement; and

3. granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

The record date for the special meeting is                     , 2015. Only shareowners of record as of the close of business on                     , 2015 are entitled to notice of, and to vote at, the special meeting. All shareowners of record as of that date and time are cordially invited to attend the special meeting in person.

Your vote is very important, regardless of the number of shares of UIL common stock that you own. The merger cannot be completed unless the merger agreement is approved by the affirmative vote of the owners of at least a majority of the shares of UIL common stock outstanding as of the close of business on the record date. Whether or not you plan to attend the special meeting, UIL urges you to vote your shares before the meeting over the Internet or via the toll-free telephone number, as described in the accompanying materials. You may also vote by mail by completing, signing and dating the enclosed proxy card and returning it in the pre-addressed, postage-prepaid envelope accompanying the proxy card. No postage is necessary if mailed in the United States. Voting over the Internet, via the toll-free telephone number or by mailing a proxy card will not limit your right to vote in person or to attend the special meeting. If you hold your shares in “street name” through a bank, brokerage firm or other nominee, you should follow the procedures provided by your bank, brokerage firm or other nominee to vote your shares. If you fail to submit a proxy or to attend the special meeting in person or do not provide your bank, brokerage firm or other nominee with instructions as to how to vote your shares, as applicable, your shares of UIL common stock will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote “AGAINST” the proposal to approve the merger agreement.

Your proxy is being solicited by the board of directors of UIL. After careful consideration, UIL’s board of directors has unanimously (i) adopted the merger agreement, (ii) approved and determined that it is in the best interests of UIL for UIL to consummate the merger and the other transactions contemplated by the merger agreement and to execute and deliver the merger agreement and perform UIL’s obligations thereunder and (iii) resolved to recommend the approval of the merger agreement by UIL shareowners. UIL’s board of directors unanimously recommends that you vote “FOR” the proposal to approve the merger agreement and “FOR” the other matters described in the accompanying proxy statement/prospectus. The board of directors made its determination after consultation with its legal and financial advisors and after considering a number of factors. In considering the recommendation of the board of directors of UIL, you should be aware that certain directors and executive officers of UIL may have interests in the merger that are different from or in addition to the interests of UIL shareowners generally. See the section entitled “Interests of UIL’s Directors and Executive Officers in the Merger” beginning on page 108 of the accompanying proxy statement/prospectus.

If you personally attend the special meeting, you will be asked to verify that you are a shareowner by presenting an attendance ticket (attached to your proxy card), together with a proper form of identification. Cameras, recording devices and other electronic devices including telephones or other devices with photographic capability may not be used during the meeting and are subject to confiscation. For the safety of attendees, all bags, packages and briefcases are subject to inspection. Your compliance is appreciated.

IT IS IMPORTANT THAT YOU VOTE YOUR SHARES OF UIL COMMON STOCK PROMPTLY. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE VOTE YOUR SHARES BEFORE THE MEETING OVER THE INTERNET OR VIA THE TOLL-FREE TELEPHONE NUMBER OR BY COMPLETING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE PRE-ADDRESSED, POSTAGE-PREPAID ENVELOPE ACCOMPANYING THE PROXY CARD. IF YOU ATTEND THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY SUBMITTED.

By Order of the Board of Directors,

Sigrid E. Kun

Vice President, Corporate Secretary and

Assistant General Counsel

New Haven, Connecticut

Dated:                     , 2015

TABLE OF CONTENTS

	Page
QUESTIONS AND ANSWERS		1
SUMMARY		12
Information About The Companies		12
The Merger and the Merger Agreement		13
Recommendation of the UIL Board		21
The UIL Special Meeting		22
Opinion of UIL’s Financial Advisor		24
Interests of UIL’s Directors and Executive Officers in the Merger		24
Appraisal Rights of UIL Shareowners		25
Delisting and Deregistration of UIL Common Stock		25
Regulatory Approvals Required for the Merger		25
Material U.S. Federal Income Tax Consequences		26
Comparison of Shareholder Rights Before and After the Merger		26
Risk Factors		27
SUMMARY HISTORICAL COMBINED AND CONSOLIDATED FINANCIAL DATA OF IBERDROLA USA		28
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA OF UIL		30
SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION		32
COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA		34
COMPARATIVE PER SHARE MARKET PRICE INFORMATION		35
RISK FACTORS		37
Risks Relating to the Proposed Merger		37
Risks Relating to Iberdrola USA’s Regulatory Environment		43
Risks Relating to Iberdrola USA’s Business and Operations		51
Risks Relating to Investing in and Ownership of Common Stock of the Combined Company		63
Risks Relating to UIL’s Business and Operations		67
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		68
INFORMATION ABOUT THE COMPANIES		69
THE UIL SPECIAL MEETING		71
Time, Place and Purpose of the Special Meeting		71
Record Date and Quorum		71
Attendance		71
Vote Required		72
Proxies and Revocations		73
Adjournments and Postponements		74
Anticipated Date of Completion of the Merger		74
Solicitation of Proxies; Payment of Solicitation Expenses		75
Questions and Additional Information		75
ADVISORY VOTE ON MERGER-RELATED COMPENSATION FOR UIL’S NAMED EXECUTIVE OFFICERS		76
ADJOURNMENT OF THE SPECIAL MEETING TO SOLICIT ADDITIONAL PROXIES		79
THE MERGER		80
Background of the Merger		80
Ownership of the Combined Company		88
Iberdrola USA’s Reasons for the Merger		88
UIL’s Reasons for the Merger		90
Recommendation of the UIL Board		93
Certain Unaudited Financial Forecasts Prepared by the Management of UIL		93
Opinion of UIL’s Financial Advisor		95

i

	Page
Regulatory Approvals Required for the Merger		104
Public Trading Markets		106
No Appraisal Rights		106
Accounting Treatment		106
Litigation Relating to the Merger		106
Restrictions on Sales of Shares of the Combined Company Common Stock Received in the Merger		107
INTERESTS OF UIL’S DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER		108
Equity Compensation Awards		108
Payments Upon Termination Upon Change in Control		109
Employment Agreements		110
Retention		111
Executive Officer Positions with the Combined Company		111
Director Positions with the Combined Company		111
Indemnification; Directors’ and Officers’ Insurance		112
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION		113
THE MERGER AGREEMENT		118
Structure of the Merger		118
Governance and Management of the Combined Company		118
Effective Time; Closing Date		119
Post-Merger Governing Documents and Additional Matters Concerning Merger Sub		119
Effects of the Merger; Merger Consideration		120
Treatment of UIL Stock Plans and UIL Equity-Based Awards		120
Exchange of Shares		121
Dividends		121
Lost, Stolen and Destroyed Certificates		122
Representations and Warranties		122
Conduct of Business Pending the Merger		126
Acquisition Proposals and Superior Proposals		130
No Solicitation by UIL		131
Adverse Recommendation Change		132
No Solicitation by Iberdrola USA		134
UIL Shareowner Meeting		134
Reasonable Best Efforts to Obtain Required Approvals; Regulatory Matters		134
Indemnification and Insurance of Directors and Officers		136
Exchange Listing		137
Employee Matters		137
Certain Other Covenants		137
Conditions to Completing the Merger		139
Termination		140
Effect of Termination		141
Fees and Expenses		142
Miscellaneous		143
SELECTED HISTORICAL COMBINED AND CONSOLIDATED FINANCIAL DATA OF IBERDROLA USA		144
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF IBERDROLA USA		146
Executive Overview		146
Factors Affecting Financial Condition and Results of Operations		146
Non-GAAP Financial Measures		151

ii

		Page
Results of Operations			154
Comparison of Period to Period Results of Operations			156
Liquidity and Capital Resources			162
Cash Flows			164
Contractual Obligations			167
Critical Accounting Policies and Estimates			167
Quantitative and Qualitative Disclosures about Market Risk			171
New Accounting Standards			175
Management’s Discussion and Analysis of Financial Condition and Results of Operation of UIL			177
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION			178
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF UIL			188
ADDITIONAL INFORMATION ABOUT IBERDROLA USA			191
Iberdrola USA Directors and Executive Officers			219
Board of Directors and Management of the Combined Company			225
Iberdrola USA Director Compensation			226
Iberdrola USA Compensation Discussion and Analysis			227
Iberdrola USA Executive Compensation			234
DESCRIPTION OF IBERDROLA USA CAPITAL STOCK			245
General			245
Common Stock			245
Dividends			245
Iberdrola USA’s Transfer Agent			245
Listing of the Combined Company’s Shares			245
Special Meeting of Shareholders			245
Advance Notice Requirements for Shareholder Proposals and Director Nominations			246
Authorized but Unissued Shares			246
Forum Selection			246
BENEFICIAL OWNERSHIP OF SECURITIES			247
Security Ownership of Certain Beneficial Owners and Management of Iberdrola USA			247
Security Ownership of Certain Beneficial Owners and Management of UIL			247
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			250
Relationship with Iberdrola, S.A.			250
The Shareholder Agreement			250
Service Agreements			253
Other Related Party Transactions			255
Related Party Transaction Policy			255
COMPARISON OF SHAREHOLDER RIGHTS BEFORE AND AFTER THE MERGER			257
General			257
Certain Differences between the Rights of UIL Shareowners and the Combined Company Shareholders			257
LEGAL MATTERS			272
EXPERTS			273
HOUSEHOLDING OF PROXY MATERIALS			274
WHERE YOU CAN FIND ADDITIONAL INFORMATION			275
GLOSSARY OF TERMS AND ABBREVIATIONS			277
IBERDROLA USA, INC. INDEX TO FINANCIAL STATEMENTS			F-1
ANNEX A	Merger Agreement		A-1
ANNEX B	Form of Shareholder Agreement		B-1
ANNEX C	Opinion of Morgan Stanley & Co. LLC		C-1

iii

QUESTIONS AND ANSWERS

The following questions and answers are intended to briefly address some commonly asked questions regarding the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a holder of UIL common stock. Please see the section entitled “Summary” beginning on page 12 of this proxy statement/prospectus and the more detailed information contained elsewhere in this proxy statement/prospectus, the annexes to this proxy statement/prospectus and the documents referred to or incorporated by reference into this proxy statement/prospectus, which you should read carefully and in their entirety.

You may obtain the information incorporated by reference into this proxy statement/prospectus without charge by following the instructions under the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

Q: Why am I receiving this proxy statement/prospectus and proxy card?

A: UIL has agreed to combine with Iberdrola USA under the terms of the merger agreement, as further described in this proxy statement/prospectus. If the merger agreement is approved by UIL shareowners and the other conditions to closing under the merger agreement are satisfied or waived, UIL will merge with and into merger sub. Merger sub will be renamed UIL Holdings Corporation and continue as a wholly-owned subsidiary of the combined company upon completion of the merger.

UIL is holding the special meeting to ask its shareowners to consider and vote upon a proposal to approve the merger agreement. UIL shareowners are also being asked to (i) consider and vote upon a proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger and (ii) grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

This proxy statement/prospectus contains important information about the merger, the merger agreement, a copy of which is attached as Annex A to this proxy statement/prospectus, the special meeting and the proposals to be voted on at the special meeting.

UIL shareowners should read this information carefully and in its entirety. The enclosed voting materials allow shareowners to vote their shares without attending the special meeting in person.

Q: What am I being asked to vote on at the special meeting?

A: You are being asked to (i) consider and vote upon a proposal to approve the merger agreement, (ii) consider and vote upon a proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger and (iii) grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

Q: Does my vote matter?

A: Yes. Your vote is important. You are encouraged to submit your proxy as promptly as possible. The merger cannot be completed unless the merger agreement is approved by the UIL shareowners. If you fail to submit a proxy or vote in person at the special meeting, or vote to abstain, or you do not provide your bank, brokerage firm or other nominee with instructions, as applicable, this will have the same effect as a vote “AGAINST” the proposal to approve the merger agreement. The board of directors of UIL, or the UIL board, unanimously recommends that shareowners vote “FOR” the proposal to approve the merger agreement and the related matters.

1

Q: What is the proposed merger and what effect will it have on UIL?

A: The proposed merger is the merger of UIL with and into merger sub, a direct, wholly-owned subsidiary of Iberdrola USA, with merger sub continuing as the surviving corporation. As a result of the merger, UIL will no longer be a publicly held company and will cease its separate corporate existence. Following the merger, UIL common stock will be delisted from the NYSE and deregistered under the Exchange Act, and UIL will no longer be required under Sections 13 or 14 of the Exchange Act to file periodic reports and proxy and information statements with the SEC in respect of UIL common stock. Following the merger, the combined company will become a publicly traded company with its common stock listed on the NYSE and registered under the Exchange Act. The combined company will be subject to the reporting requirements of Sections 13 and 14 of the Exchange Act to file periodic reports and proxy and information statements with the SEC in respect of the common stock of the combined company.

Q: What is the vote required to approve each proposal at the special meeting?

A: The approval of the merger agreement requires the affirmative vote of the owners of a majority of the shares of UIL common stock outstanding as of the close of business on                     , 2015, the record date for the special meeting. Because the affirmative vote required to approve the merger agreement is based upon the total number of outstanding shares of UIL common stock, if you fail to submit a proxy or vote in person at the special meeting, or vote to abstain, or if your shares of UIL common stock are held through a bank, brokerage firm or other nominee and you do not provide your bank, brokerage firm or other nominee with instructions, as applicable, this will have the same effect as a vote “AGAINST” the proposal to approve the merger agreement.

The approval of the merger-related executive compensation requires that the votes favoring the action cast by the owners of the shares entitled to vote thereon exceed the votes opposing the action cast by such shareowners; however, such vote is non-binding and advisory only. If you vote to abstain or if you fail to submit a proxy or to vote in person at the special meeting or if your shares of UIL common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of UIL common stock, as applicable, your shares of UIL common stock will not be voted, but this will not have an effect on the approval, by non-binding, advisory vote, of the merger-related executive compensation.

If no quorum is present, authorization for proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement requires the affirmative vote of the owners of a majority of shares of UIL common stock present in person or represented by proxy and entitled to vote thereon. If a quorum is present, authorization for proxy holders to vote in favor of one or more adjournments of the special meeting would require that the votes favoring the action cast by the owners of the shares entitled to vote thereon exceed the votes opposing the action cast by such shareowners. If no quorum is present and your shares of UIL common stock are present at the special meeting but are not voted on the proposal, or if you vote to abstain on the proposal, each will have the effect of a vote “AGAINST” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting. If a quorum is present and your shares of UIL common stock are not voted on granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, or if you have given a proxy and abstained on the adjournments of the special meeting, your shares will not be counted in respect of, and will not have an effect on, the vote to grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting. Whether or not a quorum is present, if you fail to submit a proxy and to attend the special meeting or if your shares of UIL common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of UIL common stock, as applicable, your shares of UIL common stock will not be voted, but this will not have an effect on the vote to grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting.

See the section entitled, “The UIL Special Meeting—Record Date and Quorum” beginning on page 71 of this proxy statement/prospectus.

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Q: Did the UIL board adopt the merger agreement?

A: Yes. At a meeting on February 25, 2015, the UIL board unanimously adopted the merger agreement and approved and determined that it is in the best interests of UIL for UIL to consummate the merger and the other transactions contemplated by the merger agreement and to execute and deliver the merger agreement and perform its obligations thereunder.

Q: How does the UIL board recommend that I vote at the special meeting?

A: The UIL board unanimously recommends that UIL shareowners vote “FOR” the proposal to approve the merger agreement, “FOR” the proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger, and “FOR” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. See the section entitled “The Merger—UIL’s Reasons for the Merger” beginning on page 90 of this proxy statement/prospectus.

Q: What will I receive if the merger is completed?

A: If the merger is completed, each share of UIL common stock issued and outstanding immediately prior to the completion of the merger will be converted into the right to receive one validly issued share of common stock of the combined company, credited as fully paid, and $10.50 in cash, without interest and less any applicable withholding taxes, or the per share merger consideration.

Q: What is the value of the per share merger consideration?

A: The exact value of the per share merger consideration that UIL shareowners receive will depend on the price per share of the common stock of the combined company at the time of the completion of the merger. This price will not be known at the time of the special meeting and may be less than the current price of UIL common stock or the price per share of UIL common stock at the time of the special meeting. Based on the closing stock price per share of UIL common stock on the NYSE on February 25, 2015, the last trading day before public announcement of the merger, of $42.33, and estimating the value of the stock consideration (as defined below) received based on the mid-point of the combined company’s estimated 2016 and 2017 earnings per share valued at peer price-to-earnings multiples of 17.5x and 16.5x, respectively, the estimated value of the per share merger consideration would be $52.75 for each share of UIL common stock (which includes the $10.50 per share cash consideration). You are encouraged to obtain current market quotations of UIL common stock. See the section entitled “Where You Can Find Additional Information” beginning at page 275 of this proxy statement/prospectus.

Q: How does the per share merger consideration compare to the market price per share of UIL common stock prior to the announcement of the merger?

A: Based on the estimated value of the per share merger consideration of $52.75 for each share of UIL common stock (estimated as discussed above), the per share merger consideration would represent a premium of approximately 24.6% to the closing price per share of UIL common stock on February 25, 2015, the last trading day prior to the public announcement of the proposed merger. The per share merger consideration would represent a premium of approximately 19.3% to the average closing price per share of UIL common stock over the 30-day period ending on February 25, 2015.

Q: What will holders under UIL stock-based plans receive in the merger?

A: Upon completion of the merger, each award of restricted UIL common stock granted under the UIL 2008 Stock and Incentive Compensation Plan and the UIL Deferred Compensation Plan that is outstanding and

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unvested or otherwise subject to forfeiture or other restrictions as of immediately prior to the completion of the merger will be converted into the right to receive the number of validly-issued restricted shares of common stock of the combined company equal to the product (rounded up to the nearest whole number) of the number of restricted shares of UIL common stock multiplied by an exchange factor. The exchange factor is the sum of one plus a fraction, (i) the numerator of which is $10.50 and (ii) the denominator of which is the average of the volume weighted averages of the trading prices per share of UIL common stock on the NYSE (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the parties to the merger agreement) on each of the ten consecutive trading days ending on (and including) the trading day that immediately precedes the closing date of the merger minus $10.50. Any restricted shares of common stock of the combined company received in exchange for restricted shares of UIL common stock will be subject to the same terms and conditions (including vesting and forfeiture restrictions) that were applicable to the corresponding restricted shares of UIL common stock immediately prior to the completion of the merger.

Each award of restricted UIL common stock that vests by its terms upon the completion of the merger will be converted into the right to receive the per share merger consideration upon completion of the merger.

Upon completion of the merger, each award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards granted or deferred under the UIL 2008 Stock and Incentive Compensation Plan or the UIL Deferred Compensation Plan and relating to shares of UIL common stock that is outstanding immediately prior to the completion of the merger will be converted into an award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards, as applicable, relating to shares of common stock of the combined company of the same type and on the same terms and conditions, with the number of such shares being equal to the product (rounded up to the nearest whole number) of the number of shares of UIL common stock subject to the equity award granted by UIL multiplied by the exchange factor.

If any UIL restricted stock awards or other equity awards are subject to any performance-based vesting or other performance conditions immediately prior to the completion of the merger, the performance determination will be made pursuant to the terms of such restricted stock awards or other equity awards.

Upon completion of the merger, no participant in the UIL 2012 Non-Qualified Employee Stock Purchase Plan will have any right under such plan to purchase or acquire any shares of UIL common stock and no further payroll deductions will be made under such plan and the UIL 2012 Non-Qualified Employee Stock Purchase Plan will terminate upon completion of the merger.

Q: Why am I being asked to consider and vote on the proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for named executive officers of UIL in connection with the merger?

A: Under SEC rules, UIL is required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to its named executive officers that is based on, or otherwise relates to, the merger.

Q: What will happen if UIL shareowners do not approve this merger-related executive compensation?

A: UIL shareowner approval of the compensation that may be paid or become payable to UIL’s named executive officers that is based on, or otherwise relates to, the merger is not a condition to completion of the merger. The vote is an advisory vote and will not be binding on UIL or the surviving corporation in the merger. If the merger is completed, the merger-related compensation may be paid to UIL’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if UIL shareowners do not approve, by non-binding, advisory vote, the merger-related executive compensation.

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Q: Do any of UIL’s directors or executive officers have interests in the merger that differ from or are in addition to my interests as a shareowner of UIL common stock?

A: In considering the recommendation of the UIL board with respect to the proposal to approve the merger agreement and the other matters described in this proxy statement/prospectus, you should be aware that certain directors and executive officers of UIL may have interests in the merger that are different from, or in addition to, the interests of UIL shareowners generally. The UIL board was aware of and has considered these interests, among other matters, in evaluating and negotiating the merger agreement and approving the merger, and in recommending that the merger agreement be approved by UIL shareowners. See the sections entitled “Interests of UIL’s Directors and Executive Officers in the Merger” beginning on page 108 of this proxy statement/prospectus and “Advisory Vote on Merger-Related Compensation for UIL’s Named Executive Officers” beginning on page 76 of this proxy statement/prospectus.

Q: What equity stake will UIL shareowners hold in the combined company immediately following the merger?

A: The merger agreement provides that holders of shares of UIL common stock as of immediately prior to the completion of the merger will hold, in the aggregate, 18.5% of the issued and outstanding shares of common stock of the combined company immediately following the completion of the merger.

Q: Where will the shares of common stock of the combined company that I receive in the merger be publicly traded?

A: Prior to the completion of the merger, Iberdrola USA will apply to the NYSE to list shares of the combined company common stock under the trading symbol “                     .” The listing of the combined company common stock on the NYSE is one of the closing conditions under the merger agreement. See the section entitled, “The Merger Agreement—Conditions to Completing the Merger” beginning on page 139 of this proxy statement/prospectus.

Q: When do you expect the merger to be completed?

A: Subject to the satisfaction or waiver of the closing conditions described under the section entitled “The Merger Agreement—Conditions to Completing the Merger” beginning on page 139 of this proxy statement/prospectus, including the approval of the merger agreement by UIL shareowners at the special meeting, the merger will close as soon as reasonably practicable; UIL and Iberdrola USA expect that the merger will close on or before December 31, 2015. However, it is possible that factors outside the control of both companies could result in the merger being completed at a different time or not at all.

Q: What are the material United States federal income tax consequences of the merger to UIL shareowners?

A: It is a condition to the completion of the merger that Iberdrola USA and UIL receive written opinions from their respective counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or the Code. Assuming the merger qualifies as a reorganization, a U.S. holder exchanging its shares of UIL common stock for a combination of common stock of the combined company and cash pursuant to the merger agreement will generally recognize gain (but not loss) in an amount equal to the lesser of (i) the amount of cash received in exchange for shares of UIL common stock in the merger and (ii) the excess of the “amount realized” in the transaction (i.e., the fair market value of the shares of common stock of the combined company at the effective time of the merger plus the amount of cash received in exchange for shares of UIL common stock in the merger) over its tax basis in its surrendered shares of UIL common stock.

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Any gain recognized upon the exchange will generally be capital gain, and will be long-term capital gain if, as of the effective date of the merger, the U.S. holder’s holding period with respect to its surrendered shares of UIL common stock exceeds one year. Depending on certain facts specific to each U.S. holder, any gain recognized could be taxable as a dividend rather than capital gain.

For a definition of “U.S. holder” and a more detailed discussion of the material United States federal income tax consequences of the merger, see the section entitled “Material United States Federal Income Tax Consequences of the Transaction.”

Each holder is encouraged to consult its tax advisors as to the tax consequences of the merger in the holder’s particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local or foreign and other tax laws and of changes in those laws.

Q: Who can vote at the special meeting?

A: All holders of record of shares of UIL common stock as of the close of business on                     , 2015, the record date, are entitled to receive notice of, and to vote at, the special meeting. Each holder of shares of UIL common stock is entitled to cast one vote on each matter properly brought before the special meeting for each share of UIL common stock that such holder owned of record as of the close of business on the record date.

Q: When and where is the special meeting?

A: The special meeting will be held on                     , 2015, at                      Eastern time, at Quinnipiac University, Center for Medicine, Nursing and Health Sciences, 370 Bassett Road, North Haven, Connecticut 06473. If you personally attend the special meeting, you will be asked to verify that you are a shareowner by presenting an attendance ticket (attached to your proxy card), together with a proper form of identification. If your shares of UIL common stock are held through a bank, brokerage firm or other nominee, please bring proof of your beneficial ownership of such shares to the special meeting. Acceptable proof could include an account statement showing that you owned shares of UIL common stock on the record date.

For additional information about the special meeting, see the section entitled “The UIL Special Meeting” beginning on page 71 of this proxy statement/prospectus.

Q: How will I receive the merger consideration to which I am entitled?

A: After receiving the proper documentation from you, following the completion of the merger, the exchange agent will forward to you the shares of common stock of the combined company and cash to which you are entitled. If you own UIL common stock in book-entry form or through a broker, bank or other holder of record, you will not need to obtain share certificates to submit for exchange to the exchange agent, nor will you receive certificated shares of Iberdrola USA common stock. However, you or your broker, bank or other nominee will need to follow the instructions provided by the exchange agent in order to properly surrender your UIL common stock. More information on the documentation you are required to deliver to the exchange agent may be found in the section entitled “The Merger Agreement—Exchange of Shares” beginning on page 121 of this proxy statement/prospectus.

Q: Will my shares of common stock of the combined company acquired in the merger receive a dividend?

A: After the completion of the merger, as a holder of shares of common stock of the combined company you will receive the same dividends on shares of common stock of the combined company that all other holders of shares of common stock of the combined company will receive for any dividend record date that occurs after the merger is completed.

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Former UIL shareowners who held UIL book-entry shares immediately prior to the completion of the merger will be automatically entitled to be paid dividends otherwise payable on the shares of common stock of the combined company. Former UIL shareowners who held UIL share certificates immediately prior to the completion of the merger will not be entitled to be paid dividends otherwise payable on the shares of common stock of the combined company into which their shares of UIL common stock are exchangeable until they surrender their UIL share certificates according to the instructions provided to them. Dividends will be accrued for these shareowners and they will receive the accrued dividends when they surrender their UIL share certificates, subject to abandoned property laws. These shareowners will also receive all dividends with a record date prior to the completion of the merger that have been declared by UIL with respect to the shares of UIL common stock but that have not been paid on those shares of UIL common stock that they hold.

The combined company will initially set its dividend at UIL’s current quarterly dividend of $0.432 per share and expects to target a dividend based on a 65% to 75% payout ratio long-term, subject to consideration and approval by the combined company board of directors, or the combined company board. All future dividends of the combined company will remain subject to consideration and approval by the Iberdrola USA board of directors.

Q: What is the difference between holding shares as a shareowner of record and as a beneficial owner?

A: If your shares of UIL common stock are registered directly in your name with the transfer agent of UIL, Broadridge Corporate Issuer Solutions, Inc., or Broadridge, you are considered the shareowner of record with respect to those shares. As the shareowner of record, you have the right to vote, to grant a proxy for your vote directly to UIL or to a third party to vote at the special meeting.

If your shares are held by a bank, brokerage firm or other nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, brokerage firm or other nominee is considered the shareowner of record with respect to those shares. Your bank, brokerage firm or other nominee will send you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. You are invited to attend the special meeting; however, you may not vote these shares in person at the special meeting unless you obtain a “legal proxy” from your bank, brokerage firm or other nominee that holds your shares, giving you the right to vote the shares at the special meeting.

Q: If my shares of UIL common stock are held in “street name” by my bank, brokerage firm or other nominee, will my bank, brokerage firm or other nominee automatically vote those shares for me?

A: Your bank, brokerage firm or other nominee will only be permitted to vote your shares of UIL common stock if you instruct your bank, brokerage firm or other nominee how to vote. You should follow the procedures provided by your bank, brokerage firm or other nominee regarding the voting of your shares of UIL common stock. In accordance with the rules of the NYSE, banks, brokerage firms and other nominees who hold shares of UIL common stock in “street name” for their customers have authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to non-routine matters, such as the proposal to approve the merger agreement, the proposal to approve, by non-binding, advisory vote, of the merger-related executive compensation and the granting of authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. As a result, absent specific instructions from you, banks, brokerage firms or other nominees are not empowered to vote your shares of UIL common stock at the special meeting. The effect of not instructing your broker how you wish your shares to be voted will be the same as a vote “AGAINST” the proposal to approve the merger agreement, and will not have an effect on the proposal to approve, by non-binding, advisory vote, of the merger-related executive compensation or on the granting of authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

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Q: How many votes do I have?

A: Each UIL shareowner is entitled to one vote for each share of UIL common stock held of record as of the close of business on the record date. As of the close of business on the record date, there were          outstanding shares of UIL common stock.

Q: What constitutes a quorum for the special meeting?

A: The presence at the special meeting, in person or represented by proxy, of owners of a majority of the shares of UIL common stock outstanding as of the close of business on the record date constitutes a quorum for the purposes of the special meeting. Abstentions are considered for purposes of establishing a quorum. A quorum is necessary to transact business at the special meeting. Once a share of UIL common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and any adjournment of the special meeting. However, if a new record date is set for the adjourned special meeting, then a new quorum will be determined.

Q: How do I vote?

A: You can vote your shares of UIL common in the following ways, depending on whether you are a shareowner of record or a beneficial owner:

Shareowner of Record. If you are a shareowner of record, you may vote your shares of UIL common stock on matters presented at the special meeting in any of the following ways:

• by telephone or over the Internet, by accessing the telephone number or Internet website specified on the enclosed proxy card. Proxies delivered over the internet or by telephone must be submitted by 11:59 p.m. Eastern time on                     , 2015. Please be aware that if you vote by telephone or over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible;

• by completing, signing, dating and returning the enclosed proxy card in the pre-addressed, postage-prepaid envelope accompanying the proxy card; or

• in person—you may attend the special meeting and cast your vote there.

Beneficial Owner. If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must obtain a legal proxy from your bank, brokerage firm or other nominee.

Q: How do I vote my shares held in my 401K plan account?

A: If you are a participant in UIL’s 401K Plan, you can vote your UIL common stock held in your plan account by completing, signing and dating your voting instruction form and returning it in the enclosed postage-paid envelope, through the Internet or by telephone as instructed on your voting instruction form. The plan trustee will vote the shares held in your plan account in accordance with your instructions. Shares of UIL common stock held in UIL’s 401K plan for which no instructions from participants are received will be voted by the plan trustee in the same proportion as shares of UIL common stock for which voting instructions are received from participants.

Q: How can I change or revoke my vote?

A: You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by voting again at a later date through any of the methods available to you, by attending the special meeting and voting in person, or by giving written notice of revocation to UIL prior to the time the special meeting begins. Written notice of revocation should be mailed to: UIL Holdings Corporation, Attention:

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Sigrid E. Kun, Vice President, Corporate Secretary and Assistant General Counsel, 157 Church Street, P.O. Box 1564, New Haven, Connecticut 06506. For a full description of proxy submittals and revocations, see the section entitled “The UIL Special Meeting—Proxies and Revocations” beginning on page 73 of this proxy statement/prospectus.

Q: If a shareowner gives a proxy, how are the shares of UIL common stock voted?

A: Regardless of the method you choose to vote, the individuals named on the enclosed proxy card will vote your shares of UIL common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of UIL common stock should be voted “FOR” or “AGAINST” or to “ABSTAIN” from voting on all, some or none of the specific items of business to come before the special meeting.

If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted “FOR” the proposal to approve the merger agreement, “FOR” the proposal to approve, by non-binding, advisory vote, of the merger-related executive compensation and “FOR” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

Q: What should I do if I receive more than one set of voting materials?

A: If you hold shares of UIL common stock in “street name” and also directly as a record holder or otherwise or if you hold shares of UIL common stock in more than one brokerage account, you may receive more than one set of voting materials relating to the special meeting. Please complete, sign, date and return each proxy card (or cast your vote by telephone or Internet as provided on your proxy card) or otherwise follow the voting instructions provided in this proxy statement/prospectus in order to ensure that all of your shares of UIL common stock are voted. If you hold your shares in “street name” through a bank, brokerage firm or other nominee, you should follow the procedures provided by your bank, brokerage firm or other nominee to vote your shares. If you hold your shares in “street name” through more than one bank, brokerage firm or other nominee, you should follow the procedures provided by each of your banks, brokerage firms or other nominees in respect of each set of voting materials to vote the portion of your shares held through such bank, brokerage firm or other nominee.

Q: What happens if I sell my shares of UIL common stock before the special meeting?

A: The record date is earlier than both the date of the special meeting and the completion of the merger. If you transfer your shares of UIL common stock after the record date but before the special meeting, you will, unless the transferee requests a proxy from you, retain your right to vote at the special meeting but will transfer the right to receive the per share merger consideration to the person to whom you transfer your shares. In order to receive the per share merger consideration, you must hold your shares at the time of the completion of the merger.

Q: What happens if I sell or otherwise transfer my shares of UIL common stock after the special meeting but before the completion of the merger?

A: If the merger agreement is approved by UIL shareowners at the special meeting and you sell or otherwise transfer your shares after the special meeting but before the completion of the merger, you will have transferred the right to receive the per share merger consideration to the person to whom you transfer your shares. In order to receive the per share merger consideration upon completion of the merger, you must hold your shares of UIL common stock at the time of the completion of the merger.

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Q: Who will solicit and pay the cost of soliciting proxies?

A: UIL is making this solicitation and will bear the expense of printing and mailing proxy materials to its shareowners. UIL will ask banks, brokers and other custodians, nominees and fiduciaries to send proxy materials to beneficial owners of shares and to secure their voting instructions, if necessary, and UIL will reimburse them for their reasonable expenses in so doing. UIL’s directors, officers and employees may also solicit proxies personally or by telephone, but they will not be specifically compensated for soliciting proxies. UIL has retained Okapi, for a fee of up to $20,000 plus expenses, to aid in the solicitation of proxies by similar methods.

Q: What do I need to do now?

A: Even if you plan to attend the special meeting in person, after carefully reading and considering the information contained in this proxy statement/prospectus, please vote promptly to ensure that your shares are represented at the special meeting. If you hold your shares of UIL common stock in your own name as the shareowner of record, you may submit a proxy to have your shares of UIL common stock voted at the special meeting in one of three ways:

• by telephone or over the Internet, by accessing the telephone number or Internet website specified on the enclosed proxy card. Proxies delivered over the internet or by telephone must be submitted by 11:59 p.m. Eastern time on                     , 2015. Please be aware that if you vote by telephone or over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible;

• by completing, signing, dating and returning the enclosed proxy card in the pre-addressed, postage-prepaid envelope accompanying the proxy card; or

• in person—you may attend the special meeting and cast your vote there.

If you decide to attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must obtain a legal proxy from your bank, brokerage firm or other nominee.

Q: Should I send in my share certificates now?

A: No, please do NOT return your share certificate(s) with your proxy. If the merger agreement is approved by UIL shareowners and the merger is completed, and you hold physical share certificates, you will be sent a letter of transmittal as promptly as reasonably practicable after the completion of the merger describing how you may exchange your shares of UIL common stock for the per share merger consideration. If your shares of UIL common stock are held in “street name” through a bank, brokerage firm or other nominee, you will receive instructions from your bank, brokerage firm or other nominee as to how to effect the surrender of your “street name” shares of UIL common stock in exchange for the per share merger consideration.

Q: Where can I find the voting results of the special meeting?

A: The preliminary voting results will be announced at the special meeting. In addition, within four business days following certification of the final voting results, UIL intends to file the final voting results with the SEC on a Current Report on Form 8-K.

Q: Am I entitled to exercise appraisal rights instead of receiving the per share merger consideration for my shares of UIL common stock?

A: UIL shareowners of record do not have appraisal rights under the Connecticut Business Corporation Act, or CBCA, in connection with the merger.

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Q: Are there any risks that I should consider in deciding whether to vote for the proposal to approve the merger agreement?

A: Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 37 of this proxy statement/prospectus. You also should read and carefully consider the risk factors contained in the documents that are incorporated by reference into this proxy statement/prospectus.

Q: What are the conditions to completion of the merger?

A: In addition to the approval of the merger agreement by UIL shareowners as described above, completion of the merger is subject to the satisfaction of a number of other conditions, including the receipt of required regulatory approvals, the accuracy of UIL’s and Iberdrola USA’s respective representations and warranties under the merger agreement (subject to certain materiality exceptions), Iberdrola USA’s and UIL’s performance of their respective obligations under the merger agreement, the absence of a material adverse effect on Iberdrola USA or UIL (as described in the merger agreement), authorization for the listing of Iberdrola USA common stock on the NYSE and receipt of specified tax opinions. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, see the section entitled “The Merger Agreement—Conditions to Completing the Merger” beginning on page 139 of this proxy statement/prospectus.

Q: What happens if the merger is not completed?

A: If the merger agreement is not approved by UIL shareowners or if the merger is not completed for any other reason, UIL shareowners will not receive any consideration for their shares of UIL common stock. Instead, UIL will remain an independent public company, UIL common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and UIL will continue to file periodic reports with the SEC. Under certain circumstances, UIL may be required to pay Iberdrola USA a termination fee of $75,000,000 and/or reimburse its expenses in connection with the merger up to $15,000,000, with any reimbursement of expenses being credited toward, and offset against, the payment of the termination fee. See the section entitled “The Merger Agreement—Termination,” “The Merger Agreement—Effect of Termination” and “The Merger Agreement—Fees and Expenses” beginning on pages 140, 141 and 142, respectively, of this proxy statement/prospectus.

Q: Who can help answer any other questions I have?

A: If you have additional questions about the merger, need assistance in submitting your proxy or voting your shares of UIL common stock, or need additional copies of this proxy statement/prospectus or the enclosed proxy card, please contact Okapi, UIL’s proxy solicitor, by calling toll-free at (855) 208-8902.

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SUMMARY

This summary highlights information contained elsewhere in this proxy statement/prospectus. Iberdrola USA and UIL urge you to read carefully the remainder of this proxy statement/prospectus, including the attached annexes, the documents incorporated by reference into this proxy statement/prospectus and the other documents to which Iberdrola USA and UIL have referred you because this section does not provide all the information that might be important to you with respect to the merger and the related matters being considered at the UIL special meeting. See also the section entitled “Where You Can Find Additional Information” on page 275. Iberdrola USA and UIL have included page references to direct you to a more complete description of the topics presented in this summary.

Information About The Companies (Page 69)

Iberdrola USA

Durham Hall, 52 Farm View Drive

New Gloucester, Maine 04260

(207) 688-6300

Iberdrola USA is a direct, wholly-owned subsidiary of Iberdrola, S.A., a corporation (sociedad anónima) organized under the laws of Spain, one of the world’s leading energy companies. Iberdrola USA holds the U.S. operations of Iberdrola, S.A. through its direct, wholly-owned subsidiaries, including Iberdrola USA Networks, Inc., or Iberdrola Networks, and Iberdrola Renewables Holdings, Inc., or IRHI. IRHI in turn holds subsidiaries including Iberdrola Renewables LLC, or Iberdrola Renewables and Iberdrola Energy Holdings, LLC, or Iberdrola Energy Holdings. Iberdrola Networks owns and operates the regulated utility businesses of Iberdrola USA through its subsidiaries, including electric transmission and distribution and natural gas distribution, while Iberdrola Renewables operates a portfolio of renewable energy generation facilities primarily using onshore wind power, and also solar, biomass and thermal power. Iberdrola Energy Holdings operates the natural gas storage facilities and gas trading businesses of Iberdrola USA through Iberdrola Energy Services LLC (gas trading) and Enstor Inc. (gas storage). Additionally, Iberdrola USA holds merger sub, a direct and wholly-owned subsidiary newly formed in Connecticut for the sole purpose of completing the merger. See “—Merger Sub.”

There is currently no public trading market for Iberdrola USA common stock. Iberdrola USA will apply to list its common stock on the NYSE under the symbol “                    ” in connection with the merger. Iberdrola USA is headquartered in New Gloucester, Maine, where its senior management maintains offices and is responsible for overall executive, financial and planning functions. For additional information about Iberdrola USA, see the section entitled “Additional Information About Iberdrola USA” beginning on page 191 of this proxy statement/prospectus.

Merger Sub

Durham Hall, 52 Farm View Drive

New Gloucester, Maine 04260

(207) 688-6327

Green Merger Sub, Inc., or merger sub, is a Connecticut corporation and a direct wholly-owned subsidiary of Iberdrola USA that was formed solely in contemplation of the merger, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, except as described in this proxy statement/prospectus, nor any outstanding commitments other than as set forth in the merger agreement. Merger sub has not incurred any obligations, engaged in any business activities or entered into any agreements or arrangements with any third parties other than the merger agreement.

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UIL

157 Church Street

New Haven, Connecticut 06510

(203) 499-2000

The primary business of UIL is ownership of its operating regulated utility businesses. The utility businesses consist of the electric distribution and transmission operations of The United Illuminating Company, or UI, and the natural gas transportation, distribution and sales operations of The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation, and The Berkshire Gas Company. UI is also a party to a joint venture with certain affiliates of NRG Energy, Inc. pursuant to which UI holds 50% of the membership interests in GCE Holding LLC, whose wholly-owned subsidiary, GenConn Energy LLC, operates peaking generation plants in Devon, Connecticut and Middletown, Connecticut. UIL is headquartered in New Haven, Connecticut, where its senior management maintains offices and is responsible for overall executive, financial and planning functions.

UIL common stock is listed on the NYSE under the symbol “UIL.”

The Merger and the Merger Agreement (Page 118)

The terms and conditions of the merger are contained in the merger agreement, a copy of which is attached as Annex A to this proxy statement/prospectus. You are encouraged to read the merger agreement carefully and in its entirety, as it is the legal document that governs the merger.

Pursuant to the merger agreement, UIL will merge with and into merger sub. Upon completion of the merger, merger sub will continue as the surviving corporation and a wholly-owned subsidiary of the combined company. Following the merger, the combined company will be a publicly traded company with its common stock listed on the NYSE and registered under the Exchange Act. Following the merger, UIL common stock will be delisted from the NYSE, deregistered under the Exchange Act and cease to be publicly traded. The UIL board recommends that you vote “FOR” the proposal to approve the merger agreement and “FOR” the other matters described in this proxy statement/prospectus.

Effects of the Merger; Merger Consideration (Page 120)

As of the effective time, each issued share of UIL common stock that is owned by UIL (other than any shares owned on behalf of third parties) immediately prior to the effective time will automatically be cancelled and cease to exist, and no consideration will be delivered or deliverable in connection with such cancellation. Upon the terms and subject to the conditions set forth in the merger agreement, each issued and outstanding share of UIL common stock (other than any shares owned directly or indirectly by UIL, but including any shares owned by UIL on behalf of third parties) will be converted into the right to receive (i) one validly issued share of common stock of the combined company, credited as fully paid, which, when issued, ranks equally in all respects with all of the shares of common stock of the combined company then in issue and (ii) $10.50 in cash, without interest and less any applicable withholding taxes, referred to as the merger consideration. The shares of common stock of the combined company issued in the merger to UIL shareowners will represent 18.5% of the total number of shares of common stock of the combined company outstanding as of that time.

For a full description of the merger consideration, see the section entitled “The Merger Agreement—Effects of the Merger; Merger Consideration” beginning on page 120 of this proxy statement/prospectus.

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Treatment of UIL Stock Plans and UIL Equity-Based Awards (Page 120)

Each award of restricted UIL common stock granted under the UIL stock plans that is outstanding and unvested or otherwise subject to forfeiture or other restrictions as of immediately prior to the effective time of the merger, or the UIL restricted shares, other than those UIL restricted shares that vest by their terms upon the completion of the merger, will be converted into the right to receive the number of validly-issued restricted shares of common stock of the combined company calculated pursuant to an exchange ratio.

Each award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards granted or deferred under a UIL stock plan and relating to shares of UIL common stock shall be converted into a right to receive an award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards, as applicable, relating to shares of the combined company common stock of the same type and on the same terms and conditions. The number of shares of common stock of the combined company covered by each such right will be determined pursuant to a conversion ratio.

The performance determination with respect to any UIL stock award that is subject to any performance-based vesting or other performance conditions immediately prior to the effective time of the merger, will be made pursuant to the terms of the performance award.

The UIL 2012 Non-Qualified Employee Stock Purchase Plan will terminate as of the effective time of the merger.

For a full description of the treatment of UIL stock plans and equity-based awards, see the section entitled “The Merger Agreement—Treatment of UIL Stock Plans and UIL Equity Based Awards” beginning on page 120 of this proxy statement/prospectus.

No Solicitation by UIL (Page 131)

Subject to certain exceptions described below, UIL has agreed that it will, and will cause each of its subsidiaries, and will use its reasonable best efforts to cause its and their respective representatives to:

• immediately cease and cause to be terminated all existing discussions or negotiations with any person with respect to, or that could reasonably be expected to lead to, any acquisition proposal (as such term is defined on pages 130 and 131 of this proxy statement/prospectus);

• not solicit, initiate, knowingly facilitate or knowingly encourage any inquiries, offers or the making of any proposal that could reasonably be expected to lead to, any acquisition proposal;

• not engage in or otherwise participate in any negotiations or discussions regarding, or that could reasonably be expected to lead to, any acquisition proposal;

• not furnish any nonpublic information regarding UIL or any of its subsidiaries to any person (other than Iberdrola USA or merger sub) in connection with or in response to any acquisition proposal; and

• not approve, endorse or recommend any acquisition proposal except in connection with an adverse recommendation change (as defined below).

However, before UIL obtains the approval of its shareowners for the merger, or the UIL shareowner approval, UIL is not prohibited from:

• furnishing nonpublic information regarding UIL or its subsidiaries to, or entering into or participating in discussions or negotiations with, any person in response to an unsolicited, written acquisition

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proposal that the UIL board concludes in good faith, after consultation with its financial advisors and outside counsel, constitutes, or could reasonably be expected to result in, an acquisition proposal if certain conditions set forth in the merger agreement are met; or

• failing to enforce, or granting any waiver or release under, any standstill or similar agreement with any person to the extent the UIL board concludes in good faith, after consultation with its financial advisors and outside legal counsel, that taking such action could reasonably be expected to result in a possible superior proposal and that failing to take such action could reasonably be expected to result in a breach of its fiduciary duties and to the extent this action is necessary to allow such person to make a confidential proposal to the UIL board.

If UIL receives an acquisition proposal or any request for nonpublic information relating to UIL or its subsidiaries in connection with an acquisition proposal, UIL must notify Iberdrola USA orally and in writing within 24 hours of receipt of the proposal or request for information, including the identity of the person making the request or acquisition proposal. If the acquisition proposal is made in writing, UIL must include a copy of the acquisition proposal and related draft agreements or other documentation or materials delivered to UIL. If the acquisition proposal is made orally, UIL must include a reasonably detailed summary that includes all material terms of the acquisition proposal. UIL must keep Iberdrola USA informed on a reasonably prompt basis of any change to the material terms of an acquisition proposal (and in no event later than 24 hours after any such change).

Adverse Recommendation Change (Page 132)

Except as provided in the two succeeding paragraphs below, neither the UIL board nor any committee of the UIL board may:

• withhold, withdraw, change, qualify or modify in a manner adverse to Iberdrola USA, or publicly propose to withhold, withdraw, change, qualify or modify in a manner adverse to Iberdrola USA, the approval, recommendation or declaration of advisability by the UIL board or any committee of the UIL board in respect of the merger agreement and the transactions, or the UIL board recommendation;

• recommend, adopt or approve, or propose publicly to recommend, adopt or approve any acquisition proposal;

• fail to include the UIL board recommendation in this proxy statement/prospectus;

• resolve, publicly propose or agree to do any of the above actions, each of which constitutes an adverse recommendation change; or

• recommend, adopt or approve, or publicly propose to recommend, adopt or approve, or allow UIL or any of its subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or related to, or that is intended to (or would reasonably be expected to) lead to, any acquisition proposal or that would require UIL to abandon, terminate or fail to consummate the transactions, or resolve, agree or propose to do any of the actions in this sub-paragraph.

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Notwithstanding anything to the contrary in the merger agreement, at any time prior to obtaining the UIL shareowner approval, an adverse recommendation change can be effected if either of the following sets of conditions has been met.

• If an acquisition proposal has been made to UIL, the UIL board or any committee of the UIL board may effect an adverse recommendation change if:

• the UIL board or an applicable committee of the UIL board determines in good faith, after consultation with its financial advisors and outside legal counsel, that the offer constitutes a superior proposal (as such term is defined on page 131 of this proxy statement/prospectus) and that failure to take action could reasonably be expected to result in a breach of its fiduciary duties;

• UIL provides Iberdrola USA five business days’ prior written notice of its intention to take such action and the rationale for taking such action (and each time any material revision or amendment to the terms of the acquisition proposal determined to be a superior proposal is made, the five business day period will be extended for additional three business days (for the first extension) or two business days (for each subsequent extension) after notification of such change to Iberdrola USA); and

• at the end of the applicable periods described above, the UIL board again makes the good faith determination, after consultation with its outside legal counsel and financial advisors (and after taking into account any adjustments or modifications proposed by Iberdrola USA during this period), that the acquisition proposal continues to be a superior proposal, or

• If no acquisition proposal has been made to UIL, but there has been a change first occurring or becoming known to the UIL board after February 25, 2015 that materially affects or could reasonably be expected to materially affect the business, assets, liabilities, condition (financial or otherwise) or results of operations of UIL and its subsidiaries, taken as a whole, or Iberdrola USA and its subsidiaries, taken as a whole or the shareowners of UIL (including the benefits of the merger to UIL or the shareowners of UIL), and the change is material, individually or in the aggregate with any other such changes first occurring or becoming known to the UIL board after February 25, 2015 and does not involve or relate to an acquisition proposal, then the UIL board may effect an adverse recommendation change if:

• UIL provides Iberdrola USA five business days’ prior written notice of its intention to take such action and the rationale for taking such action;

• at the end of the five business day period described above, the UIL board determines in good faith, after consultation with its financial advisors and outside legal counsel (after taking into account any adjustments or modifications to the terms of the merger agreement proposed by Iberdrola USA during the period described above), that the failure to take such action could reasonably be expected to result in a breach of its fiduciary duties under applicable laws.

In either case, UIL agrees that during the periods described above, UIL will negotiate in good faith with Iberdrola USA and its representatives, if requested by Iberdrola USA, regarding any adjustments or modifications to the terms of the merger agreement.

No Solicitation by Iberdrola USA (Page 134)

Iberdrola USA has agreed that it will, and will cause each of its affiliates, and will use its reasonable best efforts to cause its and their respective representatives to:

• immediately cease and cause to be terminated all existing discussions or negotiations with any person with respect to, or that could reasonably be expected to lead to, an Iberdrola USA business combination (as defined below);

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• not solicit, initiate, endorse, knowingly facilitate or knowingly encourage any Iberdrola USA business combination or any inquiries, offers or the making of any proposal that could reasonably be expected to lead to, any Iberdrola USA business combination;

• enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or related to, or that is intended to effect, any Iberdrola USA business combination or that would reasonably be expected to cause Iberdrola USA to abandon, terminate or fail to consummate the merger;

• enter into, initiate, continue, engage in or otherwise participate in any way in any discussions or negotiations regarding, or that could reasonably be expected to lead to, any Iberdrola USA business combination; or

• agree or propose to do any of the above things.

The merger agreement defines an “Iberdrola USA business combination” as:

• any acquisition or purchase, in a single transaction or a series of transactions of all or any material part of the Iberdrola USA parties (regardless of whether such acquisition or purchase is by means of a sale of assets or a sale of equity securities of one or more of the Iberdrola USA parties or their subsidiaries), or

• any acquisition, purchase or corporate reorganization by the Iberdrola USA parties or their affiliates that could reasonably be expected to prevent, materially delay or materially impair the consummation of the merger.

Conditions to Completing the Merger (Page 139)

Conditions to Each Party’s Obligation to Effect the Merger

Each party’s obligation to complete the merger is subject to the satisfaction or waiver by Iberdrola USA and UIL of the following conditions:

• the UIL shareowner approval will have been obtained;

• no temporary restraining order or preliminary or permanent injunction or other order by any governmental authority of competent jurisdiction preventing completion of the merger, or applicable law prohibiting, materially restraining or making illegal the completion of the merger will be in effect;

• Iberdrola USA and UIL will have obtained the required statutory approvals identified in the merger agreement at or prior to the effective time, and such approvals will have become final orders;

• the Committee on Foreign Investment in the United States, or CFIUS, will have concluded its review and the President of the United States of America will not have taken action to block or prevent the completion of the merger and no requirements or conditions to mitigate any national security concerns will have been imposed; and

• the registration statement on Form S-4 filed with the SEC by Iberdrola USA in connection with the offer of the Iberdrola USA common stock to be delivered as consideration pursuant to the merger will have become effective under the Securities Act, and no stop order will be in effect, and the Iberdrola USA common stock will have been authorized for listing on the NYSE, subject to official notice of issuance.

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Conditions to Obligations of Iberdrola USA and Merger Sub

The obligation of Iberdrola USA and merger sub to effect the merger is also subject to satisfaction or waiver of the following conditions:

• the representations and warranties of UIL set forth in the merger agreement, subject to certain exceptions, will be true and correct as of February 25, 2015 and as of the closing as though made on and as of the closing, except for such failures to be true and correct that do not have, individually or in the aggregate, a UIL material adverse effect (as defined below);

• the representations and warranties of UIL concerning organization and qualification, certain provisions relating to UIL capital stock and UIL authority to enter into the merger agreement, subject to certain exceptions, will be true and correct in all respects (except de minimis errors) as of February 25, 2015 and as of the closing;

• UIL will have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing;

• a UIL material adverse effect will not have occurred after February 25, 2015;

• Iberdrola USA will have received a certificate signed by an executive officer of UIL, dated the closing date, certifying that the foregoing conditions have been satisfied;

• the final orders granting certain of the UIL required statutory approvals (as defined below) and certain of the Iberdrola USA required statutory approvals (as defined below) identified in the merger agreement will not impose terms or conditions that, individually or in the aggregate, could reasonably be expected to have a burdensome effect (as defined below);

• Iberdrola USA will have received a tax opinion from Latham & Watkins, dated the closing date, to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, Latham & Watkins will be entitled to receive and rely upon customary certificates and representations of officers of Iberdrola USA, merger sub and UIL.

Conditions to Obligations of UIL

The obligation of UIL to effect the merger is also subject to satisfaction or waiver by UIL of the following conditions:

• each of the representations and warranties of Iberdrola USA set forth in the merger agreement, subject to certain exceptions, will be true and correct as of February 25, 2015 and as of the closing as though made on and as of the closing, except for such failures to be true and correct that do not have, individually or in the aggregate, an Iberdrola USA material adverse effect (as defined below);

• the representations and warranties of Iberdrola USA concerning organization and qualification, Iberdrola USA capital stock and the authority of Iberdrola USA to enter into the merger agreement, subject to certain exceptions, will be true and correct in all respects (except de minimis errors) as of February 25, 2015 and as of the closing;

• Iberdrola USA and merger sub will have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing;

• an Iberdrola USA material adverse effect will not have occurred after February 25, 2015;

• UIL will have received a certificate signed by an executive officer of Iberdrola USA, dated the closing date, certifying that the foregoing conditions have occurred;

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• the final orders granting certain of the UIL required statutory approvals and certain of the Iberdrola USA required statutory approvals identified in the merger agreement will not impose terms or conditions that, individually or in the aggregate, could reasonably be expected to have a burdensome effect; and

• UIL will have received an opinion of Sullivan & Cromwell LLP, dated the closing date, to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, Sullivan & Cromwell will be entitled to receive and rely upon customary certificates and representations of officers of Iberdrola USA, merger sub and UIL.

Each of Iberdrola USA, merger sub and UIL may, to the extent permitted by applicable law, waive the conditions to the performance of its respective obligations under the merger agreement and complete the merger even though one or more of these conditions have not been met.

Termination (Page 140)

The merger agreement may be terminated prior to the effective time by mutual written agreement of Iberdrola USA and UIL. The merger agreement may also be terminated prior to the effective time in the following manner:

By either Iberdrola USA or UIL:

• in the event that any governmental authority has denied either any Iberdrola USA required statutory approval or UIL required statutory approval and such denial is final and nonappealable or if any law or final order that permanently restrains, enjoins or otherwise prohibits the completion of the merger is no longer subject to rehearings or appeals, and the party seeking to terminate the merger agreement due to the foregoing reasons has used its reasonable best efforts to contest, appeal and change such denial or to contest, appeal and remove such law or final order;

• in the event that the merger has not been completed by December 31, 2015, or the outside date, if the failure to complete the merger on or before the outside date is not caused by any breach of the merger agreement by the party electing to terminate the merger agreement (the outside date may be extended at the election of either UIL or Iberdrola USA by up to two successive three month periods if the conditions to closing relating to required statutory approvals identified in the merger agreement and CFIUS review have not been satisfied and all other conditions to the closing have been satisfied or are capable of being satisfied at the closing), and the party seeking to terminate the merger agreement due to the foregoing reason it is not then in breach in any material respect of any of its material covenants or agreements contained in the merger agreement; or

• if the UIL shareowner approval is not obtained at the UIL shareowner meeting (as defined below) where such matter was presented to the UIL shareowners for approval and properly voted upon.

Unilaterally by Iberdrola USA:

• in the event that the UIL board has failed to make the UIL board recommendation, to include the UIL board recommendation in this proxy statement/prospectus or to publicly reaffirm the UIL board recommendation within five business days of receipt of a written request from Iberdrola USA during the period following the receipt by UIL of a bona fide acquisition proposal that has not been withdrawn and prior to the date on which the UIL shareowner approval is received (Iberdrola USA will be entitled to make a written request for reaffirmation only once with respect to each acquisition proposal or material amendment thereto) or the UIL board has effected an adverse recommendation change, whether or not permitted by the terms of the merger agreement; or

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• in the event that UIL breaches any of the covenants or agreements or any of its representations or warranties in the merger agreement, which, individually or in the aggregate, results in, if occurring or continuing on the closing date, the failure of any condition required to be satisfied for Iberdrola USA and merger sub to effect the merger, and such breach is not cured within 45 days following written notice to UIL or by its nature or timing cannot be cured within the 45-day period (but Iberdrola USA can only terminate due to the foregoing reason if neither Iberdrola USA nor merger sub is then in breach in any material respect of any of their material covenants or agreements).

Unilaterally by UIL:

• if UIL effects an adverse recommendation change to accept an acquisition proposal prior to obtaining the UIL shareowner approval (provided that UIL pays the termination fee (as described below)); or

• in the event that Iberdrola USA or merger sub breaches any of the covenants or agreements or any of its representations or warranties in the merger agreement, which, individually or in the aggregate, results in, if occurring or continuing on the closing date, the failure of any condition required to be satisfied for UIL to effect the merger, and such breach is not cured within 45 days following written notice to Iberdrola USA or by its nature or timing cannot be cured within the 45-day period (but UIL can only terminate due to the foregoing reason if it is not then in breach in any material respect of any of its material covenants or agreements).

The party who intends to terminate the merger agreement must provide the other party with written notice, specifying the provision or provisions of the merger agreement pursuant to which the termination is effected.

Effect of Termination (Page 141)

If the merger agreement is terminated as described above, the merger agreement will become null and void and no party will have any liability under the merger agreement, except that:

• no such termination will relieve the breaching party from liability resulting from any knowing and intentional breach by such party of the merger agreement; and

• designated provisions of the merger agreement will survive the termination, including

• provisions regarding payment of the termination fee and the reimbursement of fees and expenses incurred in connection with the merger agreement and the transactions,

• provisions describing the effects of termination and

• general provisions such as governing law, entire agreement, waivers and consents and notices.

Fees and Expenses (Page 142)

Termination Fees

If Iberdrola USA terminates the merger agreement because the UIL board (i) fails to make a UIL board recommendation, (ii) fails to include the UIL board recommendation in this proxy statement/prospectus, (iii) fails to publicly affirm the UIL board recommendation within five business days of receipt of a written request from Iberdrola USA during the period following receipt by UIL of a bona fide acquisition proposal prior to the date UIL shareowner approval is received or (iv) has effected an adverse recommendation change, or if UIL terminates the merger agreement because the UIL board has effected an adverse recommendation change to accept an acquisition proposal, then UIL must pay to Iberdrola USA an amount equal to $75,000,000, or the termination fee, in same-day funds, promptly upon termination (and in any event within one business day of termination).

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If either Iberdrola USA or UIL terminates the merger agreement because any governmental authority denies any UIL required statutory approval or Iberdrola USA required statutory approval, any law or order permanently restrains, enjoins or otherwise prohibits consummation of the merger or the parties fail to consummate the merger by the outside date and the failure to consummate the merger on or before the outside date is not caused by any breach of the merger agreement by the party electing to terminate the merger agreement (and in each of the foregoing cases, only if the registration statement on Form S-4 filed by Iberdrola USA was declared effective and remained effective for a sufficient period of time for UIL to hold the UIL shareowner meeting and the UIL shareowner approval has not been obtained), or if the UIL shareowner approval is not obtained at the UIL shareowner meeting, or if Iberdrola USA terminates the merger agreement because UIL breached any of its covenants or agreements or representations or warranties which breach, either individually or in the aggregate, would result in the failure of the Iberdrola USA conditions to closing, and, in any case, before the termination, there has been an acquisition proposal which was not publicly withdrawn at least ten business days before the date of the UIL shareowner meeting, and within 12 months of the termination UIL consummates, or enters into a definitive agreement to effect a transaction pursuant to an acquisition proposal, then UIL will pay to Iberdrola USA the termination fee. Notwithstanding the foregoing, any reimbursable expenses (as defined below) previously paid by UIL to Iberdrola USA will be credited and offset against UIL’s payment of the termination fee. As used in this paragraph, the definition of acquisition proposal is modified by substituting “50%” for “15%” and substituting “UIL” for “UIL and its significant subsidiaries” when referring to the equity securities or voting power of equity securities of UIL and its significant subsidiaries.

Expenses

Except as provided otherwise in the provisions of the merger agreement related to termination fees and expenses, all fees and expenses incurred in connection with the merger agreement and the transactions will be paid by the party incurring such fees or expenses, whether or not the merger is completed.

If the merger agreement is terminated by Iberdrola USA as a result of UIL’s breach of any of its covenants, agreements, representations or warranties in the merger agreement or by either party in the event that the UIL shareowner approval is not obtained at the UIL shareowner meeting, then UIL will promptly, but no later than one business day after the date of termination and a written demand from Iberdrola USA, pay to Iberdrola USA all reasonable and documented out-of-pocket fees and expenses, or the reimbursable expenses, incurred by Iberdrola USA and its affiliates in connection with the merger agreement or the transaction (including with respect to obtaining financing), in an amount not to exceed $15,000,000. If the merger agreement is terminated by UIL as a result of Iberdrola USA’s or merger sub’s breach of any of its respective covenants, agreements, representations or warranties in the merger agreement, then Iberdrola USA will promptly, but in no event later than one business day after the date of termination and a written demand from UIL, pay to UIL the reimbursable expenses incurred by UIL and its affiliates in connection with the merger agreement or the transaction (including with respect to obtaining financing), in an amount not to exceed $15,000,000.

Recommendation of the UIL Board (Page 93)

After careful consideration of various factors described in the section entitled “The Merger—UIL’s Reasons for the Merger” beginning on page 90 of this proxy statement/prospectus, at a meeting held on February 25, 2015, the UIL board unanimously (i) adopted the merger agreement, (ii) approved and determined that it is in the best interests of UIL to consummate the merger and the other transactions contemplated by the merger agreement and to execute and deliver the merger agreement and perform UIL’s obligations thereunder and (iii) resolved to submit the merger agreement for consideration and approval by UIL shareowners and recommend the approval of the merger agreement by UIL shareowners.

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The UIL Special Meeting (Page 71)

Time, Place and Purpose of the Special Meeting

The special meeting to consider and vote upon a proposal to approve the merger agreement, or the special meeting, will be held on                     , 2015, at          Eastern time, at Quinnipiac University, Center for Medicine, Nursing and Health Sciences, 370 Bassett Road, North Haven, Connecticut 06473.

At the special meeting, UIL shareowners will be asked to (i) consider and vote upon a proposal to approve the merger agreement, (ii) consider and vote upon a proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger and (iii) grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. For a full description of the time, place and purpose of the special meeting, see the section entitled “The UIL Special Meeting—Time, Place and Purpose of the Special Meeting” beginning on page 71 of this proxy statement/prospectus.

Record Date and Quorum

You are entitled to receive notice of, and to vote at, the special meeting if you are an owner of record of shares of UIL common stock as of the close of business on                     , 2015, the record date. On the record date, there were              shares of UIL common stock outstanding and entitled to vote. You will have one vote on all matters properly coming before the special meeting for each share of UIL common stock that you owned on the record date.

The presence at the special meeting, in person or represented by proxy, of owners of a majority of the shares of UIL common stock entitled to vote outstanding as of the close of business on the record date constitutes a quorum for the purposes of the special meeting. Abstentions are considered for purposes of establishing a quorum. A quorum is necessary to transact business at the special meeting. Once a share of UIL common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and any adjournment of the special meeting. However, if a new record date is set for the adjourned special meeting, then a new quorum will be determined. For a full description of the record date and quorum of the special meeting, see the section entitled “The UIL Special Meeting—Record Date and Quorum” beginning on page 71 of this proxy statement/prospectus.

Vote Required

The approval of the merger agreement requires the affirmative vote of the owners of a majority of the shares of UIL common stock outstanding as of the close of business on the record date. Votes to abstain will not be counted as votes cast in favor of the proposal to approve the merger agreement, but will count for the purpose of determining whether a quorum is present. If you fail to submit a proxy or to vote in person at the special meeting or if you vote to abstain, each will have the same effect as a vote “AGAINST” the proposal to approve the merger agreement.

The proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger requires that the votes favoring the action cast by the owners of the shares entitled to vote thereon exceed the votes opposing the action cast by such shareowners; however, such vote is non-binding and advisory only. For purposes of the proposal, if your shares of UIL common stock are present at the special meeting but are not voted on this proposal, or if you have given a proxy and abstained on this proposal or if you fail to submit a proxy or to vote in person at the special meeting, as applicable, the shares of UIL common stock held by you or your bank, brokerage firm or other nominee will not be counted in respect of, and will not have an effect on, the proposal to approve, by non-binding, advisory vote, the merger-related executive compensation.

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If no quorum is present, authorization for proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement, requires the affirmative vote of the owners of a majority of the shares of UIL common stock present in person or represented by proxy and entitled to vote thereon. If a quorum is present, authorization for proxy holders to vote in favor of one or more adjournments of the special meeting would require that the votes favoring the action cast by the owners of the shares entitled to vote thereon exceed the votes opposing the action cast by such shareowners. If no quorum is present and your shares of UIL common stock are present at the special meeting but are not voted on this proposal, or if you vote to abstain on this proposal, this will have the effect of a vote “AGAINST” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting. If a quorum is present and your shares of UIL common stock are not voted on granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, or if you have given a proxy and abstained on granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, your shares will not be counted in respect of, and will not have an effect on, the vote to grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting. Whether or not a quorum is present, if you fail to submit a proxy or to attend the special meeting or if your shares of UIL common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of UIL common stock, as applicable, your shares of UIL common stock will not be voted, but this will not have an effect on the vote to grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting.

As of the close of business on the record date, the directors and executive officers of UIL beneficially owned and were entitled to vote, in the aggregate,              shares of UIL common stock, representing approximately     % of the outstanding shares of UIL common stock as of the close of business on the record date. The directors and executive officers of UIL have informed UIL that they currently intend to vote all such shares of UIL common stock “FOR” the proposal to approve the merger agreement, “FOR” the proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger and “FOR” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement, although they are not obligated to do so. For a full description of the voting requirements the special meeting, see the section entitled “The UIL Special Meeting—Vote Required” beginning on page 72 of this proxy statement/prospectus.

Proxies and Revocations

Any shareowner of record entitled to vote at the special meeting may submit a proxy over the Internet or via the toll-free telephone number or by completing, signing and dating the enclosed proxy card and returning it in the pre-addressed, postage-prepaid envelope accompanying the proxy card, or may vote in person by appearing at the special meeting. If your shares of UIL common stock are held in “street name” through a bank, brokerage firm or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of UIL common stock using the instructions provided by your bank, brokerage firm or other nominee. If you fail to submit a proxy or to vote in person at the special meeting, or do not provide your bank, brokerage firm or other nominee with instructions as to how to vote your shares, as applicable, your shares of UIL common stock will not be voted on the proposal to approve the merger agreement, which will have the same effect as a vote “AGAINST” the proposal to approve the merger agreement, and your shares of UIL common stock will not have an effect on the proposal to approve, by non-binding, advisory vote, of the merger-related executive compensation or on granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by voting again at a later date through any of the methods available to you, by

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attending the special meeting and voting in person, or by giving written notice of revocation to UIL prior to the time the special meeting begins. Written notice of revocation should be mailed to: UIL Holdings Corporation, Attention: Sigrid E. Kun, Vice President, Corporate Secretary and Assistant General Counsel, 157 Church Street, P.O. Box 1564, New Haven, Connecticut 06506. For a full description of proxy submittals and revocations, see the section entitled “The UIL Special Meeting—Proxies and Revocations” beginning on page 73 of this proxy statement/prospectus.

Opinion of UIL’s Financial Advisor (Page 95)

On February 25, 2015, Morgan Stanley & Co. LLC, or Morgan Stanley, financial advisor to UIL, rendered its oral opinion, which was confirmed in writing, to the UIL board to the effect that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its written opinion, the consideration to be received by the holders of shares of UIL common stock pursuant to the merger agreement was fair from a financial point of view to such holders. For a full description of the opinion of UIL’s financial advisor, see the section entitled “The Merger—Opinion of UIL’s Financial Advisor” beginning on page 95 of this proxy statement/prospectus.

The full text of Morgan Stanley’s written opinion to the UIL board, dated February 25, 2015, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is attached as Annex C to this proxy statement/prospectus. The summary of Morgan Stanley’s opinion included in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion. You are encouraged to read Morgan Stanley’s opinion and the summary of Morgan Stanley’s opinion beginning on page 95 of this proxy statement/prospectus carefully and in their entirety. Morgan Stanley’s opinion was provided to the UIL board for the benefit of the UIL board, in its capacity as such, and addressed only the fairness from a financial point of view of the consideration to be received by the holders of shares of UIL common stock pursuant to the merger agreement as of the date of the opinion and did not address any other aspects or implications of the merger. Morgan Stanley’s opinion was not intended to, and does not, constitute advice or a recommendation as to how UIL shareowners should vote at any shareowners’ meeting to be held in connection with the merger or take any other action with respect to the merger.

Interests of UIL’s Directors and Executive Officers in the Merger (Page 108)

Certain of the directors and executive officers of UIL may have interests in the merger that are different from or in addition to those of UIL shareowners generally. These interests include the treatment in the merger of UIL equity compensation awards, bonus awards, severance plans and other rights that may be held by UIL’s directors and executive officers; the expectation that some of the directors and executive officers of UIL will serve as directors and executive officers of the combined company or its subsidiaries following completion of the merger; and the indemnification of current and former UIL directors and officers by Iberdrola USA. The UIL board was aware of and considered these interests when it unanimously (i) adopted the merger agreement, (ii) approved and determined that it is in the best interests of UIL to consummate the merger and the other transactions contemplated by the merger agreement and to execute and deliver the merger agreement and perform its obligations thereunder and (iii) resolved to recommend the approval of the merger agreement by UIL shareowners. For a full description of the stock ownership of UIL directors and executive officers and the financial interests of UIL officers and directors in the merger, see the sections entitled “Interests of UIL’s Directors and Executive Officers in the Merger” beginning on page 108 of this proxy statement/prospectus and “Advisory Vote on Merger-Related Compensation for UIL’s Named Executive Officers” beginning on page 76 of this proxy statement/prospectus.

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Appraisal Rights of UIL Shareowners (Page 106)

UIL shareowners of record do not have appraisal rights under the CBCA in connection with the merger.

Delisting and Deregistration of UIL Common Stock (Page 106)

If the merger is completed, UIL common stock will be delisted from the NYSE and deregistered under the Exchange Act and UIL will no longer file periodic reports with the SEC on account of its common stock.

Regulatory Approvals Required for the Merger (Page 104)

To complete the merger, Iberdrola USA and UIL must obtain approvals or consents from, or make filings with, a number of U.S. federal and state regulatory authorities. The material regulatory approvals, consents and filings include the following:

• the expiration or early termination of the waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or the HSR Act, and the rules and regulations thereunder;

• notices to and filings under, and compliance with all requirements of CFIUS, pursuant to Section 721 of the Defense Production Act of 1950 as amended by Section 5021 of the Omnibus Trade and Competitiveness Act of 1988, and as amended by The Foreign Investment National Security Act of 2007, or Exon-Florio;

• approval by the Connecticut Public Utilities Regulatory Authority, or PURA, pursuant to Conn. Gen. Stat. Section 16-47;

• approval by the Massachusetts Department of Public Utilities, or DPU, pursuant to Mass. Gen. Laws ch. 164, Section 96;

• approval from the Federal Energy Regulatory Commission, or FERC, pursuant to Section 203 of the Federal Power Act, or FPA; and

• approval from the Federal Communications Commission, or FCC, under the Communications Act of 1934 for the transfer of control over radio licenses held by certain UIL subsidiaries.

Iberdrola USA and UIL have made various filings and submissions for the above-mentioned authorizations and approvals and, under the terms of the merger agreement, each company must use its reasonable best efforts to obtain these authorizations and approvals, subject to certain conditions.

The merger agreement also requires the following conditions be satisfied prior to closing: (i) a declaration of effectiveness by the SEC of Iberdrola USA’s registration statement on Form S-4 containing UIL’s proxy statement; (ii) approval of the merger agreement and related transactions by UIL’s shareowners (as of the close of business on the record date set by UIL); and (iii) authorization for listing of Iberdrola USA common stock on the NYSE (subject to official issuance of notice by the NYSE).

Pursuant to the HSR Act requirements, Iberdrola USA and UIL filed the required Notification and Report Forms with the U.S. Department of Justice, or DOJ, and the Federal Trade Commission, or FTC, on March 25, 2015, and early termination of the waiting period was granted on April 7, 2015. Iberdrola USA and UIL submitted a voluntary notice to CFIUS on May 8, 2015 in connection with the proposed merger. On May 18, 2015, CFIUS began its review and on June 16, 2015, CFIUS issued a letter to the parties confirming that its review of the transaction is complete and there are no unresolved national security concerns. Iberdrola USA and UIL filed transfer of control applications with the FCC with respect to private radio licenses held by UIL’s subsidiaries on May 21, 2015 and consent was granted on May 22, 2015. Iberdrola USA and UIL filed their joint

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application with FERC on March 25, 2015, and FERC issued its authorization on June 2, 2015. Iberdrola USA and UIL originally filed applications with PURA and with DPU on March 25, 2015. Iberdrola USA and UIL withdrew the PURA application in a letter dated July 7, 2015, informing PURA that they would be re-filing a new application before the end of July 2015. Once Iberdrola USA and UIL file a new application with PURA in July 2015, PURA will have 120 days to issue a final decision. The application before the DPU remains pending.

Material U.S. Federal Income Tax Consequences (Page 113)

The merger is intended to qualify as a reorganization under Section 368(a) of the Code. It is a condition to the completion of the merger that Iberdrola USA and UIL receive written opinions from their respective counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Assuming the merger qualifies as a reorganization, a U.S. holder exchanging its shares of UIL common stock for a combination of shares of common stock of the combined company and cash pursuant to the merger agreement will generally recognize gain (but not loss) in an amount equal to the lesser of (i) the amount of cash received in exchange for shares of UIL common stock in the merger and (ii) the excess of the “amount realized” in the transaction (i.e., the fair market value of the shares of common stock of the combined company at the effective time of the merger plus the amount of cash received in exchange for shares of UIL common stock in the merger) over its tax basis in its surrendered shares of UIL common stock.

Any gain recognized upon the exchange will generally be capital gain, and will be long-term capital gain if, as of the effective date of the merger, the U.S. holder’s holding period with respect to its surrendered shares of UIL common stock exceeds one year. Depending on certain facts specific to each U.S. holder, any gain recognized could be taxable as a dividend rather than capital gain.

For a definition of “U.S. holder” and a more detailed discussion of the material United States federal income tax consequences of the merger, see the section entitled “Material United States Federal Income Tax Consequences of the Transaction” beginning on page 113 of this proxy statement/prospectus.

Each holder is encouraged to consult its tax advisors as to the tax consequences of the merger in the holder’s particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local or foreign and other tax laws and of changes in those laws.

The U.S. federal income tax consequences described above may not apply to all holders of UIL common stock. A holder’s tax consequences will depend on its individual situation. Accordingly, each holder is urged to consult its tax advisors for a full understanding of the particular tax consequences of the merger to the holder.

Comparison of Shareholder Rights Before and After the Merger (Page 257)

Iberdrola USA and UIL are incorporated under the laws of the State of New York and Connecticut, respectively, and, accordingly, the rights of the shareowners of UIL are governed by the CBCA, and the rights of the shareholders of Iberdrola USA are governed by the New York Business Corporation Law (as now or hereafter may be amended), or the NYBCL. The rights of UIL shareowners are also governed by the UIL certificate of incorporation and the UIL bylaws, while the rights of the shareholders of the combined company will be governed by the combined company’s restated certificate of incorporation and amended and restated bylaws, and the rights of Iberdrola, S.A. as a shareholder of the combined company will also be governed by the shareholder agreement. Upon completion of the merger, each share of UIL common stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive the merger consideration of one share of common stock of the combined company plus $10.50 cash. As a result, upon completion of the merger, the rights of UIL shareowners who become shareholders of the combined company in the merger will be governed by the NYBCL and by the combined company’s restated certificate of incorporation

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and amended and restated bylaws and, with respect to Iberdrola, S.A., the shareholder agreement. For more detailed information regarding a comparison of your rights as a shareowner of UIL and a shareholder of the combined company, see the section entitled “Comparison of Shareholder Rights Before and After the Merger” beginning on page 257 of this proxy statement/prospectus.

Risk Factors (Page 37)

You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 37 of this proxy statement/prospectus. You also should read and carefully consider the risk factors of UIL contained in the documents that are incorporated by reference into this proxy statement/prospectus.

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SUMMARY HISTORICAL COMBINED AND CONSOLIDATED FINANCIAL DATA

OF IBERDROLA USA

The following tables set forth Iberdrola USA’s summary historical combined and consolidated financial data. You should read the following summary combined and consolidated financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Iberdrola USA’s combined and consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus. Historical results are not necessarily indicative of future results. Iberdrola USA’s financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.

The summary historical combined and consolidated financial information of Iberdrola USA as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 have been derived from Iberdrola USA’s audited historical combined and consolidated financial statements prepared in accordance with U.S. GAAP, included elsewhere in this proxy statement/prospectus. The summary historical consolidated statements of operations data for the three months ended March 31, 2015 and 2014 and the summary historical consolidated balance sheet data as of March 31, 2015 have been derived from Iberdrola USA’s unaudited consolidated financial statements. In the opinion of Iberdrola USA’s management, all adjustments considered necessary for a fair presentation of the interim March 31 financial information have been included. Results of interim periods are not necessarily indicative of the results expected for a full year or for future periods.

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013			2012
	(in millions)
Consolidated and Combined Statements of Operations Data:
Operating revenues	$	1,227	$	1,556	$	4,594	$	4,313		$	4,055
Net income		106		201		424		(64	)		170
Earnings (loss) per common share, basic and diluted	$	0.4	$	0.8	$	1.7	$	(0.3	)	$	0.7

	As of March 31,		As of December 31,
	2015		2014		2013
Consolidated Balance Sheet Data:
Total assets	$	24,306	$	24,252	$	23,209
Non-current debt		2,623		2,516		2,696

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012
	(in millions)
Other Financial Data (Non-GAAP):
Adjusted EBITDA(1)	$	371	$	571	$	1,539	$	1,393	$	1,285

(1) Iberdrola USA defines Adjusted EBITDA as operating income (loss) from continuing operations adding back impairment of non-current assets and depreciation and amortization. The most directly comparable U.S. GAAP measure to Adjusted EBITDA is operating income (loss) from continuing operations. The following table reconciles operating income (loss) from continuing operations to Adjusted EBITDA for the periods presented:

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012
	(in millions)
Operating Income (Loss) From Continuing Operations	$	196	$	414	$	885	$	156	$	251
Add: Impairment of non-current assets		—		2		25		620		463
Depreciation and amortization		175		155		629		617		571
Adjusted EBITDA (Non-GAAP)	$	371	$	571	$	1,539	$	1,393	$	1,285

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Iberdrola USA presents non-GAAP financial measures because Iberdrola USA believes that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance. Iberdrola USA also uses these measures internally to establish budgets and operational goals to manage and monitor Iberdrola USA’s business, as well as evaluating Iberdrola USA’s underlying historical performance. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of Iberdrola USA’s operating results as reported under U.S. GAAP.

Non-GAAP financial measures are not measurements of Iberdrola USA’s performance under U.S. GAAP and should not be considered as alternatives to operating income, net income or any other performance measures determined in accordance with U.S. GAAP. For additional information, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Iberdrola USA—Non-GAAP Financial Measures” included elsewhere in this proxy statement/prospectus.

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA OF UIL

The following table presents summary historical consolidated financial data for UIL as of and for the fiscal years ended December 31, 2014, 2013 and 2012 and as of and for the three months ended March 31, 2015 and 2014. The statement of operations data for each of the three years in the period ended December 31, 2014 and the balance sheet data as of December 31, 2014 and 2013 have been derived from UIL’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which are incorporated by reference into this proxy statement/prospectus. The balance sheet data as of December 31, 2012 has been derived from UIL’s audited consolidated financial statements for the year 2013, which have not been incorporated into this document by reference. The financial data as of and for the three months ended March 31, 2015 and 2014 have been derived from UIL’s unaudited consolidated financial statements included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2015, which is incorporated by reference into this proxy statement/prospectus. The financial data as of March 31, 2014 has been derived from UIL’s unaudited consolidated financial statements included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2014, which has not been incorporated into this document by reference.

The information set forth below is not necessarily indicative of future results and should be read together with the other information contained in UIL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and UIL’s Quarterly Report on Form 10-Q for the three months ended March 31, 2015, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes therein. See the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

	Three Months Ended March 31				Year Ended December 31
	2015		2014		2014		2013		2012
	(in millions, except per share amounts)
Consolidated Statements of Income Data:
Operating Revenues	$	584	$	571	$	1,632	$	1,619	$	1,487
Net Income		58		55		110		115		104
Earnings Per Share of Common Stock—Basic	$	1.01	$	0.98	$	1.93	$	2.20	$	2.04
Earnings Per Share of Common Stock—Diluted	$	1.01	$	0.97	$	1.92	$	2.18	$	2.02
Cash Dividends Declared per share of Common Stock	$	0.432	$	0.432	$	1.728	$	1.728	$	1.728

	As of March 31				As of December 31
	2015		2014		2014		2013		2012
	(in millions)
Consolidated Balance Sheet Data:
Total Assets	$	5,128	$	5,130	$	5,112	$	5,144	$	5,019
Long-term obligations and redeemable preferred stock
Long-term debt, net of unamortized discount and premium	$	1,710	$	1,723	$	1,711	$	1,724	$	1,600
Preferred stock, not subject to mandatory redemption	$	—	$	—	$	—	$	—	$	—

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	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012
	(in millions)
Other Financial Data (Non-GAAP):
Adjusted EBITDA(1)	$	143	$	144	$	400	$	430	$	413

(1) UIL defines Adjusted EBITDA as operating income adding back impairment of non-current assets and depreciation and amortization. The most directly comparable U.S. GAAP measure to Adjusted EBITDA is operating income. The following table reconciles operating income to Adjusted EBITDA for the periods presented:

	Three Months Ended     March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012
	(in millions)
Operating Income From Continuing Operations	$	100	$	104	$	248	$	240	$	232
Add: Impairment of non-current assets		—		—		—		—		—
Depreciation and amortization		43		40		152		190		181
Adjusted EBITDA (Non-GAAP)	$	143	$	144	$	400	$	430	$	413

UIL believes presenting the non-GAAP financial measures above are useful in understanding and evaluating actual and projected financial performance and that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of UIL’s operating results as reported under GAAP.

Non-GAAP financial measures are not measurements of UIL’s performance under GAAP and should not be considered as alternatives to operating income, net income or any other performance measures determined in accordance with GAAP.

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SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma combined financial information sets forth the summary unaudited pro forma combined statement of income of the combined company for the three months ended March 31, 2015 and for the year ended December 31, 2014, and the summary unaudited pro forma combined balance sheet as of March 31, 2015 to give effect to the merger, as if such transaction was completed on January 1, 2014 and March 31, 2015, respectively. You should read the following summary unaudited pro forma combined financial information in conjunction with UIL’s consolidated financial statements and related notes incorporated by reference as well as Iberdrola USA’s combined and consolidated financial statements and related notes and the more detailed unaudited pro forma combined consolidated financial information and the related notes, included elsewhere in this proxy statement/prospectus.

The following summary unaudited pro forma combined financial information is based on the historical financial statements of Iberdrola USA and UIL and is intended to illustrate how the transaction might have affected the historical financial statements of Iberdrola USA if it had been consummated at the dates indicated above. The summary unaudited pro forma combined financial information is provided for illustrative purposes only and does not necessarily reflect the financial position or results of operations that would have actually resulted had the transaction occurred as of the dates indicated, nor should it be taken as necessarily indicative of the future financial position or results of operations of the combined company. Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled “Risk Factors” beginning on page 37 of this proxy statement/prospectus.

The summary unaudited pro forma combined financial information does not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the transaction, the costs to integrate the operations of UIL and Iberdrola USA or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements. The summary unaudited pro forma combined financial information also does not reflect any potential regulatory actions that may impact the combined company when the transaction is completed.

Summary Unaudited Pro Forma Combined Statements of Operations Data:

	Historical Iberdrola USA		Historical UIL		Reporting Reclassifications		Transaction Adjustments		Pro Forma Iberdrola USA
	(in millions)
Three Months Ended March 31, 2015:
Operating revenues	$	1,227	$	584	$	—	$	—	$	1,811
Operating income		196		100		—		12		308
Net income		106		58		—		8		172
Year Ended December 31, 2014:
Operating revenues	$	4,594	$	1,632	$	—	$	—	$	6,226
Operating income		885		248		—		—		1,133
Net income		424		110		—		4		538

Summary Unaudited Pro Forma Combined Balance Sheet Information:

	Historical Iberdrola USA		Historical UIL		Reporting Reclassifications		Transaction Adjustments		Pro Forma Iberdrola USA
	(in millions)
As of March 31, 2015:
Total assets	$	24,306	$	5,128	$	—	$	950	$	30,384
Non-current debt		2,623		1,710		—		268		4,601

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Summary Pro Forma Earnings Per Share:

The pro forma earnings per share calculation reflects the estimated shares of the combined company to be issued to Iberdrola, S.A. and to UIL shareowners, after giving effect to the transaction, as follows:

Total shares held by Iberdrola, S.A.	243
Total estimated shares to be issued to Iberdrola, S.A.(1)	251,695,194
Total estimated shares to be issued to UIL shareowners(2)	57,133,320
Pro forma weighted-average shares used in computing earnings per share—basic and diluted	308,828,757

(1) Represents 81.5% of the total aggregate number of shares of common stock of the combined company; in addition to shares to be issued, 243 shares of Iberdrola USA common stock are held by Iberdrola, S.A.

(2) Represents 18.5% of the total aggregate number of shares of common stock of the combined company.

Pro forma earnings per share for the three months ended March 31, 2015

	(in millions except per share data)
Pro forma net income for the three months ended March 31, 2015	$	172
Pro forma weighted-average shares used in computing earnings per share—basic and diluted		309
Pro forma earnings per share for the three months ended March 31, 2015	$	0.56

Pro forma earnings per share for the year ended December 31, 2014

	(in millions except per share data)
Pro forma net income for the year ended December 31, 2014	$	538
Pro forma weighted-average shares used in computing earnings per share—basic and diluted		309
Pro forma earnings per share for the year ended December 31, 2014	$	1.74

The pro forma earnings per share presented in this summary unaudited pro forma combined financial information vary significantly from the actual earnings per share of Iberdrola USA included in the historical financial statements of Iberdrola USA given that the pro forma earnings per share calculation takes into consideration the issuance of 308,828,757 shares by Iberdrola USA as a consequence of its merger with UIL. Iberdrola USA’s number of shares outstanding was 243 during all the periods presented in the historical financial statements included herein, all of which shares were owned by Iberdrola, S.A.

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The following selected unaudited pro forma per share information for the year ended December 31, 2014 and the three month period ended March 31, 2015 reflects the merger as if they had occurred on January 1, 2014. The book value per share amounts in the table below reflect the merger as if it had occurred on March 31, 2015 or December 31, 2014. The information in the table is based on, and should be read together with, the historical financial information that Iberdrola USA has presented in this proxy statement/prospectus and UIL has presented in its filings with the SEC. See the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

The unaudited pro forma combined per share data is presented for illustrative purposes only and is not necessarily indicative of actual or future financial position or results of operations that would have been realized if the proposed merger had been completed as of the dates indicated or will be realized upon the completion of the proposed merger.

	Historical				Unaudited Pro Forma Combined
	Iberdrola USA		UIL
Basic Earnings Per Share Attributable to Common Shareowners
Three Months Ended March 31, 2015	$	435,035	$	1.01	$	0.56
Year Ended December 31, 2014	$	1,743,940	$	1.93	$	1.74
Diluted Earnings Per Share Attributable to Common Shareowners
Three Months Ended March 31, 2015	$	435,035	$	1.01	$	0.56
Year Ended December 31, 2014	$	1,743,940	$	1.92	$	1.74
Cash Dividends Per Share
Three Months Ended March 31, 2015	$	N/A	$	0.432	$	0.432	(1)
Year Ended December 31, 2014	$	N/A	$	1.728	$	1.728	(1)
Book Value Per Share
As of March 31, 2015	$	51,633,745	$	24.79	$	47.4
As of December 31, 2014	$	51,193,416	$	24.06	$	N/A

(1) After the completion of the merger, the combined company will initially set its dividend at UIL’s current quarterly dividend of $0.432 per share, and currently expects to target a dividend based on a 65% to 75% payout ratio long-term, subject to consideration and approval by the board of directors of the combined company.

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COMPARATIVE PER SHARE MARKET PRICE INFORMATION

UIL common stock is currently listed on the NYSE under the ticker symbol “UIL.” The following table presents the closing prices of UIL common stock on February 25, 2015, the last day for which information was available prior to the date of the public announcement of the signing of the merger agreement, and                     , 2015, the last practicable trading day prior to the mailing of this proxy statement/prospectus. The table also shows the estimated implied value of the per share merger consideration for each share of UIL common stock on the relevant date. If the merger is completed, UIL will delist its common stock from the NYSE.

Date	UIL Closing Price		Estimated Equivalent Per Share Value(1)
February 25, 2015	$	42.33	$	52.75
, 2015	$		$

(1) The implied value of the per share merger consideration represents the sum of $10.50, the cash portion of the per share merger consideration, plus the stock portion of the per share merger consideration, based on the mid-point of the combined company’s estimated 2016 and 2017 earnings per share valued at peer P/E multiples of 17.5x and 16.5x, respectively.

There is no public trading market for Iberdrola USA common stock. Iberdrola USA will apply to list the common stock of the combined company on the NYSE under the symbol “            .”

The following table sets forth, for the calendar quarters indicated, the quarterly high and low bid information of UIL’s common stock on the NYSE:

	UIL Common Stock
	High		Low
2015
Third Quarter (through July 10)	$	47.85	$	43.98
Second Quarter	$	51.50	$	43.59
First Quarter	$	52.50	$	41.19
2014
Fourth Quarter	$	46.33	$	35.33
Third Quarter	$	38.89	$	34.34
Second Quarter	$	38.82	$	35.05
First Quarter	$	40.68	$	34.37
2013
Fourth Quarter	$	39.69	$	36.47
Third Quarter	$	41.63	$	36.14
Second Quarter	$	42.14	$	36.32

The above table shows only historical data. These data may not provide meaningful information to UIL shareowners in determining whether to approve the merger agreement. UIL shareowners are urged to obtain current market quotations for UIL common stock and to review carefully the other information contained in this proxy statement/prospectus or incorporated by reference into this proxy statement/prospectus, when considering whether to approve the merger agreement. See the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

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Dividend Policy

UIL’s quarterly cash dividends declared in 2015, 2014 and 2013 were at a rate of $0.432 per share.

Iberdrola USA has not paid any cash dividends on its common stock to date. Any decision by Iberdrola USA to pay dividends in the future will be at the discretion of the Iberdrola USA board and will depend upon the operations, cash requirements, legal restrictions and other factors deemed relevant by the Iberdrola USA board. After the completion of the merger, the combined company will initially set its dividend at UIL’s current quarterly dividend of $0.432 per share, and currently expects to target a dividend based on a 65% to 75% payout ratio long-term, subject to consideration and approval by the combined company board. For additional information, see the section entitled “The Merger Agreement—Dividends” beginning on page 121 of this proxy statement/prospectus.

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RISK FACTORS

You should consider carefully the following risk factors, as well as the other information set forth in and incorporated by reference into this proxy statement/prospectus, before making a decision on the merger proposal, or the other matters presented. As a shareholder of the combined company following the completion of the proposed merger, you will be subject to all risks inherent in the business of Iberdrola USA in addition to the risks relating to UIL. The market value of your shares will reflect the performance of the business relative to, among other things, that of the competitors of Iberdrola USA and general economic, market and industry conditions. You should carefully consider the following factors as well as the other information contained in and incorporated by reference into this proxy statement/prospectus. In addition, the risks associated with UIL can be found in UIL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as updated by subsequent Quarterly Reports on Form 10-Q, all of which are filed with the SEC and incorporated by reference into this proxy statement/prospectus. For information regarding the documents incorporated into this proxy statement/prospectus by reference, see the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

Risks Relating to the Proposed Merger

There is no assurance when or if the proposed merger will be completed.

Completion of the proposed merger is subject to the satisfaction or waiver of a number of conditions as set forth in the merger agreement, including regulatory and UIL shareowner approvals and other customary closing conditions. There can be no assurance that the conditions to completion of the proposed merger will be satisfied or waived or that other events will not intervene to delay or result in the failure to close the proposed merger. In addition, each of Iberdrola USA and UIL may unilaterally terminate the merger agreement under certain circumstances, and Iberdrola USA and UIL may agree at any time to terminate the merger agreement, even if UIL shareowners have already approved the merger agreement and thereby approved the proposed merger and the other transactions contemplated by the merger agreement. Iberdrola USA and UIL can also terminate the merger agreement under other specified circumstances. For a discussion of the conditions to the completion of the proposed merger and the provisions relating to the termination of the proposed merger, see the sections entitled “The Merger Agreement—Conditions to Completing the Merger” beginning on page 139 of this proxy statement/prospectus and “The Merger Agreement—Termination” beginning on page 140 of this proxy statement/prospectus.

Iberdrola USA and UIL may be unable to obtain the regulatory approvals required to complete the proposed merger.

In addition to other conditions set forth in the merger agreement, completion of the proposed merger is conditioned upon the receipt of various state and U.S. federal regulatory approvals. The state regulatory approvals needed include but are not limited to approval by PURA and DPU. Iberdrola USA and UIL have made various filings and submissions and are pursuing all required consents, orders and approvals in accordance with the merger agreement. On April 7, 2015, the FTC and the DOJ notified Iberdrola USA and UIL that early termination of the statutory waiting period required under the HSR Act, and related rules, was granted. On June 2, 2015, authorization for the merger was received from FERC and on May 22, 2015, Iberdrola USA and UIL received approval of their transfer of control applications with respect to private radio licenses held by UIL subsidiaries from the FCC. On June 16, 2015, CFIUS issued a letter to the parties confirming that its review of the transaction is complete and there are no unresolved national security concerns. For a discussion of the required regulatory approvals, see the section entitled “The Merger—Regulatory Approvals Required for the Merger” beginning on page 104 of this proxy statement/prospectus and the section entitled “The Merger Agreement—Reasonable Best Efforts to Obtain Required Approvals; Regulatory Matters” beginning on page 134 of this proxy statement/prospectus and section 6.9(b) of the merger agreement. These consents, orders and approvals may impose conditions on or require divestitures relating to the divisions, operations or assets of Iberdrola USA and UIL or may impose requirements, limitations or costs or place restrictions on the conduct of

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the combined company’s business, and if such consents, orders and approvals require an extended period of time to be obtained, such extended period of time could increase the chance that an event occurs that constitutes a material adverse effect with respect to Iberdrola USA or UIL and thereby may offer the other party an opportunity not to complete the proposed merger. Such extended period of time also may increase the chance that other adverse effects with respect to Iberdrola USA or UIL could occur, such as the loss of key personnel.

The merger agreement requires Iberdrola USA and UIL, among other things, to accept conditions, divestitures, requirements, limitations, costs or restrictions that may be imposed by regulatory entities, subject to the burdensome effect provisions in the merger agreement. Such conditions, divestitures, requirements, limitations, costs or restrictions may jeopardize or delay completion of the proposed merger, may reduce the benefits that may be achieved from the proposed merger or may result in the abandonment of the proposed merger. Further, no assurance can be given that the required consents, orders and approvals will be obtained or that the required conditions to closing will be satisfied, and, even if all such consents, orders and approvals are obtained and such conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents, orders and approvals.

The UIL shareowners meeting at which the merger agreement will be considered may take place before all of the required regulatory approvals have been obtained and before all conditions to such approvals, if any, are known. In this event, if the merger proposal is approved by UIL shareowners, Iberdrola USA and UIL may agree to, or be subjected to, certain regulatory conditions following the receipt of such shareowner approval vote and would not be required to seek further approval of UIL shareowners, even if such conditions could have an adverse effect on Iberdrola USA, UIL or the combined company.

The announcement and pendency of the proposed merger, during which Iberdrola USA and UIL are subject to certain operating restrictions, could have an adverse effect on Iberdrola USA’s and UIL’s businesses, results of operations, financial condition or cash flows.

The announcement and pendency of the proposed merger could disrupt Iberdrola USA’s and UIL’s businesses, and uncertainty about the effect of the proposed merger may have an adverse effect on Iberdrola USA, UIL or the combined company following the proposed merger. These uncertainties could disrupt the business of Iberdrola USA or UIL and cause suppliers, vendors, partners and others that deal with Iberdrola USA and UIL to defer entering into contracts with Iberdrola USA and UIL or making other decisions concerning Iberdrola USA and UIL or seek to change or cancel existing business relationships with Iberdrola USA and UIL. In addition, Iberdrola USA’s and UIL’s employees may experience uncertainty regarding their roles after the proposed merger, for example, employees may depart either before or after the completion of the proposed merger because of such uncertainty and issues relating to the difficulty of coordination or a desire not to remain following the proposed merger; and the pendency of the proposed merger may adversely affect Iberdrola USA’s and UIL’s ability to retain, recruit and motivate key personnel. Additionally, the attention of Iberdrola USA’s and UIL’s management may be directed towards the completion of the proposed merger including obtaining regulatory approvals and other transaction-related considerations and may be diverted from the day-to-day business operations of Iberdrola USA and UIL, as applicable, and matters related to the proposed merger may require commitments of time and resources that could otherwise have been devoted to other opportunities that might have been beneficial to Iberdrola USA and UIL, as applicable. Additionally, the merger agreement requires Iberdrola USA and UIL to obtain each other’s consent prior to taking certain specified actions while the proposed merger is pending. These restrictions may prevent Iberdrola USA and UIL from pursuing otherwise attractive business opportunities or other capital structure alternatives and making other changes to its business or executing certain of its business strategies prior to the completion of the proposed merger. Further, the proposed merger may give rise to potential liabilities, including as a result of pending and future shareholder lawsuits relating to the proposed merger. Any of these matters could adversely affect the businesses of, or harm the results of operations, financial condition or cash flows of Iberdrola USA and UIL. For a discussion of the operating covenants to which Iberdrola USA and UIL are subject during the pendency of the proposed merger, see the sections entitled “The Merger Agreement—Conduct of Business Pending the Merger” beginning on page 126 of this proxy statement/prospectus.

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Iberdrola USA and UIL will incur substantial transaction fees and costs in connection with the proposed merger.

Iberdrola USA and UIL have incurred and expect to incur additional material non-recurring expenses in connection with the proposed merger and completion of the transactions contemplated by the merger agreement. Additional unanticipated costs may be incurred in the course of coordinating the businesses of Iberdrola USA and UIL after completion of the proposed merger. The parties cannot be certain that the elimination of duplicative costs or the realization of other efficiencies related to the coordination of the two businesses after the completion of the proposed merger will offset the transaction and coordination costs in the near term, or at all. Further, even if the proposed merger is not completed, Iberdrola USA and UIL will need to pay certain pre-tax costs relating to the proposed merger incurred prior to the date the proposed merger was abandoned, such as legal, accounting, financial advisory, filing and printing fees. Additionally, if the proposed merger is not completed within the expected timeframe, such delay may materially adversely affect the benefits that Iberdrola USA and UIL may achieve as a result of the proposed merger and could result in additional pre-tax transaction costs, loss of revenue or other effects associated with uncertainty about the proposed merger. Satisfying the conditions to, and completion of, the proposed merger may take longer than, and could cost more than, Iberdrola USA and UIL expect.

The Unaudited Pro Forma Combined Financial Information is presented for illustrative purposes only and may not be an indication of Iberdrola USA’s results of operations or financial condition following the completion of the proposed merger.

The unaudited pro forma combined financial information contained in this proxy statement/prospectus is presented for illustrative purposes only and should not be considered to be an indication of Iberdrola USA’s results of operation or financial condition following the completion of the proposed merger. The unaudited pro forma combined financial information has been derived from the historical financial statements of Iberdrola USA and UIL and adjustments, assumptions and preliminary estimates have been made in connection with the preparation of this information. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments, assumptions and estimates are difficult to make with accuracy. Moreover, the unaudited pro forma combined financial information does not reflect all costs that are expected to be incurred by Iberdrola USA in connection with the proposed merger. For example, the impact of any incremental costs incurred in coordinating the operations of Iberdrola USA and UIL are not reflected in the pro forma financial statements. As a result, the actual results of operations and financial condition of Iberdrola USA following the completion of the proposed merger may not be consistent with, or evident from, this pro forma financial information. The assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect Iberdrola USA’s results of operations or financial condition following the proposed merger. Any potential decline in the combined company’s financial condition or results of operations may cause significant variations in the price for the common stock of the combined company following the closing of the merger.

The combined company may be unable to integrate successfully and the combined company may not experience the strategic and financial benefits being sought from the proposed merger.

Iberdrola USA and UIL have operated and, until the completion of the proposed merger will continue to operate, independently. If the proposed merger is completed, UIL will become an indirect wholly-owned subsidiary of the combined company but will initially continue its operations on a basis that is separate from the rest of the combined company’s subsidiaries’ operations. Coordinating certain aspects of the operations and personnel of UIL with Iberdrola USA after the completion of the proposed merger will involve complex operational, technological and personnel-related challenges. This process will be time-consuming and expensive, may disrupt the businesses of either or both of the companies and may not result in the benefits potentially available to Iberdrola USA and UIL. The potential difficulties, and resulting costs and delays, include:

• managing a larger combined company;

• coordinating corporate and administrative infrastructures;

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• unanticipated issues in coordinating information technology, communications, administration and other systems;

• difficulty addressing possible differences in corporate cultures and management philosophies;

• unforeseen and unexpected liabilities related to the proposed merger or UIL’s business; and

• a deterioration of credit ratings.

Further, while, either party can, in general, refuse to complete the proposed merger if there is a material adverse effect (as defined in the merger agreement) affecting the other party prior to the completion of the proposed merger, certain types of changes do not permit either party to refuse to complete the proposed merger, even if such changes would have a material adverse effect on Iberdrola USA or UIL. If adverse changes occur but Iberdrola USA and UIL must still complete the proposed merger, the market price of the combined company common stock may suffer. There can be no assurance that, if the proposed merger is not completed, these risks will not materialize and will not materially adversely affect the business and financial results of Iberdrola USA and UIL as separate companies.

UIL shareowners will not be entitled to appraisal rights in the proposed merger.

Pursuant to Section 33-856 of the CBCA, current holders of UIL common stock are not entitled to appraisal rights in the proposed merger with respect to their shares of UIL common stock. Pursuant to the terms of the merger agreement, at the completion of the proposed merger, each share of UIL common stock issued and outstanding and certain equity awards outstanding immediately prior to the completion of the proposed merger will be automatically cancelled and extinguished and converted into the right to receive the merger consideration, consisting of an equal number of shares of common stock of the combined company plus cash consideration of $10.50 per share or, in the case of certain equity awards, additional shares of common stock of the combined company calculated based on an exchange formula. If the proposed merger is not completed for any reason, Iberdrola USA and UIL will remain separate companies. For more information, see the section entitled “The Merger Agreement—Effects of the Merger; Merger Consideration” beginning on page 120 of this proxy statement/prospectus.

The termination of the merger agreement could negatively impact UIL.

If the merger is not completed for any reason, including as a result of UIL shareowners failing to approve the merger proposal, the ongoing businesses of UIL may be adversely affected and, without realizing any of the anticipated benefits of having completed the merger, UIL would be subject to a number of risks, including the following:

• UIL may experience negative reactions from the financial markets, including a decline of its stock price (which may reflect a market assumption that the merger will be completed);

• UIL may experience negative reactions from its customers, regulators and employees;

• UIL may be required to pay certain costs relating to the merger, whether or not the merger is completed; and

• matters relating to the merger (including integration planning) will have required substantial commitments of time and resources by UIL management, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to UIL as an independent company.

If the merger agreement is terminated and the UIL board seeks another merger, business combination or other transaction, UIL shareowners cannot be certain that UIL will be able to find a party willing to offer equivalent or more attractive consideration than the consideration UIL shareowners would receive in the merger. If the merger agreement is terminated under certain circumstances specified in the merger agreement, UIL may

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be required to pay Iberdrola USA a termination fee of $75 million, depending on the circumstances surrounding the termination. Additionally, UIL may be required to reimburse Iberdrola USA for its reasonable and documented out-of-pocket transaction fees and expenses, up to an amount of $15 million, with any such reimbursable expenses previously paid by UIL to Iberdrola USA credited and offset against UIL’s payment of the termination fee. See the sections entitled “The Merger Agreement—Fees and Expenses” beginning on page 142 of this proxy statement/prospectus for a more complete discussion of the circumstances under which the merger agreement could be terminated and when the termination fee and expense payment may be payable by UIL.

Litigation has been instituted against UIL, members of the UIL board of directors, Iberdrola USA and merger sub challenging the proposed merger, and adverse judgments in these lawsuits may prevent the proposed merger from becoming effective within the expected timeframe or at all.

UIL, members of the UIL board of directors, Iberdrola USA and merger sub have been and may continue to be named as defendants in putative class action lawsuits or other proceedings that may be brought by UIL shareowners challenging the proposed merger. If the plaintiffs in any of these actions seek a preliminary or permanent injunction and are successful in obtaining one, the parties may be prevented from completing the proposed merger in the expected timeframe, if at all. Even if the plaintiffs in these potential actions are not successful in obtaining an injunction, they may nevertheless continue the action and seek damages after the transaction has closed. In addition, the costs of defending against such claims could adversely affect the financial condition of UIL or Iberdrola USA and such actions could adversely affect the reputations of UIL or Iberdrola USA and members of their respective boards of directors or management. For more information, see the section entitled “The Merger—Litigation Relating to the Merger” beginning on page 106 of this proxy statement/prospectus.

Certain of the directors and executive officers of UIL may have interests in the merger that are different from, or in addition to, those of UIL shareowners generally.

Certain of the directors and executive officers of UIL may have interests in the merger that are different from, or in addition to, those of UIL shareowners generally. These interests include the continued employment of certain executive officers of UIL, the treatment in the merger of UIL stock options and other stock-based awards, annual bonus opportunities and other rights held by UIL’s directors and executive officers, and the indemnification of former UIL directors and officers by Iberdrola USA. UIL shareowners should be aware of these interests when they consider the recommendation of the UIL board that they vote in favor of the merger proposal. The UIL board was aware of and considered these interests when it determined that the terms of the merger agreement and the transactions contemplated thereby were fair to, and in the best interests of, UIL, and recommended that UIL shareowners approve the merger proposal and the transactions contemplated by the merger agreement. See the sections entitled “Interests of UIL’s Directors and Executive Officers in the Merger” beginning on page 108 of this proxy statement/prospectus and “Advisory Vote on Merger-Related Compensation for UIL’s Named Executive Officers” beginning on page 76 of this proxy statement/prospectus.

The Internal Revenue Service, or IRS, may assert that the merger does not qualify as a “reorganization” for federal income tax purposes.

Although Iberdrola USA and UIL will each receive “reorganization” tax opinions of their respective legal counsel, based on certain fundamental representations in UIL’s officer’s certificate and Iberdrola USA’s and merger sub’s officer’s certificate, to be delivered concurrently with the completion of the proposed merger, as to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, neither Iberdrola USA nor UIL has applied for, or expects to obtain, a ruling from the IRS with respect to the federal income tax consequences of the proposed merger. No assurance can be given that the IRS will agree with the positions taken in the legal opinions or will not challenge the income tax consequences of the proposed merger.

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The market price for the combined company common stock will be affected by factors different from those that historically have affected UIL common stock.

Following the merger, UIL shareowners will become shareholders of the combined company. The combined company’s business will differ from that of UIL, and accordingly the results of operations of the combined company will be affected by some factors that are different from those currently affecting the results of operations of UIL. For a discussion of the businesses of Iberdrola USA and of some important factors to consider in connection with such business, see the section entitled “Additional Information About Iberdrola USA” beginning on page 191 of this proxy statement/prospectus.

Iberdrola USA and UIL may be materially adversely affected by negative publicity related to the proposed merger and in connection with other matters.

From time to time, political and public sentiment in connection with the proposed merger and in connection with other matters may result in a significant amount of adverse press coverage and other adverse public statements affecting Iberdrola USA and UIL. Adverse press coverage and other adverse statements, whether or not driven by political or public sentiment, may also result in investigations by regulators, legislators and law enforcement officials or in legal claims. Responding to these investigations and lawsuits, regardless of the ultimate outcome of the proceeding, can divert the time and effort of senior management from the management of Iberdrola USA’s and UIL’s respective businesses. Addressing any adverse publicity, governmental scrutiny or enforcement or other legal proceedings is time consuming and expensive and, regardless of the factual basis for the assertions being made, can have a negative impact on the reputation of Iberdrola USA and UIL, on the morale and performance of their employees and on their relationships with their respective regulators. It may also have a negative impact on their ability to take timely advantage of various business and market opportunities. The direct and indirect effects of negative publicity, and the demands of responding to and addressing it, may have a material adverse effect on Iberdrola USA’s and UIL’s respective business, financial condition, results of operations and cash flows.

The merger agreement contains provisions that could discourage a potential alternative acquirer that might be willing to pay more to acquire UIL.

The merger agreement contains “no shop” provisions which state that UIL will not solicit or facilitate proposals regarding a merger or similar transaction with another party except in certain limited circumstances. While the UIL board may withdraw or change its recommendation regarding the merger agreement in response to an unsolicited third-party proposal to acquire UIL that the UIL board determines to be superior to the merger with Iberdrola USA, there are restrictions on its ability to do so. For a discussion of the “no shop” provisions and the provisions relating to the termination of the proposed merger, see the sections entitled “The Merger Agreement—No Solicitation by UIL” and “—Adverse Recommendation Change” beginning on pages 131 and 132 of this proxy statement/prospectus. These provisions could discourage a potential third-party acquirer from considering or proposing an alternative acquisition, even if it were prepared to pay consideration with a higher value than that proposed to be paid in the merger.

The fairness opinion obtained by UIL from its financial advisor reflects the fairness of the merger consideration, from a financial point of view, only as of the date of the opinion.

UIL obtained a fairness opinion dated February 25, 2015 from Morgan Stanley, which has not been updated as of the date of this document. In rendering its opinion, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, market and financial conditions and other matters, which are beyond the control of UIL or Iberdrola USA. These include, among other things, the impact of competition on the businesses of UIL and Iberdrola USA, the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of UIL and Iberdrola USA, the industry and in the financial markets in general, which could affect the public trading value of UIL common stock by the time the merger is completed. The fairness opinion does not address the fairness of the merger consideration, from a

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financial point of view, at the time the merger is expected to be completed or as of any date other than the date of the opinion nor the prices at which UIL common stock will trade at any time. The fairness opinion that UIL received from Morgan Stanley is attached as Annex C to this proxy statement/prospectus. For a description of the opinion, see the section entitled “The Merger—Opinion of UIL’s Financial Advisor” beginning on page 95 of this proxy statement/prospectus. For a description of the other factors considered by the UIL board in determining to approve the merger, see the section entitled “The Merger—UIL’s Reasons for the Merger” beginning on page 90 of this proxy statement/prospectus.

Risks Relating to Iberdrola USA’s Regulatory Environment

Iberdrola USA’s businesses are subject to substantial regulation by federal, state and local regulatory agencies and its businesses, results of operations and prospects may be materially adversely affected by legislative or regulatory changes, as well as liability under, or any future inability to comply with, existing or future regulations or requirements.

The operations of Iberdrola USA’s subsidiaries are subject to, and its businesses are influenced by, complex and comprehensive federal, state and local regulation and legislation, including regulations promulgated by state utilities commissions and FERC. This extensive regulatory and legislative framework, portions of which are more specifically identified in the following risk factors, regulates, among other things and to varying degrees, the industries in which Iberdrola USA’s subsidiaries operate, Iberdrola USA’s business segments, rates for Iberdrola USA’s products and services, financings, capital structures, cost structures, construction, environmental obligations (including in respect of, among others, air emissions, water consumption, water discharge, protections for wildlife and humans, nuisance prohibitions and allowances, and regulation of gas and oil infrastructure operations, and associated environmental and facility permitting), development and operation of electric and gas transmission and distribution facilities, natural gas transportation, processing and storage facilities, acquisition, disposal, depreciation and amortization of facilities and other assets, service reliability, hedging and derivatives transactions and Iberdrola Energy Holdings’ commodities trading.

In its business planning and in the management of its subsidiaries’ operations, Iberdrola USA must address the effects of regulation on its businesses, including the significant and increasing compliance costs imposed on Iberdrola USA’s operations as a result of such regulation, and any inability or failure to do so timely and adequately could have a material adverse effect on its businesses, results of operations, financial condition and cash flows. The federal, state and local political and economic environment has had, and may in the future have, an adverse effect on regulatory decisions with negative consequences for Iberdrola USA’s businesses. These decisions may require, for example, Iberdrola USA’s businesses to cancel or delay planned development activities, to reduce or delay other planned capital expenditures or investments or otherwise incur costs that it may not be able to recover through rates, any of which could have a material adverse effect on the business, results of operations, financial condition and cash flows of Iberdrola USA’s businesses. In addition, changes in the nature of the regulation of Iberdrola USA’s business could have a material adverse effect on its business, results of operations, financial condition and cash flows. Iberdrola USA is unable to predict future legislative or regulatory changes, initiatives or interpretations, and there can be no assurance that Iberdrola USA will be able to respond adequately or sufficiently quickly to such changes, although any such changes, initiatives or interpretations may increase costs and competitive pressures on Iberdrola USA, which could have a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows. There can be no assurance that Iberdrola USA will be able to respond adequately or sufficiently quickly to such rules and developments, or to any other changes that reverse or restrict the competitive restructuring of the energy industry in those jurisdictions in which such restructuring has occurred. Any of these events could have a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Iberdrola USA’s businesses are subject to the jurisdiction of various federal, state and local regulatory agencies including, but not limited to, FERC, the Commodity Futures Trading Commission, or CFTC, the Department of Energy, or DOE, and the Environmental Protection Agency, or EPA. Further, Iberdrola Networks’ regulated utilities in New York and Maine are subject to the jurisdiction of the New York State Public Service

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Commission, or NYPSC, the Maine Public Utilities Commission, or MPUC, the New York State Department of Environmental Conservation and the Maine Department of Environmental Protection. These regulatory agencies cover a wide range of business activities, including, among other items, the retail and wholesale rates for electric energy, capacity and ancillary services, and for the transmission and distribution of these products, the costs charged to Iberdrola Networks’ customers through tariffs including cost recovery clauses, the terms and conditions of Iberdrola Networks’ services, procurement of electricity for Iberdrola Networks’ customers, issuances of securities, the provision of services by affiliates and the allocation of those service costs, certain accounting matters, and certain aspects of the siting, construction and transmission and distribution systems. FERC has the authority to impose penalties on regulated utilities owned by Iberdrola USA and the transmission and distribution of electricity and gas, which could be substantial, for violations of the FPA, the Natural Gas Act of 1938 or related rules, including reliability and cyber security rules as described in further detail below. The Financial Accounting Standards Board, or FASB, or the SEC may enact new accounting standards that could impact the way Iberdrola USA is required to record revenue, expenses, assets and liabilities. Certain regulatory agencies have the authority to review and disallow recovery of costs that they consider excessive or imprudently incurred and to determine the level of return that Iberdrola USA’s businesses are permitted to earn on invested capital. The regulatory process, which may be adversely affected by the political, regulatory and economic environment in New York or Maine, as applicable, may limit Iberdrola USA’s ability to increase earnings and does not provide any assurance as to achievement of authorized or other earnings levels. The disallowance of the recovery of costs incurred by Iberdrola USA or a decrease in the rate of return that Iberdrola USA is permitted to earn on its invested capital could have a material adverse effect on the business, results of operation, financial condition and cash flows of Iberdrola USA’s business. Certain of these regulatory agencies also have the authority to audit the management and operations of Iberdrola USA’s businesses in New York and Maine and require or recommend operational changes. Such audits and post-audit work requires the attention of the management and employees of Iberdrola USA and may divert their attention from other regulatory, operational or financial matters. The last management audit was by the NYPSC of Iberdrola, S.A., Iberdrola USA, New York State Electric & Gas Corporation, or NYSEG, and Rochester Gas & Electric Corporation, or RG&E, and completed in 2012. This audit resulted in 72 recommendations that were accepted by the NYPSC and that the companies verified as complete in 2014. As of April 24, 2015, the NYPSC has accepted 63 of the companies’ implementations as complete, and Iberdrola Networks continues to work with the NYPSC on the remaining nine recommendations. For additional information, see the section entitled “Additional Information About Iberdrola USA—Regulatory Environment and Principal Markets” beginning on page 204 of this proxy statement/prospectus.

Failure by Iberdrola USA to meet the reliability standards mandated by the Energy Policy Act of 2005 could have a material adverse effect on Iberdrola USA’s business, results of operation, financial condition and cash flows.

As a result of the Energy Policy Act of 2005, or EPAct 2005, owners, operators and users of bulk electric systems are subject to mandatory reliability standards developed by the North American Electric Reliability Corporation, or NERC, and its regional entities and approved and enforced by FERC. The standards are based on the functions that need to be performed to ensure that the bulk electric system operates reliably. Iberdrola Networks’ and Iberdrola Renewables’ businesses have been, and will continue to be, subject to routine audits and monitoring with respect to compliance with applicable NERC reliability standards, including standards approved by FERC that will result in an increase in the number of assets (including cyber-security assets) designated as “critical assets,” which would subject such assets to NERC cyber-security. NERC and FERC can be expected to continue to refine existing reliability standards as well as develop and adopt new reliability standards. Compliance with modified or new reliability standards may subject Iberdrola Networks’ and/or Iberdrola Renewables’ businesses to new requirements resulting in higher operating costs and/or increased capital expenditures. If Iberdrola Networks’ and/or Iberdrola Renewables’ businesses were found not to be in compliance with the mandatory reliability standards, it could be subject to penalties of up to $1.0 million per day per violation. Both the costs of regulatory compliance and the costs that may be imposed as a result of any actual or alleged compliance failures could have a material adverse effect on Iberdrola USA’s business, results of operation, financial condition and prospects.

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The NYPSC has initiated a proceeding that may result in the alteration of the public utility model in New York State and could materially and adversely impact the business and operations of Iberdrola USA in New York State.

In April 2014, the NYPSC initiated a proceeding intended to explore the “Reforming the Energy Vision” initiative, or REV, the goals of which are to improve electric system efficiency and reliability, encourage renewable energy resources, support distributed energy resources, or DER, and empower customer choice. In this proceeding, the NYPSC is examining the establishment of a Distributed System Platform, or DSP, to manage and coordinate DER, and provide customers with market data and tools to manage their energy use. The NYPSC also is examining how its regulatory practices should be modified to incent utility practices to promote REV objectives. The proceeding is following a two-phased schedule with an order relating to policy determinations for DSP and related matters issued in February 2015 and an order for regulatory design and regulatory matters, expected in 2016. Iberdrola USA is not able to predict the outcome of the REV proceeding or its impact on Iberdrola USA’s business, results of operations, financial condition and cash flows. While the end result of the REV process at the NYPSC remains unclear, it could alter the utility model in New York in a manner that could create material adverse impacts on the businesses and the operations of Iberdrola USA in New York.

Changes in regulatory and/or legislative policy could negatively impact Iberdrola Networks’ transmission planning and cost allocation.

The existing FERC-approved ISO New England, Inc., or ISO-NE, transmission tariff allocates the costs of transmission facilities that provide regional benefits to all customers of participating transmission-owning utilities. As new investment in regional transmission infrastructure occurs in any one state, its cost is shared across New England in accordance with a FERC approved formula found in the transmission tariff. Participating New England transmission owners’ agreement to this regional cost allocation is set forth in the Transmission Operating Agreement. This agreement can be modified with the approval of a majority of the transmission owning utilities and approval by FERC. In addition, other parties, such as state regulators, may seek certain changes to the regional cost allocation formula, which could have adverse effects on the rates Iberdrola Networks’ distribution companies in New England charge their retail customers.

FERC has issued rules requiring all regional transmission organizations, or RTOs, and transmission owning utilities to make compliance changes to their tariffs and contracts in order to further encourage the construction of transmission for generation, including renewable generation. This compliance will require RTOs (such as ISO-NE and NYISO) and the transmission owners in New England and New York to develop methodologies that allow for regional planning and cost allocation for transmission projects chosen in the regional plan that are designed to meet public policy goals such as reducing greenhouse gas emissions or encouraging renewable generation. Such compliance may also allow non-incumbent utilities and other entities to participate in the planning and construction of new projects in Iberdrola Networks’ service areas and regionally.

Changes in RTO tariffs, transmission owners’ agreements, or legislative policy, or implementation of these new FERC planning rules, could adversely affect Iberdrola USA’s transmission planning, results of operations, financial condition and cash flows.

Iberdrola USA is subject to numerous environmental laws, regulations and other standards, including rules and regulations with respect to climate change, that may result in capital expenditures, increased operating costs and various liabilities, and may require Iberdrola USA to limit or eliminate certain operations.

Iberdrola USA’s businesses are subject to environmental laws and regulations, including, but not limited to, extensive federal, state and local environmental statutes, rules and regulations relating to air quality, water quality and usage, climate change, emissions of greenhouse gases (including, but not limited to carbon dioxide), waste management, hazardous wastes (including the clean-up of former manufactured gas and electric generation facilities), marine, avian and other wildlife mortality and habitat protection, historical artifact preservation, natural resources and health and safety (including, but not limited to, electric and magnetic fields from power

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lines and substations, and ice throw, shadow flicker and noise related to wind turbines) that could, among other things, prevent or delay the development of power generation, power or natural gas transmission, or other infrastructure projects, restrict the output of some existing facilities, limit the availability and use of some fuels required for the production of electricity, require additional pollution control equipment, and otherwise increase costs, increase capital expenditures and limit or eliminate certain operations. There are significant capital, operating and other costs associated with compliance with these environmental statutes, rules and regulations, and those costs could be even more significant in the future as a result of new legislation, the current trend toward more stringent standards, and stricter and more expansive application and enforcement of existing environmental regulations. For example, new laws, regulations or treaties relating to climate change could mandate new or increased requirements to control or reduce the emission of greenhouse gases, such as carbon dioxide, taxes or fees on fossil fuels or emissions, cap and trade programs, emission limits and clean or renewable energy standards. Violations of current or future laws, rules, regulations or other standards could expose Iberdrola USA’s subsidiaries to regulatory and legal proceedings, disputes with, and legal challenges by, third parties, and potentially significant civil fines, criminal penalties and other sanctions. Proceedings could include, for example, litigation regarding property damage, personal injury, common law nuisance, noise and enforcement by citizens or governmental authorities of environmental requirements such as air, water, wildlife and soil quality-standards.

Iberdrola USA’s regulated utility operations may not be able to recover costs in a timely manner or at all or obtain a return on certain assets or invested capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise.

Iberdrola Networks’ regulated utilities in New York and Maine are subject to periodic review of their rates by the NYPSC and MPUC, respectively, and the retail rates charged to Iberdrola Networks’ regulated utilities’ customers through base rates and cost recovery clauses are subject to the jurisdiction of the NYPSC or MPUC, as applicable. New rates may be proposed by the Iberdrola Network’s businesses, which are then subject to review, modification and final authorization and implementation by regulators. Alternatively, regulators may review the rates of Iberdrola Networks’ regulated utilities on their own motion. Iberdrola Networks’ regulated utilities’ rate plans cover specified periods, but rates determined pursuant to a plan generally continue in effect until a new rate plan is approved by the state utility regulator. The Iberdrola Networks’ regulated utilities’ business rate plans approved by state utility regulators limit the rates Iberdrola Networks’ regulated utilities can charge their customers. The rates are generally designed for, but do not guarantee, the recovery of Iberdrola Networks’ regulated utilities’ respective cost of service and the opportunity to earn a reasonable rate of return (including a return on equity, or ROE). Actual costs may exceed levels provided for such costs in the rate plans for Iberdrola Networks’ regulated utilities. Utility regulators can initiate proceedings to prohibit Iberdrola Networks’ regulated utilities from recovering from their customers the cost of service (including energy costs) that the regulators determine to have been imprudently incurred. Iberdrola Networks’ regulated utilities defer for future recovery certain costs including major storm costs and environmental costs. If Iberdrola Networks’ regulated utilities’ costs are not fully and timely recovered through the rates ultimately approved by regulators, Iberdrola USA’s cash flows, results of operations and financial condition, and its ability to earn a return on investment and meet financial obligations, could be adversely affected.

Iberdrola Networks’ regulated utilities in New York filed for new rates at the NYPSC on May 20, 2015. Central Maine Power Company, or CMP, filed for approval of a billing system on February 27, 2015. Maine Natural Gas Company, or MNG, filed a multi-year distribution rate case with the MPUC on March 5, 2015. On June 19, 2015 the MPUC Staff issued an analysis that proposed a disallowance between approximately $10 million and $30 million of capital investment. MNG will file a response to the staff analysis and the MPUC will conduct hearings before making a final determination on the rate filing, which is expected by the end of 2015. The outcome of future rates for the New York and Maine businesses remains uncertain due to the pending rate proceedings. Iberdrola Networks may not be able to recover from customers increasing costs, taxes or state-mandated assessments or surcharges, which could adversely affect Iberdrola Networks’ ability to generate a reasonable rate of return. Iberdrola Networks’ current electric and gas rate plans include revenue decoupling

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mechanisms, or RDMs, and the gas and electric rate plans of Iberdrola Networks’ New York regulated utilities include provisions for the recovery of energy costs, including reconciliation of the actual amount paid by Iberdrola Networks. There is no guarantee that such decoupling mechanisms or recovery and reconciliation mechanism will remain part of the rate plan of Iberdrola Networks in future rate proceedings.

Iberdrola Networks previously owned and operated manufactured gas and electric generation facilities. Most of these facilities have been sold or decommissioned. State and federal environmental laws impose continuing strict liability on former owners and operators to clean up environmental contamination that impacts human health or the environment. NYSEG and RG&E have a comprehensive state plan to investigate and clean up more than 40 former manufactured gas plants. NYSEG, RG&E and CMP are all allowed to recover reasonable clean-up costs in their current rate provisions. The timing, allowance, and mechanism for future clean-up cost recovery is subject to future rate proceedings. NYSEG, RG&E and CMP could also be responsible to decommission former generation facilities to ensure compliance with state and federal environmental and health and safety laws. RG&E is currently decommissioning two former fossil generation sites located in Rochester, New York, and while NYPSC has allowed cost recovery for the decommissioning, the total amount of the decommissioning costs, the allowance, and the timing could be subject to future rate proceedings. Iberdrola Networks may not be able to obtain, in a timely manner or at all, rate recovery in respect of all or a portion of the costs its subsidiaries may incur in respect of clean-up decommissioning manufactured gas and electric generation facilities.

In addition, there are pending challenges at FERC against New England transmission owners (including CMP) seeking to lower the ROE that these transmission owners are allowed by FERC to receive for wholesale transmission service pursuant to the ISO-NE Open Access Transmission Tariff. Reductions to returns on equity adversely impact the revenues that Iberdrola Networks’ regulated utilities receive from wholesale transmission customers and could materially adversely affect the business, results of operations, financial condition and cash flows of Iberdrola USA. For additional information, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Iberdrola USA—Factors Affecting Financial Condition and Results of Operations—Iberdrola Networks—New England Transmission Owners” beginning on page 148 of this proxy statement/prospectus.

Harming of protected species can result in curtailment of wind project operations and other damages.

The operation of energy projects and transmission of energy can adversely affect endangered, threatened or otherwise protected animal species under federal and state statutes, laws, rules and regulations. Wind projects involve a risk that protected flying species, such as birds and bats, will be harmed due to collision. Transmission and distribution lines are another source of potential avian collision as well as electrocution. Energy generation and transmission facilities can result in impacts to protected wildlife, including death caused by collision, electrocution and poisoning. Energy infrastructure occasionally affects endangered or protected species. Iberdrola USA’s businesses observe industry guidelines and government-recommended best practices to avoid, minimize and mitigate harm to protected species, but complete avoidance is not possible and subsequent penalties may result. Where appropriate, Iberdrola USA’s businesses can apply for an “incidental take” permit for protected species, which may be conditioned upon the institution of costly avoidance and remediation measures.

Violations of environmental laws in certain jurisdictions may result in civil or criminal penalties, including with respect to violations of certain laws protecting migratory birds, endangered species and eagles. The federal Endangered Species Act, or ESA, and analogous state laws restrict activities without a permit that may adversely affect endangered and threatened species or their habitat. The ESA also provides for private causes of actions against a development project, an operating facility, or the agency that oversees the alleged violation of law. Similar protections are offered to migratory birds under the Migratory Bird Treaty Act, or MBTA, which implements various treaties and conventions between the United States and certain other nations for the protection of migratory birds and, pursuant to which the taking, killing or possessing of migratory birds is unlawful. Complying with the ESA and the MBTA may require implementation of operating restrictions or a

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temporary, seasonal, or permanent ban on operations in affected areas, which can materially adversely affect the revenue of those projects. Similar federal protections for eagles are provided for by the Bald and Golden Eagle Protection Act, or BGEPA, which prohibits the taking of eagles without a permit. The ESA, MBTA and BGEPA provide for criminal penalties for the “take” of protected species; the ESA and BGEPA also provide for civil penalties. Iberdrola Networks and Iberdrola Renewables are particularly prone to risks relating to birds and bats given the potential for collision and electrocution with their infrastructure, which can be considered an incidental “take” and therefore subject to penalties. The designation of new endangered or threatened species located in, or the movement or migration of species into areas where Iberdrola USA’s businesses operate could cause Iberdrola USA to incur additional costs or become subject to operating delays, restrictions or bans. For example, there have been recent sightings of the protected California condor at Iberdrola Renewables’ Manzana wind facility. Any incidental taking of a California condor could result in substantial financial, legal and reputational harm to Iberdrola USA. The U.S. Department of Justice is currently investigating Iberdrola Renewables for potential violations under the MBTA and the ESA at its Blue Creek facility and for potential violations of the MBTA and BGEPA at its three wind farms located in the state of Washington. Successful prosecutions or settlements relating to these potential violations or other violations involving environmental laws could result in material financial and reputational harm to Iberdrola USA. Taking of protected species can result in requirements to implement mitigation strategies, including curtailment of operations, short-term or long-term compensatory mitigation payments, investments or participation in mitigation research, and processing of and compliance with permits. Iberdrola USA cannot guarantee that its practices and mitigation strategies will not have a material adverse effect on its business, results of operations, financial condition and cash flows.

Iberdrola Renewables relies in part on governmental policies that support utility-scale renewable energy. Any reductions to, or the elimination of, governmental incentives that support utility-scale renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Iberdrola Renewables relies, in part, upon government policies that support utility-scale renewable energy projects and enhance the economic feasibility of developing and operating wind energy projects in regions in which Iberdrola Renewables operates or plans to develop and operate renewable energy facilities. The federal government and many states and local jurisdictions have policies or other mechanisms, such as tax incentives or renewable portfolio standards, or RPS, that support the sale of energy from utility-scale renewable energy facilities, such as wind and solar energy facilities. As a result of budgetary constraints, political factors or otherwise, federal, state and local governments from time to time may review their policies and other mechanisms that support renewable energy and consider actions that would make them less conducive to the development or operation of renewable energy facilities. Any reductions to, or the elimination of, governmental policies or other mechanisms that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development of new renewable energy projects, Iberdrola Renewables abandoning the development of new renewable energy projects, a loss of Iberdrola Renewables’ investments in the projects and reduced project returns, any of which could have a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Iberdrola USA’s businesses may face risks related to obtaining governmental approvals and permits in respect of project siting, financing, construction, operation and the negotiation of project development agreements.

Iberdrola Renewables owns, develops, constructs and/or operates electricity generation, including renewable and thermal generators, and associated transmission facilities. Iberdrola Energy Holdings owns, develops, constructs, manages and/or operates natural gas storage and associated transportation facilities. Iberdrola Networks develops, constructs, manages and operates transmission and distribution facilities to meet customer needs. As part of these operations, Iberdrola USA’s businesses must periodically apply for licenses and permits from various local, state, federal and other regulatory authorities and abide by their respective conditions. In particular, with respect to Iberdrola Renewables, over the past two years noise standards and siting criteria in the

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Northeast, where population density is higher compared to the Northwest, where Iberdrola Renewables also operates, have grown more restrictive. If Iberdrola USA’s businesses are unsuccessful in obtaining necessary licenses or permits on acceptable terms, there is a delay in obtaining or renewing necessary licenses or permits or regulatory authorities initiate any associated investigations or enforcement actions or impose related penalties or disallowances on Iberdrola USA, Iberdrola USA’s businesses, results of operations, financial conditions and cash flows could be materially adversely affected.

Iberdrola USA’s operating subsidiaries’ purchases and sales of energy commodities and related transportation and services expose Iberdrola USA to potential regulatory risks.

Under the EPAct 2005, as well as under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, Iberdrola USA’s businesses are subject to enhanced FERC and CFTC statutory authority to monitor certain segments of the physical and financial energy commodities markets. The Dodd-Frank Act creates a new regulatory framework for federal oversight of derivatives transactions by the CFTC and the SEC and requires the CFTC, the SEC and other regulatory agencies to promulgate rules and regulations implementing the legislation. These agencies have imposed broad regulations prohibiting fraud and manipulation of the electricity and gas markets. Under these laws, FERC and CFTC have promulgated new regulations that have increased compliance costs and imposed new reporting requirements on Iberdrola USA’s businesses. For example, the Dodd-Frank Act substantially increased regulation of the over-the-counter derivative contracts market and futures contract markets, which impacts Iberdrola USA’s businesses. The new regulations require Iberdrola USA’s operating subsidiaries to comply with certain margin requirements for its over-the-counter derivative contracts with certain CFTC- or SEC-registered entities and if the rules implementing the new regulations require Iberdrola USA to post significant amounts of cash collateral with respect to swap transactions, Iberdrola USA’s liquidity could be materially adversely affected. Iberdrola USA cannot predict the impact these new regulations will have on its businesses’ ability to hedge their commodity and interest rate risks or on over-the-counter derivatives markets as a whole, but they could potentially have a material adverse effect on Iberdrola USA’s businesses’ risk exposure, as well as reduce market liquidity and further increase the cost of hedging activities.

With regard to the physical purchases and sales of energy commodities, the physical trading of energy commodities and any related transportation and/or hedging activities that some of the operating subsidiaries of Iberdrola USA undertake, Iberdrola USA’s operating subsidiaries are required to observe the market-related regulations and certain reporting and other requirements enforced by the FERC, the CFTC and the SEC. Additionally, to the extent that the operating subsidiaries enter into transportation contracts with natural gas pipelines or transmission contracts with electricity transmission providers that are subject to FERC regulation, the operating subsidiaries are subject to FERC requirements related to the use of such transportation or transmission capacity. Any failure on the part of Iberdrola USA’s operating subsidiaries to comply with the regulations and policies of the FERC, the CFTC or the SEC relating to the physical or financial trading and sales of natural gas or other energy commodities, transportation or transmission of these energy commodities or trading or hedging of these commodities could result in the imposition of significant civil and criminal penalties. Failure to comply with such regulations, as interpreted and enforced, could have a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Iberdrola Renewables’ ability to generate revenue from certain utility-scale wind energy power plants depends on having continuing interconnection arrangements, power purchase agreements, or PPAs, or other market mechanisms and depends upon interconnecting utility and RTO rules, policies, procedures and FERC tariffs that do not present restrictions to current and future wind project operations.

The electric generation facilities owned by Iberdrola Renewables rely on interconnection and/or transmission agreement and transmission networks in order to sell the energy generated by such facility. If the interconnection and/or transmission agreement of an electric generating facility Iberdrola Renewables owns is terminated for any reason, Iberdrola Renewables may not be able to replace it with an interconnection or

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transmission arrangement on terms as favorable as the existing arrangement, or at all, or it may experience significant delays or costs in securing a replacement. If a transmission network to which one or more of Iberdrola Renewables’ electric generating facilities is connected experiences outages or curtailments, the affected projects may lose revenue. These factors could materially affect Iberdrola Renewables’ ability to forecast operations and negatively affect Iberdrola USA’s business, results of operations, financial condition and cash flow. In addition, certain of Iberdrola Renewables’ operating facilities’ generation of electricity may be physically or economically curtailed, and offtakers or transmission or interconnection providers may be permitted to restrict wind project operations without paying full compensation to Iberdrola Renewables pursuant to PPA or interconnection agreement or FERC tariff provisions or rules, policies or procedures of RTOs, which may reduce Iberdrola USA’s revenues and impair Iberdrola USA’s ability to capitalize fully on a particular facility’s generating potential. Such curtailments or operational limitations could have a material adverse effect on Iberdrola USA’s business, financial condition, results of operations and cash flows. Furthermore, economic congestion on the transmission grid (for instance, a negative price difference between the location where power is put on the grid by a project and the location where power is taken off the grid by the project’s customer) in certain of the bulk power markets in which Iberdrola Renewables operates may occur and its businesses may be responsible for those congestion costs. Similarly, negative congestion costs may require that the wind projects either not participate in the energy markets or bid and clear at negative prices which may require the wind projects to pay money to operate each hour in which prices are negative. If such businesses were liable for such congestion costs or if the wind projects are required to pay money to operate in any given hour when prices are negative, then Iberdrola USA’s financial results could be adversely affected.

Iberdrola Energy Holdings’ natural gas storage operations are subject to regulation and reporting obligations by FERC and other federal and state regulatory agencies, including rules and regulations related to the rates its businesses can charge for their services and their ability to construct or abandon facilities. FERC’s rate-making policies could limit Iberdrola Energy Holdings’ ability to recover the full cost of operating its facilities, including earning a reasonable return.

Iberdrola Energy Holdings’ natural gas storage operations are subject to regulation and reporting obligations by FERC and other federal and state regulatory agencies or commissions, such as the Railroad Commission of Texas for facilities located in Texas. Such regulations and reporting obligations cover rates, the types, operating parameters, operating terms and conditions of services Iberdrola Energy Holdings may offer to its customers, the construction of new facilities, the creation, expansion, modification or abandonment of services or facilities, creditworthiness and credit-supporting requirements, recordkeeping and relationships with affiliated companies involved in similarly situated aspects of the natural gas storage business. Iberdrola Energy Holdings may also perform certain engineering studies and/or engineering analysis resulting in a reduction of net working gas capacity and the potential reclassification to pad gas. FERC or state regulatory action in any of these areas could adversely affect Iberdrola Energy Holdings’ ability to compete for business, construct new facilities, modify or expand existing facilities, offer new services or recover the full cost of operating Iberdrola Energy Holdings’ storage facilities. Jurisdiction-specific regulatory oversight could also result in longer lead times to develop and complete any existing or future project than competitors that are not subject to such regulations.

New or amended pipeline safety laws and regulations requiring substantial changes to existing integrity management programs or safety technologies could subject Iberdrola Energy Holdings’ natural gas storage operations as well as Iberdrola Networks’ natural gas distribution operating companies to increased capital and operating costs and require them to use more comprehensive and stringent safety controls.

Iberdrola Energy Holdings’ natural gas storage operations as well as Iberdrola Networks’ natural gas distribution companies are subject to regulation by the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration, or PHMSA, under the Natural Gas Pipeline Safety Act of 1968, or NGPSA, as amended, which regulates the design, installation, testing, construction, operation, maintenance, repair, inspection, replacement and management of interstate and certain intrastate natural gas pipeline facilities. PHMSA, through NGPSA, has adopted rules under the NGPSA that require natural gas storage and pipeline

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operators to implement integrity management programs, including more frequent inspections, correction of identified anomalies and other measures to ensure pipeline safety in high consequence areas, such as high population areas, areas unusually sensitive to environmental damage and commercially navigable waterways. These regulations have resulted in an overall increase in maintenance costs for Iberdrola Energy Holdings. PHMSA may develop more stringent regulations applicable to integrity management programs and other aspects of Iberdrola USA’s operations, which may be hastened by recently highly-publicized incidents on certain pipelines in the United States. Iberdrola USA could incur significant additional costs if new or more stringent pipeline safety requirements are implemented. The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, or the 2011 Act, was enacted and signed into law in early 2012. Under the 2011 Act, maximum civil penalties for certain violations have been increased to $200,000 per violation per day, and from a total cap of $1.0 million to $2.0 million. In addition, the 2011 Act reauthorized the federal pipeline safety programs of PHMSA through September 30, 2015, and directs the Secretary of Transportation to undertake a number of reviews, studies and reports, some of which may result in more stringent safety controls or inspections or additional natural gas and hazardous liquids pipeline safety rulemaking. A number of the provisions of the 2011 Act have the potential to cause owners and operators of pipeline facilities to incur significant capital expenditures and/or operating costs. Iberdrola Energy Holdings’ natural gas storage operations, through its wholly-owned direct subsidiary Enstor, Inc., are also regulated by the EPA and state environmental agencies. Therefore, Iberdrola Energy Holdings’ natural gas storage operations must comply with certain environmental permits promulgated by the following emissions based standards and regulations: the National Emission Standards for Hazardous Air Pollutants, New Source Performance Standards and National Ambient Air Quality Standards. If Iberdrola USA incurs additional expenses and expenditures due to increased regulation, its business, results of operation, financial condition and cash flows could be adversely affected.

Risks Relating to Iberdrola USA’s Business and Operations

Iberdrola USA’s businesses are subject to general economic, credit and market conditions.

A credit crisis affecting the banking system and the financial markets and the resultant deterioration of macroeconomic conditions, including a global reduction in credit and liquidity in the financial markets and severe volatility in stock and bond markets could impact the financial operating conditions of Iberdrola USA, its day-to-day activities, its liquidity and cash positions, the loss of significant investment opportunities, the value of its business and its financial condition. In addition, during periods of slow or little economic growth, energy conservation efforts often increase and the amount of uncollectible customer accounts increases. These factors may also reduce earnings and cash flow.

If Iberdrola Networks’ electricity and natural gas transmission and distribution systems do not operate as expected, they could require unplanned expenditures, including the maintenance and refurbishment of Iberdrola Networks’ facilities, which could adversely affect Iberdrola USA’s business, results of operations, financial position and cash flows.

Iberdrola Networks’ ability to operate its electricity and natural gas transmission and distribution systems is critical to the financial performance of Iberdrola USA’s business. The ongoing operation of Iberdrola Networks’ facilities involves risks customary to the electric and natural gas industry that include the breakdown, failure, loss of use or destruction of Iberdrola Networks’ facilities, equipment or processes or the facilities, equipment or processes of third parties due to war or acts of terrorism, operational and safety performance below expected levels, errors in the operation or maintenance of these facilities and the inability to transport electricity or natural gas to customers in an efficient manner. These and other occurrences could reduce potential earnings and cash flows and increase the costs of repairs and replacement of assets. Losses incurred by Iberdrola Networks in respect of such occurrences may not be fully recoverable through insurance or customer rates. Further, certain of Iberdrola Networks’ facilities require periodic upgrading and improvement. Iberdrola Networks continuously updates and improves its facilities. For example, NYSEG and RG&E plan to invest a total of $2.75 billion from 2015 to 2019 to upgrade and expand their electricity and natural gas transmission and distribution infrastructure, while CMP is near completion of a $1.4 billion investment plan for the construction of a project to enhance the

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bulk power transmission grid in Maine. In addition, unplanned outages typically increase Iberdrola Networks’ operation and maintenance expenses. Any unexpected failure, including failure associated with breakdowns, forced outages or any unanticipated capital expenditures, accident, failure of major equipment, shortage of or inability to acquire critical replacement or spare parts, could result in reduced profitability or regulatory penalties. For more information, see “Risks Relating to Iberdrola USA’s Regulatory Environment.”

Iberdrola USA’s businesses’ operations and power production may fall below expectations due to the impact of severe weather or other natural events, which could adversely affect Iberdrola USA’s cash flows, results of operations and financial position.

Weather conditions directly influence the demand for electricity and natural gas and other fuels and affect the price of energy and energy-related commodities. Severe weather, such as ice and snow storms, hurricanes and other natural disasters, such as hurricanes, floods and earthquakes, can be destructive and cause power outages, bodily injury and property damage or affect the availability of fuel and water, which may require Iberdrola Networks and Iberdrola Energy Holdings to incur additional costs or loss of revenues, for example, to restore service and repair damaged facilities, to obtain replacement power and to access available financing sources, that may not be recoverable from customers, which could adversely affect Iberdrola USA’s cash flows, results of operations and financial position. Many of Iberdrola USA’s facilities could be placed at greater risk of damage should changes in the global climate produce unusual variations in temperature and weather patterns, resulting in more intense, frequent and extreme weather events, abnormal levels of precipitation and a change in sea level. A disruption or failure of electric generation, transmission or distribution systems or natural gas production, transmission, storage or distribution systems in the event of ice and snow storms, long periods of severe weather, hurricane, tornado or other severe weather event, or otherwise, could prevent Iberdrola USA from operating its business in the normal course and could result in any of the adverse consequences described above. Because utility companies, including Iberdrola USA’s regulated electric and natural gas utility subsidiaries, have large consumer customer bases, they are subject to adverse publicity focused on the reliability of their distribution services and the speed with which they are able to respond to electric outages, natural gas leaks and similar interruptions caused by storm damage or other unanticipated events. Adverse publicity of this nature could harm the reputations of Iberdrola USA and its subsidiaries. Furthermore, many of Iberdrola Networks’ and, through its wholly-owned direct subsidiary Enstor, Inc., Iberdrola Energy Holdings’ operating facilities are located either in, or close to, densely populated public places. A failure of, or damage to, these facilities, could result in bodily injury or death, property damage, the release of hazardous substances or extended service interruptions. The cost of repairing damage to Iberdrola Networks’ and Iberdrola Energy Holdings’ facilities and the potential disruption of their operations due to storms, natural disasters or other catastrophic events could be substantial. In respect of the businesses of Iberdrola USA where cost recovery is available, recovery of costs to restore service and repair damaged facilities is or may be subject to regulatory approval, and any determination by the regulator not to permit timely and full recovery of the costs incurred could have a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

If wind conditions are unfavorable or below Iberdrola Renewables’ production forecasts, or Iberdrola Renewables’ wind turbines are not available for operation, Iberdrola Renewables projects’ electricity generation and the revenue generated from its projects may be substantially below Iberdrola USA’s expectations.

Changing wind patterns or lower than expected wind resource could cause reductions in electricity generation at Iberdrola Renewables’ projects, which could affect the revenues produced by these wind generating facilities. Iberdrola Renewables’ wind projects are sited, developed and operated to maximize wind performance. Prior to siting a wind facility, detailed studies are conducted to measure the wind resource in order to estimate future production. However, wind patterns or wind resource in the future might deviate from historical patterns and are difficult to predict. These events could negatively impact the results of operations of Iberdrola Renewables, which may vary significantly from period to period, depending on the level of available resources. To the extent that resources are not available at planned levels, the financial results from these facilities may be

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less than expected. Changing wind patterns or lower than expected wind resources could also degrade equipment or components and the interconnection and transmission facilities’ lives or maintenance costs. Replacement and spare parts for wind turbines and key pieces of electrical equipment may be difficult or costly to acquire or may be unavailable. The loss of any suppliers or service providers or inability to find replacement suppliers or service providers or to purchase turbines at rates currently offered by Iberdrola Renewables’ existing suppliers or a change in the terms of Iberdrola Renewables’ supply or operations and maintenance agreements, such as increased prices for maintenance services or for spare parts, could have a material adverse effect on Iberdrola Renewables’ ability to construct and maintain wind farms or the profitability of wind farm development and operation.

The revenues generated by Iberdrola Renewables’ facilities depend upon Iberdrola Renewables’ ability to maintain the working order of its wind turbines. A natural disaster, severe weather, accident, failure of major equipment, shortage of or inability to acquire critical replacement or spare parts, failure in the operation of any future transmission facilities that Iberdrola Renewables may acquire, including the failure of interconnection to available electricity transmission or distribution networks, could damage or require Iberdrola Renewables to shut down its turbines or related equipment and facilities, leading to decreases in electricity generation levels and revenues. Additionally, Iberdrola Renewables’ operating projects generally do not hold spare substation main transformers in inventory. These transformers are designed specifically for each wind power project, and order lead times can be lengthy. If one of Iberdrola Renewables’ projects had to replace any of its substation main transformers, it would be unable to sell all of its power until a replacement is installed.

If Iberdrola Renewables experiences a prolonged interruption at one of its operating projects due to natural events or operational problems and such events are not fully covered by insurance, Iberdrola Renewables’ electricity generation levels could materially decrease, which could have a material adverse effect on its business, results of operation and financial condition and could adversely affect Iberdrola USA’s cash flows, results of operations and financial position.

Cyber breaches, acts of war or terrorism, grid disturbances or security breaches involving the misappropriation of confidential and proprietary customer, employee, financial or system operating information could negatively impact Iberdrola USA’s business.

Cyber breaches, acts of war or terrorism or grid disturbances resulting from internal or external sources could target Iberdrola USA’s subsidiaries’ generation, transmission and distribution facilities or Iberdrola USA’s information technology systems. In the regular course of business, the subsidiaries of Iberdrola USA maintain sensitive customer, employee, financial and system operating information and are required by various federal and state laws to safeguard this information. Cyber or physical security intrusions could potentially lead to disabling damage to Iberdrola USA’s generation, transmission and distribution facilities and to theft and the release of critical operating information or confidential customer or employee information, which could adversely affect Iberdrola USA’s subsidiaries’ operations or adversely impact Iberdrola USA’s reputation, and could result in significant costs, fines and litigation. Additionally, because Iberdrola USA’s subsidiaries’ generation and transmission facilities are part of an interconnected regional grid, Iberdrola USA’s subsidiaries face the risk of blackout due to a disruption on a neighboring interconnected system. As threats evolve and grow increasingly more sophisticated, Iberdrola USA cannot ensure that a potential security breach may not occur or quantify the potential impact of such an event. Any such cyber breaches could result in a significant decrease in revenues, significant expense to repair system damage or security breaches, regulatory penalties and liability claims, which could have a material adverse effect on Iberdrola USA’s cash flows, results of operations and financial condition.

Risks including but not limited to any physical security breach involving unauthorized access, electricity or equipment theft and vandalism could adversely affect Iberdrola USA’s business operations and adversely impact Iberdrola USA’s reputation.

A physical attack on Iberdrola USA’s subsidiaries’ transmission and distribution infrastructure could interfere with normal business operations and affect Iberdrola USA’s subsidiaries’ ability to control their

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transmission and distribution assets. A physical security intrusion could potentially lead to theft and the release of critical operating information, which could adversely affect Iberdrola USA’s subsidiaries’ operations or adversely impact Iberdrola USA’s reputation, and could result in significant costs, fines and litigation. Additionally, certain of Iberdrola USA’s subsidiaries’ power generation and transmission and distribution assets and equipment are at risk for theft and damage. For example, Iberdrola Networks is at risk for copper wire theft, especially, due to an increased demand for copper in the United States and internationally. Theft of copper wire or solar panels can cause significant disruption to Iberdrola Networks’ and Iberdrola Renewables’ operations, respectively, and can lead to operating losses at those locations. Furthermore, Iberdrola Renewables can incur damage to wind turbine equipment, either through natural events such as lightning strikes that damage blades or in-ground electrical systems used to collect electricity from turbines, or through vandalism, such as gunshots into towers or other generating equipment. Such damage can cause disruption of operations for unspecified periods which may lead to operating losses at those locations.

Iberdrola USA’s risk management policies cannot fully eliminate the risk associated with some of its operating subsidiaries’ commodity trading and hedging activities, which may result in significant losses.

Iberdrola Renewables and Iberdrola Energy Holdings have exposure to commodity price movements through their “natural” long positions in electricity and natural gas storage in addition to proprietary trading and hedging activities.

Iberdrola Networks, Iberdrola Renewables and Iberdrola Energy Holdings manage the exposure to risks of commodity price movements through internal risk management policies, enforcement of established risk limits and risk management procedures. These risk policies, risk limits and risk management procedures may not work as planned and cannot eliminate all risks associated with these activities. Even when these risk policies and procedures are followed, and decisions are made based on projections and estimates of future performance, results of operations may be diminished if the judgments and assumptions underlying those decisions prove to be incorrect. Iberdrola USA’s risk management tools and metrics associated with their hedging and trading procedures, such as daily value at risk, stop loss limits and liquidity guidelines, are based on historical price movements. Due to the inherent uncertainty involved in price movements and potential deviation from historical pricing behavior, Iberdrola USA is unable to assure that their risk management tools and metrics will be effective to protect against material adverse effects on their business, financial condition, results of operations and prospects. Factors, such as future prices and demand for power and other energy-related commodities, become more difficult to predict and the calculations become less reliable the further into the future estimates are made. As a result, Iberdrola USA cannot fully predict the impact that some of its subsidiaries’ commodity trading and hedging activities and risk management decisions may have on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Iberdrola USA expects to invest in development opportunities in all segments of its business, but such opportunities may not be successful and projects may not commence operation as scheduled or at all, or be completed within budget or at all, which could have a material adverse effect on Iberdrola USA’s business prospects.

Iberdrola USA is pursuing broader development investment opportunities related to all segments of its business, particularly in respect of additional construction projects in respect of renewable energy generation. The development, construction and expansion of such facilities involve numerous risks. Various factors could result in increased costs or result in delays or cancellation of these projects. Risks include regulatory approval processes, new legislation, economic events or factors, environmental and community concerns, design and siting issues, difficulties in obtaining required rights of way, competition from incumbent facilities and other entities, and actions of strategic partners. Should any of these factors result in such delays or cancellations, Iberdrola USA’s business, financial position, results of operations, and cash flows could be adversely affected or its future growth opportunities may not be realized as anticipated.

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The progressive reduction in the costs of distributed energy assets, as a result of technological improvements, large scale deployment in certain jurisdictions and constructive support regimes could result in customer defection.

The emergence of technology and the proliferation and structure of rate incentives to distributed energy assets, such as net energy metering which allows electricity customers who supply their own electricity from on-site generation to pay only for the net energy obtained from the utility, behind-the-meter storage systems and grid integration components such as inverters or electronics, could result in electricity delivery customers abandoning the grid system or replacing part of grid services with self-supply or self-balancing, or could impact the return on current or future network assets deployed and designed to serve projected load. Such emergence of alternative sources of energy supply can result in customers relying on the power grid for limited use, such as in the case of a deficit or an emergency, or completely abandoning the grid, which is known as customer defection. While the operating subsidiaries of Iberdrola Networks are protected from reduced volumetric sales by decoupling mechanisms, which delinks a utility’s delivery revenues from volumetric sales, these are temporary in nature and there is no assurance such mechanisms will be extended. The progressive reduction in the costs of distributed energy assets, as a result of technological improvements, large scale deployment in certain jurisdictions and constructive support regimes could result in customer defection (individually or integrated in micro-grids) when a net benefit analysis of investing in self-supply and storage of energy compared to energy provided by utility service appears attractive for certain customer classes. Similarly, some current costs or future investments in networks could be impacted, such as allocating more costs to certain customer segments, if adequate rate making does not fully contemplate the characteristics of an integrated reliable grid from a unified perspective, regardless of customer disconnection. Further, the interoperability, integration and standard connection of these distributed energy devices and systems could place a burden on the system of Iberdrola Networks’ operating subsidiaries, without adequately compensating them.

Advances in technology could impair or eliminate the competitive advantage of Iberdrola USA’s businesses.

The emergence of initiatives designed to reduce greenhouse gas emissions and control or limit the effects of global warming and overall climate change has increased the incentive for the development of new technologies for power generation and energy efficiency, and for investment in research and development to make those technologies more efficient and cost-effective. There is potential that distributed generation systems and energy efficiency measures could adversely affect the demand for services of Iberdrola USA’s regulated subsidiaries thus impacting revenues, which could adversely affect Iberdrola USA’s cash flows, results of operations and financial condition. Furthermore, the technologies used in the renewable energy sector change and evolve rapidly. Techniques for the production of electricity from renewable sources are constantly improving and becoming more complex. In order to maintain Iberdrola Renewables’ competitiveness and expand its business, Iberdrola Renewables must adjust effectively to changes in technology and further its research and development. If Iberdrola Renewables fails to react effectively to current and future technological changes in the sector or to progress its research and development in a timely manner, Iberdrola Renewables’ future business growth, results of operations and financial condition could be materially adversely affected.

Investments in development opportunities in electricity generation, transmission and distribution and natural gas storage and transportation may not be successful and projects may not commence or complete operation as scheduled or be within budget.

The operating subsidiaries of Iberdrola USA pursue development opportunities related to electric transmission and renewable energy generation, interconnections to generating resources and other investment opportunities. The development, construction and expansion of projects involve numerous risks. Various factors could result in increased costs or result in delays or cancellation of these projects. Risks include regulatory approval processes, permitting, new legislation, economic events or factors, environmental and community concerns, negative publicity, design and siting issues, difficulties in obtaining required rights of way, construction delays and cost overruns, competition from incumbent utilities and other entities, and actions of strategic partners. If any of these factors result in delays or cancellations to these projects, Iberdrola USA’s

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growth projections, results of operations and financial position could be adversely affected or Iberdrola USA’s future growth opportunities may not be realized as anticipated. For example, NYSEG and RG&E hold approximately 20% ownership interest in the regulated New York Transco, LLC, or New York Transco, along with other investor owned utilities. In December 2014, New York Transco filed for regulatory approval of a transmission project. While New York Transco received an order from FERC in April 2015 accepting the project’s risk mitigation measures, FERC rejected the project’s cost allocation proposal and ordered a settlement and hearing proceeding on the proposed capital structure and the base ROE. Additionally, there may be delays or unexpected developments in completing Iberdrola Renewables’ current and future construction projects, which could cause the construction costs of these projects to exceed Iberdrola USA’s expectations. While most of Iberdrola USA’s subsidiaries’ construction projects are constructed under fixed-price and fixed-schedule contracts with construction and equipment suppliers, these contracts provide for limitations on the liability of these contractors to pay Iberdrola USA’s subsidiaries liquidated damages for cost overruns and construction delays. In respect of Iberdrola Renewables’ wind projects, a delay resulting in a wind project failing to qualify for federal production tax credits could result in losses that would be substantially greater than the amount of liquidated damages paid to Iberdrola Renewables.

Iberdrola USA’s subsidiaries may suffer significant construction delays or construction cost increases as a result of regulatory approval processes, environmental and community concerns, negative publicity, design and siting issues, difficulties in obtaining required rights of way or underperformance of these contractors and equipment suppliers, as well as other suppliers, to Iberdrola USA’s subsidiaries’ projects. For example, while RG&E’s Rochester Area Reliability Project, which includes the development of a new substation and transmission lines, was approved by the NYSPC, the project has encountered significant delays due to the concerns of landowners. Delays in equipment deliveries, particularly of wind turbines or transformers, or severe weather may result in extended delays in project construction and completion. These circumstances could prevent Iberdrola Renewables’ construction projects from commencing operations or from meeting Iberdrola Renewables’ original expectations about how much electricity it will generate or the returns it will achieve. In addition, for projects that are subject to PPAs, substantial delays could cause defaults under the PPAs, which generally require the completion of project construction by a certain date at specified performance levels.

Iberdrola Renewables’ revenue may be reduced significantly upon expiration of PPAs if the market price of electricity decreases and Iberdrola Renewables is otherwise unable to negotiate more favorable pricing terms.

Iberdrola Renewables’ portfolio of PPAs is made up of PPAs that primarily have fixed or otherwise predetermined electricity prices for the life of the PPA. A decrease in the market price of electricity, including due to lower prices for traditional fossil fuels, could result in a decrease in revenues once a PPA has expired or upon a renewal of a PPA, unless market conditions recover at the time of expiration and/or Iberdrola Renewables is able to negotiate more favorable pricing terms. Any decrease in the price payable to Iberdrola Renewables under new PPAs could materially adversely affect Iberdrola USA’s business, results of operations, financial conditions and cash flows. In the majority of Iberdrola Renewables’ wind energy generation projects, upon the expiration of a PPA, the project becomes a merchant project subject to market risks, unless Iberdrola Renewables can negotiate a renewal of the PPA. If Iberdrola Renewables is not able to replace an expiring PPA with a contract on equivalent terms and conditions or otherwise obtain prices that permit operation of the related facility on a profitable basis, the affected site may temporarily or permanently cease operations.

There are a limited number of purchasers of utility-scale quantities of electricity, which exposes Iberdrola Renewables’ utility-scale projects to additional risk.

Since the transmission and distribution of electricity is highly concentrated in most jurisdictions, there are a limited number of possible purchasers for utility-scale quantities of electricity in a given geographic location, including transmission grid operators, state and investor-owned power companies, public utility districts and cooperatives. As a result, there is a concentrated pool of potential buyers for electricity generated by Iberdrola Renewables’ businesses, which may restrict their ability to negotiate favorable terms under new PPAs and could

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impact their ability to find new customers for the electricity generated by their generation facilities should this become necessary. Furthermore, if the financial condition of these utilities and/or power purchasers deteriorated or the RPS programs, climate change programs or other regulations to which they are currently subject and that compel them to source renewable energy supplies change, demand for electricity produced by Iberdrola Renewables’ businesses could be negatively impacted.

Lower prices for other fuel sources may reduce the demand for wind and solar energy development.

Wind and solar energy demand is affected by the price and availability of other fuels, including nuclear, coal, natural gas and oil, as well as other sources of renewable energy. To the extent renewable energy, particularly wind and solar energy, becomes less cost-competitive due to reduced government targets, increases in the cost of wind and solar energy, as a result of new regulations, and incentives that favor alternative renewable energy, cheaper alternatives or otherwise, demand for wind and solar energy and other forms of renewable energy could decrease. Slow growth or a long-term reduction in the demand for renewable energy could have a material adverse effect on Iberdrola Renewables’ ability to grow its business.

Iberdrola USA’s subsidiaries do not own all of the land on which their projects are located and their use and enjoyment of real property rights for their projects may be adversely affected by the rights of lienholders and leaseholders that are superior to those of the grantors of those real property rights to Iberdrola USA’s subsidiaries’ projects.

Iberdrola USA’s subsidiaries do not own all of the land on which their projects are located. For example, Iberdrola Renewables does not own all of the land on which its wind projects are located and Iberdrola Energy Holdings does not own all of the land on which its natural gas storage projects are located. Such projects generally are, and future projects may be, located on land occupied under long-term easements, leases and rights of way. The ownership interests in the land subject to these easements, leases and rights of way may be subject to mortgages securing loans or other liens and other easements, lease rights and rights of way of third parties that were created previously. As a result, some of the rights under such easements, leases or rights of way held by Iberdrola USA’s operating subsidiaries may be subject to the rights of these third parties, and the rights of Iberdrola USA’s operating subsidiaries to use the land on which their projects are or will be located and their projects’ rights to such easements, leases and rights of way could be lost or curtailed. Any such loss or curtailment of the rights of Iberdrola USA’s operating subsidiaries to use the land on which their projects are or will be located could have a material adverse effect on their business, results of operations, financial condition and cash flows.

Iberdrola USA and its subsidiaries are subject to litigation or administrative proceedings.

The operating subsidiaries of Iberdrola USA have been and continue to be involved in legal proceedings, administrative proceedings, claims and other litigation that arise in the ordinary course of business. These actions may include environmental claims, employment-related claims and contractual disputes or claims for personal injury or property damage that occur in connection with services performed relating to the operation of Iberdrola USA’s businesses, or actions by regulatory or tax authorities. Unfavorable outcomes or developments relating to these proceedings or future proceedings, such as judgments for monetary damages, injunctions or denial or revocation of permits, could have a material adverse effect on Iberdrola USA’s business, financial condition and results of operations. In addition, settlement of claims could adversely affect Iberdrola USA’s business, results of operations, financial condition and cash flows.

Long-term low natural gas prices and/or seasonal natural gas price spreads could have a negative impact on the demand for Iberdrola Energy Holdings’ natural gas storage services.

Storage businesses benefit from price volatility and temporal price spreads, which impacts the level of demand for services and the rates that can be charged for natural gas storage services. On a system-wide basis, natural gas is typically injected into storage between April and October when natural gas prices are generally

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lower and withdrawn during the winter months of November through March when natural gas prices are typically higher. Largely due to the abundant supply of natural gas made available by hydraulic fracturing techniques, natural gas prices have dropped significantly to levels that are near historic lows. If prices and volatility remain low or prices decline further, then the demand for natural gas storage services, and the prices that Iberdrola Energy Holdings will be able to charge for those services, may decline or be depressed for a prolonged period of time. A sustained decline in these prices and volatility could have an adverse impact on Iberdrola USA’s business, results of operation, financial condition and cash flows. Furthermore, low gas prices drive down electricity prices and may lower prices in certain power markets, which may have a potentially adverse impact on prices for uncontracted generation and future PPAs for Iberdrola USA’s businesses.

Storing and transporting natural gas involves inherent risks that could cause Iberdrola USA to incur significant financial losses.

There are inherent hazards and operation risks in gas distribution activities, such as leaks, accidental explosions and mechanical problems that could cause the loss of human life, significant damage to property, environmental pollution and impairment of operations. The location of pipelines and storage facilities near populated areas, including residential areas, commercial business centers and industrial sites, could increase the level of damages resulting from these risks. These activities may subject Iberdrola USA to litigation and administrative proceedings that could result in substantial monetary judgments, fines or penalties. To the extent that the occurrence of any of these events is not fully covered by insurance, they could adversely affect Iberdrola USA’s revenue, earnings and cash flow.

Iberdrola USA is not able to insure against all potential risks and may become subject to higher insurance premiums, and the ability of Iberdrola USA to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events and company-specific events, as well as the financial condition of insurers.

Iberdrola USA’s businesses and activities are exposed to the risks inherent in the construction and operation of their respective assets, such as electrical power plants, wind power plants and other renewable energy projects and natural gas storage facilities, including breakdowns, manufacturing defects, natural disasters, terrorist attacks, cyber attacks and sabotage. Iberdrola USA’s subsidiaries are also exposed to third party liability risks and environmental risks. While the operating subsidiaries of Iberdrola USA maintain insurance coverage, such insurance may not continue to be offered on an economically feasible basis and may not cover all events that could give rise to a loss or claim involving the assets or operations of Iberdrola USA’s subsidiaries. For example, Iberdrola Renewables currently has 409 megawatts, or MW, of installed capacity in California subject to known earthquake risks and approximately 600 MW of installed capacity on the Texas Gulf Coast subject to known hurricane and windstorm risks. Further, while insurance coverage applies to property damages and business interruptions, this coverage is limited as a result of severe insurance market restrictions and Iberdrola USA is generally not fully insured against all significant losses. In addition, Iberdrola USA’s subsidiaries’ insurance policies are subject to annual review by its insurers. The ability of Iberdrola USA to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events and company-specific events, as well as the financial condition of insurers. If insurance coverage is not available or obtainable on acceptable terms, Iberdrola USA may be required to pay costs associated with adverse future events. If an operating subsidiary of Iberdrola USA were to incur a serious uninsured loss or a loss significantly exceeding the limits of its insurance policies, the results could have a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Furthermore, Iberdrola Networks’ gas distribution activities and Iberdrola Energy Holdings’ natural gas storage activities involve a variety of inherent hazards and operating risks, such as leaks, accidents, explosions, and mechanical problems and could result in serious injury to employees and non-employees, loss of human life, significant damage to property, environmental pollution and impairment of Iberdrola USA’s subsidiaries’ operations. In accordance with customary industry practice, Iberdrola USA’s subsidiaries maintain insurance

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against some, but not all, of these risks and losses. The location of natural gas pipelines and natural gas storage facilities near populated areas, including residential areas, commercial business centers and industrial sites, could increase the level of damages that could potentially result from these risks. The occurrence of any of these events not fully covered by insurance could adversely affect Iberdrola USA’s business, results of operations, financial position and cash flows.

The benefits of any warranties provided by the suppliers of equipment for Iberdrola Networks and Iberdrola Renewables’ projects may be limited by the ability of a supplier to satisfy its warranty obligations, or if the term of the warranty has expired or has liability limits.

Iberdrola Networks and Iberdrola Renewables expect to benefit from various warranties, including product quality and performance warranties, provided by suppliers in connection with the purchase of equipment. The suppliers of Iberdrola USA’s operating subsidiaries may fail to fulfill their warranty obligations or a particular defect may not be covered by a warranty. Even if a supplier fulfills its obligations, the warranty may not be sufficient to compensate the operating subsidiary for all of its losses. In addition, these warranties generally expire within two to five years after the date each equipment item is delivered or commissioned and are subject to liability limits. If installation is delayed, the operating subsidiaries may lose all or a portion of the benefit of a warranty. If Iberdrola Networks or Iberdrola Renewables seeks warranty protection and a supplier is unable or unwilling to perform its warranty obligations, whether as a result of its financial condition or otherwise, or if the term of the warranty has expired or a liability limit has been reached, there may be a reduction or loss of warranty protection for the affected equipment, which could have a material adverse effect on Iberdrola USA’s business, results of operation, financial condition and cash flows.

A disruption in the wholesale energy markets or failure by an energy supplier could adversely affect Iberdrola USA.

Almost all the electricity and gas Iberdrola Networks sells to full-service customers is purchased through the wholesale energy markets or pursuant to contracts with energy suppliers. A disruption in the wholesale energy markets or a failure on the part of energy suppliers or operators of energy delivery systems that connect to Iberdrola Networks’ energy facilities could adversely affect Iberdrola Networks’ ability to meet its customers’ energy needs and adversely affect Iberdrola USA.

The increased cost of purchasing natural gas during periods in which natural gas prices are rising significantly could adversely impact Iberdrola USA’s earnings and cash flow.

The rates that are permitted to be charged by Iberdrola USA’s regulated utilities that allow for rate recovery generally allow such businesses to recover their cost of purchasing natural gas. In general, the various regulatory agencies allow Iberdrola USA’s regulated utilities to recover the costs of natural gas purchased for customers on a dollar-for-dollar basis (in the absence of disallowances), without a profit component. Iberdrola Networks’ regulated utilities periodically adjust customer rates for increases and decreases in the cost of gas purchased by Iberdrola Networks’ regulated utilities for sale to its customers. Under the regulatory body-approved gas cost recovery pricing mechanisms, the gas commodity charge portion of gas rates charged to customers may be adjusted upward on a periodic basis. If the cost of purchasing natural gas increases and Iberdrola Networks’ regulated utilities is unable to recover these costs from its customers immediately, or at all, Iberdrola Networks may incur increased costs associated with higher working capital requirements. In addition, any increases in the cost of purchasing natural gas may result in higher customer bad debt expense for uncollectible accounts and reduced sales volume and related margins due to lower customer consumption.

Iberdrola Renewables owns, and in the future may acquire, certain projects in joint ventures, and such joint venture partners’ interests may conflict with Iberdrola USA and Iberdrola USA’s shareholders’ interests.

Iberdrola Renewables owns, and in the future may acquire, certain projects in joint ventures. For example, Iberdrola Renewables owns 50% of the Flat Rock Windpower LLC and Flat Rock Wind Power II LLC projects,

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which are jointly owned and operated with Horizon Wind Energy LLC. Iberdrola Renewables also owns 50% of Colorado Wind Ventures LLC in conjunction with Shell Wind Energy Inc. Under these structured institutional partnership investment arrangements, a variety of third-party institutional investors invest in the equity of a holding company that owns wind farm facilities. In return, the investors receive profit/loss, cash distributions and tax benefits resulting from the wind farm energy generation. In each of these cases, a non-controlling stake is offered and the company retains total control of the operations of the facilities.

In the future, Iberdrola Renewables may invest in other projects with a joint venture partner. Joint ventures inherently involve a lesser degree of control over business operations, which could result in an increase in the financial, legal, operational or compliance risks associated with a project, including, but not limited to, variances in accounting and internal control requirements. To the extent Iberdrola Renewables does not have a controlling interest in a project, Iberdrola Renewables’ joint venture partners could take actions that decrease the value of Iberdrola Renewables’ investment and lower its overall return. In addition, conflicts of interest may arise in the future between Iberdrola Renewables, Iberdrola USA and Iberdrola USA’s shareholders, on the one hand, and the joint venture partners of Iberdrola Renewables, on the other hand, where Iberdrola Renewables’ joint venture partners’ business interests are inconsistent with the interests of Iberdrola Renewables, Iberdrola USA and Iberdrola USA’s shareholders. Further, disagreements or disputes between Iberdrola Renewables and its joint venture partners could result in litigation, which could increase expenses and potentially limit the time and effort Iberdrola Renewables’ officers and directors are able to devote to its business, all of which could have a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Pension and post-retirement benefit plans could require significant future contributions to such plans.

Iberdrola USA provides defined benefit pension plans and other post-retirement benefits administered by Iberdrola USA’s subsidiaries for a significant number of employees, former employees and retirees. Financial market disruptions and significant declines in the market values of the investments held to meet the pension and post-retirement obligations, discount rate assumptions, participant demographics and increasing longevity, and changes in laws and regulations may require Iberdrola USA to make significant contributions to the plans. Large funding requirements or significant increases in expenses could adversely impact Iberdrola USA’s business, results of operations, financial condition and cash flows.

If Iberdrola USA and/or certain of its subsidiaries fail to maintain their credit ratings, Iberdrola USA’s cost of long-term debt and equity capital may increase and preclude access to the debt and equity capital markets.

Iberdrola USA, NYSEG, RG&E and CMP are parties to revolving credit facilities which contain facility fees and borrowing spread pricing that are a function of the credit rating of the borrower. A lower credit rating automatically increases the cost of these facilities. A downgrade to the lowest investment grade rating of the borrower would likely preclude access to the commercial paper market for NYSEG and CMP, which each have commercial paper programs. Lower credit ratings increase the cost of long-term debt and equity capital and, depending on the rating and market conditions, can preclude access to the debt and equity capital markets. Any of these events could have a materially adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Iberdrola USA’s existing credit facilities contain, and agreements that Iberdrola USA may enter into in the future may contain, covenants that could restrict Iberdrola USA’s financial flexibility.

Iberdrola USA’s existing credit facilities, and the credit facilities of its subsidiaries, contain covenants imposing certain requirements on Iberdrola USA’s business including covenants regarding the ratio of indebtedness to total capitalization. Furthermore, Iberdrola USA’s subsidiaries periodically issue long-term debt, historically consisting of both secured and unsecured indebtedness. These third-party debt agreements also contain covenants, including covenants regarding the ratio of indebtedness to total capitalization. These requirements may limit the ability of Iberdrola USA and its subsidiaries to take advantage of potential business

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opportunities as they arise and may adversely affect the conduct of Iberdrola USA and its operating subsidiaries’ current business, including restricting Iberdrola USA’s ability to finance future operations and capital needs and limiting the subsidiaries’ ability to engage in other business activities. Other covenants place or could place restrictions on Iberdrola USA’s ability and the ability of Iberdrola USA’s operating subsidiaries to, among other things:

• incur additional debt or issue some types of preferred shares;

• create liens;

• enter into transactions with affiliates;

• sell or transfer assets; and

• consolidate or merge.

Agreements Iberdrola USA and its operating subsidiaries enter into in the future may also have similar or more restrictive covenants, especially if the general credit market deteriorates. A breach of any covenant in the existing credit facilities or the agreements governing Iberdrola USA’s other indebtedness would result in an event of default. Certain events of default may trigger automatic acceleration of payment of the underlying obligations or may trigger acceleration of payment if not remedied within a specified period. Events of default under one agreement may trigger events of default under other agreements, although Iberdrola USA’s regulated utilities are not subject to the risk of default of affiliates. Should payments become accelerated as the result of an event of default, the principal and interest on such borrowing would become due and payable immediately. If that should occur, Iberdrola USA may not be able to make all of the required payments or borrow sufficient funds to refinance the accelerated debt obligations. Even if new financing were then available, it may not be on terms that are acceptable to Iberdrola USA. For more information, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Iberdrola USA—Liquidity and Capital Resources” beginning on page 162 of this proxy statement/prospectus.

Iberdrola USA may be unable to meet its financial obligations and to pay dividends on its common stock if its subsidiaries are unable to pay dividends or repay loans from Iberdrola USA.

Iberdrola USA is a holding company and, as such, has no revenue-generating operations of its own. Iberdrola USA is dependent on dividends and the repayment of loans from its subsidiaries and on external financings to provide the cash that is necessary to make future investments, service debt incurred by Iberdrola USA, pay administrative costs and pay dividends. Iberdrola USA’s subsidiaries are separate legal entities and have no independent obligation to pay dividends to Iberdrola USA. Prior to paying dividends to Iberdrola USA, the subsidiaries have financial obligations that must be satisfied, including among others, their operating expenses and obligations to creditors. Furthermore, Iberdrola USA’s regulated utilities are required by regulation to maintain a minimum equity-to-total capital ratio that may restrict their ability to pay dividends to Iberdrola USA or may require that Iberdrola USA contribute capital. The future enactment of laws or regulations may prohibit or further restrict the ability of Iberdrola USA’s subsidiaries to pay upstream dividends or to repay funds. In addition, in the event of a subsidiary’s liquidation or reorganization, Iberdrola USA’s right to participate in a distribution of assets is subject to the prior claims of the subsidiary’s creditors. As a result, Iberdrola USA’s ability to pay dividends on its common stock and meet its financial obligations are reliant on the ability of Iberdrola USA’s subsidiaries to generate sustained earnings and cash flows and pay dividends to and repay loans from Iberdrola USA.

Iberdrola USA’s investments and cash balances are subject to the risk of loss.

Cash balances at Iberdrola USA and its subsidiaries may be deposited in banks, may be invested in liquid securities such as commercial paper or money market funds or may be deposited in a cash pool account in which Iberdrola USA is a participant along with other affiliates of the group of companies controlled by Iberdrola, S.A., or the Iberdrola Group. Bank deposits in excess of federal deposit insurance limits would be subject to risks in

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the counter-party bank. Liquid securities and money market funds are subject to loss of principal, more likely in an adverse market situation, and to the risk of illiquidity. Moreover, under the cash pool agreement governing the cash pool account mentioned above, credit balances in the cash pool account are pledged as collateral for the debit balances of other cash pool participants. Iberdrola USA is therefore subject to the credit risk of the affiliated parties to the cash pool agreement and to Iberdrola, S.A.’s ability to manage the overall liquidity of the Iberdrola Group.

Iberdrola USA and its subsidiaries may suffer the loss of key personnel or the inability to hire and retain qualified employees.

The operations of Iberdrola USA’s operating subsidiaries depend on the continued efforts of Iberdrola USA’s and its subsidiaries’ employees. Retaining key employees and maintaining the ability to attract new employees are important to Iberdrola USA’s financial performance and for its subsidiaries’ operations and financial performance. Iberdrola USA cannot guarantee that any member of Iberdrola USA’s or of its subsidiaries’ management will continue to serve in any capacity for any particular period of time. In addition, a significant portion of Iberdrola USA and its subsidiaries’ workforce, including many workers with specialized skills maintaining and servicing the electrical infrastructure, will be eligible to retire over the next five to ten years. Such highly skilled individuals cannot be quickly replaced due to the technically complex work they perform. Iberdrola USA and its subsidiaries cannot predict the impact of these plans on the ability to hire and retain key employees.

Iberdrola USA and its subsidiaries face the risk of strikes, work stoppages or an inability to negotiate future collective bargaining agreements on commercially reasonable terms.

A majority of the employees at Iberdrola Networks’ facilities are subject to collective bargaining agreements with various unions. Additionally, unionization activities, including votes for union certification, could occur among non-union employees. If union employees strike, participate in a work stoppage or slowdown or engage in other forms of labor strike or disruption, Iberdrola USA’s subsidiaries could experience reduced power generation or outages if replacement labor is not procured. The ability to procure such replacement labor is uncertain, though risks are reduced by rigorous contingency planning. Strikes, work stoppages or an inability to negotiate future collective bargaining agreements on commercially reasonable terms could have a material adverse effect on Iberdrola USA’s business, results of operations, financial condition and cash flows.

Changes in tax laws, as well as judgments and estimates used in the determination of tax-related asset and liability amounts, could materially adversely affect Iberdrola USA’s business, results of operations, financial condition and cash flows.

Iberdrola USA’s provision for income taxes and reporting of tax-related assets and liabilities require significant judgments and the use of estimates. Amounts of tax-related assets and liabilities involve judgments and estimates of the timing and probability of recognition of income, deductions and tax credits, including, but not limited to, estimates for potential adverse outcomes regarding tax positions that have been taken and the ability to utilize tax benefit carryforwards, such as net operating loss and tax credit carryforwards. Actual income taxes could vary significantly from estimated amounts due to the future impacts of, among other things, changes in tax laws, regulations and interpretations, the financial condition and results of operations of Iberdrola USA, and the resolution of audit issues raised by taxing authorities. Ultimate resolution of income tax matters may result in material adjustments to tax-related assets and liabilities, which could materially adversely affect Iberdrola USA’s business, results of operations, financial conditions and cash flows.

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Risks Relating to Investing in and Ownership of Common Stock of the Combined Company

There has been no public market for Iberdrola USA common stock and the lack of a public market makes it difficult to determine the fair market value of Iberdrola USA. The market price of the common stock of the combined company following the consummation of the merger could be volatile and UIL shareowners could lose all or part of their investment.

The outstanding capital stock of Iberdrola USA is privately held and is not traded on any public market. As a result, no public market price is available to UIL shareowners for use in determining the value of the common stock of the combined company they are entitled to receive as merger consideration. The value ascribed to Iberdrola USA’s securities in other contexts may not be indicative of the price at which Iberdrola USA common stock may have traded if it were traded on a public market. The merger consideration to be paid to UIL shareowners was determined based on negotiations between the parties and likewise may not be indicative of the price at which Iberdrola USA common stock may have traded if it were traded on a public market. The merger consideration to be paid to UIL shareowners will not necessarily reflect the price at which investors in the market will be willing to buy and sell shares of the combined company common stock following the consummation of the merger. In addition, the market price of the common stock of the combined company following the consummation of the merger may be volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond Iberdrola USA’s control.

UIL shareowners cannot be sure that an active trading market will develop or be sustained for the shares of the combined company common stock they will receive. The trading volume of the combined company common stock may be volatile, and holders of the combined company common stock may not be able to sell their shares following the merger.

Iberdrola USA does not have any class of securities publicly traded or listed in the United States or elsewhere and, accordingly, public information about it and its businesses or operations has been limited. Iberdrola USA has agreed to use its reasonable best efforts to cause the shares of the combined company common stock to be issued in the proposed merger to be approved for listing on the New York Stock Exchange, or NYSE, prior to the effective time of the proposed merger, and authorization for listing on the NYSE of the combined company common stock to be issued in the proposed merger is a condition to the completion of the proposed merger. The listing of shares on the NYSE does not assure that a market for the common stock of the combined company will develop or be sustained. No assurance can be provided as to the demand for or trading price of the combined company common stock following the completion of the proposed merger and the combined company common stock may trade at a price less than the current market price of UIL common stock.

The trading price of and demand for the common stock of the combined company following completion of the proposed merger and the development and continued existence of a market and favorable price for the common stock of the combined company will depend on a number of conditions, including:

• the risk factors described in this proxy statement/prospectus;

• general economic conditions internationally and within the U.S., including changes in interest rates;

• changes in electricity and natural gas prices;

• actual or anticipated fluctuations in the combined company’s quarterly and annual results and those of its competitors;

• the businesses, operations, results and prospects of the combined company;

• future mergers and strategic alliances;

• market conditions in the energy industry;

• changes in government regulation, taxes, legal proceedings or other developments;

• shortfalls in the combined company’s operating results from levels forecasted by securities analysts;

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• investor sentiment toward the stock of energy companies in general;

• announcements concerning the combined company or its competitors;

• maintenance of acceptable credit ratings or credit quality; and

• the general state of the securities markets.

These and other factors may impair the development or sustainability of a liquid market for the common stock of the combined company and the ability of investors to sell shares at an attractive price. These factors also could cause the market price and demand for the combined company common stock to fluctuate substantially, which may negatively affect the price and liquidity of the combined company common stock. Many of these factors and conditions are beyond the control of the combined company or the shareholders of the combined company.

Future sales or issuances of the combined company common stock, including sales by Iberdrola, S.A., could have a negative impact on the combined company’s stock price.

Upon completion of the proposed merger, Iberdrola, S.A., the parent company of Iberdrola USA, will own 81.5% of the combined company’s common stock. Sales of common stock of the combined company by Iberdrola, S.A. or the perception that sales may be made by it could significantly reduce the market price of the combined company common stock. Pursuant to the merger agreement, the combined company and Iberdrola, S.A. will become parties to a shareholder agreement pursuant to which Iberdrola, S.A. will be generally restricted from transferring shares of the combined company common stock for a period of 18 months after the completion of the proposed merger, except that after 12 months following the completion of the proposed merger, Iberdrola, S.A. will be generally permitted to transfer its shares of the combined company common stock if a committee of “independent” directors (as defined in the shareholder agreement), or the unaffiliated committee, has approved the transfer after having received the advice of a nationally recognized independent investment banking firm. Under the shareholder agreement, a director will be considered “independent” if he or she is independent under the rules of NYSE with respect to the combined company, and would be independent under the rules of NYSE with respect to Iberdrola, S.A. if he or she was a director of Iberdrola, S.A. Iberdrola, S.A. will also be restricted, for a period of three years after the completion of the proposed merger, from transferring more than an aggregate of 10% of the outstanding shares of the combined company common stock in any transaction or series of transactions, unless all shareowners of the combined company are entitled to participate in such transaction (on a pro rata basis) and are entitled to the same per share consideration to be received in such transaction as Iberdrola, S.A. In addition, even if Iberdrola, S.A. does not sell a large number of its shares of the combined company common stock into the market, its right to transfer such shares may depress the stock price of the combined company common stock. Furthermore, pursuant to the shareholder agreement and subject to the terms and conditions therein, Iberdrola, S.A. will be entitled to registration rights of its combined company common stock. These registration rights will include the right to choose the method by which the shares of common stock are distributed, a choice as to the underwriter and registration rights in conjunction with other registered offerings by the combined company. Expenses incident to the combined company’s performance of or compliance with a demand registration made by Iberdrola, S.A. will be borne by the combined company. Iberdrola, S.A. will also retain preemptive rights to protect against dilution in connection with issuances of equity by the combined company. If Iberdrola, S.A. exercises its registration rights and/or its preemptive rights, the market price of shares of the combined company common stock may be adversely affected.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about the combined company or its businesses, its common stock price and trading volume could decline.

The trading market for the common stock of the combined company will depend in part on the research and reports that securities or industry analysts publish about the combined company or its businesses. While securities and industry analysts currently cover Iberdrola, S.A., securities and industry analysts do not currently cover Iberdrola USA, and may never publish research on the combined company. If no securities or industry

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analysts commence coverage of the combined company, the trading price for its common stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover the combined company downgrade its securities or publish inaccurate or unfavorable research about its businesses, its stock price would likely decline. If one or more of these analysts cease coverage of the combined company or fail to publish reports on the combined company regularly, demand for its common stock could decrease, which might cause its common stock price and trading volume to decline.

Iberdrola, S.A. will exercise significant influence over the combined company, and its interests in the combined company may be different than yours.

Upon the completion of the proposed merger, Iberdrola, S.A. will beneficially own 81.5% of the outstanding common stock of the combined company. Accordingly, Iberdrola, S.A. will be able to exercise significant influence over the combined company’s business policies and affairs, including the composition of the combined company’s board of directors and any action requiring the approval of the combined company’s shareholders, including the adoption of amendments to the certificate of incorporation and bylaws and the approval of a merger or sale of substantially all of the combined company’s assets, subject to applicable law and the limitations set forth in the shareholder agreement. The directors designated by Iberdrola, S.A. will have significant authority to effect decisions affecting the capital structure of the combined company, including the issuance of additional capital stock, incurrence of additional indebtedness, the implementation of stock repurchase programs and the decision of whether or not to declare dividends.

The interests of Iberdrola, S.A. may conflict with the interests of other shareholders of the combined company. For example, Iberdrola, S.A. may support certain long-term strategies or objectives for the combined company that may not be accretive to shareholders in the short term. The concentration of ownership may also delay, defer or even prevent a change in control of the combined company, even if such a change in control would benefit the combined company’s other shareholders, and may make some transactions more difficult or impossible without the support of Iberdrola, S.A. This significant concentration of share ownership may adversely affect the trading price for the common stock of the combined company because investors may perceive disadvantages in owning stock in companies with shareholders who own significant percentages of a company’s outstanding stock.

The combined company will be a “controlled company” within the meaning of the rules of the NYSE and, as a result, will qualify for, and intends to initially rely on, exemptions from certain corporate governance requirements.

In addition to the consequences of the concentration of share ownership and possible conflicts between the interests of Iberdrola, S.A., and your interests discussed above, the combined company will initially be a “controlled company” within the meaning of the rules of the NYSE. Under these rules, a company in which over 50% of the voting power is held by an individual, a group or another company is a “controlled company” and is not required to have:

• a majority of its board of directors be independent directors;

• a nominating and corporate governance committee or a compensation committee, or to have such committees be composed entirely of independent directors; and

• the compensation of the chief executive officer be determined, or recommended to the board of directors for determination, either by a compensation committee comprised of independent directors or by a majority of the independent directors on the board of directors.

Following the proposed merger, the combined company intends to rely on these exemptions. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE without regard to the exemptions available for “controlled companies,” and the combined company’s initial status as a “controlled company” may adversely affect the

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trading price for the combined company common stock. For more information, see the section entitled “Additional Information About Iberdrola USA—Iberdrola USA Directors and Executive Officers” beginning on page 219 of this proxy statement/prospectus.

The rights of UIL shareowners who become shareholders of the combined company in the proposed merger will be governed by the combined company’s restated certificate of incorporation and the combined company amended and restated bylaws.

UIL shareowners who receive shares of common stock of the combined company in the proposed merger will become shareholders of the combined company and their rights as shareholders will be governed by the combined company’s restated certificate of incorporation and amended and restated bylaws, rather than UIL’s certificate of incorporation and bylaws. There may be material differences between the current rights of UIL shareowners, as compared to the rights they will have as shareholders of the combined company. For more information, see the section entitled “Comparison of Shareholder Rights Before and After the Merger” beginning on page 257 of this proxy statement/prospectus.

The combined company’s dividend policy is subject to the discretion of its board of directors and may be limited by the combined company’s debt agreements and limitations under New York law.

Although it is currently anticipated that the combined company will pay a regular quarterly dividend following the closing of the merger, any such determination to pay dividends will be at the discretion of its board of directors and will be dependent on then-existing conditions, including the company’s financial condition, earnings, legal requirements, including limitations under New York law, restrictions in the combined company’s debt agreements that limit its ability to pay dividends to shareholders and other factors the board of directors deems relevant. The board of directors may, in its sole discretion, change the amount or frequency of dividends or discontinue the payment of dividends entirely. For these reasons, you will not be able to rely on dividends to receive a return on your investment. Accordingly, realization of a gain on your shares of the combined company common stock received in the merger may depend on the appreciation of the price of the combined company common stock, which may never occur.

Upon the completion of the proposed merger, the combined company will become a public reporting company subject to financial reporting and other requirements.

Upon the completion of the proposed merger, as a public company, the combined company will become subject to reporting, disclosure control and other obligations under the Securities Exchange Act of 1934, the Sarbanes-Oxley Act, or SOX, the Dodd-Frank Act, as well as rules adopted, and to be adopted, by the SEC and the NYSE. The combined company’s management and other personnel will need to devote a substantial amount of time to these compliance initiatives. As a result, the combined company will incur higher legal, accounting and other expenses than before, and these expenses may increase even more in the future. For example, Section 404 of SOX requires annual management assessment of the effectiveness of internal controls over financial reporting and a report by the combined company’s independent registered public accounting firm addressing these assessments. If the combined company is unable to implement its compliance initiatives in a timely and effective fashion, its ability to comply with the financial reporting requirements and other rules that apply to reporting companies could be impaired.

In addition, Iberdrola USA cannot assure you that there will not be material weaknesses or significant deficiencies in its internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit the combined company’s ability to accurately report its cash flows, results of operations or financial condition. If the combined company is unable to conclude that its internal control over financial reporting is effective, or if its independent registered public accounting firm determines the combined company has a material weakness or significant deficiency in its internal control over financial reporting, the combined company could lose investor confidence in the accuracy and completeness of its

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financial reports, the market price of its common stock could decline, and the combined company could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities. Failure to remedy any material weakness in the combined company’s internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict its future access to the capital markets and reduce or eliminate the trading market for the combined company common stock.

The financial performance, and price of the common stock, of the combined company may be affected by factors different from those that historically have affected UIL.

Upon completion of the proposed merger, holders of UIL common stock will become holders of common stock of the combined company. The businesses and target markets of Iberdrola USA differ from those of UIL, and accordingly the results of operations and the price of the common stock of the combined company will be affected by some factors that are different from those currently affecting the results of operations and stock price of UIL. For a discussion of the business of Iberdrola USA and of some important factors to consider in connection with Iberdrola USA’s business, see the section entitled “Additional Information about Iberdrola USA” beginning on page 191 of this proxy statement/prospectus.

Risks Relating to UIL’s Business and Operations

You should read and consider risk factors specific to UIL’s business and operations, which will also affect the combined company. These risks are described in the section entitled “Risk Factors” in UIL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, its Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and in other documents incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus for the location of information incorporated by reference into this proxy statement/prospectus.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus and other documents incorporated by reference into this proxy statement/prospectus contain or may contain forward-looking statements. Forward-looking statements may be identified by the use of forward-looking terms such as “may,” “will,” “should,” “can,” “expects,” “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” “is confident that” and “seeks” or the negative of such terms or other variations on such terms or comparable terminology. Such forward-looking statements include, but are not limited to, statements about the potential benefits of the proposed merger between Iberdrola USA and UIL, including the combined company’s plans, objectives and intentions, the expected timing of completion of the transaction, outlooks or expectations for earnings, revenues, expenses or other future financial or business performance, strategies or expectations, or the impact of legal or regulatory matters on business, results of operations or financial condition of the combined business and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the respective managements of Iberdrola USA and UIL and are subject to significant risks and uncertainties that could cause actual outcomes and results to differ materially. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, without limitation, the risks and uncertainties set forth under the section entitled “Risk Factors” beginning on page 37 of this proxy statement/prospectus. Specifically, forward-looking statements may include statements relating to:

• the inability to complete the merger due to the failure to obtain shareowner approval or governmental or regulatory clearances or the failure to satisfy other conditions to the completion of the merger or the failure of the merger to be completed for any other reason;

• the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;

• the future financial performance, anticipated liquidity and capital expenditures of the combined company;

• success in retaining or recruiting, or changes required in, Iberdrola USA’s officers, key employees or directors following the merger;

• the risk that the businesses will not be coordinated successfully, or that the coordination will be more costly or more time consuming and complex than anticipated

• disruption from the merger making it difficult to maintain business and operational relationships;

• adverse developments in general market, business, economic, labor, regulatory and political conditions;

• the impact of any cyber-breaches, acts of war or terrorism or natural disasters; and

• the impact of any change to applicable laws and regulations affecting operations, including those relating to environmental and climate change, taxes, price controls, regulatory approval and permitting.

Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary in material respects from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements. Neither Iberdrola USA nor UIL undertakes any obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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INFORMATION ABOUT THE COMPANIES

Iberdrola USA

Durham Hall, 52 Farm View Drive

New Gloucester, Maine 04260

(207) 688-6363

Iberdrola USA is a direct, wholly-owned subsidiary of Iberdrola, S.A., a corporation (sociedad anónima) organized under the laws of Spain, one of the world’s leading energy companies. Iberdrola USA holds the U.S. operations of Iberdrola, S.A. through its direct, wholly-owned subsidiaries, including Iberdrola Networks and IRHI. IRHI in turn holds subsidiaries, including Iberdrola Renewables and Iberdrola Energy Holdings. Iberdrola Networks owns and operates the regulated utility businesses of Iberdrola USA through its subsidiaries, including electric transmission and distribution and natural gas distribution. Iberdrola Renewables operates a portfolio of renewable energy generation facilities primarily using onshore wind power, and also solar, biomass and thermal power. Iberdrola Energy Holdings operates the natural gas storage facilities and gas trading businesses of Iberdrola USA through Iberdrola Energy Services LLC (gas trading) and Enstor Inc. (gas storage). Additionally, Iberdrola USA holds merger sub, a direct and wholly-owned subsidiary newly formed in Connecticut for the sole purpose of completing the merger. See “—Merger Sub.”

There is currently no public trading market for Iberdrola USA common stock. Iberdrola USA will apply to list the common stock of the combined company on the NYSE under the symbol “                    .” Iberdrola USA is headquartered in New Gloucester, Maine, where its senior management maintains offices and is responsible for overall executive, financial and planning functions. For additional information about Iberdrola USA, see the section entitled “Additional Information About Iberdrola USA” beginning on page 191 of this proxy statement/prospectus.

Merger Sub

Durham Hall, 52 Farm View Drive

New Gloucester, Maine 04260

(207) 688-6327

Merger sub is a Connecticut corporation and a direct wholly-owned subsidiary of Iberdrola USA that was formed solely in contemplation of the merger, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, except as described in this proxy statement/prospectus, nor any outstanding commitments other than as set forth in the merger agreement. Merger sub has not incurred any obligations, engaged in any business activities or entered into any agreements or arrangements with any third parties other than the merger agreement.

UIL

157 Church Street

New Haven, Connecticut 06510

(203) 499-2000

The primary business of UIL is ownership of its operating regulated utility businesses. The utility businesses consist of the electric distribution and transmission operations of UI, and the natural gas transportation, distribution and sales operations of The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company. UI is also a party to a joint venture with certain affiliates of NRG Energy, Inc. pursuant to which UI holds 50% of the membership interests in GCE Holding LLC, whose wholly-owned subsidiary, GenConn Energy LLC, operates peaking generation plants in Devon, Connecticut and Middletown, Connecticut. UIL is headquartered in New Haven, Connecticut, where its senior management maintains offices and is responsible for overall executive, financial and planning functions.

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UIL common stock is listed on the NYSE under the symbol “UIL.”

For more information about UIL, please visit the Internet website of UIL at www.uil.com. The Internet website address of UIL is provided as an inactive textual reference only. The information contained on the Internet website of UIL is not incorporated into, and does not form a part of, this proxy statement/prospectus or any other report or document on file with or furnished to the SEC. Additional information about UIL is included in the documents incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

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THE UIL SPECIAL MEETING

Time, Place and Purpose of the Special Meeting

This proxy statement/prospectus is being furnished to UIL shareowners as part of the solicitation of proxies by the UIL board for use at the special meeting to be held on                     , 2015, at              Eastern time, at Quinnipiac University, Center for Medicine, Nursing and Health Sciences, 370 Bassett Road, North Haven, Connecticut 06473, or at any postponement or adjournment thereof.

At the special meeting, UIL shareowners will be asked to (i) consider and vote upon a proposal to approve the merger agreement, (ii) consider and vote upon a proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger and (iii) grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

UIL shareowners must approve the merger agreement in order for the merger to occur. If UIL shareowners fail to approve the merger agreement, the merger will not occur. A copy of the merger agreement is attached as Annex A to this proxy statement/prospectus, and you are encouraged to read the merger agreement carefully and in its entirety.

Record Date and Quorum

UIL has set the close of business on                     , 2015 as the record date for the special meeting, and only holders of record of shares of UIL common stock on the record date are entitled to vote at the special meeting. You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of UIL common stock as of the close of business on the record date. On the record date, there were              shares of UIL common stock outstanding and entitled to vote and, accordingly,              shares of UIL common stock must vote to approve the merger agreement for the merger to occur. You will have one vote on all matters properly coming before the special meeting for each share of UIL common stock that you owned on the record date.

The presence, in person or represented by proxy, of owners of a majority of the shares of UIL common stock entitled to vote at the special meeting outstanding as of the close of business on the record date constitutes a quorum for the purposes of the special meeting. Abstentions are considered for purposes of establishing a quorum. A quorum is necessary to transact business at the special meeting. Once a share of UIL common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and any adjournment of the special meeting. However, if a new record date is set for the adjourned special meeting, then a new quorum will be determined.

Attendance

Only UIL shareowners of record as of the close of business on the record date, their duly authorized proxy holders, beneficial owners with proof of ownership and guests of UIL may attend the special meeting. If you personally attend the special meeting, you will be asked to verify that you are a shareowner by presenting an attendance ticket (attached to your proxy card), together with a proper form of identification. If shares are held in the name of a broker, trust, bank, or other nominee, you should bring with you a statement, proxy or a letter from the broker, trustee, bank or nominee confirming your beneficial ownership of the shares on the record date. If you are the representative of a corporate or institutional shareowner, you must present valid photo identification along with proof that you are the representative of such shareowner. Cameras, recording devices and other electronic devices including telephones or other devices with photographic capability should not be used during the meeting and are subject to confiscation. For the safety of attendees, all bags, packages, and briefcases are subject to inspection. Your compliance is appreciated.

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Vote Required

The approval of the merger agreement requires the affirmative vote of the owners of a majority of the shares of UIL common stock outstanding as of the close of business on the record date. For the proposal to approve the merger agreement, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Votes to abstain will not be counted as votes cast in favor of the proposal to approve the merger agreement, but will count for the purpose of determining whether a quorum is present. If you fail to submit a proxy or to vote in person at the special meeting or if you vote to abstain, it will have the same effect as a vote “AGAINST” the proposal to approve the merger agreement.

If your shares of UIL common stock are registered directly in your name with Broadridge, UIL’s transfer agent, you are considered, with respect to those shares of UIL common stock, the shareowner of record. If you are a shareowner of record, this proxy statement/prospectus and the enclosed proxy card have been sent directly to you by UIL.

If your shares of UIL common stock are held through a bank, brokerage firm or other nominee, you are considered the beneficial owner of shares of UIL common stock held in “street name.” In that case, this proxy statement/prospectus has been forwarded to you by your bank, brokerage firm or other nominee who is considered, with respect to those shares of UIL common stock, the shareowner of record. As the beneficial owner, you have the right to direct your bank, brokerage firm or other nominee how to vote your shares by following their instructions for voting.

Under the rules of the NYSE, banks, brokerage firms or other nominees who hold shares in “street name” for customers have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters such as the proposal to approve the merger agreement, the proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger, and granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. As a result, absent specific instructions from you, banks, brokerage firms or other nominees are not empowered to vote your shares of UIL common stock at the special meeting.

The proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger requires that the votes favoring the action cast by the owners of the shares entitled to vote thereon exceed the votes opposing the action cast by such shareowners; however, such vote is non-binding and advisory only. For purposes of the proposal, if your shares of UIL common stock are present at the special meeting but are not voted on this proposal, or if you have given a proxy and abstained on this proposal or if you fail to submit a proxy or to vote in person at the special meeting, as applicable, the shares of UIL common stock held by you or your bank, brokerage firm or other nominee will not be counted in respect of, and will not have an effect on, the proposal to approve, by non-binding, advisory vote, the merger-related executive compensation.

If no quorum is present, authorization for proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement, requires the affirmative vote of the owners of a majority of the shares of UIL common stock present in person or represented by proxy and entitled to vote thereon. If a quorum is present, authorization for proxy holders to vote in favor of one or more adjournments of the special meeting would require that the votes favoring the action cast by the owners of the shares entitled to vote thereon exceed the votes opposing the action cast by such shareowners. If no quorum is present and your shares of UIL common stock are present at the special meeting but are not voted on this proposal, or if you vote to abstain on this proposal, this will have the effect of a vote “AGAINST” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting. If a quorum is present and your shares of UIL common

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stock are not voted on granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, or if you have given a proxy and abstained on granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, your shares will not be counted in respect of, and will not have an effect on, the vote to grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting. Whether or not a quorum is present, if you fail to submit a proxy or to attend the special meeting or if your shares of UIL common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of UIL common stock, as applicable, your shares of UIL common stock will not be voted, but this will not have an effect on the vote to grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting.

As of the close of business on the record date, the directors and executive officers of UIL beneficially owned and were entitled to vote, in the aggregate,              shares of UIL common stock, representing approximately     % of the outstanding shares of UIL common stock as of the close of business on the record date. The directors and executive officers of UIL have informed UIL that they currently intend to vote all such shares of UIL common stock “FOR” the proposal to approve the merger agreement, “FOR” the proposal to approve, by non-binding, advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger and “FOR” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement, although they are not obligated to do so.

Proxies and Revocations

If you are a shareowner of record, you may vote your shares of UIL common stock on matters presented at the special meeting in any of the following ways:

• by telephone or over the Internet, by accessing the telephone number or Internet website specified on the enclosed proxy card. Proxies delivered over the internet or by telephone must be submitted by 11:59 p.m. Eastern time on                     , 2015. Please be aware that if you vote by telephone or over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible;

• by completing, signing, dating and returning the enclosed proxy card in the pre-addressed, postage-prepaid envelope accompanying the proxy card; or

• in person—you may attend the special meeting and cast your vote there.

If you are a beneficial owner, you will receive instructions from your bank, brokerage firm or other nominee that you must follow in order to have your shares of UIL common stock voted. Those instructions will identify which of the above choices are available to you in order to have your shares voted. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the special meeting.

Please refer to the instructions on your proxy to determine the deadlines for voting over the Internet or by telephone. If you choose to submit a proxy by mailing a proxy card, your proxy card should be mailed in the pre-addressed, postage-prepaid envelope accompanying the proxy card, and your proxy card must be filed with the Office of the Corporate Secretary of UIL by the time the special meeting begins. Please do not send in your share certificates with your proxy card. When the merger is completed, a separate letter of transmittal will be mailed to you that will enable you to receive the per share merger consideration in exchange for your share certificates.

If you vote by proxy, regardless of the method you choose to vote, the individuals named on the enclosed proxy card, and each of them, with full power of substitution, will vote your shares of UIL common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify

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whether your shares of UIL common stock should be voted “FOR” or “AGAINST” or to “ABSTAIN” from voting on all, some or none of the specific items of business to come before the special meeting.

If you properly sign your proxy card but do not mark the boxes showing how your shares of UIL common stock should be voted on a matter, the shares of UIL common stock represented by your properly signed proxy will be voted “FOR” the proposal to approve the merger agreement, “FOR” the proposal to approve, by non-binding advisory vote, certain existing compensation arrangements for UIL’s named executive officers in connection with the merger and “FOR” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by voting again at a later date through any of the methods available to you, by attending the special meeting and voting in person, or by giving written notice of revocation to UIL prior to the time the special meeting begins. Written notice of revocation should be mailed to: UIL Holdings Corporation, Attention: Sigrid E. Kun, Vice President, Corporate Secretary and Assistant General Counsel, 157 Church Street, P.O. Box 1564, New Haven, Connecticut 06506.

If you have any questions or need assistance voting your shares, please contact Okapi, UIL’s proxy solicitor, by calling toll-free at (855) 208-8902.

IT IS IMPORTANT THAT YOU VOTE YOUR SHARES OF UIL COMMON STOCK PROMPTLY. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE VOTE YOUR SHARES BEFORE THE MEETING OVER THE INTERNET OR VIA THE TOLL-FREE TELEPHONE NUMBER OR BY COMPLETING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE PRE-ADDRESSED, POSTAGE-PREPAID ENVELOPE ACCOMPANYING THE PROXY CARD. IF YOU ATTEND THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY SUBMITTED.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned on one or more occasions for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement or if a quorum is not present at the special meeting. An adjournment generally may be made with the affirmative vote of the owners of a majority of the shares of UIL common stock present in person or represented by proxy and entitled to vote thereon if no quorum is present or, if a quorum is present, if the number of votes favoring the action cast by the owners of the shares entitled to vote thereon exceeds the votes opposing the action cast by such shareowners. Any adjournment of the special meeting for the purpose of soliciting additional proxies will allow UIL shareowners who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned.

Anticipated Date of Completion of the Merger

Subject to the satisfaction or waiver of the closing conditions described under the section entitled “The Merger Agreement—Conditions to Completing the Merger” beginning on page 139 of this proxy statement/prospectus, including the approval of the merger agreement by UIL shareowners at the special meeting, UIL and Iberdrola USA expect that the merger will be completed on or before December 31, 2015. However, it is possible that factors outside the control of both companies could result in the merger being completed at a different time or not at all.

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Solicitation of Proxies; Payment of Solicitation Expenses

UIL is making this solicitation and will bear the expense of printing and mailing proxy materials to UIL’s shareowners. UIL will ask banks, brokers and other custodians, nominees and fiduciaries to send proxy materials to beneficial owners of shares and to secure their voting instructions, if necessary, and UIL will reimburse them for their reasonable expenses in so doing. UIL’s directors, officers and employees may also solicit proxies personally or by telephone, but they will not be specifically compensated for soliciting proxies. UIL has retained Okapi, for a fee of up to $20,000 plus expenses, to aid in the solicitation of proxies by similar methods.

Questions and Additional Information

If you have additional questions about the merger, need assistance in submitting your proxy or voting your shares of UIL common stock or need additional copies of this proxy statement/prospectus or the enclosed proxy card, please contact Okapi, UIL’s proxy solicitor, by calling toll-free at (855) 208-8902.

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ADVISORY VOTE ON MERGER-RELATED COMPENSATION

FOR UIL’S NAMED EXECUTIVE OFFICERS

UIL is requesting the UIL shareowners’ approval, on an advisory (non-binding) basis, of specified compensation that may be payable to UIL’s named executive officers in connection with the merger and therefore is asking shareholders to adopt the following resolution:

“RESOLVED, that the compensation that may be paid or become payable to UIL’s named executive officers in connection with the merger, as disclosed in the table in the section of the proxy statement entitled “Advisory Vote on Merger-Related Compensation for UIL’s Named Executive Officers,” including the associated narrative discussion, and the agreements pursuant to which such compensation may be paid or become payable, are hereby APPROVED on an advisory basis.”

The advisory vote on executive compensation payable in connection with the merger is a vote separate and apart from the vote to approve the merger agreement, and approval of such executive compensation is not a condition to completion of the merger. Accordingly, you may vote to approve the advisory executive compensation and vote not to approve the merger agreement or vice versa. Because the vote is advisory in nature only, it will not be binding on either UIL or Iberdrola USA. Accordingly, to the extent that UIL or Iberdrola USA is contractually obligated to pay the compensation, the compensation will be payable to the named executive officers, subject only to the conditions applicable thereto, if the merger agreement is approved and the merger completed, regardless of the outcome of the advisory vote. The UIL board unanimously recommends that shareowners vote “FOR” the approval of this resolution.

This section sets forth the information required by Item 402(t) of the SEC’s Regulation S-K regarding compensation that is based on, or otherwise relates to, the merger for each “named executive officer” of UIL. The plans or arrangements pursuant to which such payments would be made (other than the merger agreement), consist of the UIL Change in Control Severance Plan II, or CIC Plan, each named executive officer’s employment agreement, and, with respect to equity awards, the UIL 2008 Stock and Incentive Compensation Plan, and the respective equity awards specifying the terms and conditions of each such award. With respect to UIL’s named executive officers, no changes were made in the terms and conditions of such plans or the equity awards, other than as specified in the merger agreement and described in the section entitled “The Merger Agreement—Treatment of UIL Stock Plans and UIL Equity-Based Awards.” Throughout this discussion, the following individuals are referred to collectively as the named executive officers of UIL:

• James P. Torgerson—President and Chief Executive Officer;

• Richard J. Nicholas—Executive Vice President and Chief Financial Officer;

• Linda L. Randell—Senior Vice President and General Counsel;

• John J. Prete—Senior Vice President Electric Operations; and

• Anthony Marone III—Senior Vice President Customer and Business Services.

The potential payments in the table below are based on the following assumptions:

• the relevant price per share of UIL common stock is $50.83, which is the average closing market price per share of UIL common stock as quoted on the NYSE over the first five business days following the first public announcement of the merger on February 25, 2015;

• the closing date of the merger is December 31, 2015, which is the estimated date of the completion of the merger solely for purposes of this golden parachute compensation disclosure; and

• the named executive officers of UIL are terminated without “cause” or resign under circumstances constituting a “constructive termination” (each, a “covered termination” for purposes of this section), in either case immediately following the assumed closing date of the merger on December 31, 2015.

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The amounts shown are estimates of amounts that would be payable to the named executive officers based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement/prospectus. Some of the assumptions are based on information not currently available and, as a result, the actual amounts received by a named executive officer may differ materially from the amounts shown in the following table.

The following tables, footnotes and discussion describe double-trigger benefits for the named executive officers. For purposes of this discussion, “double-trigger” refers to benefits that require two conditions, which are the completion of the merger as well as a covered termination within two years following the completion of the merger.

Golden Parachute Compensation
Name	Cash(1) ($)		Equity(2) ($)		Pension/ NQDC(3) ($)		Perquisites/ Benefits(4) ($)		Tax Reimbursement(5) ($)		Other(6) ($)		Total ($)
James P. Torgerson		1,650,000		4,919,215		—		39,547		—		2,475,000		9,083,762
Richard J. Nicholas		143,212		1,486,379		197,120		90,556		—		1,280,788		3,198,055
Linda L. Randell		558,000		966,253		—		17,016		—		744,000		2,285,269
John J. Prete		1,005,000		670,332		—		201,690		—		—		1,877,022
Anthony Marone		865,200		493,722		—		38,531		—		—		1,397,453

(1) The amounts reflect estimated payments of the lump-sum cash severance that would be provided to the named executive officer under the terms of the CIC Plan and/or respective employment agreement if the named executive officer were to experience a covered termination for the purposes of the CIC Plan on or within two years following the closing date of the merger, calculated as: (i) for Mr. Torgerson, a lump sum severance payment equal to the sum of his annual base salary immediately prior to the date of his termination, or base salary, plus one times his target annual short-term incentive compensation calculated as if he had been employed on the last day of the year of his termination, or annual incentive compensation; (ii) for Mr. Nicholas, a lump sum severance payment equal to (A) two times the sum of his base salary plus his annual incentive compensation, minus (B) his target total remuneration (target total remuneration is one times base salary plus one times annual incentive compensation, plus the amount of the most recently approved target long-term incentive award); (iii) for Ms. Randell, a lump sum severance payment equal to the sum of her base salary plus one times her annual incentive compensation; and (iv) for each of Messrs. Prete and Marone, a lump sum cash severance payment equal to two times the sum of his base salary plus his annual incentive compensation. Receipt of the double-trigger payments is conditioned upon the named executive officer’s execution of a general release and compliance with covenants relating to non-competition, non-diversion of business and non-interference with employee relationships, in each case through the period ending on the one-year anniversary of their covered termination, and confidentiality.

(2) The amounts reflect estimates of payments for the unvested portion of restricted share awards granted in 2011, 2012, 2013, 2014 and 2015 and performance share awards awarded in 2013, 2014 and 2015, for which vesting would accelerate upon a covered termination on or within two years following the merger. The amounts above do not include amounts in respect of equity awards that are currently vested or that will vest under their original terms prior to the estimated closing date of the merger. Please see the section entitled “The Merger Agreement—Treatment of UIL Stock Plans and UIL Equity-Based Awards” for a description of the treatment of outstanding equity awards in connection with the merger. With respect to performance shares, under the terms of the applicable award agreements, the level of performance deemed achieved will be determined based on actual performance for the period prior to the merger and based on target performance for the period following the merger.

The actual amounts that would be received by the named executive officers in connection with a covered termination would be determined based on the conversions described in the section entitled “The Merger Agreement—Treatment of UIL Stock Plans and UIL Equity-Based Awards” and may be higher or lower than the estimated amounts shown above. With respect to restricted share awards, the amounts above are based on a price per share of UIL common stock of $50.83, which is the average closing market price per

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share of UIL common stock as quoted on the NYSE over the first five business days following the first public announcement of the merger on February 25, 2015. With respect to performance share awards, the amounts above are based on a price per share of UIL common stock of $50.83 and estimated performance at target levels for the duration of the performance period.

Details of the payments that would be received on a covered termination in connection with outstanding unvested equity awards are shown in the following supplementary table:

Name	Restricted Shares ($)		Performance Shares ($)		Total ($)
Mr. Torgerson		305,590		4,613,625		4,919,215
Mr. Nicholas		—		1,486,379		1,486,379
Ms. Randell		—		966,253		966,253
Mr. Prete		—		670,332		670,332
Mr. Marone		—		493,722		493,722

(3) The amount represents a lump sum pension supplement calculated as the difference between the pension benefit actually payable under UIL’s tax-qualified pension plan and the pension benefit that would have been payable had the participant been credited with two additional years of service. This amount will be payable only if the named executive officer were to experience a covered termination on or within two years following the closing date of the merger and is conditioned upon the named executive officer’s execution of a general release.

(4) The amounts represent (i) benefits under UIL’s healthcare plans during the COBRA continuation period, (ii) a lump sum payment of one (Ms. Randell), one and one-half (Mr. Marone), two (Messrs. Nicholas and Prete) or three (Mr. Torgerson) times a benefit supplement of $5,500, in lieu of continued coverage under UIL’s life insurance, disability and other employee welfare and fringe benefit plans and (iii) one and one-half (Mr. Marone) or two (Messrs. Nicholas and Prete) additional credited years of service for the purposes of calculating benefits payable to the participant under UIL’s retiree medical benefit plans. Receipt of these benefits is conditioned upon the named executive officer experiencing a covered termination on or within two years following the closing date of the merger, and his or her execution of a general release. Details of the payments are shown in the following supplementary table:

Name	Benefits Continuation ($)		Benefit Supplement ($)		Retiree Medical ($)		Total ($)
Mr. Torgerson		23,047		16,500		—		39,547
Mr. Nicholas		23,047		11,000		56,509		90,556
Ms. Randell		11,516		5,500		—		17,016
Mr. Prete		23,407		11,000		167,283		201,690
Mr. Marone		30,281		8,250		—		38,531

(5) For each of Messrs. Torgerson and Nicholas and Ms. Randell, if any payments to the executive would be subject to the excise tax on “excess parachute payments” under Section 280G of the Code, the executive will receive a full gross-up payment to be made whole for the effects of the tax. No gross-up payments are expected to be triggered for any named executive officer in connection with the merger.

(6) These amounts reflect estimated payments conditioned on compliance with a covenant not to compete if the named executive officer were to have an involuntary separation from service without cause or for “Good Reason” (as defined in the respective employment agreement) within two years following the closing of the merger calculated as follows: (i) for Mr. Torgerson, payments equal to three times his base salary; (ii) for Mr. Nicholas, payments equal to one times his target total remuneration; and (iii) for Ms. Randell, payments equal to two times her base salary. In all three cases, amounts would be paid out over a 12 month period in equal fixed monthly installments (subject to delay to the extent required under Section 409A of the Code).

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ADJOURNMENT OF THE SPECIAL MEETING TO SOLICIT ADDITIONAL PROXIES

UIL shareowners are being asked to grant authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. If this proposal is approved, the special meeting could be successively adjourned to any date. In accordance with the UIL bylaws, a vote on adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement may be taken in the absence of a quorum. UIL does not intend to call a vote on adjournments of the special meeting to solicit additional proxies if the merger agreement is approved at the special meeting.

If the special meeting is adjourned to solicit additional proxies, UIL shareowners who have already submitted their proxies will be able to revoke them at any time prior to their use. Approval of granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement will require the affirmative vote of the owners of a majority of the outstanding shares of UIL common stock present in person or represented by proxy at the special meeting and entitled to vote at the special meeting, if no quorum is present. If a quorum is present, the approval of granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting would require that the votes favoring the action cast by the owners of the shares entitled to vote thereon exceed the votes opposing the action cast by such shareowners. Accordingly, if no quorum is present and your shares of UIL common stock are present at the special meeting but are not voted on the proposal, or if you vote to abstain on the proposal, this will have the effect of a vote “AGAINST” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. If a quorum is present and your shares of UIL common stock are not voted on this proposal, or if you have given a proxy and abstained on this proposal, your shares will not be counted in respect of, and will not have an effect on, the proposal. Whether or not a quorum is present, if you fail to submit a proxy or to attend the special meeting or if your shares of UIL common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of UIL common stock, as applicable, your shares of UIL common stock will not be voted, but this will not have an effect on the vote to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

The UIL board unanimously recommends that you vote “FOR” granting authority to proxy holders to vote in favor of one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

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THE MERGER

This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement/prospectus as Annex A. You should read the entire merger agreement carefully as it is the legal document that governs the merger.

The merger agreement provides that, upon satisfaction or waiver of the conditions to the merger, UIL will merge with and into merger sub. Merger sub will be the surviving corporation in the merger. As a result of the merger, UIL will cease to be a publicly traded company and cease its separate corporate existence.

Background of the Merger

In May 2010, UIL and Iberdrola USA entered into a purchase agreement pursuant to which UIL purchased The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company, along with their respective holding companies, from Iberdrola USA. Since then, James P. Torgerson, President and Chief Executive Officer of UIL and Pedro Azagra Blázquez, Chief Development Officer of Iberdrola, S.A., have been in regular contact with one another and, from time to time, have had discussions concerning various strategic and market-related issues involving the companies.

As part of the ongoing evaluation of UIL’s business, members of UIL’s senior management and the UIL board periodically review and assess the operations and financial performance of UIL as well as broader industry trends, and evaluate potential opportunities for business combinations, acquisitions and other financial and strategic alternatives to enhance shareholder value. In addition, members of UIL’s senior management periodically meet with senior executives of other companies in the industry, investment bankers and investors to discuss industry trends and possible transactions to enhance shareholder value.

In furtherance of the board’s objective to engage in transactions to enhance shareowner value, on March 2, 2014, UIL entered into an asset purchase agreement with the City of Philadelphia, pursuant to which UIL agreed to acquire the operating assets of Philadelphia Gas Works, or the PGW transaction, subject to, among other things, the approval of the Philadelphia City Council. The PGW transaction agreement, which would have terminated automatically on December 31, 2014, was ultimately terminated by UIL on December 4, 2014 due to the Philadelphia City Council’s failure to consider an ordinance approving the sale.

As part of the periodic interactions between UIL and Iberdrola, S.A., on May 20, 2014, Mr. Torgerson met with Mr. Azagra Blázquez to discuss the electric and gas utility industry. At this meeting, Mr. Azagra Blázquez raised the concept of a strategic combination involving UIL and Iberdrola USA, but no specifics of any transaction were discussed. Mr. Azagra Blázquez indicated that Iberdrola, S.A. would be interested in analyzing such a transaction for Iberdrola USA whether or not the PGW transaction was completed and that, given Mr. Torgerson’s track record leading UIL, Mr. Torgerson could possibly be a candidate to lead any combined business between the companies. Mr. Torgerson expressed an interest but indicated that he was focused on completing the PGW transaction and did not wish to enter into any discussions, at that time, that could interfere with its completion. Mr. Torgerson reported his conversation with Mr. Azagra Blázquez to the UIL board during the executive session of its regularly scheduled board meeting on June 16, 2014.

On July 10, 2014, Mr. Torgerson had a further discussion with Mr. Azagra Blázquez concerning strategic possibilities, including a potential combination of UIL and Iberdrola USA. Given the continued pendency of the PGW transaction, Mr. Azagra Blázquez and Mr. Torgerson agreed to defer discussion of a potential transaction until after completion or termination of the PGW transaction. Mr. Torgerson reported this conversation to the UIL board during the executive session of its regularly scheduled meeting on August 5, 2014.

Mr. Torgerson again met with Mr. Azagra Blázquez on October 13, 2014, during which meeting Mr. Torgerson and Mr. Azagra Blázquez discussed the still-pending PGW transaction and additional strategic

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options for UIL. Mr. Torgerson informed the UIL board at its regularly scheduled meeting on October 28, 2014 that Iberdrola, S.A. appeared to be seriously interested in analyzing a transaction in which it would combine UIL with Iberdrola USA, and the UIL board should begin to consider whether this was something it would wish to pursue following the completion or termination of the PGW transaction.

On November 10, 2014, Mr. Torgerson reported to the UIL board at its meeting that he had informed Richard Nicholas, Executive Vice President and Chief Financial Officer of UIL, and Linda Randell, Senior Vice President and General Counsel of UIL, of his preliminary discussions with Mr. Azagra Blázquez. Mr. Torgerson also reported that he had discussed his meetings with Mr. Azagra Blázquez with Sullivan & Cromwell, UIL’s outside legal advisor. The UIL board agreed that Mr. Torgerson should hold further discussions with Mr. Azagra Blázquez to clarify the structure and terms Iberdrola, S.A. might be willing to offer UIL in a potential transaction.

On November 11, 2014, Mr. Torgerson met with Mr. Azagra Blázquez. The parties discussed the status of the PGW transaction and Mr. Azagra Blázquez reiterated that Iberdrola, S.A. would be interested in discussing a potential strategic transaction between Iberdrola USA and UIL regardless of the outcome of the PGW transaction. Although no specific proposals were made during this meeting, the parties discussed such a potential strategic transaction.

Following the meeting on November 11, 2014, UIL, Iberdrola, S.A. and their respective legal advisors negotiated the terms of a non-disclosure agreement that provided for the sharing of confidential information in connection with the analysis of a potential strategic transaction between UIL and Iberdrola USA. This non-disclosure agreement included a “don’t ask, don’t waive” standstill provision that prohibited Iberdrola, S.A. from making a proposal for UIL except in connection with a mutually agreed, negotiated transaction and prohibited Iberdrola, S.A. from asking UIL for a waiver of such provision. This non-disclosure agreement was executed on November 20, 2014.

On December 2, 2014, representatives and advisors of UIL and Iberdrola, S.A., including representatives of Sullivan & Cromwell and Iberdrola, S.A.’s outside legal advisors, Latham & Watkins, met in New York City. In addition to Mr. Torgerson, Mr. Nicholas attended from UIL and Mr. Azagra Blázquez, Juan Romero Izquierdo and Manuel Toledano Lanza attended from Iberdrola, S.A. At this meeting, the parties discussed the possibility of a potential strategic transaction, including possible structures for a transaction that would include a combination of common stock of the combined company and cash that would include a premium for UIL shareowners, and that would result in the combined company being a publicly listed company. The parties agreed to further consider various structure alternatives in light of tax, regulatory and other considerations. However, neither party made a specific proposal as to the price or relative ownership of the combined company following the merger other than the concept of a cash premium for UIL’s shareowners.

Mr. Torgerson reported on the December 2, 2014 meeting to the UIL board during its regularly scheduled meeting on December 9, 2014, which was also attended by members of UIL’s senior management and a representative of Sullivan & Cromwell. Mr. Torgerson reported that Iberdrola, S.A. was interested in a potential transaction in which Iberdrola USA would be combined with UIL, and he noted that Iberdrola, S.A. had expressed an interest in causing the new combined company to be a publicly listed company that could possibly be led by Mr. Torgerson. He discussed the engagement of financial and legal advisors with the UIL board, and explained the factors for consideration in selecting a financial advisor for this strategic opportunity given the need to evaluate the expected share trading price of the combined public company. He also discussed with the UIL board conversations he had had in recent days with an infrastructure fund interested in pursuing a transaction and with another utility company that expressed a more general interest in UIL’s long-term strategic plans. The UIL board held an executive session without Mr. Torgerson, during which the UIL board discussed the potential transaction, a practice that continued at every meeting of the UIL board prior to the signing of the merger agreement.

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On December 4, 2014, UIL terminated the PGW transaction in accordance with its terms because the Philadelphia City Council had refused to hold a vote on the transaction.

On December 11, 2014, UIL contacted Morgan Stanley about its interest in advising UIL in connection with a potential strategic transaction involving Iberdrola USA. UIL contacted Morgan Stanley based on Morgan Stanley’s qualifications, expertise and reputation, its knowledge of and involvement in recent transactions in UIL’s industry, its capital markets expertise and its knowledge of UIL’s business and affairs.

On December 15, 2014, Mr. Torgerson, Mr. Nicholas, Ms. Randell and representatives of Sullivan & Cromwell and Morgan Stanley met with Mr. Azagra Blázquez, Mr. Toledano Lanza and representatives of Latham & Watkins and Lazard Freres & Co., or Lazard, in New Haven, Connecticut. Although Iberdrola, S.A. initially intended to use Lazard as its financial advisor on any potential transaction between Iberdrola USA and UIL, Iberdrola, S.A. and UIL considered jointly engaging Lazard to provide transaction structuring advice to both parties, with the parties to potentially engage separate financial advisors at a later date. However, shortly thereafter Iberdrola, S.A. and UIL agreed that Lazard would act as financial advisor solely to Iberdrola, S.A. from the outset. During this meeting, Iberdrola, S.A. reiterated its interest in a potential transaction that would include consideration for UIL shareowners consisting of a combination of common stock of the combined company and cash, including a premium, and result in a publicly listed company, but did not propose any specific terms. The parties discussed mutual due diligence workstream items that would need to be completed in order for Iberdrola, S.A. to clarify the transaction terms it would propose to UIL and in order for UIL to be able to respond to such proposal in early 2015.

On December 29, 2014, UIL entered into an engagement letter with Morgan Stanley for Morgan Stanley to assist UIL as its financial advisor in connection with, among other things, UIL’s review and consideration of opportunities available to UIL, including a possible sale of UIL, or a merger or similar transaction in which a third party acquires, directly or indirectly, a majority of the capital stock of UIL. UIL selected Morgan Stanley to act as its financial advisor based on the same reasons it contacted Morgan Stanley on December 11, 2014.

During December 2014, UIL, Iberdrola, S.A. and Iberdrola USA commenced mutual due diligence in connection with a potential transaction. During this time, UIL, Iberdrola, S.A. and Iberdrola USA worked with their respective legal and financial advisors on evaluating various structures for a potential transaction.

On January 9, 2015, Mr. Torgerson, Mr. Nicholas, Ms. Randell and UIL’s advisors met with Mr. Azagra Blázquez and Iberdrola, S.A.’s advisors to discuss the basic framework for the potential transaction, including potential structures and the consideration for a transaction, as well as plans for next steps. During this meeting, Iberdrola, S.A. and Lazard discussed a consideration mix of stock and cash in a potential transaction. Iberdrola, S.A. proposed that UIL’s shareowners would receive one share of common stock of the combined company for each share of UIL common stock along with a cash premium equal to approximately 20% of UIL’s stock price, with Iberdrola USA becoming a publicly listed company in connection with the completion of the potential transaction and UIL’s shareowners owning approximately 18-22% of the combined company following the completion of the transaction. Iberdrola, S.A.’s advisors noted that, for tax reasons, it may be important to Iberdrola, S.A. that it owns at least 80% of the combined company following the completion of the transaction. Latham & Watkins summarized the general terms Iberdrola USA would desire in a merger agreement, including non-solicitation restrictions and a termination fee that would be payable by UIL in certain circumstances. Latham & Watkins also noted that Iberdrola USA would want to limit the level of regulatory commitments imposed by regulators in connection with obtaining approval of the merger to which Iberdrola USA would be obligated to agree.

Following this meeting, a series of calls were set up between UIL, Iberdrola, S.A. and Iberdrola USA to allow UIL, Iberdrola, S.A. and Iberdrola USA to further proceed with reciprocal due diligence, and additional documents were exchanged as part of the due diligence process. The due diligence calls and exchange of documents continued until the signing of the merger agreement.

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On January 15, 2015, Latham & Watkins sent UIL’s legal advisors an initial draft of the merger agreement. Among other things, this draft included restrictions on the ability of the UIL board to change its recommendation with respect to the merger, including a restriction that would only permit the UIL board to change its recommendation to accept a superior proposal from an alternative acquiror and a termination right for and termination fee payable to Iberdrola USA if, among other reasons, UIL materially breached the non-solicitation restrictions. As Latham & Watkins had noted at the January 9, 2015 meeting, the draft agreement included a proposal with respect to the limit on regulatory commitments required to be made in connection with a potential transaction. The threshold proposed was a level of commitments that would have a material adverse effect on a business that is the size of UIL; if commitments were imposed in excess of this threshold, one of Iberdrola USA’s conditions to closing would not be satisfied and Iberdrola USA would not be required to complete the merger. The draft also included reimbursement of expenses by UIL if the UIL shareowner vote were not obtained or UIL were to materially breach the merger agreement.

On January 19, 2015, the UIL board held a meeting, which was attended by UIL’s legal and financial advisors and several members of UIL’s senior management. During this meeting, Mr. Torgerson provided an update on the status of the potential transaction with Iberdrola USA and noted that both the due diligence investigation and the structuring discussions were ongoing. Mr. Torgerson and other members of UIL’s senior management also provided details on the steps that had been taken since the last meeting of the UIL board, including the January 9, 2015 meeting and subsequent due diligence calls. In addition, Mr. Torgerson and the UIL board discussed the current trend toward consolidation in the regulated utilities industry, and UIL’s senior management and UIL’s legal advisors responded to questions from the UIL board on various topics related to potential acquisition opportunities for UIL as well as on topics related to Iberdrola USA and the potential transaction.

Representatives of Sullivan & Cromwell reviewed with the UIL board the directors’ fiduciary duties in evaluating a possible business combination. The UIL board then received a presentation and advice from Morgan Stanley. Morgan Stanley discussed strategic considerations for UIL, strategic considerations that Iberdrola USA could have in pursuing the potential transaction, the pro forma company that would result from the potential transaction, the structure for the potential transaction and the capital markets implications associated with the potential transaction structure, including the post-signing and post-closing trading price, and the trading implications of being a controlled company. Morgan Stanley also reviewed financial considerations associated with a potential transaction and reviewed its preliminary financial analyses concerning UIL, Iberdrola USA and a potential transaction between UIL and Iberdrola USA, as well as other considerations including the shift in business mix, regulatory approvals and the potential for other bidders. Morgan Stanley also advised the UIL board about the scope and nature of its prior and current engagements and relationships with Iberdrola, S.A.

During the executive session for this meeting, the UIL board discussed various actual and potential conflicts of management and advisors, including Morgan Stanley’s relationship with Iberdrola, S.A. on other matters. The UIL board concluded with respect to Morgan Stanley that Morgan Stanley’s capital markets and M&A expertise was very strong and that it would render independent and appropriate advice. The UIL board also discussed senior management’s conflicts and the UIL board’s preference, given the stock component of the potential transaction consideration, that Mr. Torgerson lead the combined company following the merger. The UIL board and Mr. Torgerson agreed that he would not discuss with Iberdrola, S.A. or its advisors any compensation aspects of a position with the combined company without further discussion with the UIL board. Mr. Torgerson’s post-merger compensation has not yet been decided.

From January 24, 2015 through January 26, 2015, Mr. Torgerson met with members of Iberdrola, S.A.’s senior management team in Madrid, Spain, during which meetings he and other attendees discussed the U.S. gas and electric utility industries and the potential management structure for the combined company. The structure and valuation of the potential transaction were not discussed during these meetings.

The UIL board next met on January 30, 2015 with members of UIL’s senior management and UIL’s legal and financial advisors, during which meeting Mr. Torgerson reported on the meetings in Madrid and updated the

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UIL board on the status of the due diligence activities related to the potential transaction. Morgan Stanley updated the UIL board on its activities since the last board meeting, including ongoing work relating to financial forecasts and analyses of UIL, Iberdrola USA and the post-transaction company, transaction structuring analyses and due diligence. Morgan Stanley also discussed with the UIL board possible alternatives to a potential transaction with Iberdrola USA, including an acquisition by infrastructure funds or other strategic acquirors. The UIL board discussed the possibility of contacting other parties, either now or later in the process, weighing the possibility of a leak and other risks of reaching out to third parties against the benefit of improved knowledge about whether another party would pay more for UIL. After discussion, the UIL board decided not to approach other potential counterparties at that time. Sullivan & Cromwell provided the UIL board with an update on the status of the merger agreement negotiations. During the executive session, the UIL board discussed transaction timing and whether Iberdrola USA might be willing to offer an all-cash transaction and whether cash might be preferable to a combination of cash and stock.

Sullivan & Cromwell sent a revised draft of the merger agreement to Latham & Watkins on January 31, 2015. In this draft, revisions were made to reflect UIL’s positions on several key issues. The regulatory commitments threshold for Iberdrola USA was increased to the level of commitments that would cause a material adverse effect on a business that was half the size of the combined business of Iberdrola USA and UIL. The restrictions on the ability of the UIL board to change its recommendation were revised to expand the UIL board’s ability to change its recommendation with respect to the merger even if UIL had not received a superior proposal, subject to customary limitations. Material breaches of the non-solicitation covenant would not give Iberdrola USA a right to terminate the merger agreement or trigger the payment of a termination fee by UIL. Termination by UIL due to a material breach of the merger agreement by Iberdrola USA would make Iberdrola USA responsible for reimbursement of UIL’s expenses. In addition, the draft proposed a two-tiered termination fee where a termination to accept a superior proposal made within the first 45 days after signing would result in a lower termination fee than the termination fee that would be otherwise payable.

Over the next two weeks, the advisors and management of UIL, Iberdrola, S.A. and Iberdrola USA continued their respective work on structuring considerations, financial analyses, due diligence and regulatory considerations.

On February 11, 2015, the UIL board held a meeting attended by Mr. Azagra Blázquez and representatives of Iberdrola, S.A.’s and Iberdrola USA’s legal and financial advisors, in addition to members of UIL’s senior management and representatives of UIL’s legal and financial advisors. Mr. Azagra Blázquez presented an overview of Iberdrola, S.A.’s and Iberdrola USA’s respective business and management. After Mr. Azagra Blázquez concluded his presentation, he and his advisors left the meeting and following their departure, Morgan Stanley presented an update on the potential transaction, including an update on its financial analyses of the potential transaction. The UIL board then discussed the potential transaction, including, among other things, the mix of cash and stock consideration and the tax treatment of each portion, the expected dividend policy of Iberdrola USA, UIL’s strategic prospects, interest rate fluctuations and their effects on the stock trading price of companies in the utility sector, potential alternatives to the transaction and regulatory considerations related to the transaction.

Also on February 11, 2015, Latham & Watkins sent a revised draft of the merger agreement to Sullivan & Cromwell. During the meeting of the UIL board on the same day, Sullivan & Cromwell provided an overview of the revised draft of the merger agreement and noted that provisions related to the circumstances under which the UIL board could change its recommendation with respect to the merger, the circumstances in which a termination fee or expense reimbursement would be required, and the allocation of risk with respect to regulatory approvals had been and were expected to continue to be key areas of focus in the ongoing negotiation of the merger agreement.

On February 12, 2015, Mr. Torgerson and two members of the UIL board, John Lahey, the Non-Executive Chair of the UIL board, and Arnold Chase, met with José Ignacio Sanchez Galán, Chairman of the Iberdrola

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USA board and the Chairman of Iberdrola, S.A., and Mr. Azagra Blázquez in Augusta, Maine, during which meeting the parties discussed the future prospects of a combined company and Iberdrola, S.A.’s plans with respect to the future management of Iberdrola USA. Messrs. Lahey and Chase noted that the UIL board believed it would be important for Mr. Torgerson to serve as the chief executive officer of Iberdrola USA after the completion of the merger based on Mr. Torgerson’s strong performance leading UIL. The parties also discussed Iberdrola, S.A.’s long-term strategy, its renewables business in the United States and its operations generally in Europe and the United States.

On February 13, 2015, Mr. Azagra Blázquez and representatives of Latham & Watkins met with representatives of Sullivan & Cromwell at the New York offices of Latham & Watkins. During this meeting, Sullivan & Cromwell explained the key considerations for UIL in the merger agreement and a term sheet for a shareholder agreement that would be entered into between Iberdrola USA and Iberdrola, S.A. after the signing of the merger agreement but prior to the completion of the merger. In particular, the parties discussed the need for the term sheet for the shareholder agreement to offer protections for minority shareholders, the need for the UIL board to preserve its flexibility to change its recommendation and terminate the merger agreement without triggering a termination fee and Iberdrola USA’s termination right due to a material breach of the non-solicitation restrictions by UIL. Latham & Watkins indicated that Iberdrola, S.A. was not willing to accept a two-tiered termination fee but expressed Iberdrola, S.A.’s willingness to agree to a reasonably sized termination fee and a reasonable cap for expense reimbursement.

On February 16, 2015, the UIL board met telephonically with UIL’s senior management and legal and financial advisors to further discuss the status of the potential transaction. During this meeting, Mr. Torgerson briefed the UIL board on the ongoing discussions with Iberdrola, S.A. with respect to the potential transaction. Morgan Stanley discussed the cash and stock mix currently proposed by Iberdrola, S.A. as consideration in the potential transaction and financial analyses with respect to the value of the stock portion of the consideration. Mr. Torgerson and Morgan Stanley discussed the recent trends in stock prices for utilities with the UIL board, which had traded down significantly over the last week, primarily as a result of market expectations of an increase in the interest rate by the Federal Reserve. Mr. Torgerson discussed the share price expectations for UIL based on management’s standalone five-year strategic plan and assuming different price/earnings multiples to arrive at projected trading prices. The UIL board discussed the pro forma valuation of Iberdrola USA with Morgan Stanley. Mr. Lahey, Mr. Chase and Mr. Torgerson then gave an overview of their meeting on February 12, 2015 with Iberdrola, S.A. discussed above. The UIL board discussed the consideration of the potential transaction and provided UIL’s management and UIL’s advisors with directional and strategic guidance for subsequent negotiations.

Sullivan & Cromwell sent a revised draft of the merger agreement to Latham & Watkins on February 16, 2015, and subsequent drafts of the merger agreement were exchanged between the parties on February 16, 2015 and February 17, 2015 reflecting changes to a number of key terms. The ability of the UIL board to change its recommendation with respect to the merger was expanded to permit a change where failure to do so could reasonably be expected to result in a breach of the fiduciary duties of the UIL board. Iberdrola USA was permitted to require the UIL board to publicly reaffirm its recommendation to approve the merger each time an acquisition proposal or material amendment to an acquisition proposal is received by UIL, and failure by the UIL board to make such public affirmation would permit Iberdrola USA to terminate the merger agreement. The parties exchanged their views on the regulatory commitment threshold, and the parties did not make proposals with respect to the amount of the termination fee or the cap for expenses reimbursement.

On February 17, 2015, Latham & Watkins sent an initial draft of the term sheet for the shareholder agreement to Sullivan & Cromwell. This initial draft provided for, among other things, the appointment of three directors who are current UIL directors (including Mr. Torgerson) to the combined company board, certain approval rights granted to a committee composed of directors unaffiliated with Iberdrola, S.A. for a “going private” transaction, a provision that Iberdrola, S.A. and other shareholders of the combined company must receive the same per share consideration in a merger of the combined company with a third party, limitations on

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affiliate transactions between Iberdrola, S.A. and its affiliates, on the one hand, and the combined company and its subsidiaries, on the other hand, and a waiver for the benefit of Iberdrola, S.A. of corporate opportunities in the certificate of incorporation of Iberdrola USA.

Also on February 17, 2015, Lazard and Morgan Stanley met to discuss the merger consideration. During this meeting, Lazard presented its financial analyses of the assets UIL and Iberdrola USA would each contribute in the transaction, which the parties then discussed. Neither Lazard nor Morgan Stanley made any specific proposal with respect to the percentage ownership.

The parties continued to discuss transaction valuation on February 18, 2015, and on February 19, 2015, Mr. Torgerson and members of senior management of UIL, Mr. Azagra Blázquez, and representatives of Morgan Stanley and Sullivan & Cromwell met in the New York offices of Sullivan & Cromwell. During this meeting, Iberdrola, S.A. proposed that UIL’s shareowners would own 17% or less of the combined company and would receive a cash payment equal to 20% of the UIL stock price. No methodology for determining the reference price for UIL common stock was proposed.

During the six days after February 19, 2015, Iberdrola USA, UIL and the financial advisors had numerous further negotiations with respect to the percentage ownership and cash premium. In light of recent stock price declines in the utility sector that had also affected UIL, UIL sought to protect UIL shareowners from reductions to the cash premium that would be payable to UIL shareowners through the use of various volume-weighted average price and true-up mechanics.

On February 20, 2015, the UIL board met in person with members of UIL’s senior management and representatives of UIL’s legal and financial advisors to further consider the potential transaction with Iberdrola USA. Representatives of UIL’s Connecticut counsel, Wiggin and Dana LLP, reviewed the fiduciary duties of the UIL board under Connecticut law in considering the potential transaction. The UIL board received updates from members of UIL’s management on the status of UIL’s due diligence investigation related to the potential transaction. Representatives of Morgan Stanley reviewed its updated financial analyses, including with respect to UIL’s standalone performance and projections, and answered questions from the UIL board with respect to UIL’s stock price, growth prospects for Iberdrola USA and general industry trends. Representatives from Morgan Stanley discussed in detail their thinking on the likely trading value of Iberdrola USA common stock and the factors that could affect it positively and negatively, their belief that the terms of the shareholder agreement were sufficient to avoid any negative trading consequences and the appropriateness of using NextEra Energy, Inc. as a trading comparable to Iberdrola USA given the similarities in its business with that of the combined company resulting from the merger. The UIL board discussed with Morgan Stanley and Mr. Torgerson the possibility of an infrastructure fund or a strategic buyer making a proposal for UIL, and in response to questions from the UIL board, Morgan Stanley advised that it believed it was quite unlikely that an infrastructure fund or a strategic buyer would offer a price resulting in greater value than the value currently offered by Iberdrola USA. A representative from Morgan Stanley also updated the UIL board on the meeting with Lazard and the latest price proposal made by Iberdrola USA, including the approximately 17% ownership of the combined company by UIL shareowners following the merger, which Morgan Stanley indicated it believed Iberdrola USA was prepared to increase to 18%, and a cash premium of approximately 20% over the UIL stock price, with still no agreement on against what the 20% would be measured. The UIL board and Morgan Stanley discussed various stock-cash mixes at length, along with the considerations in valuing each portion. Representatives of Sullivan & Cromwell then summarized the current status of negotiations on the key aspects of the merger agreement.

Following this meeting, on February 20, 2015, at the direction of the UIL board, Morgan Stanley proposed to Iberdrola USA that UIL shareowners receive 19% of the stock of the combined company and a cash payment of $10.00 per share of UIL common stock.

The drafts of the merger agreement exchanged between the parties from February 23, 2015 through February 25, 2015 reflected further negotiations between the parties. These drafts contained agreement on several

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key issues. With respect to regulatory approvals, Iberdrola USA agreed that instead of measuring the regulatory commitment limit for Iberdrola USA against a business that was the size of UIL, it would be measured against a business that was one-and-a-half times the size of UIL. With respect to termination rights, Iberdrola USA agreed that it would not have a stand-alone right to terminate the merger agreement due to UIL’s material breach of the non-solicitation covenant. With respect to the termination fee and cap for expense reimbursement, UIL proposed a termination fee of $50 million with a cap for expenses reimbursement of $15 million; following negotiation, the parties agreed on a termination fee at $75 million (or approximately 2.5% of UIL’s equity value) and a cap on expense reimbursement of $15 million (or approximately 0.5% of UIL’s equity value), with reciprocal expense reimbursement obligations for each party if the agreement were terminated by the other party due to a material breach by the non-terminating party.

The parties negotiated the term sheet for the shareholder agreement in parallel with the merger agreement and exchanged drafts between February 22, 2015 and February 25, 2015. The final term sheet includes, among other things, a commitment by Iberdrola, S.A. to vote in favor of the non-executive UIL directors for a period of time after the completion of the merger, limitations on Iberdrola, S.A.’s ability to dispose of shares of the combined company for a period of time after the completion of the merger, and independent director review and arm’s-length requirements in connection with affiliate transactions.

On February 23, 2015, Iberdrola, S.A. contacted Morgan Stanley and proposed an ownership percentage for UIL’s shareowners of 18.5% of the combined company with a cash payment of $10.00 per share.

On February 24, 2015, the UIL board met in person, first in executive session and then with members of UIL’s senior management and representatives of UIL’s legal and financial advisors, to further consider the potential transaction with Iberdrola USA. The UIL board received advice and updated views from Morgan Stanley with respect to the financial aspects of the potential transaction. After extensive discussions between the UIL board and UIL’s advisors, the UIL board instructed Morgan Stanley to accept an ownership percentage of 18.5% in the combined company for UIL shareowners and to propose a higher cash consideration in its negotiations with Iberdrola.

On February 24, 2015, at the direction of the UIL board, Morgan Stanley accepted Iberdrola, S.A.’s proposal that UIL shareowners receive 18.5% of the common stock of the combined company, and proposed that UIL shareowners receive a cash payment of $10.75 per share.

On the morning of February 25, 2015, Iberdrola USA indicated to UIL and Morgan Stanley that it would not agree to the proposed $10.75 per share cash payment proposal by UIL. Iberdrola USA asked UIL and Morgan Stanley for a revised proposal. UIL, after consultation with Morgan Stanley, proposed a cash premium payable to UIL shareowners of $10.50 per share, which Iberdrola USA accepted.

In the afternoon of February 25, 2015, the UIL board met with members of UIL’s senior management and representatives of UIL’s legal and financial advisors to discuss the status of the potential transaction negotiations and the associated transaction agreements.

Representatives of Morgan Stanley provided the UIL board with its financial analyses of the potential transaction, and reviewed the financial terms of the merger agreement. Following the discussion, representatives of Morgan Stanley delivered to the UIL board an oral opinion, which was confirmed in writing, to the effect that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its written opinion, the consideration to be received by the holders of shares of UIL common stock pursuant to the merger agreement was fair from a financial point of view to such holders. The full text of Morgan Stanley’s written opinion to the UIL board, dated February 25, 2015, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is attached as Annex C to this proxy statement/prospectus

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After reviewing substantially final versions of the transaction documents and receiving a presentation from Sullivan & Cromwell on such documents, the UIL board unanimously determined that the merger agreement and the transactions contemplated thereby were in the best interests of UIL, adopted the merger agreement and recommended that UIL shareowners approve the merger agreement and the transactions contemplated thereby.

Following the meeting of the UIL board, on the evening of February 25, 2015, UIL and Iberdrola USA executed the merger agreement and issued a joint press release announcing the execution of the merger agreement.

Ownership of the Combined Company

Iberdrola USA expects to issue approximately 57,628,297 shares of common stock of the combined company in exchange for the outstanding shares of UIL common stock and UIL equity-based awards. As described in the section entitled “The Merger Agreement—Certain Other Covenants” beginning on page 137 of this proxy statement/prospectus, Iberdrola USA is obligated under the merger agreement to issue, prior to the closing, additional shares of common stock of the combined company to Iberdrola, S.A., such that Iberdrola, S.A. will own an aggregate number of shares of common stock of the combined company equal to 81.5% of all issued and outstanding shares of common stock of the combined company immediately following the completion of the merger. Holders of shares of UIL common stock as of immediately prior to the completion of the merger will hold in the aggregate 18.5% of the issued and outstanding shares of the common stock of the combined company immediately following the completion of the merger.

Iberdrola USA’s Reasons for the Merger

Iberdrola USA is focused on regulated activities in the United States such as gas and electric utilities and renewable electricity generation. The merger with UIL supports Iberdrola USA’s strategic framework, which focuses on growth, operational excellence and prudent capital allocation. In approving the merger and the other transactions contemplated by the merger agreement, the Iberdrola USA board considered a variety of factors related to these strategic priorities, including the following:

• the addition of UIL’s portfolio of regulated utilities in Connecticut and Massachusetts is expected to allow Iberdrola USA to enhance its position as a leading utility holding company in the U.S., expanding its regulated gas and electric utilities footprint from New York and Maine to Connecticut and Massachusetts;

• the Iberdrola USA and UIL combination will create a geographically complementary energy delivery platform with a strong customer base and is expected to create opportunities to develop new projects and operations;

• the transaction is expected to increase Iberdrola USA’s regulated footprint, adding low risk and predictable cash flows to its current mix of investments;

• Iberdrola USA will continue to maintain its financial strength after the closing of the transaction;

• in connection with the transaction, Iberdrola USA will become a publicly traded company in the U.S., which is expected to provide the company greater access to capital markets and allow Iberdrola USA to continue analyzing new potential opportunities;

• the UIL shareowners will receive common stock of the combined company plus a limited cash component ($10.50 per share of UIL common stock), which is expected to allow Iberdrola USA to maintain a strong financial position;

• the historically low interest rate environment and robust capital markets have led to strong investor demand for diversified and stable companies like the one expected to result from this combination;

• the combination of the companies’ management teams, both with successful and proven operational track records, provides confidence and certainty with respect to the management of the combined entity;

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• the transaction is expected to offer greater flexibility to grow the business through project development and to compete more effectively in a consolidating industry;

• Iberdrola USA would be entitled to a break-up fee under certain circumstances if the transaction is not consummated;

• the expected dividend, together with the pipeline for new projects and potential growth opportunities, make the combined company attractive to Iberdrola, S.A., Iberdrola USA’s current sole shareholder, and public investors;

• the combination is expected to create an excellent platform to develop gas distribution projects in Connecticut and the northeast U.S.; and

• the transaction will strengthen the position of Iberdrola, S.A. in the United States, a country that has a solid credit rating (AAA Fitch Ratings, or Fitch, Aaa Moody’s Investors Service, or Moody’s, and AA+ according to Standard & Poor’s Rating Group, a division of McGraw-Hill Companies, Inc., or Standard & Poor’s) and enhance its exposure to the U.S. Dollar currency.

The Iberdrola USA board acknowledged that the merger requires regulatory approvals from certain state and U.S. federal agencies, including PURA, DPU and FERC. PURA requires a showing that the new upstream owner is financially, technologically and managerially suitable to ensure that the UIL utilities in Connecticut will provide safe, adequate and reliable service to the public and that the transaction is in the public interest. The DPU requires a showing that the benefits of the proposed transaction outweigh the costs and that the transaction is in the public interest. Iberdrola USA’s management believes the merger meets these standards and Iberdrola USA and UIL and their respective appropriate regulated affiliates have submitted filings for approval to all three agencies. On July 7, 2015, Iberdrola USA and UIL withdrew their application to PURA and informed PURA that they would be re-filing an application before the end of July 2015. On June 2, 2015, FERC issued its authorization of the merger. As of the date of this proxy statement/prospectus, the DPU has not completed its consideration of the merger or issued its final decision.

In connection with its deliberations of the merger, the Iberdrola USA board also considered potential risks and negative factors concerning the merger and the other transactions contemplated by the merger agreement, including the following:

• the risk that the transaction might not be completed in a timely manner or at all;

• the risk that the regulatory approval process could result in undesirable conditions, and/or result in increased pre-tax transaction costs;

• potential challenges associated with coordinating Iberdrola USA’s and UIL’s operations;

• the risk that any inability to maintain the current management team of UIL could affect the combined company, as Iberdrola USA recognizes the value of UIL’s management and expertise and the value that UIL’s local management brings to UIL’s utilities;

• potential negative regulatory outcomes in Connecticut and Massachusetts following the proposed transaction;

• potential increases in interest rates could lead to the combined company’s growth opportunities being delayed or not pursued.

The foregoing discussion of factors considered by the Iberdrola USA board is not intended to be exhaustive. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the Iberdrola USA board did not attempt, to quantify, rank or otherwise assign any relative or specific weights to the factors that it considered in reaching its determination to approve the merger and the merger agreement. In addition, individual members of the Iberdrola USA board may have given differing weights to different factors. The Iberdrola USA board conducted an overall review of the factors described above and other material factors, including through discussions with, and inquiry of, Iberdrola USA’s management and outside legal and financial advisors regarding certain of the matters described above.

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UIL’s Reasons for the Merger

In recent years the UIL board has regularly received and discussed advice and opinions from management, consultants and financial advisors regarding trends in the utility industry as part of its consideration of ways in which to enhance UIL’s earnings and value. As part of this effort, the UIL board has focused on operational improvements as well as possible strategic initiatives. These efforts contributed to the UIL board’s 2010 decision to acquire the Connecticut and Massachusetts natural gas distribution businesses of Iberdrola USA and its 2014 decision to enter into an agreement to acquire the PGW business, which agreement was terminated in December, 2014. These transactions represented an effort to diversify UIL’s business mix, increase UIL’s exposure to gas distribution and increase UIL’s size to take advantage of economies of scale in its operation and purchasing capabilities. The UIL board believed such actions were advisable given overall electric industry trends, the development of shale gas resources in the United States, and the desirability of leveraging management capabilities and costs over a larger business.

The UIL board believes that while UIL owns an attractive mix of electric and gas distribution businesses, and could continue to be a profitable company on a standalone basis, UIL’s size limits its ability to grow through acquisition or through significant investment in regional electric transmission or gas pipeline projects. Given overall trends towards greater size in the electric and gas distribution businesses, the UIL board believed that it likely would be advisable at some point to consider a sale of UIL. The failure to complete the acquisition of PGW, a transaction that might have given UIL the scale and greater regional presence needed to pursue additional meaningful acquisitions, together with Iberdrola, S.A.’s expression of interest in a combination of Iberdrola USA with UIL, brought forward the consideration of a possible sale transaction.

The UIL board concluded, based on consideration over the course of numerous meetings at which a possible transaction with Iberdrola, S.A. and other alternatives were discussed, that the merger was in the best interests of UIL, that the merger consideration likely represented the highest value that could be obtained for UIL shareowners in a sale transaction and that the combination of a stock-for-stock merger at a per share value roughly equivalent to UIL’s then current trading price plus a $10.50 per share cash premium represented a good balance between taking advantage of the current trading environment for utility stocks, which are trading at historically high multiples due in part to the low interest rate environment, via the cash premium and sharing in what the UIL board believes is an opportunity to participate as equity owners in a U.S. energy company with an attractive, diversified portfolio of businesses with significantly better than average growth prospects and the scale and access to resources to permit further improvements in the business and further growth.

After careful consideration, at a meeting held on February 25, 2015, the UIL board unanimously (i) adopted the merger agreement, (ii) approved and determined that it is in the best interests of UIL to consummate the merger and the other transactions contemplated by the merger agreement and to execute and deliver the merger agreement and perform UIL’s obligations thereunder and (iii) resolved to submit the merger agreement for consideration and approval by UIL shareowners and recommend the approval of the merger agreement by UIL shareowners.

In addition to the factors mentioned above, the material factors considered by the UIL board in making these determinations included the following:

• The UIL board’s understanding of the business, operations, financial condition, earnings, regulatory position, strategy and prospects of each of UIL and Iberdrola USA, as well as UIL’s and Iberdrola USA’s historical and projected financial performance.

• The merger consideration represented a premium to UIL’s recent and historic share trading price (approximately 21% to 30%, depending on assumptions regarding the expected trading value of the combined company common stock after the merger, based on the February 25, 2015 closing share price of UIL common stock, and approximately a 15% to 24% premium to the average of the closing share prices of UIL’s common stock over the 30 calendar days prior to entering into the merger agreement).

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• The merger consideration indicated an implied valuation multiple for UIL of 21.1x to 22.7x UIL’s projected 2015 earnings per share as determined based on the Institutional Brokers’ Estimate System (depending on assumptions regarding the expected trading multiple of Iberdrola USA).

• The relative contribution of UIL and Iberdrola USA to the earnings, EBITDA and discounted cash flow equity valuation of the pro forma combined company indicated that while UIL would contribute more than 18.5% of the combined company’s projected net income in the 2016 through 2018 time period, Iberdrola USA would contribute more than 81.5% of the combined company’s discounted cash flow value during that time period.

• The fact that Iberdrola USA will initially set its dividend at UIL’s current annual dividend of $1.728 per share after the closing, and currently expects to target a dividend based on a 65% to 75% payout ratio long-term, subject to consideration and approval by the combined company board, as announced in the February 25, 2015 press release.

• The information concerning the improved credit position and financial capacity of Iberdrola USA as compared to UIL on a standalone basis, including the improved cash flow coverage over time for the expected dividend of Iberdrola USA going forward, as compared to UIL on a standalone basis.

• The fact that as an 81.5% equity owner of the combined company, Iberdrola, S.A. should have strong incentives to ensure that the business is operated in a manner that optimizes the equity value of the combined company as well as Iberdrola, S.A.’s financial and reputational incentives, as a major, global energy holding company, to deal fairly with the minority equity owners of the combined company and the independent directors of the combined company.

• Recent increases in interest rates and the expectation that interest rates were likely to further increase in the future, which may have the effect of lowering the trading multiples of utility stocks.

• The UIL board’s belief that UIL would benefit from an increase in its size and scope in the long term in order to keep rates at a reasonable level for customers by spreading costs over a larger company.

• The UIL board’s conclusion, based on Morgan Stanley’s advice, that other potential acquirors of UIL, including infrastructure funds and other strategic buyers, were not likely to offer a price resulting in a greater value than the value offered by Iberdrola, S.A.

• The opinion of Morgan Stanley, dated February 25, 2015, that as of such date and based on, and subject to, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its opinion, the consideration to be received by the holders of shares of UIL common stock pursuant to the merger agreement was fair from a financial point of view to such holders, as described below in the section entitled “The Merger—Opinion of UIL’s Financial Advisor” beginning on page 95 and attached as Annex C to this proxy statement/prospectus.

• The terms and conditions of the merger agreement that permit UIL, prior to the time that UIL shareowners approve the merger agreement and the transactions contemplated thereby, under certain circumstances, to discuss and negotiate an acquisition proposal should one be made and, if the UIL board determines in good faith, after consultation with its legal and financial advisors, that the unsolicited acquisition proposal constitutes a superior proposal within the meaning of the merger agreement, the UIL board is permitted, after giving Iberdrola USA an opportunity to match that proposal, to terminate the merger agreement in order to enter into a definitive agreement for such superior proposal, subject to payment of a termination fee of $75 million.

• The other terms and conditions of the merger agreement, including, among other things, the representations, warranties, covenants and agreements of the parties, the conditions to completion of the merger, the ability of the UIL board to withdraw or change its recommendation in favor of the merger in connection with a superior proposal or certain material change related to UIL or Iberdrola USA, where the UIL board determines in good faith, after consultation with its legal advisors, that the

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failure to change its recommendation would be reasonably likely to be inconsistent with the UIL board’s fiduciary duties under applicable law, subject to payment of a termination fee of $75 million in the event Iberdrola terminates the merger agreement following such recommendation change.

• The fact that Iberdrola USA has agreed to appoint the current chief executive officer of UIL as chief executive officer of the combined company and to appoint him and two other current UIL directors to the combined company board as of the closing.

• The fact that Iberdrola USA has agreed to implement through its charter, by-laws and a shareholder agreement, certain limited protections for non-Iberdrola, S.A. shareholders, including requirements for independent director approval of certain transactions between the combined company and its subsidiaries and Iberdrola, S.A. and its other subsidiaries.

The UIL board also considered a variety of risks and potentially negative factors concerning the merger and the merger agreement, including the following:

• The risk that the merger will be delayed or will not be completed, including the risk that required regulatory approvals may not be obtained or are obtained on terms and conditions that adversely affect the value of Iberdrola USA common stock, as well as the potential loss of value to UIL shareowners and the potential negative impact on the financial position, operations and prospects of UIL if the merger is delayed or is not completed for any reason.

• The risk that new adverse information concerning the business of Iberdrola USA and its subsidiaries will be discovered in connection with the preparation of the disclosures and audited financial information necessary in connection with Iberdrola USA’s registration statement filed with the SEC in order for its common stock to become publicly traded on the NYSE.

• The fact that the diversified nature of the Iberdrola USA businesses naturally gives rise to different business risks and potential for earnings volatility to a greater extent than the current businesses of UIL, which is almost entirely a regulated gas and electric distribution and transmission company.

• The uncertainty inherent in the future trading price of the combined company common stock, which uncertainty is substantially amplified by the fact that Iberdrola USA is not presently publicly traded.

• The uncertainty inherent in Iberdrola USA’s plan for future projects and the impact of these projects on the future trading price of the combined company common stock.

• That after the completion of the merger, the combined company will initially be a controlled company under the rules of the NYSE and will be controlled by Iberdrola, S.A., including with respect to the management and board composition, business decisions and direction of the combined company, and Iberdrola, S.A.’s requirement that it retain significant flexibility to direct future U.S. business opportunities to subsidiaries other than the combined company or its subsidiaries, including, following the consummation of the merger, UIL.

• That Iberdrola, S.A.’s ownership position in Iberdrola USA means that the public float for the common stock of the combined company will be limited relative to its market capitalization.

• That UIL will be required to bear the costs associated with negotiating the merger agreement and attempting to close the merger even if the merger is not ultimately completed, as well as in connection with potential litigation that may arise in the future, and which subsequently did arise in relation to the merger agreement.

• That substantial management time and effort will be required to effectuate the merger and the related disruption to UIL’s day-to-day operations during the pendency of the merger.

• The risk, if the merger is not completed, that the pendency of the merger could adversely affect the relationship of UIL and its subsidiaries with their respective regulators, customers, employees, suppliers, agents and others with whom they have business dealings.

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• That the terms of the merger agreement place restrictions on the conduct of UIL’s business prior to completion of the merger, which may delay or prevent UIL from undertaking business opportunities that may arise prior to completion of the merger, and the resultant risk if the merger is not completed.

• That the cash consideration will be a taxable transaction for U.S. federal income tax purposes for many UIL shareowners.

• That UIL’s executive officers and directors may have interests in the merger that are different from, or in addition to, the interests of UIL shareowners.

The foregoing discussion of factors considered by the UIL board is not intended to be exhaustive. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the UIL board did not attempt to quantify, rank or otherwise assign any relative or specific weights to the factors that it considered in reaching its determination to approve the merger and adopt the merger agreement. In addition, individual members of the UIL board may have given differing weights to different factors. The UIL board conducted an overall review of the factors described above and other material factors, including through discussions with, and inquiry of, UIL’s management, its inside and outside legal advisors, and its financial advisors regarding certain of the matters described above.

Recommendation of the UIL Board

After careful consideration of various factors described in the section entitled “The Merger—UIL’s Reasons for the Merger” beginning on page 90 of this proxy statement/prospectus, at a meeting held on February 25, 2015, the UIL board unanimously (i) adopted the merger agreement, (ii) approved and determined that it is in the best interests of UIL to consummate the merger and the other transactions contemplated by the merger agreement and to execute and deliver the merger agreement and perform UIL’s obligations thereunder and (iii) resolved to submit the merger agreement for consideration and approval by UIL shareowners and recommend the approval of the merger agreement by UIL shareowners.

Certain Unaudited Financial Forecasts Prepared by the Management of UIL

While UIL provides public earnings guidance each year for that fiscal year, UIL does not, as a matter of course, publicly disclose other financial forecasts as to future performance, earnings or other results. UIL is especially cautious of making financial forecasts for periods longer than one fiscal year due to unpredictability of the underlying assumptions and estimates. However, in connection with the evaluation of a possible transaction involving UIL, UIL provided Morgan Stanley, Iberdrola USA, and the UIL board with certain non-public financial forecasts regarding UIL, or the UIL forecasts, that were prepared by UIL’s management and not for public disclosure, and UIL provided Morgan Stanley and the UIL board with certain non-public financial forecasts regarding Iberdrola USA, or the Iberdrola USA projections considered by UIL, that were prepared by UIL’s management based on non-public financial forecasts provided to UIL by Iberdrola USA’s management and not for public disclosure.

In preparing the Iberdrola USA projections considered by UIL, UIL’s management modified the financial forecasts provided by Iberdrola USA’s management to, among other things, make probability-weighted adjustments to certain forecasts provided by Iberdrola USA’s management. UIL’s management believed that it would be consistent with the past practice of UIL management in forecasting future project developments for purposes of internal financial forecasts, and prudent from the perspective of evaluating the fairness of the proposed merger consideration from a financial point of view to the UIL shareowners, to make such probability-weighted adjustments.

A summary of the UIL forecasts and the Iberdrola USA projections considered by UIL is not being included in this document to influence your decision whether to vote for or against the proposal to approve the merger agreement, but is being included because these financial forecasts were made available to Morgan Stanley and

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the UIL board and, in the case of the UIL forecasts, to Iberdrola USA. The inclusion of this information should not be regarded as an indication that the UIL board, its advisors or any other person considered, or now considers, such financial forecasts to be material or to be a reliable prediction of actual future results, and these financial forecasts should not be relied upon as such. UIL management’s internal financial forecasts, upon which the UIL forecasts are based, and Iberdrola USA management’s internal financial forecasts, upon which the Iberdrola USA projections considered by UIL are based, are subjective in many respects. There can be no assurance that these financial forecasts will be realized or that actual results will not be significantly higher or lower than forecasted. The financial forecasts cover multiple years and become subject to greater uncertainty with each successive year. As a result, the inclusion of the financial forecasts in this proxy statement should not be relied on as necessarily predictive of actual future events.

In addition, the financial forecasts were not prepared with a view toward public disclosure or toward complying with generally accepted accounting principles, or GAAP, the published guidelines of the SEC regarding projections and the use of non-GAAP measures or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The financial forecasts contained herein have been prepared by, and are the responsibility of, UIL’s management. PricewaterhouseCoopers LLP has neither examined, compiled nor performed any procedures with respect to the accompanying financial forecasts and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report incorporated by reference herein relates to UIL’s historical financial information. It does not extend to the financial forecasts and should not be read to do so.

These financial forecasts were based on numerous variables and assumptions that were deemed by UIL’s management to be reasonable as of February 24, 2015, when the projections were finalized. These variables and assumptions are inherently uncertain and may be beyond UIL’s control. Important factors that may affect actual results and cause these financial forecasts not to be achieved include, but are not limited to, risks and uncertainties relating to UIL’s business, regulatory decisions and the regulatory environment generally, general business and economic conditions and other factors described or referenced in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 68 of this proxy statement/prospectus, “Risk Factors” beginning on page 37 of this proxy statement/prospectus. In addition, financial forecasts also reflect assumptions that are subject to change and do not reflect revised prospects for UIL’s business, changes in general business or economic conditions or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the financial forecasts were prepared, including assumptions with respect to the future prices of natural gas, electricity and renewable energy. UIL’s and Iberdrola USA’s forecasts depend, in large part, upon sales volume, major weather disturbances and the ability to manage expenses, uncollectibles and capital expenditures; with respect to UIL only, customer growth for The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company; and, with respect to Iberdrola USA only, prevailing market prices for power. UIL has not prepared revised forecasts to take into account other variables that may have changed since the preparation of the UIL forecasts, and Iberdrola USA has not provided to UIL, and UIL has not prepared, revised forecasts to take into account other variables that may have changed since the preparation of the Iberdrola USA projections considered by UIL. Accordingly, there can be no assurance that these financial forecasts will be realized or that UIL’s or Iberdrola USA’s future financial results will not materially vary from these financial forecasts.

UIL Forecasts

(Dollars in millions)	2014A			2016E		2019E
Net Income	$	110	(1)	$	147	$	174

(1) The net income amount of $110 million for 2014 includes non-recurring after-tax acquisition related expenses in the amount of $13.9 million; adding back this non-recurring expense would result in an adjusted net income amount of $123.9 million for 2014.

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Iberdrola USA Projections Considered by UIL

(Dollars in millions)	2014E			2016E		2019E
Net Income	$	446	(1)	$	566	$	769

(1) $446 million represents the preliminary estimate for the year ended December 31, 2014 that was available when the projections were finalized. Actual net income of Iberdrola USA for the year ended December 31, 2014 was $424 million. For more information, see the audited combined and consolidated financial statements for the year ended December 31, 2014 included elsewhere in this proxy statement/prospectus.

Opinion of UIL’s Financial Advisor

Opinion of Morgan Stanley & Co. LLC

At the meeting of the UIL board on February 25, 2015, Morgan Stanley rendered its oral opinion, which was confirmed in writing on February 25, 2015, to the UIL board to the effect that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its written opinion, the consideration to be received by the holders of shares of UIL common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of Morgan Stanley’s written opinion to the UIL board, dated February 25, 2015, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is attached as Annex C to this proxy statement/prospectus. The summary of Morgan Stanley’s opinion included in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion. You are encouraged to read Morgan Stanley’s opinion, this section and the summary of Morgan Stanley’s opinion below carefully and in their entirety. Morgan Stanley’s opinion was provided to the UIL board for the benefit of the UIL board, in its capacity as such, and addressed only the fairness from a financial point of view of the consideration to be received by the holders of shares of UIL common stock pursuant to the merger agreement as of the date of the opinion and did not address any other aspects or implications of the merger. Morgan Stanley’s opinion did not in any manner address the prices at which shares of UIL stock or Iberdrola USA common stock would trade at any time in the future, or any compensation or compensation agreements arising from (or relating to) the merger which benefit any officer, director or employee of UIL or any class of such persons. Morgan Stanley’s opinion was not intended to, and does not, constitute advice or a recommendation as to how UIL shareowners should vote at any shareowners’ meeting to be held in connection with the merger or take any other action with respect to the merger.

In connection with rendering its opinion, Morgan Stanley, among other things:

(i) reviewed certain publicly available financial statements and other business and financial information of UIL and Iberdrola USA, respectively;

(ii) reviewed certain internal financial statements and other financial and operating data concerning UIL and Iberdrola USA, respectively;

(iii) reviewed certain financial projections of (i) UIL prepared by the management of UIL including the UIL forecasts, and (ii) Iberdrola USA prepared by management of Iberdrola USA and modified by UIL management, including the Iberdrola USA projections considered by UIL;

(iv) reviewed information relating to certain strategic, financial and operational benefits anticipated from the merger, prepared by the managements of UIL and Iberdrola USA, respectively;

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(v) discussed the past and current operations and financial condition and the prospects of UIL, including information relating to certain strategic, financial and operational benefits anticipated from the merger, with senior executives of UIL;

(vi) discussed the past and current operations and financial condition and the prospects of Iberdrola USA, including information relating to certain strategic, financial and operational benefits anticipated from the merger, with senior executives of Iberdrola USA;

(vii) reviewed the pro forma impact of the merger on Iberdrola USA’s earnings per share, cash flow, consolidated capitalization and financial ratios;

(viii) reviewed the reported prices and trading activity for UIL common stock;

(ix) compared the financial performance of UIL and Iberdrola USA and the prices and trading activity of UIL common stock with that of certain other publicly traded companies comparable with UIL and Iberdrola USA, respectively, and their securities;

(x) reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;

(xi) participated in certain discussions and negotiations among representatives of UIL and Iberdrola USA and their financial and legal advisors;

(xii) reviewed the merger agreement, and certain related documents; and

(xiii) performed such other analyses, reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate.

In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to Morgan Stanley by UIL and Iberdrola USA and formed a substantial basis for its opinion. With respect to the financial projections, Morgan Stanley assumed that they were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of UIL of the future financial performance of UIL and Iberdrola USA. In addition, Morgan Stanley assumed that the merger will be consummated in accordance with the terms set forth in the merger agreement without any waiver, amendment or delay of any terms or conditions that are material to Morgan Stanley’s analysis, including among other things, that the merger will be treated as a tax free reorganization, pursuant to the Code. Morgan Stanley assumed that in connection with the receipt of all necessary governmental, regulatory or other approvals and consents required for the proposed merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed merger. Morgan Stanley is not a legal, tax or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without independent verification, the assessment of Iberdrola USA and UIL and their legal, tax and regulatory advisors with respect to legal, tax and regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of UIL’s officers, directors or employees, or any class of such persons, relative to the consideration to be received by the holders of shares of UIL common stock in the merger. In arriving at its opinion, Morgan Stanley was not authorized to, and did not solicit, interest from any party with respect to any acquisition, business combination or other extraordinary transaction, involving UIL and its opinion does not address the relative merits of the merger as compared to any other alternative business transaction, or other alternatives, or whether or not any such alternative could be achieved or is available. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities of UIL or Iberdrola USA, nor was it furnished with any such valuations or appraisals. Morgan Stanley’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Morgan Stanley as of, the date of its opinion. Events occurring after such date may affect Morgan Stanley’s opinion and the assumptions used in preparing it, and Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion.

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Summary of Financial Analyses

The following is a summary of the material financial analyses performed by Morgan Stanley in connection with its oral opinion and the preparation of its written opinion letter dated February 25, 2015 to the UIL board. The following summary is not a complete description of Morgan Stanley’s opinion or the financial analyses performed and factors considered by Morgan Stanley in connection with its opinion, nor does the order of analyses described represent the relative importance or weight given to those analyses. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. The analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Morgan Stanley’s opinion. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on (or where otherwise specified, before) February 24, 2015, which was the trading day prior to the date on which the UIL board approved the merger, and is not necessarily indicative of current market conditions.

Share Price Performance Analysis

Morgan Stanley performed a share price performance analysis with respect to the historical share prices of UIL common stock during fiscal year 2014 and 2015 year-to-date. During such periods, shares of UIL common stock traded at a high of $47.79 on January 28, 2015 and a low of $34.34 on August 7, 2014. Shares of UIL common stock closed at $42.38 on February 24, 2015, which was the trading day prior to the date on which the UIL board approved the merger.

Equity Research Analysts’ Future Price Targets

Morgan Stanley reviewed and analyzed future public market trading price targets for UIL common stock prepared and published by equity research analysts on or prior to February 24, 2015, which was the trading day prior to the date on which the UIL board approved the merger. These one year forward targets reflected each analyst’s estimate of the future public market trading price of shares of UIL common stock and were not discounted to reflect present values. The range of undiscounted analyst price targets for UIL common stock was $42.50 to $47.00 per share.

The public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for UIL common stock, and these estimates are subject to uncertainties, including the future financial performance of UIL and future financial market conditions.

Public Trading Comparables Analysis

Morgan Stanley performed a public trading comparable analysis, which attempts to provide an implied value of a company by comparing it to similar companies that are publicly traded.

UIL—Public Trading Comparables Analysis

Morgan Stanley compared certain financial estimates for UIL with comparable publicly available consensus equity analyst research estimates for selected companies, or the UIL comparable companies, that Morgan Stanley determined share similar business characteristics with UIL, such as those that provide electric network services and have certain comparable operating characteristics including, among other things, similarly sized revenue and/or revenue growth rates, market capitalizations, profitability, scale and/or other similar operating characteristics. These companies were the following:

• Alliant Energy Corporation

• TECO Energy, Inc.

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• Vectren Corporation

• Northwestern Corporation

• Avista Corp.

For purposes of this analysis, Morgan Stanley analyzed price per share to estimated earnings per share for calendar years 2015 and 2016, and analyzed the ratio of aggregate value, which Morgan Stanley defined as fully diluted market capitalization, plus total debt, plus leases, plus preferred stock, less cash and cash equivalents, to estimated EBITDA for calendar years 2015 and 2016, of each of the UIL comparable companies for comparison purposes.

Based on its analysis of the relevant metrics for each of the UIL comparable companies and upon the application of its professional judgment, Morgan Stanley selected representative ranges of price per share to earnings per share multiples and applied these ranges of multiples to the earnings per share for UIL. For purposes of this analysis and other analyses described below, Morgan Stanley utilized two sources of estimated earnings per share for calendar years 2015 and 2016. Morgan Stanley utilized publicly available estimates of earnings per share prepared by equity research analysts, available as of February 24, 2015, or the analyst street case. Morgan Stanley also utilized earnings per share estimates, or the UIL management case, prepared by UIL’s management and included in the UIL forecasts.

Based on the estimated outstanding shares of UIL common stock on a fully diluted basis (including outstanding options and unvested restricted stock awards) as of February 24, 2015, Morgan Stanley calculated the estimated implied value per share of UIL common stock as of February 24, 2015 as follows:

Calendar Year Financial Statistic	Comparable Company Multiple Range		Implied Value Per Share of UIL Common Stock
Analyst Street Case
Price Per Share to Estimated 2015 Earnings Per Share		17.0x – 18.3x	$	41.31 – $ 44.47
Price Per Share to Estimated 2016 Earnings Per Share		16.1x – 17.1x	$	41.86 – $ 44.46
UIL Management Case
Price Per Share to Estimated 2015 Earnings Per Share		17.0x – 18.3x	$	39.88 – $ 42.93
Price Per Share to Estimated 2016 Earnings Per Share		16.1x – 17.1x	$	41.57 – $ 44.15

Iberdrola USA—Public Trading Comparables Analysis

Morgan Stanley compared certain financial information of Iberdrola USA with publicly available consensus estimates for companies that shared similar business characteristics with Iberdrola USA (referred to as the Iberdrola USA comparable companies). These companies were the following:

• Wisconsin Energy Corp.

• CMS Energy Corp.

• DTE Energy Company

• Alliant Energy Corporation

• Ameren Corporation

• NextEra Energy, Inc.

Morgan Stanley separately analyzed NextEra Energy, Inc., or NextEra, from the other Iberdrola USA comparable companies based on Morgan Stanley’s conclusion that NextEra shares particular similar business characteristics with the combined company from an operational perspective that made additional analyses of NextEra appropriate. These similarities include that the combined company and NextEra would both be holding companies with regulated utilities and large, competitive generation businesses with contracted wind generation assets.

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For purposes of this analysis, Morgan Stanley analyzed price per share to estimated earnings per share for calendar years 2015 and 2016, and analyzed the ratio of aggregate value to estimated EBITDA for calendar years 2015 and 2016, of each of the Iberdrola USA comparable companies for comparison purposes.

Based on its analysis of the relevant metrics for each of the Iberdrola USA comparable companies and upon the application of its professional judgment, Morgan Stanley selected representative ranges of price per share to earnings per share multiples for the Iberdrola USA comparable companies and applied these ranges of multiples to the consolidated estimated net income of Iberdrola USA for calendar year 2016, based on the Iberdrola USA projections considered by UIL. For purposes of this analysis, Morgan Stanley utilized publicly available estimates of earnings per share prepared by equity analysts.

Morgan Stanley calculated the estimated equity value of Iberdrola USA as of February 23, 2015 as follows:

Calendar Year Financial Statistic (Analyst Street Case)	Comparable Company Multiple Range		Approximate Equity Value (in millions)
Price Per Share to Estimated 2016 Earnings Per Share (Utilities)		16.0x – 18.3x	$	9,100 – $10,400
Price Per Share to Estimated 2016 Earnings Per Share (NextEra)		17.1x – 18.1x	$	9,700 – $10,300

Discounted Cash Flow Analysis

UIL—Discounted Cash Flow Analysis

Morgan Stanley calculated a range of equity values per share for UIL common stock based on a discounted cash flow analysis to value UIL as a standalone entity using estimated free cash flows from the UIL forecasts for the years 2015 through 2019 and a range of estimated terminal values in the year 2019. The range of terminal values was calculated using a range of exit multiples of 18.0x to 20.4x, based on the last-12 months’ multiples of the UIL comparable companies, applied to 2019 estimated earnings. These values were discounted to present values as of February 24, 2015 by applying a range of weighted average cost of capital of 3.8% to 5.0%, which was selected based upon Morgan Stanley’s professional judgment based on UIL’s estimated weighted average cost of capital. Based on these estimates, Morgan Stanley calculated a range of implied value per share of UIL Common Stock of $46.19 to $56.82.

Iberdrola USA—Discounted Cash Flow Analysis

Morgan Stanley calculated a range of equity values of Iberdrola USA based on an unlevered discounted cash flow analysis to value Iberdrola USA as a standalone entity using estimated free cash flows for Iberdrola USA from the Iberdrola USA projections considered by UIL for each of the years from 2015 through 2019 and estimated terminal values in the year 2019. The terminal values were calculated using a range of exit multiples of 18.2x to 20.2x, based on the last-12 months’ multiples of the Iberdrola USA comparable companies, applied to 2019 net income. These values were discounted to present values as of February 24, 2015 by applying a range of weighted average cost of capital of 3.6% to 5.1%, which range was selected by Morgan Stanley using its professional judgment based on Iberdrola USA’s estimated weighted average cost of capital. Morgan Stanley also included in this valuation an estimate of the range of the value of scheduled utilization of tax benefits from 2015 through 2022, discounted using a range of weighted cost of capital of 3.6% to 5.1%. The range of estimated equity values of Iberdrola USA calculated by Morgan Stanley using this methodology was $13.2 billion to $15.6 billion.

Analysis of Precedent Transactions—Trading Premia

Morgan Stanley performed a precedent trading premia transactions analysis, which is designed to imply a value of a company based on publicly available financial terms and premia of selected transactions. Morgan Stanley selected such comparable transactions because they include parties that are either regulated electric utility companies or regulated gas and electric utility companies. In connection with its analysis, Morgan Stanley

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compared publicly available statistics for energy sector transactions with an aggregate value greater than $600 million announced between January 1, 2011 and December 3, 2014.

For purposes of this analysis, Morgan Stanley analyzed price per share to estimated earnings per share for the first fiscal year following the comparative transaction and calculated the implied company price to earnings multiple, referred to as a P/E multiple. The following table summarizes Morgan Stanley’s analysis:

Transaction	Comparable Company P/E Multiple
Duke Energy Corporation / Progress Energy, Inc.		15.4x
The AES Corporation / DPL Inc.		12.5
Gaz Métro Limited Partnership / Central Vermont Public Service Corporation		21.4
Fortis Inc. / CH Energy Group, Inc.		20.3
MidAmerican Energy Holdings Company / NV Energy, Inc.		18.3
UNS Energy Corporation / Fortis Inc.		19.7
Exelon Corp. / Pepco Holding Inc.		22.5
Wisconsin Energy Corp. / Integrys Energy Group Inc.		20.1
Cleco Corporation / Macquarie Infrastructure and Real Assets Investment Group		20.6
NextEra Energy, Inc. / Hawaiian Electric Industries, Inc.		20.6

Morgan Stanley compared these P/E multiples to the range of implied P/E multiples of 21.1x and 22.7x that it calculated based on the ratio of analyst street case earnings estimates to the implied values of the merger consideration to UIL shareowners that it calculated for the value of the consideration to be received by UIL shareowners in the merger as described below in “Total Consideration Value Analysis.”

Based on its analysis of the relevant metrics and time frame of each of the selected transactions and upon the application of its professional judgment, Morgan Stanley also selected representative ranges of implied earnings per share multiples of the transactions and applied these ranges of implied multiples to the relevant estimated earnings per share for UIL based on the UIL management case and the analyst street case. The following table summarizes Morgan Stanley’s analysis:

Calendar Year Financial Statistic	Multiple Range		Implied Equity Value per Share
Price Per Share to Estimated 2015 Earnings Per Share (UIL Management Case)		18.0x – 22.5x	$	42.23 – $52.79
Price Per Share to Estimated 2015 Earnings Per Share (Analyst Street Case)		18.0x – 22.5x	$	43.74 – $54.68

Morgan Stanley also calculated that the implied equity value per share based on premia of 15% and 30% to the current market price of UIL common would be $48.74 and $55.09, respectively.

No company or transaction utilized in the precedent transactions analysis is identical to UIL or the merger. In evaluating the precedent transactions, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, market and financial conditions and other matters, which are beyond UIL’s control, such as the impact of competition on UIL’s business or the industry generally, industry growth and the absence of any adverse material change in UIL’s financial condition or the industry or in the financial markets in general, which could affect the public trading value of the companies and the aggregate value and equity value of the transactions to which they are being compared.

Infrastructure Fund Purchase Analysis

Morgan Stanley performed an illustrative purchase analysis to estimate the theoretical prices at which an infrastructure fund might undertake an acquisition of UIL. For purpose of this analysis, Morgan Stanley assumed a transaction date of December 31, 2014, a net debt balance as of the transaction date of $1,712 million, plus

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$300 million of incremental debt issued at the holding company level at a 4.45% fixed interest rate and $300 million of high-yield back-leveraged debt at a 6.50% interest rate, a ten year discounted cash flow, with a range of exit multiples based on last-12 months’ net income at the exit date of 18.0x to 20.4x. The implied acquisition price per share was based on a hypothetical target range of internal rates of return for the infrastructure fund over a ten year period of 10.0% to 12.0%. The following table summarizes Morgan Stanley’s analysis:

Financial Statistic	Net Income Exit Multiple		Implied Value Per Share of UIL Common Stock
Price Per Share		18.0x – 20.4x	$	40.80 – $ 49.84

Relative Contribution Analysis

Morgan Stanley compared UIL’s and Iberdrola USA’s shareowners’ respective percentage ownership of the combined company to UIL and Iberdrola USA’s respective percentage contribution to the combined company with respect to estimated calendar years 2016 through 2018 net income, EBITDA and midpoint 5-year unlevered discounted cash flow, in the case of UIL, based on the UIL forecasts and in the case of Iberdrola USA, based on the Iberdrola USA projections considered by UIL. In its calculations of discounted cash flow, Morgan Stanley used the mid-points of the assumptions regarding exit multiples and estimated weighted average cost of capital used in its discounted cash flow calculations described above in the section entitled “Discounted Cash Flow Analysis.” Morgan Stanley assumed UIL’s percentage ownership of the combined company in relation to the following metrics as 18.5% based on equity alone and 23.3% assuming incremental ownership implied by the $600 million cash portion of the merger consideration, divided by the estimated combined company equity value of $12.4 billion. The following table summarizes Morgan Stanley’s analysis:

Metric	UIL Leverage-Adjusted Contribution %	Iberdrola USA Leverage-Adjusted Contribution %
2016E-2018E Net Income	18.9% – 20.7%	79.3% – 81.1%
2016E-2018E EBITDA	16.6% – 17.4%	82.6% – 83.4%
Unlevered Discount Cash Flow	17.6%	82.4%

Total Consideration Value Analysis

Morgan Stanley also performed an analysis of the potential merger consideration value in comparison to the foregoing analyses of the implied value of UIL and Iberdrola USA. To perform this analysis, Morgan Stanley selected representative ranges of P/E multiples, as described in the following paragraph, and applied these ranges of multiples to UIL’s equity portion of the transaction value implied by the combined net income of UIL and Iberdrola USA (based on the UIL forecasts), divided by approximately 57.2 million acquisition shares.

The multiples used were calculated based on (i) UIL’s current multiple of the 2016 and 2017 earnings per share from the analyst street case with respect to UIL (16.4x for 2016 and 15.5x for 2017), (ii) median estimates prepared by equity research analysts for certain electric and gas utilities referenced as the Iberdrola USA comparable companies above (other than NextEra) in the section entitled “Public Trading Comparables Analysis—Iberdrola USA—Public Trading Comparables Analysis” (17.2x for 2016 and 16.3x for 2017), referred to as the Integrated Averages, and (iii) median estimates prepared by equity research analysts for NextEra, (17.6x for 2016 and 16.7x for 2017). Morgan Stanley also calculated the implied values that would result from a P/E multiple 0.5x greater than the multiples shown for NextEra below, but the implied values derived from such calculations were not used for purposes of Morgan Stanley’s fairness analysis.

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The following table summarizes Morgan Stanley’s analysis. The metric included next to each multiple is the total per share consideration generated by adding the results of the calculations described in the two preceding paragraphs to the per share cash consideration of $10.50.

	Street Case		Integrated Average		NextEra Average
2016 Pro Forma P/E Multiple		16.4x		17.2x		17.6x
Total Consideration Value	$	48.38	$	50.23	$	51.15
2017 Pro Forma P/E Multiple		15.5x		16.3x		16.7x
Total Consideration Value	$	51.84	$	53.98	$	55.04

General

In connection with the review of the merger by the UIL board, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of UIL or Iberdrola USA. In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry performance, general business and economic conditions and other matters. Many of these assumptions are beyond UIL’s control. Any estimates contained in Morgan Stanley’s analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness from a financial point of view of the consideration to be received by the holders of shares of UIL common stock pursuant to the merger agreement and in connection with the delivery of its opinion, dated February 25, 2015, to the UIL board. These analyses do not purport to be appraisals or to reflect the prices at which shares of UIL common stock might actually trade.

The consideration to be received by the holders of shares of UIL common stock pursuant to the merger agreement was determined through arm’s length negotiations between UIL and Iberdrola USA and was approved by the UIL board. Morgan Stanley provided advice to the UIL board during these negotiations. Morgan Stanley did not, however, recommend any specific consideration to UIL or the UIL board or conclude that any specific consideration constituted the only appropriate consideration for the merger.

Morgan Stanley’s opinion and its presentation to the UIL board was one of many factors taken into consideration by the UIL board in deciding to adopt the merger agreement, approve and determine that it is in the best interests of UIL to complete the merger and the other transactions contemplated by the merger agreement and to execute and deliver the merger agreement and perform its obligations thereunder, and resolve to recommend the approval of the merger agreement by UIL shareowners. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the UIL board with respect to the consideration pursuant to the merger agreement or of whether the UIL board would have been willing to agree to different consideration. Morgan Stanley’s opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with Morgan Stanley’s customary practice.

The UIL board retained Morgan Stanley based upon Morgan Stanley’s qualifications, experience and expertise. Morgan Stanley is an internationally recognized investment banking and advisory firm. Morgan

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Stanley, as part of its investment banking and financial advisory business, is continuously engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate, estate and other purposes. In the ordinary course of Morgan Stanley’s trading, brokerage, investment management and financing activities, Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, or may trade or otherwise structure and effect transactions, for their own account or for the accounts of their customers, in the debt or equity securities or loans of UIL, Iberdrola, S.A., and Iberdrola USA or any other company, or any currency or commodity, that may be involved in the transactions contemplated by the merger agreement, or any related derivative instrument.

Under the terms of its engagement letter, Morgan Stanley provided UIL financial advisory services and a financial opinion, described in this section and attached as Annex C to this proxy statement/prospectus, in connection with the merger, and UIL has agreed to pay Morgan Stanley a fee for its services based on the aggregate consideration involved in the merger, which fee was calculated to be approximately $22.4 million, approximately half of which is contingent on the completion of the merger. UIL has also agreed to reimburse Morgan Stanley for reasonable expenses including fees of outside counsel and other professional advisors, incurred in connection with its engagement. In addition, UIL has agreed to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses relating to or arising out of Morgan Stanley’s engagement.

In the two years prior to the date of its opinion rendered in connection with the merger, in addition to the services described in this proxy statement/prospectus, Morgan Stanley has provided financial advisory and financing services for UIL and its affiliates and has received fees of approximately $10.76 million in the aggregate in connection with such services, including having acted as (i) lender in connection with two credit facilities (ii) co-manager in connection with a follow-on equity issuance and (iii) arranger in connection with an event-related loan facility.

In addition, in the two years prior to the date of its opinion rendered into connection with the merger, Morgan Stanley and its affiliates have also provided financial advisory, financing and relationship loan services to Iberdrola, S.A. and its affiliates and has received fees of approximately $4.94 million in the aggregate in connection with such services, including having acted as (i) lender in connection with two credit facilities involving loans and swap transactions, (ii) counterparty in connection with two interest rate swap transactions, (iii) counterparty in connection with five foreign exchange and hedging transactions, (iv) co-manager on two bond issuance transactions, (v) financial advisor to an affiliate of Iberdrola, S.A. in connection with its sale of a minority interest in pipeline operator, MEDGAZ, to Compañía Española de Petróleos, S.A.U. (CEPSA) and Sonatrach and (vi) financial advisor to an affiliate of Iberdrola, S.A. located outside of the United States in connection with a transaction that is unrelated to the merger and is not material to Iberdrola, S.A. and its affiliates. In addition, in 2007, Morgan Stanley acquired limited partnership interests in two partnerships managed by Iberdrola S.A. that own and operate renewable energy assets across the United States. During 2013 and 2014, Morgan Stanley recognized production tax credits and cash benefits from these two portfolios. With respect to the ongoing financial advisory role, no member of the Morgan Stanley deal team representing UIL is or was a member of the Morgan Stanley deal team representing such affiliate of Iberdrola, S.A. Morgan Stanley may seek to provide any of the services listed above to UIL and Iberdrola USA in the future and would expect to receive fees for the rendering of these services.

As of December 23, 2014, Morgan Stanley held an aggregate interest of less than 1.0% in the common stock of UIL and less than 1.5% in the common stock of Iberdrola, S.A., which interests are held in connection with Morgan Stanley’s (i) investment management business, (ii) wealth management business, including client discretionary accounts or (iii) ordinary course trading activities, including hedging activities.

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Regulatory Approvals Required for the Merger

General

To complete the merger, Iberdrola USA and UIL must obtain approvals or consents from, or make filings with, a number of U.S. federal and state regulatory authorities. The material regulatory approvals, consents and filings include the following:

• the expiration or early termination of the waiting periods under the HSR Act and the rules and regulations thereunder;

• notices to and filings under, and compliance with all requirements of CFIUS, pursuant to Exon-Florio;

• approval by PURA, pursuant to Conn. Gen. Stat. Section 16-47;

• approval by DPU, pursuant to Mass. Gen. Laws ch. 164, Section 96;

• approval from FERC, pursuant to Section 203 of the Federal Power Act; and

• approval from the FCC under the Communications Act of 1934 for the transfer of control over radio licenses held by certain UIL subsidiaries.

Iberdrola USA and UIL have made various filings and submissions for the above-mentioned authorizations and approvals and, under the terms of the merger agreement, each company must use its reasonable best efforts to obtain these authorizations and approvals, subject to certain conditions.

The merger agreement also requires the following conditions be satisfied prior to closing: (i) a declaration of effectiveness by the SEC of Iberdrola USA’s registration statement on Form S-4 containing UIL’s proxy statement; (ii) approval of the merger agreement and related transactions by UIL’s shareowners (as of the close of business on the record date set by UIL); and (iii) authorization for listing of the common stock of the combined company on the NYSE (subject to official issuance of notice by the NYSE).

HSR Act and Antitrust

The merger is subject to the requirements of the HSR Act, which prevents Iberdrola USA and UIL from completing the merger until required information and materials are furnished to the Antitrust Division of the DOJ and the FTC, and the HSR Act’s initial 30-day waiting period is terminated earlier or expires. Pursuant to the HSR Act requirements, Iberdrola USA and UIL filed the required Notification and Report Forms with the DOJ and the FTC on March 25, 2015, and early termination of the waiting period was granted on April 7, 2015. Notwithstanding the termination of the waiting period under the HSR Act, the DOJ, the FTC and others may challenge the merger on antitrust grounds at any time before or after the completion of the merger, including without limitation seeking to enjoin the completion of the merger or permitting completion subject to regulatory concessions or conditions.

CFIUS

CFIUS has the jurisdiction to review any merger, acquisition or takeover, by or with a foreign person, that could result in foreign control of any “U.S. business”—i.e., an entity or business unit engaged in interstate commerce in the United States—for the impact of such a transaction on U.S. national security. Parties to transactions subject to CFIUS’s jurisdiction may voluntarily notify CFIUS of their proposed transactions in anticipation of receiving the certainty provided CFIUS clearance. CFIUS may also initiate a review of any transaction within CFIUS’s jurisdiction. Iberdrola USA and UIL submitted a voluntary notice to CFIUS on May 8, 2015 in connection with the proposed merger. On May 18, 2015, CFIUS began its review and on June 16, 2015, CFIUS issued a letter to the parties confirming that its review of the transaction is complete and there are no unresolved national security concerns.

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PURA Approval

Section 16-47(c) of the General Statutes of Connecticut prohibits a “corporation, association, partnership, trust or similar organization, or person” from taking “any action that causes it to become a holding company with control” over a Connecticut gas or electric distribution company, or acquire, directly or indirectly, control over such a holding company, without first obtaining approval from the PURA. UIL is a “holding company” as that term is defined in Conn. Gen. Stat. Section 16-47(a)(1) because it is the owner of UI, CTG Resources, Inc., or CTG, and Connecticut Energy Corporation, or CEC. CTG is the owner of Connecticut Natural Gas Corporation, and CEC is the owner of The Southern Connecticut Gas Company. The PURA must make its determination within 120 calendar days after filing the application, unless the applicant agrees to an extension of time. There is no guarantee that the PURA will approve the merger or that it will not impose conditions on its approval that are unacceptable to either Iberdrola USA or UIL. Iberdrola USA and UIL filed an application with the PURA on March 25, 2015. Following a proposed final decision on June 30, 2015, Iberdrola USA and UIL withdrew the PURA application in a letter dated July 7, 2015, informing PURA that they would be re-filing a new application before the end of July 2015. Once Iberdrola USA and UIL file a new application with PURA in July 2015, PURA will have 120 days to issue a final decision.

DPU Approval

Under Chapter 164, Section 96(c) of the Massachusetts General Laws, gas companies, electric companies and holding companies are prohibited from entering into any transaction that would result in a change of control without DPU approval. UIL is a “holding company” as defined in Mass. Gen. Laws ch. 164, Section 96(a) because it is an indirect, upstream owner of The Berkshire Gas Company. There is no statutorily designated timeframe within which the DPU must act in response to an application for transfer of control over UIL under Chapter 164, Section 96(c). There is no guarantee that the DPU will approve the merger or that it will not impose conditions on its approval that are unacceptable to either Iberdrola USA or UIL. Iberdrola USA and UIL filed an application with the DPU on March 25, 2015, and the proceeding is in its discovery stage.

FERC Approval

Iberdrola USA and UIL each have public utility subsidiaries subject to the jurisdiction of FERC under Part II of the FPA. Section 203(a)(1) of the FPA provides that no public utility shall dispose of its jurisdictional facilities or merge or consolidate, either directly or indirectly, such facilities without securing an order from FERC authorizing it to do so. Section 203(a)(2) of the FPA further provides that no holding company in a holding company system that includes a transmitting utility or an electric utility may purchase, acquire, merge or consolidate with a transmitting utility, an electric utility company or a holding company in a holding company system that includes a transmitting utility or electric utility company without prior FERC authorization. Consequently, the FERC’s approval of the merger under Section 203(a)(1) and (a)(2) of the FPA is required. The FERC must authorize the merger if it finds that the merger is consistent with the public interest. In addition, in accordance with the EPAct 2005, the FERC must also find that the merger will not result in the cross-subsidization by utilities of their non-utility affiliates or the improper encumbrance or pledge of utility assets.

Iberdrola USA and UIL filed an application with FERC on March 25, 2015, and FERC issued its authorization for the merger on June 2, 2015.

FCC Approval

Under FCC regulations implementing provisions of the Communications Act of 1934, as amended, an entity holding private radio licenses for internal communications purposes generally must obtain the approval of the FCC before the direct or indirect transfer of control or assignment of those licenses. Certain UIL subsidiaries hold FCC licenses for private internal communications and, thus, must obtain prior FCC approval to assign or transfer direct or indirect control of those licenses. Iberdrola USA and UIL filed transfer of control applications

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with respect to private radio licenses held by UIL’s subsidiaries on May 21, 2015 and consent was granted on May 22, 2015. Once the FCC has consented to the transfer of control, the parties have 180 days to complete the merger. If the merger does not close within 180 days of receiving the FCC consent, the parties can request an extension of time to complete the transaction. The FCC customarily grants extension requests of this nature.

Public Trading Markets

Listing of the Combined Company Common Stock

There is no public trading market for Iberdrola USA’s securities. Iberdrola USA has agreed to use its reasonable efforts to cause the shares of the combined company common stock to be issued in connection with the merger and to be listed on the NYSE. Iberdrola USA will apply to list the combined company common stock on the NYSE under the symbol “            .”

Delisting of UIL Shares

If the merger is completed, UIL’s common stock will be delisted from the NYSE and deregistered under the Exchange Act and UIL will no longer file periodic reports with the SEC on account of its common stock.

No Appraisal Rights

Pursuant to Section 33-856 of the CBCA, the shareowners of UIL will not have appraisal or dissenters’ rights in connection with any of the proposals to be voted upon at the UIL meeting.

Accounting Treatment

IUSA prepares its financial statements in accordance with GAAP. The merger will be accounted for in accordance with ASC 805. The purchase price will be determined based on the number of common shares issued using the UIL stock price on the date of the merger. The purchase price will also include additional consideration related to converted UIL equity awards for amounts attributable to pre-combination services. The purchase price will be allocated to the fair values of assets acquired and liabilities assumed. Any excess purchase price after this allocation will be assigned to goodwill. Under the acquisition method of accounting, goodwill is not amortized but is tested for impairment at least annually, or more frequently if circumstances indicate potential impairment. The operating results of UIL will be part of the combined company beginning on the date of the merger.

Litigation Relating to the Merger

In connection with the proposed merger, as of the date of this proxy statement/prospectus, five putative class action lawsuits have been filed in the Connecticut Superior Court, Judicial District of New Haven. The lawsuits name UIL, its directors, Iberdrola USA, merger sub and/or Morgan Stanley as defendants. The actions are captioned:

• Stein v. UIL Holdings Corp. et al., NNH-CV15-6053112-S (dated February 27, 2015);

• Meyer v. UIL Holdings Corp. et al., NNH-CV15-6053312-S (dated March 5, 2015);

• Minucci v. UIL Holdings Corp. et al., NNH-CV15-6053313-S (dated March 5, 2015);

• Lenois v. UIL Holdings Corp. et al., NNH-CV15-6053331-S (dated March 10, 2015); and

• Porter v. Torgerson et al., NNH-CV15-6053559-S (dated March 20, 2015).

The complaints generally allege that UIL’s directors breached their fiduciary duties by failing to maximize shareowner value in negotiating and approving the merger. Among other things, some or all of the complaints allege that UIL’s directors conducted an allegedly inadequate sale process, agreed to the merger at a price that

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allegedly undervalues UIL, agreed to deal protection measures that allegedly prevent another company from making a superior offer, and retained Morgan Stanley as UIL’s financial advisor despite Morgan Stanley’s alleged conflicts of interest. The complaints also allege that certain of the directors approved the merger to benefit themselves personally. The complaints further allege that UIL, Iberdrola USA, merger sub, and/or Morgan Stanley aided and abetted those purported breaches of fiduciary duties. The complaints seek various remedies, including to enjoin or rescind the merger, damages, an accounting, a constructive trust, and/or attorneys’ fees and expenses.

The five actions have been consolidated and transferred to the Complex Litigation Docket of the Connecticut Superior Court in Stamford, Connecticut. Defendants’ time to move, answer or otherwise respond in the actions has been extended until after a consolidated amended complaint has been filed or designated.

All defendants deny any wrongdoing in connection with the proposed merger and plan to vigorously defend against all pending claims.

Restrictions on Sales of Shares of the Combined Company Common Stock Received in the Merger

The shares of the combined company common stock to be issued will be freely transferable under the Securities Act and the Exchange Act, except for shares issued to any shareholder who may be deemed to be an “affiliate” of the combined company for purposes of Rule 144 under the Securities Act. Persons who may be deemed to be affiliates include individuals or entities that control, are controlled by, or are under the common control with the combined company and may include the executive officers, directors and significant shareholders of the combined company. This proxy statement/prospectus does not cover resales of the combined company common stock received by any person upon completion of the merger, and no person is authorized to make use of this proxy statement/prospectus in connection with any such resale.

Pursuant to the merger agreement, the combined company and Iberdrola, S.A. will enter into the shareholder agreement. The shareholder agreement generally restricts Iberdrola, S.A. and certain of its affiliates from disposing of or transferring shares of the common stock of the combined company, or securities or warrants that may grant a right to acquire shares of common stock of the combined company, or from entering into any other contract or arrangement by virtue of which the economic effect of ownership of the combined company shares of common stock is transferred, in each case directly or indirectly, for a period of 18 months after the closing, except that after 12 months following the closing, Iberdrola, S.A. can dispose of or transfer its shares of common stock of the combined company if the unaffiliated committee has approved the transfer, after having received the advice of a nationally recognized independent investment banking firm. The shareholder agreement also restricts Iberdrola, S.A. and certain of its affiliates, for a period of three years after the closing, from transferring more than an aggregate of 10% of the outstanding shares of the combined company in any transaction or series of transactions, unless all shareowners of the combined company are entitled to participate in such transaction (on a pro rata basis) and are entitled to the same per share consideration to be received in such transaction as Iberdrola, S.A.

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INTERESTS OF UIL’S DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER

In considering the recommendation of the UIL board that you vote to approve the merger agreement, you should be aware that certain directors and executive officers of UIL may have interests in the merger that are different from, or in addition to, the interests of UIL shareowners generally. The UIL board was aware of and considered these interests when it unanimously (i) adopted the merger agreement, (ii) approved and determined that it is in the best interests of UIL to consummate the merger and the other transactions contemplated by the merger agreement and execute and deliver the merger agreement and perform its obligations thereunder, and (iii)  resolved to recommend the approval of the merger agreement by UIL shareowners.

Equity Compensation Awards

Treatment of Restricted Shares

Each award of restricted UIL common stock granted under the UIL 2008 Stock and Incentive Compensation Plan (which, together with the employee and director deferred compensation plans maintained or sponsored by UIL or any of its subsidiaries, are referred to as the UIL stock plans) that is outstanding and unvested or otherwise subject to forfeiture or other restrictions as of immediately prior to the effective time of the merger (which are referred to as restricted shares), other than those restricted shares that vest by their terms upon the effective time of the merger, shall be converted into the right to receive the number of validly-issued restricted shares of the combined company common stock equal to the product (rounded up to the nearest whole number) of the number of such restricted shares multiplied by the “equity exchange factor,” provided, however, that any restricted shares of common stock of the combined company received in respect of such restricted shares shall be subject to the same terms and conditions (including vesting and forfeiture restrictions) as were applicable to the corresponding restricted shares immediately prior to the effective time of the merger. The “equity exchange factor” is the sum of one plus a fraction, (i) the numerator of which is the cash consideration and (ii) the denominator of which is the average of the volume weighted averages of the trading prices of UIL common stock on the NYSE (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the parties to the merger agreement) on each of the ten consecutive trading days ending on (and including) the trading day that immediately precedes the closing date of the merger minus $10.50. Restricted shares that vest by their terms upon the effective time of the merger shall be converted into the right to receive the merger consideration.

Treatment of Stock Units and Performance Shares

Immediately prior to the effective time, each award of UIL restricted stock units, performance shares, phantom stock units or other similar rights or awards granted or deferred under a UIL stock plan and relating to shares of UIL common stock (which is referred to as a UIL equity right and which, together with the restricted shares, are referred to as the stock awards), shall cease to relate to or represent a right to receive shares of UIL common stock and shall be converted, at the effective time, into an award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards, as applicable, relating to shares of common stock of the combined company (which is referred to as a combined company equity right) of the same type and on the same terms and conditions as were applicable to the corresponding UIL equity right, except as adjusted as described herein. The number of shares of common stock of the combined company covered by each such combined company equity right shall be equal in number to the product (rounded up to the nearest whole number) of the number of shares of UIL common stock subject to the corresponding UIL equity right multiplied by the equity exchange factor. With respect to any UIL stock award that, immediately prior to the effective time, is subject to performance-based vesting or other performance conditions, determination of performance will be made pursuant to the terms of such stock award.

Vesting of unvested equity awards held by UIL’s named executive officers would accelerate upon a termination of employment without “cause” or a “constructive termination” (each as defined under the heading “Change in Control Severance Plan” below) or within two years following the merger. See the section entitled

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“Advisory Vote on Merger-Related Compensation for UIL’s Named Executive Officers” beginning on page 76 of this proxy statement/prospectus for information regarding unvested equity compensation awards for the named executive officers determined in accordance with Item 402(t) of the SEC’s Regulation S-K. Vesting of unvested restricted shares held by UIL’s non-employee directors will accelerate upon the completion of the merger, pursuant to the existing terms of such awards. As of December 31, 2015, which is the estimated date of the completion of the merger solely for the purposes of this “Interests of UIL’s Directors and Executive Officers in the Merger” disclosure, UIL’s non-employee directors as a group will hold unvested restricted shares with an estimated value of $1,278,883 (based on a price per share of UIL common stock of $50.83, which is the average closing market price per share of UIL common stock as quoted on the NYSE over the first five business days following the first public announcement of the merger on February 25, 2015), and UIL’s executive officers, other than the named executive officers, as a group will hold unvested performance-based restricted shares with an estimated value of $4,460,269 (based on a price per share of UIL common stock of $50.83). See the section entitled “Advisory Vote on Merger-Related Compensation for UIL’s Named Executive Officers” beginning on page 76 of this proxy statement/prospectus for the assumptions used to calculate these estimates.

Payments Upon Termination Upon Change in Control

The CIC Plan provides severance benefits to participants (including UIL’s executive officers) in the event their employment is terminated by UIL without “cause” or by the executive under circumstances giving rise to a “constructive termination” during the two-year period following a change in control (such as the merger) (each of which is referred to as a covered termination for the purposes of this section). Each of UIL’s named executive officers is also a party to an employment agreement that provides for certain severance payments and benefits. The named executive officer would be entitled to receive the greater of (i) the benefits provided under his or her employment agreement and (ii) the benefits provided under the CIC Plan. The severance benefits that the participants are eligible to receive pursuant to the CIC Plan and/or employment agreement include the following: (i) (a) for Mr. Torgerson, a lump-sum cash severance payment equal to the greater of (A) the sum of one year of his base salary, plus one times his annual incentive compensation, or (B) three times his base salary, minus his target total remuneration, (b) for Mr. Nicholas, a lump-sum cash severance payment equal to (A) two times the sum of his base salary plus his annual incentive compensation minus (B) his target total remuneration, (c) for Ms. Randell, a lump-sum cash severance payment equal to the greater of (A) the sum of one year of base salary plus one times her annual incentive compensation, or (B) two times her base salary minus her target total remuneration; and (d) for each of Mr. Marone and Mr. Prete, a lump-sum cash severance payment equal to two times the sum of his base salary plus his annual incentive compensation; and (e) for UIL’s other executive officers, a lump-sum cash severance payment equal to a multiple (either 1, 1.5 or 2) times either his or her base salary or base salary plus annual incentive compensation; (ii) benefits under UIL’s healthcare plans during the COBRA continuation period; (iii) a lump sum payment of one (Ms. Randell), one and one-half (Mr. Marone and four other executive officers), two (Messrs. Nicholas and Prete) or three (Mr. Torgerson) times a benefit supplement of $5,500, in lieu of continued coverage under UIL’s life insurance, disability and other employee welfare and fringe benefit plans; (iv) for certain participants, one and one-half (Messrs. Marone and two other executive officers) or two (Messrs. Nicholas and Prete) additional credited years of service for the purposes of calculating benefits payable to the participant under UIL’s retiree medical benefit plans; (v) for Messrs. Nicholas and Prete, a lump sum pension supplement calculated as the difference between the pension benefit actually payable under UIL’s tax-qualified pension plan and the pension benefit that would have been payable had the participant been credited with 2 additional years of service and (vi) for Messrs. Torgerson and Nicholas and Ms. Randell, a tax gross-up payment if the participant become subject to an excise tax under Section 4999 of the Code on account of any payments or benefits that are determined to constitute an “excess parachute payment” within the meaning of the Section 280G of the Code. For each executive officer other than Messrs. Torgerson and Nicholas and Ms. Randell, if any portion of the payments that the executive has the right to receive after a covered termination would constitute “excess parachute payments” (as defined in Section 280G of the Code) subject to the excise tax imposed by Section 4999 of the Code, the amount otherwise payable under clause (i) above shall be reduced to the largest amount that will result in no portion of such excess parachute payments being subject to the excise tax imposed by Section 4999 of the Code.

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A participant’s receipt of payments and benefits in the event of covered termination after a change in control is conditioned upon the participant’s execution of a full and effective release of any liability by UIL to the participant in form and substance reasonably satisfactory to UIL. In addition, a participant’s benefits that become payable would be forfeited and discontinued if such participant violates the terms of any agreement with UIL or UIL’s policy relating to confidential information, non-competition or disclosure and assignment of inventions and discoveries, or if such participant engages in conduct that is materially injurious to UIL, monetarily or otherwise, all as determined by UIL, in its sole discretion.

Under the CIC Plan, “cause” means the participant’s (i) commission of a serious crime, such as an act of fraud, misappropriation of funds, embezzlement, or a crime involving personal dishonesty or moral turpitude; (ii) willful failure of the participant to substantially perform his or her duties (other than by reason of incapacity due to physical or mental illness or injury); or (iii) misconduct that is demonstrably injurious to UIL or its affiliates.

Under the CIC Plan, a “constructive termination” generally means a voluntary separation by the participant under any of the following circumstances without the consent of the participant: (i) a material diminution in the participant’s annual base salary, unless such reduction is part of, and consistent with, a general reduction of the compensation rates of all employees of the participant’s employing company; (ii) a material diminution in the participant’s authority, duties, or responsibilities, including the assignment of duties inconsistent in any material adverse respect with such participant’s position, duties, responsibilities and status with the participant’s employing company immediately prior to the change in control, or material diminishment in such participant’s management responsibilities, duties or powers as in effect immediately prior to the change in control, or the removal from or failure to re-elect such participant to any such position or office; (iii) a requirement that the participant relocate his or her principal place of employment by more than 75 miles from such location immediately prior to the change in control; or (iv) any other action or inaction that constitutes a material breach by the participant’s employing company (or its successor) of any agreement under which the participant provides services.

See the section entitled “Advisory Vote on Merger-Related Compensation for UIL’s Named Executive Officers” beginning on page 76 of this proxy statement/prospectus for the estimated amounts that the named executive officers of UIL would receive under the CIC Plan upon a termination without cause or a constructive termination as of December 31, 2015. UIL’s other executive officers as a group would receive approximately $6,956,098 upon a covered termination under the CIC Plan as of December 31, 2015.

Employment Agreements

Each of UIL’s named executive officers is party to an employment agreement that provides for certain severance payments and benefits in the event that he or she has an involuntary separation from service without cause or under circumstances constituting a constructive termination within 24 months following a change in control. In addition, in the event of an involuntary separation from service without cause or under circumstances constituting a constructive termination within 24 months following a change in control, each named executive officer is entitled to severance payments and benefits payable under the CIC Plan. The named executive officer would be entitled to receive the greater of the benefits provided under his or her employment agreement and the CIC Plan and would not receive duplicative payments.

Messrs. Torgerson and Nicholas and Ms. Randell are also eligible for payments on account of covenants not to compete. If Messrs. Torgerson and Nicholas and Ms. Randell were to experience a covered termination within two years following a change in control, under each executive’s employment agreement he or she would be entitled to payments on account of a covenant not to compete, in Mr. Torgerson’s case, in an amount equal to the lesser of (i) three times his base salary or (ii) his target total remuneration, in the case of Mr. Nicholas, an amount equal to the lesser of (i) two times his base salary plus annual incentive compensation or (ii) his target total remuneration, and in the case of Ms. Randell, an amount equal to the lesser of (i) two times her base salary or

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(ii) her target total remuneration, in each case, paid out over a 12 month period in equal fixed monthly installments (subject to delay to the extent required under Section 409A of the Code). These payments are separate from, and not duplicative of, payments received pursuant to the CIC Plan.

All named executive officers are bound by non-competition and non-solicitation covenants for a period of 12 months from termination following a change in control. Pursuant to these covenants, named executive officers are prohibited for 12 months following termination from (i) becoming employed by, entering into a consulting arrangement with or otherwise performing services for a competitor of the named executive officers’ direct employer; (ii) diverting business, directly or indirectly, from UIL or any affiliate, or interfering with UIL’s customer or supply relationships; or (iii) attempting to interfere with UIL’s relationships with its employees. Further, each named executive officer is required to maintain the confidentiality of UIL’s methods of doing business, marketing and strategic business plans, customer lists and the like. A breach of these covenants will result in the forfeiture of any termination or change-of-control payments or benefits then still owing to the named executive officer.

Retention

Under the terms of the merger agreement, UIL may establish a cash incentive pool of up to $10 million, from which UIL may grant retention awards to employees, including executive officers. As of the date of this proxy statement, no executive officers have received a retention award.

Executive Officer Positions with the Combined Company

Upon completion of the merger, Mr. Torgerson, UIL’s President and Chief Executive Officer, will serve as Chief Executive Officer of the combined company. His compensation as Chief Executive Officer of Iberdrola USA has not been determined, but will be determined in accordance with the Senior Officer Remuneration Policy of Iberdrola, S.A., as described in “Additional Information About Iberdrola USA—Iberdrola USA Compensation Discussion and Analysis” beginning on page 227 of this proxy statement/prospectus. Biographical information with respect to Mr. Torgerson is contained in UIL’s Definitive Proxy Statement for UIL’s 2015 Annual Meeting (filed with the SEC on April 1, 2015) and is incorporated by reference into this proxy statement/prospectus.

Director Positions with the Combined Company

Upon completion of the merger, the combined company board will include Mr. Torgerson, UIL’s President and Chief Executive Officer and currently a member of the UIL board, and two of UIL’s other directors as of immediately prior to completion of the merger, to be selected by Iberdrola USA, or the UIL director appointees. Iberdrola USA has determined that Arnold L. Chase and John L. Lahey will be appointed to the combined company board upon completion of the merger. Under the terms of a shareholder agreement, a form of which is attached as Annex B to this proxy statement/prospectus, that will be executed by the combined company and Iberdrola, S.A. prior to the closing, for a period of three years after the completion of the merger, the combined company board is required to nominate, and Iberdrola, S.A. is required to cast all of its votes in favor of the election of, the UIL director appointees (other than the former UIL chief executive officer), and may not vote to remove such UIL director appointees. Biographical information with respect to Mr. Torgerson, Mr. Chase, Mr. Lahey and the other existing members of the UIL board is contained in UIL’s Definitive Proxy Statement for UIL’s 2015 Annual Meeting (filed with the SEC on April 1, 2015) and is incorporated by reference into this proxy statement/prospectus. Compensation for the directors of the combined company will be determined in accordance with the Director Remuneration Policy of Iberdrola, S.A., as described in “Additional Information About Iberdrola USA—Iberdrola USA Director Compensation” beginning on page 226 of this proxy statement/prospectus.

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Indemnification; Directors’ and Officers’ Insurance

From and after the effective time of the merger, the combined company will indemnify and hold harmless each present and former director and officer of UIL and its subsidiaries determined as of the time of completion of the merger, or the indemnified parties, against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the effective time of the merger, whether asserted or claimed prior to, at or after the effective time, to the fullest extent that UIL would have been permitted under Connecticut law and its certificate of incorporation or by-laws in effect on the date of the merger agreement to indemnify such person. For additional information, see the section entitled “The Merger Agreement—Indemnification and Insurance of Directors and Officers” beginning on page 136 of this proxy statement/prospectus.

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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION

The following section discusses the anticipated material U.S. federal income tax consequences of the merger generally applicable to holders of UIL common stock. The following discussion is based on, and subject to, the Code, the treasury regulations promulgated under the Code, existing interpretations, court decisions, and administrative rulings, all of which are in effect as of the date of this proxy statement/prospectus, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the continuing validity of the discussion.

This discussion only addresses the material U.S. federal income tax consequences of the merger to the UIL shareowners that hold UIL common stock as a capital asset within the meaning of Section 1221 of the Code. This discussion does not address all aspects of U.S. federal income taxation that may be applicable to UIL shareowners in light of their particular circumstances or to UIL shareowners subject to special treatment under U.S. federal income tax law, such as:

• financial institutions;

• insurance companies;

• tax-exempt organizations;

• brokers or dealers in securities or currencies;

• traders in securities that elect to use a mark-to-market method of accounting;

• persons whose functional currency is not the U.S. dollar;

• persons who purchased or sell their shares of UIL common stock as part of a wash sale;

• shareowners who hold their shares of UIL common stock as part of a hedge, straddle, constructive sale or conversion transaction; and

• shareowners who acquired their shares of UIL common stock pursuant to the exercise of employee stock options or otherwise acquired shares as compensation or through a tax-qualified retirement plan.

In addition, the discussion does not address any alternative minimum tax or any state, local or foreign tax consequences of the merger.

If a partnership (including any entity or arrangement, domestic or foreign, that is treated as a partnership for U.S. federal income tax purposes) holds shares of UIL common stock, the tax treatment of a partner will generally depend on the status of the partners and the activities of the partnership. Partnerships and partners in such a partnership should consult their tax advisers about the tax consequences of the merger to them.

The Merger

Iberdrola USA and UIL intend that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. The obligation of Iberdrola USA to complete the merger is conditioned upon the receipt of an opinion from Latham & Watkins LLP, counsel to Iberdrola USA, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. The obligation of UIL to complete the merger is conditioned upon the receipt of an opinion from Sullivan & Cromwell LLP, counsel to UIL, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. These opinions and the opinions in this section “—The Merger” are and will be based on assumptions, representations, warranties and covenants, including those contained in the merger agreement and in tax representation letters provided by Iberdrola USA, merger sub and UIL. The accuracy of such assumptions, representations and warranties, and compliance with such covenants, could affect the conclusions set forth in such opinions and in this discussion. The opinions are not binding on the IRS or the courts, and neither Iberdrola USA nor UIL intends to obtain a ruling from the IRS with respect to the tax consequences of the merger. Additionally, these opinions

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of counsel do not address any state, local or foreign tax consequences of the merger. Accordingly, each UIL shareowner should consult its tax advisors with respect to the particular tax consequences of the merger to such holder.

Neither Iberdrola USA nor UIL currently intends to waive the foregoing opinion condition to its obligation to complete the merger. If either Iberdrola USA or UIL waives this opinion condition after the registration statement of which this proxy statement/prospectus forms a part is declared effective by the SEC, and if the expected U.S. federal income tax consequences of the merger to UIL shareholders have materially changed, Iberdrola USA and UIL will recirculate this proxy statement/prospectus and resolicit votes of the UIL shareholders.

Subject to the qualifications and limitations set forth herein, Sullivan & Cromwell LLP, counsel to UIL, and Latham & Watkins LLP, counsel to Iberdrola USA, are of the opinion that for U.S. federal income tax purposes the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

Tax Consequences to U.S. Holders

The following is a discussion of the material U.S. federal income tax consequences of the merger to U.S. holders of shares of UIL common stock.

For purposes of this proxy statement/prospectus, the term “U.S. holder” means a beneficial owner of shares of UIL common stock that is for U.S. federal income tax purposes:

• a citizen or resident of the United States;

• a domestic corporation;

• a trust that (i) is subject to both the primary supervision of a court within the United States and the control of one or more U.S. persons; or (ii) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or

• an estate that is subject to U.S. federal income tax on its income regardless of its source.

A U.S. holder that exchanges its shares of UIL common stock for a combination of shares of the combined company common stock and cash in the merger will generally recognize gain (but not loss) in an amount equal to the lesser of: (1) the amount of cash received in exchange for shares of UIL common stock in the merger and (2) the excess, if any, of (a) the sum of the amount of cash received in exchange for shares of UIL common stock in the merger plus the fair market value of the shares of the combined company common stock received in the merger, over (b) the holder’s basis in its shares of UIL common stock exchanged. If a U.S. holder acquired different blocks of shares of UIL common stock at different times or at different prices, any gain or loss will be determined separately with respect to each block of shares of UIL common stock, and such holder’s basis and holding period in its shares of the combined company common stock may be determined with reference to each block of shares of UIL common stock. Any such holder should consult its tax advisors regarding the manner in which cash and the combined company common stock received in the exchange should be allocated among different blocks of shares of UIL common stock and with respect to identifying the bases or holding periods of the particular shares of the combined company common stock received in the merger.

Any recognized gain will generally be long-term capital gain if, as of the effective date of the merger, the U.S. holder’s holding period with respect to the surrendered shares of UIL common stock exceeds one year. The aggregate tax basis of the shares of the combined company common stock a holder receives as a result of the merger will be the same as such holder’s aggregate tax basis in its shares of UIL common stock surrendered in the merger, decreased by the amount of cash such holder receives that is treated as received in exchange for shares of UIL common stock and increased by the amount of gain, if any, such holder recognizes in the exchange. Subject to the discussion above regarding separate blocks of shares of UIL common stock, the holding period of the shares of the combined company common stock a U.S. holder receives as a result of the exchange will include the holding period of its shares of UIL common stock surrendered in the merger.

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Medicare Tax

A U.S. holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on the lesser of (1) the U.S. holder’s “net investment income” (or “undistributed net investment income” in the case of an estate or trust) for the relevant taxable year and (2) the excess of the U.S. holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and $250,000, depending on the individual’s circumstances). A holder’s net investment income generally will include net gains recognized from the disposition of shares of UIL common stock in the merger. A U.S. holder that is an individual, estate or trust is urged to consult its tax advisors regarding the applicability of the Medicare tax to its recognized gains in respect of any shares of UIL common stock such holder disposes of in the merger.

Tax Consequences to Non-U.S. Holders

The following is a discussion of the material U.S. federal income tax consequences of the merger to a beneficial owner of shares of UIL common stock that is neither a U.S. person nor a partnership for U.S. federal income tax purposes, or a Non-U.S. holder, in connection with the merger.

In general, the U.S. federal income tax consequences to a Non-U.S. holder that exchanges its shares of UIL common stock for a combination of shares of the combined company’s common stock and cash in the merger will be the same as those described above for a U.S. holder, except that, subject to the discussion below regarding potential FIRPTA Tax (defined below), a Non-U.S. holder generally will not be subject to U.S. federal income tax or withholding tax on any gain recognized in connection with the merger unless:

• such gain is effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment of the Non-U.S. holder in the United States); or

• the Non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year in which the gain is recognized and certain other conditions are met.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated U.S. federal income tax rates in the same manner as if such Non-U.S. holder were a U.S. person. A Non-U.S. holder that is a corporation also may be subject to an additional branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on its “effectively connected earnings and profits” for the taxable year, subject to certain adjustments.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty), but may be offset by U.S. source capital losses, if any, of the Non-U.S. holder.

The FIRPTA Tax

The following discussion of the applicability of U.S. federal income tax at the regular graduated rates imposed under Section 897 of the Code, or the FIRPTA Tax, to a Non-U.S. holder assumes that (i) the UIL common stock will be “regularly traded” (within the meaning of Section 897 of the Code) on the New York Stock Exchange at all times leading up to the effective time of the merger and (ii) the combined company’s common stock received in the merger will be “regularly traded” (within the meaning of Section 897 of the Code) on the New York Stock Exchange following the effective time of the merger.

A Non-U.S. holder that is a Significant Holder (as defined below) and that receives shares of the combined company’s common stock in the merger will be subject to the FIRPTA Tax on any gain realized provided that (i) UIL is or has been a USRPHC (as defined below) at any time during the Testing Period (as defined below) and (ii) any of the following conditions is met:

• the combined company is not a USRPHC (as defined below) immediately after the merger,

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• the Significant Shareholder (as defined below) does not own, directly or indirectly, more than 5% of the combined company’s common stock immediately after the merger, or

• certain federal income tax filing requirements are not satisfied by the Significant Shareholder (as defined below).

It is not clear whether either UIL or Iberdrola USA is, has been or will be or whether the combined company will be a “United States real property holding corporation,” or USRPHC, as defined under the provisions of Section 897 of the Code, originally enacted under the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA. A corporation generally is characterized as a USRPHC if the fair market value of the U.S. real property interests, or USRPIs, owned by the corporation and its subsidiaries equals or exceeds 50% of the sum of (i) the fair market value of the worldwide real property interests owned by the group and (ii) the other assets used or held for use by the group in a trade or business. USRPIs include any interest (other than an interest solely as a creditor) in real property located in the United States or the Virgin Islands. Real property generally includes land and unsevered natural products of the land, improvements on land (e.g., pipelines, and the inherently permanent structural components of power plants) and personal property associated with the use of real property.

As used herein, “Testing Period” means, with respect to a Non-U.S. holder, the shorter of (i) the five year period preceding the effective time of the merger and (ii) the period during which the Non-U.S. holder held its UIL common stock, and “Significant Shareholder” means a Non-U.S. holder that has owned, directly or indirectly, more than 5% of UIL’s common stock at any time during the Testing Period.

For purposes of determining whether any Non-U.S. holder owns more than 5% of UIL’s common stock or the combined company’s common stock, ownership is determined by applying the constructive ownership rules of Section 318 of the Code as modified by Section 897 of the Code. Generally, those rules treat a shareholder as owning (i) shares owned by certain relatives, related corporations, partnerships, estates or trusts, and (ii) shares that the shareholder has an option to acquire.

The amount of gain recognized by a Significant Shareholder that is subject to the FIRPTA Tax will equal the excess of (i) the sum of the amount of cash received in exchange for shares of UIL common stock in the merger plus the fair market value of the shares of post-merger Iberdrola USA common stock received in the merger over (ii) the shareholder’s tax basis in the UIL common stock exchanged therefor. Loss generally may not be recognized by a Significant Shareholder in connection with the merger.

A Significant Shareholder subject to the FIRPTA Tax will be required to file a U.S. federal income tax return with the Internal Revenue Service. An exemption from the FIRPTA Tax or a reduced tax rate may be available under certain U.S. income tax treaties. In the case of a Significant Shareholder that is subject to the FIRPTA Tax, such holder’s aggregate tax basis in the post-merger Iberdrola USA common stock received in the merger will generally equal such stock’s fair market value at the time of receipt, and such holder’s holding period in the combined company’s common stock received in the merger will begin the day after the effective time of the merger.

If the combined company is a USRPHC immediately after the merger, a Non-U.S. holder may be subject to U.S. federal income tax on gain recognized on future dispositions of shares of the combined company’s common stock after the merger, if that Non-U.S. holder has held, directly or indirectly, at any time during the five year period ending on the date of the disposition, more than 5% of the combined company’s common stock and is not eligible for any treaty exemption.

Under Section 1445 of the Code, a person acquiring stock in a USRPHC from a Non-U.S. holder generally is required to deduct and withhold a tax equal to 10% of the amount realized by that Non-U.S. holder on the sale or exchange of that stock, or FIRPTA Withholding. However, there is an exemption from FIRPTA Withholding for stock that is regularly traded on an established securities market. UIL believes that UIL common stock will continue to be regularly traded on the New York Stock Exchange at all times leading up to and as of the effective

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time of the merger, so that UIL common stock should be considered to be “regularly traded on an established securities market” for purposes of this exemption. Assuming that this expectation proves to be correct, neither UIL, Iberdrola USA nor the exchange agent will be required to, nor will they, deduct and withhold amounts on account of FIRPTA Withholding with respect to a Non-U.S. holder’s exchange of UIL common stock pursuant to the merger.

Because of the complexity of the FIRPTA rules, Non-U.S. holders are urged to consult their tax advisors to determine the possible application of the FIRPTA Tax, availability of an exemption or tax reduction under an applicable U.S. income tax treaty, and other potential U.S. federal income tax consequences of the merger.

Tax Reporting

In general, each UIL shareholder that receives the combined company’s common stock in the merger that owned immediately before the merger (i) 5% or more by vote or value of the stock of UIL or (ii) securities of UIL with a tax basis of $1,000,000 or more will be required to file a statement with the shareholder’s federal income tax return setting forth the shareholder’s basis in the shares of UIL common stock surrendered, the fair market value of the shares of UIL common stock surrendered in the merger, the date of the merger and the name and employer identification number of Iberdrola USA, UIL and merger sub, and will be required to retain permanent records of this information.

Backup Withholding and Information Reporting

In general, information reporting requirements may apply to the cash payments made to U.S. holders and Non-U.S. holders in connection with the merger, unless an exemption applies. Backup withholding may be imposed on the above payments if (A) a U.S. holder (1) fails to provide a taxpayer identification number or appropriate certificates or (2) otherwise fails to comply with all applicable requirements of the backup withholding rules or establish an exemption or (B) a Non-U.S. holder fails to certify under penalty of perjury that it is a Non-U.S. holder or such Non-U.S. holder otherwise fails to establish an exemption.

Any amounts withheld from payments to a holder under the backup withholding rules are not an additional tax and will be allowed as a refund or credit against its applicable U.S. federal income tax liability, provided the required information is furnished to the IRS. Holders should consult their own tax advisors regarding the application of backup withholding based on their particular circumstances and the availability of and procedure for obtaining an exemption from backup withholding.

The foregoing discussion is not intended to be a complete analysis or description of all potential U.S. federal income tax consequences of the merger. This discussion does not address tax consequences which may vary with, or are contingent on, individual circumstances. Moreover, the discussion does not address any non-income tax or any foreign, state or local tax consequences of the merger. Accordingly, each holder is strongly encouraged to consult its tax advisors as to the tax consequences of the merger in the holder’s particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local or foreign and other tax laws and of changes in those laws.

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THE MERGER AGREEMENT

This section of this proxy statement/prospectus describes the material provisions of the merger agreement, dated February 25, 2015, by and among UIL, Iberdrola USA, and merger sub, but does not purport to describe all of the terms of the merger agreement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. The following summary is qualified in its entirety by reference to the complete text of the merger agreement, which is attached as Annex A to this proxy statement/prospectus and incorporated into this proxy statement/prospectus by reference. Iberdrola USA and UIL urge you to read the full text of the merger agreement because it is the legal document that governs the merger.

The merger agreement is not intended to provide you with any factual information about Iberdrola USA or UIL. The representations, warranties and covenants made in the merger agreement by UIL, Iberdrola USA and merger sub were made solely to the parties to, and solely for the purposes of, the merger agreement and as of specific dates and were qualified and subject to important limitations agreed to by UIL, Iberdrola USA and merger sub in connection with negotiating the terms of the merger agreement. In particular, representations and warranties were negotiated with the principal purposes of allocating risk between the parties to the merger agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC, and the assertions embodied in the representations and warranties contained in the merger agreement (and summarized below) are qualified by information in disclosure schedules provided by UIL to Iberdrola USA and by Iberdrola USA to UIL in connection with the signing of the merger agreement and by certain information contained in certain of UIL’s filings with the SEC. These disclosure schedules and SEC filings contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the merger agreement. In addition, information concerning the subject matter of the representations and warranties may have changed or may change after February 25, 2015, which subsequent information may or may not be fully reflected in public disclosures by Iberdrola USA and UIL. Accordingly, you should not rely on the representations and warranties in the merger agreement (or the summaries contained herein) as characterizations of the actual state of facts about Iberdrola USA or UIL.

The representations and warranties in the merger agreement and the description of them in this proxy statement/prospectus should not be read alone, but instead should be read in conjunction with the other information contained in the reports, statements and filings Iberdrola USA and UIL publicly file with the SEC. Such information can be found elsewhere in this proxy statement/prospectus and in the public filings Iberdrola USA and UIL make with the SEC, as described in the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

Structure of the Merger

The merger agreement provides for the merger of UIL with and into merger sub, after which UIL will cease to exist as a separate corporate entity subject to the terms and conditions of the merger agreement and in accordance with Connecticut law. Merger sub will continue as the surviving corporation of the merger and a wholly-owned subsidiary of the combined company, which prior to the merger was a wholly-owned subsidiary of Iberdrola, S.A. All of UIL’s property, rights, privileges, powers and franchises will vest in merger sub, and all of its debts, liabilities and duties will become those of merger sub, and the separate corporate existence of UIL will cease. After completion of the merger, the name of merger sub will be changed to “UIL Holdings Corporation.”

Governance and Management of the Combined Company

As of the completion of the merger, the board of directors of the combined company will consist of up to 12 directors. Three of these directors will be directors who were members of the UIL board immediately prior to closing, one of whom will be the current Chief Executive Officer of UIL and two of whom will be selected by

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Iberdrola USA from among UIL’s directors as of the closing. While the merger agreement contained provisions requiring that at least six members of the board of directors of the combined company be independent of Iberdrola USA and Iberdrola S.A. within the meaning of the rules of the NYSE, following the execution of the merger agreement, UIL and Iberdrola USA agreed that, instead of six independent members of the board of directors of the combined company, the combined company will have at least five (5) “independent” directors (as defined in the shareholder agreement) for a period of five years following the completion of the merger, and Arnold Chase and John Baldacci may be deemed to be independent directors solely for purposes of determining compliance with this obligation. Under the shareholder agreement, a director will be considered “independent” if he or she is independent under the rules of NYSE with respect to the combined company, and would be independent under the rules of NYSE with respect to Iberdrola, S.A. if he or she was a director of Iberdrola, S.A. Additionally, pursuant to the shareholder agreement to be entered into between Iberdrola, S.A. and Iberdrola USA, in the event of the resignation, removal or death of Mr. Baldacci and/or Mr. Chase (or their respective replacements on the combined company board), or if Mr. Baldacci and/or Mr. Chase (or their respective replacements on the combined company board) decide not to stand for reelection to the combined company board or are otherwise unwilling or unable to serve on the combined company board, Iberdrola, S.A. will nominate a person to serve on the combined company board who qualifies as an independent director pursuant to the rules of the NYSE and applicable law. Pursuant to the agreement by UIL and Iberdrola USA after the execution of the merger agreement, the shareholder agreement will also provide that the combined company will, after such five-year period, have at least four “independent” directors (as defined in the shareholder agreement), provided that either Mr. Chase or Mr. Baldacci, but not both, may be deemed independent directors for this purpose. As a result, as of the completion of the merger, the combined company will have at least three directors who will be “independent” under the rules of the NYSE and other applicable law. See the section entitled “Certain Relationships and Related Party Transactions—Service Agreements” beginning on page 253 of this proxy statement/prospectus. From and after the closing, the combined company will comply with applicable law (and the rules of the NYSE) with respect to the composition of its board of directors. Additionally, pursuant to the shareholder agreement, UIL’s Chief Executive Officer as of the closing will be the Chief Executive Officer of the combined company following the completion of the merger and, for a period of three years after the closing, the combined company board will nominate, and Iberdrola, S.A. will cast all of its votes in favor of the election of, the UIL director appointees (other than the former UIL chief executive officer).

Effective Time; Closing Date

The effective time of the merger will occur at the time that a certificate of merger is filed with and accepted by the Secretary of State of the State of Connecticut (or such other date as Iberdrola USA and UIL may agree). The closing date will occur on the second business day after all of the conditions to the merger set forth in the merger agreement have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of such conditions), or such other date as Iberdrola USA and UIL may agree.

Post-Merger Governing Documents and Additional Matters Concerning Merger Sub

The certificate of incorporation and bylaws of merger sub as in effect immediately prior to the effective time will serve as the certificate of incorporation and bylaws of the surviving corporation, until amended in accordance with their terms, the certificate of incorporation (in respect of the bylaws) or applicable law. From and after the effective time, each director of merger sub immediately prior to the effective time will remain a director of the surviving corporation until additional directors or successors have been duly elected, appointed or qualified or until his or her earlier death, resignation, or removal in accordance with the surviving corporation’s certificate of incorporation and bylaws. Additionally, the officers of UIL immediately prior to the effective time will be the officers of the surviving corporation, with each such officer to serve until his or her successors have been duly elected or appointed or until his or her earlier death, resignation or removal.

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Effects of the Merger; Merger Consideration

As of the effective time, each issued share of UIL common stock that is owned by UIL (other than any shares owned on behalf of third parties) immediately prior to the effective time will automatically be cancelled and cease to exist, and no consideration will be delivered or deliverable in connection with such cancellation. Upon the terms and subject to the conditions set forth in the merger agreement, each issued and outstanding share of UIL common stock (other than any shares owned directly or indirectly by UIL, but including any shares owned by UIL on behalf of third parties) will be converted into the right to receive (i) one validly issued share of common stock of the combined company, credited as fully paid, which, when issued, ranks equally in all respects with all of the shares of common stock of the combined company then in issue, or the stock consideration, and (ii) $10.50 in cash, without interest and less any applicable withholding taxes, or the cash consideration. The stock consideration and the cash consideration together constitute the merger consideration. The shares of common stock of the combined company issued in the merger to UIL shareowners will represent 18.5% of the total number of shares of common stock of the combined company outstanding as of that time.

Treatment of UIL Stock Plans and UIL Equity-Based Awards

Each award of the UIL restricted shares, other than those UIL restricted shares that vest by their terms upon the consummation of the merger (which, for the avoidance of doubt, at the effective time will be converted into only the right to receive the merger consideration), will be converted into the right to receive the number of validly-issued restricted shares of the combined company common stock equal to the product (rounded up to the nearest whole number) of the number of such UIL restricted shares multiplied by the equity exchange factor, provided, however, that any restricted shares of the combined company common stock received in respect of such UIL restricted shares will be subject to the same terms and conditions (including vesting and forfeiture restrictions) as were applicable to the corresponding UIL restricted shares immediately prior to the effective time. Average UIL stock price means the average of the volume weighted averages of the trading prices of UIL common stock on the NYSE (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the parties) on each of the ten consecutive trading days ending on, and including, the trading day that immediately precedes the closing date.

Each award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards granted or deferred under a UIL stock plan and relating to shares of UIL common stock (any such award, a UIL equity right and such awards together with the UIL restricted shares, the UIL stock awards) that is outstanding immediately prior to the effective time will cease to relate to or represent a right to receive shares of UIL common stock and will be converted, at the effective time, into an award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards, as applicable, relating to shares of the combined company common stock, or a combined company equity right, of the same type and on the same terms and conditions as were applicable to the corresponding UIL equity right, except as adjusted in the merger agreement. The number of shares of common stock of the combined company covered by each such combined company equity right will be equal in number to the product (rounded up to the nearest whole number) of the number of shares of UIL common stock subject to the corresponding UIL equity right multiplied by the equity exchange factor.

With respect to any UIL stock award that is, immediately prior to the effective time, subject to any performance-based vesting or other performance conditions, or a UIL performance award, determination of performance will be made pursuant to the terms of such UIL performance award.

UIL will take all actions necessary to provide that as of the effective time, no participant in the UIL 2012 Non-Qualified Employee Stock Purchase Plan will have any right under such plan to purchase or otherwise acquire any shares of UIL common stock thereunder and that no further payroll deductions will be made under such plan. This UIL non-qualified employee stock purchase plan will terminate as of the effective time.

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Exchange of Shares

Prior to the effective time, UIL will select a bank or trust company, reasonably acceptable to Iberdrola USA, to act as an exchange agent, or the exchange agent, in connection with the merger for the purpose of delivering or causing to be delivered to each holder of UIL common stock the merger consideration such holder is entitled to receive.

Immediately prior to the filing of the certificate of merger with the Secretary of State of the State of Connecticut, at the direction of Iberdrola USA, there shall be deposited with the exchange agent the amount of immediately available cash, or the exchange fund, necessary for the exchange agent to make payment of the aggregate cash consideration to the holders of shares of UIL common stock and the number of shares of common stock of the combined company necessary for the exchange of all issued and outstanding shares of UIL common stock (other than any shares owned directly or indirectly by UIL, but including any shares owned by UIL on behalf of third parties) into common stock of the combined company. Unless Iberdrola USA chooses otherwise, the exchange fund and shares will be deposited with the exchange agent through The Depository Trust Company. The exchange agent will invest the exchange fund at Iberdrola USA’s direction.

Promptly after the effective time (and in any event within three business days thereafter), the surviving corporation will cause the exchange agent to mail a form of letter of transmittal to each record holder of UIL common stock. Beneficial holders of UIL common stock that are held in “street name” through a bank, brokerage firm or other nominee will receive instructions from the bank, brokerage firm or other nominee as to how to effect the surrender of the “street name” shares of UIL common stock in exchange for the per share merger consideration. Each holder of UIL common stock will be entitled to receive the merger consideration per share of UIL common stock he or she holds upon surrender to the exchange agent of the shares of UIL common stock, along with a letter of transmittal, duly completed and validly executed in accordance with the instructions, as well as any other documents that may reasonably be required pursuant to such instructions. If a record holder’s shares of UIL common stock are represented by certificate(s), the holder must also surrender his or her certificate or certificates to the exchange agent.

Holders of UIL common stock should not send in their UIL stock certificates until they receive a letter of transmittal from the exchange agent with instructions.

Dividends

Holders of UIL common stock are entitled to receive dividends or distributions with respect to shares of the combined company common stock with a record date occurring after the effective time, but only after such holder has surrendered his or her shares of UIL common stock. After surrender, there will be delivered and/or paid to the holder of the combined company common stock delivered in exchange for the surrendered UIL common stock, without interest, (i) at the time of surrender, the dividends or other distributions payable with respect to those shares of the combined company common stock with a record date on or after the date of the effective time and a payment date on or prior to the date of surrender and not previously paid, and at the appropriate payment date, the dividends or other distributions payable with respect to those shares of the combined company common stock with a record date on or after the date of the effective time but with a payment date subsequent to surrender and (ii) at the time of payment and delivery of shares of the combined company common stock by the exchange agent, all dividends or other distributions with a record date prior to the effective time, that have been declared by UIL with respect to the UIL common stock but that have not been paid on the surrendered UIL common stock.

If UIL does not declare a record date in the fiscal quarter of the closing in respect of a dividend with respect to shares of UIL common stock, Iberdrola USA will declare the record date in respect of a dividend for shares of the combined company common stock in that fiscal quarter at the same time UIL historically declared its dividend for the applicable quarter.

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Lost, Stolen and Destroyed Certificates

If a UIL common stock certificate has been lost, stolen or destroyed, the person claiming the lost, stolen or destroyed stock certificate must deliver an affidavit of that fact and, if requested by Iberdrola USA or the exchange agent, must provide an indemnity bond in customary form and amount and comply with any other replacement requirements established by the exchange agent before the exchange agent will deliver the merger consideration deliverable in respect of the shares of UIL common stock represented by the lost, stolen or destroyed stock certificate.

Representations and Warranties

Mutual Representations and Warranties of UIL and Iberdrola USA

Each of UIL and Iberdrola USA makes to the other party various representations and warranties as to itself and its subsidiaries and, in the case of representations and warranties concerning anti-corruption, its affiliates, which are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement, in the disclosure schedule that each of UIL and Iberdrola USA delivered to the other party in connection with the merger agreement, or, in the case of UIL only, in certain reports filed with the SEC. These representations and warranties relate to, among other things:

• such party’s due organization, valid existence and good standing and authority to carry on its business;

• the absence of violations of, or conflicts with, such party’s or its subsidiaries’ governing documents, governmental orders, applicable law and certain agreements as a result of such party’s entering into and performing under the merger agreement;

• the due organization, existence and good standing and authority to carry on its respective business of such party’s subsidiaries and joint ventures;

• the conduct of business in the ordinary course and the absence of certain changes, events or developments that would have or would be reasonably likely to have a material adverse effect (as described below) for such party since December 31, 2014;

• the absence of certain undisclosed liabilities other than as reflected in the financial statements, incurred in connection with the proposed transactions or incurred in the ordinary course since September 30, 2014;

• the absence of certain legal proceedings, investigations and outstanding governmental orders related to such party or its subsidiaries;

• the accuracy of information supplied for use in filings in connection with the proposed transactions;

• compliance with laws and orders, and possession of, and compliance with, necessary permits and licenses;

• tax matters;

• employee benefits plans and Employee Retirement Income Security Act, or ERISA matters;

• labor matters;

• environmental matters;

• insurance policies;

• establishment and compliance with energy price risk management practices and policies;

• the absence of any default under certain material contracts of such party, and compliance with, and validity and effectiveness of, certain material contracts

• the absence of any undisclosed broker’s or finder’s fees in connection with the proposed transactions;

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• good title to, and absence of liens (except certain permitted liens) on, certain real property;

• intellectual property matters; and

• anti-corruption and anti-money laundering matters.

Representations and Warranties of UIL

Additionally, UIL makes to Iberdrola USA various representations and warranties as to itself and its subsidiaries, which are subject to similar exceptions and qualifications as the mutual representations and warranties. These representations and warranties of UIL relate to, among other things:

• the capitalization of UIL and its subsidiaries;

• the absence of any outstanding subscriptions, options, warrants, rights (including stock appreciation rights), preemptive rights or other contracts, commitments, understanding or arrangements, including any right of conversion or exchange under any outstanding security, instrument, contract or agreement that obligates UIL or any of its subsidiaries to issue or sell any shares of capital stock or other securities or make any investment, including in the form of a loan or capital contribution in any person or that gives any person a right to subscribe for or acquire any of UIL or its subsidiaries’ equity securities;

• the absence of any voting trusts, proxies or other commitments, understandings, restrictions or arrangements to which UIL or any of its subsidiaries is a party;

• the status of UIL as a “holding company” under the Public Utility Holding Company Act of 2005, or PUHCA 2005;

• the absence of any debt of UIL or its subsidiaries that gives holders of such debt a right to vote on matters on which the shareowners of UIL may vote;

• the corporate power and authority of UIL to enter into, perform its obligations under, and consummate the transactions under, the merger agreement, and the enforceability of the merger agreement against UIL;

• the adoption of the merger agreement by the UIL board, and the approval and determination by the UIL board that it is in the best interests of UIL for UIL to consummate the merger and related transaction;

• governmental approvals and third party consents required by UIL to consummate the deal;

• UIL’s SEC filings since January 1, 2012 and the financial statements included therein;

• utility reports and rate filings before FERC, PURA or DPU, and tariffs filed with respect to the services provided by UIL or its subsidiaries;

• the legal entitlement of UIL with respect to FERC, PURA or DPU to provide services in its current service areas;

• UIL’s disclosure controls and procedures and internal control over financial reporting;

• compliance with the applicable listing and corporate governance rules and regulations of the NYSE;

• the vote required of the holders of UIL common stock necessary to approve the merger agreement;

• the inapplicability of any state anti-takeover law to the merger; and

• receipt of fairness opinions from Morgan Stanley.

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Representations and Warranties of Iberdrola USA

Additionally, Iberdrola USA makes to UIL various representations and warranties as to itself and its subsidiaries, which are subject to similar exceptions and qualifications as the mutual representations and warranties. These representations and warranties of Iberdrola USA relate to, among other things:

• the capitalization of Iberdrola USA and merger sub;

• the absence of any outstanding subscriptions, options, warrants, rights (including stock appreciation rights), preemptive rights or other contracts, commitments, understanding or arrangements, including any right of conversion or exchange under any outstanding security, instrument, contract or agreement that obligates Iberdrola USA or any of its subsidiaries to issue or sell any shares of capital stock or other securities or make any investment, including in the form of a loan or capital contribution in any person or that gives any person a right to subscribe for or acquire any of Iberdrola USA or its subsidiaries’ equity securities;

• the absence of any debt of Iberdrola USA or its subsidiaries that gives holders of such debt a right to vote on matters on which the equity holders of Iberdrola USA may vote;

• the corporate power and authority of Iberdrola USA and merger sub to enter into, perform its respective obligations under, and consummate the transactions under, the merger agreement, and the enforceability of the merger agreement against Iberdrola USA and merger sub;

• the issuance of the combined company common stock at the effective time and the approvals and registration under the Securities Act and Exchange Act related to such issuance;

• governmental approvals and third party consents required by Iberdrola USA to consummate the deal;

• the financial statements provided by Iberdrola USA to UIL in connection with the execution of the merger agreement;

• utility reports and rate filings before FERC, NYPSC and MPUC and tariffs filed with respect to the services provided by Iberdrola USA or its subsidiaries;

• the legal entitlement of Iberdrola USA with respect to FERC, the New York Public Service Commission and the Maine Public Utilities Commission to provide services in its current service areas;

• Iberdrola USA’s disclosure controls and procedures and internal control over financial reporting;

• shared assets and services between Iberdrola USA and Iberdrola, S.A.;

• employee benefit plans of Iberdrola USA;

• the inapplicability of any state anti-takeover law to the merger;

• certain contracts for electric generation capacity of Iberdrola Renewables;

• merger sub’s due organization, existence and good standing and authority to carry on its business;

• the absence of violations of, or conflicts with, merger sub’s governing documents, governmental orders, applicable law and certain agreements as a result of merger sub’s entering into and performing under the merger agreement;

• the absence of ownership by Iberdrola, S.A., Iberdrola USA or any of their subsidiaries of UIL common stock; and

• the availability of funds to satisfy Iberdrola USA’s and merger sub’s obligations under the merger agreement.

The representations and warranties in the merger agreement of each of UIL, Iberdrola USA and merger sub will not survive the consummation of the merger or the termination of the merger agreement pursuant to its terms.

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Many of the representations and warranties in the merger agreement are qualified by a “materiality” or “material adverse effect” standard. For purposes of the merger agreement, a UIL material adverse effect is any (i) change, effect, event, circumstance or development, or change, that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, condition (financial or otherwise) or results of operations of UIL and its subsidiaries, taken as a whole or (ii) change that would prevent, materially impair or materially delay the ability of UIL to consummate the merger and the other transactions contemplated by the merger agreement; an Iberdrola USA material adverse effect is any (a) change that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, condition (financial or otherwise) or results of operations of Iberdrola USA and its subsidiaries, taken as a whole or (b) change that would prevent, materially impair or materially delay the ability of Iberdrola USA or merger sub to consummate the merger and the other transactions contemplated by the merger agreement.

The merger agreement provides that no change (by itself or when aggregated or taken together with any and all other changes) directly or indirectly resulting from, attributable to or arising out of any of the following will be deemed to be, contribute towards or constitute a UIL material adverse effect or Iberdrola USA material adverse effect, as applicable, or will be taken into account when determining whether a UIL material adverse effect or Iberdrola USA material adverse effect, as applicable, has occurred or may, would or could occur:

• changes in law (or the interpretation thereof) or changes in generally acceptable accounting standards or other accounting standards (or the interpretation thereof), in each case after February 25, 2015;

• the entry into, pendency of, actions contemplated by, or the performance of obligations required by the merger agreement or consented to by Iberdrola USA or merger sub, in the case of a UIL material adverse effect, or UIL, in the case of an Iberdrola USA material adverse effect, including any loss or threatened loss of, or adverse change or threatened adverse change in, the relationship of Iberdrola USA or any of its subsidiaries, in the case of an Iberdrola USA material adverse effect, or UIL or any of its subsidiaries, in the case of a UIL material adverse effect, with their respective customers, employees, regulators, financing sources, labor unions or suppliers; or

• any written proposal or commitment made by Iberdrola USA or its affiliates or by UIL or its affiliates to any governmental authority or imposed by any governmental authority, in each case, in accordance with the merger agreement and in order to obtain the UIL required statutory approvals or Iberdrola USA required statutory approvals.

The merger agreement provides that no change (by itself or when aggregated or taken together with any and all other changes) directly or indirectly resulting from, attributable to or arising out of any of the following will be deemed to be, contribute towards or constitute a UIL material adverse effect or Iberdrola USA material adverse effect, as applicable, or will be taken into account when determining whether a UIL material adverse effect or Iberdrola USA material adverse effect, as applicable, has occurred or may, would or could occur, except to the extent the changes disproportionately and adversely affect UIL or Iberdrola USA and their relevant subsidiaries, taken as a whole, in any material respect relative to other companies operating in any industry or industries and geographies in which UIL or Iberdrola USA and its subsidiaries, operate:

• general economic conditions (or changes in such conditions) in the United States (or within the State of New York or the State of Maine in the case of Iberdrola USA, or the State of Connecticut or the Commonwealth of Massachusetts in the case of UIL) or any other country or region in the world, or conditions in the global economy generally;

• conditions (or changes in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world, including (A) changes in interest rates in the United States or any other country or region in the world and changes in exchange rates for the currencies of any countries, and (B) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world;

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• conditions (or changes in such conditions) in the industries in which Iberdrola USA and its subsidiaries, or UIL and its subsidiaries, as applicable, conduct business;

• changes in international, national or regional wholesale or retail markets for electric power, capacity or fuel or related products;

• changes in national or regional electric transmission or distribution systems; or

• political conditions (or changes in such conditions) in the United States (or within the State of New York or the State of Maine in the case of Iberdrola USA, or within the State of Connecticut or the Commonwealth of Massachusetts in the case of UIL) or any other country or region in the world or acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States (or within the State of New York or the State of Maine in the case of Iberdrola USA, or within the State of Connecticut or Commonwealth of Massachusetts in the case of UIL) or any other country or region in the world; or

• earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world.

The merger agreement provides that no change (by itself or when aggregated or taken together with any and all other changes) directly or indirectly resulting from, attributable to or arising out of any of the following will be deemed to be, contribute towards or constitute a UIL material adverse effect or Iberdrola USA material adverse effect or will be taken into account when determining whether a UIL material adverse effect or Iberdrola USA material adverse effect has occurred or may, would or could occur, but will not prevent or otherwise affect a determination that the underlying cause of the change, event or occurrence has resulted in, or contributed to, a UIL material adverse effect or Iberdrola USA material adverse effect:

• any change in the credit rating of Iberdrola USA, in the case of an Iberdrola USA material adverse effect, or UIL, in the case of a UIL material adverse effect; or

• the failure of Iberdrola USA or its subsidiaries, in the case of an Iberdrola USA material adverse effect, or UIL, in the case of a UIL material adverse effect, to meet any internal or published projections, forecasts or revenues predictions; or

• in respect of a UIL material adverse effect only, a decline in the price or trading volume of UIL common stock on the NYSE on or after February 25, 2015.

Conduct of Business Pending the Merger

The merger agreement provides that, subject to certain exceptions in the merger agreement and the disclosure schedule delivered by UIL to Iberdrola USA and by Iberdrola USA to UIL in connection with the merger agreement, between February 25, 2015 and the effective time, each of Iberdrola USA and UIL will, and will cause each of its respective subsidiaries to, and Iberdrola USA and UIL will exercise (and will cause its subsidiaries to exercise) any available rights with respect to any of its respective joint ventures, until the earlier to occur of the completion of the merger and the termination of the merger agreement, subject to certain exceptions and limitations:

• to carry on its business in the usual, regular and ordinary course in substantially the same manner as conducted prior to February 25, 2015; and

• to use its commercially reasonable efforts, consistent with past practice, to keep available the services of its current officers, key employees and consultants, and preserve its current relationships with customers, suppliers and any other individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government or agency or subdivision thereof or any other entity, or person, with whom it has significant business relations as is reasonably necessary to preserve substantially intact its business organization.

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In addition, except as otherwise expressly permitted by the merger agreement or set forth in the disclosure schedule delivered by UIL to Iberdrola USA or by Iberdrola USA to UIL in connection with the merger agreement, or with prior written approval by Iberdrola USA or by UIL, as applicable (which approval cannot be unreasonably withheld, delayed or conditioned) each of Iberdrola USA and UIL has agreed, until the earlier to occur of the completion of the merger and the termination of the merger agreement, subject to certain exceptions and limitations, it will not (and will cause its respective subsidiaries not to) and will exercise (and will cause its subsidiaries to exercise) any available rights with respect to any of its respective joint ventures, not to, among other things:

• amend, with respect to any entity at any time (except, in respect of Iberdrola USA, to conform to a form agreed with UIL), in each case as amended, modified and supplemented at that time, (i) the articles of association or certificate of formation, incorporation, partnership or organization (or the equivalent organizational documents) of that entity, (ii) the bylaws, partnership agreement or limited liability company agreement or regulations (or the equivalent governing documents) of that entity, and (iii) each document setting forth the designation, amount and relative rights, limitations and preferences of any class or series of that entity’s equity securities or of any rights in respect of that entity’s equity securities, or, (i)-(iii) together, the charter documents;

• issue, sell, pledge, dispose of, grant, deliver, transfer, encumber, or agree, authorize, or commit to the issue, sale pledge, disposition of, grant, delivery, transfer, or encumbrance of, (in each case, whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), any equity securities;

• split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, directly or indirectly, any shares of its equity securities;

• declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any equity securities, or make any other actual, constructive or deemed distribution in respect of its equity securities, except, with respect to UIL, for cash dividends made by any direct or indirect wholly-owned subsidiary of UIL to UIL or one of its wholly-owned subsidiaries and regular quarterly dividends paid by UIL in the same amounts as the regular quarterly dividends paid in 2014 and with record dates and payment dates consistent with the record date and payment date for each quarterly period ended December 31, 2014, and except, with respect to Iberdrola USA, for cash dividends made by any direct or indirect wholly-owned subsidiary of Iberdrola USA to Iberdrola USA or one of its wholly-owned subsidiaries;

• propose or adopt a plan of complete or partial liquidation, dissolution, merge, consolidation, restructuring, recapitalization or other reorganization;

• enter into any agreement with respect to the voting of its capital stock;

• make any material change in any of the accounting principles, policies, procedures or practices used by it or any annual tax accounting period;

• other than in the ordinary course of business, make, revoke, change or rescind any material tax election, file or amend any income or other material tax return or claim for refund, or enter into any closing agreement affecting any material tax liability or refund or settle or compromise any material tax liability or refund;

• take, or omit to take, any action that would prevent or impede, or would reasonably be expected to prevent or impede, the merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

• fail to use its commercially reasonable efforts to maintain, in full force without interruption, its present insurance policies or comparable insurance coverage; or

• agree or commit to take any of the foregoing actions, or any of the actions set forth below in respect of UIL or Iberdrola USA, as applicable.

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Further, except as otherwise expressly permitted by the merger agreement or set forth in the disclosure schedule delivered by UIL to Iberdrola USA in connection with the merger agreement, UIL has agreed that until the earlier to occur of the completion of the merger and the termination of the merger agreement, subject to certain exceptions and limitations, that it will not (and will cause its subsidiaries and joint ventures not to) among other things:

• incur or assume any long-term or short-term debt for borrowed monies or issue any debt securities in excess of $50,000,000 in the aggregate; and any debt incurred below such amount must be voluntarily pre-payable without material premium, penalties or any other material costs, except for debt incurred in the ordinary course of business under letters of credit, lines of credit or other credit facilities or arrangements in effect on February 25, 2015, loans or advances between UIL and any of its direct or indirect subsidiaries, or between any of its direct or indirect subsidiaries and any refinancing of long-term or short-term debt of UIL or any of its subsidiaries existing as of February 25, 2015, provided that if such refinancing is completed prior to maturity, it must be on substantially similar terms or terms that are more favorable to UIL or such subsidiaries, for the same or lesser principal amount and prepayable by UIL or such subsidiaries without a premium or penalty amount greater than the premium or penalty associated with the debt that is being refinanced;

• assume, guarantee, endorse or otherwise become liable or responsible for the obligations of any other person in excess of $10,000,000 in the aggregate, except with respect to obligations of direct or indirect subsidiaries of UIL;

• make any loans, advances or capital contributions to or investments in any other person (other than UIL or any of its direct or indirect subsidiaries), except for business expense advances in the ordinary course of business consistent with past practice to employees of UIL or any of its subsidiaries;

• mortgage or pledge any of its or its subsidiaries’ assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than permitted liens);

• authorize or make capital expenditures which are, in the aggregate, greater than 125% of the aggregate amount of capital expenditures scheduled to be made in UIL’s capital expenditure budget for the period indicated as set forth in the UIL disclosure schedule for the items previously budgeted, except for capital expenditures to repair damage resulting from insured casualty events or make emergency repairs or investments required to maintain the safety and reliability of its assets or the continuity of its service in accordance with good utility practices or capital expenditures in response to weather conditions or other emergencies;

• increase in any respect the compensation, bonus or fringe benefits of any director, officer or employee of UIL or any of its subsidiaries, other than as required by any collective bargaining agreement or UIL employee benefit plan or applicable law, increases in salaries, wages and bonuses of any director, officer or employee made in the ordinary course of business consistent with past practice, and changes made in the ordinary course of business consistent with past practice to group employee benefit plans that do not discriminate in favor of executive level employees;

• enter into, adopt, renew or amend any UIL employee benefit plan (other than a renewal in accordance with the terms) providing for the payment to any director, officer or employee compensation or benefits contingent, or the terms of which are materially altered, upon or in connection with the merger;

• other than as required by law or any collective bargaining agreement or pursuant to any UIL Employee Benefit Plan in existence on the date hereof or entered into February 25, 2015 to the extent expressly permitted by the merger agreement, for the benefit of any current or former director, officer or employee of UIL or any of its subsidiaries, pay any benefit not provided for under any UIL employee benefit plan, except for payments and benefits provided to non-executive level employees in the ordinary course of business consistent with past practice, take any action to fund or in any other way secure the payment of compensation or benefits under any UIL employee benefit plan, exercise any

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discretion to accelerate the vesting or payment of any compensation or benefit under any UIL employee benefit plan (except in the ordinary course of business consistent with past practice with respect to non-executive level employees), enter into or adopt any new employee benefit plan or arrangement or amend, modify or terminate (except as may be required to avoid the imposition of any tax or penalty under Section 409A of the Code or by applicable tax qualification requirements) any existing UIL employee benefit plan, except in the ordinary course of business consistent with past practice with respect to employee benefit plans that either do not apply to executive level employees or that are broad based group benefit plans that do not discriminate in favor of executive level employees, enter into or amend collective bargaining agreements with existing collective bargaining representatives or newly certified bargaining units regarding mandatory subjects of bargaining under applicable law, in each case in a manner inconsistent with past practice to the extent permitted by law, grant the right to receive any severance, termination or retention pay, or increases therein, except for severance or termination pay that may be agreed to be provided in the ordinary course of business consistent with past practice to terminating employees who are not executive level employees in exchange for a release of claims or pay any benefit or grant, amend or modify any award, including in respect of stock options or other equity-related award;

• settle any pending or threatened legal proceeding if such settlement exceeds $2,500,000 individually or $15,000,000 in the aggregate, subject to certain exceptions;

• other than in the ordinary course of business consistent with past practice, acquire (by merger, consolidation or acquisition of stock or assets) any other person or any material equity interest therein or assets thereof in excess of $5,000,000 individually or $15,000,000 in the aggregate, or sell, transfer, lease, license or otherwise dispose of any of its properties or assets, which are material to UIL and its subsidiaries, taken as a whole;

• other than contracts implementing any requirement of law or the outcome of any regulatory proceeding, or as required by any governmental authority or in the ordinary course of business consistent with past practice, enter into, amend or modify in any material respect any material contract of UIL or its subsidiaries; or

• other than in the ordinary course of business consistent with past practice, enter into any contract for the lease or purchase of real property or modify the terms of any real property lease of UIL or any of its subsidiaries.

Moreover, except as otherwise expressly permitted by the merger agreement or set forth in the disclosure schedule delivered by Iberdrola USA to UIL in connection with the merger agreement, Iberdrola USA has agreed until the earlier to occur of the completion of the merger and the termination of the merger agreement, subject to certain exceptions and limitations, that it will not (and will cause its subsidiaries and joint ventures not to) among other things:

• incur or assume any long-term or short-term debt for borrowed monies or issue any debt securities in excess of $200,000,000 in the aggregate; and any debt incurred below such amount must be voluntarily pre-payable without material premium, penalties or any other material costs, except for debt incurred in the ordinary course of business under letters of credit, lines of credit or other credit facilities or arrangements in effect on February 25, 2015, loans or advances between Iberdrola USA and any of its direct or indirect subsidiaries, or between any of its direct or indirect subsidiaries and any refinancing of long-term or short-term debt of Iberdrola USA or any of its subsidiaries existing as of February 25, 2015, provided that if such refinancing is completed prior to maturity, it must be on substantially similar terms or terms that are more favorable to Iberdrola USA or such subsidiaries, for the same or lesser principal amount and prepayable by Iberdrola USA or such subsidiaries without a premium or penalty amount greater than the premium or penalty associated with the debt that is being refinanced;

• assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person in excess of $40,000,000 in the aggregate, except with respect to obligations of direct or indirect subsidiaries of Iberdrola USA;

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• authorize or make capital expenditures which are, in the aggregate, greater than 125% of the aggregate amount of capital expenditures scheduled to be made in Iberdrola USA’s capital expenditure budget for the period indicated as set forth in the Iberdrola USA disclosure schedule for the items previously budgeted, except for capital expenditures to repair damage resulting from insured casualty events or make emergency repairs or investments required to maintain the safety and reliability of its assets or the continuity of its service in accordance with good utility practices or capital expenditures in response to weather conditions or other emergencies;

• settle any pending or threatened legal proceeding in excess of $10,000,000 individually or $60,000,000 in the aggregate, subject to certain exceptions;

• other than in the ordinary course of business consistent with past practice, acquire (by merger, consolidation or acquisition of stock or assets) any other person or any material equity interest therein or assets thereof in excess of $20,000,000 individually or $60,000,000 in the aggregate, or sell, transfer, lease, license or otherwise dispose of any of its properties or assets, which are material to Iberdrola USA and its subsidiaries, taken as a whole;

• other than as required by any governmental authority or in the ordinary course of business consistent with past practice, enter into, amend or modify in any material respect any material contract of Iberdrola USA or its subsidiaries;

• other than in the ordinary course of business consistent with past practice, enter into any contract for the lease or purchase of real property or modify the terms of any lease or sublease for material leased real property of Iberdrola USA or any of its subsidiaries; or

• enter into, amend, extend, renew or modify any contract or transaction to which Iberdrola USA and its subsidiaries and joint ventures, on the one hand, and Iberdrola, S.A. and its subsidiaries and joint ventures (other than Iberdrola USA or any of its subsidiaries or joint ventures), on the other hand, are parties, on other than an arm’s length basis.

However, nothing in the merger agreement is intended to give UIL, directly or indirectly, the right to control or direct the business or operations of Iberdrola USA or any of its subsidiaries or joint ventures at any time prior to the effective time. Similarly, nothing in the merger agreement is intended to give Iberdrola USA or merger sub, directly or indirectly, the right to control or direct the business or operations of UIL or any of its subsidiaries or joint ventures at any time prior to the effective time. Prior to the closing of the merger, Iberdrola USA and its subsidiaries and joint ventures and UIL and its subsidiaries and joint ventures will exercise, consistent with the terms and conditions of the merger agreement, complete control and supervision over their respective businesses and operations.

Acquisition Proposals and Superior Proposals

The merger agreement defines an “acquisition proposal” as any bona fide proposal or offer from any person relating to any:

• direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of assets or businesses of UIL or its subsidiaries that, in the aggregate, constitute or generate 15% or more of the consolidated net revenue or earnings before interest, taxes, depreciation and amortization (on an estimated current replacement cost basis) for the preceding 12 months of UIL and its subsidiaries, taken as a whole;

• direct or indirect acquisition or purchase of beneficial ownership of 15% or more of any class of equity securities (by vote or value) of UIL or any of its significant subsidiaries;

• tender offer or exchange offer that if consummated would result in any person beneficially owning, directly or indirectly, 15% or more of any class of equity securities (by vote or value) of UIL or any of its significant subsidiaries;

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• merger, consolidation, business combination, asset purchase, recapitalization, liquidation, dissolution, binding share exchange or similar transaction involving UIL or any of its significant subsidiaries pursuant to which any person (or the stockholders of any person) would own, directly or indirectly, 15% or more of the total voting power of the equity securities of UIL or any of its significant subsidiaries or the surviving entity in a merger with UIL or any of its significant subsidiaries or the resulting direct or indirect parent of UIL or such surviving entity; or

• any combination of the above transactions.

The merger agreement defines a “superior proposal” as a bona fide written acquisition proposal that the UIL board or committee thereof determines in good faith, after consultation with financial advisors and its outside legal counsel, would result in a transaction more favorable to UIL’s shareowners from a financial point of view than the merger and the other transactions, taking into account,

• in respect of the acquisition proposal:

• all relevant legal, financial, conditionality (including whether such acquisition proposal is subject to a financing condition), regulatory and other aspects of such acquisition proposal and the merger and the other transactions contemplated by the merger agreement deemed in good faith to be relevant by the UIL board to the consummation of such acquisition proposal,

• the identity of the acquisition proposal offeror(s), and

• the likelihood of completion of such acquisition proposal); and

• in respect of the merger and the transactions with Iberdrola USA, all of the terms of any proposal by Iberdrola USA to amend or modify the merger and the other transactions contemplated by the merger agreement in response to such proposal);

except that the references to “15%” in the definition of “acquisition proposal” will each be deemed to be a reference to “50%.”

No Solicitation by UIL

Subject to certain exceptions described below, UIL has agreed that it will, and will cause each of its subsidiaries, and will use its reasonable best efforts to cause its and their respective representatives to:

• immediately cease and cause to be terminated all existing discussions or negotiations with any person with respect to, or that could reasonably be expected to lead to, any acquisition proposal;

• not solicit, initiate, knowingly facilitate or knowingly encourage any inquiries, offers or the making of any proposal that could reasonably be expected to lead to, any acquisition proposal;

• not engage in or otherwise participate in any negotiations or discussions regarding, or that could reasonably be expected to lead to, any acquisition proposal;

• not furnish any nonpublic information regarding UIL or any of its subsidiaries to any person (other than Iberdrola USA or merger sub) in connection with or in response to any acquisition proposal; and

• not approve, endorse or recommend any acquisition proposal except in connection with an adverse recommendation change (as defined below).

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However, before UIL obtains the UIL shareowner approval, UIL is not prohibited from:

• furnishing nonpublic information regarding UIL or its subsidiaries to, or entering into or participating in discussions or negotiations with, any person in response to an unsolicited, written acquisition proposal that the UIL board concludes in good faith, after consultation with its financial advisors and outside counsel, constitutes, or could reasonably be expected to result in, an acquisition proposal if:

• the UIL Board concludes in good faith, after consultation with its financial advisors and outside legal counsel, that the acquisition proposal is or could reasonably be expected to lead to a superior proposal and that the failure to take such action could reasonably be expected to result in a breach of its fiduciary duties;

• UIL furnishes any nonpublic information provided to the maker of such acquisition proposal only pursuant and subject to a confidentiality agreement that contains terms that are, in the aggregate, no less favorable to UIL than the confidentiality agreement entered into by UIL and Iberdrola, S.A. in connection with the transactions (it being understood that any such confidentiality agreement need not contain any standstill provisions so long as, concurrently with entering into such confidentiality agreement, UIL agrees to amend the standstill provisions in the confidentiality agreement between UIL and Iberdrola USA to be no more restrictive to Iberdrola USA than those contained in the new confidentiality agreement); and

• UIL promptly (and, in any event, within 48 hours) makes available to Iberdrola USA any non-public information concerning UIL or its subsidiaries that UIL made available to such person to the extent such information was not previously provided to Iberdrola USA; or

• failing to enforce, or granting any waiver or release under, any standstill or similar agreement with any person to the extent the UIL board concludes in good faith, after consultation with its financial advisors and outside legal counsel, that taking such action could reasonably be expected to result in a possible superior proposal and that failing to take such action could reasonably be expected to result in a breach of its fiduciary duties and to the extent this action is necessary to allow such person to make a confidential proposal to the UIL board.

If UIL receives an acquisition proposal or any request for nonpublic information relating to UIL or its subsidiaries in connection with an acquisition proposal, UIL must notify Iberdrola USA orally and in writing within 24 hours of receipt of the proposal or request for information, including the identity of the person making the request or acquisition proposal. If the acquisition proposal is made in writing, UIL must include a copy of the acquisition proposal and related draft agreements or other documentation or materials delivered to UIL. If the acquisition proposal is made orally, UIL must include a reasonably detailed summary that includes all material terms of the acquisition proposal. UIL must keep Iberdrola USA informed on a reasonably prompt basis of any change to the material terms of an acquisition proposal (and in no event later than 24 hours after any such change).

Adverse Recommendation Change

Except as provided in the two succeeding paragraphs below, neither the UIL board nor any committee of the UIL board may:

• withhold, withdraw, change, qualify or modify in a manner adverse to Iberdrola USA, or publicly propose to withhold, withdraw, change, qualify or modify in a manner adverse to Iberdrola USA, the UIL board recommendation;

• recommend, adopt or approve, or propose publicly to recommend, adopt or approve any acquisition proposal;

• fail to include the UIL board recommendation in this proxy statement/prospectus;

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• resolve, publicly propose or agree to do any of the above actions, each of which constitutes an adverse recommendation change; or

• recommend, adopt or approve, or publicly propose to recommend, adopt or approve, or allow UIL or any of its subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or related to, or that is intended to (or would reasonably be expected to) lead to, any acquisition proposal or that would require UIL to abandon, terminate or fail to consummate the transactions, or resolve, agree or propose to do any of the actions in this sub-paragraph.

Notwithstanding anything to the contrary in the merger agreement, at any time prior to obtaining the UIL shareowner approval, an adverse recommendation change can be effected if either of the following sets of conditions has been met.

• If an acquisition proposal has been made to UIL, the UIL board or any committee of the UIL board may effect an adverse recommendation change if:

• the UIL board or an applicable committee of the UIL board determines in good faith, after consultation with its financial advisors and outside legal counsel, that the offer constitutes a superior proposal and that failure to take action could reasonably be expected to result in a breach of its fiduciary duties;

• UIL provides Iberdrola USA five business days’ prior written notice of its intention to take such action and the rationale for taking such action (and each time any material revision or amendment to the terms of the acquisition proposal determined to be a superior proposal is made, the five business day period will be extended for additional three business days (for the first extension) or two business days (for each subsequent extension) after notification of such change to Iberdrola USA); and

• at the end of the applicable periods described above, the UIL board again makes the good faith determination, after consultation with its outside legal counsel and financial advisors (and after taking into account any adjustments or modifications proposed by Iberdrola USA during this period), that the acquisition proposal continues to be a superior proposal, or

• If no acquisition proposal has been made to UIL, but there has been a change first occurring or becoming known to the UIL board after February 25, 2015 that materially affects or could reasonably be expected to materially affect the business, assets, liabilities, condition (financial or otherwise) or results of operations of UIL and its subsidiaries, taken as a whole, or Iberdrola USA and its subsidiaries, taken as a whole or the shareowners of UIL (including the benefits of the merger to UIL or the shareowners of UIL), and the change is material, individually or in the aggregate with any other such changes first occurring or becoming known to the UIL board after February 25, 2015 and does not involve or relate to an acquisition proposal, then the UIL board may effect an adverse recommendation change if:

• UIL provides Iberdrola USA five business days’ prior written notice of its intention to take such action and the rationale for taking such action; and

• at the end of the five business day period described above, the UIL board determines in good faith, after consultation with its financial advisors and outside legal counsel (after taking into account any adjustments or modifications to the terms of the merger agreement proposed by Iberdrola USA during the period described above), that the failure to take such action could reasonably be expected to result in a breach of its fiduciary duties under applicable laws.

In either case, UIL agrees that during the periods described above, UIL will negotiate in good faith with Iberdrola USA and its representatives, if requested by Iberdrola USA, regarding any adjustments or modifications to the terms of the merger agreement.

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No Solicitation by Iberdrola USA

Iberdrola USA has agreed that it will, and will use its reasonable best efforts to cause its affiliates and its and their respective representatives to:

• immediately cease and cause to be terminated all existing discussions or negotiations with any person with respect to, or that could reasonably be expected to lead to, an Iberdrola USA business combination (as defined below);

• not solicit, initiate, endorse, knowingly facilitate or knowingly encourage any Iberdrola USA business combination or any inquiries, offers or the making of any proposal that could reasonably be expected to lead to, any Iberdrola USA business combination;

• enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or related to, or that is intended to effect, any Iberdrola USA business combination or that would reasonably be expected to cause Iberdrola USA to abandon, terminate or fail to consummate the merger;

• enter into, initiate, continue, engage in or otherwise participate in any way in any discussions or negotiations regarding, or that could reasonably be expected to lead to, any Iberdrola USA business combination; or

• agree or propose to do any of the above things.

The merger agreement defines an “Iberdrola USA business combination” as:

• any acquisition or purchase, in a single transaction or a series of transactions of all or any material part of the Iberdrola USA parties (regardless of whether such acquisition or purchase is by means of a sale of assets or a sale of equity securities of one or more of the Iberdrola USA parties or their subsidiaries); or

• any acquisition, purchase or corporate reorganization by the Iberdrola USA parties or their affiliates that could reasonably be expected to prevent, materially delay or materially impair the consummation of the merger.

UIL Shareowner Meeting

Subject to the satisfaction of certain conditions, and in accordance with the federal securities laws, the CBCA and UIL’s charter documents, UIL has agreed to take all action necessary to establish a record date for, duly call, give notice of, convene and hold a meeting of UIL shareowners, or the UIL shareowner meeting, as soon as reasonably practical for purposes of seeking the approval of the UIL shareowners for the merger and other related matters and to solicit proxies in connection with this proxy statement/prospectus. UIL may adjourn or postpone, and at the request of Iberdrola USA will adjourn or postpone, the UIL shareowner meeting (i) to the extent necessary to ensure that any supplement or amendment to this proxy statement/prospectus that UIL determines in good faith is required by applicable law to be filed and mailed to UIL shareowners is so filed or mailed, or (ii) if there are insufficient shares of UIL common stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the UIL shareowner meeting, but any adjournment or postponement at the request of Iberdrola USA cannot be for more than 15 days in the aggregate.

Reasonable Best Efforts to Obtain Required Approvals; Regulatory Matters

Iberdrola USA and UIL agree to cooperate and promptly prepare and file all necessary documentation to effect all necessary applications, notices, petitions and filings, and will use reasonable best efforts to take or cause to be taken all actions and do or cause to be done all things in order to:

• obtain all approvals and authorizations of all governmental authorities necessary or advisable to consummate and make effective the merger and the other transactions contemplated by the merger

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agreement in the most expeditious manner reasonably practicable, including with respect to certain statutory approvals required by UIL as identified in the merger agreement, or the UIL required statutory approvals, and certain statutory approvals required by Iberdrola USA as identified in the merger agreement, or the Iberdrola USA required statutory approvals;

• make all registrations and filings, and thereafter, make any other required registrations, filings or submissions, and pay any fees due in connection with the registrations, filings or submissions, with any governmental authority necessary in connection with the consummation of the transactions contemplated by the merger agreement;

• defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging the merger agreement or the completion of the transactions contemplated by the merger agreement;

• seek to have lifted or rescinded any injunction or restraining order which may adversely affect the ability of the parties to complete the transactions contemplated by the merger agreement, in each case until the issuance of a final, non-appealable order with respect thereto; and

• execute and deliver any additional agreements or instruments reasonably necessary to complete the transactions contemplated by the merger agreement.

Each of Iberdrola USA and UIL agree to use its reasonable best efforts to take (and to cause its subsidiaries and affiliates to take) any and all steps reasonably necessary, proper or advisable to obtain all approvals and authorizations of all governmental authorities necessary or advisable to complete the merger and other transactions contemplated by the merger agreement, including:

• obtaining the Iberdrola USA required statutory approvals and the UIL required statutory approvals so as to enable the parties to close the transactions as promptly as reasonably practicable, including, if necessary, by proposing, negotiating, committing to and implementing, by way of operational restriction, consent decree, hold separate order, divestiture, undertaking or otherwise, all terms, conditions, liabilities, obligations, commitments, sanctions or undertakings in respect of UIL, Iberdrola USA and their respective affiliates; except that neither UIL nor any of its subsidiaries will agree to, or accept, any additional or different undertakings, agreements, commitments or conditions in connection with the transactions pursuant to any settlement, negotiation, litigated proceeding or otherwise with any person with respect to obtaining the UIL required statutory approvals and/or the Iberdrola USA required statutory approvals or any other approvals or authorizations without the prior written consent of Iberdrola USA; and

• filing as promptly as practicable a joint voluntary notice in respect of the transactions contemplated in the merger agreement under Exon-Florio.

Iberdrola USA and UIL will not be required, in connection with obtaining any UIL required statutory approvals or Iberdrola USA required statutory approvals, to agree or consent to or accept any terms, conditions, liabilities, obligations, commitments, sanctions or undertakings as a condition to obtaining the UIL required statutory approvals and the Iberdrola USA required statutory approvals that, individually or in the aggregate, and taking into account any positive effects, would have, or be reasonably likely to have, a material and adverse effect on the business, assets, liabilities, properties, condition (financial or otherwise) or results of operations of a business that is 150% the size of, but otherwise identical to, UIL and its subsidiaries, taken as a whole, or a burdensome effect. Neither Iberdrola USA nor UIL nor any of their respective subsidiaries is required to take any action or agree to any commitment that is not conditioned on the closing. None of Iberdrola USA, merger sub or UIL, directly or indirectly through one or more of its respective affiliates, will take any action, including acquiring or making any investment in any person or any division or assets thereof, that would reasonably be expected to prevent, materially impair or materially delay the ability of the parties to consummate the merger and the other transactions.

Neither Iberdrola USA nor UIL will participate in or attend any meeting or engage in any substantive discussion with any governmental authority in respect to the merger agreement, the merger or other transaction

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contemplated by the merger agreement without providing prior notice of any such meeting or discussion to the other, unless prohibited by applicable law or by applicable governmental authority. In the event a party is prohibited by applicable law or by applicable governmental authority from participating in or attending any such meeting or engaging in any discussion, the other party will keep such party reasonably and promptly apprised. The parties will cooperate in the filing of any substantive memoranda, white papers, filings, correspondence or other written communications explaining or defending the merger agreement, the merger or the other transactions contemplated by the merger agreement, articulating any regulatory or competitive argument or responding to requests or objections made by any governmental authority and to the extent reasonably practicable, each party will provide the other party copies of all correspondence, filings and communications between it and its subsidiaries and affiliates and their respective representatives, and any governmental authority with respect to the merger agreement, the merger or the other transactions contemplated by the merger agreement.

Indemnification and Insurance of Directors and Officers

Iberdrola USA and the surviving corporation have agreed that from the effective time, all rights to indemnification and exculpation existing in favor of any current or former director or officer, or individuals performing equivalent functions, of UIL or any of its subsidiaries with respect to any of their activities prior to the closing date, as provided in UIL’s charter documents in effect on February 25, 2015 and under Connecticut law, will survive the closing. Each of the combined company and the surviving corporation agrees that it will indemnify and hold harmless each present and former director and officer of UIL or any of its subsidiaries, determined as of the effective time, against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the effective time, whether asserted or claimed prior to, at or after the effective time, to the fullest extent that UIL would have been permitted under the laws of the State of Connecticut and UIL’s charter documents in effect on February 25, 2015 to indemnify such person. The combined company or the surviving corporation will also advance expenses as incurred to the fullest extent permitted under applicable law, but the person to whom expenses are advanced must provide an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification. Independent counsel selected by the surviving corporation will make any determination required to be made with respect to whether an officer’s or director’s conduct complies with the standards set forth under the laws of the State of Connecticut and UIL’s charter documents.

Additionally, prior to the effective time, UIL will, and if UIL is unable to, Iberdrola USA has agreed to cause the surviving corporation at the effective time to, obtain and fully pay for “tail” insurance policies with a claims period of at least six years from the effective time with respect to directors’ and officers’ liability insurance and fiduciary liability insurance. The benefits and levels of coverage of such policy must be at least as favorable as UIL’s policies existing on February 25, 2015 with respect to matters existing at or prior to the effective time. However, neither the combined company nor the surviving corporation will be required to pay annual premiums in excess of 250% of the annual premiums currently paid by UIL for such insurance.

If UIL and the surviving corporation fail to obtain these “tail” insurance policies as of the effective time, the surviving corporation will, and the combined company has agreed to cause the surviving corporation to, maintain in effect for a period of not less than six years from the effective time the directors’ and officers’ liability insurance and fiduciary liability insurance in place as of February 25, 2015 or use reasonable best efforts to purchase comparable directors’ and officers’ liability insurance and fiduciary liability insurance for the six-year period. Such insurance will have benefits and levels of coverage at least as favorable as provided in UIL’s policies existing as of February 25, 2015. However, neither the combined company nor the surviving corporation will be required to pay annual premiums in excess of 250% of the annual premiums currently paid by UIL for such insurance. If the annual premiums for insurance with at least as favorable coverage as UIL’s existing policies exceed 250% of UIL’s current premiums, then the surviving corporation will obtain a policy with the greatest coverage available for a cost not exceeding such amount.

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Each of Iberdrola USA and the surviving corporation has agreed that if it participates in a transaction or merger where it will not be the surviving corporation or if it transfers all or substantially all of its assets to another person, their obligations with respect to directors’ and officers’ liability insurance and fiduciary liability insurance will be assumed by the successors and assigns of the combined company or the surviving corporation.

Exchange Listing

Iberdrola USA will prepare and submit a listing application to the NYSE for the common stock of the combined company to be issued pursuant to the merger agreement. Iberdrola USA and UIL will furnish each other with all relevant information that may be reasonably required in connection with the preparation of the listing application. Iberdrola USA will use its reasonable best efforts to cause the common stock of the combined company that is to be issued pursuant to the merger agreement, to be approved for listing on the NYSE prior to the effective time.

Employee Matters

Iberdrola USA has agreed that each employee of UIL or its subsidiaries at the effective time will be, as of the effective time, an employee of the combined company or its subsidiaries. The merger agreement provides that the employees of UIL or its subsidiaries who remain employed with the combined company or its subsidiaries will be provided, for one year following the effective time (and for so long as such employee remains employed with the combined company or its subsidiaries), with (i) a base salary or base wage that is no less favorable than the base salary or base wage provided by UIL and its subsidiaries to each such continuing employee immediately prior to the effective time, (ii) target annual cash bonus and long-term incentive opportunities (which do not need to be in the form of equity or equity-based grants) that are no less favorable in the aggregate than the target annual cash bonus and long-term incentive opportunities provided by UIL and its subsidiaries to each such continuing employees immediately prior to the effective time, (iii) defined contribution retirement, pension and vacation and other welfare benefits that are no less favorable in the aggregate than those provided by UIL and its subsidiaries to such continuing employees immediately prior to the effective time and (iv) severance benefits that are no less favorable than the severance benefits provided by UIL and its subsidiaries to such continuing employees immediately prior to the effective time; provided, however, that these requirements will not apply to continuing employees who are covered by a collective bargaining agreement.

Additionally, Iberdrola USA will waive, or cause the surviving corporation to waive, any pre-existing conditions or limitations and eligibility waiting periods under any group health plans of Iberdrola USA or its affiliates. Iberdrola USA will give each continuing employee credit, for the plan year in which the effective time occurs, towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the effective time for which payment has been made and will give such continuing employees service credit for such continuing employee’s employment with UIL and its subsidiaries, for the purposes of vesting, benefit accrual and eligibility to participate under each combined company benefit plan that corresponds to or replaces the UIL employee benefit plan in which such continuing employee participated in prior to the effective time, except for benefit accrual under defined benefit pension plans, for purposes of qualifying for subsidized early retirement benefits or to the extent it would result in a duplication of benefits. Lastly, Iberdrola USA will, or will cause the surviving corporation or another of Iberdrola USA’s affiliates to, honor all employee benefit obligations to current and former employees under the UIL employee benefit plans.

Certain Other Covenants

The merger agreement contains certain other covenants and agreements, including, among others, those relating to:

• obligations of each of Iberdrola USA and UIL to promptly notify the other party if it becomes aware of any event, fact or circumstance that would make the satisfaction of the conditions to closing impossible or unlikely;

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• obligations of each of Iberdrola USA and UIL to provide access to the books and records and personnel of each party to the other party and the obligation of UIL to provide Iberdrola USA with access to its properties, subject to certain restrictions;

• restrictions and obligations on making public announcements regarding the merger;

• obligation of UIL to notify Iberdrola USA of any shareowner litigation related to the merger agreement, the merger or the other transactions contemplated by the merger agreement that is brought or threatened against UIL and/or the members of the UIL board, give Iberdrola USA the opportunity to participate in the defense or settlement of any such shareowner litigation, and not settle any shareowner litigation without Iberdrola USA’s prior written consent, which will not be unreasonably withheld, conditioned or delayed, subject to certain exceptions;

• obligations of each of Iberdrola USA and UIL to use reasonable best efforts to take all actions and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under applicable law to carry out the intent and purposes of the merger agreement;

• obligations of Iberdrola USA, prior to the closing, to issue additional shares of combined company common stock to Iberdrola, S.A., such that immediately after the closing, after giving effect to the merger and the other transactions contemplated by the merger agreement, Iberdrola, S.A. will own an aggregate number of shares of the combined company common stock equal to 81.5% of all issued and outstanding shares of the combined company common stock;

• obligations of Iberdrola USA to amend its charter documents prior to the closing to conform with the form of such documents attached as exhibits to the merger agreement;

• obligations of Iberdrola USA regarding entering into a shared services agreement with Iberdrola, S.A. or its affiliates regarding the provision of various corporate and other shared services to the combined company and its subsidiaries on an arm’s length basis and on financial and other material terms no less favorable to the combined company than the terms related to the provision of shared services existing as of February 25, 2015 and at costs no greater than those incurred and reflected in the Iberdrola USA financial statements provided in conjunction with the merger agreement (and attached to Iberdrola USA’s disclosure schedule), except that such costs are subject to ordinary course, market adjustments to be made on arm’s length basis. Iberdrola USA will not enter into a new shared services agreement before obtaining the approval of a committee comprised solely of its independent directors for such shared services agreement and of Iberdrola USA and such committee shall consult with UIL regarding the scope, nature and terms of the services to be provided under such shared services agreement;

• obligations of Iberdrola USA and UIL to negotiate in good faith in respect of and of Iberdrola USA to enter into a shareholder agreement with Iberdrola, S.A. containing certain terms set forth in the shareholder agreement term sheet attached as an exhibit to the merger agreement, or the shareholder agreement term sheet, and other terms agreed to by UIL, Iberdrola USA and Iberdrola, S.A. that are not inconsistent with the shareholder agreement term sheet;

• obligations of Iberdrola USA regarding the governance of the combined company and the continuation of charitable support currently provided by UIL to the service areas of UIL and its subsidiaries; and

• obligations of the UIL board and the Iberdrola USA board, prior to the effective time, to adopt resolutions consistent with the interpretative guidelines of the SEC pursuant to Rule 16b-3(d) and Rule 16b-3(e) under the Exchange Act to exempt for the purposes of Section 16 of the Exchange Act the conversion of UIL common stock into the combined company common stock, the conversion of UIL stock awards and the acquisition of the combined company common stock pursuant to the terms of the merger agreement by officers and directors of UIL subject to the reporting requirements of Section 16(a) of the Exchange Act or by employees of UIL who may become an officer or director of the combined company subject to the reporting requirements of Section 16(a) of the Exchange Act.

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Conditions to Completing the Merger

Conditions to Each Party’s Obligation to Effect the Merger

Each party’s obligation to complete the merger is subject to the satisfaction or waiver by Iberdrola USA and UIL of the following conditions:

• the UIL shareowner approval will have been obtained;

• no temporary restraining order or preliminary or permanent injunction or other order by any governmental authority of competent jurisdiction preventing completion of the merger, or applicable law prohibiting, materially restraining or making illegal the completion of the merger will be in effect;

• Iberdrola USA and UIL will have obtained the following statutory approvals identified in the merger agreement at or prior to the effective time, and such approvals will have become final orders;

• expiration or termination of the waiting period under the HSR Act;

• authorization by the PURA;

• authorization by the DPU;

• authorization by FERC;

• authorization from the FCC for transfers of certain radio licenses;

• CFIUS will have concluded their review and the President of the United States of America will not have taken action to block or prevent the completion of the transactions and no requirements or conditions to mitigate any national security concerns will have been imposed; and

• the registration statement on Form S-4 filed with the SEC by Iberdrola USA in connection with the offer of the Iberdrola USA common stock to be delivered as consideration pursuant to the merger will have become effective under the Securities Act, and no stop order will be in effect, and the combined company common stock will have been authorized for listing on the NYSE, subject to official notice of issuance.

Conditions to Obligations of Iberdrola USA and Merger Sub

The obligation of Iberdrola USA and merger sub to effect the merger is also subject to satisfaction or waiver of the following conditions:

• the representations and warranties of UIL set forth in the merger agreement, subject to certain exceptions, will be true and correct as of February 25, 2015 and as of the closing as though made on and as of the closing, except for such failures to be true and correct that do not have, individually or in the aggregate, a UIL material adverse effect;

• the representations and warranties of UIL concerning organization and qualification, certain provisions relating to UIL capital stock and UIL authority to enter into the merger agreement, subject to certain exceptions, will be true and correct in all respects (except de minimis errors) as of February 25, 2015 and as of the closing;

• UIL will have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing;

• a UIL material adverse effect will not have occurred after February 25, 2015;

• Iberdrola USA will have received a certificate signed by an executive officer of UIL, dated the closing date, certifying that the foregoing conditions have been satisfied;

• the final orders granting certain of the UIL required statutory approvals and certain of the Iberdrola USA required statutory approvals identified in the merger agreement will not impose terms or conditions that, individually or in the aggregate, could reasonably be expected to have a burdensome effect; and

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• Iberdrola USA will have received a tax opinion from Latham & Watkins, dated the closing date, to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, Latham & Watkins will be entitled to receive and rely upon customary certificates and representations of officers of Iberdrola USA, merger sub and UIL.

Conditions to Obligations of UIL

The obligation of UIL to effect the merger is also subject to satisfaction or waiver by UIL of the following conditions:

• each of the representations and warranties of Iberdrola USA set forth in the merger agreement, subject to certain exceptions, will be true and correct as of February 25, 2015 and as of the closing as though made on and as of the closing, except for such failures to be true and correct that do not have, individually or in the aggregate, an Iberdrola USA material adverse effect;

• the representations and warranties of Iberdrola USA concerning organization and qualification, Iberdrola USA capital stock and the authority of Iberdrola USA to enter into the merger agreement, subject to certain exceptions, will be true and correct in all respects (except de minimis errors) as of February 25, 2015 and as of the closing;

• Iberdrola USA and merger sub will have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing;

• an Iberdrola USA material adverse effect will not have occurred after February 25, 2015;

• UIL will have received a certificate signed by an executive officer of Iberdrola USA, dated the closing date, certifying that the foregoing conditions have occurred;

• the final orders granting certain of the UIL required statutory approvals and certain of the Iberdrola USA required statutory approvals identified in the merger agreement will not impose terms or conditions that, individually or in the aggregate, could reasonably be expected to have a burdensome effect; and

• UIL will have received an opinion of Sullivan & Cromwell, dated the closing date to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, Sullivan & Cromwell will be entitled to receive and rely upon customary certificates and representations of officers of Iberdrola USA, merger sub and UIL.

Each of Iberdrola USA, merger sub and UIL may, to the extent permitted by applicable law, waive the conditions to the performance of its respective obligations under the merger agreement and complete the merger even though one or more of these conditions have not been met.

Termination

The merger agreement may be terminated prior to the effective time by mutual written agreement of Iberdrola USA and UIL. The merger agreement may also be terminated prior to the effective time in the following manner.

By either Iberdrola USA or UIL:

• in the event that any governmental authority has denied either any Iberdrola USA required statutory approval or UIL required statutory approval and such denial is final and nonappealable or if any law or final order that permanently restrains, enjoins or otherwise prohibits the completion of the merger is no longer subject to rehearings or appeals, and the party seeking to terminate the merger agreement due to the foregoing reasons has used its reasonable best efforts to contest, appeal and change such denial or to contest, appeal and remove such law or final order;

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• in the event that the merger has not been completed by the outside date, if the failure to complete the merger on or before the outside date is not caused by any breach of the merger agreement by the party electing to terminate the merger agreement (the outside date may be extended at the election of either UIL or Iberdrola USA by up to two successive three month periods if the conditions to closing relating to required statutory approvals identified in the merger agreement and CFIUS review have not been satisfied and all other conditions to the closing have been satisfied or are capable of being satisfied at the closing), and the party seeking to terminate the merger agreement due to the foregoing reason it is not then in breach in any material respect of any of its material covenants or agreements contained in the merger agreement; or

• if the UIL shareowner approval is not obtained at the UIL shareowner meeting where such matter was presented to the UIL shareowners for approval and properly voted upon.

Unilaterally by Iberdrola USA:

• in the event that the UIL board has failed to make the UIL board recommendation, to include the UIL board recommendation in this proxy statement/prospectus or to publicly reaffirm the UIL board recommendation within five business days of receipt of a written request from Iberdrola USA during the period following the receipt by UIL of a bona fide acquisition proposal that has not been withdrawn and prior to the date on which the UIL shareowner approval is received (Iberdrola USA will be entitled to make a written request for reaffirmation only once with respect to each acquisition proposal or material amendment thereto) or the UIL board has effected an adverse recommendation change, whether or not permitted by the terms of the merger agreement; or

• in the event that UIL breaches any of the covenants or agreements or any of its representations or warranties in the merger agreement, which, individually or in the aggregate, results in, if occurring or continuing on the closing date, the failure of any condition required to be satisfied for Iberdrola USA and merger sub to effect the merger, and such breach is not cured within 45 days following written notice to UIL or by its nature or timing cannot be cured within the 45-day period (but Iberdrola USA can only terminate due to the foregoing reason if neither Iberdrola USA nor merger sub is then in breach in any material respect of any of their material covenants or agreements).

Unilaterally by UIL:

• if UIL effects an adverse recommendation change to accept an acquisition proposal prior to obtaining the UIL shareowner approval (provided that UIL pays the termination fee (as described below)); or

• in the event that Iberdrola USA or merger sub breaches any of the covenants or agreements or any of its representations or warranties in the merger agreement, which, individually or in the aggregate, results in, if occurring or continuing on the closing date, the failure of any condition required to be satisfied for UIL to effect the merger, and such breach is not cured within 45 days following written notice to Iberdrola USA or by its nature or timing cannot be cured within the 45-day period (but UIL can only terminate due to the foregoing reason if it is not then in breach in any material respect of any of its material covenants or agreements).

The party who intends to terminate the merger agreement must provide the other party with written notice, specifying the provision or provisions of the merger agreement pursuant to which the termination is effected.

Effect of Termination

If the merger agreement is terminated as described above, the merger agreement will become null and void and no party will have any liability under the merger agreement, except that:

• no such termination will relieve the breaching party from liability resulting from any knowing and intentional breach by such party of the merger agreement; and

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• designated provisions of the merger agreement will survive the termination, including (i) provisions regarding payment of the termination fee and the reimbursement of fees and expenses incurred in connection with the merger agreement and the transactions, (ii) provisions describing the effects of termination and (iii) general provisions such as governing law, entire agreement, waivers and consents and notices.

Fees and Expenses

Termination Fees

If Iberdrola USA terminates the merger agreement because the UIL board (i) fails to make a UIL board recommendation, (ii) fails to include the UIL board recommendation in this proxy statement/prospectus, (iii) fails to publicly affirm the UIL board recommendation within five business days of receipt of a written request from Iberdrola USA during the period following receipt by UIL of a bona fide acquisition proposal prior to the date UIL shareowner approval is received or (iv) has effected an adverse recommendation change, or if UIL terminates the merger agreement because the UIL board has effected an adverse recommendation change to accept an acquisition proposal, then UIL must pay to Iberdrola USA the termination fee, in same-day funds, promptly upon delivery of the written notice of termination (and in any event within one business day of termination).

If either Iberdrola USA or UIL terminates the merger agreement because any governmental authority denies any UIL required statutory approval or Iberdrola USA required statutory approval, any law or order permanently restrains, enjoins or otherwise prohibits consummation of the merger or the parties fail to consummate the merger by the outside date and the failure to consummate the merger on or before the outside date is not caused by any breach of the merger agreement by the party electing to terminate the merger agreement (and in each of the foregoing cases, only if the registration statement on Form S-4 filed by Iberdrola USA was declared effective and remained effective for a sufficient period of time for UIL to hold the UIL shareowner meeting and the UIL shareowner approval has not been obtained), or if the UIL shareowner approval is not obtained at the UIL shareowner meeting, or if Iberdrola USA terminates the merger agreement because UIL breached any of its covenants or agreements or representations or warranties which breach, either individually or in the aggregate, would result in the failure of the Iberdrola USA conditions to closing, and, in any case, before the termination, there has been an acquisition proposal which was not publicly withdrawn at least ten business days before the date of the UIL shareowner meeting, and within 12 months of the termination UIL consummates, or enters into a definitive agreement to effect a transaction pursuant to an acquisition proposal, then UIL will pay to Iberdrola USA the termination fee. Notwithstanding the foregoing, any reimbursable expenses previously paid by UIL to Iberdrola USA will be credited and offset against UIL’s payment of the termination fee. As used in this paragraph, the definition of acquisition proposal is modified by substituting “50%” for “15%” and substituting “UIL” for “UIL and its significant subsidiaries” when referring to the equity securities or voting power of equity securities of UIL and its significant subsidiaries.

Expenses

Except as provided otherwise in the provisions of the merger agreement related to termination fees and expenses, all fees and expenses incurred in connection with the merger agreement and the transactions will be paid by the party incurring such fees or expenses, whether or not the merger is completed.

If the merger agreement is terminated by Iberdrola USA as a result of UIL’s breach of any of its covenants, agreements, representations or warranties in the merger agreement or by either party in the event that the UIL shareowner approval is not obtained at the UIL shareowner meeting, then UIL will promptly, but no later than one business day after the date of termination and a written demand from Iberdrola USA, pay to Iberdrola USA the reimbursable expenses incurred by Iberdrola USA and its affiliates in connection with the merger agreement or the transaction (including with respect to obtaining financing), in an amount not to exceed $15,000,000. If the merger agreement is terminated by UIL as a result of Iberdrola USA’s or merger sub’s breach of any of its

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respective covenants, agreements, representations or warranties in the merger agreement, then Iberdrola USA will promptly, but in no event later than one business day after the date of termination and a written demand from UIL, pay to UIL the reimbursable expenses incurred by UIL and its affiliates in connection with the merger agreement or the transaction (including with respect to obtaining financing), in an amount not to exceed $15,000,000.

If either party fails to promptly pay the termination fee or reimbursable expenses, then the party failing to make such prompt payment will pay the other party cumulative interest on the amount of the payment due at the prime rate published in the Wall Street Journal plus three percent (3%) accruing daily from the date such payment was due under the merger agreement until the date of payment.

Miscellaneous

Waivers and Consents

All waivers and consents relating to the merger agreement must be in writing. No waiver by any party of any breach or anticipated breach of any provision of the merger agreement by any other party will be a deemed a waiver of any other contemporaneous, preceding or succeeding breach or anticipated breach. Except as provided otherwise, no action taken pursuant to the merger agreement, including any investigation by or on behalf of any party, will be deemed to constitute a waiver by the party taking such action of compliance by any other party with any representations, warranties, covenants or agreements contained in the merger agreement. The failure of any party to assert any rights under the merger agreement or otherwise will not constitute a waiver of such rights.

Governing Law

The merger agreement, and all claims or causes of action that may arise or relate to the merger agreement or the negotiation, execution or performance of the merger agreement will be governed by and construed in accordance with the laws of the State of New York without regard to any choice or conflict of law principles or rules, except that any matter relating to the fiduciary obligations of the UIL board will be governed by the laws of the State of Connecticut and the mechanics of the merger will be governed by the CBCA.

Each party agrees that all claims arising out of or in connection with the merger agreement will be brought in New York state court sitting in New York County or, if such state court does not have subject matter jurisdiction, the federal court sitting in New York County, New York. Each party waives its right to a trial by jury in connection with any suit, action or proceeding relating to the merger agreement or transactions.

Specific Performance

To prevent breaches or threatened breaches by the parties of any of their respective covenants or obligations set forth in the merger agreement and to enforce specifically the terms and provisions of the merger agreement, the parties will be entitled to an injunction, specific performance and other equitable relief to prevent breaches of the merger agreement and to specifically enforce the terms and provisions of the merger agreement, in addition to any other remedy to which they are entitled to at law or equity.

Assignments, Successors and No Third-Party Rights

No party may assign any of its rights or delegate any of its obligations under the merger agreement without the prior written consent of the other parties, and any unauthorized purported assignment will be void. Except as expressly provided in the merger agreement, nothing expressed or referred to in the merger agreement will be construed to give any person other than the parties to the merger agreement any legal or equitable right, remedy or claim under or with respect to the merger agreement. Subject to the provisions related to termination, each of Iberdrola USA and UIL will have the right, on behalf of its respective stockholders, to pursue damages against the other parties for losses in the event of any breach of the merger agreement by the other parties.

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SELECTED HISTORICAL COMBINED AND CONSOLIDATED FINANCIAL DATA

OF IBERDROLA USA

The following tables set forth Iberdrola USA’s selected historical combined and consolidated financial data. You should read the following selected combined and consolidated financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Iberdrola USA’s combined and consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus. Historical results are not necessarily indicative of future results. Iberdrola USA’s financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.

The selected historical combined and consolidated financial information of Iberdrola USA as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 have been derived from Iberdrola USA’s audited historical combined and consolidated financial statements prepared in accordance with U.S. GAAP, included elsewhere in this proxy statement/prospectus. The selected historical combined statements of operations data for the years ended December 31, 2011 and 2010 and the selected historical combined balance sheet data as of December 31, 2012, 2011 and 2010 (collectively “historical unaudited financial information”), prepared in accordance with U.S. GAAP, have been derived from Iberdrola USA’s unaudited accounting records and are not included in the historical combined financial statements included in this proxy statement/prospectus.

The selected historical consolidated statements of operations data for the three months ended March 31, 2015 and 2014 and the selected historical consolidated balance sheet data as of March 31, 2015 have been derived from Iberdrola USA’s unaudited consolidated financial statements. Results of interim periods are not necessarily indicative of the results expected for a full year or for future periods.

In the opinion of Iberdrola USA’s management, all adjustments considered necessary for a fair presentation of the interim March 31 financial information and historical unaudited financial information have been included.

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013			2012		2011			2010
	(in millions)
Consolidated and Combined Statements of Operations Data:
Operating revenues	$	1,227	$	1,556	$	4,594	$	4,313		$	4,055	$	4,761		$	4,662
Net income (loss) from continuing operations		106		201		424		(64	)		170		(44	)		(541	)
Earnings (loss) from continuing operations per common share, basic and diluted	$	0.4	$	0.8	$	1.7	$	(0.3	)	$	0.7	$	(0.2	)	$	(2.2	)

	As of March 31,		As of December 31,
	2015		2014		2013		2012		2011		2010
	(in millions)
Consolidated and Combined Balance Sheet Data:
Total assets	$	24,306	$	24,252	$	23,209	$	23,860	$	23,991	$	24,981
Non-current debt		2,623		2,516		2,696		2,813		2,911		2,811

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	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012		2011		2010
	(in millions)
Other Financial Data (Non-GAAP):
Adjusted EBITDA(1)	$	371	$	571	$	1,539	$	1,393	$	1,285	$	1,288	$	1,167

(1) Iberdrola USA defines Adjusted EBITDA as operating income (loss) from continuing operations adding back impairment of non-current assets and depreciation and amortization. The most directly comparable U.S. GAAP measure to Adjusted EBITDA is operating income (loss) from continuing operations. The following table reconciles operating income (loss) from continuing operations to Adjusted EBITDA for the periods presented:

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012		2011		2010
	(in millions)
Operating Income (Loss) From Continuing Operations	$	196	$	414	$	885	$	156	$	251	$	72	$	(171	)
Add: Impairment of non-current assets		—		2		25		620		463		609		779
Depreciation and amortization		175		155		629		617		571		607		559
Adjusted EBITDA (Non-GAAP)	$	371	$	571	$	1,539	$	1,393	$	1,285	$	1,288	$	1,167

Iberdrola USA presents non-GAAP financial measures because Iberdrola USA believes that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance. Iberdrola USA also uses these measures internally to establish budgets and operational goals to manage and monitor Iberdrola USA’s business, as well as evaluating Iberdrola USA’s underlying historical performance. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of Iberdrola USA’s operating results as reported under U.S. GAAP.

Non-GAAP financial measures are not measurements of Iberdrola USA’s performance under U.S. GAAP and should not be considered as alternatives to operating income, net income or any other performance measures determined in accordance with U.S. GAAP. For additional information, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Iberdrola USA—Non-GAAP Financial Measures” included elsewhere in this proxy statement/prospectus.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS OF IBERDROLA USA

The following discussion and analysis of Iberdrola USA’s financial condition and results of operations should be read together with the consolidated financial statements of Iberdrola USA and related notes thereto and other financial information appearing elsewhere in this document. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 68 of this proxy statement/prospectus. Iberdrola USA’s actual results could differ materially from those contained in forward-looking statements as a result of many factors, including those discussed in the section entitled “Risk Factors” beginning on page 37 of this proxy statement/prospectus and elsewhere in this proxy statement/prospectus.

Executive Overview

Iberdrola USA is a direct, wholly-owned subsidiary of Iberdrola, S.A., a corporation (sociedad anónima) organized under the laws of Spain, one of the world’s leading global energy companies. Iberdrola USA holds the U.S. operations of Iberdrola, S.A. through its direct, wholly-owned operating subsidiaries, Iberdrola Networks and IRHI. IRHI in turn holds Iberdrola Renewables and Iberdrola Energy Holdings. Iberdrola Networks provides the transmission and distribution of electricity and the distribution of natural gas through regulated electric and gas public utility affiliates. Iberdrola Renewables develops, constructs and operates a portfolio consisting primarily of renewable energy generation facilities using wind, solar and thermal power. Iberdrola Energy Holdings operates natural gas storage facilities and gas trading businesses.

Through Iberdrola Networks, Iberdrola USA owns electric transmission and distribution companies and natural gas distribution companies in New York and Maine, delivering electricity to approximately 1.9 million electric utility customers, with a rate base of $5.2 billion as of March 31, 2015, and delivering natural gas to 574 thousand natural gas public utility customers, with a rate base of $1.0 billion as of March 31, 2015. Iberdrola Networks strives to be a leader in safety, reliability and quality of service to its utility customers. Iberdrola Networks serves as a super-regional energy services and delivery company through four regulated utility companies owned by Iberdrola Networks:

• NYSEG: serves electric and natural gas customers across more than 40% of upstate New York geographic area;

• RG&E: serves electric and natural gas customers within a nine-county region in western New York, centered around Rochester;

• CMP: serves electric customers in central and southern Maine; and

• MNG: serves natural gas customers in several communities in central and southern Maine.

Through Iberdrola Renewables, Iberdrola USA had a combined wind, solar and thermal installed capacity of 6,330 MW as of March 31, 2015, including Iberdrola Renewables’ share of joint projects, of which 5,645 MW was installed wind capacity. As the second largest wind operator in the United States based on installed capacity as of March 31, 2015, Iberdrola Renewables strives to lead the transformation of the U.S. energy industry to a competitive, clean energy future. Iberdrola Renewables currently operates 53 wind farms in 18 states across the United States.

Through Iberdrola Energy Holdings, as of March 31, 2015 Iberdrola USA owns approximately 67.5 Bcf of net working natural gas storage capacity. Through Iberdrola Energy Services, Iberdrola Energy Holdings operates 52.3 Bcf of contracted or managed natural gas storage capacity in North America as of April 1, 2015.

Factors Affecting Financial Condition and Results of Operations

The financial condition and financing capability of Iberdrola USA will be dependent on many factors, including the level of income and cash flow of its subsidiaries, conditions in the bank and capital markets, economic conditions, interest rates and legislative and regulatory developments.

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Iberdrola Networks

Electric Transmission and Distribution and Natural Gas Distribution

The operating subsidiaries of Iberdrola Networks are regulated electric distribution and transmission and natural gas transportation and distribution utilities whose structure and operations are significantly affected by legislation and regulation. FERC regulates, under the FPA, the interstate transmission and wholesale sale of electricity by these regulated utilities, including transmission rates and allowed ROE. Further, the distribution rates and allowed ROEs for Iberdrola Networks’ regulated utilities in New York and Maine are subject to regulation by the NYPSC and the MPUC, respectively. Legislation and regulatory decisions implementing legislation establish a framework for Iberdrola Networks’ operations. Other factors affecting Iberdrola Networks’ financial results are operational matters, such as the ability to manage expenses, uncollectibles and capital expenditures, in addition to major weather disturbances and environmental regulation. Iberdrola Networks expects to continue to make capital investments in its distribution and transmission infrastructure.

Pursuant to a Maine state law, CMP earns revenue for the delivery of energy to its retail customers, but is prohibited from selling power to them. CMP generally does not enter into purchase or sales arrangements for power with ISO-NE, the New England Power Pool, or any other independent system operator, or ISO, or similar entity. CMP generally sells all of its power entitlements under its nonutility generator and other purchase power contracts to unrelated third parties under bilateral contracts. If the MPUC does not approve the terms of bilateral contracts, it can direct CMP to sell power entitlements that it receives from those contracts on the spot market through ISO-NE. NYSEG and RG&E enter into power purchase and sales transactions with the New York Independent System Operator, Inc., or NYISO, to have adequate supplies for their customers who choose to purchase energy directly from them. Customers may also choose to purchase energy from other energy supply companies.

NYSEG’s and RG&E’s electric and natural gas rate plans and CMP’s electric rates each contain a revenue decoupling mechanism under which their actual energy delivery revenues are compared on a periodic basis with the authorized delivery revenues and the difference accrued, with interest, for refund to or recovery from customers, as applicable.

Iberdrola Networks’ New York regulated utilities, NYSEG and RG&E, are delivery companies and provide energy supply as providers of last resort. Energy costs that are set on the New York wholesale markets are passed on to consumers. The difference between actual energy costs that are incurred and those that are initially billed are reconciled in a process that results in either immediate or deferred tariff adjustments. These procedures apply to other costs, which are in most cases exceptional, such as the effects of extreme weather conditions, environmental factors, regulatory and accounting changes, and treatment of vulnerable customers, that are offset in the tariff process.

Pursuant to agreements with the NYPSC and MPUC, NYSEG, RG&E, CMP and MNG are each subject to a minimum equity ratio requirement that is tied to the capital structure assumed in establishing revenue requirements. The minimum equity ratio requirement has the effect of limiting the amount of dividends that can be paid and can, under certain circumstances, require that Iberdrola, USA contribute equity capital. The regulated utility subsidiaries are prohibited by regulation from lending to unregulated affiliates.

Rates

On September 16, 2010, the NYPSC approved new rate plans for electric and natural gas service provided by NYSEG and RG&E with rate changes in 2010, 2011 and 2012. The rate plans contain continuation provisions beyond 2013 if NYSEG and RG&E do not request new rates. On May 20, 2015, NYSEG and RG&E filed rate cases in New York for new rates to become effective in April 2016. The primary reasons for the rate filings is to recovery prior costs, particularly at NYSEG electric whereby it requested recovery of major storm restoration costs that occurred from 2011 to the present. NYSEG’s and RG&E’s transmission rates are determined by a tariff regulated by FERC and administered by NYISO.

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On August 25, 2014, the MPUC approved a stipulation agreement for a CMP rate change which provided for a distribution rate increase of approximately $24.3 million effective July 1, 2014 with an allowed ROE of 9.45% and an allowed equity ratio of 50%. On December 22, 2009, MPUC approved a stipulation which provided for a rate increase to MNG’s base distribution rates for a three year period, with a 12% increase effective January 1, 2010, a 10% increase effective December 1, 2010 and another 10% increase effective December 1, 2011. On March 5, 2015, MNG filed a rate case to recover investments in infrastructure in future rates and provide safe and adequate service. On June 19, 2015 the MPUC Staff issued an analysis that proposed a disallowance between approximately $10 million and $30 million of capital investment. MNG will file a response to the staff analysis and the MPUC will conduct hearings before making a final determination on the rate filing, which is expected by the end of 2015.

CMP’s transmission rates are determined by a tariff regulated by FERC and administered by ISO-NE. Transmission rates are set annually pursuant to a FERC authorized formula that allows for recovery of direct and allocated transmission operating and maintenance expenses, including return of and on investment in assets. FERC provided an initial base ROE of 11.14% and additional incentive adders applicable to assets based upon vintage, voltage, and other factors.

Reforming the Energy Vision

In April 2014, the NYPSC instituted its REV proceeding, the goals of which are to improve electric system efficiency and reliability, encourage renewable energy resources, support DER, and empower customer choice. In this proceeding, the NYPSC is examining the establishment of a DSP, to manage and coordinate DER, and provide customers with market data and tools to manage their energy use. The NYPSC also is examining how its regulatory practices should be modified to incentivize utility practices to promote REV objectives. REV has been divided into two tracks, Track 1 for market design and technology, and Track 2 for regulatory reform. REV proposes regulatory changes that are intended to promote more efficient use of energy, deeper penetration of renewable energy resources such as wind and solar, and wider deployment of DER, such as micro grids, on-site power supplies and storage. The NYPSC Order on Track 1 affirmed that utilities would serve as the DSP and required utilities to file implementation plans before the end of 2015. Track 2 is undertaken in parallel with the Track 1, and examines changes in current regulatory, tariff, and market designs, and incentive structures to better align utility interests with achieving NYPSC’s policy objectives. The NYPSC staff straw proposal for Track 2 is expected in the third quarter of 2015. New York utilities will also be addressing related regulatory issues in their individual rate cases.

New England Transmission Owners

In September 2011, several New England governmental entities, including PURA, the Connecticut Attorney General and the Connecticut Office of Consumer Counsel, filed a joint complaint with FERC against ISO-NE and several New England transmission owners (including CMP) claiming that the current approved base ROE used in calculating formula rates for transmission service under the ISO-NE Open Access Transmission Tariff by the New England transmission owners of 11.14% was not just and reasonable and seeking a reduction of the base ROE with refunds to customers for the refund period of October 1, 2011 through December 31, 2012, or the refund period. FERC issued an order in 2014 to reset the base ROE at 10.57% and capped the incentive rate at 11.74% for applicable projects for the refund period. Two additional complaints have also been filed for subsequent periods. The complaints have been consolidated and a final decision is expected in 2016. The results of the decision in the initial complaint, as well as the results of any future decisions will be reconciled in future transmission rates.

New York Transco

NYSEG and RG&E hold an approximately 20% ownership interest in the regulated New York Transco. The New York Transco was established by the New York transmission utilities to develop, own, and operate electric

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transmission in New York. In December 2014, New York Transco filed for regulatory approval of its rates, terms, and conditions with FERC. The filing requests a formula base ROE of 10.6%, 150 basis points ROE incentives, construction work in progress, a formula rate mechanism, and a proposed cost allocation. Various parties, including the NYPSC, have protested the filing with FERC, including the base ROE, the ROE incentives, and the cost allocation. The New York Transco will not make final decisions on transmission project development until a FERC decision. NYSEG and RG&E anticipate a FERC decision in late 2015 or 2016.

Weather Impact

The demand for electric power and natural gas is affected by seasonal differences in the weather. Statewide demand for electricity in New York and Maine tends to increase during the summer months to meet cooling load or in winter months for heating load while statewide demand for natural gas tends to increase during the winter to meet heating load. Market prices for both electricity and natural gas reflect the demand for these products and their availability at that time. Overall operating results of Iberdrola Networks do not fluctuate due to commodity costs as the regulated utilities generally recover those costs coincident with their expense or defer any differences for future recovery. Iberdrola Networks has historically sold less power when weather conditions are milder and may also be affected by severe weather, such as ice and snow storms, hurricanes and other natural disasters which may result in additional cost or loss of revenues that may not be recoverable from customers. However, Iberdrola Networks’ regulated utilities, other than MNG, have approved RDMs as part of the NYPSC and MPUC rate plans. The RDM allows the regulated utilities to defer for future recovery and shortfall from projected revenues whether due to weather, economic conditions, conservation or other factors.

Iberdrola Renewables

Renewable Energy Incentives

Iberdrola Renewables relies, in part, upon government policies that support utility-scale renewable energy and enhance the economic feasibility of development and operating wind energy projects in regions in which Iberdrola Renewables operates or plans to develop and operate renewable energy facilities. The federal government and many states and local jurisdictions have policies or other mechanisms, such as tax incentives or RPS that support the sale of energy from utility-scale renewable energy facilities, such as wind and solar energy facilities. As a result of budgetary constraints, political factors or otherwise, U.S., state or local governments from time to time may review their policies and other mechanisms that support renewable energy and consider actions that would make them less conducive to the development and operation of renewable energy facilities. Any reductions to, or the elimination of, governmental policies or other mechanisms that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development of new renewable energy projects, Iberdrola Renewables abandoning the development of new renewable energy projects, a loss of Iberdrola Renewables’ investments in the projects and reduced project returns, any of which could have a material adverse effect on Iberdrola Renewables’ business, financial condition, results of operations and prospects.

Renewable Energy Demand

Since the transmission and distribution of electricity is highly concentrated in most jurisdictions, there are a limited number of possible purchasers for utility-scale quantities of electricity in a given geographic location, including transmission grid operators, state and investor-owned power companies, public utility districts and cooperatives. As a result, there is a concentrated pool of potential buyers for electricity generated by Iberdrola Renewables’ business, which may restrict their ability to negotiate favorable terms under new PPAs, and could impact their ability to find new customers for the electricity generated by their generation facilities should this become necessary. Furthermore, if the financial condition of these utilities and/or power purchasers deteriorated or the RPS programs, climate change programs or other regulations to which they are currently subject and that compel them to source renewable energy supplies change, demand for electricity produced by Iberdrola Renewables’ businesses could be negatively impacted.

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Energy Prices

Iberdrola Renewables has exposure to commodity price movements through their “natural” long positions in electricity to proprietary trading and hedging activities. Iberdrola Renewables manages the exposure to risks of commodity price movements through internal risk management policies, enforcement of established risk limits and risk management procedures.

Wind Conditions

If wind conditions are unfavorable, or if Iberdrola Renewables’ wind turbines are not available for operation, Iberdrola Renewables projects’ electricity generation and related revenue may be substantially below Iberdrola USA’s expectations. Iberdrola Renewables’ wind projects are sited, developed and operated to maximize wind performance. Prior to siting a wind facility, detailed studies are conducted to measure the wind resource in order to estimate future production. However, wind patterns or wind resource in the future might deviate from historical patterns. These events could also degrade equipment or components and the interconnection and transmission facilities’ lives or maintenance costs. Historically, Iberdrola Renewables wind production is greater in the first, second and fourth quarters.

Wind Turbine Supply

Replacement and spare parts for wind turbines and key pieces of electrical equipment may be difficult or costly to acquire or may be unavailable. Although Iberdrola Renewables has expanded and diversified its supplier base, the loss of any of these suppliers or service providers or inability to find replacement suppliers or service providers or to purchase turbines at rates currently offered by Iberdrola Renewables’ existing suppliers or a change in the terms of Iberdrola Renewables’ supply or operations and maintenance agreements, such as increased prices for maintenance services or for spare parts, could have a material adverse effect on Iberdrola Renewables’ ability to construct and maintain wind farms or the profitability of wind farm development and operation.

Iberdrola Energy Holdings

Iberdrola Energy Holdings benefits from price volatility and temporal price spreads, which impacts the level of demand for services and the rates that can be charged for natural gas storage services. On a system-wide basis, natural gas is typically injected into storage between April and October when natural gas prices are generally lower and withdrawn during the winter months of November through March when natural gas prices are typically higher. Largely due to the abundant supply of natural gas made available by hydraulic fracturing techniques, natural gas prices have dropped significantly to levels that are near historic lows. If prices and volatility remain low or declines further, then the demand for natural gas storage services, and the prices that Iberdrola Energy Holdings will be able to charge for those services, may decline or be depressed for a prolonged period of time. Conversely, if prices and volatility remain high or increase then the demand for natural gas storage services and the prices that Iberdrola Energy Holdings will be able to charge for these services may increase for a period of time.

Merger with UIL

On February 25, 2015, Iberdrola USA and merger sub entered into a merger agreement with UIL, pursuant to which UIL will merge with and into merger sub, with merger sub being the surviving corporation. Upon completion of the transaction, it is expected that long-term earnings per share for the combined company will grow by approximately 10% annually through 2019. Iberdrola USA’s historical consolidated financial statements included in this proxy statement/prospectus are based on the financial statements of Iberdrola USA. As a result, historical financial data may not give you an accurate indication of what Iberdrola USA’s actual results would have been if the merger with UIL had been completed at the beginning of the periods presented or what Iberdrola USA’s future results of operations are likely to be.

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Non-GAAP Financial Measures

Iberdrola USA supplements the use of U.S. GAAP, financial measures in this proxy statement/prospectus with non-GAAP financial measures, including adjusted gross margin and adjusted EBITDA. Iberdrola USA refer to these measures as “non-GAAP financial measures” given they are not required by, or presented in accordance with U.S. GAAP.

Iberdrola USA defines adjusted gross margin as operating income (loss) from continuing operations adding back certain operating expenses, such as operations and maintenance, taxes other than income taxes and depreciation and amortization, plus expenses related to purchased power costs that are recorded under operations and maintenance for U.S. GAAP reporting. The most directly comparable U.S. GAAP measure to adjusted gross margin is operating income (loss) from continuing operations.

Iberdrola USA defines adjusted EBITDA as operating income (loss) from continuing operations adding back impairment of non-current assets and depreciation and amortization. The most directly comparable U.S. GAAP measure to adjusted EBITDA is operating income (loss) from continuing operations.

Iberdrola USA presents non-GAAP financial measures because Iberdrola USA believes that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance. Iberdrola USA also use these measures internally to establish budgets and operational goals to manage and monitor Iberdrola USA’s business, as well as to evaluate Iberdrola USA’s underlying historical performance. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of Iberdrola USA’s operating results as reported under U.S. GAAP.

Non-GAAP financial measures are not measurements of Iberdrola USA’s performance under U.S. GAAP and should not be considered as alternatives to operating income (loss) from continuing operations, net income or any other performance measures determined in accordance with U.S. GAAP.

The following table provides a reconciliation between U.S. GAAP and adjusted gross margin and adjusted EBITDA for the three months ended March 31, 2015 and 2014, as well as each of the years ended December 31, 2014, 2013 and 2012:

Iberdrola USA Consolidated

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012
	(in millions)
Operating revenues	$	1,227	$	1,556	$	4,594	$	4,313	$	4,055
Operating expenses		1,031		1,142		3,709		4,157		3,804
Operating income (loss) from continuing operations		196		414		885		156		251
Add: Depreciation and amortization		175		155		629		617		571
Impairment of non current assets		—		2		25		620		463
Operations and maintenance		380		383		1,552		1,530		1,415
Taxes other than income taxes		84		81		322		302		322
Less: Transmission wheeling(1)		33		37		143		149		125
Adjusted gross margin		802		998		3,270		3076		2897
Less: Operations and maintenance(1)		347		346		1,409		1,381		1,290
Taxes other than income taxes		84		81		322		302		322
Adjusted EBITDA	$	371	$	571	$	1,539	$	1,393	$	1,285

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Iberdrola Networks

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012
	(in millions)
Operating revenues	$	1003	$	1,130	$	3,397	$	3,319	$	3,080
Operating expenses		814		915		2,781		2,616		2,446
Operating income (loss) from continuing operations		189		215		616		703		634
Add: Depreciation and amortization		86		67		275		257		232
Impairment of non current assets		—		—		—		—		—
Operations and maintenance		298		296		1,183		1,136		1,056
Taxes other than income taxes		70		67		268		266		257
Less: Transmission wheeling(1)		33		37		143		149		125
Adjusted gross margin		610		608		2,199		2,213		2,054
Less: Operations and maintenance(1)		265		259		1,040		987		931
Taxes other than income taxes		70		67		268		266		257
Adjusted EBITDA	$	275	$	282	$	891	$	960	$	866

Iberdrola Renewables

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012
	(in millions)
Operating revenues	$	240	$	317	$	1,189	$	1,097	$	939
Operating expenses		214		230		932		998		1,210
Operating income (loss) from continuing operations		26		87		257		99		(271	)
Add: Depreciation and amortization		83		82		332		333		303
Impairment of non current assets		—		2		24		75		441
Operations and maintenance		77		79		336		351		296
Taxes other than income taxes		13		13		48		46		40
Less: Transmission wheeling(1)		—		—		—		—		—
Adjusted gross margin		199		263		997		904		809
Less: Operations and maintenance(1)		77		79		336		351		296
Taxes other than income taxes		13		13		48		46		40
Adjusted EBITDA	$	109	$	171	$	613	$	507	$	473

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Iberdrola Energy Holdings

	Three Months Ended March 31,					Year Ended December 31,
	2015			2014		2014		2013			2012
	(in millions)
Operating revenues	$	(1	)	$	127	$	84	$	(27	)	$	34
Operating expenses		14			15		68		620			113
Operating income (loss) from continuing operations		(15	)		112		16		(647	)		(79	)
Add: Depreciation and amortization		5			5		22		26			32
Impairment of non current assets		—			—		—		545			23
Operations and maintenance		7			8		40		40			49
Taxes other than income taxes		1			2		5		5			4
Less: Transmission wheeling(1)		—			—		—		—			—
Adjusted gross margin		(2	)		127		83		(31	)		29
Less: Operations and maintenance(1)		7			8		40		40			49
Taxes other than income taxes		1			2		5		5			4
Adjusted EBITDA	$	(10	)	$	117	$	38	$	-76		$	(24	)

(1) Transmission wheeling is a component of operations and maintenance and has been considered a component of adjusted gross margin since it is directly associated with the power supply costs included in the cost of sales.

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Results of Operations

The following table sets forth Iberdrola USA’s operating revenues and expenses items for each of the periods indicated and as a percentage of operating revenues:

	Three Months Ended March 31,												Year Ended December 31,
	2015			%			2014			%			2014			%			2013			%			2012			%
	(in millions)
Operating Revenues	$	1,227			100	%	$	1,556			100	%	$	4,594			100	%	$	4,313			100	%	$	4,055			100	%
Operating Expenses
Purchased power, natural gas and fuel used		392			32			521			33			1,181			26			1,088			25			1,033			25
Operation and maintenance		380			31			383			25			1,552			34			1,530			35			1,415			35
Impairment of noncurrent assets		—			—			2			—			25			1			620			14			463			11
Depreciation and amortization		175			14			155			10			629			14			617			14			571			14
Taxes other than income taxes		84			7			81			5			322			7			302			7			322			8
Total Operating Expenses		1,031			84			1,142			73			3,709			81			4,157			95			3,804			93
Operating income (loss) from continuing operations		196			16			414			27			885			19			156			4			251			6
Other Income and (Expense)
Other income and (expense)		12			1			15			1			52			1			54			1			117			3
Earnings (losses) from equity method investments		1			—			8			—			12			—			(3	)		—			(3	)		—
Interest expense, net of capitalization		(61	)		(5	)		(64	)		(4	)		(243	)		(5	)		(245	)		(6	)		(316	)		(8	)
Income Before Income Tax		148			12			373			24			706			15			(38	)		0			49			1
Income tax expense (benefit)		42			3			172			11			282			6			26			1			(121	)		(3	)
Income (Loss) From Continuing Operations		106			9			201			13			424			9			(64	)		(1	)		170			4
Income From Discontinued Operations, net of income tax expense		—			—			—			—			—			—			—			—			74			2
Consolidated Net Income (Loss)		106			9			201			13			424			9			(64	)		(1	)		244			5
Less: Net income attributable to other
Non-controlling interests		—			—			1			—			—			—			1			—			1			—
Net Income	$	106			9	%	$	200			13	%	$	424			9	%	$	(65	)		(1	)%	$	243			6	%

The following tables set forth Iberdrola USA’s segment revenues and expenses for each of the periods indicated and as a percentage of operating revenues:

Three Months Ended March 31, 2015

	Total			Iberdrola Networks			Iberdrola Renewables			Iberdrola Energy Holdings			Other(1)
	(in millions)
Operating revenues	$	1,227		$	1,003		$	240		$	(1	)	$	(15	)
Adjusted gross margin	$	802		$	610		$	199		$	(2	)	$	(5	)
Adjusted gross margin %		65	%		61	%		83	%		200	%		33	%
Operating expenses	$	1,031		$	814		$	214		$	14		$	(11	)
Operating expenses %		84	%		81	%		89	%		N/A	%		73	%
Adjusted EBITDA	$	371		$	275		$	109		$	(10	)	$	(3	)
EBITDA %		30	%		28	%		45	%		N/A			20	%

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Three Months Ended March 31, 2014

	Total			Iberdrola Networks			Iberdrola Renewables			Iberdrola Energy Holdings			Other(1)
	(in millions)
Operating revenues	$	1,556		$	1,130		$	317		$	127		$	(18	)
Adjusted gross margin	$	998		$	608		$	263		$	127		$	0
Adjusted gross margin %		64	%		54	%		83	%		100	%		(0	)%
Operating expenses	$	1,142		$	915		$	230		$	15		$	(18	)
Operating expenses %		73	%		81	%		73	%		12	%		100	%
Adjusted EBITDA	$	571		$	282		$	171		$	117		$	1
EBITDA %		37	%		25	%		54	%		92	%		(6	)%

Year Ended December 31, 2014

	Total			Iberdrola Networks			Iberdrola Renewables			Iberdrola Energy Holdings			Other(1)
	(in millions)
Operating revenues	$	4,594		$	3,397		$	1,189		$	84		$	(76	)
Adjusted gross margin	$	3,270		$	2,199		$	997		$	83		$	(9	)
Adjusted gross margin %		71	%		65	%		84	%		99	%		12	%
Operating expenses	$	3,709		$	2,781		$	932		$	68		$	(72	)
Operating expenses %		81	%		82	%		78	%		81	%		95	%
Adjusted EBITDA	$	1,539		$	891		$	613		$	38		$	(3	)
EBITDA %		34	%		26	%		52	%		45	%		4	%

Year Ended December 31, 2013

	Total			Iberdrola Networks			Iberdrola Renewables			Iberdrola Energy Holdings			Other(1)
	(in millions)
Operating revenues	$	4,313		$	3,319		$	1,097		$	(27	)	$	(76	)
Adjusted gross margin	$	3,076		$	2,213		$	904		$	(31	)	$	(10	)
Adjusted gross margin %		71	%		67	%		82	%		115	%		13	%
Operating expenses	$	4,157		$	2,616		$	998		$	620		$	(77	)
Operating expenses %		96	%		79	%		91	%		N/A			101	%
Adjusted EBITDA	$	1,393		$	960		$	507		$	(76	)	$	2
EBITDA %		32	%		29	%		46	%		281	%		(3	)%

Year Ended December 31, 2012

	Total			Iberdrola Networks			Iberdrola Renewables			Iberdrola Energy Holdings			Other(1)
	(in millions)
Operating revenues	$	4,055		$	3,080		$	939		$	34		$	2
Adjusted gross margin	$	2,897		$	2,054		$	809		$	29		$	5
Adjusted gross margin %		71	%		67	%		86	%		85	%		250	%
Operating expenses	$	3,804		$	2,446		$	1,210		$	113		$	35
Operating expenses %		94	%		79	%		129	%		332	%		1750	%
Adjusted EBITDA	$	1,285		$	866		$	473		$	(24	)	$	(30	)
EBITDA %		32	%		28	%		50	%		(71	)%		(1500	)%

(1) Other amounts represent corporate and company eliminations.

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Comparison of Period to Period Results of Operations

Iberdrola USA’s operating revenues decreased by 21% from $1.6 billion for the three months ended March 31, 2014 to $1.2 billion for the three months ended March 31, 2015, and increased by 7%, from $4.3 billion for the year ended December 31, 2013 to $4.6 billion for the year ended December 31, 2014.

Iberdrola USA’s adjusted gross margin decreased by 20%, from $998 million for the three months ended March 31, 2014 to $802 million for the three months ended March 31, 2015, and increased 6% from $3.1 billion for the year ended December 31, 2013 to $3.3 billion for the year ended December 31, 2014.

Iberdrola USA’s operating expenses decreased by 10% from $1.1 billion for the three months ended March 31, 2014 to $1.0 billion for the three months ended March 31, 2015, and decreased 11% from $4.2 billion for the year ended December 31, 2013 to $3.7 billion for the year ended December 31, 2014.

Iberdrola USA’s adjusted EBITDA decreased by 35%, from $571 million for the three months ended March 31, 2014 to $371 million for the three months ended March 31, 2015, and increased by 10%, from $1.4 billion for the year ended December 31, 2013 to $1.5 billion for the year ended December 31, 2014.

The specific details of the period to period comparison are described below at the segment level.

Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

Iberdrola Networks

Operating revenues for the three months ended March 31, 2015 decreased $127 million or 11% from $1.1 billion for the three months ended March 31, 2014 to $1.0 billion for the three months ended March 31, 2015. The decrease in revenues was due to the cost associated with purchase power directly related to the price of fuel. This is offset at the adjusted gross margin level as these costs are reconciled and are collected from customers.

Adjusted gross margin for the three months ended March 31, 2015 increased $2 million or less than 1% from $608 million for the three months ended March 31, 2014 to $610 million for the three months ended March 31, 2015. The slight increase was associated with year-over-year differences in demand.

Operations and maintenance for the three months ended March 31, 2015 increased $6 million or 2% from $259 million for the three months ended March 31, 2014 to $265 million for the three months ended March 31, 2015. The change in operations and maintenance expenses for the comparative periods represents timing differences over the periods primarily associated with incremental maintenance expenses in the first quarter of 2015.

Adjusted EBITDA for the three months ended March 31, 2015 decreased $7 million or 2% from $282 million for the three months ended March 31, 2014 to $275 million for the three months ended March 31, 2015. The decrease is driven by the increase in operations and maintenance discussed above.

Iberdrola Renewables

Operating revenues for the three months ended March 31, 2015 decreased $77 million or 24% from $317 million for the three months ended March 31, 2014 to $240 million for the three months ended March 31, 2015. The decrease in revenues was due to lower output from wind assets with output sold under long term contracts reflecting poor wind resource, reduced prices realized in the market on existing merchant wind assets, unfavorable results from power trading activities due to lower price volatility and declining prices in the northwest markets.

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Adjusted gross margin for the three months ended March 31, 2015 decreased $64 million or 24% from $263 million for the three months ended March 31, 2014 to $199 million for the three months ended March 31, 2015. The decrease in total adjusted gross margin was due to the same reasons discussed above for revenues. However, adjusted gross margin increased on completion of the Baffin Bay Wind asset (202 MW or 4% increase) in 2015 and from thermal generation.

Operations and maintenance during the three months ended March 31, 2015 decreased $2 million or 2.5% from $79 million for the three months ended March 31, 2014 to $77 million for the three months ended March 31, 2015. The quarter over quarter comparison shows the expenses are consistent for the periods evaluated.

Adjusted EBITDA for the three months ended March 31, 2015 decreased $62 million or 36% from $171 million for the three months ended March 31, 2014 to $109 million for the three months ended March 31, 2015. The decrease in adjusted EBITDA was due to the same reasons discussed above regarding adjusted gross margin.

Iberdrola Energy Holdings

Operating revenues for the three months ended March 31, 2015 decreased $128 million from $127 million for the three months ended March 31, 2014 to negative $1 million for the three months ended March 31, 2015. The decrease in revenues is primarily attributable to a $114 million change in mark to market, or MtM, unrealized value of hedging instruments caused by volatility in gas prices.

Adjusted gross margin for the three months ended March 31, 2015 decreased $129 million from $127 million for the three months ended March 31, 2014 to negative $2 million for the three months ended March 31, 2015. The decrease in adjusted gross margin was due to the reasons discussed above related to operating revenues.

Operations and maintenance for the three months ended March 31, 2015 decreased $1 million or 13% from $8 million for the three months ended March 31, 2014 to $7 million for the three months ended March 31, 2015. This decrease is primarily attributable to decreases in indirect expenses, such as information technology and facility services.

Adjusted EBITDA for the three months ended March 31, 2015 was negative $10 million compared to positive $117 million for the three months ended March 31, 2014, a decrease of $127 million. The decrease in adjusted EBITDA was due to the same reasons discussed above for operating revenue.

Depreciation, Amortization and Impairment of Non-Current Assets

Depreciation, amortization and impairment expenses for the three months ended March 31, 2015 was $175 million compared to $155 million for the three months ended March 31, 2014, an increase of $20 million. The increase was primarily attributable to increases in overall plant costs associated with increased transmission assets primarily in the businesses of Iberdrola Networks.

Other Income and (Expense)

Other income and (expense) for the three months ended March 31, 2015 decreased $10 million from $23 million for the three months ended March 31, 2014 to $13 million for the three months ended March 31, 2015. The decrease resulted principally from lower equity earnings for the first quarter of 2015 compared to the first quarter of 2014.

Interest Expense, Net of Capitalization

Interest expense for the three months ended March 31, 2015 and March 31, 2014 were $61 million and $64 million, respectively. The expenses for this category are driven by the financial expenses in the businesses of Iberdrola Networks which remained consistent over the comparison period.

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Income Tax Expense (Benefit)

The effective tax rates for continuing operations for the three months ended March 31, 2015 and March 31, 2014 were 28.1% and 46.1% respectively. The rate in 2015 is lower than the 35% statutory federal income tax rate predominately due to the recognition of production tax credits associated with wind production. The rate in 2014 is higher than the 35% statutory federal income tax rate predominately due to the increase in the overall accumulated deferred state income tax liability caused by the imposition of a unitary tax regime in New York effective January 1, 2015.

Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013

Iberdrola Networks

Operating revenues for the year ended December 31, 2014 increased $78 million or 2% from approximately $3.3 billion for the year ended December 31, 2013 to approximately $3.4 billion. The increase in operating revenues was primarily related to increased electric commodity revenues of $145 million which was offset by lower retail prices of $63 million. The majority of these impacts are offset at adjusted gross margin due to the reconciliation of purchase power and RDMs.

Adjusted gross margin for the year ended December 31, 2014 decreased $14 million or 1% to $2.2 billion. Adjusted gross margin decreased due to the provision associated with the transmission ROE case in Maine of approximately $22 million and non-recurring revenues associated with the accounting of regulatory assets in 2013 associated with costs from previous years that will be recovered from customers in future periods.

Operations and maintenance during the year ended December 31, 2014 increased $53 million or 5% from approximately $987 million for the year ended December 31, 2013 to approximately $1.0 billion. Operations and maintenance increased due to higher spending that was required in 2014, which focused primarily on the strengthening the system, including increased spending for vegetation management as well as expansions of maintenance programs in the natural gas public utility businesses.

Adjusted EBITDA for the year ended December 31, 2014 decreased $69 million or 7% from $960 million for the year ended December 31, 2013 to $891 million. Adjusted EBITDA decreased primarily due to the reasons discussed above regarding adjusted gross margin and operations and maintenance.

Iberdrola Renewables

Operating revenues for the year ended December 31, 2014 increased $92 million or 8% from $1.1 billion for the year ended December 31, 2013 to $1.2 billion. The increase was due to higher results from existing wind assets with output sold under long term contracts reflecting stronger wind resource, increased prices realized in the market on existing merchant wind assets, collection from customers and control area operators for curtailments and pass-through of transmission charges and favorable results from power trading activities due to significant price volatility in the northwest markets due to cold weather and abundant hydro conditions.

Adjusted gross margin for the year ended December 31, 2014 increased $93 million or 10% from $904 million for the year ended December 31, 2013 to $997million. The adjusted gross margin increase was due to the reasons above as well as the increased gross margin from thermal generation on contracted sales to new customers and value derived from transmission rights.

Operations and maintenance for the year ended December 31, 2014 decreased $15 million or 4% from $351 million for the year ended December 31, 2013 to $336 million, primarily as a result of reductions in medical expenses and other benefit costs; however, these decreases were slightly offset by increased indirect expenses.

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Adjusted EBITDA for the year ended December 31, 2014 increased $106 million or 21% from $507 million for the year ended December 31, 2013 to $613 million. The increase was due to the same reasons discussed above for adjusted gross margin and the reduction in operating expenses compared to the prior period.

Iberdrola Energy Holdings

Operating revenues for the year ended December 31, 2014 increased $111 million from negative revenues of $27 million for the year ended December 31, 2013 to positive revenues of $84 million. The increase in operating revenues was due to $125 million unrealized gain driven by change in MtM firm storage and transport hedges gain in value due to an average price decrease in 2014 compared to a loss in value due to an average price increase in 2013.

Adjusted gross margin for the year ended December 31, 2014 increased $114 million from negative $31 million for the year ended December 31, 2013 to positive $83 million. The increase in adjusted gross margin was due to reasons discussed above.

Operations and maintenance for the year ended December 31, 2014 remained consistent over the periods at $40 million.

Adjusted EBITDA for the year ended December 31, 2014 was positive $38 million compared to negative $76 million for the year ended December 31, 2013, an increase of $114 million. The increase in adjusted EBITDA was due to reasons discussed above.

Depreciation, Amortization and Impairment of Non-Current Assets

Depreciation, amortization and impairment expenses for the years ended December 31, 2014 and December 31, 2013 were $654 million and $1.2 billion, respectively. The decrease of $583 million was driven by a 2013 provision, relating mainly to natural gas storage facilities of $382 million and impairment of goodwill of the Iberdrola Energy Holdings business of $163 in view of the potential long term low margins for natural gas, given the impact of shale gas on the North American energy market. For additional information, please see Notes 6 and 7 to the audited combined and consolidated financial statements for the year ended December 31, 2014 included elsewhere in this proxy statement/prospectus.

Other Income and (Expense)

Other income and (expense) for the year ended December 31, 2014 increased $13 million from $51 million other income for the year ended December 31, 2013 to $64 million for the year ended December 31, 2014. The increase in other income is associated with higher equity earnings of which the majority is associated with joint ventures of Iberdrola Renewables in the Flat Rock and Colorado Green projects. For additional information, please see Note 20 to the audited combined and consolidated financial statements for the year ended December 31, 2014 included elsewhere in this proxy statement/prospectus.

Interest Expense, Net of Capitalization

Interest expense for the year ended December 31, 2014 and December 31, 2013 were $243 million and $245 million, respectively. The decrease of $2 million or less than 1% shows the expenses were consistent over these periods driven primarily by Iberdrola Networks’ debt expense.

Income Tax Expense (Benefit)

Income tax expense from continuing operations for the year ended December 31, 2014 was $35 million higher than it would have been at the statutory federal income tax rate of 35% due predominately to

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remeasurement of the deferred income tax liability caused by the imposition of a unitary tax regime in New York effective January 1, 2015. Income tax expense from continuing operations for the year ended December 31, 2013 was $39 million higher than it would have been at the statutory federal income tax rate of 35% due predominately to the book impairment of goodwill.

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

Iberdrola Networks

Operating revenues for the year ended December 31, 2013 increased $239 million or 8% from approximately $3.1 billion for the year ended December 31, 2012 to approximately $3.3 billion. The increase in operating revenues was primarily due to the recovery of increases in purchase power expenses associated with fuel prices which were offset at the adjusted gross margin level. The increase not offset in adjusted gross margin is associated with non-recurring revenues related with the accounting of regulatory assets in 2013 associated with costs from previous years that will be recovered from customers in future periods as well as higher transmission revenues associated with growth in the transmission business and higher demand.

Adjusted gross margin for the year ended December 31, 2013 increased $159 million or 8% to approximately $2.2 billion. Gross margin increased due to the reasons stated above in operating revenues.

Operations and maintenance for the year ended December 31, 2013 increased $56 million or 6% to approximately $987 million from $931 million for the year ended December 31, 2012. Operations and maintenance increased due to higher spending in 2012 associated with Cayuga reliability of $22 million linked with meeting demands for increased load in New York, conservation program spending increases of $31 million, and increased staffing expenses of $26 million (internal and external staff). These increases were slightly offset by small reductions in a number of other areas.

Adjusted EBITDA for the year ended December 31, 2013 increased $94 million or 11% from $866 million for the year ended December 31, 2012 to $960 million. Adjusted EBITDA increased due to the reasons stated above.

Iberdrola Renewables

Operating revenues for the year ended December 31, 2013 increased $158 million or 17% from $939 million for the year ended December 31, 2012 to approximately $1.1 billion. The increase in operating revenues was due to the full year operation in 2013 of six new wind assets of 716 MW, or a 16% increase, completed and placed in service during 2012, offset in part by reduced revenues on existing wind assets with output sold under long term contracts on lower wind resource and increased prices realized in the market on existing merchant wind assets.

Adjusted gross margin for the year ended December 31, 2013 increased $95 million or 12% from $809 million for the year ended December 31, 2012 to $904 million. The adjusted gross margin increased due to the reasons discussed above.

Operations and maintenance during the year ended December 31, 2013 increased $55 million or 19% from $296 million for the year ended December 31, 2012 to $351 million. The increase in operating expenses is attributable to the six new wind assets operational for the full year 2013 but only for a portion of 2012, increased wages and $20 million associated with increased indirect expenses such as software fees.

Adjusted EBITDA for the year ended December 31, 2013 increased $34 million or 7% from $473 million for the year ended December 31, 2012 to $507 million. The adjusted EBITDA increase was due to increases in gross margin partially offset by the increase in 2013 operating expenses, described above. However, adjusted EBITDA was also reduced by $5 million in 2013 due to higher property taxes from the six new wind assets.

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Iberdrola Energy Holdings

Operating revenues for the year ended December 31, 2013 decreased $61 million from positive revenues of $34 million for the year ended December 31, 2012 to negative revenues of $27 million net of trading activities. The decrease in operating revenues was due to lower spreads and price volatility related to gas storage.

Adjusted gross margin for the year ended December 31, 2013 was negative $31 million compared to positive $29 million for the year ended December 31, 2012, a decrease of $60 million. The increase in adjusted gross margin was due to the reasons above.

Operations and maintenance for the year ended December 31, 2013 decreased $9 million or 18% from $49 million for the year ended December 31, 2012 to $40 million. The decrease was the result of cost savings measures across all businesses which included operational expense reductions in the trading and storage businesses as well as headcount reductions.

Adjusted EBITDA for the year ended December 31, 2013 was negative $76 million compared to negative $24 million for the year ended December 31, 2012, a decrease of $52 million. The decrease was due to the reasons discussed above.

Depreciation, Amortization and Impairment of Non-Current Assets

Depreciation, amortization and impairment expenses for the year ended December 31, 2013 and December 31, 2012 were approximately $1.2 billion and $1 billion, respectively. The increase of $203 million was driven primarily by the $157 million difference in impairments recognized in 2013 and 2012 due to changes in the long-term view of lower gas and power prices. For additional information, please see Notes 6 and 7 to the audited combined and consolidated financial statements for the year ended December 31, 2014 included elsewhere in this proxy statement/prospectus. Additionally, there was a $30 million increase associated with newly installed capacity related to Iberdrola Renewables.

Other Income and (Expense)

Other income and (expense) during the year ended December 31, 2013 and December 31, 2012 were $51 million and $114 million, respectively. The decrease of $63 million was primarily driven by the incorporation in 2012 of interest related to the reversal of income tax contingencies in Iberdrola Renewables, of which the interest income portion was $56 million.

Interest Expense, Net of Capitalization

Interest expense during the year ended December 31, 2013 and December 31, 2012 were $245 million and $316 million, respectively. The decrease of $71 million was driven by the reduction of notes payable in February 2013.

Income Tax Expense (Benefit)

Income tax expense from continuing operations for the year ended December 31, 2013 was $39 million higher than it would have been at the statutory federal income tax rate of 35% due predominately to the book impairment of goodwill. Income tax expense from continuing operations for the year ended December 13, 2012 was $127 million lower than it would have been at the statutory federal income tax rate of 35% due predominately to the reversal of a tax reserve associated with a federal income tax settlement covering the tax years 2001-2007, offset by an increase associated with the book impairment of goodwill.

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Liquidity and Capital Resources

Iberdrola USA’s operating, investing, developing and acquisition activities have significant short-term liquidity and long-term capital requirements. Historically, Iberdrola USA has used cash from operations, and borrowings under its credit facilities and commercial paper programs as its primary sources of liquidity. Iberdrola USA’s long-term capital requirements have been met primarily through retention of earnings, equity contributions from Iberdrola, S.A. and borrowings in the investment grade debt capital markets. Continued access to these sources of liquidity and capital are critical to Iberdrola USA. Risks may increase due to circumstances beyond Iberdrola USA’s control, such as a general disruption of the financial markets and adverse economic conditions.

Liquidity Resources

At December 31, 2014, Iberdrola USA had cash and cash equivalents of $482 million, as compared to $219 million at December 31, 2013. At March 31, 2015, Iberdrola USA had cash and cash equivalents of $655 million.

Iberdrola USA Revolving Credit Facility

On May 30, 2012, Iberdrola USA entered into a $300 million revolving credit facility with a syndicate of nine banks, or the revolving credit facility. The purpose of the revolving credit facility was to enable Iberdrola USA to fund its own liquidity needs, the liquidity needs of its unregulated subsidiaries and affiliates and to fund draws on the supplemental intercompany revolving credit facilities with the regulated operating utilities. Iberdrola USA has no secured indebtedness and none of its assets are mortgaged, pledged or otherwise subject to lien, nor are any of Iberdrola USA’s debt obligations guaranteed or secured by its subsidiaries.

The revolving credit facility contains negative covenants that require Iberdrola USA, among other things, to maintain a ratio of consolidated indebtedness to consolidated total capitalization that does not exceed 0.65 to 1.00 at any time. For purposes of calculating this maximum ratio of consolidated indebtedness to consolidated total capitalization, the revolving credit facility excludes from consolidated net worth the balance of other comprehensive income (loss), or OCI, as it appears on Iberdrola USA’s consolidated balance sheet. Additionally, the revolving credit facility restricts the amount of secured indebtedness that Iberdrola USA may maintain. Under the revolving credit facility, Iberdrola USA pays an annual facility fee that is based on its credit ratings and that is currently equal to 22.5 basis points. While the initial maturity date was May 30, 2017, it was extended to May 30, 2019. As of December 31, 2014 and March 31, 2015, the revolving credit facility was undrawn.

Joint Utility Revolving Credit Facility

On July 15, 2011, NYSEG, CMP and RG&E entered into a revolving credit facility with a syndicate of banks, or the joint facility, that provides for maximum borrowings of up to $600 million in the aggregate. Under the terms of the joint facility, each joint borrower has a maximum borrowing entitlement, or sublimit, which can be periodically adjusted to address specific short-term capital funding needs, subject to the maximum limit established by the banks. In 2012, CMP and NYSEG established commercial paper programs with limits of $350 million and $200 million respectively. CMP’s commercial paper program limit was subsequently reduced to $250 million. The joint facility provides support for these commercial paper programs. The companies intend to use commercial paper as an alternative to revolving credit facilities as a source of short-term debt.

The joint facility contains no rating triggers that would cause default, acceleration or puts but does contain rating sensitive pricing. The joint facility also contains negative covenants, including one that sets the ratio of maximum allowed consolidated debt to consolidated total capitalization at 0.65 to 1.00.

Under the joint facility, each of the borrowers currently pays an annual facility fee of 15 to 20 basis points of their sublimit, depending on their credit rating. While, the initial maturity date was July 15, 2015, the parties have since extended the maturity date to July 15, 2018. As of December 31, 2014 and March 31, 2015, there was $586 million and $578 million, respectively, available under the joint facility.

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Iberdrola Financiación, S.A.U. Credit Facility

In August 2011 Iberdrola USA entered into a revolving credit facility with Iberdrola Financiación S.A.U., a subsidiary of Iberdrola, S.A. under which Iberdrola USA may borrow up to $600 million. This facility terminates in August 2016, and Iberdrola USA pays a commitment fee of 20.0 basis points annually on this facility. As of March 31, 2015, this facility has never been utilized.

Liquidity Management

Iberdrola USA optimizes its liquidity within the United States through a series of arms’-length intercompany lending arrangements with its subsidiaries to move liquidity from subsidiaries with cash surplus to subsidiaries with liquidity needs, subject to the limitation that the regulated utilities may borrow from affiliates, but may not lend to unregulated affiliates.

Iberdrola USA manages its overall liquidity position as part of the broader Iberdrola, S.A. group and is a party to a cash pooling agreement with Bank Mendes Gans, N.V., similar to other Iberdrola, S.A. subsidiaries. Cash surpluses remaining after meeting the liquidity requirements of Iberdrola USA and its subsidiaries may be deposited in the cash pooling account where such funds are available to meet the liquidity needs of other affiliates within the Iberdrola S.A. group. Under the cash pooling agreement, affiliates with credit balances have pledged those balances to cover the debit balances of the other affiliated parties to the agreement. Deposits in the cash pooling account were $449 million and $641 million at December 31, 2014 and March 31, 2015, respectively.

Long-term Capital Resources

Iberdrola USA expects to incur approximately $700 to $900 million in capital expenditures over the next 12 months. Iberdrola USA expects to meet its long-term capital requirements over the next 12 months through the use of its cash surplus, cash from operations and borrowings by Iberdrola Networks in the investment grade debt capital markets. In the event of disruption in the debt capital markets, Iberdrola USA believes that it has sufficient liquidity resources to fund its operations and investments over the next 12 months. Iberdrola USA does not believe that additional equity capital will be required for at least the 12 months following the date of this proxy statement/prospectus. At December 31, 2014 and March 31, 2015 Iberdrola USA has no outstanding debt. It can borrow under the revolving credit facility discussed above. Iberdrola USA also has investment grade ratings from Standard and Poor’s, Moody’s and Fitch and believes that it could raise capital on competitive terms in the investment grade debt capital markets. Iberdrola USA has paid no common stock dividends since its acquisition by Iberdrola, S.A. in September 2008.

Iberdrola Network’s regulated utilities are required by regulation to maintain a minimum ratio of common equity to total capital equal to the ratio used in the establishment of their revenue requirements. The regulated utilities periodically pay dividends to, or receive capital contributions from Iberdrola USA, in order to maintain the minimum equity ratio requirement. NYSEG, CMP and RG&E each independently incur indebtedness by issuing investment grade debt securities. Of the $2.7 billion of Iberdrola USA’s long-term debt (including the current portion thereof) at December 31, 2014, $879 million, $930 million and $702 million are obligations of NYSEG, CMP and RG&E respectively.

IRHI has historically been financed primarily with equity contributions from its parent, which prior to the reorganization that occurred in November 2013 was Iberdrola, S.A. The last such contribution of $800 million was made in February 2013. IRHI has also sourced capital through tax equity financing arrangements associated with particular wind farm projects. The arrangements allocate tax losses and production tax credits to the tax equity investor in exchange for an initial contribution. The obligations created under the tax equity arrangements are recorded as a liability with an aggregate balance of $401 million at December 31, 2014. IRHI has also sourced capital through sale-leaseback arrangements, the balance of which are included in long-term debt and totaled $74 million at December 31, 2014.

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In its credit facilities, long-term borrowing and tax-equity partnerships, Iberdrola USA and its affiliates that are parties to the agreements are subject to covenants that are standard to such agreements. Affirmative covenants impose certain obligations on the borrower and negative covenants limit certain activities by the borrower. The agreements also define certain events of default, including but not limited to non-compliance with the covenants that may automatically in some circumstances, or at the option of the lenders in other circumstances, trigger acceleration of the obligations. Iberdrola USA and its affiliates were in compliance with all such covenants at December 31, 2014 and March  31, 2015.

Cash Flows

Iberdrola USA’s cash flows depend on many factors, including general economic conditions, regulatory decisions, weather, commodity price movements, and operating expense and capital spending control.

The following is a summary of the cash flows by activity for the three months ended March 31, 2015 and 2014 and the years ended December 31, 2014, 2013 and 2012:

	Three Months Ended March 31,						Year Ended December 31,
	2015			2014			2014			2013			2012
	(in millions)
Cash Flows
Net cash from operating activities	$	460		$	469		$	1,331		$	1,177		$	723
Net cash used in investing activities		(351	)		(257	)		(888	)		(868	)		(1,147	)
Net cash from (used in) financing activities		64			—			(180	)		(144	)		106
Net increase (decrease) in cash and cash equivalents	$	173		$	212		$	263		$	165		$	(318	)

Operating Activities

Iberdrola USA’s primary sources of operating cash inflows are proceeds from transmission and distribution of electricity and natural gas, sales of wholesale energy and energy related products and services, and natural gas revenues from natural gas storage services. Iberdrola USA’s primary operating cash outflows are power and natural gas purchases and transmission operating and maintenance expenses, as well as personnel costs and other employee-related expenditures. As Iberdrola USA’s business has expanded, Iberdrola USA’s working capital requirements have grown. Iberdrola USA expects its working capital to grow as it continues to grow its business.

For the three months ended March 31, 2015, net cash provided by operating activities was $460 million, attributable to revenues from sales of energy and energy related products and revenues from natural gas storage services, partially offset by cost of power and natural gas purchased and transmission operating and maintenance expenses and personnel costs. The $33 million net change in Iberdrola USA’s net operating assets and liabilities was primarily attributable to increases in other assets of $68 million, income taxes payable of $57 million and regulatory assets/liabilities of $92 million. These increases are offset by decreases in accounts receivable of $19 million, inventories of $130 million, accounts payable of $78 million, and other liabilities of $119 million.

For the three months ended March 31, 2014, net cash provided by operating activities was $469 million, attributable to revenues from sales of energy and energy related products and revenues from natural gas storage services, partially offset by power and natural gas purchases and transmission operating and maintenance expenses and personnel costs. The $9 million net change in Iberdrola USA’s net operating assets and liabilities was primarily attributable to increases in accounts payable of $253 million, other assets of $88 million, other liabilities of $130 million, and regulatory assets/liabilities of $54 million. These increases are offset by decreases in inventories of $206 million, accounts payable of $32 million, and income taxes payable of $8 million.

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In 2014, net cash provided by operating activities was approximately $1.3 billion, attributable to revenues from sales of energy and energy related products and revenues from natural gas storage services, partially offset by power and natural gas purchases and transmission operating and maintenance expenses and personnel costs. The $35 million net change in Iberdrola USA’s net operating assets and liabilities was primarily attributable to increases in accounts receivable of $1 million, other assets of $101 million, accounts payable of $27 million, and regulatory assets/liabilities of $175 million. These increases are offset by decreases in inventories of $58 million, other liabilities of $110 million, and income taxes payable of $13 million.

In 2013, net cash provided by operating activities was approximately $1.2 billion, attributable to revenues from sales of energy and energy related products and natural gas and revenues from natural gas storage services, partially offset by power and natural gas purchases and transmission operating and maintenance expenses and personnel costs. The $181 million net change in Iberdrola USA’s net operating assets and liabilities was primarily attributable to increases in other assets of $126 million, other liabilities of $123 million, and income taxes payable of $2 million. These increases are offset by decreases in accounts receivable of $56 million, accounts payable of $208 million, and regulatory assets/liabilities of $27 million.

In 2012, net cash provided by operating activities was $723 million, attributable to revenues from sales of energy and energy related products and revenues from natural gas storage services, partially offset by power and natural gas purchases and transmission operating and maintenance expenses and personnel costs. The $448 million net change in Iberdrola USA’s net operating assets and liabilities was primarily attributable to increases in accounts receivable of $109 million, inventories of $11 million, other assets of $113 million, and other liabilities of $92 million. These increases are offset by decreases in accounts payable of $226 million, taxes accrued of $2 million, and regulatory assets/liabilities of $79 million.

Investing Activities

Iberdrola USA’s investing activities have primarily focused on enhancing, automating, and reinforcing the asset base to support safety, reliability, and customer growth in accordance with the regulatory markets within which it operates, as well as constructing solar assets, pre-constructing wind asset and spending on gas generation assets. During 2012 through 2014, Iberdrola USA invested primarily in upgrading and expanding Iberdrola USA’s electricity and natural gas infrastructure across Iberdrola USA’s energy service and utility companies. The cost of investments however has been offset, partially, by refunds received from the U.S. Treasury grant program and from deposits made for turbine purchases and transmission interconnections.

For the three months ended March 31, 2015, net cash used in investing activities was $351 million, attributable to $177 million associated with Iberdrola Networks and $137 million related to payments of wind turbines by Iberdrola Renewables.

For the three months ended March 31, 2014, net cash used in investing activities was $257 million, attributable to $155 million associated with Iberdrola Networks. The majority of the additional amounts are attributed to changes in working capital to support investments within Iberdrola Renewables, including turbine payments in support of the Baffin wind construction project that was completed in 2014.

In 2014, the cash used in investing activities was $888 million, compared to $868 million in 2013 and $1.1 billion in 2012. These cash outflows primarily related to capital expenditures for Iberdrola Networks in the amount of $727 million in 2014, $870 million in 2013, and $955 million in 2012, with the remaining balance representing principally capital expenditures in Iberdrola Renewables.

The yearly decreases from 2012 to 2014 in Iberdrola Networks capital expenditures are primarily due to a reduced spending for Iberdrola USA’s transmission project in Maine, the Maine Power Reliability Program, with 2012 being the peak year for Iberdrola USA’s investment for this multiyear project. Other investments have remained relatively flat across Iberdrola Networks during this period.

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Iberdrola Renewables also made capital investments during this three year period. Investing activities in 2014 related to capital expenditures of $257 million for construction of the Baffin Bay Wind asset, $14 million in capital expenditures on the Klamath gas-fired cogeneration facility, or the Klamath Plant, $14 million on improvements to operating wind assets and $13 million in development costs, partially offset by $16 million in net refunds of wind turbine deposits.

In 2013, cash used in investing activities for Iberdrola Renewables included capital expenditures of $35 million related to the Baffin Bay Wind asset, $19 million in capital expenditures for the Klamath Plant, $14 million on improvements to operating wind assets, and $17 million in development costs, partially offset by $42 million for refunds of unused wind turbine deposits and $29 million received in cash grants under the Treasury cash grant program.

In 2012, cash used in investing activities for Iberdrola Renewables included $278 million in capital expenditures related to final construction activities for six new wind assets and one solar asset, $7 million in capital expenditures for the Klamath Plant, $25 million on improvements to operating wind assets and $18 million in development costs, partially offset by $4 million of refunds of wind turbine deposits and $6 million refunded on transmission deposits. Iberdrola Renewables made payments for turbines installed in the previous year. Iberdrola Renewables received $438 million in cash grants under the Treasury cash grant program.

Financing Activities

Iberdrola USA’s financing activities have primarily consisted of using its credit facilities and long-term debt issued or redeemed by its regulated Iberdrola Networks subsidiaries.

For the three months ended March 31, 2015, financing activities provided $64 million in cash. CMP issued $150 million in first mortgage bonds and this was offset by the maturity of $60 million of pollution control notes at NYSEG and $27 million in payments made on tax equity financing arrangements.

For the three months ended March 31, 2014, financing activities remained unchanged. An increase in short-term notes was offset by the payments on equity financing arrangements.

In 2014, cash used in financing activities was $180 million reflecting a reduction in notes payable and maturities and $119 million in payments on tax equity financing arrangements.

In 2013, cash used in financing activities was $144 million. CMP issued first mortgage bonds of $225 million. IRHI received an equity contribution that included a cash infusion of $153 million. These were offset by repayments of non-current debt of $273 million and a reduction of $165 million in notes payable and maturities and payments of tax equity financing arrangements of $173 million.

In 2012, cash provided by financing activities was $106 million. CMP issued $225 million of first mortgage bonds and NYSEG issued $150 million of senior unsecured notes. These were offset by repayments of non-current debt of $255 million.

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Contractual Obligations

As of December 31, 2014, Iberdrola USA’s contractual obligations (excluding any tax reserves) were as follows:

	Total		2015		2016		2017		2018		2019		Thereafter
	(in millions)
Operating leases(1)	$	373	$	24	$	24	$	23	$	22	$	23	$	257
Projected future pension benefit plan contributions(2)		102		1		28		29		25		19		—
Long-term debt (including current maturities)(3)		2,664		148		197		214		10		310		1,785
Interest payments(4)		1,576		148		134		119		102		92		981
Material purchase commitments(5)		2,936		2,117		335		67		58		30		329
Total Contractual Obligations	$	7,651	$	2,438	$	718	$	452	$	217	$	474	$	3,352

(1) Represents lease contracts relating to operational facilities, office building leases, and vehicle and equipment leases. These amounts represent Iberdrola USA’s expected portion of the costs to pay as amounts related to contingent payments are predominantly linked to electricity generation at the respective facilities.

(2) The qualified pension plans’ contributions are generally based on the estimated minimum pension contributions required under ERISA and the Pension Protection Act of 2006, as well as contributions necessary to avoid benefit restrictions and at- risk status. These amounts represent estimates that are based on assumptions that are subject to change. The minimum required contributions for years after 2019 are not included as projection beyond 2019 are not available.

(3) See debt payment discussion in “Long-term Capital Resources.”

(4) Interest payments are estimated based on final maturity dates of debt securities outstanding at December 31, 2014 and do not reflect anticipated future refinancing, early redemptions or debt issuances. Variable rate interest obligations are estimated based on rates as of December 31, 2014

(5) Represents forward purchase commitments under power, gas, and other arrangements.

Critical Accounting Policies and Estimates

The financial statements provided herein have been prepared in accordance with U.S. GAAP and include the accounts of Iberdrola USA.

In preparing the accompanying financial statements, Iberdrola USA’s management has made certain estimates and assumptions that affect the reported amounts of assets, liabilities, shareholder’s equity, revenues and expenses, and the disclosures thereof. Iberdrola USA’s management recorded the net assets of IRHI in these combined and consolidated financial statements at the historical accounting basis of Iberdrola USA. The historical accounting basis of Iberdrola USA includes purchase accounting adjustments related to Iberdrola USA’s acquisition of IRHI in 2007. Prior to the 2013 reorganization of Iberdrola USA, Iberdrola Networks was not considered to be a substantive operating entity as it did not hold any direct operations and had always been a part of Iberdrola USA. As a result, the net assets of Iberdrola Networks in these combined and consolidated financial statements are recorded at the historical accounting basis of Iberdrola USA, which do not include purchase accounting adjustments related to Iberdrola, S.A.’s acquisition of Iberdrola USA in 2008. For additional information regarding Iberdrola USA’s corporate history and reorganization, see the section entitled “Additional Information about Iberdrola USA—History” beginning on page 202 of this proxy statement/prospectus.

Accounting for Regulated Public Utilities

U.S. GAAP allows regulated entities to give accounting recognition to the actions of regulatory authorities. In order to apply such regulatory accounting treatment and record regulatory assets and liabilities, certain criteria must be met. In determining whether the criteria are met for its operations, Iberdrola USA’s management makes significant judgments, which involve (i) determining whether rates for services provided to customers are subject

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to approval by an independent, third-party regulator, (ii) determining whether the regulated rates are designed to recover specific costs of providing the regulated service, (iii) considering relevant historical precedents and recent decisions of the regulatory authorities and (iv) considering the fact that decisions made by regulatory commissions or legislative changes at a later date could vary from earlier interpretations made by management and that the impact of such variations could be material. Iberdrola USA’s regulated subsidiaries have deferred recognition of costs (a regulatory asset) or have recognized obligations (a regulatory liability) if it is probable that such costs will be recovered or obligations relieved in the future through the ratemaking process. Management regularly reviews its regulatory assets and liabilities to determine whether adjustments to its previous conclusions are necessary based on the current regulatory environment as well as recent rate orders. If Iberdrola USA’s regulated subsidiaries, or a portion of their assets or operations, were to cease meeting the criteria for application of these accounting rules, accounting standards for businesses in general would become applicable and immediate recognition of any previously deferred costs would be required in the year in which such criteria are no longer met.

Accounting for Pensions and Other Post-retirement Benefits

Iberdrola USA provides pensions and other post-retirement benefits for a significant number of employees, former employees and retirees. Iberdrola USA accounts for these benefits in accordance with the accounting rules for retirement benefits. In accounting for its pension and other post-retirement benefit plans, or the Iberdrola USA plans, assumptions are made regarding the valuation of benefit obligations and the performance of plan assets. Delayed recognition of differences between actual results and those assumed allows for a smoother recognition of changes in benefit obligations and plan performance over the working lives of the employees who benefit under the Iberdrola USA plans. The primary assumptions include the discount rate, the expected return on plan assets, health care cost trend rate, mortality assumptions and demographic assumptions. Iberdrola USA applies consistent estimation techniques regarding its actuarial assumptions, where appropriate, across the Iberdrola USA plans of its operating subsidiaries. The estimation technique utilized to develop the discount rate for the Iberdrola USA plans is based upon the settlement of such liabilities as of December 31, 2014 utilizing a hypothetical portfolio of actual, high quality bonds, which would generate cash flows required to settle the liabilities. Iberdrola USA believes such an estimate of the discount rate accurately reflects the settlement value for plan obligations and results in cash flows which closely match the expected payments to participants.

Iberdrola USA reflects all unrecognized prior service costs and credits and unrecognized actuarial gains and losses for the regulated utilities of Iberdrola Networks as regulatory assets or liabilities as it is probable that such items will be recovered through the ratemaking process in future periods.

During 2014, the Society of Actuaries issued its final updated mortality tables and projection scales. Iberdrola USA, in conjunction with its actuaries, performed an analysis to determine the appropriateness of adopting these tables and the related mortality projections. As a result, Iberdrola USA’s pension and post-retirement plan liabilities as of December 31, 2014 reflect updated mortality assumptions.

Goodwill

Goodwill is not amortized, but is subject to an assessment for impairment at least annually or more frequently if events occur or circumstances change that will more likely than not reduce the fair value of the reporting unit below its carrying amount. A reporting unit is an operating segment or one level below an operating segment and is the level at which goodwill is tested for impairment.

In assessing goodwill for impairment, Iberdrola USA has the option of first performing a qualitative assessment to determine whether a quantitative assessment is necessary, or step zero. If it is determined, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not greater than the carrying amount, no further testing is required. If Iberdrola USA bypasses step zero or performs the qualitative assessment but determines that it is more likely than not that its fair value is less than its carrying amount, a quantitative two step, fair value based test is performed. Step one compares the fair value of the reporting unit to

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its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, step two is performed. Step two requires an allocation of fair value to the individual assets and liabilities using business combination accounting guidance to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than its carrying amount, an impairment loss is recorded as a reduction to goodwill and a charge to operating expense.

Iberdrola USA’s step zero qualitative assessment involves evaluating key events and circumstances that could affect the fair value of Iberdrola USA’s reporting units, as well as other factors. Events and circumstances evaluated include macroeconomic conditions, industry, regulatory and market considerations, cost factors and their effect on earnings and cash flows, overall financial performance as compared with projected results and actual results of relevant prior periods, other relevant entity specific events, and events affecting a reporting unit.

Iberdrola USA’s step one impairment testing, and step two if required, includes various assumptions, primarily the discount rate, which is based on an estimate of Iberdrola USA’s marginal, weighted average cost of capital, and forecasted cash flows. Iberdrola USA tests the reasonableness of the conclusions of its step one impairment testing using a range of discount rates and a range of assumptions for long term cash flows.

Impairment of long lived assets

Iberdrola USA evaluates property, plant, and equipment and other long lived assets for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is required to be recognized if the carrying amount of the asset exceeds the undiscounted future net cash flows associated with that asset.

Iberdrola USA determines the fair value of a long-lived asset (asset group) by applying the approaches prescribed under the fair value measurement accounting framework. Generally, the market approach and income approach are most relevant in the fair value measurement of Iberdrola USA’s long-lived assets; however, due to the lack of available relevant observable market information in many circumstances, Iberdrola USA often relies on the income approach. Iberdrola USA develops the underlying assumptions consistent with its internal budgets and forecasts for such valuations. Iberdrola USA uses an internal discounted cash flow valuation model, or the DCF model, based on the principles of present value techniques, to estimate the fair value of Iberdrola USA’s long-lived assets under the income approach. The DCF model estimates fair value by discounting Iberdrola USA’s cash flow forecasts at an appropriate discount rate. Management applies considerable judgment in selecting several input assumptions during the development of Iberdrola USA’s internal budgets and cash flow forecasts. Examples of the input assumptions that Iberdrola USA’s budgets and forecasts are sensitive to include macroeconomic factors such as growth rates, industry demand, inflation, power prices and commodity prices. Whenever appropriate, management obtains these input assumptions from observable market data sources and extrapolates the market information if an input assumption is not observable for the entire forecast period. Many of these input assumptions are dependent on other economic assumptions, which are often derived from statistical economic models with inherent limitations such as estimation differences. Further, several input assumptions are based on historical trends which often do not recur. The input assumptions most significant to Iberdrola USA’s budgets and cash flows are based on expectations of macroeconomic factors which may be volatile. The use of a different set of input assumptions could produce significantly different budgets and cash flow forecasts.

A considerable amount of judgment is also applied in the estimation of the discount rate used in the DCF model. To the extent practical, inputs to the discount rate are obtained from market data sources.

Fair value of a long-lived asset (asset group) is sensitive to both input assumptions related to Iberdrola USA’s budgets and cash flow forecasts and the discount rate. Further, estimates of long-term growth and terminal value are often critical to the fair value determination. As part of the impairment evaluation process, management analyzes the sensitivity of fair value to various underlying assumptions. The level of scrutiny increases as the gap between fair value and carrying amount decreases. Changes in any of these assumptions

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could result in management reaching a different conclusion regarding the potential impairment, which could be material. Iberdrola USA’s impairment evaluations inherently involve uncertainties from uncontrollable events that could positively or negatively impact the anticipated future economic and operating conditions.

Capitalization and recovery of project development costs

Development and construction of Iberdrola USA’s various facilities are carried out in stages. Project costs are expensed during early stage development activities. Once certain development milestones are achieved and it is probable that Iberdrola USA can obtain future economic benefits from a project, salaries and wages for persons directly involved in the project, and engineering, permits, licenses, wind measurement and insurance costs are capitalized.

Development projects in construction are reviewed periodically for any indications of impairment. Furthermore, Iberdrola USA assesses the recoverability of development costs that have been capitalized using several criteria to assess economic recoverability and probability of future economic benefit including energy prices, government regulation, and the internal rate of return to be earned on the project. If based on these factors, we conclude that it will not proceed with the related project, or that the project is no longer viable, the cost of the project is expensed in full.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place in either the principal market for the asset or liability, or, in the absence of a principal market, in the most advantageous market for the asset or liability.

Iberdrola USA uses valuation techniques and methodologies that maximize the use of observable inputs and minimize the use of unobservable inputs. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices are not available, valuation models are applied to estimate the fair value using the available observable inputs. The valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

To increase consistency and enhance disclosure of the fair value of financial instruments, the fair value measurement standard includes a fair value hierarchy to prioritize the inputs used to measure fair value into three categories. An asset or liability’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement, where Level 1 is the highest and Level 3 is the lowest.

Income tax

Iberdrola USA and IRHI filed separate consolidated federal income tax returns that included the taxable income or loss of all their respective subsidiaries, which are 80% or more owned, for all tax periods prior to 2013. For the period of January 1, 2013 through November 20, 2013, Iberdrola USA, excluding IRHI, filed a consolidated federal income tax return that included the taxable income or loss of all of its subsidiaries, which are 80% or more owned. In addition, a consolidated federal income tax return that included the taxable income or loss of IRHI and all of its subsidiaries for the entire 2013 tax year and the taxable income or loss of Iberdrola USA and all of its subsidiaries for the tax period of November 21, 2013 through December 31, 2013, was filed. Beginning with the 2014 tax year Iberdrola USA filed a consolidated federal income tax return that includes the taxable income or loss of all its subsidiaries, including IRHI, which are 80% or more owned.

Iberdrola USA uses the liability method of accounting for income taxes. Deferred tax assets and liabilities reflect the expected future tax consequences based on enacted tax law of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts. In accordance with GAAP for regulated

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industries, Iberdrola USA’s regulated subsidiaries have established a regulatory asset for the net revenue requirements to be recovered from customers for the related future tax expense associated with certain of these temporary differences. Investment tax credits are amortized over the estimated lives of the related assets.

Deferred tax assets and liabilities are measured at the expected tax rate for the period in which the asset or liability will be realized or settled, based on legislation enacted as of the balance sheet date. Changes in deferred income tax assets and liabilities that are associated with components of OCI are charged or credited directly to OCI. Significant judgment is required in determining income tax provisions and evaluating tax positions. Iberdrola USA’s tax positions are evaluated under a more-likely-than-not recognition threshold before they are recognized for financial reporting purposes. Valuation allowances are recorded to reduce deferred tax assets when it is not more-likely-than not that all or a portion of a tax benefit will be realized.

Certain states impose on corporations a franchise tax that is computed as the higher of a tax based on income or a tax based on capital. To the extent Iberdrola USA’s state tax based on capital is in excess of the state tax based on income, Iberdrola USA reports such excess in other taxes and taxes accrued in the accompanying consolidated financial statements.

Iberdrola USA accounts for sales tax collected from customers and remitted to taxing authorities on a net basis.

Uncertain tax positions have been classified as noncurrent unless expected to be paid within one year. Iberdrola USA’s policy is to recognize interest and penalties on uncertain tax positions as a component of interest expense in the combined and consolidated statements of income.

Off-Balance Sheet Arrangements

Iberdrola USA at times is required to provide bank or corporate guarantees in the normal course of business. These include the following guarantees provided to market operators to enable Iberdrola USA to participate in the energy markets:

• Market Guarantees—guarantees given to cover risks of buying and trading electricity and gas with Iberdrola USA or Iberdrola USA’s subsidiaries.

• Performance Guarantees—guarantees given to secure fulfillment of obligations resulting from the exercise of Iberdrola USA’s business activities or those of Iberdrola USA’s subsidiaries.

Iberdrola USA does not currently have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on Iberdrola USA’s financial condition, results of operations, liquidity, capital expenditures or capital resources.

Quantitative and Qualitative Disclosures about Market Risk

Iberdrola USA is exposed to risks associated with adverse changes in commodity prices, interest rates and equity prices. Financial instruments and positions affecting the financial statements of Iberdrola USA described below are held primarily for purposes other than trading. Market risk is measured as the potential loss in fair value resulting from hypothetical reasonably possible changes in commodity prices, interest rates or equity prices over the next year. Management has established risk management policies to monitor and manage such market risks, as well as credit risks.

Commodity Price Risk

Iberdrola Renewables and Iberdrola Energy Holdings face a number of energy market risk exposures, including fixed price, basis (both location and time), and heat rate risk. Contracted natural gas storage exposures are affected by gas price differentials across time. Iberdrola USA manages this exposure with fixed price, basis, and index gas derivatives. In addition, contracted transport positions are subject to gas price risk across location

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(i.e., the price differentials between the receipt and delivery points associated with the leased pipelines). Iberdrola USA hedges this exposure with basis swaps. Its merchant power plants are subject to heat rate risk, which is hedged with fixed price power and fixed price gas and basis positions. Iberdrola Renewables merchant wind facilities are subject to fixed price power risk, which is hedged with fixed price power trades.

Iberdrola Networks also experiences commodity price risk, due to volatility in the wholesale energy markets. Iberdrola Networks manages that risk through a combination of regulatory mechanisms, such as the pass-through of the market price of electricity and natural gas to customers, and through comprehensive risk management processes. Those measures mitigate Iberdrola USA’s commodity price exposure, but do not completely eliminate it. Iberdrola Networks also uses electricity contracts, both physical and financial, to manage fluctuations in electricity commodity prices in order to provide price stability to customers. It also uses natural gas futures and forwards to manage fluctuations in natural gas commodity prices in order to provide price stability to customers. It includes the cost or benefit of those contracts in the amount expensed for electricity or natural gas purchased when the related electricity is sold.

Long-term supply contracts reduce Iberdrola USA’s exposure to market fluctuations. Iberdrola USA has electricity commodity purchases and sales contracts for both capacity and energy (physical contracts) that have been designated and qualify for the own use exemption in accordance with the accounting requirements concerning derivative instruments and hedging activities.

Iberdrola Renewables and Iberdrola Energy Holdings use a Monte Carlo Simulation Value-at-Risk, or VaR, technique to measure and control the level of risk it undertakes. VaR is a statistical technique used to measure and quantify the level of risk within a portfolio over a given timeframe and within a specified level of confidence. VaR is primarily composed of three variables: the measured amount of potential loss, the probability of not exceeding the amount of potential loss, and the portfolio holding period.

Iberdrola Renewables and Iberdrola Energy Holdings use a 99% probability level over a five-day holding period, indicating that it can be 99% confident that losses over five days would not exceed that value. Using a simple summation approach across commodities, average VaR for 2014 was $12.5 million compared to a 2013 average of $12.3 million. This approach has limitations in that it ignores the extent of correlation between commodity prices and diversification between positions; as a result, VaR is not additive.

As noted above, VaR is a statistical technique and is not intended to be a guarantee of the maximum loss IRHI may incur.

Because all gains or losses on Iberdrola Networks’ commodity contracts will ultimately be passed on to retail customers, no sensitivity analysis is performed for Iberdrola Networks.

The following tables provide details on changes in Iberdrola USA’s derivative net asset (or liability) position related to natural gas swaps and futures during 2014:

	(in millions)
Derivative net asset at December 31, 2013	$	53
Reclassify to realize upon settlement		11
Changes in fair value recorded to income		(1	)
Amounts recorded to unrealized income		(3	)
Changes in fair value recorded in regulatory liabilities		14
Change in collateral held by (for) others		(26	)
Option premiums received and other		9
Derivative net asset at December 31, 2014	$	57

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Interest Rate Risk

Total debt outstanding was $2.7 billion at December 31, 2014 of which $159 million had a floating interest rate; a change of 25 basis points in this interest rate would result in a fluctuation of approximately $400,000 annually. There were no outstanding borrowings under the Iberdrola USA $300 million credit facility and the $600 million joint facility. Borrowings under the credit facilities incur interest at a floating rate tied to LIBOR. The estimated fair value of the Iberdrola USA’s debt at December 31, 2014 was $3.0 billion.

There are no interest rate derivative contracts outstanding at December 31, 2014.

Pension and Post-Retirement Plans

Iberdrola USA provides pensions and other post-retirement benefits for a significant number of employees, former employees and retirees. In applying relevant accounting policies, Iberdrola USA has made critical estimates related to actuarial assumptions, including assumptions of expected returns on plan assets, discount rates, health care cost trends and future compensation. The cost of pension and other post-retirement benefits in future periods will depend on actual returns on plan assets, assumptions for future periods, contributions and benefit experience. In 2014, Iberdrola contributed $31 million to its pension plans. Employer contributions to Iberdrola USA’s pension plans in 2015 is expected to be $1 million.

The discount rate used in accounting for pension and other benefit obligations in 2014 ranged from 3.80% to 3.90%. The expected rate of return on plan assets for qualified pension benefits in 2014 ranged from 6.50% to 7.50%. The following tables reflect the estimated sensitivity associated with a change in certain significant actuarial assumptions (each assumption change is presented mutually exclusive of other assumption changes):

	Change in Assumption		Impact on 2014 Pension Expense Increase (Decrease)
			Pension Benefits			Post Retirement
			(in millions)
Increase in discount rate		50 basis points	$	(9	)	$	(2	)
Decrease in discount rate		50 basis points		9			2
Increase in return on plan asset		50 basis points		11			—
Decrease in return on plan asset		50 basis points		11			—

Credit Risk

This risk is defined as the risk that a third party will not fulfill its contractual obligations and, therefore, generate losses for Iberdrola USA. Iberdrola Networks is exposed to nonpayment of customer bills. Standard debt recovery procedures are in place, in accordance with best practices and in compliance with applicable state regulations and embedded tariff mechanisms to manage uncollectable expense. Iberdrola USA’s credit department, based on guidelines approved by the Iberdrola USA board, establishes and manages its counterparty credit limits. Iberdrola USA has developed a matrix of unsecured credit thresholds that are dependent on a counterparty’s or the counterparty guarantor’s applicable credit rating. Credit risk is mitigated by contracting with multiple counterparties and limiting exposure to individual counterparties or counterparty families to clearly defined limits based upon the risk of counterparty default. At the counterparty level, Iberdrola USA employs specific eligibility criteria in determining appropriate limits for each prospective counterparty and supplements this with netting and collateral agreements, including margining, guarantees, letters of credit, and cash deposits, where appropriate.

Iberdrola Renewables and Iberdrola Energy Holdings are also exposed to credit risk through their energy marketing and trading operations. Iberdrola USA manages counterparty credit risk for its subsidiaries with energy marketing and trading operations through established policies, including counterparty credit limits, and in some cases credit enhancements, such as cash prepayments, letters of credit, cash and other collateral and guarantees.

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Some relevant considerations when assessing the credit risk exposure of the energy marketing and trading operations follows:

• Operations are primarily concentrated in the energy industry.

• Trade receivables and other financial instruments are predominately with energy, utility and financial services related companies, as well as municipalities, cooperatives and other trading companies in the U.S.

• Overall credit risk is managed through established credit policies by a Credit Risk Management group that is independent of the energy marketing and trading functions.

• Prospective and existing customers are reviewed for creditworthiness based upon established standards, with customers not meeting minimum standards providing various credit enhancements or secured payment terms, such as letters of credit or the posting of margin cash collateral.

• Master netting agreements are used, where appropriate, to offset cash and non-cash gains and losses arising from derivative instruments with the same counterparty.

Based on Iberdrola USA’s policies and risk exposures related to credit risk from its energy marketing and trading operations, Iberdrola USA does not anticipate a material adverse effect on its financial statements as a result of counterparty nonperformance. As of December 31, 2014, approximately 98% of Iberdrola USA’s energy marketing and trading counterparty credit risk exposure is associated with companies that have investment grade credit ratings.

The following table displays the credit quality of Iberdrola USA’s trading counterparties as of December 31, 2014:

	Credit Exposure Before Cash Collateral		Cash Collateral		Net Credit Exposure
	(in millions)
Investment Grade(1)
A- and Greater	$	1,813	$	—	$	1,813
BBB+ and BBB		474		2		473
BBB-		140		—		140
Total Investment Grade		2,427		2		2,426
Non-investment grade(2) (3) (4)		65		5		59
Total	$	2,492	$	7	$	2,485

(1) This category includes counterparties with minimum credit ratings of Baa3 assigned by Moody’s and BBB- assigned by Standard & Poor’s, if rated by both agencies. The five largest counterparty exposures, combined, for this category represented approximately 37.9% of the total gross credit exposure.

(2) This category includes counterparties with credit ratings that are below investment grade. The five largest counterparty exposures, combined, for this category represented approximately 0.6% of the total gross credit exposure.

(3) This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s, but are considered investment grade based on Iberdrola USA’s evaluation of the counterparty’s creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 0.9% of the total gross credit exposure.

(4) This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s, and are considered non-investment grade based on Iberdrola’ s evaluation of the counterparty’s creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 0.8% of the total gross credit exposure.

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Treasury Management (including Liquidity Risk)

Iberdrola USA Inc.’s cash management and short-term funding activities are coordinated with its ultimate parent, Iberdrola, S.A. Iberdrola USA is able, effectively, to borrow from or lend to Iberdrola, S.A. Iberdrola USA and its subsidiaries use a series of arms-length agreements to provide short term funding to its unregulated subsidiaries, to minimize overall short-term funding costs and to maximize returns on temporary cash investments. Iberdrola USA has the capacity to borrow from third parties through a $300 million revolving credit facility that expires in 2019 and was undrawn at December 31, 2014. Iberdrola USA had no other short term third-party debt at December 31, 2014. For more information, see the sections entitled “—Liquidity and Capital Resources—Liquidity Resources” and “—Liquidity and Capital Resources—Liquidity Management” beginning on page 162 and 163, respectively, of this proxy statement/prospectus.

Iberdrola Networks

Iberdrola Networks’ regulated utilities fund their operations independently, except to the extent that they borrow on a short-term basis from unregulated affiliates and from each other when circumstances warrant in order to minimize short-term funding costs and maximize returns on temporary cash investments. The regulated utilities are prohibited by regulation from lending to unregulated affiliates. NYSEG, RG&E and CMP each independently access the investment grade debt capital markets for long-term funding and each are borrowers in a joint revolving credit facility in which the aggregate credit limit is $600 million. This facility expires in 2018 and had $586 million of credit available as of December 31, 2014. NYSEG and CMP also have commercial paper programs. CMP issued $150 million of first mortgage bonds in January 2015 that had been priced in a private transaction in October 2014. Iberdrola Networks had approximately $2.5 billion of outstanding third-party debt at December 31, 2014.

Iberdrola Networks’ regulated utilities are subjected by regulation to certain credit quality maintenance measures, including minimum equity ratios, that are linked to the level of equity assumed in the establishment of revenue requirements. The companies maintain their equity ratios at or above the minimum through dividend declarations or, when necessary, receive capital contributions from Iberdrola USA.

Iberdrola Renewables

Iberdrola Renewables has primarily funded operations through equity contributions from the Iberdrola Group. The last such equity contribution of $800 million was made in February 2013. Iberdrola Renewables has also raised a small percentage of its capital through tax equity partnerships, project loans and sale-leaseback arrangements. The balance of the outstanding tax equity financing arrangement at December 31, 2014 was $401 million and the balance of leases was $73 million.

New Accounting Standards

Simplifying the Presentation of Debt Issuance Costs

The FASB issued an amendment in April 2015 that is intended to simplify the presentation of debt issuance costs. Instead of presenting debt issuance costs as a deferred charge (that is, as an asset), the amendments require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with the presentation for debt discounts. The amendment is effective for public entities for financial statements issued for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The amendments require retrospective application and permit early adoption. Iberdrola USA does not expect its adoption of the amendments to affect its results of operations, financial position, or cash flows.

Amendments to the Consolidation Analysis

In February 2015 the FASB issued an amendment to improve targeted areas of the consolidation guidance and reduce the number of consolidation models. The amendments are effective for public business entities for

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fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The adoption of the amendments is not expected to materially affect the results of operations, financial position, or cash flows of Iberdrola USA.

Pushdown Accounting

In November 2014, the FASB issued guidance on when and how an acquired entity that is a business or nonprofit activity, whether public or nonpublic, can apply pushdown accounting in its separate financial statements upon the occurrence of an event in which an acquirer, either an individual or an entity, obtains control of the acquired entity. The guidance provides an acquired entity with an option to apply pushdown accounting in its separate financial statements. As a result of the new standard, Iberdrola USA was not required to apply pushdown accounting for the purchase of Energy East by Iberdrola, S.A. in 2008.

Discontinued Operations and Disposals of Components of an Entity

The FASB issued amendments in April 2014 that change the requirements for the reporting of discontinued operations. The new definition of discontinued operations limits reporting to disposals of components that represent strategic shifts that have, or will have, a major effect on an entity’s operations and financial results. The amendments are effective for public business entities and certain not-for-profit entities for annual periods beginning on or after December 15, 2014, and interim periods within those years, and are effective for all other entities for annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. The adoption of the amendments is not expected to materially affect the results of operations, financial position or cash flows of Iberdrola USA.

Revenue from Contracts with Customers

In May 2014, the FASB issued a new accounting standard related to the recognition of revenue from contracts with customers and required disclosures. The core principle is for an entity to recognize revenue to represent the transfer of goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In April 2015, the FASB issued a proposal to defer by one year the effective date of this standard. On July 9, 2015, a majority of the FASB voted to approve a one-year deferral of the effective date of the revenue standard for all entities. Thus, the standard will now be effective for annual reporting periods beginning after December 15, 2017 and interim periods therein, with early adoption as of the original effective date permitted. Iberdrola USA is currently evaluating how the adoption of the standard will affect the results of operations, financial position, or cash flows.

Presentation of an Unrecognized Tax Benefit

In July 2013 the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit when an NOL carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, is to be presented as a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. The unrecognized tax benefit is to be presented as a liability and should not be combined with deferred tax assets to the extent that an NOL carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose. Iberdrola USA adopted these amendments effective January 1, 2014. The adoption of these amendments did not materially affect Iberdrola USA’s results of operation, financial position or cash flows.

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Management’s Discussion and Analysis of Financial Condition and Results of Operation of UIL

UIL’s financial condition and results of operations are described in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in UIL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, UIL’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 and in other documents incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus for the location of information incorporated by reference into this proxy statement/prospectus.

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UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined financial information sets forth the unaudited pro forma combined statement of income of the combined company for the three months ended March 31, 2015 and for the year ended December 31, 2014, and the unaudited pro forma combined balance sheet as of March 31, 2015 to give effect to the transaction described in Note 1, or the transaction, as if such transaction was completed on January 1, 2014 and March 31, 2015, respectively.

The following unaudited pro forma combined financial information is based on the historical financial statements of Iberdrola USA and UIL and is intended to illustrate how the transaction might have affected the historical financial statements of Iberdrola USA if it had been consummated at the dates indicated above. The unaudited pro forma combined financial information reflects preliminary estimates and assumptions based on information available at the time of preparation, including fair value estimates of assets and liabilities. The unaudited pro forma combined financial information is provided for illustrative purposes only and does not necessarily reflect the financial position or results of operations that would have actually resulted had the transaction occurred as of the dates indicated, nor should it be taken as necessarily indicative of the future financial position or results of operations of the combined company. Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled “Risk Factors” beginning on page 37 of this proxy statement/prospectus.

The unaudited pro forma combined financial information should be read together with:

• the accompanying notes to the unaudited pro forma combined financial information;

• the unaudited condensed consolidated financial statements of Iberdrola USA as of and for the three months ended March 31, 2015 and 2014 included elsewhere in this proxy statement/prospectus;

• the audited combined and consolidated financial statements of Iberdrola USA as of December 31, 2014 and 2013 and for the three years ended December 31, 2014 included elsewhere in this proxy statement/prospectus;

• the unaudited consolidated financial statements of UIL as of and for the three months ended March 31, 2015 and 2014 contained in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, which are incorporated by reference into this document (see section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus);

• the audited consolidated financial statements of UIL as of December 31, 2014 and 2013 and for the three years ended December 31, 2014 contained in its Annual Report on Form 10-K for the year ended December 31, 2014, which are incorporated by reference into this document (see section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus).

The unaudited pro forma combined financial information does not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the transaction, the costs to integrate the operations of UIL and Iberdrola USA or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements. The unaudited pro forma combined financial information also does not reflect any potential regulatory actions that may impact the combined company when the transaction is completed.

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Unaudited Pro Forma Combined Balance Sheet as of March 31, 2015

	As of March 31, 2015
	Historical Iberdrola USA			Historical UIL			Reporting Reclassifications (K)			Transaction Adjustments				Pro Forma Iberdrola USA
	(in millions)
Assets
Current Assets
Cash and cash equivalents	$	655		$	80		$	—		$	(674	)	A	$	61
Restricted cash		—			1			(1	)		—				—
Accounts receivable and unbilled revenues, net		872			—			389			—				1,261
Accounts receivable, less allowance		—			298			(298	)		—				—
Unbilled revenue		—			91			(91	)		—				—
Other receivables		—			—			—			—				—
Derivative assets		95			7			—			—				102
Fuel and gas in storage		94			31			—			—				125
Materials and supplies		104			—			—			—				104
Deferred income taxes		129			—			—			20		B		149
Refundable taxes		—			18			—			—				18
Prepayments and other current assets		387			—			36			—				423
Prepayments		—			23			(23	)		—				—
Other		—			12			(12	)		—				—
Regulatory assets		106			87			—			—				193
Deferred income taxes regulatory		33			—			—			—				33
Total Current Assets		2,475			648			—			(654	)			2,469
Other Investments
Equity investment in GenConn		—			112			(112	)		—				—
Other		—			28			(28	)		—				—
Total Other Investments		—			140			(140	)		—				—
Property, plant and equipment, at cost		21,867			4,106			—			—				25,973
Less: accumulated depreciation		(5,957	)		(1,052	)		—			—				(7,009	)
Net Property, Plant and Equipment in Service		15,910			3,054			—			—				18,964
Construction work in progress		1,157			263			—			—				1,420
Total Property, Plant and Equipment		17,067			3,317			—			—				20,384
Equity method investments		259			—			112			—				371
Other investments		66			—			28			24		C		118
Regulatory assets		2,353			700			—			230		E		3,283
Other Assets
Goodwill		1,361			266			—			1,335		D		2,962
Intangible assets		560			—			—			—				560
Derivative assets		94			20			—			—				114
Unamortized debt issuance expenses		—			13			(13	)		—				—
Other long-term receivable		—			1			(1	)		—				—
Other		71			23			14			15		F		123
Total Other Assets		2,086			323			—			1,350				3,759
Total Assets	$	24,306		$	5,128		$	—		$	950			$	30,384

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	As of March 31, 2015
	Historical Iberdrola USA		Historical UIL		Reporting Reclassifications (K)			Transaction Adjustments			Pro Forma Iberdrola USA
	(in millions)
Liabilities
Current Liabilities
Line of credit borrowings	$	—	$	70	$	—		$	—		$	70
Current portion of debt		134		7		—			—			141
Tax equity financing arrangements		120		—		—			—			120
Interest accrued		35		26		—			—			61
Accounts payable		599		167		61			—			827
Dividends payable		—		24		—			—			24
Accrued liabilities		—		61		(61	)		—			—
Taxes accrued		66		26		—			—			92
Derivative liability		93		23		—			—			116
Deferred income taxes		—		17		—			—			17
Other current liabilities		225		—		—			—			225
Regulatory liabilities		188		24		—			—			212
Total Current Liabilities		1,460		445		—			—			1,905
Regulatory Liabilities		1,299		491		—			—			1,790
Deferred income taxes regulatory		390		—		—			—			390
Other Non-current Liabilities
Deferred income taxes		2,495		604		—			—			3,099
Deferred income		1,599		—		—			—			1,599
Pension and other post-retirement		787		—		350			—			1,137
Pension accrued		—		265		(265	)		—			—
Other post-retirement benefits accrued		—		85		(85	)		—			—
Tax equity financing arrangements		259		—		—			—			259
Derivative liability		48		76		—			—			124
Asset retirement obligation		238		—		19			—			257
Environmental remediation costs		285		—		4			—			289
Other		260		48		(23	)		—			285
Total Other Non-current Liabilities		5,971		1,078		—			—			7,049
Non-current debt		2,623		1,710		—			268	E		4,601
Total Non-current Liabilities		10,283		3,279		—			268			13,830
Total Liabilities		11,743		3,724		—			268			15,735
Stockholders’ Equity		12,547		1,404		—			682	G		14,633
Noncontrolling Interests		16		—		—			—			16
Total Equity		12,563		1,404		—			682			14,649
Total Liabilities and Equity	$	24,306	$	5,128	$	—		$	950		$	30,384

See accompanying notes to the unaudited pro forma combined financial information.

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Unaudited Pro Forma Combined Statement of Income for the three months ended

March 31, 2015

	For the three months ended March 31, 2015
	Historical Iberdrola USA			Historical UIL			Reporting Reclassifications (K)			Transaction Adjustments				Pro Forma Iberdrola USA
	(in millions, except per share data)
Operating Revenues	$	1,227		$	584		$	—		$	—			$	1,811
Operating Expenses
Purchased power, natural gas and fuel used		392			272			—			—				664
Transmission wholesale		—			20			(20	)		—				—
Operations and maintenance		380			101			27			(12	)	H		496
Depreciation and amortization		175			43			—			—				218
Taxes other than income taxes		84			41			—			—				125
Merger and acquisition related expenses		—			7			(7	)		—				—
Total Operating Expenses		1,031			484			—			(12	)			1,503
Operating Income		196			100			—			12				308
Other Income and (Expense)
Other income, net		12			5			—			—				17
Earnings from equity method investments		1			3			—			—				4
Interest expense/charges, net		(61	)		(24	)		—			2		E		(83	)
Income Before Income Tax		148			84			—			14				246
Income tax expense		42			26			—			6		I		74
Net Income	$	106		$	58		$	—		$	8			$	172
Earnings per share (basic)	$	435,035		$	1.01			N/A			N/A			$	0.56
Earnings per share (diluted)	$	435,035		$	1.01			N/A			N/A			$	0.56
Cash dividends per share		—		$	0.432			—			—			$	0.432	(1)

(1) After the completion of the merger, Iberdrola USA will initially set its dividend at UIL’s current quarterly dividend of $0.432 per share, and currently expects to target a dividend based on a 65% to 75% payout ratio long-term, subject to consideration and approval by the combined company board.

See accompanying notes to the unaudited pro forma combined financial information.

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Unaudited Pro Forma Combined Statement of Income for the year ended December 31, 2014

	For the year ended December 31, 2014
	Historical Iberdrola USA			Historical UIL			Reporting Reclassifications (K)			Transaction Adjustments			Pro Forma Iberdrola USA
	(in millions, except per share data)
Operating Revenues	$	4,594		$	1,632		$	—		$	—		$	6,226
Operating Expenses
Purchased power, natural gas and fuel used		1,181			599			—			—			1,780
Transmission wholesale		—			88			(88	)		—			—
Operation and maintenance		1,552			400			95			—			2,047
Impairment of non-current assets		25			—			—			—			25
Depreciation and amortization		629			152			—			—			781
Taxes other than income taxes		322			138			—			—			460
Acquisition related expenses		—			7			(7	)		—			—
Total Operating Expenses		3,709			1,384			—			—			5,093
Operating Income		885			248			—			—			1,133
Other Income and (Expense)
Other income, net		52			18			(16	)		—			54
Earnings from equity method investments		12			14			—			—			26
Interest expense/charges, net		(243	)		(96	)		—			7	E		(332	)
Acquisition related bridge facility fees		—			(16	)		16			—			—
Income Before Income Tax		706			168			—			7			881
Income tax expense		282			58			—			3	K		343
Net Income	$	424		$	110		$	—		$	4		$	538
Earnings per share (basic)	$	1,743,940		$	1.93			—			—		$	1.74
Earnings per share (diluted)	$	1,743,940		$	1.92			—			—		$	1.74
Cash dividends per share		—		$	1.728			—			—		$	0.432	(1)

(1) After the completion of the merger, Iberdrola USA will initially set its dividend at UIL’s current quarterly dividend of $0.432 per share, and currently expects to target a dividend based on a 65% to 75% payout ratio long-term, subject to consideration and approval by the combined company board.

See accompanying notes to the unaudited pro forma combined financial information.

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NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

1. Description of the Transaction

On February 25, 2015, an agreement was reached between Iberdrola USA, a wholly-owned subsidiary of Iberdrola, S.A., merger sub, a wholly-owned subsidiary of Iberdrola USA, and UIL, under which UIL will merge with and into merger sub, with merger sub surviving the merger as a wholly-owned subsidiary of the combined company. In connection with the merger, each issued and outstanding share of the common stock of UIL will be converted into the right to receive one validly issued share of common stock of the combined company and $10.50 in cash. Immediately following the completion of the merger, former UIL shareowners will own 18.5% of the outstanding shares of common stock of the combined company and Iberdrola, S.A. will own the remaining shares. The completion of the merger and the actual closing date depend upon the satisfaction of a number of conditions, including (i) a declaration of effectiveness by the SEC of Iberdrola USA’s registration statement on Form S-4 containing a proxy statement; (ii) approval by UIL’s shareowners (as of the close of business on the record date); (iii) authorization for listing of Iberdrola USA common stock on the NYSE (subject to official issuance of notice by the NYSE); and (iv) receipt of required regulatory approvals. The transaction described above is referred to as the transaction in these notes to the unaudited pro forma combined financial information.

2. Basis of Presentation

The historical consolidated financial statements of Iberdrola USA and UIL have been adjusted in the unaudited pro forma combined financial information to give effect to pro forma events that are (1) directly attributable to the transaction, (2) factually supportable, and (3) with respect to the statements of income, expected to have a continuing impact on the combined results.

The unaudited pro forma combined financial information has been prepared in accordance with Article 11 of the SEC’s Regulation S-X.

The unaudited pro forma combined financial information gives effect to the transaction to be accounted for as a business combination in accordance with ASC 805 Business Combinations, with Iberdrola USA treated as the accounting acquirer, as if the transaction with UIL had been completed on January 1, 2014, for statements of income purposes, and on March 31, 2015 for balance sheet purposes.

UIL’s assets acquired and liabilities assumed will be recorded at their fair value at the transaction date. ASC 805 establishes that the consideration transferred shall be measured at the closing date of the transaction at the then-current market price. This particular requirement will likely result in a per share equity component that is different from the amount assumed in this unaudited pro forma combined financial information. The purchase consideration for UIL under the acquisition method will be based on the stock price of UIL on the closing date of the transaction multiplied by the estimated number of shares to be issued by Iberdrola USA to the UIL shareowners. The preliminary allocation of the purchase price assumes a UIL stock price of $47.53 per share (based on the closing stock price on June 29, 2015).

Transaction costs (i.e., advisory, legal and other professional fees) are not included as a component of the consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. Total transaction costs still expected to be incurred are estimated to be approximately $50 million, which are reflected in the unaudited pro forma combined balance sheet as of March 31, 2015 as a reduction to equity, net of the estimated tax effect of $20 million at a statutory tax rate of 40% applied to deductible amounts. Transaction costs of $12 million recorded in the historical income statement are non-recurring expenses and have therefore been removed, net of taxes, from the unaudited pro forma combined income statement for the three months ended March 31, 2015.

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3. Pro Forma Adjustments

Transaction Adjustments

For the purpose of preparing the accompanying unaudited pro forma combined balance sheet as of March 31, 2015, management made the following assumptions:

• UIL’s shareowners exchanged their shares of UIL common stock for the equivalent of 18.5% of the combined company common stock issued and outstanding;

• the estimated fair value of the combined company common shares to be issued to UIL shareowners was determined based on the closing market price of the UIL common shares on June 29, 2015 with the $10.50 cash portion of the merger consideration included in this closing market price and the estimated number of shares to be issued to UIL shareowners was based on the number of shares of UIL common stock outstanding on June 29, 2015 plus the number of UIL shares of vested restricted stock, performance awards and other UIL shares on June 29, 2015.

Iberdrola USA is a private company and the fair value of its common shares is not readily available. ASC 805 addresses a business combination scenario where the transaction-date fair value of the acquiree’s equity interests may be more reliably measurable than the transaction-date fair value of the acquirer’s equity interests. In such cases, ASC 805 requires the acquirer to use the transaction-date fair value of the acquiree’s equity interests instead of the transaction-date fair value of acquirer’s equity interests transferred.

As UIL’s common stock is publicly traded in an active market, Iberdrola USA determined that UIL’s common stock is more reliably measurable than the common stock of Iberdrola USA to determine the fair value of the consideration to be transferred in the transaction. The quoted price of UIL shares has been determined to be the most factually supportable measure available to support the determination of the fair value of the consideration transferred, given the market participant element of a widely held stock in an actively traded market. Under this approach, a preliminary estimate of fair value of the combined company common stock to be issued to the UIL shareowners in the business combination represents the purchase consideration in the business combination, which was computed as follows:

Estimated number of UIL common shares:
Common shares(1)		56,423,748
Restricted stock units(2)		541,165
Performance shares(3)		162,117
Other shares(4)		6,290
Total estimated shares to be issued to UIL shareowners		57,133,320
Market price of UIL common stock as of June 29, 2015(5)	$	47.53
Estimated consideration	$	2,715,546,700

(1) Based on the trading float of UIL’s common shares on June 29, 2015

(2) Based on UIL’s shares of vested restricted stock.

(3) Based on UIL’s vested performance shares award.

(4) Based on UIL’s restricted shares to vest upon the change in control.

(5) The $47.53 share price used in calculating the estimated consideration represents the closing share price of UIL common stock on June 29, 2015. UIL share price was used because, as a privately held company, Iberdrola USA does not have a readily observable market price at the time of this proxy statement/prospectus. When evaluating the trading value of UIL common stock as an estimate of the fair value of the estimated consideration exchanged, management determined that the trading value of UIL already reflects the cash consideration of $10.50 per share. Upon announcement of the merger on February 25, 2015, the UIL stock price increased from $42.33, the stock price at the close on the day immediately preceding the announcement, to $52.07. This increase is likely attributable to the announcement of the total consideration payable to the holders of UIL common stock in the merger, which includes both the equity and the cash

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component. The actual purchase consideration will be based upon the actual closing market price per share of UIL common stock on the closing date of the business combination and the cash consideration of $10.50 per share. A $5.00 increase or decrease in the share price would increase or decrease, as applicable, the purchase consideration by approximately $286 million. The following is a summary of the components of the estimated consideration to be transferred to UIL’s shareowners:

	(in millions)
Total estimated consideration
Cash ($10.50 x number of shares 57,133,320)	$	600
Equity		2,116
Total estimated consideration	$	2,716

The final purchase accounting to be determined in accordance with ASC 805 is dependent upon certain valuations that have yet to progress to a stage where there is sufficient information for a definitive measurement. In addition, the value of the combined company common stock to be issued to UIL’s shareowners will be determined based on the trading price of the shares of UIL common stock at the date of completion of the transaction. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma combined financial information. Following completion of the transaction, final valuations will be performed and management anticipates that the values assigned to the assets acquired and liabilities assumed will be finalized during the measurement period following the completion date of the transaction. Differences between these preliminary estimates and the final purchase accounting will occur and these differences could have a material impact on the accompanying unaudited pro forma combined financial information and the combined company’s future results of operations and financial position.

The following is a summary of the preliminary allocation of the purchase price as reflected in the unaudited pro forma combined balance sheet as of March 31, 2015:

	(in millions)
Current assets	$	648
Other investments		140
Property, plant and equipment, net		3,317
Regulatory assets		930
Other assets		72
Current liabilities		(445	)
Regulatory liabilities		(491	)
Non-current debt		(1,978	)
Other liabilities		(1,078	)
Total net assets acquired at fair value		1,115
Goodwill—consideration transferred in excess of fair value assigned		1,601
Total estimated consideration (see note 5 above)	$	2,716

For the majority of UIL’s assets and liabilities, primarily property, plant and equipment, fair value was determined to be the respective carrying amounts. UIL’s operations are conducted in a regulated environment where the regulatory authority allows a reasonable rate of return on the carrying amount of the regulated asset base. In addition, the fair value adjustment to non-current debt has been reflected on the pro forma balance sheet with an offsetting regulatory asset based upon the expectation that if these fair value adjustments are realized, a portion of such amounts would be reflected in the future customer rates.

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Based on the above, the pro forma adjustments related to the purchase accounting included in the unaudited pro forma combined financial information are explained below:

(A) This adjustment is to record cash consideration to be paid to UIL’s shareowners of $600 million based on the $10.50 cash payment per share multiplied by the estimated number of UIL common shares outstanding at the transaction closing date. Also includes the funding obligation of approximately $24 million related to certain contractual change in control obligations of UIL (refer to note C below) and $50 million of estimated transaction costs not reflected in the historical financial statements and expected to be incurred in the future.

(B) This adjustment is to record the tax effect of the estimated transaction costs mentioned in note A above. Because the tax rate used for these pro forma financial statements is an estimate, it may vary from the actual effective rate in periods subsequent to the transaction.

(C) This adjustment is to record approximately $24 million related to certain contractual change in control funding obligations of UIL existing deferred compensation plans.

(D) This adjustment reflects the write-off of the historical UIL’s goodwill of $266 million and to record pro forma goodwill of $1,601 million resulting from purchase accounting.

(E) This adjustment is to record non-current debt at its estimated fair value resulting from purchase accounting. Also includes an adjustment of $230 million to regulatory assets to offset the fair value adjustment to the regulatory component of the non-current debt. The fair value amortization impact to the income statement was to decrease interest expense by approximately $2 million and $7 million for the three months ended March 31, 2015 and for the year ended December 31, 2014, respectively.

(F) This adjustment is to record the tax effect of the corresponding fair value adjustment to the non-current debt resulting from purchase accounting.

(G) This adjustment is to record the following affecting equity: (1) a negative impact of $1,404 million to remove the book value of the net assets acquired from UIL as part of the business combination, (2) a positive impact of $2,116 million to equity representing the issuance of the combined company common stock to UIL shareowners as part of the business combination, and (3) a negative impact of $30 million representing estimated transaction costs, net of taxes, not reflected in the historical financial statements and expected to be incurred in the future.

(H) This adjustment is to eliminate accrued transaction costs of $12 million representing non-recurring expenses directly related to the transaction.

(I) This adjustment is to record the tax effect of $5 million associated with the accrued transaction costs mentioned in note H above and the tax effect of $1 million associated with the interest expense relating to recording the non-current debt at its estimate fair value mentioned in note E above. The tax rate used for these pro forma financial statements is an estimate and it may vary from the actual effective rate in periods subsequent to the transaction.

(J) This adjustment is to record the tax effect of $3 million associated with the interest expense relating to recording the non-current debt at its estimated fair value mentioned in note E above. The tax rate used for these pro forma financial statements is an estimate and it may vary from the actual effective rate in periods subsequent to the transaction.

Reporting Reclassifications

(K) These reclassifications have been made to the historical balance sheet and historical income statements of UIL to conform to the presentation and classification used in the historical financial statements of Iberdrola USA.

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4. Pro Forma Earnings Per Share

The pro forma earnings per share calculation reflects the estimated shares of the combined company to be issued to Iberdrola, S.A. and to UIL shareowners, after giving effect to the transaction, as follows:

Total shares held by Iberdrola, S.A.	243
Total estimated shares to be issued to Iberdrola, S.A.(1)	251,695,194
Total estimated shares to be issued to UIL shareowners(2)	57,133,320
Pro forma weighted-average shares used in computing earnings per share—basic and diluted	308,828,757

(1) Represents 81.5% of the total aggregate number of shares of common stock of the combined company; in addition to shares to be issued. 243 shares of Iberdrola USA common stock are held by Iberdrola, S.A.

(2) Represents 18.5% of the total aggregate number of shares of common stock of the combined company.

Pro forma earnings per share for the three months ended March 31, 2015

	(in millions except per share data)
Pro forma net income for the three months ended March 31, 2015	$	172
Pro forma weighted-average shares used in computing earnings per share—basic and diluted		309
Pro forma earnings per share for the three months ended March 31, 2015	$	0.56

Pro forma earnings per share for the year ended December 31, 2014

	(in millions except per share data)
Pro forma net income for the year ended December 31, 2014	$	538
Pro forma weighted-average shares used in computing earnings per share—basic and diluted		309
Pro forma earnings per share for the year ended December 31, 2014	$	1.74

The pro forma earnings per share presented in this unaudited combined pro forma financial information vary significantly from the actual earnings per share of Iberdrola USA included in the historical financial statements of Iberdrola USA given that the pro forma earnings per share calculation takes into consideration the issuance of up to 308,828,757 shares by Iberdrola USA as a consequence of its merger with UIL. Iberdrola USA’s number of shares outstanding was 243 during all the periods presented in the historical financial statements included herein, all of which shares were owned by Iberdrola, S.A.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF UIL

The following table presents selected historical consolidated financial data for UIL as of and for the fiscal years ended December 31, 2014, 2013, 2012, 2011 and 2010 and as of and for the three months ended March 31, 2015 and 2014. The statement of operations data for each of the three years in the period ended December 31, 2014 and the balance sheet data as of December 31, 2014 and 2013 have been derived from UIL’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which are incorporated by reference into this proxy statement/prospectus. The statement of operations data as of and for the fiscal year ended December 31, 2011 and the balance sheet data as of December 31, 2012 have been derived from UIL’s audited consolidated financial statements for the year 2013, which have not been incorporated into this document by reference. The statement of operations data as of and for the fiscal year ended December 31, 2010 and the balance sheet data as of December 31, 2011 have been derived from UIL’s audited consolidated financial statements for the year 2012 included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which have not been incorporated into this document by reference. The balance sheet data as of December 31, 2010 has been derived from UIL’s audited consolidated financial statements for the year 2011 included in its Annual Report on Form 10-K for the year ended December 31, 2011, which have not been incorporated into this document by reference. The financial data as of and for the three months ended March 31, 2015 and 2014 have been derived from UIL’s unaudited consolidated financial statements included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2015, which is incorporated by reference into this proxy statement/prospectus. The financial data as of March 31, 2014 has been derived from UIL’s unaudited consolidated financial statements included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2014, which has not been incorporated into this document by reference.

The information set forth below is not necessarily indicative of future results and should be read together with the other information contained in UIL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and UIL’s Quarterly Report on Form 10-Q for the three months ended March 31, 2015, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes therein. See the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

	Three Months Ended March 31				Year Ended December 31
	2015		2014		2014		2013		2012		2011(1)(2)		2010(2)
	(in millions, except per share amounts)
Consolidated Statements of Income Data:
Operating Revenues	$	584	$	571	$	1,632	$	1,619	$	1,487	$	1,570	$	998
Net Income		58		55		110		115		104		100		55
Earnings Per Share of Common Stock—Basic	$	1.01	$	0.98	$	1.93	$	2.20	$	2.04	$	1.96	$	1.53
Earnings Per Share of Common Stock—Diluted	$	1.01	$	0.97	$	1.92	$	2.18	$	2.02	$	1.95	$	1.52
Cash Dividends Declared per share of Common Stock	$	0.432	$	0.432	$	1.728	$	1.728	$	1.728	$	1.728	$	1.728

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	As of March 31				As of December 31
	2015		2014		2014		2013		2012		2011(1)(2)		2010(2)
	(in millions)
Consolidated Balance Sheet Data:
Total Assets	$	5,128	$	5,130	$	5,112	$	5,144	$	5,019	$	4,745	$	4,482
Long-term obligations and redeemable preferred stock
Long-term debt, net of unamortized discount and premium	$	1,710	$	1,723	$	1,711	$	1,724	$	1,600	$	1,548	$	1,512
Preferred stock, not subject to mandatory redemption	$	—	$	—	$	—	$	—	$	—	$	1	$	1

(1) On November 16, 2010, UIL completed its acquisition of The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation, and The Berkshire Gas Company, or the gas companies, and their respective holdings companies, from Iberdrola USA. The gas companies contributed $772.3 million in operating revenues and $43.8 million in net income to UIL’s results of operations for the year ended December 31, 2011. The gas companies contributed $138.1 million in operating revenues and $12.9 million in net income to UIL’s 2010 results of operations for the post-acquisition period of 45 days from November 17, 2010 to December 31, 2010. Taking into account the final indebtedness and working capital adjustment of $11.2 million in May 2011, the net purchase price amounted to $906.7 million.

(2) During 2010, UIL recognized a significant one-time income tax deduction, which it reflected on its 2009 state and federal income tax returns, related to repair and maintenance costs it had previously capitalized for tax purposes. This one-time income tax deduction resulted in a cash benefit of approximately $40.5 million.

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012		2011		2010
	(in millions)
Other Financial Data (Non-GAAP):											$	387	$	240
Adjusted EBITDA(1)	$	143	$	144	$	400	$	430	$	413

(1) UIL defines Adjusted EBITDA as operating income adding back impairment of non-current assets and depreciation and amortization. The most directly comparable U.S. GAAP measure to Adjusted EBITDA is operating income. The following table reconciles operating income to Adjusted EBITDA for the periods presented:

	Three Months Ended March 31,				Year Ended December 31,
	2015		2014		2014		2013		2012		2011		2010
	(in millions)
Operating Income From Continuing Operations	$	100	$	104	$	248	$	240	$	232	$	220	$	126
Add: Impairment of non-current assets		—		—		—		—		—		—		—
Depreciation and amortization		43		40		152		190		181		167		114
Adjusted EBITDA (Non-GAAP)	$	143	$	144	$	400	$	430	$	413	$	387	$	240

UIL believes presenting the non-GAAP financial measures above are useful in understanding and evaluating actual and projected financial performance and that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of UIL’s operating results as reported under GAAP.

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Non-GAAP financial measures are not measurements of UIL’s performance under GAAP and should not be considered as alternatives to operating income, net income or any other performance measures determined in accordance with GAAP.

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ADDITIONAL INFORMATION ABOUT IBERDROLA USA

Overview

Iberdrola USA is a New York corporation headquartered in New Gloucester, Maine. It is a direct, wholly-owned subsidiary of Iberdrola, S.A., a corporation (sociedad anónima) organized under the laws of Spain. The primary business of Iberdrola USA is ownership of its operating businesses, which are described below.

Iberdrola USA is a holding company for its direct, wholly-owned operating subsidiaries, Iberdrola Networks and IRHI. IRHI in turn holds Iberdrola Renewables and Iberdrola Energy Holdings. Each of Iberdrola Networks, Iberdrola Renewables and Iberdrola Energy Holdings is led by its own management team and board of directors, who assume decentralized executive responsibilities, enjoy the independence necessary to carry out the day-to-day and effective management of their businesses, and are assigned responsibility for the day-to-day control thereof. Iberdrola Networks provides the transmission and distribution of electricity and the distribution of natural gas through regulated electric and gas public utility affiliates, while Iberdrola Renewables develops, constructs and operates a portfolio consisting primarily of renewable energy generation facilities using wind, solar and thermal power. Iberdrola Energy Holdings operates natural gas storage facilities and gas trading businesses. Iberdrola USA Management Corporation, a subsidiary of Iberdrola Networks, provides corporate and back office services on a consolidated basis to various subsidiaries of Iberdrola USA. Additionally, Iberdrola USA holds merger sub, a direct, wholly-owned subsidiary, newly formed in Connecticut for the sole purpose of completing the merger.

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Iberdrola USA’s organizational structure is consistent with the separation between Iberdrola Networks’ regulated electric and natural gas public utility businesses from the ownership and operation of Iberdrola Renewables’ renewable energy generation facilities, Iberdrola Energy Holdings’ natural gas storage-facilities, natural gas trading operations and certain regulated activities. The following simplified organizational chart provides a condensed overview of certain of Iberdrola USA’s business segments, prior to giving effect to the merger:

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Through Iberdrola Networks, Iberdrola USA owns electric transmission and distribution companies and natural gas distribution companies in New York and Maine, delivering electricity to approximately 1.9 million electric utility customers, with a rate base of $5.2 billion as of March 31, 2015, and delivering natural gas to 574,000 natural gas public utility customers, with a rate base of $1.0 billion as of March 31, 2015. The interstate transmission and wholesale sale of electricity by these regulated utilities is regulated by FERC, under the FPA, including with respect to transmission rates. Further, Iberdrola Networks’ distribution utilities in New York and Maine are subject to regulation by the NYPSC and the MPUC, respectively. Iberdrola Networks strives to be a leader in safety, reliability and quality of service to its utility customers. Iberdrola Networks serves as a super-regional energy services and delivery company through four regulated utilities:

• NYSEG: serves electric and natural gas customers across more than 40% of upstate New York geographic area;

• RG&E: serves electric and natural gas customers within a nine-county region in western New York, centered around Rochester;

• CMP: serves electric customers in central and southern Maine; and

• MNG: serves natural gas customers in several communities in central and southern Maine.

Through Iberdrola Renewables, Iberdrola USA had a combined wind, solar and thermal installed capacity of 6,330 MW as of March 31, 2015, including Iberdrola Renewables’ share of joint projects, of which 5,645 MW was installed wind capacity. As the second largest wind operator in the United States based on installed capacity as of March 31, 2015, Iberdrola Renewables strives to lead the transformation of the U.S. energy industry to a competitive, clean energy future. Iberdrola Renewables currently operates 53 wind farms in 18 states across the United States. Approximately 68% of the capacity was contracted for an average period of 9 years as of March 31, 2015. Through Iberdrola Energy Holdings, as of March 31, 2015 Iberdrola USA owns approximately 67.5 Bcf of net working gas storage capacity. Through Iberdrola Energy Services, Iberdrola Energy Holdings operates 52.3 Bcf of contracted or managed gas storage capacity in North America as of April 1, 2015.

Iberdrola USA’s operating revenues decreased by 21% from $1.6 billion for the three months ended March 31, 2014 to $1.2 billion for the three months ended March 31, 2015, and increased by 7%, from $4.3 billion for the year ended December 31, 2013 to $4.6 billion for the year ended December 31, 2014. Iberdrola USA’s adjusted gross margin decreased by 20%, from $998 million for the three months ended March 31, 2014 to $801 million for the three months ended March 31, 2015, and increased 6% from adjusted gross margin of $3.1 billion for the year ended December 31, 2013 to adjusted gross margin of $3.3 billion for the year ended December 31, 2014. Iberdrola USA’s adjusted EBITDA decreased by 35%, from $571 million for the three months ended March 31, 2014 to $371 million for the three months ended March 31, 2015, and increased by 10%, from $1.4 billion for the year ended December 31, 2013 to $1.5 billion for the year ended December 31, 2014. See the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Iberdrola USA—Non-GAAP Financial Measures” beginning on page 151 of this proxy statement/prospectus, for how Iberdrola USA defines and calculates adjusted gross margin and adjusted EBITDA, and a discussion about the limitations of these non-GAAP financial measures.

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The following table represents the percentage of Iberdrola USA’s consolidated operating revenues, adjusted gross margin and adjusted EBITDA represented by each business segment in the period indicated:

	Iberdrola USA Consolidated		Iberdrola Networks		Iberdrola Renewables		Iberdrola Energy Holdings			Other(1)
	(in millions)		(%)		(%)		(%)			(%)
For the three months ended March 31, 2015
Operating revenues	$	1,227		82		20		—			(2	)
Adjusted gross margin		802		76		25		—			(1	)
Adjusted EBITDA		371		74		29		(2	)		(1	)
For the year ended December 31, 2014
Operating revenues	$	4,594		74		26		2			(2	)
Adjusted gross margin		3,270		67		30		3			—
Adjusted EBITDA		1,539		58		40		2			—

(1) Other amounts represent corporate and company eliminations.

Iberdrola Networks accounted for 82% and 74% of Iberdrola USA’s operating revenues, 76% and 67% of Iberdrola USA’s adjusted gross margin, and 74% and 58% of Iberdrola USA’s adjusted EBITDA for the three months ended March 31, 2015 and for the year ended December 31, 2014, respectively.

Iberdrola Renewables accounted for 20% and 26% of Iberdrola USA’s operating revenues, 25% and 30% of Iberdrola USA’s adjusted gross margin, and 29% and 40% of Iberdrola USA’s adjusted EBITDA for the three months ended March 31, 2015 and for the year ended December 31, 2014, respectively.

Iberdrola Energy Holdings accounted for 0% and 2% of Iberdrola USA’s operating revenues, 0% and 3% of Iberdrola USA’s adjusted gross margin, and (2)% and 2% of Iberdrola USA’s adjusted EBITDA for the three months ended March 31, 2015 and for the year ended December 31, 2014, respectively.

For additional information regarding Iberdrola USA’s business segments, see Note 12 of the unaudited consolidated financial statements of Iberdrola USA for the quarterly period ended March 31, 2015 and Note 22 of the audited combined and consolidated financial statements of Iberdrola USA for the three years ended December 31, 2014.

Iberdrola Networks

Overview

Iberdrola Networks, a Maine corporation, holds the regulated utility businesses of Iberdrola USA, including electric transmission and distribution and natural gas distribution. Iberdrola Networks serves as a super-regional energy services and delivery company through four regulated utilities:

• NYSEG;

• RG&E;

• CMP; and

• MNG.

For the three months ended March 31, 2015 and the year ended December 31, 2014, Iberdrola Networks distributed 8,576,000 megawatt-hours, or MWh, and 31,769,000 MWh of electricity. As of March 31, 2015, Iberdrola Networks provided service to its 1.9 million customers in 65 counties and 962 cities, towns, villages and townships across a service area of nearly 34,000 square miles in the states of New York and Maine. In total, Iberdrola Networks’ electric system consisted of 8,276 miles of transmission lines, 67,181 miles of distribution

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lines and 869 substations as of March 31, 2015. Furthermore, for the three months ended March 31, 2015 and the year ended December 31, 2014, Iberdrola Networks delivered more than 57 million dekatherms, or DTh, and 111 DTh of natural gas, respectively, to approximately 574,000 customers, providing service in 42 counties and 332 cities, towns and villages as of March 31, 2015.

The following table sets forth certain information relating to the location and number of customers and the amount of electricity or natural gas they received from each of Iberdrola Networks’ regulated utilities as of the dates set forth below:

	Rate Base(1) (in billions)				Electricity Customers				Electricity Delivered (in MWh)				Natural Gas Customers				Natural Gas Delivered (in DTh)
Utility	March 31, 2015		December 31, 2014		March 31, 2015		December 31, 2014		For the three months ended March 31, 2015		For the year ended December 31, 2014		March 31, 2015		December 31, 2014		For the three months ended March 31, 2015		For the year ended December 31, 2014
NYSEG	$	2.3	$	2.3		883,000		883,000		4,335,000		15,397,000		264,000		263,000		27,002,000		57,690,000
RG&E	$	1.6	$	1.6		373,000		373,000		1,863,000		7,002,000		306,000		307,000		26,342,000		52,874,000
CMP	$	2.2	$	2.2		614,000		612,775		2,378,000		9,370,000		—		—		—		—
MNG	$	0.1	$	0.1		—		—		—		—		4,000		4,000		3,728,000		16,000

(1) “Rate base” means the assets upon which a utility can receive a specified return, based on the value of such assets. The rate base is set by the relevant regulatory authority and typically represents the value of specified property, such as plants, facilities and other investments used by the utility.

Over the last six years, Iberdrola Networks has invested nearly $4.4 billion in creating a delivery network with greater capacity and improved reliability, environmental security and sustainability, efficiency and automation. Iberdrola Networks continuously improves its grid to accommodate new requirements for advanced metering, demand response and enhanced outage management, while improving its flexibility for the integration and management of distributed energy resources. From 2009 to 2014, Iberdrola Networks increased capital expenditure investments in its New York and Maine regulated utilities by 130%, from $315.0 million to $727.0 million.

New York

As of March 31, 2015, NYSEG had a rate base of $2.3 billion and served approximately 883,000 electricity customers and 264,000 natural gas customers across more than 40% of upstate New York’s geographic area, while RG&E had a rate base of $1.6 billion and served approximately 373,000 electricity customers and 306,000 natural gas customers in a nine-county region centered around Rochester, in western New York.

NYSEG and RG&E plan to invest a total of $2.75 billion from 2015 to 2019 to upgrade and expand their electricity and natural gas transmission and distribution infrastructure. This plan, subject to regulatory approvals, includes the Marcy-South Series Compensation project, in which NYSEG is working with the New York Power Authority to upgrade various elements of the transmission system between the Marcy and Fraser—Cooper Corners substations, including the installation of three capacitor banks and the reconductoring of an existing 21.8 mile section of a transmission line. The plan also includes the Ginna Retirement Transmission Alternative project, which is intended to provide a transmission solution to address the planned retirement of the Ginna nuclear power plant near Rochester. In 2014, NYSEG and RG&E’s nine hydroelectric plants generated nearly 400 million kilowatt-hours, or kWh, of clean hydropower, which is enough energy to power 55,000 homes across New York State, assuming an average electricity consumption of 600 kwh per month per customer. See “—Properties—Iberdrola Networks” for more information regarding Iberdrola Networks’ electric generation plants.

NYSEG and RG&E also hold an approximate 20% ownership interest in the regulated New York TransCo. Through New York TransCo, NYSEG and RG&E have formed a partnership along with Central Hudson Gas and Electric Corporation, Consolidated Edison, Inc., National Grid, plc and Orange and Rockland Utilities, Inc. to

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develop a portfolio of interconnected transmission lines and substations to fulfill the objectives of the New York energy highway initiative, a proposal to install up to 3,200 MW of new electric generation and transmission capacity in order to deliver more power generated from upstate New York power plants to downstate New York.

Maine

As of March 31, 2015, CMP had a rate base of $2.2 billion and delivered electricity to more than 614,000 customers in an 11,000 square-mile service area in central and southern Maine. CMP is near completion of a $1.4 billion investment plan for the construction of a bulk power transmission grid in Maine, the largest transmission investment in the history of Maine, which includes the construction of five new 345-kilovolt, or kV, substations and related facilities linked by approximately 440 miles of new transmission lines. CMP also recently completed a $200.0 million investment, one-half of which was funded by the DOE, in advanced meter infrastructure, which included the installation of more than 600,000 smart meters for all of its electric customers. Smart meters monitor and record a customer’s power consumption, eliminating the need for on-site meter reading.

MNG delivers natural gas to approximately 4,000 customers in central and southern Maine and recently completed construction of the first natural gas pipeline in Augusta, Maine. Through MNG, Iberdrola Networks provides these communities in southern Maine with access to natural gas for the first time, offering a competitive and clean energy option to homes and businesses.

The regulated utilities’ capital expenditures over the last 5 years have been the following:

Capital Expenditures	2010		2011		2012		2013		2014
	(in millions)
NYSEG	$	230	$	225	$	218	$	235	$	247
RG&E		112		190		222		195		181
CMP (non-MPRP(1))		108		184		170		149		172
CMP (MPRP)		127		330		340		255		112
MNG		6		6		5		36		15
Total	$	584	$	936	$	955	$	870	$	727

(1) MPRP refers to the Maine Power Reliability Program.

Iberdrola Networks Service Quality

State regulatory commissions require utilities to report and meet certain service quality measures and, under certain circumstances, impose penalties if those measures are not met. As such, Iberdrola Networks carefully monitors quality of service metrics. In that regard, the System Average Interruption Frequency Index, or SAIFI, which is the average number of times that a customer is interrupted during a specified period of time, for the regulated electric utilities are as follows:

SAIFI	2010		2011		2012		2013		2014
NYSEG		1.14		1.20		0.98		1.09		1.03
RG&E		0.71		0.86		0.73		0.74		0.76
CMP		2.00		1.99		1.75		1.74		1.80

The Customer Average Interruption Duration Index, or CAIDI, which measures the average amount of time a customer is without power per interruption, for the regulated electric utilities was:

CAIDI	2010		2011		2012		2013		2014
NYSEG		1.98		2.07		2.00		1.93		1.97
RG&E		1.71		1.85		1.79		1.82		1.74
CMP		1.97		1.73		1.75		2.09		1.83

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Iberdrola Networks’ regulated electric utilities have met all state regulatory commission measures for the last five years, from 2010 to 2014.

The regulated utilities rate base has increased significantly over the last five years, mainly due to the investments in regulated projects, such as the Maine Reliability Power Program, or MPRP, transmission project in Maine and increased replacement of aging infrastructure and investments in smart grid automation. The changes in Iberdrola Networks’ regulated utilities’ rate base for the years indicated below have been as follows:

Rate base	2010		2011		2012		2013		2014
	(in millions)
NYSEG Electric	$	1,546	$	1,560	$	1,639	$	1,702	$	1,796
NYSEG Gas		553		473		465		482		508
RG&E Electric		977		900		928	$	1,058		1,119
RG&E Gas		450		405		424		427		444
Subtotal New York	$	3,526	$	3,338	$	3,456	$	3,669	$	3,867
CMP Dist	$	590	$	625	$	686	$	714	$	738
CMP Trans		424		782		1,027		1,252		1,510
MNG		22		27		33		47		64
Subtotal Maine		1,036		1,434		1,746		2,013		2,312
Total NY-Maine	$	4,562	$	4,772	$	5,202	$	5,682	$	6,179

The rate plan’s approval by regulators in New York and Maine, typically the earnings sharing mechanisms, or ESM, are intended to encourage regulated utilities to operate efficiently. Pursuant to ESMs, if the regulated utilities of Iberdrola Networks earn more than certain threshold amounts, the regulated utilities must share with customers a specified percentage of any earnings above the threshold amounts. Below is a history of ESMs over the past five years:

	2010	2011	2012	2013	2014
NYSEG Electric	None	50% (customer) / 50% (shareholder): 10.30% – 11.05% 85% / 15%: over 11.05% Based on Actual Equity Ratio up to 50%	50% / 50%: 10.60% – 11.35%; 85% / 15%: over 11.35%; Based on Actual Equity Ratio up to 50%	50% / 50%: 10.90% – 11.65% 85% / 15%: over 11.65%; Based on Actual Equity Ratio up to 50%	50% / 50%: 10.90% –11.65% 85% / 15%: over 11.65%; Based on Actual Equity Ratio up to 50%
NYSEG Gas	None	Same as above	Same as above	Same as above	Same as above
RG&E Electric	None	Same as above	Same as above	Same as above	Same as above
RG&E Gas	None	Same as above	Same as above	Same as above	Same as above
CMP Dist.	50% (customer) / 50% (shareholder) over 11.0% Based on 47% Equity Ratio	50% (customer) / 50% (shareholder) over 11.0% Based on 47% Equity Ratio	50% (customer) / 50% (shareholder) over 11.0% Based on 47% Equity Ratio	50% (customer) / 50% (shareholder) over 11.0% Based on 47% Equity Ratio	No ESM
CMP Trans.	No ESM	No ESM	No ESM	No ESM	No ESM
MNG	No ESM	ROE Test	ROE Test	No ESM	No ESM

Iberdrola Renewables

Iberdrola Renewables, an Oregon limited liability company, is engaged primarily in the design, development, construction, management and operation of generation plants that produce electricity using renewable resources and, with more than 50 renewable energy projects, is one of the leaders in renewable energy production in the United

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States based on installed capacity. Iberdrola Renewables’ primary business is onshore wind energy generation, which represents approximately 89% of Iberdrola Renewables’ combined installed renewable capacity as of March 31, 2015. For the three months ended March 31, 2015 and the year ended December 31, 2014, Iberdrola Renewables produced over 3,398,000 MWh and 14,740,000 MWh of energy through wind power generation, respectively. Iberdrola Renewables had a pipeline of approximately 5,800 MW of renewable energy projects in various stages of development as of March 31, 2015.

Typically, Iberdrola Renewables enters into long-term lease agreements with property owners who lease their land for renewable projects. Electricity generated at a wind project is then transmitted to customers through agreements with purchasers. There are a limited number of turbine suppliers in the market. Iberdrola Renewables’ largest turbine suppliers, Gamesa Wind US and GE Wind, in the aggregate supplied turbines which accounted for 67% of its installed wind capacity as of December 31, 2014.

Iberdrola Renewables currently operates 53 wind farms in 18 states across the United States. To monetize the tax benefits resulting from production tax credits and accelerated tax depreciation available to qualifying wind energy projects, Iberdrola Renewables has entered into “tax equity” financing structures with third party investors for a portion of its wind farms. Under these structures, Iberdrola Renewables holds 16 operating wind farms through limited liability companies jointly owned by one or more third party investors, who generally receive a majority or all of the cash flows and tax benefits generated by the wind farms in exchange for a combination of up-front investment and enter into fixed and/or contingent notes for their membership interests in the financing structures. Iberdrola Renewables maintains operational and management control over the wind farm businesses, subject to investor approval of certain major decisions. See “—Properties—Iberdrola Renewables” for more information regarding Iberdrola Renewables’ wind power generation properties.

Additionally, as part of the Iberdrola Renewables portfolio, Iberdrola Renewables operates two thermal generation facilities in the United States, with 636 MW of combined capacity as of March 31, 2015. Iberdrola Renewables worked closely with the City of Klamath Falls, Oregon to develop the Klamath Plant, which has a current capacity of 536 MW, operating by creating two useful forms of energy, electricity and process steam, from a single fuel source of natural gas. In addition, Iberdrola Renewables operates a highly flexible 100 MW Klamath Peaking Plant adjacent to the Klamath Plant, providing customers of Iberdrola Renewables additional capability to meet their peak summer and winter power needs.

In addition to its wind assets, Iberdrola Renewables operates two solar photovoltaic facilities with an installed capacity of 50 MW. The solar photovoltaic facilities produced 26,000 MWh and 129,000 MWh of renewable energy for the three months ended March 31, 2015 and the year ended December 31, 2014, respectively. Solar accounted for 0.9% and 0.8% of the total renewable energy generation from Iberdrola Renewables in these same periods.

Iberdrola Renewables’ capital expenditures for the years set forth below were as follows:

Capital expenditures	2010			2011			2012			2013			2014
	(in millions)
Wind & solar	$	2,096		$	970		$	315		$	35		$	270
Thermal		23			13			7			19			14
Corporate(1)		9			7			9			5			9
Total capital expenditures		2,128			990			331			58			292
Cash grants(2)		(399	)		(519	)		(438	)		(29	)		—
Total capital expenditures less cash grants	$	1,730		$	471		$	(107	)	$	29		$	292

(1) Includes information technology and facilities and safety (security).

(2) Payments received from the United States Department of Treasury under Section 1603 of the American Recovery and Reinvestment Act of 2009, as a reimbursement for a portion of the costs related to the construction of wind farms, and in lieu of production tax credits.

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Iberdrola Renewables is pursuing the continued development of a large pipeline of wind energy projects in various regions across the United States. Each site features a range of different atmospheric characteristics that ultimately drive the selection of turbine technology for the proposed project. As part of Iberdrola Renewables’ wind resource assessment investigation, critical atmospheric parameters such as mean wind speed, extreme wind speed, turbulence intensity, and mean air density are characterized to represent long-term conditions, for over 20 years. The summary wind characteristics are then combined with a terrain, or orography, analysis to assess siting risks in order to mitigate any future operations and maintenance concerns that may arise due to improper turbine siting.

Iberdrola Renewables maintains close relationships with key turbine suppliers, including Gamesa, GE, Vestas, Siemens, and others in order to identify the turbine technology that safely delivers the lowest cost of energy for each candidate project in its portfolio. Iberdrola Renewables has deployed the following mix of turbines under this strategy. See “—Properties—Iberdrola Renewables” for more information regarding Iberdrola Renewables’ turbine technology.

MFG	Model	Rating		Turbines		MW
Gamesa	G83		2.0		61		122
Gamesa	G87		2.0		643		1,286
Gamesa	G90		2.0		237		474
Gamesa	G97		2.0		101		202
GE	1.5s		1.5		133		200
GE	1.5sle		1.5		1,072		1,608
MHI	MWT62/1.0		1.0		45		45
MHI	MWT92/2.4		2.4		168		403
MHI	MWT95/2.4		2.4		1		2
MHI	MWT102/2.4		2.4		1		2
NEG	NM48		0.7		3		2
Siemens	SWT2.3-93		2.3		44		101
Suzlon	S88		2.1		341		716
Vestas	V47		0.7		34		22
Vestas	V82		1.7		97		160
Total					3,105		5,645

The Iberdrola Renewables meteorology team supports the commercial development of wind energy projects in Iberdrola Renewables’ pipeline by performing a wide variety of detailed investigations to characterize the expected wind energy production from a proposed wind farm in its pre-construction phase of development. These investigations include measuring the wind resource with several well-equipped meteorological masts, utilizing state of the art laser-based and acoustic-based remote sensing equipment, computational fluid dynamics modeling software, and energy modeling software packages that characterize wake losses from any upwind turbines that may be present. The Iberdrola Renewables fleet of measurement masts consists of over 160 towers that are currently in operation. Additionally, a total of 8 light detecting and ranging, and ten sonic detecting and ranging, remote sensing devices are deployed at sites across the United States. These remote sensing devices allow hub-height wind speed measurement from a ground-based sensor that can be rapidly deployed and moved as the project matures or changes in nature. The resulting pre-construction energy production estimates that utilize these measurements have been shown to be accurate in a multi-year internal study that compares results to actual, operational data in a benchmarking analysis. This study provides a critical feedback loop that is used to define methodology requirements for future pre-construction energy production estimates to ensure confidence in project investment. Iberdrola Renewables’ commitment to obtaining robust atmospheric measurement is driven by a company culture that values business case certainty and understands the role that accurate meteorological data play in the pursuit of this goal.

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Iberdrola Energy Holdings

Iberdrola Energy Holdings, a Delaware limited liability company, operates a natural gas storage and natural gas trading business through its wholly-owned direct subsidiaries, Enstor, Inc., an Oregon corporation (natural gas storage) and Iberdrola Energy Services LLC, a Delaware limited liability company (natural gas trading). Iberdrola Energy Holdings owns and operates four natural gas storage facilities, with a total storage capacity of 88.5 Bcf and a net working gas storage capacity of 67.5 Bcf. Enstor Operating Company, a Texas limited liability company and wholly-owned direct subsidiary of Enstor, Inc., manages all four natural gas storage facilities. The demand for natural gas storage is dependent upon the seasonal differences in the weather. Since market prices and temporal price spreads for natural gas reflect the demand for these products and their availability at a given time, the overall operating results of Iberdrola Energy Holdings’ business may fluctuate substantially on a seasonal basis. Severe weather, such as ice and snow storms, hurricanes and other natural disasters may cause outages, bodily injury or property damage, which may require Iberdrola Energy Holdings to incur additional costs, such as operation and maintenance expenses, which may not be recoverable from customers. See “—Properties—Iberdrola Energy Holdings” for more information regarding Iberdrola Energy Holdings’ natural gas storage facilities. Iberdrola Energy Services LLC also contracts and manages natural gas storage and pipeline capacity throughout the United States and parts of Canada.

Business Strengths

Iberdrola USA has a number of business strengths, including:

• Strong position in its businesses. Iberdrola Networks has significant regulated utility presence in the Northeastern United States. Iberdrola USA believes that there will be significant additional development opportunities such as natural gas infrastructure projects in New York and Maine and transmission projects across the United States. Moreover, Iberdrola Renewables is one of the leaders in renewable energy in the United States. Furthermore, Iberdrola USA, through Iberdrola Renewables, has a significant project development pipeline and extensive industry expertise. Additionally, Iberdrola USA believes that the relationships it has already fostered with customers, suppliers and local communities, help to favorably position Iberdrola USA’s businesses for future growth.

• Financial strength and stability. Iberdrola USA adheres to financial and risk management policies intended to maintain financial strength and flexibility, investment grade credit ratings at Iberdrola USA and its rated subsidiaries and the capacity to invest in future growth opportunities. Maintaining a strong liquidity position helps to ensure that Iberdrola USA can maintain strength and flexibility during periods when access to the capital markets may be restricted. Furthermore, Iberdrola USA maintains a low net debt-to-capital ratio of 16.7% as of March 31, 2015. As March 31, 2015, Iberdrola USA and its subsidiaries had $655 million of cash and cash equivalents and undrawn, third-party, committed credit facilities of approximately $870.0 million.

• Scale and diversity. As of March 31, 2015, Iberdrola USA’s subsidiaries had 1.9 million electric utility customers and 0.6 million gas utility customers, and 6,479 MW of installed generation capacity, offering a diversified energy delivery platform with a focus on regulated activities and the second largest wind portfolio in the United States. In addition to owning, through Iberdrola Networks, four regulated utilities in New York and Maine, Iberdrola USA’s subsidiaries own wind and solar facilities in 18 states and, through Iberdrola Energy Holdings natural gas storage facilities in 4 states. Through their diversified businesses and geographical mix, Iberdrola USA’s subsidiaries generate substantial revenue from regulated electric transmission and distribution and gas distribution, as well as largely contracted renewables power generation, and gas storage and services.

• Innovation. Innovation serves as the primary tool to promote the sustainability, efficiency and competitiveness of Iberdrola USA’s businesses. Iberdrola USA’s businesses strive to optimize operating conditions, improve safety and reduce its environmental impact. By focusing on innovation, Iberdrola USA’s businesses continue to pursue initiatives in the fields of smart grids, clean generation

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and other new technologies. For the three months ended March 31, 2015 and the year ended December 31, 2014, Iberdrola USA spent $5.5 million and $27.2 million, respectively, on research and development. Iberdrola USA’s businesses seeks to continuously focus on innovation in order to optimize the performance of its current renewable energy projects and contribute to electricity network stability.

• Management team with substantial operational, technical and regulatory affairs expertise. Iberdrola USA benefits from an experienced and innovative senior management team, with industry-leading regulatory expertise. Iberdrola USA believes that the management of each business of Iberdrola USA possesses the skills and capabilities required to compete effectively and to successfully execute the strategy of Iberdrola USA. The Iberdrola Group recognizes the value of local expertise and relies upon the management of its subsidiaries in the United States to execute its strategic growth initiatives. To that end, the Iberdrola Group’s corporate governance system confers its U.S. subsidiaries the independence it believes necessary to carry out the day-to-day and effective management of their businesses.

• Support from Iberdrola, S.A., a world leader in energy. Iberdrola USA continues to benefit from the support, commitment and sharing of best practices as a result of operating within the Iberdrola Group. The Iberdrola Group has developed a well-recognized international brand. As a part of this group, Iberdrola USA benefits from the technical and regulatory experience and expertise of the Iberdrola Group. Iberdrola, S.A. has an award-winning corporate governance system that has provided the foundation for Iberdrola USA’s governance system. Additionally, as a testament to its environmental commitments, in 2014, Iberdrola, S.A. was named a leader in all editions of the Dow Jones Sustainability Index, awarded an “A” ranking in the Carbon Performance Leadership Index, achieved a 99/100 ranking in the Carbon Disclosure Leadership Index and was the first Spanish utility to join the ET Global 800 Carbon Rating and the first utility with nuclear assets to join the FTSE4Good index. Furthermore, Iberdrola, S.A. provides Iberdrola USA with corporate, technical, administrative and a variety of other services pursuant to a services agreement. For additional information, see the section entitled “Certain Relationships and Related Party Transactions—Service Agreements” beginning on page 253 of this proxy statement/prospectus.

Business Strategies

Iberdrola USA’s primary strategic vision is to create value for its stakeholders and to improve profitability by serving as a leader in safety, reliability and quality service to customers through its regulated businesses and to transform the U.S. energy industry through its renewable generation. The key elements of this strategy include:

• Investments to expand exposure to businesses with stable risk profiles. Iberdrola USA seeks to make significant capital investments from 2015 to 2019, including approximately $6.9 billion in electric and natural gas infrastructure operated by Iberdrola Networks and Iberdrola Renewables. Through these investments, Iberdrola USA aims to expand its footprint in regulated businesses, which are characterized by stable regulatory frameworks and predictable cash flows. These investments are expected to be made both in the areas of existing Iberdrola USA group operations, as well as in new strategic locations. By investing in expansion in these businesses, Iberdrola USA believes that it will increase the stability of its overall risk profile.

• Commitment to providing reliable and quality service to customers. Iberdrola USA’s subsidiaries continue to focus on the needs and expectations of their customers, seeking to provide the highest level of service quality, safety and reliability. Iberdrola USA aims to build on its successful track record by investing in equipment and infrastructure that will allow Iberdrola USA’s subsidiaries to provide services in a more efficient, reliable, secure and environmentally sustainable manner. Iberdrola USA’s subsidiaries’ focus on operational excellence is evidenced by the fact that the four regulated utilities in New York and Maine have consistently met or exceeded approximately 40 customer reliability and

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service standards since 2008. Furthermore, Iberdrola Networks’ regulated utilities have received a number of awards for superior performance, including from Edison Electric Institute, or EEI, and JD Power, while CMP and RG&E ranked among the most trusted utility brands in the nation according to a 2014 study conducted by Cogent Reports, a subsidiary of Market Strategies International.

• Continued focus on operating efficiency. Iberdrola USA focuses on the best allocation of resources to optimize operations while keeping expenses low in order to achieve sustainable returns. Iberdrola USA intends to maintain and optimize the efficiency levels of its subsidiaries by maximizing availability of installed capacity and maintaining the technical performance of its facilities.

• Commitment to local communities. Iberdrola USA believes in developing and maintaining strong relationships with regulators, politicians and local communities, working to develop a relationship of trust and respect in the communities that Iberdrola USA’s subsidiaries serve. For example, in addition to working to meet or exceed local permitting, wildlife and other standards, Iberdrola Renewables also makes donations of money, goods and employee volunteer hours in support of local communities. The Iberdrola USA Foundation, a separately operated private foundation, will continue to support local initiatives that enhance the quality of life where Iberdrola USA’s subsidiaries operate, with a focus on energy sustainability, the environment, art and culture and cooperation and solidarity.

• Business sustainability and social responsibility. Iberdrola USA’s subsidiaries continue to address critical infrastructure with a focus on clean energy, energy efficiency and sustainable development. Through its subsidiaries, Iberdrola USA seeks to provide services in a manner that respects the environment and promotes the safety of all. Iberdrola USA and its subsidiaries continue to reduce their carbon footprint, while taking measures such as improving fuel efficiency for fleet vehicles, upgrading hydroelectric generation capacity, reducing sulfur hexafluoride emissions from breakers and encouraging and rewarding its customers for conserving energy. Additionally, through its approach to corporate social responsibility, Iberdrola USA continues to promote ethics, transparency and strong corporate governance practices, with its corporate governance system, comprised of the bylaws, corporate policies, the internal corporate governance rules and other internal codes and procedures approved or adopted by the appropriate bodies of Iberdrola USA.

History

Iberdrola USA was incorporated in 1997 as a New York corporation under the name NGE Resources, Inc. and subsequently changed its name to Energy East Corporation. The stock of Energy East Corporation was publicly traded on the NYSE. In 2007, Iberdrola, S.A. acquired Scottish Power Ltd., including ScottishPower Holdings, Inc., or SPHI, the parent company of Scottish Power’s U.S. subsidiaries. Through this acquisition, Iberdrola, S.A. acquired PPM Energy, a subsidiary that operated SPHI’s U.S. wind business, thermal generation operations and the gas storage and energy management businesses and changed PPM Energy’s name to Iberdrola Renewables. In 2008, Iberdrola, S.A. acquired Energy East Corporation and changed its name to Iberdrola USA, Inc. in December 2009. In 2013, Iberdrola USA obtained all necessary regulatory approvals to complete an internal corporate reorganization to create a unified corporate presence for the Iberdrola brand in the United States, bringing all of its U.S. energy companies under one single holding company, Iberdrola USA. The internal reorganization, completed in November 2013, resulted in the concentration of Iberdrola USA’s principal businesses in three major subsidiaries: Iberdrola Networks, which holds all of Iberdrola USA’s regulated utilities; Iberdrola Renewables, which holds the renewable and thermal generation businesses of Iberdrola USA; and Iberdrola Energy Holdings, which holds Iberdrola USA’s gas storage and marketing businesses.

Iberdrola USA was the corporate parent of The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company prior to UIL acquiring those companies in 2010 for approximately $1.3 billion. In 2011, NYSEG sold its Seneca Lake Storage facility and certain related assets for $65 million. In 2012, Iberdrola USA sold two upstate New York-based energy retailers, Energetix, Inc. and NYSEG Solutions, Inc. for $110.2 million. In July 2014, Iberdrola Networks, CMP Group, Inc. and CNE Energy

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Services, LLC entered into an agreement with United Resources, Inc., a subsidiary of UIL, to sell their partnership interests in LNG Storage Partners, LNG Marketing Partners, CNE Peaking LLC and Total Peaking Services, LLC. The transaction was structured as a sale of the partnerships, with a purchase price of approximately $20.3 million. In February 2015, merger sub was formed for the sole purpose of completing the merger.

Recent Developments

On February 25, 2015, Iberdrola USA entered into the merger agreement. For additional information regarding the merger agreement, see the section entitled “The Merger Agreement” beginning on page 118 of this proxy statement/prospectus.

Iberdrola, S.A. and the Iberdrola Group

Iberdrola, S.A. is one of the world’s leading energy companies, Spain’s largest energy company, one of the five largest European electricity companies by market capitalization and the world leader in operating wind energy. The Iberdrola Group has geographically diverse operations in 30 countries. Since its creation in 1901, Iberdrola, S.A. has over 100 years of experience as an investor-owned global energy company, with extensive experience in electric transmission and distribution services, with a focus on increasing and maintaining distribution infrastructure and maximizing service quality. As of March 31, 2015 the Iberdrola Group owned 45,034 MW of installed generation capacity of which 62% was emission free and 14,652 MW was installed renewable power. Additionally, as of March 31, 2015, the Iberdrola Group served approximately 32.6 million supply points providing energy for some 100 million people around the world. The Iberdrola Group is also a supplier and developer of natural gas infrastructure in Europe and the Americas, supplying over 3.6 million customers worldwide as of March 31, 2015. As of March 31, 2015, the Iberdrola Group had 28,210 employees.

The Iberdrola Group is structured so that management is not centralized within a single governance body or person. Instead, management is distributed among the boards of directors of the country-specific subholding companies, which hold equity stakes in the business subholding companies operating in their respective countries. The Iberdrola Group’s businesses consist of three main segments:

• Networks Business. The Iberdrola Group’s networks business includes its energy transmission and distribution networks, as well as any other regulated business, in Spain, the United Kingdom, the United States and Brazil. The Iberdrola Group shares institutional knowledge of the networks businesses of these four countries in order to increase the quality, safety and reliability of electricity and gas supply, optimize operating expenses, leverage on technology and identify business growth opportunities. As of March 31, 2015, 87% of Networks’ customers were residential and 13% were commercial and other customers, which included 100% of Iberdrola, S.A.’s affiliates in Brazil.

• Renewable Energy Business. The Iberdrola Group is a renewable energy pioneer and has the largest wind asset base of any company in the world. With extensive knowledge of regulatory schemes and experienced project teams that promote research, development and innovation, the Iberdrola Group continues to develop its renewables pipeline in an efficient manner, operating as a leader in the renewable energy industry. During 2014, renewable energy accounted for 24% of the Iberdrola Group’s energy producing operations, with the majority of this renewable energy coming from onshore wind energy.

• Wholesale and Retail Business. The Iberdrola Group’s wholesale and retail business participates in the sales of electricity in the energy markets of Spain, Portugal, the United Kingdom, Mexico and other European countries such as France and Germany. By integrating the wholesale and retail businesses of these countries, the Iberdrola Group seeks to improve the optimization of the various organizations, deliver additional benefits, increase operational efficiency and identify activities with growth potential.

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Innovation is a key tenet of Iberdrola, S.A. In accordance with its Innovation Policy, Iberdrola, S.A. has focused its research and development on smart grids, clean generation, offshore wind and new technologies and business models, investing approximately $200.0 million in research and development in 2014. Additionally, Iberdrola, S.A. has a comprehensive corporate governance system that has received the World Finance Corporate Governance Awards in 2012 and 2014 as well the Golden Peacock Award for excellence in Corporate Governance in 2013.

Regulatory Environment and Principal Markets

Federal Energy Regulatory Commission

Among other things, FERC regulates the transmission and wholesale sales of electricity in interstate commerce and the transmission and sale of natural gas for resale in interstate commerce. Certain aspects of Iberdrola Networks’ businesses, Iberdrola Renewables’ competitive generation and Iberdrola Energy Holdings’ natural gas storage and energy trading businesses are subject to regulation by FERC.

Pursuant to the FPA, electric utilities must maintain tariffs and rate schedules on file with FERC which govern the rates, terms and conditions for the provision of FERC-jurisdictional wholesale power and transmission services. Unless otherwise exempt, any person that owns or operates facilities used for the wholesale sale or transmission of power in interstate commerce is a public utility subject to FERC’s jurisdiction. FERC regulates, among other things, the disposition of certain utility property, the issuance of securities by public utilities, the rates, the terms and conditions for the transmission or wholesale sale of power in interstate commerce, interlocking officer and director positions, and the uniform system of accounts and reporting requirements for public utilities.

With respect to Iberdrola Networks’ regulated utilities in Maine and New York, FERC governs the ROE, rates, terms and conditions of transmission of electric energy in interstate commerce, interconnection service in interstate commerce (which applies to independent power generators, for example), and the rates, terms and conditions of wholesale sales of electric energy in interstate commerce, which includes cost-based rates, market-based rates and the operations of regional capacity and electric energy markets in New England administered by an independent entity, ISO-NE, and in New York, administered by another independent entity, the NYISO. FERC approves the Iberdrola Networks’ regulated utilities’ transmission revenue requirements. Wholesale transmission revenues are recovered through formula rates that are approved by FERC. CMP’s transmission revenues are recovered from New England customers through charges that recover costs of transmission and other transmission-related services provided by all regional transmission owners. NYSEG’s and RG&E’s transmission revenues are recovered from New York customers through charges that recover the costs of transmission, and other transmission-related services provided by all transmission owners in New York. Additionally, overall ROE is determined by FERC. Several of Iberdrola USA’s affiliates have been granted authority to engage in sales at market-based rates and blanket authority to issue securities, and have also been granted certain waivers of FERC reporting and accounting regulations available to non-traditional public utilities; however, Iberdrola USA cannot assure that such authorities or waivers will not be revoked for these affiliates or will be granted in the future to other affiliates.

FERC has the right to review books and records of “holding companies,” as defined in the PUHCA 2005, that are determined by FERC to be relevant to the companies’ respective FERC-jurisdictional rates. Iberdrola USA is a holding company, as defined in PUHCA 2005.

FERC has civil penalty authority over violations of any provision of Part II of the FPA, as well as any rule or order issued thereunder. FERC is authorized to assess a maximum civil penalty of $1.0 million per violation for each day that the violation continues. The FPA also provides for the assessment of criminal fines and imprisonment for violations under Part II of the FPA. This penalty authority was enhanced in the EPAct 2005. Pursuant to EPAct 2005, NERC has been certified by FERC as the Electric Reliability Organization to develop

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and oversee the enforcement of electric system reliability standards applicable throughout the United States, which are subject to FERC review and approval. FERC-approved reliability standards may be enforced by FERC independently, or, alternatively, by NERC and the regional reliability organizations with frontline responsibility for auditing, investigating and otherwise ensuring compliance with reliability standards, subject to FERC oversight. Monetary penalties of up to $1.0 million per day per violation may be assessed for violations of the reliability standards.

Iberdrola Energy Holdings’ current natural gas storage operations in the United States are subject to the jurisdiction of FERC under the Natural Gas Act of 1938, or NGA, as a Section 7(c) natural gas storage provider (i.e., Caledonia Energy Partners, L.L.C. and Freebird Gas Storage, LLC each with Enstor Operating Company, LLC as their manager) and by providing interstate storage and storage related services under Section 311 of the Natural Gas Policy Act of 1978 (i.e., Enstor Katy Storage and Transportation, L.P. and Enstor Grama Ridge Storage and Transportation, LLC with Enstor Operating Company, LLC as their general partner), at market based rates. Iberdrola Energy Holdings’ interstate and intrastate high-deliverability multi-cycle natural gas storage service projects and operations are subject to FERC regulation under the NGA and as such, regulation may extend to the following matters:

• rates, operating terms and conditions of service;

• the types of services Iberdrola Energy Holdings may offer to its customers;

• the expansion of Iberdrola Energy Holdings’ natural gas storage facilities;

• creditworthiness and credit support requirements;

• relationships among affiliated companies involved in certain aspects of the natural gas business; and

• various other matters.

Furthermore, Iberdrola Energy Holdings’ natural gas trading operations in the United States are subject to the jurisdiction of FERC under EPAct 2005. FERC possesses regulatory oversight over gas markets, including the purchase, sale and transportation of gas by “any entity” in order to enforce the anti-market manipulation provisions in EPAct 2005. NYSEG’s and RG&E’s gas supply operations, similar to IEH, are also subject to FERC regulation with respect to its gas purchases/sales and contracted transportation/storage capacity. With its natural gas storage service and trading operations subject to FERC regulation and scrutiny, should Iberdrola Energy Holdings fail to comply with all applicable FERC administered statutes, rules, regulations and orders, it could potentially be subject to substantial penalties, fines and further FERC enforcement. Under EPAct 2005, FERC has civil penalty authority under the NGA to impose penalties for certain violations of up to $1 million per day for each violation. FERC also has the authority to order the disgorgement of profits from transactions deemed to violate the NGA and EPAct 2005. Additionally, Iberdrola Energy Holdings’ current natural gas trading operations are also subject to FERC regulation with respect to matters such as market manipulation and capacity release rules.

FERC’s policies and rules will continue to evolve, and FERC may amend or revise them, or may introduce new policies or rules in the future. The impact of such policies and rules on Iberdrola Energy Holdings’ business is uncertain and cannot be predicted at this time.

Market Anti-manipulation Regulation

The FERC and the CFTC monitor certain segments of the physical and futures energy commodities market pursuant to the FPA and the Commodity Exchange Act, including Iberdrola USA’s businesses’ energy transactions and operations in the United States. In July 2010, Congress passed the Dodd-Frank Act, which incorporated an expansion of the authority of the CFTC to prohibit market manipulation in the markets regulated by the CFTC. With regard to the physical purchases and sales of electricity and natural gas, the gathering storage, transmission and delivery of these energy commodities and any related trading or hedging transactions that some

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of the operating subsidiaries of Iberdrola USA undertake, the operating subsidiaries of Iberdrola USA are required to observe these anti-market manipulation laws and related regulations enforced by the FERC and CFTC. The FERC and CFTC hold substantial enforcement authority, including the ability to assess civil penalties of up to $1.0 million per day per violation, to order disgorgement of profits and to recommend criminal penalties.

State Regulation

Iberdrola Networks’ regulated utilities in New York and Maine are subject to regulation by the applicable state public utility commissions, including with regard to their rates, terms and conditions of service, issuance of securities, purchase or sale of utility assets and other accounting and operational matters. NYSEG and RG&E are subject to regulation by the NYPSC and CMP and MNG are subject to regulation by the MPUC. The NYPSC and MPUC exercise jurisdiction over the siting of electric transmission lines and the approval of certain mergers or other business combinations involving Iberdrola Networks’ regulated utilities. In addition, the NYPSC and MPUC have the authority to impose penalties on these regulated utilities, which could be substantial, for violating state utility laws and regulations and their orders.

Iberdrola Networks’ regulated distribution utilities deliver electricity and/or natural gas to all customers in their service territory at rates established under cost of service regulation. Under this regulatory structure, Iberdrola Networks’ regulated distribution utilities recover the cost of providing distribution service to their customers based on its costs, and earn a return on their capital investment in utility assets.

The following provides a summary of Iberdrola Networks regulated utilities’ most recent rate cases:

• New York. NYSEG and RG&E have each had one rate case decision since they were acquired by Iberdrola, S.A. in 2008. On September 17, 2009, NYSEG and RG&E initiated a rate case to allow the companies to recover past and future investments, provide safe and adequate service, and improve their credit ratings. On September 21, 2010, the NYPSC issued an Order Establishing Rate Plan whereby NYSEG and RG&E were allowed to increase rates after modification over three years beginning September 1, 2010 by a combined respective rate increase of $52.8 million in year one, $59.2 million in year two and $64.0 million in year three with and a permitted ROE of 10% and a permitted equity ratio of 48%. On May 20, 2015, NYSEG and RG&E filed rate cases in New York for new rates to become effective in April 2016. The primary cause for the rate filings is to recover prior costs, particularly at NYSEG electric which will be requesting recovery of major storm costs that occurred from 2011 to the present, including storm restoration costs for Super Storm Sandy and Hurricanes Irene and Lee. NYSEG also proposed a vegetation management phase-in plan to put the regulated utility on a full-cycle trim (NYSEG is the only utility in New York not on a full cycle vegetation management trim program). NYSEG and RG&E also filed gas rate cases to cover the costs of increasing its leak prone pipe replacement program, replace aging gas transmission lines and expand gas service in upstate New York.

• CMP. On May 1, 2013, CMP filed a rate case in order to recover past and future investments and provide safe and adequate service. On August 25, 2014, MPUC approved a stipulation agreement which provided for a distribution rate increase of approximately $24.3 million effective July 1, 2014 with an allowed ROE of 9.45% and an allowed equity ratio of 50%.

• MNG. On February 23, 2009, MNG filed a rate case to recover prior capital investment and provide safe and adequate service. On December 22, 2009 the MPUC approved a stipulation which provided for a rate increase to MNG’s base distribution rates for a three year period, with a 12% increase effective January 1, 2010, a 10% increase effective December 1, 2010 and another 10% increase effective December 1, 2011. On March 5, 2015, MNG filed a rate case in order to further recover future investments and provide safe and adequate service. On June 19, 2015 the MPUC staff issued an analysis that proposed a disallowance between approximately $10 million and $30 million of capital investment. MNG will file a response to the staff’s analysis and the MPUC will conduct hearings before making a final determination on the rate filing, which is expected by the end of 2015.

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Further, as a result of a restructuring of the utility industry in New York and Maine, most of Iberdrola Networks’ distribution utilities’ customers have the opportunity to purchase their electricity or natural gas supplies from third-party energy supply vendors. Most customers in New York, however, continue to purchase such supplies through the distribution utilities under regulated energy rates and tariffs. In Maine, customers can also purchase electric supply from competitive providers but the majority receives baseline standard offer service that is provided through a MPUC procurement process. Iberdrola Networks’ regulated utilities in New York and MNG purchase electricity or natural gas from unaffiliated wholesale suppliers and recover the actual approved costs of these supplies on a pass-through basis, as well as certain costs associated with industry restructuring, through reconciling rate mechanisms that are periodically adjusted.

In New York, the NYPSC has instituted its REV proceeding, the goals of which are to improve electric system efficiency and reliability, encourage renewable energy resources, support DER, and empower customer choice. In this proceeding, the NYPSC is examining the establishment of a DSP to manage and coordinate DER, and provide customers with market data and tools to manage their energy use. The NYPSC also is examining how its regulatory practices should be modified to incent utility practices to promote REV objectives. The proceeding is following a two-phased schedule with an order relating to policy determinations for DSP and related matters issued in February 2015 and an order for regulatory design and regulatory matters, expected in 2016.

State public utility commissions may also have jurisdiction over certain aspects of Iberdrola Renewables’ competitive generation businesses. For example, in New York, certain Iberdrola Renewables’ generation subsidiaries are electric corporations subject to “lightened” regulation by the NYPSC. As such, the NYPSC exercises its jurisdictional authority over certain non-rate aspects of the facilities, including safety, retirements, and the issuance of debt secured by recourse to those generation assets located in New York. In Texas, Iberdrola Renewables’ operations within the Electric Reliability Council of Texas, or ERCOT, footprint are not subject to rate regulation by FERC, as they are deemed to operate solely within the ERCOT market and not in interstate commerce. These operations are subject to regulation by the Public Utility Commission of Texas, or PUCT. In California, Iberdrola Renewables’ generation subsidiaries are subject to regulation by the California Public Utilities Commission with regard to certain non-rate aspects of the facilities, including health and safety, outage reporting and other aspects of the facilities’ operations. Furthermore, Iberdrola Energy Holdings’ natural gas storage operations are subject to certain state regulations, such as the Railroad Commission of Texas for its facilities located in Texas.

RTOs and ISOs

Iberdrola Networks’ regulated utilities in New York and Maine, as well as some of Iberdrola Renewables’ generation fleet, operate in or have access to organized energy markets, known as RTOs or ISOs, particularly NYISO and ISO-NE. Each organized market administers centralized bid-based energy, capacity and ancillary services markets pursuant to tariffs approved by FERC, or in the case of ERCOT, market rules approved by the PUCT. These tariffs and rules dictate how the energy, capacity and ancillary service markets operate, how market participants bid, clear, are dispatched, make bilateral sales with one another, and how entities with market-based rates are compensated. Certain of these markets set prices, referred to as Locational Marginal Prices, that reflect the value of energy, capacity or certain ancillary services, based upon geographic locations, transmission constraints, and other factors. Each market is subject to market mitigation measures designed to limit the exercise of market power. Some markets limit the prices of the bidder based upon some level of cost justification. These market structures impact the bidding, operation, dispatch and sale of energy, capacity and ancillary services.

The RTOs and ISOs are also responsible for transmission planning and operations within their respective regions. Each of Iberdrola Networks’ transmission-owning subsidiaries in New York and Maine has transferred operational control over certain of its electric transmission facilities to its respective ISOs, such as ISO-NE and NYISO.

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Environmental, Health and Safety

Permitting and Other Regulatory Requirements

Iberdrola Renewables. Iberdrola Renewables’ projects are subject to a variety of state environmental review and permitting requirements. Many states where Iberdrola Renewables’ projects are located, or may in the future be located, have laws that require state agencies to evaluate a broad array of environmental impacts before granting state permits. State agencies evaluate similar issues as federal agencies, including the project’s impact on wildlife, historic sites, aesthetics, wetlands and water resources, agricultural operations and scenic areas. States may impose different or additional monitoring or mitigation requirements than federal agencies. Additional approvals may be required for specific aspects of a project, such as stream or wetland crossings, impacts to designated significant wildlife habitats, storm water management and highway department authorizations for oversize loads and state road closings during construction. Permitting requirements related to transmission lines may be required in certain cases.

Iberdrola Renewables’ projects also are subject to local environmental and regulatory requirements, including county and municipal land use, zoning, building and transportation requirements. Permitting at the local municipal or county level often consists of obtaining a special use or conditional use permit under a land use ordinance or code, or, in some cases, rezoning in connection with the project. Obtaining a permit usually depends on Iberdrola Renewables demonstrating that the project will conform to development standards specified under the ordinance so that the project is compatible with existing land uses and protects natural and human environments. Local or state regulatory agencies may require modeling and measurement of permissible sound levels in connection with the permitting and approval of Iberdrola Renewables’ projects. Local or state agencies also may require Iberdrola Renewables to develop decommissioning plans for dismantling the project at the end of its functional life and establish financial assurances for carrying out the decommissioning plan.

In addition to permits required under state and local laws, Iberdrola Renewables’ projects may be subject to permitting and other regulatory requirements arising under federal law. For example, if a project is located near wetlands, a permit may be required from the U.S. Army Corps of Engineers, or Army Corps, with respect to the discharge of dredged or fill material into the waters of the United States. The Army Corps may also require the mitigation of any loss of wetland functions and values that accompanies the project’s activities. In addition, Iberdrola Renewables may be required to obtain permits under the federal Clean Water Act for water discharges, such as storm water runoff associated with construction activities, and to follow a variety of best management practices to ensure that water quality is protected and impacts are minimized. Iberdrola Renewables’ projects also may be located, or partially located, on lands administered by the U.S. Bureau of Land Management, or BLM. Therefore, Iberdrola Renewables may be required to obtain and maintain BLM right-of-way grants for access to, or operations on, such lands. To obtain and maintain a grant, there must be environmental reviews conducted, a plan of development implemented and a demonstration that there has been compliance with the plan to protect the environment, including measures to protect biological, archeological and cultural resources encountered on the grant.

Iberdrola Renewables’ projects may be subject to requirements pursuant to the ESA and analogous state laws. For example, federal agencies granting permits for Iberdrola Renewables’ projects consider the impact on endangered and threatened species and their habitat under the ESA, which prohibits and imposes stringent penalties for harming endangered or threatened species and their habitats. Iberdrola Renewables’ projects also need to consider the MBTA and the BGEPA, which protect migratory birds and bald and golden eagles and are administered by the U.S. Fish and Wildlife Service. Criminal liability can result from violations of the MBTA and the BGEPA, even for incidental takings of migratory birds. For example, the DOJ has recently entered into settlements with two large wind farm operators, pursuant to which those operators pled guilty to criminal violations of the MBTA and agreed to substantial penalties and mitigation measures.

In addition to regulations, voluntary wind turbine siting guidelines established by the U.S. Fish and Wildlife Service set forth siting, monitoring and coordination protocols that are designed to support wind development in

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the United States while also protecting both birds and bats and their habitats. These guidelines include provisions for specific monitoring and study conditions which need to be met in order for projects to be in adherence with these voluntary guidelines. Most states also have similar laws. Because the operation of wind turbines may result in injury or fatalities to birds and bats, federal and state agencies often recommend or require that Iberdrola Renewables conduct avian and bat risk assessments prior to issuing permits for its projects. They may also require ongoing monitoring or mitigation activities as a condition to approving a project.

Iberdrola Energy Holdings. Iberdrola Energy Holdings’ natural gas storage operations are regulated by the U.S. Department of Transportation, or DOT, Office of Pipeline Safety or OPS, through the PHMSA, under the NGPSA, as amended by Title I of the Pipeline Safety Act of 1979, and the Hazardous Liquids Pipeline Safety Act of 1979, or HLPSA pursuant to 49 C.F.R. Sections 191-92, 199 (2015) and 49 C.F.R. Part 40 (2015). PHMSA, through the NGPSA and HLPSA, regulates the design, installation, testing, construction, operation, maintenance, repair, inspection, replacement and management of interstate and certain intrastate natural gas pipeline facilities. PHMSA has also developed regulations that require transportation pipeline operators to implement integrity management programs to comprehensively evaluate certain high risk areas along Iberdrola Energy Holdings’ natural gas pipelines and take additional measures to protect natural gas pipeline segments located in highly populated areas.

The NGPSA and HLPSA were most recently amended by the 2011 Act in 2012, with the 2011 Act requiring increased maximum civil penalties for certain violations to $200,000 per violation per day, and an increased total cap of $2.0 million. In addition, the 2011 Act reauthorized the federal pipeline safety programs of PHMSA through September 30, 2015, and directs the Secretary of Transportation to undertake a number of reviews, studies and reports, some of which may result in more stringent safety controls or additional natural gas and hazardous liquids pipeline safety rulemaking. A number of the provisions of the 2011 Act have the potential to cause owners and operators of pipeline facilities to incur significant capital expenditures and/or operating costs.

States are largely preempted by federal law from regulating pipeline safety for interstate lines. However, most states are certified by the DOT to assume responsibility for enforcing federal intrastate pipeline regulations and for conducting inspections of intrastate pipelines. States may adopt stricter standards for intrastate pipelines than those imposed by the federal government for interstate lines; however, states vary considerably in their authority and capacity to address pipeline safety. State standards may include requirements for facility design and management, in addition to requirements for pipelines.

Iberdrola Energy Holdings’ natural gas storage operations are also regulated by the EPA, and equivalent state environmental agencies, with respect to the environmental effects of its operations, including air and water quality control, solid and hazardous waste disposal, greenhouse gas emissions, noise and limitations on land use. For example, Iberdrola Energy Holdings’ natural gas storage operations must comply with certain environmental permits that limit emissions of certain pollutants into the atmosphere, including those established under emissions based standards and regulations, such as the National Emission Standards for Hazardous Air Pollutants, New Source Performance Standards, and National Ambient Air Quality Standards.

Further, certain of Iberdrola Energy Holdings’ natural gas facilities may be regulated by the U.S. Department of Homeland Security, or DHS, if such facilities are deemed to present “high levels of security risk.” Covered facilities determined by the DHS to pose a high level of security risk are required to prepare and submit Security Vulnerability Assessments and Site Security Plans, as well as comply with other regulatory requirements including those regarding inspections, audits, recordkeeping, and protection of chemical-terrorism vulnerability information. While Iberdrola Energy Holdings’ natural gas facilities are not currently subject to governmental standards for the protection of computer-based systems and technology from cyber threats and attacks, proposals to establish such standards are being considered by the U.S. Congress and by U.S. Executive Branch departments and agencies, including DHS. Iberdrola Energy Holdings’ natural gas facilities could become subject to such standards in the future.

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Iberdrola Networks. Similar to Iberdrola Renewables and Iberdrola Energy Holdings, Iberdrola Networks’ distribution utilities in New York and Maine are subject to various federal, state and local laws and regulations in connection with the environmental, health and safety effects of its operations. The distribution utilities of Iberdrola Networks are subject to regulation by the applicable state public utility commission with respect to the siting and approval of electric transmission lines, and with respect to pipeline safety regulations for intrastate gas pipeline operators.

OSHA and Certain Other Federal Safety Laws

The operating subsidiaries of Iberdrola USA are subject to the requirements of the federal Occupational Safety and Health Act, as amended, or OSHA, and comparable state laws that regulate the protection of the health and safety of employees. In addition, OSHA’s hazard communication standard and standards administered by other federal as well as state agencies, including the Emergency Planning and Community Right to Know Act and implementing regulations require that information be maintained about hazardous materials used or produced in operations of Iberdrola USA’s subsidiaries and that this information be provided to employees, state and local government authorities and citizens.

Management, Disposal and Remediation of Hazardous Substances

The operating subsidiaries of Iberdrola USA own or lease real property and may be subject to federal, state and local requirements regarding the storage, use, transportation and disposal of petroleum products and toxic or hazardous substances, including spill prevention, control and counter-measure requirements. Project properties and materials stored or disposed thereon may be subject to the federal Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Comprehensive Environmental Response, Compensation and Liability Act and analogous state laws. If any operating subsidiary’s owned or leased properties are contaminated, whether during or prior to their ownership or operation, the operating subsidiary could be responsible for the costs of investigation and cleanup and for any related liabilities, including claims for damage to property, persons or natural resources. Such responsibility may arise even if the operating subsidiary was not at fault and did not cause the contamination. In addition, waste generated by Iberdrola USA’s operating subsidiaries is at times sent to third party disposal facilities. If such facilities become contaminated, the operating subsidiary and any other persons who arranged for the disposal or treatment of hazardous substances at those sites may be jointly and severally responsible for the costs of investigation and remediation, as well as for any claims of damages to third parties, their property or natural resources.

Industry and Market Data

Electric Power Industry

The electric power industry is essential to America’s modern economy, security and standard of living. Electricity powers all sub-sectors of the American economy, including its factories, hospitals, schools, public facilities and transportation infrastructure, among others. The United States is a leader in the generation and supply of electricity, and is one of the world’s largest electricity consumers. The electric power industry accounts for more than 2% of the U.S. GDP and employs more than 500,000 workers. According to the EEI in its 2013 Financial Review, U.S. electric output was 3,993,521 GWh in 2013, an increase of 0.1% from the prior year. On a regional basis, the New England and Mid-Atlantic regions, where Iberdrola USA’s regulated utilities operate, experienced growth of 1.2% and 0.2%, respectively, which is above the national average.

The electric power industry is primarily composed of three types of operations:

• generation;

• transmission; and

• distribution.

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Transmission systems generally consist of transmission towers, power lines, substations and associated facilities, typically operated at 60 kV or above, that are used to reliably transmit electricity across longer distances. Distribution systems generally consist of facilities, including power lines, poles, meters and associated support systems, generally operated below 60 kV, that are used for the distribution of electricity to end customers.

In the continental United States, the network of transmission and distribution, lines is not unified into a single power grid. Instead, there are three main grids that are distinct and have only limited points of interconnection. These grids are the Western Interconnected System, the Eastern Interconnected System and the Texas Interconnected System. FERC granted NERC the legal authority to enforce reliability standards with all users, owners and operators of the bulk power system in the United States. Compliance with these standards is mandatory and enforceable. In many regions of the United States, in coordination with FERC and NERC, RTOs or ISOs manage the flow of electric power and help administer the bulk power market in their respective geographic regions.

Electric distribution companies generally have been awarded exclusive rights by the affected states to distribute electricity in a specified geographic area. State public utility commissions are charged with the oversight and regulation of local electric distribution companies. State regulation of electric distribution companies has a variety of objectives, including ensuring adequate supply, dependable service and reasonable prices for consumers, while also providing utility companies the opportunity to earn a fair and reasonable return on their investments.

Electric distribution companies provide a delivery service at rates set by government regulators based on the cost of operating the delivery system, including the cost of capital. Electric distribution companies generally do not earn a profit from the price of fuel that is used for the generation of electricity, which is supplied to their customers. The delivery service rate is combined with fuel cost recovery charges to determine a customer’s bill, among other line items.

In its Annual Energy Outlook 2014, the U.S. Energy Information Administration, or EIA, projects that electricity demand will increase by 29% from 2012 to 2040, driven, in part, by the increased use of electricity in the commercial and residential sectors due to greater cooling requirements and continuous growth in demand for electrical devices and equipment, which are expected to offset efficiency gains. There are a number of factors that impact the long-term demand for electricity, including economic growth, relative energy prices and technology choices by end users, among other factors. Population shifts to warmer regions with greater cooling requirements affect both residential and commercial electricity sales. Changes in electricity demand result in corresponding changes in electricity generation and the mix of technologies used to meet demand.

Natural Gas Industry

Natural gas supplies nearly one-fourth of all of the energy used in the United States and is one of the most important energy sources for the future in light of its relative abundance, environmental qualities and multiple applications across sectors. According to the American Gas Association, natural gas serves approximately 66 million homes, 5 million businesses, 195,000 factories and 1,900 electric generating units in the United States. According to the American Gas Association, natural gas local distribution companies, or LDCs, spend more than $19.0 billion annually to help enhance the safety of natural gas distribution and transmission systems to such end customers. Natural gas will continue to play an important role for meeting energy demand in the United States.

The natural gas industry is primarily composed of four types of operations:

• exploration and production;

• gathering and processing;

• transmission and storage; and

• local distribution.

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Local distribution is the last step in delivering natural gas to end customers. While some large industrial, commercial and electric-generation customers receive natural gas directly from high-capacity transmission pipelines, most end–use customers receive natural gas from an LDC. LDCs are regulated natural gas utilities that deliver natural gas to end consumers within a specific geographic area. LDCs typically transport natural gas from central delivery points located on interstate and intrastate transmission pipelines to households. The delivery point where the natural gas is transferred from a transmission pipeline to the local gas utility is often termed the “citygate.” LDCs take ownership of the natural gas at the citygate and deliver it to each customer’s meter through an extensive network of thousands of miles of small-diameter distribution pipe.

LDCs are generally awarded exclusive rights to distribute natural gas in a specified geographic area. State public utility commissions are charged with the oversight and regulation of LDCs. State regulation of LDCs has a variety of objectives, including ensuring adequate supply, dependable service and reasonable prices for consumers, while also providing utility companies the opportunity to earn a fair and reasonable return on their investments.

LDCs do not typically earn a profit from the price of natural gas supplied to their customers; rather, LDCs provide a delivery service at rates set by government regulators based on the cost of operating the delivery system, including the cost of capital. The delivery service rate is combined with charges to recover the cost of the natural gas supplied to determine a customer’s bill.

In its Annual Energy Outlook 2014, the EIA projects that natural gas consumption will increase from 25.6 trillion cubic feet, or Tcf, in 2012 to 31.6 Tcf in 2040, primarily driven by increased use of natural gas in the industrial and electric power generation sectors. On a regional basis, the Northeast/Mid-Atlantic market, which is one of the markets which Iberdrola Networks serves, has the greatest regional gas demand in the United States by volume and is expected to have the second highest regional demand growth by total volume from 2014 to 2020 according to Bloomberg New Energy Finance, or BNEF.

In the short term, demand for natural gas by LDC customers is impacted by the weather, fuel switching and the economy. Due to the extensive use of natural gas for heating and the increasing use of natural gas for power generation, the demand for natural gas is primarily seasonal, with demand peaks during the winter to meet heating load and in the summer to meet power-generation load.

There are also a number of factors that impact the long-term demand for natural gas, including residential and commercial demand, driven primarily by residential heating applications, the price of electricity, the price of natural gas, the price of competing energy sources such as fuel oil, energy efficiency, technological advances, state of the economy, use of natural gas for electric generation, use of natural gas in the transportation sector and environmental regulations. Higher rates of economic growth generally lead to increased consumption of natural gas, primarily in response to their effects on housing starts, commercial floorspace and industrial output.

Renewable Energy Generation Industry

The United States is home to a thriving renewable energy industry, with globally competitive companies in all renewable energy generation subsectors, including wind and solar. According to BNEF, the United States had a total operating energy capacity of approximately 1,142 GW as of December 2014, which was comprised of a diverse mix of fuel types, including 493 GW of natural gas-fired capacity, 323 GW of coal-fired capacity, 182 GW of renewable capacity, 101 GW of nuclear capacity and 43 GW of oil-fired capacity. Renewable generation capacity is comprised of 80 GW of hydro, 64 GW of wind, 20 GW of solar, 15 GW of biomass and waste-related energy and 3 GW of geothermal. Renewable energy is expected to be the fastest growing form of electricity generation. BNEF forecasts the U.S. renewable energy industry to grow at a compound average annual rate of approximately 10% per year from 2013 through 2020. To achieve these gains, BNEF projects that approximately $700 billion will be invested in the U.S. renewable energy sector during the next two decades, with investment opportunities available across the deep value chain. Today, the United States has the second

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largest wind industry and the fifth largest solar industry, placing it in prime position to take advantage of the significant growth opportunities in the renewable generation industry.

Growth in renewable energy is largely attributable to its increasing cost competitiveness driven primarily by improving technology, production efficiency and installation costs, government policies and incentives, and the impact of increasingly stringent environmental rules and regulations on coal-fired generation.

U.S. federal, state and local governments and utilities have established various incentives to support the development of renewable energy. These incentives include accelerated tax depreciation, production tax credits, investment tax credits, cash grants and RPS. RPS programs are state regulatory programs created by state legislatures to encourage the development of renewable energy that typically require utilities to produce or procure a certain percentage of their energy needs from renewable energy sources. More than half of U.S. states and territories have RPS. Most states with mandatory RPS programs typically set a target between 10% and 30% of total energy capacity, while other states set a MW target to achieve their RPS goals. Governments from time to time may, however, review their policies that support the development of renewable energy and consider actions that would make the policies less conducive to the development and operation of renewable energy facilities.

Customers

Iberdrola Networks delivers natural gas and electricity to residential, commercial and institutional customers through its regulated utilities in New York and Maine. Iberdrola Networks’ customer payment terms are regulated by the states of New York, with respect to NYSEG and RG&E, and Maine, with respect to CMP and MNG, and each of the regulated utilities must provide extended payment arrangements to customers for past due balances. See “—Iberdrola Networks” for more information relating to the customers of Iberdrola Networks.

Iberdrola Renewables sells the majority of its output to large investor-owned utilities, public utilities and other credit-worthy entities. Additionally, Iberdrola Renewables generates and provides power, among other services, to federal and state agencies, institutional retail and joint action agencies. Offtakers typically purchase renewable energy from Iberdrola Renewables through long-term PPAs, allowing Iberdrola Renewables to limit its exposure to market volatility. Approximately 68% of Iberdrola Renewables’ wind generating capacity is fully committed under PPAs with an average duration of 9 years. Iberdrola Renewables also delivers thermal output to wholesale customers in the Western United States.

Iberdrola Energy Holdings’ natural gas storage and management services customers include a diversified mix of natural gas distribution companies, power generators, natural gas marketers and producers, utilities using gas as fuel, gas storage customers, financial institutions and energy marketers.

Competition

Iberdrola Networks’ regulated public utilities in New York and Maine do not generally face competition from other regulated utilities that transmit and distribute electricity and natural gas. However, demand for electricity and natural gas may be negatively impacted by federal and state legislation mandating that certain percentages of power delivered to end users be produced from renewable resources, such as wind, thermal and solar energy.

Iberdrola Networks faces competition from self-contained micro-grids that integrate renewable energy sources within in the areas served by Iberdrola Networks. However, there has been limited development of these micro-grids in Iberdrola Networks’ service areas to date, and Iberdrola Networks expects that growth in distributed generation of renewable energy will continue due to financial incentives being provided by federal and state legislation. Iberdrola Networks has experienced significant growth in alternative distribution sources of generation on its network over the past ten years, with over 90% of the growth coming from solar photovoltaic facilities.

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Iberdrola Renewables has competitive advantages, including a robust development pipeline, a management team with extensive experience, strong relationships with suppliers and clients, expert regulatory knowledge and brand awareness. However, Iberdrola Renewables faces competition throughout the life cycles of its energy facilities, including during the development phase, in the identification and procurement of suitable sites with high wind resource availability, grid connection capacity and land availability. Iberdrola Renewables also competes with other suppliers in securing long-term PPAs with power purchasers and participates in competitive bilateral and organized energy markets with other energy sources for power that is not sold under PPAs. Competitive conditions may be substantially affected by various forms of energy legislation and regulation considered from time to time by federal, state and local legislatures and administrative agencies.

Iberdrola Energy Holdings faces competition from others in the natural gas market through its subsidiaries, Enstor, Inc. and Iberdrola Energy Services LLC. Enstor, Inc. encounters regional competition, such as in the Gulf South region, from other independent natural gas storage providers, a combination of interstate and intrastate pipeline companies and local distribution companies. Furthermore, Iberdrola Energy Services LLC competes with various entities, ranging from natural gas marketing companies, to financial institutions and producer/marketers.

Properties

Iberdrola Networks

The following table sets forth certain information relating to Iberdrola Networks’ electricity generation facilities and their respective locations, type and installed capacity as of March 31, 2015. Unless noted otherwise, Iberdrola Networks owns each of these facilities.

Operating Company	Facility Location	Facility Type	Installed Capacity (in MW)	Year(s) Commissioned
NYSEG	Newcomb, NY	Diesel Turbine	1.7	1967
NYSEG	Auburn, NY(1)	Natural Gas Turbine	7.3	2000
NYSEG	Eastern New York (6 locations)	Hydroelectric	61.4	1921-1983
RG&E	Rochester, NY (3 locations)	Hydroelectric	57.5	1917-1960

(1) The Auburn, NY natural gas turbine generating unit is leased.

The following table sets forth certain operating data relating to the electricity transmission and distribution activities of each of Iberdrola Networks’ regulated utilities as of March 31, 2015.

Utility	State	Substations		Transmission Lines (in miles)		Overhead Distribution Lines (in pole miles)		Underground Lines (in miles)		Total Distribution (in miles)		Electricity Customers
NYSEG	New York		436		4,463		29,257		2,257		31,514		883,000
RG&E	New York		153		1,025		5,209		2,718		7,927		373,000
CMP	Maine		208		2,788		19,419		1,417		20,836		614,000

The following table sets forth certain operating data relating to the natural gas transmission and distribution activities of each of Iberdrola Networks’ regulated utilities, as of March 31, 2015.

Utility	State	Natural Gas Customers		Transmission Pipeline (in miles)		Distribution Pipeline (in miles)
NYSEG	New York		264,000		20		8,189
RG&E	New York		306,000		105		9,230
MNG	Maine		4,000		2		190

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Iberdrola Renewables

The following table sets forth Iberdrola Renewables’ portfolio of wind projects as of March 31, 2015. Unless noted otherwise, Iberdrola Renewables wholly-owns each of these facilities.

Location	Wind Project	Turbines	Total Installed Capacity (MW)	Commercial Operation Date	North American Electric Reliability Corporation (“NERC”) Region
Arizona	Dry Lake I	30 (Suzlon S88, 2.1 MW)	63	2009	WECC
	Dry Lake II	31 (Suzlon, 2.1 MW)	65	2010
California	Dillon	45 (Mitsubishi, 1 MW)	45	2008	WECC
	Manzana	126 (GE, 1.5 MW)	189	2011	WECC
	Mountain View III	34 (Vestas V47, 0.66 MW)	22	2003	WECC
	Phoenix Wind Power	3 (Neg Micon (Vestas), 0.66 MW)	2	1999	WECC
	Shiloh	100 (GE, 1.5 MW)	150	2006
Colorado	Colorado Green(1)	54 (GE, 1.5 MW)	81	2003	WECC
	Twin Buttes	50 (GE, 1.5 MW)	75	2007
Illinois	Providence Heights	36 (Gamesa G87, 2.0 MW)	72	2008	MRO
	Streator Cayuga Ridge South	150 (Gamesa, 2.0MW)	300	2010
Iowa	Barton	80 (Gamesa, 2.0 MW)	160	2009	MRO
	Flying Cloud	29 (GE, 1.5 MW)	44	2004	MRO
	New Harvest	50 (Gamesa G87, 2.0W)	100	2012	MRO
	Top of Iowa II	40 (Gamesa G87, 2.0 MW)	80	2008	MRO
	Winnebago I	10 (Gamesa G83, 2.0 MW)	20	2008	MRO
Kansas	Elk River	100 (GE, 1.5 MW)	150	2005	MRO
Massachusetts	Hoosac	19 (GE, 1.5 MW)	29	2012	NPCC
Minnesota	Elm Creek	66 (GE, 1.5 MW)	99	2008	MRO
	MinnDakota	100 (GE, 1.5 MW)	150	2008	MRO
	Trimont	67 (GE, 1.5 MW)	100	2005	MRO
	Elm Creek II	62 (Mitsubishi, 2.4)	149	2010	MRO
	Moraine I	34 (GE, 1.5 MW)	51	2003	MRO
	Moraine II	33 (GE, 1.5 MW)	50	2009	MRO
Missouri	Farmers City	73 (Gamesa G87, 2.0 MW)	146	2009	MRO
New Hampshire	Groton	24 (Gamesa G87, 2.0 MW)	48	2012	NPCC
	Lempster	12 (Gamesa, 2 MW)	24	2008	NPCC
New York	Hardscrabble	37 (Gamesa G90, 2MW)	74	2011	NPCC
	Maple Ridge I(2)	70 (Vestas V82, 1.65 MW)	116	2006	NPCC
	Maple Ridge II(2)	27 (Vestas V82, 1.65 MW)	45	2006	NPCC
North Dakota	Rugby	71 (Suzlon S88, 2.1 MW)	149	2009	MRO
Ohio	Blue Creek	152 (Gamesa G90 - 2.0 MW)	304	2012	RFC
Oregon	Hay Canyon	48 (Suzlon S88, 2.1 MW)	101	2009	WECC
	Klondike I	16 (GE, 1.5 S – 1.5 MW)	24	2001	WECC
	Klondike II	50 (GE, 1.5 S – 1.5 MW)	75	2005	WECC
	Klondike III	44 (Siemens, 2.3 MW); 80 (GE, 1.5 SLE, 1.5 MW); 1 (Mitsubishi, 2.4 MW)	224	2007	WECC
	Klondike IIIa	51 (GE, 1.5 MW)	77	2008	WECC
	Leaning Juniper II	74 (GE, 1.5 MW); 43 (Suzlon, 2.1 MW)	201	2011	WECC
	Pebble Springs	47 (Suzlon S88/2100, 2.1 MW)	99	2009	WECC
	Star Point	47 (Suzlon, 2.1 MW)	99	2010	WECC
Pennsylvania	Casselman	23 (GE, 1.5 MW)	35	2008	RFC
	Locust Ridge I	13 (Gamesa G87, 2.0)	26	2006	RFC
	Locust Ridge II	51 (Gamesa G83, 2.0 MW)	102	2009	RFC
	South Chestnut	23 (Gamesa, 2.0 MW)	46	2012	RFC
South Dakota	Buffalo Ridge I	24 (Suzlon, 2.1 MW)	50	2009	MRO
	Buffalo Ridge II	105 (Gamesa G87, 2.0 MW)	210	2010	MRO
Texas	Baffin	101 (Gamesa G97, 2.0 MW)	202	2015	TRE
	Barton Chapel	60 (Gamesa, 2.0 MW)	120	2009	TRE
	Peñascal I	84 (Mitsubishi, 2.4 MW)	202	2009	TRE
	Peñascal II	84 (Mitsubishi, 2.4 MW)	202	2010	TRE
Washington	Big Horn I	133 (GE, 1.5 MW)	200	2006	WECC
	Big Horn II	25 (Gamesa, 2.0 MW)	50	2010	WECC
	Juniper Canyon	63 (Mitsubishi, 2.4 MW)	151	2011	WECC

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(1) Jointly owned with Shell Wind Energy; capacity amounts represent only Iberdrola Renewables’ share of the wind farm.

(2) Jointly owned with Horizon Wind Energy; capacity amounts represent only Iberdrola Renewables’ share of the wind farm.

Additionally, unless noted otherwise, Iberdrola Renewables owns the following solar and thermal facilities as of March 31, 2015.

Facility	Location	Type of Facility	Installed Capacity (MW)	Commercial Operation Date
Copper Crossing Solar Ranch	Pinal County, Arizona	Solar	20	2011
San Luis Valley Solar Ranch(1)	Alamosa County, Colorado	Solar	30	2012
Klamath Cogeneration	Klamath Falls, Oregon	Thermal	536	2001
Klamath Peakers	Klamath Falls, Oregon	Thermal	100	2009

(1) Operated pursuant to a sale-and-leaseback agreement.

Iberdrola Energy Holdings

Iberdrola Energy Holdings owns and operates four natural gas storage facilities, all near key trading hubs. The following table provides an overview of these storage facilities as of March 31, 2015. Unless noted otherwise, Enstor, Inc., a wholly-owned direct subsidiary of Iberdrola Energy Holdings, owns and operates each of these facilities.

Facility	Type of Facility	Max Injection (MMcfd)/ Max Withdrawal (MMcfd)		Pipeline Connections	Commercial Operation Date
Caledonia Energy Partners, L.L.C., Mississippi	Depleted gas reservoir		558/550	Tennessee Gas Pipeline 500		2005
Freebird Gas Storage, LLC, Alabama(1)	Depleted gas reservoir		350/305	Tennessee Gas Pipeline 500		2001
Enstor Grama Ridge Storage and Transportation, LLC, New Mexico	Depleted gas reservoir		200/200	El Paso Natural Gas, Natural Gas Pipeline Company of America and the Duke Energy Field Services Raptor Pipeline		1973
Enstor Katy Storage and Transportation, L.P., Texas	Depleted gas reservoir		750/700	Connected to 14 different pipelines		1992

(1) 13% owned by Northwest Alabama Gas District.

Infrastructure Protection and Cyber Security Measures

Iberdrola USA has security measures in place designed to protect its facilities and assets, such as its transmission and distribution system. While Iberdrola USA has not had any significant security breaches, a physical security intrusion could potentially lead to theft and the release of critical operating information. To manage this operational risk, Iberdrola USA has implemented physical security measures and continues to strengthen its security posture by improving and expanding its physical security capabilities to protect critical assets in accordance with the Corporate Security Policy of Iberdrola, S.A. as adopted by Iberdrola USA. In addition to physical security intrusions, a cyber breach could potentially lead to theft and the release of critical operating information or confidential customer information. To manage this operational risk, in accordance with the Cybersecurity Risk Policy and with the Corporate Security Policy of Iberdrola, S.A. as adopted by Iberdrola USA, Iberdrola USA has implemented cyber and physical security measures and continues to strengthen its security posture by improving and expanding its physical and cyber security capabilities to protect critical assets.

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In an effort to reduce its vulnerability to cyber attacks, Iberdrola USA has established a dedicated Corporate Security Office, responsible for improving and coordinating security across the company and has adopted a comprehensive company-wide physical and cyber security program, which is supported by a company-wide governance policy to manage, oversee and assist the organization in meeting its corporate, legal, and regulatory responsibilities with regard to the protection of its cyber, physical and information assets. However, as threats evolve and grow increasingly more sophisticated, Iberdrola USA cannot ensure that a potential security breach may not occur or quantify the potential impact of such an event. Iberdrola USA continues to invest in technology, processes security measures and services to detect, mitigate and protect its assets, both physical and cyber. These investments include upgrades to network architecture and physical security measures, regular intrusion detection monitoring and compliance with emerging industry regulation.

Employees

As of March 31, 2015, the Iberdrola USA group had 5,058 employees excluding 18 international assignees. Of these 5,058 employees, 48.8% are represented by a union. The following table provides an overview of the number of Iberdrola USA employees at each business segment as of March 31, 2015:

Business Segment	Number of Employees (excluding International Assignees)		% of Union Workforce Subject to Collective Bargaining Agreement
Iberdrola Networks		4,213		58.6	%
Iberdrola Renewables		738		0.0	%
Iberdrola Energy Holdings		107		0.0	%
Total Iberdrola USA		5,058		48.8	%

Iberdrola USA and its subsidiaries have not experienced any work stoppages in the last five years and enjoy good relations with their labor unions. Virtually all employees of Iberdrola USA and its subsidiaries work full-time.

Legal Proceedings

The subsidiaries of Iberdrola USA are involved in various proceedings, legal actions and claims arising in the normal course of their respective businesses. The outcomes of these matters will generally not be known for an extended period of time. In certain of the legal proceedings, the claimants seek damages, as well as other compensatory relief, which could result in the payment of significant claims and settlements. While the ultimate outcome and impact of any proceeding cannot be predicted with certainty, Iberdrola USA’s management believes that the resolution of its pending proceedings will not have a material adverse effect on its financial condition or results of operations.

FirstEnergy

NYSEG sued FirstEnergy Corp., or FirstEnergy, to recover environmental cleanup costs at 16 former manufactured gas sites. In July 2011, the New York District Court issued a decision and order in NYSEG’s favor. On September 9, 2011, FirstEnergy paid NYSEG $30 million, representing its share of past costs of $27 million and pre-judgment interest of $3 million. FirstEnergy appealed the decision to the Second Circuit Court of Appeals. On September 11, 2014, the Second Circuit Court of Appeals affirmed the District Court’s decision in NYSEG’s favor, but modified the decision for nine sites, reducing FirstEnergy’s damages for incurred costs from $27 million to $22 million, excluding interest, and reducing FirstEnergy’s allocable share of future costs at these sites. NYSEG refunded FirstEnergy the excess $5 million in November 2014.

Because the District Court’s original damage award for incurred costs was based on 2009 figures, FirstEnergy now owes NYSEG an additional damages payment of approximately $16 million for cleanup costs

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incurred while the appeal was pending. FirstEnergy is also liable for a share of future costs, which, based on current projections, would be $27 million. While this decision is final, FirstEnergy can dispute the calculation of damages and has yet to pay the $16 million in damages for cleanup costs. Any recovery will be flowed through to NYSEG customers.

Century Indemnity and OneBeacon

On August 14, 2013, NYSEG filed suit in federal court against two excess insurers, Century Indemnity Co. and OneBeacon American Insurance Co., who provided excess liability coverage to NYSEG. NYSEG seeks payment for cleanup costs associated with contamination at 22 former manufactured gas plants. Based on estimated cleanup costs of $282 million, the carriers’ allocable share is approximately $89 million, excluding pre-judgment interest. Any recovery will be flowed through to NYSEG customers.

Facilities

The principal offices of Iberdrola USA and Iberdrola Networks are located in New Gloucester, Maine and in Rochester, New York. Iberdrola Renewables’ headquarters is located in Portland, Oregon, while Iberdrola Energy Holdings is principally located in Houston, Texas. In addition, Iberdrola USA and its subsidiaries have various administrative offices located throughout the United States. Iberdrola USA leases part of its administrative and local offices.

The following table sets forth the principal properties of Iberdrola USA, by location, type, lease or ownership and size as of March 31, 2015:

Location	Type of Facility	Lease/Owned	Size (square meters)
New Gloucester, Maine	Office	Leased		5,659
Rochester, New York	Office	Owned		11,380
Portland, Oregon	Office	Leased		5,298
Houston, Texas	Office	Leased		2,004

Iberdrola USA believes that its office facilities are adequate for its current needs and that additional office space can be obtained if necessary.

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Iberdrola USA Directors and Executive Officers

The following table sets forth the name, age and position of each of Iberdrola USA’s executive officers and directors as of July 16, 2015. For a discussion of the expected composition of Iberdrola USA’s executive officers and directors as of the completion of the merger, see the sections entitled “Interests of UIL’s Directors and Executive Officers in the Merger” and “The Merger Agreement—Governance and Management of the Combined Company” beginning on pages 108 and 118, respectively, of this proxy statement/prospectus.

Name	Age		Position
Executive officers
Robert Daniel Kump		54	Chief Corporate Officer and Director
Pablo Canales Abaitua		46	Chief Financial Officer
R. Scott Mahoney		49	General Counsel
Directors
Ignacio Sánchez Galán		64	Chairman
John E. Baldacci		60	Director
Pedro Azagra Blázquez		47	Director
Alfredo Elías Ayub(2)		65	Director
Santiago Martinez Garrido		46	Director
Juan Carlos Rebollo Liceaga(1)		53	Director
José Sainz Armada(1)		55	Director
Alan D. Solomont(1)(2)		66	Director

(1) Member of Iberdrola USA’s audit and compliance committee.

(2) Independent director under NYSE requirements.

Executive Officers

Robert Daniel Kump has served as Iberdrola USA’s Chief Corporate Officer since January 2014 and Iberdrola Networks’ Chief Executive Officer since November 2010. Mr. Kump also has served as a Director of Iberdrola USA’s subsidiaries CMP, NYSEG, and RG&E since 2009, as the President of the Iberdrola USA Group, LLC since March 2012 and as the Chief Executive Officer of Iberdrola USA Management Corporation since October 2009. Mr. Kump previously served from February 1997 to October 2009 as Iberdrola USA’s Senior Vice President and Chief Financial Officer, Vice President, Controller and Chief Accounting Officer, Treasurer and Secretary. Mr. Kump also previously held a number of positions at NYSEG from 1986 to 1997, including Senior Accountant-External Financial Reporting, Director-Investor Relations, Director-Financial Services, and Treasurer. Mr. Kump earned a B.A. in accounting from Binghamton University and is a C.P.A. in New York.

Pablo Canales Abaitua has served as Iberdrola USA’s Chief Financial Officer since August 2014. Mr. Canales Abaitua previously served as Director of Administration and Management Control of Iberdrola Renewables from September 2010 until July 2014. He has also served as CFO for Iberdrola Renewables USA from June 2006 to September 2010 and CFO and Controller of Iberdrola South America from February 2002 until June 2006. Mr. Canales Abaitua graduated from the Universidad Comercial de Deusto in Bilbao, Spain with a degree in Business Administration in 1992 and received his Certified International Investment Analyst designation in Finance from the Association of International Investment Analysts (ACIIA) in 2012.

R. Scott Mahoney has served as Iberdrola USA’s General Counsel since June 2012. Mr. Mahoney previously served as Deputy General Counsel and Chief FERC Compliance Officer for Iberdrola USA from January 2007 to June 2012 and previous legal and senior executive positions at Iberdrola USA subsidiaries from October 1996 until January 2007. Mr. Mahoney earned a B.A. from St. Lawrence University, a J.D. from the University of Maine, and a Master’s Degree in Environmental Law from the Vermont Law School, and a Postgraduate

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Diploma in Business Administration from the University of Warwick. He has received bar admission to the State of Maine, the U.S. Court of Appeals, the U.S. District Court and the U.S. Court of Military Appeals.

Directors

Ignacio Sánchez Galán has served as Chairman of the Iberdrola USA board since Iberdrola USA’s acquisition by Iberdrola, S.A. Since 2006, Mr. Galán has been Chairman and CEO of Iberdrola, S.A. Since 2007, Mr. Galán has also served as the Chairman of Scottish Power Limited. Mr. Galán previously served as Executive Vice President and CEO of Iberdrola, S.A. from 2001 to 2006. Mr. Galán also previously served as Chairman at Eurojet from 1993 to 1995 and Chief Executive Officer at Airtel Móvil (now Vodafone Spain) from 1995 to 2001. Mr. Galán has also held various management positions at Sociedad Española del Acumulador Tudor, S.A. (now Grupo Exide) and served as Director and General Manager of Industria de Turbo Propulsores, S.A. Mr. Galán holds honorary degrees from the Universities of Salamanca, Edinburgh and Strathclyde, where he is a visiting professor. He currently chairs the utilities group at the World Economic Forum and is a member of the steering committee of the European Round Table of Industrialists. He is also a member of the Global Sustainable Electricity Partnership and the Magritte Group. In 2014 Mr. Galán received the Award for Responsible Capitalism from FIRST, a multi-disciplinary international affairs organization. Mr. Galán graduated in Electromechanical Industrial Engineering at the Instituto Católico de Artes e Industrias. He also holds a degree in Business Administration from the Instituto Católico de Administración y Dirección de Empresas and in Business Administration and Foreign Trade from the Escuela de Organización Industrial.

Mr. Galán was selected to serve on the Iberdrola USA board because of his extensive knowledge of the energy industry and leadership experience at Iberdrola, S.A.

John E. Baldacci has served as a member of the Iberdrola USA board since January 2014. Mr. Baldacci has served as the Senior Advisor for Economic Development & Government Relations at Pierce Atwood since 2012, and has served as Vice Chair of the Board of the Northeast Midwest Institute since 2013. Mr. Baldacci served as the 73rd Governor of the State of Maine from 2003 until 2011. He previously served as director of the U.S. Department of Defense’s Military Health Care Reform Initiative from 2011 to 2012, U.S. Representative for Maine’s 2nd Congressional District from 1995 to 2003, a member of the Maine Senate from 1982 to 1994, and a member of the Bangor City Council from 1978 to 1981. Mr. Baldacci is the former Chairman of the Board of Directors and current board member for Jobs for America’s Graduates, a national nonprofit organization that works to reduce barriers to high school graduation and help students to transition to college. Mr. Baldacci earned a B.A. in History from the University of Maine at Orono.

Mr. Baldacci was selected to serve on the Iberdrola USA board because of his extensive experience in economic development and government regulations.

Pedro Azagra Blázquez has served as Iberdrola Group’s Director of Corporate Development since 2008. Mr. Azagra Blázquez previously was in charge of Strategy from 1997 to 2001, responsible for corporate development activities of the Iberdrola Group from 2001 to 2008 and was responsible for the U.S. businesses in 2008. He has served as a board member of Iberdrola México, S.A. de C.V. since 2014. He also served as member of the Board of Directors of Energy East (now Iberdrola USA) from 2008 to 2011 and RG&E, NYSEG and CMP, each from 2009 to 2011. Mr. Azagra Blázquez has also served as Professor of Corporate Finance and Mergers and Acquisitions at Universidad Pontificia de Comillas-Instituto Católico de Administración y Dirección de Empresas, Madrid, Spain since 1998. Before joining Iberdrola he worked at Morgan Stanley in London and New York in the investment banking division in advisory, equity and debt transactions. He earned a business degree and a law degree from Universidad Pontificia de Comillas - Instituto Católico de Administración y Dirección de Empresas and an MBA from the University of Chicago.

Mr. Azagra Blázquez was selected to serve on the Iberdrola USA board because of his extensive knowledge of the U.S. businesses, the U.S. utilities and U.S. mergers and acquisitions transactions.

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Alfredo Elías Ayub has served as a member of the Iberdrola USA board since January 2014. Mr. Elías Ayub previously served as Chief Executive Officer and Director of Federal Electricity Commission, Mexican State Owned Electricity Company from 1999 to 2011. From 1996 to 1999, he was the Chief Executive Officer of Aeropuertos y Servicios Auxiliares, Mexico’s Airport Operator that was responsible for managing 58 airports. He held a number of positions at Mines and State Owned Industry including Deputy Minister of Mines and Basic Industry and Deputy Energy Minister. He previously served as Deputy Director and Director of Universidad Anáhuac’s Engineering School from 1978 to 2013 and a Member of the Dean of Students Board of Advisors of Harvard University Business School from 2010 to 2013. He held a number of positions for Mexican Fund for Social Activities including Deputy Director General and Director General from 1978 to 1983. He served as Executive Coordinator at the State of Mexico Government Urban Development from 1983 to 1986. Mr. Elías Ayub earned a degree in Civil Engineering from Universidad Anáhuac, in Mexico City, and a M.B.A. from Harvard University.

Mr. Elías Ayub was selected to serve on the Iberdrola USA board because of his extensive experience in the energy and natural resources industries.

Santiago Martinez Garrido has been a member of the Iberdrola USA board since February 2015. Since 2004, Mr. Martinez Garrido has been Head of the Corporate Legal Services of Iberdrola, S.A. He has also served as Secretary of the Board of Directors of Iberdrola España, S.A. a direct subsidiary of Iberdrola, S.A., since 2014 and Fundación Iberdrola, a charitable foundation of Iberdrola, S.A., since 2010 and has been a member of the Board of Directors of Iberdrola Brazil, S.A., an indirect subsidiary of Iberdrola, S.A., since 2012 and Neoenergia, S.A., a Brazilian energy company, since 2004. Before joining Iberdrola, Mr. Martinez Garrido served as Chief of Staff of the Minister of Justice of Spain and of the Justice Secretary of State of Spain from 2000 to 2004. Mr. Martinez Garrido has also been a member of the Board of Trustees of the Royal Academy of Jurisprudence and Legislation in Madrid since 2014. Mr. Martinez Garrido has a degree in Law from Universidad Complutense in Madrid, a degree in Business Studies from Colegio Universitario San Pablo in Madrid and a PhD from Universidad Autónoma de Barcelona.

Mr. Martinez Garrido was selected to serve on the Iberdrola USA board because of his legal role at Iberdrola, S.A.

Juan Carlos Rebollo Liceaga has been a member of the Iberdrola USA board since February 2015. Since 2010, Mr. Rebollo Liceaga has been Administration and Control Director of Iberdrola, S.A. Mr. Rebollo Liceaga also currently serves as a member of the board and the audit committees of Iberdrola España, S.A. and Scottish Power Ltd., each subsidiaries of Iberdrola, S.A. Mr. Rebollo Liceaga also previously served on the Board of Directors of Energy East (now Iberdrola USA) from February 2009 until April 2011. Prior to joining Iberdrola, S.A., Mr. Rebollo Liceaga worked at Arthur Andersen. Mr. Rebollo Liceaga holds a degree in Business Administration from the Universidad Comercial de Deusto.

Mr. Rebollo Liceaga was selected to serve on the Iberdrola USA board because of his extensive experience in accounting and his executive position at Iberdrola, S.A.

José Sainz Armada has served as a member of the Iberdrola USA board since January 2014. Since 2003, Mr. Sainz Armada has been the Chief Financial Officer of Iberdrola, S.A. Prior to his appointment as Chief Financial Officer, Mr. Sainz Armada was Director of Development & Finance of Iberdrola, S.A. from 2002. Before joining Iberdrola, S.A., Mr. Sainz Armada started his professional career at JP Morgan, he then held different positions at Corporación Bancaria de España, or Argentaria, where he was its CFO from 1996 to 2000 and then moved to Banco Bilbao Vizcaya Argentaria, or BBVA, where he was General Manager of Asset Management from 2001 to 2002, and Managing Director of Corporate Value of BBVA from 2000 to 2001. Mr. Sainz Armada earned a degree in Law and Business Administration from the Catholic Institute of Business Administration from the Universidad Pontificia de Comillas Madrid and a M.B.A. from INSEAD in Fontainebleau, France.

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Mr. Sainz Armada was selected to serve on the Iberdrola USA board because of his extensive experience in finance and his executive position at Iberdrola, S.A.

Alan D. Solomont has served on the Iberdrola USA board since January 2014. Mr. Solomont has served as Pierre and Pamela Omidyar Dean of the Jonathan M. Tisch College of Citizenship and Public Service at Tufts University since January 2014. Mr. Solomont has also served on the board of directors of MAPFRE U.S.A. Corp., the U.S. subsidiary of MAPFRE S.A., since February 2014. He is the former United States Ambassador to Spain and Andorra from 2009 to 2013. Prior to his posting to Madrid, he was a member of the bipartisan Board of Directors of the Corporation for National and Community Service beginning in 2000, and he was elected chair in 2009. Mr. Solomont has served on the boards of directors of a number of other nonprofit and for profit organizations, including Boston Medical Center from 1995 to 2009, Boston Private Bank & Trust Co. from 1999 to 2009, Angel Healthcare Investors from 2000 to 2009, the New Israel Fund from 1998 to 2008, Israel Policy Forum from 1998 to 2008, the University of Lowell from 1984 to 1991, the University of Massachusetts from 1991 to 1992, the John F. Kennedy Presidential Library Foundation from 2001 to 2009 and the WGBH Education Foundation from 1999 to 2005. Mr. Solomont has a B.A. in political science and urban studies from Tufts University and a B.S. in nursing from the University of Massachusetts Lowell.

Mr. Solomont was selected to serve on the Iberdrola USA board because of his extensive experience in the nonprofit industry and background in public service.

Board Composition

Iberdrola USA’s business affairs are managed under the direction of the Iberdrola USA board. Upon the completion of the merger, the combined company board will consist of up to 12 directors. Three of these directors will be directors who were members of the UIL board immediately prior to closing, one of whom will be the current Chief Executive Officer of UIL and two of whom will be selected by Iberdrola USA from among UIL’s directors as of the closing. While the merger agreement contained provisions requiring that at least six members of the board of directors of the combined company be independent of Iberdrola USA and Iberdrola S.A. within the meaning of the rules of the NYSE, following the execution of the merger agreement, UIL and Iberdrola USA agreed that, instead of six independent members of the board of directors of the combined company, the combined company will have at least five (5) “independent” directors (as defined in the shareholder agreement) for a period of five years following the completion of the merger, and Arnold Chase and John Baldacci may be deemed to be independent directors solely for purposes of determining compliance with this obligation. Under the shareholder agreement, a director will be considered “independent” if he or she is independent under the rules of NYSE with respect to the combined company, and would be independent under the rules of NYSE with respect to Iberdrola, S.A. if he or she was a director of Iberdrola, S.A. Additionally, pursuant to the shareholder agreement, in the event of the resignation, removal or death of Mr. Baldacci and/or Mr. Chase (or their respective replacements on the combined company board), or if Mr. Baldacci and/or Mr. Chase (or their respective replacements on the combined company board) decide not to stand for reelection to the combined company board or are otherwise unwilling or unable to serve on the combined company board, Iberdrola, S.A. will nominate a person to serve on the combined company board who qualifies as an independent director pursuant to the rules of the NYSE and applicable law. Pursuant to the agreement by UIL and Iberdrola USA after the execution of the merger agreement, the shareholder agreement will also provide that the combined company will, after such five-year period, have at least four “independent” directors (as defined in the shareholder agreement), provided that either Mr. Chase or Mr. Baldacci, but not both, may be deemed independent directors for this purpose. As a result, as of the completion of the merger, the combined company will have at least three directors who will be “independent” under the rules of the NYSE and other applicable law. See “—The Controlled Company Exemption and Director Independence—Director Independence” and “Certain Relationships and Related Party Transactions—Shareholder Agreement” for additional information.

Iberdrola USA’s restated certificate of incorporation and amended and restated bylaws will provide that the number of its directors shall be fixed from time to time by resolution of its board of directors.

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Each of Iberdrola USA’s executive officers serves at the discretion of the Iberdrola USA board and holds office until his or her successor is duly appointed and qualified or until his or her earlier resignation or removal. There are no family relationships among any of Iberdrola USA’s directors or executive officers.

The Controlled Company Exemption and Director Independence

Controlled Company Exemption

Initially, the combined company will be a “controlled company” within the meaning of the rules of the NYSE because Iberdrola, S.A. will own more than 50% of the combined company’s outstanding shares of common stock. Consequently, the combined company is not required to comply with certain of the NYSE listed company requirements, such as the requirement to have a majority of “independent” directors on the combined company’s board of directors, or the requirement to have compensation and nominating/corporate governance committees.

Director Independence

Due to the combined company’s status as a controlled company, the combined company will initially rely on exemptions from the rules of the NYSE that would otherwise require that the combined company’s board of directors be comprised of a majority of “independent directors” as defined under the rules of the NYSE. The combined company will have a number of directors that will qualify as “independent directors” in accordance with the rules of the NYSE and applicable law. See “—Board Composition” and “Certain Relationships and Related Party Transactions—Shareholder Agreement” for additional information. The combined company is also required to have an “independent” audit committee under the NYSE’s listed company requirements. See the section entitled “Board Committees—Audit and Compliance Committee” for additional information.

The Iberdrola USA board has undertaken a review of the independence of each director. Based on information provided by each director concerning his background, employment and affiliations, including family relationships, the Iberdrola USA board has determined that             ,             ,             ,              and             do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of the NYSE. In making these determinations, the Iberdrola USA board considered the current and prior relationships that each non-employee director has with Iberdrola USA and all other facts and circumstances the Iberdrola USA board deemed relevant in determining their independence, including the beneficial ownership of Iberdrola USA’s capital stock by each non-employee director, and the transactions involving them described in the section entitled “Certain Relationships and Related Party Transactions.”

Board Committees

The Iberdrola USA board has the authority to appoint committees to perform certain management and administration functions. The Iberdrola USA board has an audit and compliance committee and, upon the completion of the merger, will have an unaffiliated committee made up of “independent” directors (as defined in the shareholder agreement). The composition and responsibilities of the audit and compliance committee are described below. Members will serve on the audit and compliance committee until their resignation or until otherwise determined by the board of directors. Iberdrola USA does not have a compensation committee or nominating and governance committee. Because Iberdrola USA is a “controlled company” under the rules of the NYSE, these committees are not required and the Iberdrola USA board has determined that it is appropriate not to have these committees.

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Audit and Compliance Committee

Iberdrola USA’s audit and compliance committee oversees Iberdrola USA’s accounting and financial reporting process and the audit of Iberdrola USA’s financial statements and assists the Iberdrola USA board in monitoring Iberdrola USA’s financial systems and Iberdrola USA’s legal and regulatory compliance. Iberdrola USA’s audit and compliance committee is responsible for, among other things:

• overseeing the compliance officer, who is responsible for regulatory compliance and the prevention and correction of illegal or fraudulent acts, as well as approving the compliance unit budget and the compliance plan;

• overseeing and recommending the appointment of Iberdrola USA’s director of internal audit, including ensuring that management comply with the recommendations of the internal audit function, as well as proposing the internal audit budget for approval by the Iberdrola USA board and approving the internal audit plan;

• reviewing the adequacy and effectiveness of Iberdrola USA’s internal monitoring systems over financial reporting to identify financial or economic risks;

• the appointment, retention and compensation of Iberdrola USA’s independent auditors and overseeing the independent auditor’s work, including discussing with management the recommendations of the independent registered public accounting firm regarding financial reporting;

• approving engagements of the independent registered public accounting firm to render any audit or permissible non-audit services;

• reviewing the qualifications and independence of the independent registered public accounting firm;

• reviewing and discussing with management Iberdrola USA’s financial statements and related disclosures and reviewing Iberdrola USA’s critical accounting policies and practices; establishing procedures for the receipt, retention and treatment of accounting, auditing and corporate governance related complaints and concerns through Iberdrola USA’s compliance unit; and

• reviewing any regulated business separation of activities report of Iberdrola USA and its subsidiaries and informing the Iberdrola USA board in advance of any changes to the business separation of activities regulatory requirements applicable to the Iberdrola USA and its subsidiaries.

Iberdrola USA’s audit and compliance committee consists of             ,                           and             , with             serving as the committee’s chairperson. All members of the audit and compliance committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the NYSE. In addition, the Iberdrola USA board has determined that              is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act and has the requisite financial experience as defined by the NYSE corporate governance rules.

Under the NYSE rules, Iberdrola USA is permitted to phase in its independent audit and compliance committee by requiring one independent member at the time of listing, a majority of independent members within 90 days of the effectiveness of the registration statement containing this proxy statement/prospectus and a fully independent committee within one year of the effectiveness of the registration statement containing this proxy statement/prospectus. Mr.                 is “independent” as of the time of the listing as defined under the NYSE listing standards and Rule 10A-3(b)(1) of the Exchange Act, which is different from the NYSE’s general test for independence of board and committee members. Within 90 days of the effectiveness of the registration statement containing this proxy statement/prospectus, Iberdrola USA intends to have an audit and compliance committee that will satisfy the independence requirements of the NYSE rules and Rule 10A-3(b)(1) of the Exchange Act and within one year of the effectiveness of the registration statement containing this proxy statement/prospectus. Iberdrola USA will have a fully independent audit and compliance committee, within the applicable phase in period. Upon completion of the merger, the combined company’s audit and compliance committee will operate under a written charter that will satisfy the applicable standards of the SEC and the NYSE.

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Corporate Governance Policy and Code of Business Conduct and Ethics

Prior to listing on the NYSE, Iberdrola USA will adopt a new corporate governance policy and a new code of business conduct and ethics that is applicable to all of Iberdrola USA’s employees, officers and directors, including Iberdrola USA’s executive officers. Iberdrola USA’s compliance unit will be responsible for the general interpretation and application of the code of business conduct and ethics. The new corporate governance policy and code of business conduct and ethics will be available on Iberdrola USA’s website at http://www.iberdrolausa.com/. Any amendment to the code, or any waivers of its requirements, will be disclosed on Iberdrola USA’s website. The inclusion of Iberdrola USA’s website in this proxy statement/prospectus does not include or incorporate by reference the information on Iberdrola USA’s website into this proxy statement/prospectus.

Board of Directors and Management of the Combined Company

The directors and officers of Iberdrola USA immediately prior to the effective time of the merger will continue to be directors and officers of the combined company immediately following the merger. Additionally, Iberdrola USA has agreed to appoint the current chief executive officer of UIL as chief executive officer of the combined company. Pursuant to the merger agreement, Iberdrola USA has agreed to increase the size of the combined company board to up to 12 directors as of the completion of the merger. Three of these directors will be directors who were members of the board of directors of UIL, or the UIL board, immediately prior to closing, one of whom will be the current Chief Executive Officer of UIL and two of whom will be selected by Iberdrola USA from among UIL’s directors as of the closing. While the merger agreement contained provisions requiring that at least six members of the board of directors of the combined company be independent of Iberdrola USA and Iberdrola S.A. within the meaning of the rules of the NYSE, following the execution of the merger agreement, UIL and Iberdrola USA agreed that, instead of six independent members of the board of directors of the combined company, the combined company will have at least five (5) “independent” directors (as defined in the shareholder agreement) for a period of five years following the completion of the merger, provided that Arnold Chase and John Baldacci may be deemed to be independent directors solely for purposes of determining compliance with this obligation. Under the shareholder agreement, a director will be considered “independent” if he or she is independent under the rules of NYSE with respect to the combined company, and would be independent under the rules of NYSE with respect to Iberdrola, S.A. if he or she was a director of Iberdrola, S.A. Additionally, pursuant to the shareholder agreement to be entered into between Iberdrola, S.A. and Iberdrola USA, in the event of the resignation, removal or death of Mr. Baldacci and/or Mr. Chase (or their respective replacements on the combined company board), or if Mr. Baldacci and/or Mr. Chase (or their respective replacements on the combined company board) decide not to stand for reelection to the combined company board or are otherwise unwilling or unable to serve on the combined company board, Iberdrola, S.A. will nominate a person to serve on the combined company board who qualifies as an independent director pursuant to the rules of the NYSE and applicable law. Pursuant to the agreement by UIL and Iberdrola USA after the execution of the merger agreement, the shareholder agreement will also provide that the combined company will, after such five-year period, have at least four “independent” directors (as defined in the shareholder agreement), provided that either Mr. Chase or Mr. Baldacci, but not both, may be deemed independent directors for this purpose. As a result, as of the completion of the merger, the combined company will have at least three directors who will be “independent” under the rules of the NYSE and other applicable law. From and after the closing, the combined company will comply with applicable law with respect to the composition of its board of directors. Information about current directors and executive officers of Iberdrola USA, including biographical information and executive compensation, can be found in the sections entitled “Iberdrola USA Directors and Executive Officers,” “Iberdrola USA Director Compensation,” “Iberdrola USA Compensation Discussion and Analysis” and “Iberdrola USA Executive Compensation” elsewhere in this proxy statement/prospectus. Information about the current chief executive officer and directors of UIL can be found in UIL’s Definitive Proxy Statement for its 2015 Annual Meeting incorporated by reference into this consent solicitation statement/prospectus. See the section titled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

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Iberdrola USA Director Compensation

The following table provides certain information concerning the compensation for services rendered in all capacities by each director serving on the Iberdrola USA board for the year ended December 31, 2014:

Name	Fees Earned or Paid in Cash ($)		Total ($)
José Sainz Armada(1)		—		—
Alfredo Elías Ayub		80,000		80,000
John Elias Baldacci		100,000		100,000
Pedro Azagra Blázquez(2)		—		—
Jose W. Fernandez(3)		120,000		120,000
Ignacio Sánchez Galán(4)		—		—
Santiago Martínez Garrido(5)		—		—
Robert Daniel Kump(6)		—		—
Juan Carlos Rebollo Liceaga(7)		—		—
Alan D. Solomont		100,000		100,000

(1) Mr. Sainz Armada is the Chief Financial Officer of Iberdrola, S.A. and does not receive additional compensation for service on the Iberdrola USA board.

(2) Mr. Azagra Blázquez is the Chief Development Officer of Iberdrola, S.A. and does not receive additional compensation for service on the Iberdrola USA board.

(3) Mr. Fernandez resigned from the Iberdrola USA board on February 17, 2015.

(4) Mr. Galán is the Executive Chairman of Iberdrola, S.A. and does not receive additional compensation for service on the Iberdrola USA board.

(5) Mr. Martínez Garrido is the Head of Corporate Legal Services of Iberdrola, S.A. and does not receive additional compensation for service on the Iberdrola USA board.

(6) Mr. Kump is the Chief Corporate Officer of Iberdrola USA and does not receive additional compensation for service on the Iberdrola USA board.

(7) Mr. Rebollo Liceaga is the Administration and Control Director of Iberdrola, S.A. and does not receive additional compensation for service on the Iberdrola USA board.

Iberdrola USA has adopted the Director Remuneration Policy of Iberdrola, S.A., which provides that compensation for Iberdrola USA’s non-employee directors’ services may include annual cash retainers, variable compensation, equity compensation, severance compensation, benefits, meeting fees, and fees for serving on a committee or as a committee chairman. The remuneration committee, formerly the appointments and remuneration committee, of Iberdrola, S.A. prepares a mandatory report on the remuneration established for the non-employee directors of the other companies of the Iberdrola Group before approval thereof by the competent corporate body of each such company. On that basis, the Iberdrola USA board passed a resolution to approve cash compensation for the independent members of the Iberdrola USA board in January 2014.

During 2014, each director who was not an employee of Iberdrola USA or Iberdrola, S.A. received an annual cash retainer of $80,000 for membership on the Iberdrola USA board. John E. Baldacci, the Vice Chairman of the Iberdrola USA board, received an additional annual cash retainer of $20,000. Directors on the Iberdrola USA board received an additional annual cash fee of $20,000 for service on committees.

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Iberdrola USA Compensation Discussion and Analysis

This Compensation Discussion and Analysis section of the registration statement explains how Iberdrola USA’s executive compensation programs are designed and operate with respect to the following officers identified in the “Summary Compensation Table” below, or the named executive officers:

Robert Daniel Kump	Chief Corporate Officer
Pablo Canales Abaitua	Chief Financial Officer
Jose Maria Torres Suau	Former Interim Chief Financial Officer
R. Scott Mahoney	General Counsel

Iberdrola USA’s named executive officers also serve as executive officers of Iberdrola USA’s subsidiaries and receive compensation for service at Iberdrola USA’s subsidiaries. In determining the compensation for the named executive officers, consideration is made to all responsibilities and sources of compensation. Iberdrola USA’s named executive officers receive compensation pursuant to an annual bonus plan administered through Iberdrola Networks, a subsidiary of Iberdrola USA, for services to Iberdrola Networks. Additionally, Iberdrola USA’s named executive officers receive compensation pursuant to a long-term incentive plan administered through its parent, Iberdrola, S.A., for services to Iberdrola USA. For a description of such programs, see “—Elements of Compensation.” Iberdrola USA’s named executive officers also receive retirement benefits through plans administered by Iberdrola USA’s subsidiaries. See “Iberdrola USA Executive Compensation—Pension Benefits” and “Iberdrola USA Executive Compensation—Nonqualified Deferred Compensation.” Compensation of Iberdrola USA’s named executive officers is set so that the aggregate compensation received from Iberdrola USA and its subsidiaries is reasonable and commensurate with overall responsibilities of each named executive officer at Iberdrola USA and their respective roles in the group of companies held by Iberdrola USA. For more information regarding the executive officers of Iberdrola USA, see the section entitled “Additional Information About Iberdrola USA—Iberdrola USA Directors and Executive Officers” beginning on page 219 of this proxy statement/prospectus.

Iberdrola USA’s Compensation Program Objectives and Guiding Principles

Iberdrola USA has adopted the Senior Officer Remuneration Policy of Iberdrola, S.A. The purpose of the Senior Officer Remuneration Policy is to offer compensation that makes it possible to attract, retain, and motivate the most qualified professionals, in order to enable Iberdrola USA to attain its strategic objectives within the increasingly competitive and internationalized context in which it operates. Significant practices include:

• ensuring that Iberdrola USA’s compensation, in terms of structure and total amount, is competitive when compared with that of comparable entities at the domestic and international level. While Iberdrola USA does not formally target compensation of its named executive officers against a comparator group, Iberdrola USA reviews market data to obtain a general understanding of current compensation practices to ensure that compensation offered to its named executive officers is reasonable;

• establishing compensation, in accordance with objective standards, based on the individual performance of the named executive officers and on the achievement of Iberdrola USA’s corporate objectives;

• including a significant annual variable component tied to the achievement of specific, pre-established, quantifiable objectives in line with Iberdrola USA’s corporate interest and strategic goals; and

• fostering and encouraging the attainment of strategic goals through the inclusion of long-term incentives, generating a motivating effect that acts as a driving force to ensure the loyalty and retention of the best professionals.

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Determining Executive Compensation

Any adjustment to current pay levels of Iberdrola USA’s named executive officers depends on several factors, including the scope and complexity of the functions an executive officer oversees, the contribution of those functions to Iberdrola USA’s overall performance, individual experience and capabilities, individual performance and competitive pay practices. Any variation in compensation among Iberdrola USA’s executive officers reflects differences in these factors.

Compensation Consultant

The Iberdrola USA board has authority to retain compensation consulting firms to assist it in the evaluation of executive officer and employee compensation and benefit programs. At this time no such consulting firm has been retained.

Comparator Group

Iberdrola USA believes that it is appropriate to offer industry-competitive cash and equity compensation packages to its named executive officers in order to attract and retain top executive talent. Iberdrola USA assesses market data compiled by reputable consulting firms to provide a general overview of industry practices and to ensure that it makes informed decisions regarding Iberdrola USA’s executive pay programs. However, Iberdrola USA does not formally target compensation of its named executive officers against any specific comparator group.

Role of Executive Officers in Executive Compensation Decisions

Iberdrola USA’s Chief Corporate Officer participates in Iberdrola USA board meetings to provide background information regarding Iberdrola USA’s strategic objectives and the performance of the company. Iberdrola USA’s human resources department presented the 2014 named executive officer compensation to the Iberdrola USA board, and the Iberdrola USA board ratified such compensation in 2015. The named executive officers do not propose or seek approval for their own compensation.

Elements of Compensation

The objective of Iberdrola USA’s executive compensation programs is to attract and retain talented executives and motivate them to achieve Iberdrola USA’s business goals through a combination of cash and stock-based compensation. Compensation for the named executive officers primarily consists of:

• base salary;

• annual incentive; and

• long-term incentive.

Other elements of compensation, including retirement benefits, life insurance, savings, health and welfare plans and other benefits offered to employees generally are also considered in order to evaluate the entire compensation package offered to executives.

Details of Each Element of Compensation

Base Salary

Iberdrola USA pays base salaries to provide a minimum, fixed level of cash compensation for its named executive officers to compensate them for services rendered during the fiscal year. Iberdrola USA reviews base salaries annually, but it does not necessarily award salary increases each year. The 2014 base salary of each of Iberdrola USA’s named executive officers was set following an annual review, during which adjustments were

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made to reflect performance-based factors, as well as competitive considerations. In 2015, following the recommendations of Iberdrola USA’s human resources department, the Iberdrola USA board ratified the 2014 compensation for the named executive officers.

Annual Incentive

Messrs. Kump and Mahoney participated in the annual incentive plan, or the AIP, of Iberdrola USA’s subsidiary, Iberdrola Networks, during the year ended December 31, 2014. Mr. Canales Abaitua was not eligible to participate in the AIP during 2014 because he joined Iberdrola USA in August 2014 and received annual incentive compensation during 2014 for his prior role at Iberdrola, S.A. unrelated to his service at Iberdrola USA. Mr. Jose Maria Torres Suau participates in the Iberdrola, S.A. annual incentive plan, which provides that he is subject to the performance objectives under the AIP. The AIP is designed to provide executives and certain other key employees of Iberdrola Networks and its affiliates, including Iberdrola USA, with the opportunity to earn annual incentive compensation through superior management performance and is intended to promote the future growth and success of Iberdrola Networks and its affiliates, including Iberdrola USA, and enhance the linkage between employee, customer and shareholder interests. Officers and key employees of Iberdrola Networks and its affiliates selected to participate by the board of directors of Iberdrola Networks prior to October 1, 2014 were eligible to participate in the AIP during 2014. Mr. Kump, in his capacity as chief executive officer of Iberdrola Networks, assigned each participant a target and maximum incentive, expressed as a percentage of annual base salary as of December 31, 2014, which is dependent on the level of the employee’s position and the scope of the employee’s responsibilities. Target annual incentive levels for each named executive officer are shown in a table below under “—Determination of AIP Bonus and Payouts.”

Payments under the AIP may be granted in cash, in Iberdrola, S.A. stock, or in a combination thereof. Participants may elect, during the year preceding the performance period, to defer up to 100% of any potential cash incentive award. The board of directors of Iberdrola Networks may also determine that a certain percentage of the incentive will be payable in Iberdrola, S.A. shares.

AIP Metrics. Performance under the AIP is measured under four levels, which are weighted differently for participants based on their respective roles. First, the Iberdrola, S.A. level metrics are set by the board of directors of Iberdrola, S.A. Second, the Iberdrola Networks Group level metrics are set by the board of directors of Iberdrola Networks. The remaining metrics are established by Mr. Kump, in his capacity as chief executive officer of Iberdrola Networks, and approved by the board of directors of Iberdrola Networks. AIP awards are not payable if minimum performance targets are not met at each applicable level. Threshold performance is obtained by achieving 80% of the target performance goal and results in 50% payout of the target award for each named executive officer. Maximum performance is obtained by achieving 120% of the target performance goal and results in 200% payout for Mr. Kump and Mr. Mahoney and 150% payout for Mr. Torres Suau. For each metric, performance between threshold and target or between target and maximum is determined by linear interpolation.

The tables below show the AIP level weighting and performance calculations for each named executive officer.

Name	Iberdrola, S.A. Metrics			Iberdrola Networks Group Metrics			Iberdrola USA Networks, Inc. Metrics			Business/ Individual Metrics
Robert Daniel Kump		20	%		30	%		40	%		10	%
Jose Maria Torres Suau		20	%		20	%		20	%		40	%
R. Scott Mahoney		20	%		20	%		30	%		30	%

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Iberdrola, S.A. Performance Calculations

Performance Metric	Threshold	Target	Maximum	Results	Score			Weight
Net Profit	€ 2,229 million	€ 2,329 million	€ 2,429 million	€ 2,416 million		117.40	%		30	%
Improvement in Iberdrola, S.A.’s Financial Strength	19.4%	20.4%	21.4%	21.5%		120.00	%		30	%
Staff Cost and External Services	+1%	0%	-1%	+0.3%		94.00	%		20	%
Iberdrola, S.A. Share Price Performance	5th	3rd	1st	1st		120.00	%		20	%

• Net Profit, as used for the purposes of the AIP goal, is Iberdrola, S.A. net profit under IFRS.

• Improvement in Iberdrola, S.A.’s Financial Strength, as used for the purposes of the AIP goal, is a metric calculated by Iberdrola, S.A. as funds from operations, or FFO, divided by net debt. FFO is defined as IFRS net profit adjusted for non-controlling interests, subordinated perpetual obligations owners, amortization and provisions, result of companies accounted for using the equity method net of taxes, financial provisions, goodwill deduction, dividends from companies accounted via equity and reversion of extraordinary tax provision. Net debt is defined as bank borrowings and other financial liabilities, loans and other equity instruments having the substance of a financial liability, derivative financial liabilities, gross debt, derivative financial assets, other current financial assets, cash and cash equivalents and cash assets. Financial provisions are defined as financial update of other provisions and financial update of provision for pensions and similar obligations less income associated with pensions.

• Staff Cost and External Services, as used for the purposes of the AIP goal, is Iberdrola, S.A. percentage increase in staff costs and external services, as reported under IFRS in the audited consolidated annual accounts of the Iberdrola, S.A., versus the prior year.

• Iberdrola, S.A. Share Price Performance, as used for the purposes of the AIP goal, is measured compared to the Eurostoxx Utilities index and the shares of the five leading European competitors (ENEL, E.ON, RWE, EDF, and GDFSuez). Target performance is achieved if the share’s listing price is better than that of at least three of the reference shares.

Iberdrola Networks Group Performance Calculations

Performance Metric	Threshold	Target	Maximum	Results	Score			Weight
EBITDA	€ 3,294 million	€ 3,396 million	€ 3,497 million	€ 3,495 million		119.60	%		37.5	%
Net Operating Expense	€ 1,288 million	€ 1,256 million	€ 1,225 million	€ 1,242 million		109.03	%		17.5	%
Capital Expenditure	80	100	120	120		120.00	%		30	%
Regulatory Developments	80	100	120	107		107.00	%		15	%

• EBITDA, as used for the purposes of the AIP goal, is a metric calculated by Iberdrola Networks Group as gross margin less net operating expense and taxes other than income tax. Gross margin is defined as IFRS net revenue less IFRS procurements. Net operating expense is defined below.

• Net Operating Expense, as used for the purposes of the AIP goal, is a metric calculated as staff costs plus external services less capitalized staff costs and other operating income, each component as reported under IFRS in the audited consolidated annual accounts of the Iberdrola, S.A.

• Capital Expenditure, as used for the purposes of the AIP goal, is calculated by weighting the following measures: (A) additions to Regulated Asset Value, excluding fleet, information technology and real estate in Brazil (5% weight), (B) compliance with the budget calendar and amounts forecasted, calculated by (1) investment excluding work performed on fixed assets, and (2) work performed on fixed assets, both indicators in the United States (25% weight), (C) percentage of outputs accumulated at year end 2014 from Scottish Power Networks Distribution Price Control Review #5, oDCPCR5, in the UK. (50% weight) and (D) facilities commissioned, excluding metering and installations paid by customers, in Spain (20% weight).

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• Regulatory Developments, as used for the purposes of the AIP goal, is calculated by weighting the following 33% each: (A) the impact assessment of new regulatory reforms in Spain, (B) the presentation of the Scottish Power Networks Revenue Incentives Innovation Outputs business plan in the UK, and (C) developments related to filing rate cases in New York and Maine in the United States.

Iberdrola USA Networks, Inc. Performance Calculations

Performance Metric	Threshold	Target	Maximum	Results	Score	Weight
EBITDA	$1,068.50 million	$1,095.90 million	$1,123.30 million	$1,096.49 million	100.43%		30	%
Capital Expenditures	A. 95% of Budget B. 95% of Budget C. 95% of Budget D. 1 of 3	A. Budget B. Budget C. Budget D. 2 of 3	A. Budget B. Budget*1.05 C. Budget*1.05 D. 3 of 3	A. Budget B. Budget*1.08 C. Budget*1.07 D. 3	A. 120% B. 120% C. 120% D. 120%		25	%
Customer Service and Reliability	A. NA B. 70%	A. NA B. 80%	A. All B. 90%	A. All B. 100%	A. 120% B. 120%		15	%
Corporate Safety Metrics	OIR: 2.86 LTIR: 0.81 PMVIR: 2.11 CAR/PAR: 273 Safety Observations: 5,460	OIR: 2.64 LTIR: 0.77 PMVIR: 1.86 CAR/PAR: 365 Safety Observation: 7,262	OIR: 2.42 LTIR: 0.73 PMVIR: 1.61 CAR/PAR: 457 Safety Observations: 9,064	OIR: 2.82 LTIR: 0.59 PMVIR: 2.45 CAR/PAR: 784 Safety Observations: 15,875	OIR: 83.6% LTIR: 120% PMVIR: 0% CAR/PAR: 120% Safety Observations: 120%		15	%
2014 Strategic Initiatives	A. Determined by Iberdrola Board B. Determined by Iberdrola Board C. 2 new opportunities or milestones	A. Determined by Iberdrola Board B. Determined by Iberdrola Board C. 3 new opportunities or milestones	A. Determined by Iberdrola Board B. Determined by Iberdrola Board C. 4 new opportunities or milestones	A. n/a B. n/a C. at least 4	A. 120% B. 119.9% C. 120%		15	%

• EBITDA, as used for the purposes of the AIP goal, is a financial metric calculated as the reported Iberdrola Networks EBITDA in IFRS, defined as gross margin less net operating expense and taxes other than income tax, excluding the impacts from purchase price allocation, deferrable storm expenses and energy supply adjustments that are updated in customer rates within no more than six months.

• Capital Expenditures, as used for the purposes of the AIP goal, is calculated by weighting the following 25% each: (A) attainment of Iberdrola USA capital expenditure goals, excluding capitalized staff costs, finance costs and the Maine Power Reliability Program, (B) attainment of Maine Power Reliability Program capital expenditure goals, excluding capitalized staff costs and finance costs, (C) attainment of capitalized staff cost goals, and (D) attainment of capital expenditure estimates throughout the year, including (1) 95% of April year to date estimate, (2) 95% of August year to date estimate and (3) 95% of December year to date estimate.

• Customer Service and Reliability are measured by weighting the following 50% each: (A) targets set in the regulated rate agreements and (B) 2014 targets, which include public service complaints, SAIFI, the CAIDI, vegetation management, gas backlogs measured in outstanding leaks to be repaired and gas leak responses made within 30 minutes.

• Corporate Safety Metrics are measured by weighting the following 20% each: Iberdrola USA Occupational Safety and Health Administration incidence rate, or OIR, Iberdrola USA lost time injury rate, or LTIR, Iberdrola USA preventable motor vehicle incident rate, or PMVIR, the number of corrective action reports/preventative action reports, or CAR/PAR., and the number of safety observations.

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• 2014 Strategic Initiatives are measured by weighting the following 33% each: (A) the Maine rate case outcome, as determined by the chairman of the Iberdrola Networks board of directors, (B) the Operations Excellence Program, as measured by the completion of key milestones, as determined by the chairman of the Iberdrola Networks’ board of directors, and (C) growth by identifying new transmission opportunities and/or achieving significant milestones in the development of electric transmission investments.

Business and Individual Metrics

Mr. Kump was subject to three individual metrics during 2014, including to (i) develop and implement integration plan for Iberdrola USA reorganization, (ii) achieve significant milestones in the development of electric transmission investments and (iii) implement communications plan to brand the newly restructured Iberdrola USA.

Mr. Torres Suau was subject to nine business metrics during 2014, including to (i) project for the integration of the corporate functions at Iberdrola USA, (ii) implement SAP enterprise software at Iberdrola Networks, (iii) report to Iberdrola, S.A., (iv) establish a monitoring model for the regulated businesses, (v) establish one corporation report, allocating costs following Iberdrola USA’s corporate model, (vi) improve regulatory quarterly reporting, (vii) price variances on the purchasing processes, (viii) implement a new treasury system at Iberdrola Networks, and (ix) participate in the new rate cases processes in Maine and New York.

Mr. Mahoney was subject to six business metrics during 2014, including to (i) achieve legal operations and maintenance budget, (ii) implement improvements to Iberdrola USA’s compliance program, (iii) implement internal reorganization and management governance recommendations, (iv) obtain a multi-year rate plan and revenue decoupling and/or rate design changes for protection of sales variation by increasing fixed cost recovery for CMP, (v) obtain FERC base transmission ROE and formula rate update for 2014 for CMP, and (vi) draft revenue requirement schedules and cost studies for New York businesses.

Determination of AIP Bonus and Payouts. Based on the extent to which Iberdrola Networks achieved the performance goals, as shown above, the following table shows the incentive eligible earnings and threshold, target and maximum incentive percentages and actual payout amounts for each named executive officer expressed as a percentage of incentive eligible earnings commensurate with such named executive officer’s position and scope of responsibilities.

Name	Base Salary ($)		Threshold Incentive (% Base Salary)		Target Incentive (% Base Salary)		Maximum Incentive (% Base Salary)			Actual Performance (% Target)		Actual Incentive (% Base Salary)		Actual Incentive Amount ($)
Robert Daniel Kump		660,000		27.50		55.00		110.00	%		170.25		93.64		618,015
Jose Maria Torres Suau		160,516		8.95		17.90		26.85	%		123.69		22.14		35,542
R. Scott Mahoney		320,300		20.00		40.00		80.00	%		177.22		70.89		227,056

Long-Term Incentive

Iberdrola, S.A. 2014-2016 Strategic Bonus Plan. The named executive officers of Iberdrola USA participate in the 2014-2016 Strategic Bonus Plan of Iberdrola, S.A., or the Strategic Bonus Plan, for senior officers and officers of Iberdrola, S.A. and its subsidiaries. The Strategic Bonus Plan grants participants shares of Iberdrola, S.A. stock based on achievement of pre-established performance metrics from 2014 to 2016. The Strategic Bonus Plan is designed to promote loyalty and retention of senior officers and officers of Iberdrola, S.A. and its subsidiaries, including the named executive officers of Iberdrola USA.

The board of directors of Iberdrola, S.A., at the recommendation of the chairman and chief executive officer of Iberdrola, S.A. and the remuneration committee of Iberdrola, S.A., allocate a number of Iberdrola, S.A. shares

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to each participant at the time such officer is designated and invited to join in the Strategic Bonus Plan. No later than June 30, 2017, the board of directors of Iberdrola, S.A., at the recommendation of the remuneration committee of Iberdrola, S.A., will evaluate the achievement of the objectives during the 2014 to 2016 evaluation period.

The Strategic Bonus Plan is tied to compliance with the following key strategic objectives of Iberdrola, S.A. during the 2014 to 2016 period:

• Change in consolidated net profits. This performance objective is measured by average annual growth in consolidated net profits, based on the consolidated net profits at year-end 2014. Target performance is achieved if such growth is 4%. This performance objective will not be satisfied if such growth is less than 2%.

• Iberdrola, S.A. share price performance. This performance objective is measured compared to the Eurostoxx Utilities index and the shares of the five leading European competitors (ENEL, E.ON, RWE, EDF, and GDFSuez). Target performance is achieved if the share’s listing price is better than that of at least three of the reference shares.

• Improvement in Iberdrola, S.A.’s financial strength. This performance objective is measured through FFO divided by net debt. Target performance is achieved if the ratio is greater than 22%. See “—Details of Each Element of Compensation—Annual Incentive” for a description of the calculation of this metric.

In addition, each participant must remain employed until the vesting date, which will occur in 2017, 2018 and 2019. Therefore, the 2014-2016 Strategic Bonus Plan has a total term of six years. Payment of shares under the Strategic Bonus Plan varies depending on performance, which is designed to be challenging but attainable. Threshold, target and maximum award levels granted under the Strategic Bonus Plan on August 1, 2014 for Mr. Mahoney and on June 24, 2014 for all other named executives are disclosed in the “Iberdrola USA Executive Compensation—Grants of Plan-Based Awards” table.

Performance Share Plan. The named executive officers have in previous years participated in the Iberdrola USA, Inc. Performance Share Plan, or the PSP. The PSP grants awards of phantom shares of Iberdrola, S.A. subject to restrictions as determined by the Iberdrola USA board. No named executive officers participated in the PSP in 2014. Amounts outstanding under the PSP are provided under “Iberdrola USA Executive Compensation—Outstanding Equity Awards at Fiscal Year-End.”

Perquisites and Other Personal Benefits. Iberdrola USA offers a limited amount of perquisites and other personal benefits to its named executive officers. Perquisites are not a material part of Iberdrola USA’s compensation program. The Iberdrola USA board ratified the 2014 perquisites in 2015 and reviewed the levels of perquisites and other personal benefits provided to Iberdrola USA’s named executive officers. See “Iberdrola USA Executive Compensation—Summary Compensation Table—All Other Compensation.”

Post-Employment Compensation Arrangements

To promote retention and recruiting, Iberdrola USA offers various arrangements that provide certain post-employment benefits in order to alleviate concerns that may arise in the event of an employee’s separation from service with Iberdrola USA and enable employees to focus on their duties while employed by Iberdrola USA. These post-employment benefits are provided through employment agreements and letter agreements as described more fully below under “Iberdrola USA Executive Compensation—Summary of Employment Agreements” and “Iberdrola USA Executive Compensation—Potential Payments Upon Termination or Change in Control.”

The named executive offers also participate in qualified defined benefit pension and non-qualified deferred compensation plans. See “Iberdrola USA “Executive Compensation—Pension Benefits” and “Iberdrola USA

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Executive Compensation—Nonqualified Deferred Compensation.” The named executive officers also participate in a defined contribution 401(k) retirement plan, which is administered through Iberdrola USA Management Corporation and is available to substantially all of Iberdrola USA’s non-union employees.

Compensation and Risk

Iberdrola USA regularly conducts risk assessments to determine the extent, if any, to which Iberdrola USA’s compensation practices and programs may create incentives for excessive risk taking. Iberdrola USA’s compensation program mitigates risk by emphasizing long-term compensation and financial performance measures rather than simply rewarding shorter-term performance and payout periods, which discourages imprudent short-term decision making and risk taking.

Iberdrola USA Executive Compensation

Summary Compensation Table

The following table provides certain information concerning the compensation for services rendered in all capacities to Iberdrola USA and its subsidiaries during the year ended December 31, 2014 by each named executive officer:

Name & Principal Position	Year		Salary ($)			Stock Awards(5) ($)		Non-Equity Incentive Plan Compensation(6) ($)		Change in Pension Value & Nonqualified Deferred Compensation Earnings ($)		All Other Compensation(7) ($)		Total ($)
Robert Daniel Kump		2014		760,923	(4)		2,137,661		618,015		387,198		109,490		4,013,287
Chief Corporate Officer
Pablo Canales Abaitua		2014		111,308			271,856		—		—		68,974		452,138
Chief Financial Officer(1)
Jose Maria Torres Suau		2014		160,516			174,451		35,542		—		381,669		752,178
Former Interim Chief
Financial Officer(2)
R. Scott Mahoney		2014		314,577			476,486		227,056		437,962		14,063		1,470,144
General Counsel(3)

(1) Mr. Canales Abaitua has served as Iberdrola USA’s Chief Financial Officer since August 2014.

(2) Mr. Torres Suau also served as the interim chief financial officer of Iberdrola USA from April 2012 to August 2014. Mr. Torres Suau continues to serve as Chief Financial Officer of Iberdrola Networks.

(3) Mr. Mahoney previously served as General Counsel and Secretary of Iberdrola USA during 2014. Mr. Mahoney resigned from his role as Secretary on February 25, 2015 and continues to serve as Iberdrola USA’s General Counsel.

(4) Amount includes a $120,000 annual fee pursuant to Mr. Kump’s service contract with Iberdrola USA. See “—Summary of Employment Agreements.”

(5) If the values disclosed in the table above were recognized equally over the three year performance period, rather than fully recognized during 2014 pursuant to FASB ASC Topic 718, the total compensation for each named executive officer for 2014 would be significantly lower. Such total compensation values would be $2,588,180 for Mr. Kump, $270,901 for Mr. Canales Abaitua, $635,877 for Mr. Torres Suau and $1,152,487 for Mr. Mahoney. The amounts reported in the table are calculated assuming the maximum performance levels were probable. Such amounts do not reflect the actual number of shares to be issued pursuant to the awards, which are subject to performance conditions described under the section entitled “Iberdrola USA Compensation Discussion and Analysis—Elements of Compensation—Details of Each Element of Compensation.” Following the evaluation of the performance objectives the awards will vest annually over a

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three year period and will be paid in three equal annual installments beginning on January 1, 2017 provided the named executive officer remains eligible under the terms of the Strategic Bonus Plan. The figures in the table above consist of the aggregate grant date fair value of equity awards granted during 2014 and is computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, or FASB ASC Topic 718. The following valuation assumptions have been applied to estimate the grant date fair value of such 2014 equity awards: the gross value based on the Iberdrola, S.A. share price on grant date was multiplied by the number of shares subject to the award, reduced by the value of a 0.27 euro per share dividend discounted at the risk free rate of 1% during the period that the shares subject to the award remain unvested.

(6) The amounts shown represent the components of the cash bonuses relating to the attainment of performance metrics, paid to the named executive officers under the AIP. See “Iberdrola USA Compensation Discussion and Analysis—Elements of Compensation—Details of Each Element of Compensation.”

(7) Amounts reported under “All Other Compensation” include: for Mr. Kump, $7,800 of employer contribution to Iberdrola USA Management Corporation’s 401(k) plan, $66,000 in a contractual deferred compensation contribution by Iberdrola USA and $35,690 in dividend payments in respect of performance shares granted in 2011; for Mr. Canales Abaitua, $8,432 of employer contributions to Iberdrola USA Management Corporation’s 401(k) plan, $4,598 for 100% employer-paid medical and prescription drug insurance and $55,944 in connection with relocation and housing allowance, including a tax gross up of $13,041; for Mr. Torres Suau, $5,530 of employer contributions to Iberdrola USA Management Corporation’s 401(k) plan, $13,362 for 100% employer-paid medical and prescription drug insurance, and $362,777 in connection with international assignment allowance, including $46,156 for housing, $4,142 for tax assistance, $9,501 for education, $12,221 for cost of living adjustment, $26,067 for service premium, $3,577 for vehicle, $14,703 for home leave, $134,812 for home country wages, $2,768 for immigration assistance and a tax gross up of $108,831; and for Mr. Mahoney, $7,800 of employer contribution to Iberdrola USA Management Corporation’s 401(k) plan and $6,263 in dividend payments in respect of performance shares granted in 2010.

Grants of Plan-Based Awards

The following table sets forth the information concerning the grants of any plan-based compensation to each named executive officer during 2014. The non-equity awards described below were made under the AIP. The equity awards described below were made under the Strategic Bonus Plan.

			Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)						Estimated Future Payouts Under Equity Incentive Plan Awards(2)						Grant Date Fair Value of Performance Awards(3) ($)
Name	Award Type	Grant Date	Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)
Robert Daniel Kump	AIP			181,500		363,000		726,000
	Strategic Bonus Plan	June 24, 2014								117,083		234,167		351,250		2,137,661
Pablo Canales Abaitua	AIP			—		—		—
	Strategic Bonus Plan	June 24, 2014								14,890		29,780		44,670		271,856
Jose Maria Torres Suau	AIP			14,366		28,732		43,099
	Strategic Bonus Plan	June 24, 2014								9,555		19,110		28,665		174,451
R. Scott Mahoney	AIP			64,060		128,120		256,240
	Strategic Bonus Plan	August 1, 2014								26,619		53,238		79,857		476,486

(1) Amounts represent estimated possible payments under the AIP. Actual amounts paid under the AIP for 2014 are shown in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table.” For more information on the performance metrics applicable to these awards, see “Iberdrola USA Compensation Discussion and Analysis—Elements of Compensation—Details of Each Element of Compensation.”

(2) Amounts represent the number of shares to be vested upon satisfaction of the conditions in question under the Strategic Bonus Plan awards granted during 2014. For more information on the performance metrics applicable to these awards, see “Iberdrola USA Compensation Discussion and Analysis—Elements of Compensation—Details of Each Element of Compensation.”

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(3) All equity awards were made under the Strategic Bonus Plan. For discussion of the assumptions used in these valuations, see footnote 5 to the Summary Compensation Table, above. The grant date fair value of performance awards granted is determined by multiplying the number of shares granted at maximum by the fair value of the award calculated in accordance with FASB ASC Topic 718.

Summary of Employment Agreements

Certain of the amounts shown in the “Summary Compensation Table” and the “Grants of Plan-Based Awards” table are provided for in employment or letter agreements, as the case may be. The material terms of those agreements are summarized below:

Robert Daniel Kump

Employment Agreement. Mr. Kump entered into an employment agreement with Iberdrola Networks and Iberdrola USA Management Corporation, a subsidiary of Iberdrola USA, dated October 1, 2010, to serve as Chief Executive Officer of Iberdrola Networks. At the time of execution of this agreement, this agreement was made with the entity formerly known as Iberdrola USA, Inc., which was changed to Iberdrola USA Networks, Inc. during a corporate reorganization in 2013. The agreement provides for an initial base salary of $600,000 and an annual bonus opportunity with a target amount of 55% of base salary with a maximum bonus of 110% of base salary. The agreement provides that Mr. Kump is eligible to participate in Iberdrola, S.A.’s strategic bonus program, provides that Mr. Kump will be a participant in an employer-funded non-qualified individual account deferred compensation arrangement with annual contributions equal to 10% of base salary and provides he will participate in all employee benefit plans and incentive compensation plans made available to Iberdrola Networks executives, other than the Energy East Supplemental Executive Retirement Plan, the Energy East Excess Plan or any compensation or nonqualified deferred compensation plan not explicitly reflected in the employment agreement.

In the event that Mr. Kump’s employment is terminated by Iberdrola Networks without “cause,” on account of “good reason,” death or disability, he shall be entitled to receive a lump sum payment equal to the sum of (i) his current base salary and (ii) an amount equal to his annual bonus for the prior year. In addition, unless Iberdrola Networks elects to waive Mr. Kump’s compliance with the certain provisions of the Employee Invention and Confidentiality Agreement made as of February 8, 2001 between Mr. Kump and Iberdrola Networks from and after the date that is six months after the date of termination, Iberdrola Networks shall make an additional lump sum payment to Mr. Kump equal to six months of his current base salary. For purposes of the agreement “cause” is generally defined as (i) the willful and continued failure to substantially perform his duties (other than any such failure resulting from the incapacity due to physical or mental illness or his resignation for good reason) after a written demand for substantial performance is delivered by Iberdrola Networks board, which demand specifically identifies the manner in which the Iberdrola Networks board believes that he has not substantially performed his duties, or (ii) the willful engaging in conduct which is demonstrably and materially injurious to Iberdrola Networks or its subsidiaries, monetarily or otherwise. For purposes of this agreement, “good reason” generally means the occurrence of any of the following acts (unless such act is corrected prior to the date of termination specified in the notice of termination given in respect thereof): (a) the removal from Mr. Kump of his title of chief executive officer; (b) the assignment of duties, responsibilities, or authorities, or failure to assign to Mr. Kump duties, responsibilities, or authorities, consistent with his position as the chief executive officer; or (c) Iberdrola Networks requires Mr. Kump, without his consent, to move his principal office to a location that would cause his regular commute to be both (i) substantially longer than his commute prior to such move and (ii) in excess of one hour.

The employment agreement provides that Mr. Kump and Iberdrola Networks acknowledge that the Agreement and Release between Mr. Kump and Iberdrola Networks executed on September 25, 2009 shall remain in full force and effect. Mr. Kump and Iberdrola Networks agree that the amount payable to Mr. Kump pursuant to such Agreement and Release shall be increased by an amount equal to the amount earned by the Energy East Management Corporation Benefit Trust on its investment of $3,333,241 in a financial vehicle to be

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selected by Iberdrola Networks in a commercially reasonable manner consistent with the goal of obtaining a net guaranteed level of interest without risk of loss of principal. In the event Mr. Kump’s employment is terminated by Iberdrola Networks for cause or by Mr. Kump without good reason and early termination or redemption fees are incurred in connection with the above-mentioned financial vehicle, the amount of such early termination or redemption fees shall be deducted from the amount otherwise payable to Mr. Kump pursuant to the employment agreement. Losses with respect to any such investment may not be passed along to Mr. Kump, and Iberdrola Networks guarantees that Mr. Kump shall receive not less than $3,333,241 at the time payment is due.

Service Contract. Mr. Kump and Iberdrola USA have also entered into a service contract effective as of January 16, 2014. The service contract has an initial term of one year and continues thereafter unless either party gives three months advance notice of nonrenewal. Mr. Kump will receive an annual fee of $120,000 for providing the following services under the contract: (i) obtaining access to and positively influencing the relevant regulatory and policy making bodies in the United States; (ii) receiving regular information on the activities of the Iberdrola USA and its subsidiaries in order to support the corporate functions and lines of business in understanding the local legal, regulatory and market specifics in the United States; (iii) representing Iberdrola USA’s interests and act as a point of contact in front of key stakeholders, employees, customers, regulatory bodies, media policy makers; (iv) contributing to Iberdrola USA’s external projection with a positive impact on corporate image and reputation; and other relevant organizations; (v) carrying out his functions in accordance with the Iberdrola USA governance structure; (vi) coordinating the activities of the Iberdrola USA and its subsidiaries; and (vii) receiving regular information on the activities of Iberdrola USA and its subsidiaries to support the corporate functions and lines of business in understanding the local legal, regulatory and market specifics in the United States.

Iberdrola USA may terminate the service contract upon three months advance notice provided that Mr. Kump will continue to be entitled to his service fee for such three-month period. Notwithstanding the foregoing, Iberdrola USA may immediately terminate the service contract without further payment of any service fee if Mr. Kump (i) is guilty of a serious breach of the rules or regulations of any regulatory authority relevant to Iberdrola USA and its subsidiaries or any code of practice issued by Iberdrola USA; (ii) is guilty of a serious breach of any compliance manual of Iberdrola USA or its subsidiaries; (iii) is in breach of Iberdrola USA’s coordination committee charter; (iv) is in breach (or fails to report any suspicions or knowledge of a breach) of the U.S. Foreign Corrupt Practices Act or the U.K. Bribery Act 2010 or any breach of Iberdrola USA’s anticorruption and bribery policy and related procedures; (v) is guilty of any gross misconduct affecting the business of Iberdrola USA or its subsidiaries; (vi) commits any serious or repeated breach or non-observance of any of the provisions of this agreement or refuses or neglects to comply with any reasonable and lawful directions of Iberdrola USA; (vii) is, in the reasonable opinion of Iberdrola USA, negligent and incompetent in the performance of the services; (viii) is declared bankrupt or makes any arrangement with or for the benefit of his creditors; (ix) is convicted of any felony criminal offence; (x) is guilty of any fraud or dishonesty or acts in any manner which in the opinion of Iberdrola USA brings or is likely to bring the Mr. Kump or Iberdrola USA or its subsidiaries into disrepute or is materially adverse to the interests of Iberdrola USA or its subsidiaries; or (xi) is guilty of a serious breach of any rules regarding Iberdrola USA’s electronic communications systems.

Pablo Canales Abaitua

Mr. Canales Abaitua entered into a letter agreement with Iberdrola USA Management Corporation, dated June 16, 2014, offering him the position of Chief Financial Officer of Iberdrola USA. The letter provides that Mr. Canales Abaitua will have an initial base salary of $315,000, be eligible for an annual bonus opportunity of 45% to 90% of base salary and be entitled to five weeks of vacation per year. In addition, the letter provides Mr. Canales Abaitua with immigration assistance, an annual housing allowance of $44,000, initial and return flights, temporary lodging for 30 days, shipping of household/personal goods, tax assistance for one year and a relocation payment of $5,000. Notwithstanding the letter, Mr. Canales Abaitua received $55,944 in connection with relocation and housing allowance, including a tax gross up of $13,041 during 2014. See “—Summary Compensation Table—All Other Compensation.”

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Jose Maria Torres Suau

Mr. Torres Suau entered an international assignment letter with Iberdrola, S.A., dated March 23, 2012, for service to Iberdrola Networks. At the time of execution of the assignment letter, the assignment letter was made on behalf of entity formerly known as Iberdrola USA, Inc., which was changed to Iberdrola USA Networks, Inc. during a corporate reorganization in 2013. The assignment letter was amended in 2014 to provide for a base salary of €120,697.50 (gross) annually. The assignment letter also provides for a life cost adjustment for goods and services equal to $10,827 (net) annually, a relocation bonus of €19,010 (net) annually, a personal supplement of €4,000.00 (gross) annually and the costs of rental housing up to a maximum of $3,900 (net) monthly. The letter does not provide for any severance payments. See “—Summary Compensation Table—All Other Compensation.”

R. Scott Mahoney

Mr. Mahoney entered into an employment agreement with Energy East Management Corporation, a predecessor of Iberdrola USA Management Corporation, dated March 1, 2008, to serve as Deputy General Counsel. The initial term of the agreement was from March 1, 2008 to February 28, 2009 but is automatically extended for an additional month thereafter unless either party gives notice of non-renewal. The agreement provides for an initial base salary of $200,000 and participation in all employee benefit plans and incentive compensation plans made available to comparable executives.

In the event that Mr. Mahoney’s employment is terminated without “cause,” he shall be entitled to severance equal to one year of base salary. For purposes of the agreement, “cause” is generally defined as (i) willful and continued failure to substantially perform his duties (other than resulting from incapacity due to physical or mental illness), (ii) the willful engaging in conduct which is demonstrably and materially injurious to Iberdrola USA or its affiliates, monetarily or otherwise. The agreement contains provisions preventing disclosure of confidential information, a 12-month post-termination non-compete and a 12-month post-termination non-solicitation.

Summary of Annual Incentive Plan

In the event that a participant under the AIP is terminated for any reason other than retirement, disability or death, such participant shall not be entitled to receive the AIP award unless otherwise determined by the board of directors of Iberdrola Networks in its sole discretion. In the event of retirement, disability or death, the participant is entitled to a prorated award based on the number of days of participation.

Summary of Equity Incentive Plans

Strategic Bonus Plan

In the event that a participant under the Strategic Bonus Plan is terminated for any reason other than retirement, disability or death, such participant shall not be entitled to receive the Strategic Bonus Plan award. In the event of termination following retirement, disability or death, the participant will receive part of the benefit in proportion to the time that such participant remained employed during the evaluation period, subject to the objectives having been achieved, a minimum participation period of one year and other conditions having been fulfilled.

In the event that there is a “change in control” of Iberdrola, S.A., the Strategic Bonus Plan will be terminated and named executive officers will be entitled to receive a one-time payment in proportion to the time elapsed between the date of acceptance of their participation and the date of early termination of the Strategic Bonus Plan, following an evaluation by the board of directors of Iberdrola, S.A., based on the level of achievement of the key strategic objectives of the plan as of the date of early termination.

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In the event of certain other corporate transactions by Iberdrola, S.A. involving merger by consolidation or absorption, the board of directors of Iberdrola, S.A. may terminate the Strategic Bonus Plan and named executive officers will be entitled to receive a one-time payment of a portion of their strategic bonus in proportion to the time elapsed between the date of acceptance of their participation and the date of early termination of the Strategic Bonus Plan, following an evaluation by the board of directors of Iberdrola, S.A., based on the level of achievement of the key strategic objectives of the plan as of the date of early termination.

“Change of control” of Iberdrola, S.A. means the acquisition by an individual or legal entity, individually considered or acting in concert with other individuals or entities, whether or not belonging to the same group, of an interest equal to or greater than 30% of the share capital or of a smaller number of voting rights when such individual or legal entity, within 24 months of the date of the acquisition, appoints a number of directors that combined with those, if any, already appointed thereby, account for more than one-half of the members of the board of directors of Iberdrola, S.A. In no event will the plan be terminated upon a “change in control” or other corporate transactions involving merger by consolidation or absorption unless such “change in control” or other transaction is also a “change in control event” for purposes of Section 409A of the Code.

Performance Share Plan

Although no named executive officers participated in the PSP in 2014, Mr. Kump and Mr. Mahoney have participated in previous years. In the event that a participant under the PSP is terminated by reason of death, retirement, permanent disability or termination by Iberdrola USA without cause, as determined in the sole discretion of the board of directors of Iberdrola USA, the participant shall become fully vested in such PSP award.

In addition, upon a “change in control” of the Iberdrola USA, the board of directors of Iberdrola USA in its discretion may, at the time an award is made or any time thereafter, take one or more of the following actions: (i) provide for the acceleration of the vesting of the award; (ii) adjust the terms of the award in a manner determined by the Iberdrola USA board to reflect the change in control; or (iii) make such other provision as the Iberdrola USA board may consider equitable and in the best interests of Iberdrola USA. For purposes of the PSP, a “change in control” shall generally be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied:

• an acquisition by any individual, entity or group of 25% or more of either (1) the then outstanding shares of common stock of Iberdrola USA or (2) the combined voting power of the then outstanding securities of Iberdrola USA entitled to vote generally in the election of directors;

• a change in the composition of the Iberdrola USA board such that the individuals who were member of the incumbent board, as of January 1, 2009, constitute the board cease for any reason to constitute at least a majority of the board; provided, however, that any individual who becomes a member of the board subsequent to January 1, 2009, whose election, or nomination for election by Iberdrola USA’s shareholders, was approved by a vote of at least two-thirds of those individuals who are members of the board and who were also members of the incumbent board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the incumbent board, but, provided, further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the board shall not be so considered as a member of the incumbent board;

• consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Iberdrola USA; excluding, however, such a corporate transaction pursuant to which (1) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the outstanding Iberdrola USA common stock and outstanding Iberdrola USA voting securities immediately prior to such corporate transaction will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock, and the combined

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voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such corporate transaction, (2) no person (other than the Iberdrola USA, Iberdrola, S.A. or any of its affiliates, any employee benefit plan (or related trust) of the Iberdrola USA or any entity controlled by the Iberdrola USA or such corporation resulting from such corporate transaction) will beneficially own, directly or indirectly, more than 40% of, respectively, the outstanding shares of common stock of Iberdrola USA resulting from such corporate transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent that such ownership existed prior to the corporate transaction, and (3) individuals who were members of the incumbent board of Iberdrola USA will constitute at least a majority of the members of the board of directors of the corporation resulting from such corporate transaction; or

• The approval by the shareholders of Iberdrola USA of a complete liquidation or dissolution of the Iberdrola USA.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information concerning unvested equity incentive plan awards outstanding as of December 31, 2014, for each named executive officer:

			Stock Awards
Name	Plan Name	Grant Date	Equity Incentive Plan Awards: Number of Unearned Shares or Units of Stock That Have Not Vested (#)		Equity Incentive Plan Awards: Market Value of Unearned Shares or Units of Stock That Have Not Vested(1) ($)
Robert Daniel Kump	2014-2016 Strategic Bonus Plan	June 24, 2014(2)		351,250		2,392,265
	2011-2013 Strategic Bonus Plan	March 15, 2012(3)		93,046		633,710
	PSP	December 1, 2011(4)		34,049		231,874
Pablo Canales Abaitua	2014-2016 Strategic Bonus Plan	June 24, 2014(2)		44,670		304,235
	2011-2013 Strategic Bonus Plan	September 1, 2011(3)		24,776		168,742
Jose Maria Torres Suau	2014-2016 Strategic Bonus Plan	June 24, 2014(2)		28,665		195,229
R. Scott Mahoney	2014-2016 Strategic Bonus Plan	August 1, 2014(2)		79,857		543,884
	2011-2013 Strategic Bonus Plan	March 15, 2012(3)		15,906		108,330
	PSP	December 9, 2010(4)		8,100		55,166

(1) Amounts represent the product of the fair value as of December 31, 2014 multiplied by the number of shares subject to the award. This amount is based on an Iberdrola, S.A. share price of 5.60 euros and exchange rate of 1.2162.

(2) Number of performance shares represents the estimated maximum award level under the 2014-2016 Strategic Bonus Plan, as the actual performance during the truncated measurement period from January 1, 2014 to December 31, 2014 is not yet determinable. The actual number of shares earned (if any) will be based on performance at the end of the applicable performance period described under “Iberdrola USA Compensation Discussion and Analysis—Elements of Compensation—Details of Each Element of Compensation.” Performance shares vest annually over a three year period beginning on January 1, 2017.

(3) Number of performance shares represents the actual award level under the 2011-2013 Strategic Bonus Plan. Performance shares vest annually in equal installments over a three year period beginning on January 1, 2014.

(4) Number of performance shares represents the actual award level under the PSP. Performance shares vest 50% on the first day of January in the year following the first period in which total shareholder return for Iberdrola, S.A. is at least equal to 25%, 100% on the first day of January in the year following the first period in which total shareholder return for Iberdrola, S.A. is at least equal to 50%, or if neither of these conditions are met, 100% at the end of the sixth year after the grant.

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Stock Vested

The following table provides information concerning vesting of stock awards during 2014 for each named executive officer:

	Stock Awards
Name	Number of Shares Acquired on Vesting (#)		Value Realized on Vesting(1) ($)
Robert Daniel Kump		100,716		731,663
Pablo Canales Abaitua		12,388		75,938
Jose Maria Torres Suau		—		—
R. Scott Mahoney		28,850		213,640

(1) Represents the aggregate dollar amount realized upon vesting computed by multiplying the number of shares of stock by the fair market value on the distribution date. The distribution date for shares received under the PSP was December 31, 2014, and includes 34,049 shares for Mr. Kump and 3,850 shares for Mr. Mahoney, while the Strategic Bonus Plan includes 66,667 shares for Mr. Kump, 12,388 shares for Mr. Canales Abaitua and 25,000 shares for Mr. Mahoney. For the Strategic Bonus Plan, the applicable share price and exchange rate on the distribution date was 5.514 euros and the exchange rate was 1.3596. For the Performance Share Plan, the distribution was based on a share price of 5.60 euros and an exchange rate of 1.2162.

Pension Benefits

The following table sets forth information as to the named executive officers regarding payments or other benefits at, following or in connection with retirement:

Name	Plan Name	Number of Years Credited Service (#)		Present Value of Accumulated Benefit ($)		Payments During Last Fiscal Year ($)
Robert Daniel Kump	Retirement Benefit Plan for Employees of NYSEG		28.50		1,425,969		—
Pablo Canales Abaitua	—		—		—		—
Jose Maria Torres Suau	—		—		—		—
R. Scott Mahoney	Retirement Income Plan for Non-Union Employees of CMP		17.08		614,159		—
	Energy East Corporation ERISA Excess Plan		17.08		441,897		—

Mr. Kump participates in the Retirement Benefit Plan for Employees of NYSEG, a defined benefit pension plan of Iberdrola USA’s subsidiary intended to be qualified under Section 401(a) of the Code. Non-union employees who perform at least an hour of service are eligible, provided that no new non-union employees are eligible to participate after January 1, 2014. For non-union employees, the “base basic annual benefit” under the plan shall generally equal the sum of: (i) the product of (a) 1.37% of the first $10,000 of “final average earnings” and (b) the number of years and monthly fractions of a year in his “period of service” not exceeding 35 years; and (ii) the product of (a) 1.65% of “final average earnings” in excess of $10,000, and (b) the number of years and monthly fractions of a year in his period of service not exceeding 35 years; and (iii) the product of (a) 1% of “final average earnings,” and (b) the lesser of (A) the amount by which the number of years and monthly fractions of a year in his period of service exceeds 35 years, and (B) five. “Final average earnings” is generally defined under the plan as the participant’s average annualized regular earnings for the 60 consecutive month period of highest earnings within the 120 month period ending with the calendar month immediately preceding the calendar month in which the participant terminates service. Benefits accrued under the plan generally vest

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100% after five years of service. A participant shall generally be provided with a monthly benefit that commences with the employee’s retirement date (generally, age 65) equal to 1/12 of the employee’s basic annual benefit. The normal form of benefit is a single life annuity for unmarried participants and a 50% contingent annuity with a five year pop-up for married participants, provided that the participant may elect other forms of payment including a joint and survivor annuity, a single life annuity with ten years certain or a lump-sum payment. Participants eligible for early retirement will receive a reduced basic annual benefit upon such early retirement after attaining age 55. Benefits are unreduced at age 60 for participants with at least ten years of service.

Mr. Mahoney participates in The Retirement Income Plan for Non-Union Employees of Central Maine Power, a defined benefit pension plan of Iberdrola USA’s subsidiary intended to be qualified under Section 401(a) of the IRS Code. Employees who have reached age 21 are eligible, provided that no new employees are eligible to participate after January 1, 2014. The amount of monthly retirement benefit payable to a participant beginning at age 65 is generally equal to (i) (a) 1.7% of the participant’s “final average earnings” multiplied by (b) years of benefit service up to 30 such years, plus (ii) (a) 0.5% of the participant’s “final average earnings” multiplied by (b) years of benefit service in excess of 30 minus (iii)(a) 50% of the participant’s social security benefit, multiplied by (b) a fraction equal to his years of benefit service up to 35 such years divided by 35. “Final average earnings” is generally defined under the plan as the monthly average of a participant’s highest 60 consecutive calendar months of basic earnings during the 120 month period ending in the month in which the participant’s service termination date occurs. Benefit accrued under the plan generally vest 100% after five years of service. The normal form of benefit is a single life annuity for unmarried participants and a 50% contingent annuity for married participants, provided that the participant may elect other forms of actuarially equivalent benefits including a joint & survivor annuity. Participants eligible for early retirement will receive a reduced basic annual benefit upon such early retirement after attaining age 55. Benefits are unreduced at age 62 for participants with at least five years of service.

Mr. Mahoney also participates in the Energy East Corporation ERISA Excess Plan, or the ERISA Excess Plan, which has been adopted by Iberdrola USA. The purpose of the ERISA Excess Plan is to increase retirement benefits to certain executives beyond those currently provided by the tax qualified defined benefit plans due to limitation under the Code on the amount of benefit that can be accrued and the amount of compensation that can be used to calculate benefits. The benefit payable under the ERISA Excess Plan is generally (i) the benefit payable at date of commencement as a straight life annuity specified by the qualified defined benefit pension plan the executive participates minus (ii) the benefit payable at date of commencement as a straight life annuity under the qualified defined benefit pension plan the executive participates in. Upon separation from service, retirement or disability, a participant shall receive a benefit payable in the form of an actuarially equivalent lump sum. Any portion of the actuarially equivalent lump sum benefit attributable to the eligibility, compensation and service of after December 31, 2004 may be delayed until the earlier of (i) the beginning of the seventh month following the month of the participant’s separation from service (due to termination of employment or retirement) or (ii) death. Contributions to the ERISA Excess Plan are made to a rabbi trust.

Nonqualified Deferred Compensation

The following table sets forth information as to the named executive officers regarding defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified:

Name	Executive Contributions in Last Fiscal Year ($)		Registrant Contributions in Last Fiscal Year ($)		Aggregate Earnings in Last Fiscal Year ($)		Aggregate Withdrawals/ Distributions ($)		Aggregate Balance Last Fiscal Year ($)
Robert Daniel Kump		—		66,000		44,001		—		3,749,572
Pablo Canales Abaitua		—		—		—		—		—
Jose Maria Torres Suau		—		—		—		—		—
R. Scott Mahoney		—		—		—		—		—

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Mr. Kump participates in Iberdrola USA’s Non-qualified Individual Account Balance Deferred Compensation Plan, or the Iberdrola USA Deferred Compensation Plan. The Iberdrola USA Deferred Compensation Plan provides that Iberdrola USA will make annual contributions under the plan to a deferred compensation account set up for each participant in an amount set forth in a participant’s employment agreement. Mr. Kump’s employment agreement provides that an annual employer contribution of 10% of base salary will be made to a non-qualified deferred compensation plan, such as the Iberdrola USA Deferred Compensation Plan, with a final pro-rata contribution for the year of Mr. Kump’s termination of employment based upon the portion of the year in which he works. Under the Iberdrola USA Deferred Compensation Plan, the participant is fully vested at all times in all contributions and earnings credited to his deferred compensation account. Contributions to the Iberdrola USA Deferred Compensation Plan are notational only and earn notational investment income based on an investment vehicle selected by the Iberdrola USA fiduciary committee. Distribution of amounts in a participant’s deferred compensation account shall commence in the form and at the time elected by the participant. Participants must make an election as to form and timing within 30 days of becoming a participant and may not modify that election. Upon a participant’s death prior to distribution, the plan will distribute the account within 60 days following in the form elected by the participant, unless it takes longer to identify the appropriate beneficiary. If a participant dies after commencing payments, the remaining payments will be made to the designated beneficiary. Amounts will be paid in one of the following forms as timely elected by the participant: (i) a single lump sum; (ii) annual or monthly installment payments for a period of either five or ten years; (iii) a single life annuity with the participant as beneficiary unless payment is due to the death of the participant, in which case a life annuity may be payable to the participant’s beneficiary; (iv) a joint and survivor annuity, with the Participant as the primary beneficiary; or (v) any combination thereof.

Mr. Kump’s employment agreement provides that Mr. Kump and Iberdrola Networks acknowledge that the Agreement and Release between Mr. Kump and Iberdrola Networks executed on September 25, 2009 shall remain in full force and effect. Mr. Kump and Iberdrola Networks agree that the amount payable to Mr. Kump pursuant to such Agreement and Release shall be increased by an amount equal to the amount earned by the Energy East Management Corporation Benefit Trust on its investment of $3,333,241 in a financial vehicle to be selected by Iberdrola Networks in a commercially reasonable manner consistent with the goal of obtaining a net guaranteed level of interest without risk of loss of principal. In the event Mr. Kump’s employment is terminated by Iberdrola Networks for cause or by Mr. Kump without good reason and early termination or redemption fees are incurred in connection with the above-mentioned financial vehicle, the amount of such early termination or redemption fees shall be deducted from the amount otherwise payable to Mr. Kump pursuant to the employment agreement. Losses with respect to any such investment may not be passed along to Mr. Kump, and Iberdrola Networks guarantees that Mr. Kump shall receive not less than $3,333,241 at the time payment is due.

Potential Payments Upon Termination or Change in Control

The types of compensation payable to each named executive officer in the event of a termination of employment or a change in control are described under “—Summary of Employment Agreements,” “—Summary of Annual Incentive Plan” and “—Summary of Equity Incentive Plans.” The amount of compensation payable to each named executive officer in the event of a termination of employment or a change in control on December 31, 2014, are provided under “—Quantification of Potential Payments Upon Termination or Change in Control.”

Quantification of Potential Payments Upon Termination or Change in Control

The following table sets forth potential benefits that each named executive officer would be entitled to receive in the event that the executive’s employment with Iberdrola USA is terminated for any reason, including a resignation without good reason, a termination without cause, resignation with good reason, and termination without cause or resignation with good reason in each case in connection with a change in control, in the event of a change in control without termination or death or disability. The amounts shown in the table are the amounts that would have been payable under existing plans and arrangements if the named executive officer’s

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employment had terminated, and/or a change in control occurred, on December 31, 2014. “Cash Compensation” includes payments of salary, bonus, severance or death benefit amounts payable in the applicable scenario.

The actual amounts that would be payable in these circumstances can only be determined at the time of the executive’s termination or a change in control and, accordingly, may differ from the estimated amounts set forth in the table below.

Named Executive Officer	Resignation by Executive Without Good Reason		Termination by Company Without Cause		Resignation by Executive with Good Reason		Termination by Company Without Cause, or Resignation by Executive With Good Reason, in Connection with Change in Control		Change in Control Without Termination		Death/ Disability
Robert Daniel Kump
Cash Compensation(1)	$	—	$	5,310,741	$	5,310,741	$	5,310,741	$	—	$	5,310,741
AIP(2)		—		618,015		618,015		618,015		—		618,015
Unvested PSP Awards(3)		—		231,874		—		231,874		231,874		231,874
Unvested Strategic Bonus Awards(4)		—		—		—		1,431,132		1,431,132		1,431,132
TOTAL	$	—	$	6,160,630	$	5,928,756	$	7,591,762	$	1,663,006	$	7,591,762
Pablo Canales Abaitua
Cash Compensation(1)	$	—	$	—	$	—	$	—	$	—	$	—
AIP(2)		—		—		—		—		—		—
Unvested PSP Awards(3)		—		—		—		—		—		—
Unvested Strategic Bonus Awards(4)		—		—		—		270,154		270,154		270,154
TOTAL	$	—	$	—	$	—	$	270,154	$	270,154	$	270,154
Jose Maria Torres Suau
Cash Compensation(1)	$	—	$	—	$	—	$	—	$	—	$	—
AIP(2)		—		—		—		—		—		35,542
Unvested PSP Awards(3)		—		—		—		—		—		—
Unvested Strategic Bonus Awards(4)		—		—		—		65,076		65,076		65,076
TOTAL	$	—	$	—	$	—	$	65,076	$	65,076	$	100,618
R. Scott Mahoney
Cash Compensation(1)	$	—	$	320,300	$	—	$	—	$	—	$	—
AIP(2)		—		—		—		—		—		227,056
Unvested PSP Awards(3)		—		55,166		—		55,166		55,166		55,166
Unvested Strategic Bonus Awards(4)		—		—		—		289,625		289,625		289,625
TOTAL	$	—	$	375,466	$	—	$	344,791	$	344,791	$	571,847

(1) See “—Summary of Employment Agreements.”

(2) See “—Summary of Annual Incentive Plan.” For Mr. Kump, includes annual bonus paid pursuant to his employment agreement.

(3) See “—Summary of Equity Incentive Plans—Performance Share Plan.”

(4) See “—Summary of Equity Incentive Plans—Strategic Bonus Plan.”

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DESCRIPTION OF IBERDROLA USA CAPITAL STOCK

General

Pursuant to the merger agreement, Iberdrola USA will amend and restate its certificate of incorporation. The combined company’s amended and restated certificate of incorporation will authorize the issuance of              shares of common stock, par value $0.01. The following description summarizes all of the material terms of the combined company’s securities under the combined company’s amended and restated certificate of incorporation and amended and restated bylaws that will take effect upon the completion of the merger. Because it is only a summary, it may not contain all the information that is important to you. For a complete description you should refer to the combined company’s amended and restated certificate of incorporation and amended and restated bylaws and to the applicable provisions of New York law. We refer to the amended and restated certificate of incorporation and amended and restated bylaws of the combined company that will be in effect upon the completion of the merger collectively as the “amended and restated organizational documents.”

Common Stock

Under the amended and restated organizational documents, the combined company’s shareholders of record will be entitled to one vote for each share of common stock held on all matters to be voted on by shareholders. The combined company will have one class of directors that will be elected for a term expiring at the next annual meeting of shareholders of the combined company following his or her election. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares eligible to vote for the election of directors can elect all of the directors subject to election. Other than the preemptive rights of Iberdrola, S.A. pursuant to the shareholder agreement, the combined company’s shareholders will have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock.

Dividends

Iberdrola USA has not paid any cash dividends on its common stock to date. After the completion of the merger, the combined company will initially set its dividend at UIL’s current quarterly dividend of $0.432 per share and expects to target a dividend based on a 65% to 75% payout ratio long term, subject to consideration and approval by the combined company board. The payment of cash dividends in the future will be contingent upon the combined company’s operations, cash requirements, legal restrictions and other factors deemed relevant by the combined company’s board of directors. Dividends may be paid in cash, property, or shares of the capital stock of the combined company and are expected to be non-cumulative.

Iberdrola USA’s Transfer Agent

The transfer agent for the combined company’s shares is             .

Listing of the Combined Company’s Shares

Iberdrola USA will apply to list the shares of the combined company common stock received by UIL shareowners in the merger on the NYSE under the symbol “            .”

Special Meeting of Shareholders

The combined company’s amended and restated bylaws will provide that special meetings of its shareholders may be called only by its chief executive officer or by its chairman at the request in writing of a majority of its board of directors or shareholders owning a majority of its issued and outstanding capital stock entitled to vote.

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Advance Notice Requirements for Shareholder Proposals and Director Nominations

The amended and restated organizational documents do not contain specific provisions regarding advance notice procedures with respect to shareholder proposals and shareholder nominations of candidates for election as directors.

Authorized but Unissued Shares

The combined company’s authorized but unissued common stock will be available for future issuances without shareholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock could render it more difficult or discourage an attempt to obtain control of the combined company by means of a proxy contest, tender offer, merger or otherwise.

Forum Selection

The combined company’s amended and restated bylaws will designate the state courts of the State of New York located in New York County as the exclusive forum for certain types of actions and proceedings that may be initiated by its shareholders, which would limit its shareholders’ ability to choose the judicial forum for disputes with the combined company or its directors, officers or other employees. Any person or entity purchasing or otherwise acquiring any interest in the common stock of the combined company is deemed to have received notice of and consented to such forum. Although Iberdrola USA believes this choice of forum provision provides benefits by providing increased consistency in the application of New York law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against the combined company and its directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation or similar governing documents has been challenged in legal proceedings, and it is possible that in connection with any action a court could find the choice of forum provisions contained in the certificate of incorporation to be inapplicable or unenforceable in such action.

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BENEFICIAL OWNERSHIP OF SECURITIES

Security Ownership of Certain Beneficial Owners and Management of Iberdrola USA

As of the close of business on July 10, 2015, Iberdrola, S.A. beneficially owned 100% of Iberdrola USA common stock, and none of the directors or executive officers of Iberdrola USA were beneficial owners of Iberdrola USA common stock. Immediately after the completion of the merger, Iberdrola, S.A. will own 81.5% of the common stock of the combined company, and none of the directors or executive officers of the combined company are expected to be beneficial owners of the combined company common stock.

The beneficial ownership of Iberdrola USA common stock is determined in accordance with the rules of the SEC and generally includes any shares of common stock over which a person exercises sole or shared voting or investment power, or the right to receive the economic benefit of ownership. The percentage of shares beneficially owned as of July 10, 2015 is based on 243 shares of common stock outstanding as of May 31, 2015.

A description of the material relationships between Iberdrola USA and Iberdrola, S.A. within the past three years is included in the section entitled “Certain Relationships and Related Party Transactions” beginning on page 250 of this proxy statement/prospectus.

As of May 31, 2015, Iberdrola USA had no holders of record in the United States.

Security Ownership of Certain Beneficial Owners and Management of UIL

To UIL’s knowledge, the following tables set forth certain information regarding the beneficial ownership of UIL common stock as of the close of business on July 10, 2015 (except as noted in the footnotes below) and with respect to:

• each person known by UIL to beneficially own 5% or more of the outstanding shares of UIL common stock;

• each member of the UIL board;

• each named executive officer; and

• the members of the UIL board and UIL’s executive officers as a group.

Unless otherwise noted below, the address of each beneficial owner listed in the table below is c/o Sigrid E. Kun, Vice President, Corporate Secretary and Assistant General Counsel, UIL Holdings Corporation, 157 Church Street, P.O. Box 1564, New Haven, Connecticut 06506.

UIL has determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, UIL believes, based on the information furnished to UIL, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of UIL common stock that he, she or it beneficially owns.

Applicable percentage ownership and voting power is based on 56,629,082 shares of UIL common stock outstanding and 358,687 shares of UIL common stock representing all shares that would be issued if all of the directors and executive officers exercised their rights to receive shares of UIL common stock within 60 days of July 10, 2015.

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Security Ownership of Directors and Named Executive Officers of UIL

	Amount and Nature of Beneficial Ownership(1)
Name of Beneficial Owner	Shares		Stock Units		Total Shares Beneficially Owned Directly or Indirectly
Thelma R. Albright		30,480		109,376		139,856
Arnold L. Chase(2)		1,033,468		21,762		1,055,230
Betsy Henley-Cohn		37,093		12,873		49,966
Suedeen G. Kelly		4,740		10,850		15,590
John L. Lahey		21,899		63,769		85,668
Daniel J. Miglio		41,901		21,004		62,905
William F. Murdy		6,000		82,794		88,794
William B. Plummer		6,898		2,219		9,117
Donald R. Shassian		23,212		—		23,212
James P. Torgerson		54,435		223,616		278,051
Richard J. Nicholas		32,033		63,777		95,810
John J. Prete		12,817		—		12,817
Linda L. Randell		37,574		23,985		61,559
Anthony Marone III		15,203		—		15,203
All Directors and Executive Officers as a group (18 persons)		1,397,637		644,296		2,041,933

(1) Other than as set forth in note (2) below, each of the individuals listed above owns less than 1% of the outstanding shares and voting power of UIL common stock, based on the number of shares outstanding as of July 10, 2015. The number of shares of UIL common stock beneficially owned by all of the directors and executive officers as a group represents approximately 3.6% of the shares of UIL common stock outstanding as of July 10, 2015, adjusted to reflect the additional shares which would be outstanding if all of the directors and executive officers exercised their right to receive shares of common stock for their stock units.

(2) The number of shares of UIL common stock beneficially owned by Mr. Chase, as listed in the above stock ownership table, is approximately 1.9% of the 56,629,082 shares of UIL common stock outstanding as of July 10, 2015, adjusted to reflect Mr. Chase’s right to receive shares of UIL common stock for his stock units. Shares reported as beneficially owned by Mr. Chase include 432,339 shares directly held by Mr. Chase with respect to which he holds sole voting and investment power; 1,965 shares of restricted stock directly held by Mr. Chase acquired under UIL’s director compensation plans, with respect to which he holds sole voting power; 21,762 shares underlying currently exercisable stock units held by UIL under its non-employee directors’ plan; 44,166 shares directly held by The Sandra and Arnold Chase Family Foundation, Inc., a charitable foundation of which Mr. Chase serves as a director, president and chief executive officer, and with respect to which he may be deemed to hold shared voting and investment power; 554,500 shares directly held by RLC Investments LLC, of which Mr. Chase is a manager, and with respect to which he may be deemed to hold shared voting and investment power; and 498 shares of UIL common stock held by Mr. Chase as custodian for his non-adult children, with respect to which he holds sole voting and investment power.

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Security Ownership of Other Beneficial Owners of UIL

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
BlackRock, Inc. 40 East 52nd Street New York, NY 10022		5,174,775	(1)		9.08	%
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355		3,971,031	(2)		6.97	%
FMR LLC 245 Summer Street Boston, MA 02109		3,537,544	(3)		6.21	%

(1) Information based solely on Schedule 13G/A filed by the shareowner with the SEC on January 15, 2015, which reflects ownership by BlackRock, Inc. as a parent holding company. As of December 31, 2014, BlackRock, Inc. reported sole power to vote or direct the vote of 5,013,194 shares and to dispose or direct the disposal of 5,174,775 shares.

(2) Information based solely on Schedule 13G/A filed by the shareowner with the SEC on February 10, 2015 reporting, as of December 31, 2014, sole voting and dispositive power of 82,932 shares, sole dispositive power of 3,896,295 shares and shared dispositive power of 74,736 shares.

(3) Information based solely on Schedule 13G/A filed by the shareowner with the SEC on February 13, 2015, which reflects ownership by FMR LLC as a parent holding company. As of December 31, 2014, FMR LLC reported sole power to vote or direct the vote of 1,415 shares and to dispose or direct the disposal of 3,537,544 shares.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a description of transactions in which Iberdrola USA has been a participant, in which the amount involved exceeded or will exceed $120,000 and in which any of Iberdrola USA’s directors, executive officers, beneficial holders of more than 5% of Iberdrola USA’s capital stock, immediate family members or entities affiliated with them, had or will have a direct or indirect material interest.

Relationship with Iberdrola, S.A.

Controlling interest

Iberdrola, S.A. currently directly holds 100% interest in Iberdrola USA. After completion of the merger, Iberdrola, S.A. will hold an 81.5% interest in the combined company.

As the combined company’s controlling shareholder, Iberdrola, S.A. will continue to exercise significant influence over the combined company, including the composition of its board of directors and any action requiring the approval of its shareholders. See “Risk factors—The combined company will be a “controlled company” within the meaning of the rules of the NYSE, and, as a result, will initially rely on exemptions from certain corporate governance requirements” and “—Iberdrola, S.A. will exercise significant influence over the combined company, and their interests in the combined company may be different than yours.”

Intercompany loans owed by Iberdrola USA to Iberdrola, S.A.

Transactions with the Iberdrola, S.A. relate predominantly to pass-through charges of corporate services/management fees. In addition, Iberdrola USA pays Iberdrola, S.A. fees for credit support, relating to parent company guarantees that Iberdrola, S.A. has provided to third parties to guarantee the performance of Iberdrola Renewables. During the year ended December 31, 2014, IRHI paid $5.0 million in guarantee fees to Iberdrola, S.A. for guarantees provided during 2013. In the first quarter of 2015, IRHI paid $4.9 million in guarantee fees to Iberdrola, S.A. for guarantees provided during 2014. During the fourth quarter of 2014, there were $1.7 billion outstanding in parent guarantees provided by Iberdrola, S.A. to IRHI. As of June 19, 2015, there were $1.0 billion outstanding in parent guarantees from Iberdrola, S.A. to IRHI. The guarantee fee was 30.0 basis points and 50.0 basis points for 2014 and 2015, respectively. Further, pursuant to a revolving credit facility with Iberdrola Financiación S.A.U., Iberdrola USA pays an annual commitment fee of 20.0 basis points. For additional information regarding this facility, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Iberdrola USA—Liquidity and Capital Resources” beginning on page 162 of this proxy statement/prospectus.

The Shareholder Agreement

Pursuant to the merger agreement, Iberdrola USA and Iberdrola, S.A. will enter into a shareholder agreement based upon the shareholder agreement term sheet. The following describes the material provisions of the form of shareholder agreement negotiated by Iberdrola USA and UIL pursuant to the merger agreement. The definitive shareholder agreement entered into by Iberdrola USA and Iberdrola, S.A. prior to the closing will be in substantially the same form as the form of shareholder agreement. The description in this section and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the form of shareholder agreement. This summary does not purport to be complete and may not contain all of the information about the shareholder agreement that is important to UIL shareowners. Iberdrola USA and UIL encourage you to carefully read the form of shareholder agreement, which is attached to this proxy statement/prospectus as Annex B, in its entirety.

Pursuant to the merger agreement, Iberdrola USA will enter into the shareholder agreement with Iberdrola, S.A. The shareholder agreement, which will become effective as of the closing, will set forth certain governance arrangements and will contain various provisions relating to, among other things, representation on the combined

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company board, minority protections that will limit the disposal or transfer of shares of the combined company by Iberdrola, S.A., registration rights, preemptive rights and protections for Iberdrola USA relating to affiliate transactions and business opportunities.

Pursuant to the shareholder agreement, upon closing, the combined company board will be comprised of up to 12 directors. Three of these directors will be directors who were serving as members of the board of directors of UIL, immediately prior to completion of the merger, one of whom will be the Chief Executive Officer of UIL and two of whom will be selected by Iberdrola USA from among UIL’s other directors as of closing. The combined company board will have an unaffiliated committee made up of “independent” directors (as defined in the shareholder agreement). Under the shareholder agreement, a director will be considered “independent” if he or she is independent under the rules of NYSE with respect to the combined company, and would be independent under the rules of NYSE with respect to Iberdrola, S.A. if he or she was a director of Iberdrola, S.A. Arnold Chase, for so long as he is a director, may serve on the unaffiliated committee even if he is determined not to be an independent director. For a period of three years after the closing, the combined company board will nominate, and Iberdrola, S.A. will vote its shares in favor of the election of, the UIL director appointees (other than the former UIL chief executive officer). Upon the death, resignation or removal of any such UIL director appointee during this three year period, such director’s replacement will be nominated by vote of the unaffiliated committee. Iberdrola, S.A. will be required to cast its votes in favor of the election of any such replacement nominated by the unaffiliated committee.

Subject to the above limitations and applicable law, Iberdrola, S.A. will have the right to designate nominees for the combined company board for so long as the combined voting power of Iberdrola, S.A. and certain of its affiliates over which it exercises control, or the controlled affiliates, is 50% or more; provided, however, if the combined voting power of Iberdrola, S.A. and its controlled affiliates is less than 50%, Iberdrola, S.A. will have the right to designate a number of members to the combined company board based upon Iberdrola, S.A.’s and its controlled affiliates’ combined voting power as a proportion of the total voting power of the combined company. Iberdrola, S.A. also will have the right, subject to the above limitations, to designate replacements to fill the combined company board in the event that a vacancy is created at any time by death, disability, retirement, disqualification or removal for so long as the combined voting power of Iberdrola, S.A. and its controlled affiliates is at least 50%. Further, as long as the combined voting power of Iberdrola, S.A. and its controlled affiliates is at least 50%, Iberdrola, S.A. will be entitled to use its voting power from time to time to change the composition and size of the combined company board, subject to certain limitations.

While the merger agreement contained provisions requiring that at least six members of the board of directors of the combined company be independent of Iberdrola USA and Iberdrola S.A. within the meaning of the rules of the NYSE, following the execution of the merger agreement, UIL and Iberdrola USA agreed that, instead of six independent members of the board of directors of the combined company, the combined company will have at least five (5) “independent” directors (as defined in the shareholder agreement) for a period of five years following the completion of the merger, and Arnold Chase and John Baldacci may be deemed to be independent directors solely for purposes of determining compliance with this obligation. Additionally, pursuant to the shareholder agreement to be entered into between Iberdrola, S.A. and Iberdrola USA, in the event of the resignation, removal or death of Mr. Baldacci and/or Mr. Chase (or their respective replacements on the combined company board), or if Mr. Baldacci and/or Mr. Chase (or their respective replacements on the combined company board) decide not to stand for reelection to the combined company board or are otherwise unwilling or unable to serve on the combined company board, Iberdrola, S.A. will nominate a person to serve on the combined company board who qualifies as an independent director pursuant to the rules of the NYSE and applicable law. Pursuant to the agreement by UIL and Iberdrola USA after the execution of the merger agreement, the shareholder agreement will also provide that the combined company will, after such five-year period, have at least four “independent” directors (as defined in the shareholder agreement), provided that either Mr. Chase or Mr. Baldacci, but not both, may be deemed independent directors for this purpose. As a result, as of the completion of the merger, the combined company will have at least three directors who will be “independent” under the rules of the NYSE and other applicable law.

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The shareholder agreement will generally restrict Iberdrola, S.A. and its controlled affiliates from transferring any voting securities that are beneficially owned for a period of 18 months after the closing, subject to certain exceptions. Iberdrola, S.A. will only be permitted to transfer shares of the combined company if the unaffiliated committee, based upon the advice from a nationally recognized independent investment bank, approves the transfer. In addition, the shareholder agreement will prohibit Iberdrola, S.A. from effectuating a “going private” transaction, or any other similar transaction that results in the combined company no longer being a publicly traded company, without the prior approval of both the unaffiliated committee and a majority of the voting power of the shareholders not affiliated with the combined company. Subject to certain exceptions, the shareholder agreement will generally prohibit Iberdrola, S.A. from causing the combined company to, and the combined company from, entering into or effectuating any transaction for the acquisition of the combined company by another entity, including any stock acquisition, reorganization, merger or consolidation, that results in all shareholders of the combined company exchanging their voting securities for cash or securities, unless all shareowners of the combined company are entitled to the same per share consideration to be received in such transaction as Iberdrola, S.A. The shareholder agreement will also restrict Iberdrola, S.A. and its controlled affiliates, for a period of three years after the closing, from transferring more than an aggregate of 10% of the outstanding shares of the combined company in any transaction or series of transactions, unless all shareowners of the combined company are entitled to participate in such transaction (on a pro rata basis) and are entitled to the same per share consideration to be received in such transaction as Iberdrola, S.A. Under the shareholder agreement, Iberdrola, S.A., on behalf of itself and its affiliates, will be entitled to unlimited requests for demand registrations, piggyback registrations and shelf registration statement filings following the closing, in each case, subject to certain customary limitations. Iberdrola, S.A. will also have the right to specify the method of distribution of securities, including an underwritten public offering, and approve the underwriters. Additionally, Iberdrola, S.A. will have preemptive rights to protect against dilution for issuances of equity.

The shareholder agreement will provide protections to the combined company relating to transactions with Iberdrola, S.A. and its affiliates. The services provided by Iberdrola, S.A. or its affiliates to the combined company and its subsidiaries and joint ventures at completion of the merger will be provided by Iberdrola, S.A. or its affiliates at a cost to the combined company not higher than the cost reflected in the expenses shown in the combined company’s audited consolidated financial statements, except in the case of ordinary course, market adjustments, or (ii) as otherwise approved by the majority of the members of the unaffiliated committee. Furthermore, the combined company will not enter into any transaction between, or involving, Iberdrola, S.A. or any of its subsidiaries or controlled joint ventures, on the one hand, and the combined company or its subsidiaries or controlled joint ventures, on the other hand, unless the transaction is both approved by a majority of members of the unaffiliated committee and entered into on an arms’ length basis.

The shareholder agreement will permit Iberdrola, S.A. and its affiliates to conduct business that may be competitive with the business of the combined company, while restricting actions by Iberdrola, S.A. and its controlled affiliates that could interfere with the ability of the combined company’s executive officers to conduct the combined company’s business. Pursuant to the shareholder agreement, the combined company will recognize and acknowledge that Iberdrola, S.A. and its affiliates own, engage or participate in businesses and business activities that compete, or may compete, with the business of the combined company and its subsidiaries. Iberdrola USA will acknowledge and agree that neither the execution of the merger agreement, shareholder agreement or the completion of any transactions contemplated thereby will preclude or limit Iberdrola, S.A. and its affiliates from, directly or indirectly, owning, engaging or participating in any business or business activity at any time and in any geographical location, including such businesses or business activities that compete, or may compete, with the combined company or its subsidiaries or any of their respective businesses. However, the shareholder agreement will further provide that as long as Iberdrola, S.A. continues to own 50% or more of the outstanding voting stock of the combined company, Iberdrola, S.A. will not engage in any action that is reasonably expected to impair the executive officers of the combined company and its subsidiaries from conducting the business or operations in a manner consistent with such business or operation of the combined company and its subsidiaries immediately following completion of the merger.

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The shareholder agreement will remain in effect as long as Iberdrola, S.A. and its affiliates own more than 20% of the outstanding voting stock of the combined company. Following any termination of the shareholder agreement, Iberdrola, S.A. will have one demand registration right, subject to customary limitations and exceptions, and piggyback registration rights with respect to any registration proposed by the combined company, subject to customary “cut back” provisions.

Iberdrola, S.A. will be granted certain information and access rights to information related to the combined company’s and the combined company’s subsidiaries’ businesses, operations, plans and prospects. Iberdrola, S.A. and the combined company will not be able to amend the shareholder agreement without the prior approval of both the combined company board and a majority of the members of the unaffiliated committee. The laws of the State of New York will govern the shareholder agreement as long as Iberdrola USA remains a New York corporation. If Iberdrola USA is redomiciled to Delaware, the laws of the state of Delaware will govern the shareholder agreement.

Service Agreements

The Management Service Agreement

On January 1, 2014, Iberdrola USA entered into a service agreement with the Iberdrola USA Management Corporation, or the management service agreement. The following describes the material provisions of the management service agreement. The description in this section and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the management service agreement. This summary does not purport to be complete and may not contain all of the information about the management service agreement that is important to UIL shareowners. Iberdrola USA and UIL encourage you to carefully read the management service agreement, filed as an exhibit to the registration statement of which this proxy statement/prospectus forms a part.

Pursuant to the management service agreement, Iberdrola USA Management Corporation, a shared services company organized as a wholly-owned subsidiary of Iberdrola Networks, agreed to provide to Iberdrola USA and its subsidiaries various services, including, but not limited to, accounting services, audit services, corporate planning services, finance and treasury services, governmental affairs services, accounts payable services, human resources services, corporate security services, information technology services and engineering services. In return for providing these services, the operating subsidiaries of Iberdrola USA, or client companies, pay to Iberdrola USA Management Corporation all the costs that can reasonably be identified and related to the particular services performed by Iberdrola USA Management Corporation. To the extent possible, all costs that can be specifically attributed to a client company are directly charged. Any amounts remaining after direct assignment, such as when services are provided to or will result in benefits to two or more client companies of Iberdrola USA, are distributed using agreed upon cost allocation methods designed to fully distribute costs.

The management service agreement will remain in force until terminated by either party, upon at least 90 days written notice to the other party. Further, the management service agreement is subject to termination or modification, without notice, if any performance under the management service agreement conflicts with any rule, regulation or order of FERC or any state regulatory commission with jurisdiction over the subsidiaries of Iberdrola USA adopted before or after the date of the management service agreement. Pursuant to the management service agreement, new direct or indirect subsidiaries of Iberdrola USA, which come into existence after the effective date of the service agreement, may become additional client companies of Iberdrola USA Management Corporation and subject to the management service agreement with Iberdrola USA Management Corporation.

The Framework Agreement and Declaration of Acceptance

Pursuant to the merger agreement, Iberdrola USA and Iberdrola, S.A. entered into the Declaration of Acceptance, dated July 16, 2015, or the declaration of acceptance, which among other things is the legal instrument that binds Iberdrola USA to the Framework Agreement For the Provision Of Corporate Services For Iberdrola And The Companies Of Its Group, or the framework agreement. The following describes the material terms of the framework agreement and the declaration of acceptance. The description in this section and elsewhere in this proxy

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statement/prospectus is qualified in its entirety by reference to the framework agreement and the declaration of acceptance. This summary does not purport to be complete and may not contain all of the information about the framework agreement and the related declaration of acceptance that is important to UIL shareowners. Iberdrola USA and UIL encourage you to carefully read the framework agreement and the declaration of acceptance, filed as exhibits to the registration statement of which this proxy statement/prospectus forms a part.

In connection with the merger agreement, Iberdrola USA entered into the declaration of acceptance, making Iberdrola USA a party to the framework agreement for 2015 and detailing the corporate services Iberdrola, S.A. will provide Iberdrola USA or to any affiliate of Iberdrola USA in 2015. The framework agreement governs the relationship between the parent company, Iberdrola, S.A. and the various Iberdrola, S.A. entities, with respect to the corporate services Iberdrola, S.A. contracts to provide each relevant entity. Pursuant to the framework agreement, and under the Iberdrola Group’s “Single Corporation” structure, Iberdrola, S.A. will provide efficient and flexible corporate services to Iberdrola USA and its subsidiaries. Iberdrola USA’s entry into the declaration of acceptance was approved by a committee comprised solely of its independent directors.

Pursuant to the declaration of acceptance, Iberdrola, S.A. will provide various corporate services to Iberdrola USA including, among other services, those relating to the management of buildings and leases, surveillance and maintenance of buildings, international and corporate security, human resources, brand management, procurement, management of the SAP corporate platform, research and development, quality control, insurance, information technology and general administration. Pursuant to the declaration of acceptance and in accordance with the merger agreement, the foregoing services and the price thereof were entered into on an arms’ length basis and on financial and other material terms no less favorable to Iberdrola USA and its subsidiaries than applicable agreements or arrangements in respect of such corporate or other shared services existing as of February 25, 2015, and may not result in a higher cost to the combined company or its subsidiaries and affiliates than the aggregate costs for such services reflected in the 2014 IFRS audited consolidated financial statements of Iberdrola USA, except to the extent related to ordinary course, market adjustments made on an arm’s length basis. All new, future services to be provided by Iberdrola, S.A. or its affiliates to the combined company and its subsidiaries must be on an arm’s length basis and approved by the unaffiliated committee. By entering into the framework agreement, any previous framework agreements between Iberdrola USA and Iberdrola, S.A. are terminated by operation of law. The framework agreement covers any services provided by Iberdrola, S.A. as of January 1, 2015 and remains in force as long as Iberdrola USA and/or its subsidiaries continue to operate as a subsidiary of Iberdrola, S.A. in accordance with the provisions of Article 42 of the Spanish Commercial Code. As soon as Iberdrola USA or any subsidiary of Iberdrola USA ceases to be a subsidiary of Iberdrola, S.A., the contractual relationship under the framework agreement will be terminated between such Iberdrola USA entity and Iberdrola, S.A. If parties do not formalize a new declaration of acceptance in 2016, the current declaration of acceptance will continue to remain in force under the same terms, unless any ground for termination of the framework agreement arises.

Under the framework agreement, Iberdrola, S.A. must provide the relevant services pursuant to standard market conditions. Iberdrola, S.A. cannot receive financial or other types of consideration on a more favorable basis than what a third party in a substantially similar circumstance would receive. Iberdrola, S.A. must provide the relevant services in a manner that will not impair the decision making capacity of Iberdrola USA, while Iberdrola USA must provide accurate and complete information to Iberdrola, S.A. to enable Iberdrola, S.A. to effectively provide the relevant services. Iberdrola, S.A. must provide the relevant services with a level of expertise, care and diligence that a company providing these services on the open market would provide. Iberdrola USA assumes any liability that may derive from damages or losses attributable to the instructions or information provided to Iberdrola, S.A.; provided that Iberdrola, S.A. will only be liable for non-performance, defective performance or negligence. Iberdrola, S.A. is also required to notify Iberdrola USA before December 31 of each year regarding the estimated price for each service contracted for the following year and provide Iberdrola USA with the invoice for the services provided during the preceding year on the last month of each year.

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The framework agreement contains provisions relating to confidentiality, requiring each party to safeguard all information received by the other under the framework agreement. However, Iberdrola, S.A. and Iberdrola USA are required to disclose the transactions performed under the framework agreement to the public, both in their annual and periodic public reports in accordance with applicable law.

The framework agreement is governed by the laws of Spain and contains arbitration provisions for purposes of dispute resolution. The framework agreement cannot be modified or assigned without the prior written consent of Iberdrola, S.A. and Iberdrola USA.

Other Related Party Transactions

Guarantee and Support Agreement

On April 3, 2008, Iberdrola, S.A. and ScottishPower Holdings, Inc., or SPHI, now known as Iberdrola Renewables Holding, Inc., or IRHI, entered into the Guarantee and Support Agreement, or guarantee and support agreement, which was amended on April 1, 2010. The following describes the material provisions of the guarantee and support agreement. The description in this section and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the guarantee and support agreement, as amended. This summary does not purport to be complete and may not contain all of the information about the guarantee and support agreement that is important to UIL shareowners. Iberdrola USA and UIL encourage you to carefully read the guarantee and support agreement and the first amendment to the guarantee and support agreement, filed as exhibits to the registration statement of which this proxy statement/prospectus forms a part.

Pursuant to the guarantee and support agreement, if IRHI is unable to meet its obligations set forth in a guarantee issued by IRHI or to meet its obligations to pay interest, principal or premium, if any, on any of its indebtedness for money borrowed, Iberdrola, S.A. guarantees to make payment of any such unpaid obligations, subject to certain limitations. In consideration for Iberdrola, S.A. undertaking its obligations under the guarantee and support agreement, IRHI agreed to pay to Iberdrola, S.A., after the end of each fiscal year of IRHI during the term of the guarantee and support agreement, an amount in cash equal to the product obtained by multiplying (a) the sum of the aggregate face value of obligations of IRHI relating to guarantees issued by IRHI in connection with any commodities trading arrangement consummated between any Iberdrola, S.A. subsidiary and a trading counterparty pursuant to a master trading agreement used in the United States with respect to energy, fuels, environmental commodities and derivatives markets and the aggregate exposure of IRHI to any obligations associated with guarantees issued to support structured transactions for which Iberdrola, S.A. provided any support pursuant to the guarantee and support agreement during the preceding fiscal year of IRHI, times (b) 30 basis points.

Iberdrola, S.A. can terminate the guarantee and support agreement at any time by giving IRHI 60 days’ prior written notice; provided, however, termination of the guarantee and support agreement is without prejudice to Iberdrola, S.A.’s liability for any obligations in existence as of the date of termination. Further, at all times during the term of the guarantee and support agreement, Iberdrola, S.A. must continue to beneficially own, directly or indirectly, more than 50% of the voting stock of IRHI.

Related Party Transaction Policy

The combined company’s board intends to adopt a written related party transactions policy in connection with becoming a public company that will provide that the combined company’s audit and compliance committee will periodically review all related party transactions that are required to be disclosed under SEC rules and authorize or ratify all such transactions. For purposes of the policy, interested transactions include transactions, arrangements or relationships generally involving amounts greater than $120,000 in the aggregate in which the combined company is a participant and a related party has a direct or indirect interest. Related parties are deemed to include directors, director nominees, executive officers, beneficial owners of more than five percent of IUSA’s common stock, or an immediate family member of the preceding group.

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The combined company intends that the related party transactions policy will provide that, in determining whether or not to approve or ratify a related party transaction, the combined company’s audit and compliance committee should consider all of the relevant facts and circumstances available, including (if applicable) but not limited to: (i) the benefits to the combined company; (ii) the impact on a director’s independence in the event the related party is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer; (iii) the opportunity costs of other sources for comparable products or services, including whether the transaction is made on terms no less favorable than terms that would be generally available to an unaffiliated third-party under the same or similar circumstances; (iv) the terms of the transaction; and (v) the actual or apparent conflict of interest of the related party. The policy prohibits any director from participating in any review, discussion, consideration or approval of an interested transaction for which such director or his or her family member is a related party, except that such director is required to provide all material information concerning the interested transaction to the committee.

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COMPARISON OF SHAREHOLDER RIGHTS BEFORE AND AFTER THE MERGER

General

Iberdrola USA and UIL are incorporated under the laws of the State of New York and Connecticut, respectively, and, accordingly, the rights of the shareowners of UIL are governed by the CBCA and the rights of the shareholders of Iberdrola USA are governed by the NYBCL. The rights of UIL shareowners are also governed by the UIL certificate of incorporation and the UIL bylaws, while the rights of the shareholders of the combined company will be governed by the combined company’s restated certificate of incorporation and amended and restated bylaws, and the rights of Iberdrola, S.A. as a shareholder of the combined company will also be governed by the shareholder agreement. Upon completion of the merger, each share of UIL common stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive the merger consideration of one share of the combined company common stock plus $10.50 cash. As a result, upon completion of the merger, the rights of UIL shareowners who become shareholders of the combined company in the merger will be governed by the NYBCL, the combined company’s certificate of incorporation and amended and restated bylaws and, with respect to Iberdrola, S.A., the shareholder agreement, which will become effective at the completion of the merger.

Certain Differences between the Rights of UIL Shareowners and the Combined Company Shareholders

The following is a summary of material differences between the rights of UIL shareowners prior to the completion of the merger and the rights of the combined company shareholders.

This summary is not intended to be a complete discussion of the respective rights of the combined company shareholders and UIL shareowners and may not contain all of the information that is important to you. This summary is qualified in its entirety by reference to the NYBCL and the CBCA and the governing documents of UIL and the combined company, which we urge you to read carefully and in their entirety. Iberdrola USA and UIL urge you to carefully read this entire proxy statement/prospectus, the relevant provisions of the NYBCL, the CBCA and the other documents to which Iberdrola USA and UIL refer in this proxy statement/prospectus for a more complete understanding of the differences between the rights of a shareholder of the combined company and the rights of a UIL shareowner. UIL has filed its governing documents with the SEC and will send copies of these documents to you, without charge, upon your request. See the section entitled “Where You Can Find Additional Information” beginning on page 275 of this proxy statement/prospectus.

Provision	The combined company	UIL
Name of Company	The combined company	UIL Holdings Corporation
Authorized Capital Stock	The authorized capital stock of the combined company will consist of shares of common stock, par value $0.01 per share.	The authorized capital stock of UIL consists of 125 million shares of common stock, no par value, one million shares of preferred stock, par value $100 per share, four million shares of preferred stock, par value $25 per share, and four million shares of preference stock, par value $25 per share.
Number of Directors and Number of “Independent” Directors	The combined company’s board of directors will initially be comprised of up to 12 directors as of the completion of the merger and will be fixed from time to time through resolution of the combined company board.	The certificate of incorporation of UIL provides that the number of directors of UIL must be at least three but no more than 15, as determined by the bylaws of UIL.

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Provision	The combined company	UIL
	While the merger agreement contained provisions requiring that at least six members of the board of directors of the combined company be independent of Iberdrola USA and Iberdrola S.A. within the meaning of the rules of the NYSE, following the execution of the merger agreement, UIL and Iberdrola USA agreed that, instead of six independent members of the board of directors of the combined company, the combined company will have at least five (5) “independent” directors (as defined in the shareholder agreement) for a period of five years following the completion of the merger, and Arnold Chase and John Baldacci may be deemed to be independent directors solely for purposes of determining compliance with this obligation. Under the shareholder agreement, a director will be considered “independent” if he or she is independent under the rules of NYSE with respect to the combined company, and would be independent under the rules of NYSE with respect to Iberdrola, S.A. if he or she was a director of Iberdrola, S.A. After such five-year period, the combined company will have at least four directors who are “independent” (as defined in the shareholder agreement), provided that either Mr. Chase or Mr. Baldacci, but not both, may be deemed independent directors for this purpose. The amended and restated bylaws will require that a minimum of three of the directors qualify as “independent” under the Exchange Act, SOX and the rules of the NYSE.	The bylaws of UIL provide that the number of directors of UIL are determined from time to time by the UIL board but shall be no more than 12. Under applicable law and the NYSE rules, UIL is required to have at least three “independent” directors, and a majority of the board of directors must be “independent” under the NYSE rules.
Committees	The amended and restated bylaws of the combined company will provide that the combined company will establish and maintain (i) an audit and compliance committee and (ii) the unaffiliated committee;	The bylaws of UIL provide that board of directors must appoint an audit committee and may appoint an executive committee and any other committees.

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Provision	The combined company	UIL
	provided that Mr. Chase may serve on the unaffiliated committee even if he is determined not to be an “independent” director (as defined in the shareholder agreement).
Election of Directors	The amended and restated bylaws of the combined company will provide that the directors of the combined company board will be elected by a plurality of the votes.	The certificate of incorporation of UIL provides that the directors of the UIL board will be elected if a majority of the votes cast are in favor of such nominee’s election. If the number of nominees for director exceeds the number of directors so elected, directors will be elected by a plurality of the votes represented at the meeting and entitled to vote.
Removal of Directors	Section 706 of the NYBCL, subject to certain conditions, provides that any or all of the directors may be removed for cause by vote of the stockholders, and, if the certificate of incorporation or the specific provisions of a bylaw adopted by the stockholders so provides, directors may also be removed without cause. The combined company’s amended and restated bylaws will contain a provision permitting the removal of directors without cause by vote of the stockholders. The shareholder agreement will provide that, for a period of three years following the completion of the merger, the combined company board will nominate, and Iberdrola, S.A. will cast all of its votes in favor of the election of, each of the UIL director appointees (other than the former UIL chief executive officer). During this period, the combined company board and Iberdrola, S.A. cannot vote to remove such directors.	The bylaws of UIL provide that a director may be removed from office either with or without cause at any time, and another person may be elected in his or her stead to serve for the remainder of his or her term at any special meeting of the shareowners called for the purpose, by vote of a majority of all the shares outstanding and entitled to vote.
Vacancies on the Board of Directors	Under Section 705 of the NYBCL, vacancies occurring on the board of directors by reason of the removal of directors without cause may be filled only by a vote of the stockholders unless the certificate of incorporation or bylaws provide otherwise.	The bylaws of UIL provide that, in case of any vacancy among the directors through death, resignation, disqualification, failure of the shareowners to elect as many directors as the number of directorships fixed by the bylaws, or

259

Provision	The combined company	UIL
	The amended and restated bylaws of the combined company will provide that newly created directorships resulting from an increase in the number of directors and vacancies occurring in the combined company board, including due to removal or resignation, may be filled either by majority vote of the remaining directors then in office, even if less than a quorum, or, if determined by the combined company board or requested in writing by shareholders holding at least a majority of the outstanding voting shares of capital stock of the combined company, by vote of the shareholders. If the number of directors in office is less than a quorum, such newly created directorships and vacancies may also be filled by a vote of the shareholders. The shareholder agreement will provide that upon the death, resignation or removal of any UIL director appointee (other than the former UIL chief executive officer) during the three year period following the completion of the merger, such director’s replacement will be nominated by vote of the unaffiliated committee.	any other cause except the removal of a director, the directors in office, although less than a quorum, by the affirmative vote of the majority of such other directors, or the sole director in office if there be only one, may fill such vacancy; provided that the shareowners entitled to vote may also fill any such vacancy. If any such vacancy occurs in respect of a director elected by a particular class of shares voting as a class, and if such class is still entitled to fill such directorship, the remaining directors elected by such class, by the affirmative vote of a majority of such remaining directors, or the sole remaining director so elected if there be only one, may fill such vacancy; provided the shareowners of such class may also fill any such vacancy.
Shareholder Action by Written Consent	The restated certificate of incorporation of the combined company will provide that any action required or permitted to be taken by the combined company’s shareholders may be taken without a meeting by a written consent signed by shareholders having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shareholders having a right to vote thereon were present and voted.	Under Section 33-698 of the CBCA, action required or permitted to be taken by UIL’s shareowners may be taken without a meeting if evidenced by one or more written consents bearing the date of signature and describing the action taken, signed by all the shareowners entitled to vote on the action and delivered to the corporation for inclusion in the minutes or filing with the corporate records.
Amendment to Certificate of Incorporation	The restated certificate of incorporation of the combined company will provide that it may be	The certificate of incorporation of UIL may be amended so long as the amendment is authorized by a vote of

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Provision	The combined company	UIL
	amended so long as the amendment is authorized by a vote of the combined company board, followed by a vote of a majority of all outstanding shares entitled to vote thereon at a meeting of shareholders in accordance with Section 803 of the NYBCL. However, any amendment that would reasonably be expected to limit, restrict or adversely affect those shareholders other than Iberdrola, S.A. or any of its controlled affiliates also requires the approval of the unaffiliated committee. Under Section 803 of the NYBCL, the Iberdrola USA board may make certain amendments to the certificate of incorporation without the authorization of shareowners. In particular, the Iberdrola USA board may (a) change the location of the corporation’s office, and (b) change the designation of a registered agent or the address of Iberdrola USA’s registered agent.	the UIL board, followed by a vote of a majority of all outstanding shares entitled to vote thereon at a meeting of shareowners in accordance with Section 33-797 of the CBCA. Under Section 33-795 of the CBCA, the UIL board may make certain amendments to the certificate of incorporation without the authorization of the shareowners. In particular, the UIL board may (a) delete the names and addresses of initial directors of UIL, (b) change the number of authorized shares issued and unissued if there is only one class of shares outstanding, (c) change the corporate name in a limited fashion, (d) reduce the number of authorized shares (or delete the class of share if no more shares of the class remain outstanding) in the certificate of incorporation where UIL repurchases the shares and is prohibited by the certificate of incorporation from reissuing them, (e) delete the name and address of the initial registered agent or registered office, if a statement of change is on file with the Secretary of the State, and (f) make any other change expressly permitted by the CBCA to be made without shareholder approval.
Amendment of Bylaws	The amended and restated bylaws of the combined company will provide that the bylaws may be amended by shareholder vote.	The bylaws of UIL may be altered, amended, added to or repealed (i) by the affirmative vote of the owners of a majority of the voting power of shares entitled to vote thereon or (ii) by the affirmative vote of directors holding a majority of the directorships.
Quorum for Shareholder Meetings	The amended and restated bylaws of the combined company will provide that, except as otherwise provided by law, the holders of a majority of the shares entitled to vote, represented in person or by proxy, will constitute a quorum.	The bylaws of UIL provide that, except as otherwise provided by law, the certificate of incorporation or bylaws, the shareowners of a majority of the voting power of the shares entitled to vote, represented in person or by proxy, will constitute a quorum.

261

Provision	The combined company	UIL
Voting Rights	The amended and restated bylaws of the combined company will provide that holders of the combined company common stock are entitled to one vote for each share of the combined company common stock held by such shareholder.	The bylaws of UIL provide that the owner of a share of UIL common stock that may be voted on a particular subject matter at any meeting of shareowners shall be entitled to one vote per share of UIL common stock held.
Special Meeting of Stockholders	The amended and restated bylaws of the combined company will provide that special meetings of its shareholders may be called only by its chief executive officer or by its chairman, and shall be called by the chief executive officer or the chairman at the request in writing of a majority of its board of directors or shareholders owning a majority of its issued and outstanding capital stock entitled to vote. Any such call or demand must state the purpose or purposes of the proposed meeting.	The bylaws of UIL provide that special meetings of the shareowners may be called at any time by the president, or in his absence or disability by a vice president, and shall be called on the request in writing or by a vote of a majority of the board of directors or upon the written request of the holders of not less than 35% of the shares entitled to vote at the meeting.
Notice of Shareholder Meetings	The amended and restated bylaws of the combined company will provide that whenever shareholders are required or permitted to take any action at a meeting, written notice will be given stating the place, date and hour of the meeting and, unless it is the annual meeting, indicating that it is being issued by or at the direction of the person or persons calling the meeting. Such notice must be given not less than ten nor more than 60 days before the date of the meeting.	The bylaws of UIL provide that a written or printed notice of each meeting of shareowners, stating the place, day and hour of the meeting and the general purpose or purposes for which it is called, shall be mailed, postage prepaid, by or at the direction of the secretary, to each shareowner of record entitled to vote at such meeting, addressed to the shareowner at the shareowner’s last known post office address as last shown on the stock records of the corporation, not less than ten days nor more than 60 days before the date of the meeting.
Proxy	The amended and restated bylaws of the combined company will provide that that any shareholder may vote by proxy, provided that no proxy may be voted on after three years from its date, unless the proxy provides for a longer period.	The bylaws of UIL provide that any shareowner may vote by proxy.
Preemptive Rights	The restated certificate of incorporation of the combined company will provide that shares of common stock are not subject to	UIL common stock has no preemptive or conversion rights or other subscription rights.

262

Provision	The combined company	UIL
	preferential or preemptive rights, except as specifically provided for in an agreement between the combined company and any shareholder of the combined company. The shareholder agreement will provide Iberdrola, S.A. with certain preemptive rights.
Registration Rights	The NYBCL and the restated certificate of incorporation and amended and restated bylaws of the combined company do not provide the combined company shareholders with registration rights. The shareholder agreement will provide Iberdrola, S.A. with demand registration rights, piggyback registration rights and shelf registration statement rights following the completion of the merger, in each case, subject to certain customary limitations. Iberdrola, S.A. will also have the right to specify the method of distribution of securities, including an underwritten public offering, and approve the underwriters.	The CBCA and the certificate of incorporation and bylaws of UIL do not provide UIL shareowners with registration rights.
Dividends	The amended and restated bylaws of the combined company will provide that dividends may be declared by the Iberdrola USA board at any regular or special meeting, pursuant to and subject to Section 510 of the NYBCL and other applicable laws.	The bylaws of UIL provide that, subject to preferences that may be applicable to any outstanding preferred stock and preference stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the UIL board of directors out of funds legally available therefor.
Limitation of Personal Liability of Directors	Section 402(b) of the NYBCL permits corporations to eliminate or limit the personal liability of directors to the corporation or its stockholders for damages for any breach of duty in such capacity except liability of a director (i) whose acts or omissions were in bad faith, involved intentional misconduct or a knowing violation of law, (ii) who personally	Section 33-636(b)(4) of the CBCA permits corporations to limit the personal liability of directors to the corporation or its shareowners for monetary damages for breach of duty as a director to an amount that is not more than the compensation received by that director for serving UIL during the year of the violation if such breach did not (i) involve a

263

Provision	The combined company	UIL
	gained a financial profit or other advantage to which he or she was not legally entitled or (iii) whose acts violated Section 719 of the NYBCL. The restated certificate of incorporation of the combined company will provide that to the maximum extent permitted by the NYBCL, no director will be personally liable to the combined company or its shareholders for damages for any breach of duty (including fiduciary duty) as a director. If the NYBCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the combined company will be eliminated or limited to the fullest extent permitted by the NYBCL, as so amended.	knowing and culpable violation of law by the director, (ii) enable the director or an associate to receive an improper personal economic gain, (iii) show a lack of good faith and a conscious disregard for the duty of the director to the corporation under circumstances in which the director was aware that his conduct or omission created an unjustifiable risk of serious injury to the corporation, (iv) constitute a sustained and unexcused pattern of inattention that amounted to an abdication of the director’s duty to the corporation, or (v) create liability under section 33-757 of the CBCA, provided no such provision shall limit or preclude the liability of a director for any act or omission occurring prior to the effective date of such provision. UIL’s certificate of incorporation contains provisions limiting the personal liability of a director to UIL or its shareowners for monetary damages for breach of duty as a director to an amount that is not more than the compensation received by that director for serving UIL during the year of the violation.
Indemnification of Officers and Directors / Insurance	Under Section 722 of the NYBCL, a corporation may, except for stockholder derivative suits, indemnify its directors and officers made, or threatened to be made, a party to any action or proceeding, if the director or officer acted in good faith, for a purpose that he or she reasonably believed to be in or, in the case of service to another corporation or enterprise, not opposed to the best interests of the corporation, and, in criminal proceedings, had no reasonable cause to believe his or her conduct was unlawful. In the case of stockholder derivative suits, the corporation may indemnify a director or officer if he or she acted in good faith for a purpose that he or she	Under Section 33-771 of the CBCA, a corporation may indemnify an individual who is a party to a proceeding because he or she is a director against liability incurred in the proceeding if: (1) (A) the individual conducted himself or herself in good faith; (B) the individual reasonably believed (i) in the case of conduct in his or her official capacity, that his or her conduct was in the best interests of the corporation; and (ii) in all other cases, that his or her conduct was at least not opposed to the best interests of the corporation; and (C) in the case of any criminal proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful; or (2)

264

Provision	The combined company	UIL
	reasonably believed to be in or, in the case of service to another corporation or enterprise, not opposed to the best interests of the corporation, except that no indemnification may be made in respect of (i) a threatened action, or a pending action that is settled or otherwise disposed of, or (ii) any claim, issue or matter as to which such individual has been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines, upon application, that, in view of all the circumstances of the case, the individual is fairly and reasonably entitled to indemnity for the portion of the settlement amount and expenses as the court deems proper. Pursuant to Section 723 of the NYBCL, any individual who has been successful on the merits or otherwise in the defense of a civil or criminal action or proceeding will be entitled to indemnification. Except as provided in the preceding sentence, unless ordered by a court pursuant to Section 724 of the NYBCL, any indemnification under the NYBCL may be made only if indemnification is authorized in the specific case and after a finding that the director or officer met the requisite standard of conduct by the disinterested directors if a quorum is available, or, if the quorum so directs or is unavailable, (i) the board of directors upon the written opinion of independent legal counsel or (ii) the stockholders. Section 724 of the NYBCL permits an individual entitled to indemnification under Section 722 or 723(a) of the NYBCL to apply to a court for an award of indemnification. The restated certificate of incorporation and amended and	the individual engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the certificate of incorporation. Section 33-775 of the CBCA provides that a corporation shall not indemnify a director under Section 33-771 unless authorized for a specific proceeding after a determination has been made that indemnification of the director is permissible because he or she has met the relevant standard of conduct set forth in Section 33-771. Section 33-772 and 33-776 of the CBCA require the corporation to indemnify a director, officer, employee or agent of the corporation who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which such director was a party because he or she was a director of the corporation, against reasonable expenses incurred by him or her in connection with the proceeding. Sections 33-774 and 33-776 of the CBCA permit a director, officer, employee or agent of the corporation who is party to a proceeding because of that individual’s position as such to apply to a court for an award of indemnification. UIL’s certificate of incorporation obligates UIL to indemnify a director against any person for any action taken, or any failure to take any action, as a director, except liability that (i) involved a knowing and culpable violation of law by the director, (ii) enabled the director or an associate, as defined in Section 33-840 of the CBCA, to receive an improper personal gain, (iii) showed a lack of good faith and a conscious disregard for the duty of the director to UIL under circumstances in which the director was aware that his or her conduct or omission created an

265

Provision	The combined company	UIL
	restated bylaws of the combined company will provide that, to the maximum extent permitted by the NYBCL, the combined company is authorized to provide indemnification of directors, officer and agents of the combined company. In accordance with Section 726 of the NYBCL, the amended and restated bylaws of the combined company will provide that the combined company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the combined company, or who is or was serving at the request of the combined company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the combined company would have the power to indemnify him or her against such liability.	unjustifiable risk of serious injury to UIL, (iv) constituted a sustained and unexcused pattern of inattention that amounted to an abdication of the director’s duty to UIL or (v) created liability under Section 33-757 of the CBCA. Section 33-777 of the CBCA provides that a corporation may purchase and maintain insurance on behalf of an individual who is a director, officer, employee or agent of the corporation, or who, while a director, officer, employee or agent of the corporation, serves at the corporation’s request as a director, officer, partner, trustee, employee or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan or other entity, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee or agent, whether or not the corporation would have power to indemnify or advance expenses to him against the same liability.
Advancement of Expenses	The restated certificate of incorporation of the combined company will provide that the combined company is authorized to provide advancement of expenses, through bylaw provisions and agreements, to directors, officers and agents of the corporation and any other persons to the extent permitted by the NYBCL and other applicable law. The amended and restated bylaws of the combined company will provide that expenses incurred by a person entitled to indemnification will be paid by the combined company in advance of the final disposition upon receipt of an undertaking by or on behalf of the indemnitee to repay such amount if it is ultimately	Sections 33-773 and 33-776 of the CBCA provide that a corporation may advance expenses under Sections 33-770 through 33-779 of the CBCA, inclusive, to a director, officer, employee or agent of a corporation who is party to a proceeding because of that individual’s position as such. Sections 33-774 and 33-776 of the CBCA permit a director, officer, employee or agent of the corporation who is party to a proceeding because of that individual’s position as such to apply to a court for an order for advancement for expenses.

266

Provision	The combined company	UIL
	determined that he or she is not entitled to be indemnified by the combined company.
Exclusive Forum	The amended and restated bylaws of the combined company will provide that the state courts of the State of New York located in New York County are the exclusive forum for (i) any derivative action or proceeding brought on behalf of the combined company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the combined company to the combined company or the stockholders, (iii) any action asserting a claim arising pursuant to any provision of the NYBCL or the combined company’s certificate of incorporation or bylaws, or (iv) any other action asserting a claim arising under, in connection with, and governed by the internal affairs doctrine.	Not applicable.
Appraisal Rights	Section 910 of the NYBCL provides that appraisal rights are generally not available to holders of shares that are listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. If the combined company common stock is approved for listing on the NYSE as of the completion of the merger, holders of the combined company common stock will not have appraisal rights under the NYBCL.	Section 33-856 of the CBCA provides that no appraisal rights are available to holders of shares that are “covered securities” under the Securities Act, traded on an organized market, and that are shares of a corporation that has at least 2,000 shareholders and a market value of at least $25 million. Holders of UIL common stock do not currently have appraisal rights under the CBCA.
Approval of Mergers and Other Corporate Transactions	The restated certificate of incorporation of the combined company will provide that a plan of merger or consolidation submitted to the shareholders by the combined company board in accordance with Section 903 of the NYBCL may be adopted by a majority of the	Section 33-817 of the CBCA provides that a plan of merger or share exchange must be adopted by the board of directors of a corporation and, for corporations incorporated on or after January 1, 1997 (which includes UIL), approved by each voting group entitled to vote

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Provision	The combined company	UIL
	stockholders, provided that the terms of any such plan of merger or consolidation must comply with the terms of the shareholder agreement.	separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group.
Certain Business Combination Restrictions	Section 912(c) of the NYBCL generally prohibits business combinations with an interested shareholder unless (a) the board of directors of the combined company has approved the business combination prior to the interested stockholder’s stock acquisition date, or where the board of directors approve the purchase of stock made by the interested stockholder prior to the interested stockholder’s stock acquisition date, (b) the business combination is approved by the holders of a majority of the outstanding voting stock not beneficially owned by the interested shareholder after five years from the date of the interested stockholder’s stock acquisition, or (c) the business combination meets certain price and other requirements set forth in Section 912(c)(3) of the NYBCL. The shareholder agreement will, subject to certain exceptions, generally prohibit (i) Iberdrola, S.A. from causing the combined company to, and the combined company from, entering into or effectuating any transaction for the acquisition of the combined company by another entity, including any stock acquisition, reorganization, merger or consolidation, that results in all shareholders of the combined company exchanging their voting securities for cash or securities, unless all shareowners of the combined company are entitled to the same per share consideration to be received in such transaction as Iberdrola, S.A. and (ii) Iberdrola, S.A. and its controlled affiliates, for a period of three years after the closing, from transferring more than an	Section 33-841 and Section 33-842 of the CBCA generally require business combinations with an interested shareholder to be approved by the board of directors and then by the affirmative vote of at least: (i) the holders of 80% of the voting power of the outstanding shares of UIL’s voting stock; and (ii) the holders of two-thirds of the voting power of the outstanding shares of UIL’s voting stock, excluding the voting stock held by the interested shareholder; unless the consideration to be received by the shareholders meets certain price and other requirements set forth in Section 33-842 of the CBCA or unless the board of directors of UIL has by resolution determined to exempt business combinations with that interested shareholder prior to the time that such shareholder became an interested shareholder.

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Provision	The combined company	UIL
	aggregate of 10% of the outstanding shares of the combined company in any transaction or series of transactions, unless all shareowners of the combined company are entitled to participate in such transaction (on a pro rata basis) and are entitled to the same per share consideration to be received in such transaction as Iberdrola, S.A.
State Anti-Takeover Statutes	Section 912 of the NYBCL generally provides that a New York corporation may not engage in a business combination with an interested stockholder for a period of five years following the interested stockholder’s becoming such. Such a business combination would be permitted where it is approved by the board of directors before the interested stockholder’s becoming such. Covered business combinations include certain mergers and consolidations, dispositions of assets or stock, plans for liquidation or dissolution, reclassifications of securities, recapitalizations and similar transactions. An interested stockholder is generally a stockholder beneficially owning, directly or indirectly, at least 20% of a corporation’s outstanding voting stock.	Section 33-844 of the CBCA generally prohibits a Connecticut corporation from engaging in a business combination with an interested shareholder for a period of five years after the date of the transaction in which the person became an interested shareholder, unless the business combination or the purchase of stock by which such person becomes an interested shareholder is approved by UIL’s board of directors, and by a majority of its non-employee directors, prior to the date on which the person becomes an interested shareholder. Subject to exceptions, an “interested shareholder” is a person who owns 10% or more of UIL’s voting power, or is an affiliate or associate of UIL and owned 10% or more of its voting power within the past five years.
Transactions with Related Parties	Section 713(a) of the NYBCL provides that no contract or other transaction between a corporation and one or more of its directors, or between a corporation and any other entity in which one or more of its directors are directors or officers, or have a substantial financial interest, is void or voidable for this reason alone, or for the reason alone that such directors are present at the meeting of the board, or a committee thereof, which approved such contract or transaction, or that their votes are counted for such purpose if (a) the material facts as to the director’s	Section 33-782 of the CBCA provides that a director’s conflicting interest transaction may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if: (i) the directors’ action respecting the transaction was taken in compliance with the CBCA at any time; (ii) shareowners’ action respecting the transaction was taken in compliance with the CBCA; or (iii)

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Provision	The combined company	UIL
	interest in such contract or transaction is disclosed in good faith or known to the board or committee, and the contract or transaction is approved by sufficient votes of the disinterested directors, or (b) the material facts as to the director’s interest in such contract or transaction are disclosed in good faith or known to the shareholders entitled to vote on the contract and is approved by such shareholders. A contract or transaction with an interested director that is not approved according to Section 713(a) may be avoided by a corporation unless the parties thereto establish affirmatively that the contract or transaction was fair and reasonable as regards the corporation at the time it was approved by the board, a committee or the shareholders. The restated certificate and the amended and restated bylaws of the combined company will provide that, subject to applicable law, no transaction entered into by the combined company will be affected by the fact that the directors of the combined company, their respective affiliates, or any of them, were personally interested in it. Every director of the combined company is relieved from any disability which might otherwise prevent his or her, or any of his or her affiliates, contracting with the combined company for the benefit of himself, herself, or of any firm, association or corporation in which he or she may be anywise interested or affiliated. No director will be disqualified from voting or acting on behalf of the combined company in contracting with any other firm, association or corporation in which he or she may be an affiliate, director, officer or shareholders, or may otherwise have an interest. The shareholder agreement will provide that the current services	the transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation. A “director’s conflicting interest transaction” is defined in Section 33-781 of the CBCA as a transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, (i) to which, at the relevant time, the director is a party, (ii) respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director, or (iii) respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.

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Provision	The combined company	UIL
	provided at the completion of the merger by Iberdrola, S.A. to the combined company will be provided by Iberdrola, S.A. at a cost to the combined company not higher than as reflected in the expenses shown in the 2014 IFRS audited consolidated financial statements of Iberdrola USA. Transactions (including future services not currently provided) between Iberdrola, S.A., on the one hand, and the combined company, on the other hand, will be on arm’s length basis and approved by the unaffiliated committee.
Corporate Opportunity	The restated certificate and the amended and restated bylaws of the combined company will provide that to the maximum extent permitted under the laws of the State of New York, the combined company renounces any interest or expectancy of the combined company in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to its directors or shareholders, their respective affiliates or any firm, association or corporation in which any of them may be interested or affiliated. The shareholder agreement will provide that for so long as Iberdrola, S.A. owns 50% or more of the outstanding voting stock of the combined company, Iberdrola, S.A. will not engage in actions that would reasonably be expected to impair the executive officers of the combined company from conducting the combined company’s business or operations in a manner consistent with such business or operations as of immediately following the completion of the merger.	Section 33-785 of the CBCA provides that a director’s taking advantage, directly or indirectly, of a business opportunity may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director, in a proceeding by or in the right of the corporation on the ground that such opportunity should have first been offered to the corporation, if before becoming legally obligated respecting the opportunity the director brings it to the attention of the corporation and: (i) action by qualified directors disclaiming the corporation’s interest in the opportunity is taken as if the decision being made concerned a director’s conflicting interest transaction in accordance with the CBCA; or (ii) shareowners’ action disclaiming the corporation’s interest in the opportunity is taken in accordance with the CBCA.

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LEGAL MATTERS

White & Case LLP will pass upon the validity of the shares of the registrant offered by this proxy statement/prospectus.

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EXPERTS

The combined and consolidated financial statements and financial statement schedule of Iberdrola USA, Inc. and Subsidiaries at December 31, 2014 and 2013, and for each of the three years in the period ended December 31, 2014, appearing in this proxy statement/prospectus have been audited by Ernst & Young LLP, or EY, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

Prior to the engagement of EY as Iberdrola USA’s independent registered public accounting firm under the standards of the Public Company Accounting Oversight Board, or the PCAOB, other member firms of Ernst & Young Global Limited were engaged to perform legal and expert services and entered into contingent fee arrangements that were not in accordance with the auditor independence rules of Regulation S-X and the PCAOB. These services and arrangements, which were permissible under the applicable local country independence rules, were completed or terminated before EY was initially engaged as Iberdrola USA’s independent registered public accounting firm under the PCAOB standards.

None of the professionals who provided the services mentioned above were members of the EY audit engagement team with respect to the audits of Iberdrola USA’s combined and consolidated financial statements. In addition, the services and arrangements did not directly impact the financial reporting of Iberdrola USA or the audits of Iberdrola USA’s combined and consolidated financial statements.

EY informed Iberdrola USA that, after considering all the facts and circumstances, it believes it is and was capable of exercising objective and impartial judgment on all issues encompassed within the conduct of its audit of Iberdrola USA’s combined and consolidated financial statements.

Iberdrola USA and its Audit and Compliance Committee also reviewed and considered the impact that these matters may have had on EY’s independence with respect to Iberdrola USA under the applicable Regulation S-X and PCAOB independence rules. After considering all the relevant facts and circumstances, Iberdrola USA and its Audit and Compliance Committee determined that a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY is and was capable of exercising objective and impartial judgment on all issues encompassed within their audit engagement.

The consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in the Report of Management on Internal Control over Financial Reporting) of UIL incorporated into this proxy statement/prospectus by reference to UIL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

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HOUSEHOLDING OF PROXY MATERIALS

Some banks, brokerage firms or other nominees may be participating in the practice of “householding” proxy statements. This means that only one copy of this proxy statement/prospectus may have been sent to multiple UIL shareowners sharing the same address. UIL will promptly deliver a separate copy of this proxy statement/prospectus to you if you direct your request to Sigrid E. Kun, Vice President, Corporate Secretary and Assistant General Counsel, UIL Holdings Corporation, 157 Church Street, P.O. Box 1564, New Haven, Connecticut 06506, Telephone: (203) 499-2000 or Okapi, UIL’s proxy solicitor, by calling toll-free at (855) 208-8902. If you want to receive separate copies of a UIL proxy statement in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, brokerage firm or other nominee, or you may contact UIL at the above address and telephone number.

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

UIL files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy these reports, statements or other information filed by UIL at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. The SEC filings of UIL are also available to the public from commercial document retrieval services and at the website maintained by the SEC at www.sec.gov. In addition, information relating to UIL, including UIL’s SEC filings, is available through UIL’s website at www.uil.com.

The SEC allows UIL to “incorporate by reference” information into this proxy statement/prospectus. This means that UIL can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this proxy statement/prospectus, except for any information that is superseded by information that is included directly in this proxy statement/prospectus or incorporated by reference subsequent to the date of this proxy statement/prospectus.

This proxy statement/prospectus incorporates by reference the documents listed below that UIL has previously filed with the SEC. They contain important information about UIL and its financial condition. The following documents, which were filed by UIL with the SEC, are incorporated by reference into this proxy statement/prospectus (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with SEC rules):

• Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (filed with the SEC on February 26, 2015);

• Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 (filed with the SEC on April 30, 2015);

• Current Reports on Form 8-K (excluding any information and exhibits furnished under either Item 2.02 or Item 7.01 thereof) filed with the SEC on February 26, 2015, March 25, 2015, May 14, 2015, June 8, 2015, July 1, 2015, July 2, 2015 and July 7, 2015;

• Certificate of Amendment to the Certificate of Incorporation of UIL, effective as of June 9, 2014, filed as Exhibit 3.1 to UIL’s Form 10-K for the fiscal year ended December 31, 2014 (filed with the SEC on February 26, 2015);

• Certificate of Incorporation of UIL, as amended through May 10, 2011, filed as Exhibit 3.1 to UIL’s Form 10-Q for the quarter ended June 30, 2011 (filed with the SEC on August 4, 2011);

• Bylaws of UIL, as amended through April 27, 2009, filed as Exhibit 3.2a to UIL’s Form 10-Q for the quarter ended June 30, 2009 (filed with the SEC on August 5, 2009); and

• Definitive Proxy Statement for UIL’s 2015 Annual Meeting (filed with the SEC on April 1, 2015).

In addition, UIL incorporates by reference additional documents that it may file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this proxy statement/prospectus and the date on which the merger is completed. These documents include periodic reports, such as annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K (excluding any information furnished on any current report on Form 8-K, including the related exhibits, that pursuant to and in accordance with the rules and regulations of the SEC is not deemed “filed” for purposes of the Exchange Act) as well as proxy statements.

You can obtain a copy of this proxy statement/prospectus and any of the documents incorporated by reference into this proxy statement/prospectus from UIL or from the SEC through the SEC’s website at www.sec.gov. Copies of this proxy statement/prospectus and documents incorporated by reference are available

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from UIL without charge, excluding any exhibits to those documents, unless the exhibit is specifically incorporated by reference as an exhibit into this proxy statement/prospectus. You may request a copy of such documents by contacting:

Investor Relations

UIL Holdings Corporation

157 Church Street

P.O. Box 1564

New Haven, CT 06506

In addition, you may obtain copies of the information relating to UIL, without charge, by visiting www.uil.com/. The information provided on UIL’s website, other than copies of the documents referred to above that have been filed with the SEC, is not part of this proxy statement/prospectus and, therefore, is not incorporated herein by reference.

Only one copy of this proxy statement/prospectus is being delivered to multiple UIL shareowners sharing an address unless UIL has received contrary instructions from one or more of the shareowners. Upon written or oral request, UIL will promptly deliver a separate copy of this proxy statement/prospectus to a UIL shareowner at a shared address to which a single copy of this proxy statement/prospectus has been delivered.

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GLOSSARY OF TERMS AND ABBREVIATIONS

As used in this proxy statement/prospectus, unless the context indicates otherwise, the terms contained herein have the meanings set forth below.

Acquisition proposal refers to the term “acquisition proposal” as it is defined in the merger agreement.

Adverse recommendation change refers to the term “adverse recommendation change” as it is defined in the merger agreement.

Annual incentive compensation refers to the target annual short-term incentive compensation calculated as if the executive officer had been employed on the last day of his or her termination.

Average UIL stock price refers to the average of the volume weighted averages of the trading prices of UIL Holdings Corporation’s common stock on the NYSE (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the parties) on each of the ten consecutive trading days ending on, and including, the trading day that immediately precedes the closing date.

Cash consideration refers to the conversion of each issued share of UIL common stock (other than any shares owned by UIL that are not owned on behalf of third parties) into the right to receive $10.50 in cash as a result of the merger.

Change refers to any change, effect, event, circumstance or development.

Charter documents refers to (i) the articles of association or certificate of formation, incorporation, partnership or organization (or the equivalent organizational documents) of that entity, (ii) the bylaws, partnership agreement or limited liability company agreement or regulations (or the equivalent governing documents) of that entity, and (iii) each document setting forth the designation, amount and relative rights, limitations and preferences of any class or series of that entity’s equity securities or of any rights in respect of that entity’s equity securities.

Code refers to the Internal Revenue Code of 1986, as amended.

Combined company refers to Iberdrola USA following the completion of the merger.

Combined company board refers to the board of directors of the combined company.

Combined company common stock refers to each share of common stock of the combined company issued pursuant to the merger agreement.

Combined company equity right refers to the right of each award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards granted or deferred under a UIL stock plan and relating to shares of UIL common stock that is outstanding immediately prior to the effective time to be converted, at the effective time, into an award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards, as applicable, relating to shares of the combined company common stock.

DCF model refers to the internal discounted cash flow valuation model used by Iberdrola USA.

Effective time refers to the completion of the merger and the filing with the Secretary of the State of the State of Connecticut and acceptance of the certificate of merger.

Equity exchange factor refers to the sum of one plus a fraction, the numerator of which is the cash consideration and the denominator of which is the Average UIL stock price minus the cash consideration.

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Exchange agent refers to a bank or trust company selected by UIL prior to the effective time, reasonably acceptable to Iberdrola USA, to act as an exchange agent in connection with the merger.

Exchange fund refers to the amount of immediately available cash that shall be deposited with the exchange agent immediately prior to the effective time.

FIRPTA Tax refers to the applicability of U.S. federal income tax at the regular graduated rates imposed under Section 897 of the Code.

FIRPTA Withholding refers to the requirement under Section 1445 of the Code that a person acquiring stock in a USRPHC from a Non-U.S. holder generally must deduct and withhold a tax equal to 10% of the amount realized by that Non-U.S. holder on the sale or exchange of that stock.

Guarantee and support agreement refers to the Guarantee and Support Agreement, dated April, 2010, between SPHI and IRHI.

Iberdrola Group refers to the group of companies controlled by Iberdrola, S.A.

Iberdrola, S.A. refers to the parent company of Iberdrola USA, Inc.

Iberdrola USA board refers to the board of directors of Iberdrola USA.

Iberdrola USA business combination refers to an “Iberdrola USA business combination” as that term is defined in the merger agreement.

Iberdrola USA common stock refers to each share of common stock of Iberdrola USA issued pursuant to the merger agreement.

Iberdrola USA Deferred Compensation Plan refers to Iberdrola USA’s Non-qualified Individual Account Balance Deferred Compensation Plan.

Iberdrola USA equity right refers to the right of each award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards granted or deferred under a UIL stock plan and relating to shares of UIL common stock that is outstanding immediately prior to the effective time to be converted, at the effective time, into an award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards, as applicable, relating to shares of Iberdrola USA common stock.

Iberdrola USA material adverse effect refers to an “Iberdrola USA material adverse effect” as that term is defined in the merger agreement.

Iberdrola USA plans refers to the pension and other post-retirement benefit plans of Iberdrola USA.

Iberdrola USA required statutory approvals refers to certain statutory approvals required by Iberdrola USA as identified in the merger agreement.

Indemnification agreements refers to the indemnification agreements entered into by the combined company with certain of its directors and officers.

Indemnitee refers to each director and officer who has entered into the indemnification agreements with the combined company.

Installed capacity refers to the production capacity of a power plant or wind farm based either on its rated (nameplate) capacity or actual capacity.

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Joint facility refers to the $600 million in aggregate bank-provided revolving credit facility entered into by CMP, NYSEG and RG&E.

Klamath Plant refers to the Klamath gas-fired cogeneration facility.

Management service agreement refers to the service agreement, dated January 1, 2014, between Iberdrola USA and Iberdrola USA Management Corporation.

Merger agreement refers to the Agreement and Plan of Merger, dated February 25, 2015, as it may be amended from time to time, by and among UIL Holdings Corporation, Iberdrola USA, Inc., and Green Merger Sub, Inc.

Merger consideration refers to the conversion of each share of UIL common stock issued and outstanding immediately prior to the completion of the merger (other than any shares owned by UIL that are not owned on behalf of third parties) into the right to receive one validly issued share of the combined company common stock, credited as fully paid, and $10.50 in cash, without interest and less any applicable withholding taxes

Merger sub refers to Green Merger Sub, Inc.

Non-U.S. holder refers to a beneficial owner of shares of UIL common stock that is neither a U.S. person nor a partnership for U.S. federal income tax purposes.

Outside date refers to December 31, 2015 (as such date may be extended pursuant to the merger agreement).

Record date refers to                     , 2015, the record the date of the special meeting. Only shareowners of record as of the close of business on                     , 2015 are entitled to notice of, and to vote at, the special meeting.

Reimbursable expenses refers to all reasonable and documented out-of-pocket fees and expenses incurred by Iberdrola USA and its affiliates in connection with the merger agreement or the transaction (including with respect to obtaining financing), in an amount not to exceed $15,000,000.

Revolving credit facility refers to the $300 million revolving credit facility entered on May 30, 2012 by Iberdrola USA with a syndicate of nine banks.

Shared services agreement refers to the Agreement for the Provision of Services and Resource Allocation, dated June 27, 2014, between Iberdrola S.A. and Iberdrola USA.

Shareholder agreement term sheet refers to the shareholder agreement term sheet attached as an exhibit to the merger agreement.

Significant Shareholder refers to a Non-U.S. holder that has owned, directly or indirectly, more than 5% of UIL’s common stock at any time during the Testing Period.

Special meeting refers to the special meeting of shareowners of UIL Holdings Corporation, a Connecticut corporation, or UIL, to be held on                     , 2015, at                     Eastern time, at Quinnipiac University, Center for Medicine, Nursing and Health Sciences, 370 Bassett Road, North Haven, Connecticut 06473.

Stock consideration refers to the conversion of each issued share of UIL common stock (other than any shares owned by UIL that are not owned on behalf of third parties) into the right to receive one share of common stock of the combined company as a result of the merger.

Strategic Bonus Plan refers to the 2014-2016 Strategic Bonus Plan of Iberdrola, S.A. for senior officers and officers of Iberdrola, S.A. and its subsidiaries

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Sublimit refers to the maximum borrowing entitlement of a joint borrower under the terms of the joint facility.

Superior proposal refers to a “superior proposal” as that term is defined in the merger agreement.

Surviving corporation refers to the surviving corporation of the merger, merger sub, which will survive the merger as a wholly-owned subsidiary of the combined company.

Target total remuneration refers to one times base salary plus one times annual incentive compensation, plus the amount of the most recently approved target long-term incentive award.

Termination fee refers to the termination fee of $75,000,000 payable by UIL to Iberdrola USA in certain circumstances under the merger agreement.

Testing Period refers to, with respect to a Non-U.S. holder, the shorter of (i) the five year period preceding the effective time of the merger and (ii) the period during which the Non-U.S. holder held its UIL common stock.

Transaction or transactions refers to the merger and the other transactions contemplated by the merger agreement.

UIL board refers to the members of the board of directors of UIL Holdings Corporation immediately prior to the completion of the merger.

UIL board recommendation refers to the approval, recommendation or declaration of advisability by the UIL board or any committee of the UIL board in respect of the merger agreement and the transactions.

UIL common stock refers to each share of common stock of UIL Holdings Corporation outstanding prior to the completion of the merger.

UIL equity right refers to each award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards granted or deferred under a UIL stock plan and relating to shares of UIL common stock.

UIL forecasts refers to the certain non-public financial forecasts UIL provided to Morgan Stanley, Iberdrola USA and the UIL board.

UIL material adverse effect refers to a “UIL material adverse effect” as that term is defined in the merger agreement.

UIL performance award refers to any UIL stock award that is, immediately prior to the effective time, subject to any performance-based vesting or other performance conditions

UIL required statutory approvals refers to certain statutory approvals required by UIL as identified in the merger agreement.

UIL restricted shares refers to each award of restricted UIL common stock granted under the UIL stock plans that is outstanding and unvested or otherwise subject to forfeiture or other restrictions as of immediately prior to the effective time.

UIL stock awards refers to the UIL equity rights together with the UIL restricted shares.

Unaffiliated committee refers to a committee of “independent” directors (as defined in the shareholder agreement) of the combined company. Under the shareholder agreement, a director will be considered

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“independent” if he or she is independent under the rules of NYSE with respect to the combined company, and would be independent under the rules of NYSE with respect to Iberdrola, S.A. if he or she was a director of Iberdrola, S.A.

Further, as used in this proxy statement/prospectus, the abbreviations contained herein have the meanings set forth below.

2011 Act	Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011
AIP	Annual incentive plan
Army Corps	U.S. Army Corps of Engineers
BBVA	Banco Bilbao Vizcaya Argentaria
Bcf	One billion cubic feet
BGEPA	Bald and Golden Eagle Protection Act
BLM	U.S. Bureau of Land Management
BNEF	Bloomberg New Energy Finance
Broadridge	Broadridge Corporate Issuer Solutions, Inc.
CAIDI	Customer Average Interruption Duration Index
CAR/PAR	Corrective action reports/preventative action reports
CBCA	Connecticut Business Corporation Act (as now or hereafter may be amended)
CEC	Connecticut Energy Corporation
CFIUS	Committee on Foreign Investment in the United States
CFTC	Commodity Futures Trading Commission
CIC Plan	UIL Change in Control Severance Plan II
CMP	Central Maine Power Company
COBRA	Consolidated Omnibus Budget Reconciliation Act of 1985
CTG	CTG Resources, Inc.
DER	Distributed energy resources
DHS	Department of Homeland Security
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act
DOE	Department of Energy
DOJ	Department of Justice
DOT	Department of Transportation
DPU	Massachusetts Department of Public Utilities
DSP	Distributed System Platform
DTh	Dekatherm
EBITDA	Earnings before interest, taxes, depreciation and amortization
EEI	Edison Electric Institute

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EIA	U.S. Energy Information Administration
EPA	Environmental Protection Agency
EPAct 2005	Energy Policy Act of 2005
ERCOT	Electric Reliability Council of Texas
ERISA	Employee Retirement Income Security Act
ERISA Excess Plan	Energy East Corporation ERISA Excess Plan
ESA	Endangered Species Act
ESM	Earnings sharing mechanism
Exchange Act	The Securities Exchange Act of 1934, as amended
Exon-Florio	Section 721 of the Defense Production Act of 1950 as amended by Section 5021 of the Omnibus Trade and Competitiveness Act of 1988, and as amended by The Foreign Investment National Security Act of 2007.
EY	Ernst & Young LLP
FASB	Financial Accounting Standards Board
FCC	Federal Communications Commission
FERC	Federal Energy Regulatory Commission
FFO	Funds from operations
FIRPTA	Foreign Investment in Real Property Tax Act of 1980
FirstEnergy	FirstEnergy Corp.
Fitch	Fitch Rating Inc.
FPA	Federal Power Act
FTC	Federal Trade Commission
GAAP	Generally Accepted Accounting Principles
HLPSA	Hazardous Liquids Pipeline Safety Act of 1979
HSR	Hart-Scott-Rodino Antitrust Improvements Act of 1976
Iberdrola Energy Holdings	Iberdrola Energy Holdings, LLC
Iberdrola Networks	Iberdrola USA Networks, Inc.
Iberdrola Renewables	Iberdrola Renewables, LLC
Iberdrola USA	Iberdrola USA, Inc., a New York Corporation
IEA	International Energy Agency
IFRS	International Financial Reporting Standards
IRHI	Iberdrola Renewables Holdings, Inc.
IRS	Internal Revenue Service
ISO	Independent system operator
ISO-NE	ISO New England, Inc.

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kV	Kilovolts
kWh	Kilowatt-hour
Lazard	Lazard Freres & Co.
LDC	Local natural gas distribution companies
LTIR	Iberdrola USA lost time injury rate
MBTA	Migratory Bird Treaty Act
MNG	Maine Natural Gas Company
Moody’s	Moody’s Investors Services
Morgan Stanley	Morgan Stanley & Co. LLC
MPUC	Maine Power Utilities Commission
MRPP	Maine Reliability Power Program
MtM	Mark to market
MW	Megawatts
MWh	Megawatt-hours
NERC	North American Electric Reliability Corporation
New York TransCo	New York TransCo, LLC.
NGA	Natural Gas Act of 1938
NGPSA	Natural Gas Pipeline Safety Act of 1968
NOL	Net operating loss
NYBCL	New York Business Corporation Law (as now or hereafter may be amended)
NYISO	New York Independent System Operator, Inc.
NYPSC	New York State Public Service Commission
NYSE	New York Stock Exchange
NYSEG	New York State Electric & Gas Corporation
OCI	Other comprehensive income
OIR	Iberdrola USA Occupational Safety and Health Administration incidence rate
Okapi	Okapi Partners of New York
OSHA	Occupational Safety and Health Act, as amended
PCAOB	Public Company Accounting Oversight Board
PGW	Philadelphia Gas Works
PHMSA	Pipeline and Hazardous Materials Safety Administration
PMVIR	Iberdrola USA preventable motor vehicle incident rate
PPA	Power purchase agreement

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PSP	Performance Share Plan
PUCT	Public Utility Commission of Texas
PUHCA 2005	Public Utility Holding Company Act of 2005
PURA	Connecticut Public Utilities Regulatory Authority
REV	Reforming the Energy Vision
RG&E	Rochester Gas & Electric Corporation
ROE	Return on equity
RPS	Renewable Portfolio Standards
RTO	Regional transmission organizations
SAIFI	System Average Interruption Frequency Index
SEC	United States Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
SOX	Sarbanes-Oxley Act
SPHI	ScottishPower Holdings, Inc.
Standard & Poor’s	Standard & Poor’s Rating Group, a division of McGraw-Hill Companies, Inc.
Tcf	Trillion cubic feet
U.S. GAAP	U.S. Generally Accepted Accounting Principles
UI	The United Illuminating Company
UIL	UIL Holdings Corporation, a Connecticut Corporation
USRPHC	United States real property holding corporation
USRPI	U.S. real property interest
VaR	Value-at-Risk
WECC	Western Electricity Coordinating Council

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IBERDROLA USA, INC.

INDEX TO FINANCIAL STATEMENTS

	Page
IBERDROLA USA, INC. AND SUBSIDIARIES
AUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS:
Report of Independent Registered Public Accounting Firm		F-2
Iberdrola USA, Inc. and Subsidiaries Combined and Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012		F-3
Iberdrola USA, Inc. and Subsidiaries Combined and Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2014, 2013 and 2012		F-4
Iberdrola USA, Inc. and Subsidiaries Consolidated Balance Sheets as of December 31, 2014 and 2013		F-5
Iberdrola USA, Inc. and Subsidiaries Combined and Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012		F-7
Iberdrola USA, Inc. and Subsidiaries Combined and Consolidated Statements of Changes in Equity for the years ended December 31, 2014, 2013 and 2012		F-8
Notes to the Combined and Consolidated Financial Statements		F-9
Schedule I—Financial Statements of Parent		F-70
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Iberdrola USA, Inc. and Subsidiaries Condensed Consolidated Statements of Income for the three months ended March 31, 2015 and 2014		F-75
Iberdrola USA, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2015 and 2014		F-76
Iberdrola USA, Inc. and Subsidiaries Condensed Consolidated Balance Sheets as of March  31, 2015 and December 31, 2014		F-77
Iberdrola USA, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014		F-79
Iberdrola USA, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2015 and 2014		F-80
Notes to the Condensed Consolidated Financial Statements		F-81

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder of Iberdrola USA, Inc.

We have audited the accompanying consolidated balance sheets of Iberdrola USA, Inc. and subsidiaries as of December 31, 2014 and 2013, and the related combined and consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in the index to the financial statements. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Iberdrola USA, Inc. and subsidiaries at December 31, 2014 and 2013, and the combined and consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young, LLP

New York, New York

July 17, 2015

F-2

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Combined and Consolidated Statements of Operations

Years Ended December 31,	2014			2013			2012
(Millions, except for number of shares)
Operating Revenues	$	4,594		$	4,313		$	4,055
Operating Expenses
Purchased power, natural gas and fuel used		1,181			1,088			1,033
Operations and maintenance		1,552			1,530			1,415
Impairment of non-current assets		25			620			463
Depreciation and amortization		629			617			571
Taxes other than income taxes		322			302			322
Total Operating Expenses		3,709			4,157			3,804
Operating Income From Continuing Operations		885			156			251
Other Income and (Expense)
Other income and (expense)		52			54			117
Earnings (losses) from equity method investments		12			(3	)		(3	)
Interest expense, net of capitalization		(243	)		(245	)		(316	)
Income (Loss) Before Income Tax		706			(38	)		49
Income tax expense (benefit)		282			26			(121	)
Income (Loss) From Continuing Operations		424			(64	)		170
Discontinued Operations
Income from discontinued operations		—			—			131
Income tax expense		—			—			57
Income From Discontinued Operations		—			—			74
Net Income (Loss)		424			(64	)		244
Less: Net income attributable to noncontrolling interests		—			1			1
Net Income (Loss) Attributable to Iberdrola USA, Inc.	$	424		$	(65	)	$	243
Earnings (Loss) Per Common Share, Basic and Diluted:
Continuing operations	$	1.7		$	(0.3	)	$	0.7
Discontinued operations		—			—			0.3
Total Earnings (Loss) Per Common Share, Basic and Diluted	$	1.7		$	(0.3	)	$	1.0
Weighted-average Number of Common Shares Outstanding:
Basic and diluted		243			243			243

The accompanying notes are an integral part of our combined and consolidated financial statements.

F-3

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Combined and Consolidated Statements of Comprehensive Income (Loss)

Years Ended December 31,	2014			2013			2012
(Millions)
Net Income (Loss)	$	424		$	(64	)	$	244
Other Comprehensive Income, Net of Tax
Amounts arising during the year, net of tax:
Gain(Loss) on revaluation of defined benefit plans		1			1			(8	)
Amortization of pension cost for nonqualified plans		(3	)		(1	)		—
Unrealized gain (loss) during the year on derivatives qualified as hedges		(2	)		—			7
Reclassifications to net income net of tax:
Reclassification adjustment for loss on settled cash flow hedges		5			7			6
Other Comprehensive Income, Net of Tax		1			7			5
Comprehensive Income (Loss)		425			(57	)		249
Less:
Comprehensive income attributable to noncontrolling interests		—			1			1
Comprehensive Income (Loss) attributable to Iberdrola, USA Inc.	$	425		$	(58	)	$	248

The accompanying notes are an integral part of our combined and consolidated financial statements.

F-4

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Consolidated Balance Sheets

As of December 31,	2014			2013
(Millions)
Assets
Current Assets
Cash and cash equivalents	$	482		$	219
Accounts receivable and unbilled revenues, net		841			869
Accounts receivable from affiliates		50			21
Notes receivable from affiliates		—			10
Derivative assets		134			98
Fuel and gas in storage		229			298
Materials and supplies		98			88
Deferred income taxes		68			26
Prepayments and other current assets		288			328
Regulatory assets		80			35
Deferred income taxes regulatory		29			20
Total Current Assets		2,299			2,012
Property, plant and equipment, at cost		21,499			20,812
Less: accumulated depreciation		(5,796	)		(5,339	)
Net Property, Plant and Equipment in Service		15,703			15,473
Construction work in progress		1,396			1,208
Total Property, Plant and Equipment		17,099			16,681
Equity method investments		262			278
Other investments		91			156
Regulatory assets		2,399			1,925
Other Assets
Goodwill		1,361			1,361
Intangible assets		569			599
Derivative assets		93			53
Pension		—			53
Other		79			91
Total Other Assets		2,102			2,157
Total Assets	$	24,252		$	23,209

The accompanying notes are an integral part of our combined and consolidated financial statements.

F-5

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Consolidated Balance Sheets

As of December 31,	2014			2013
(Millions)
Liabilities
Current Liabilities
Current portion of debt	$	148		$	25
Tax equity financing arrangements		124			118
Notes payable		—			14
Interest accrued		39			47
Accounts payable		684			777
Accounts payable to affiliates		239			47
Taxes accrued		8			21
Derivative liability		103			152
Other current liabilities		275			345
Regulatory liabilities		153			84
Total Current Liabilities		1,773			1,630
Regulatory liabilities		1,206			1,151
Deferred income taxes regulatory		462			313
Other Non-current Liabilities
Deferred income taxes		2,322			2,122
Deferred income		1,621			1,703
Pension and other postretirement		785			402
Tax equity financing arrangements		277			400
Derivative liability		38			29
Asset retirement obligations		234			209
Environmental remediation costs		284			260
Other		278			264
Total Other Non-current Liabilities		5,839			5,389
Non-current Debt		2,516			2,696
Total Non-current Liabilities		10,023			9,549
Total Liabilities		11,796			11,179
Commitments and Contingencies		—			—
Equity
Stockholder’s Equity:
Common stock		—			—
Additional paid-in capital		11,378			11,378
Retained earnings		1,161			737
Accumulated other comprehensive loss		(99	)		(100	)
Total Stockholder’s Equity		12,440			12,015
Noncontrolling interests		16			15
Total Equity		12,456			12,030
Total Liabilities and Equity	$	24,252		$	23,209

The accompanying notes are an integral part of our combined and consolidated financial statements.

F-6

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Combined and Consolidated Statements of Cash Flows

Years Ended December 31,	2014			2013			2012
(Millions)
Cash Flow from Operating Activities
Net income (loss)	$	424		$	(64	)	$	244
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization		629			617			571
Impairment of non-current assets		25			620			463
Accretion expenses		14			14			10
Regulatory assets/liabilities amortization		(38	)		(2	)		(29	)
Regulatory assets/liabilities carrying cost		35			21			15
Pension cost		74			96			82
(Earnings) Losses from equity method investments		(12	)		3			3
Unrealized (losses)gains on marked to market derivative contracts		(116	)		4			(11	)
Gain from discontinued operations, net of income tax		—			—			(69	)
Deferred taxes		261			49			(108	)
Changes in current operating assets and liabilities
Decrease (increase) in accounts receivable and unbilled revenues, net		(1	)		56			(109	)
Decrease (increase) in inventories		58			(1	)		(11	)
Decrease (increase) in other assets, net		(101	)		(126	)		(113	)
Increase (decrease) in accounts payable		27			(208	)		(226	)
Increase (decrease) in other liabilities		(110	)		123			92
Increase (decrease) in taxes accrued		(13	)		2			(2	)
Increase (decrease) in regulatory assets/liabilities		175			(27	)		(79	)
Net Cash provided by Operating Activities		1,331			1,177			723
Cash Flow from Investing Activities
Capital expenditures		(1,030	)		(944	)		(1,789	)
Proceeds from disposal of property, plant and equipment		—			2			—
Contributions in aid of construction		43			24			23
Government grants		4			31			296
Proceeds from sale of businesses, net of cash		31			—			102
Receipts from affiliates		10			—			182
Other investments and equity method investments		54			19			39
Net Cash used in Investing Activities		(888	)		(868	)		(1,147	)
Cash Flow from Financing Activities
Capital contributions from Parent		—			153			—
Non-current note issuance		—			225			375
Repayments of non-current debt		(27	)		(273	)		(255	)
Proceeds (repayments) of other short-term debt, net		(14	)		(165	)		104
Proceeds from sales leaseback		—			110			—
Repayments of capital leases		(21	)		(21	)		(2	)
Debt issuance cost		—			—			(4	)
Payments on tax equity financing arrangements		(119	)		(173	)		(98	)
Repurchase of redeemable preferred stock of subsidiaries		—			—			(12	)
Contribution from noncontrolling interest		4			—			—
Dividends to noncontrolling interests		(3	)		—			(2	)
Net Cash Provided by (used in) Financing Activities		(180	)		(144	)		106
Net Increase (Decrease) in Cash and Cash Equivalents		263			165			(318	)
Cash and Cash Equivalents, Beginning of Year		219			54			372
Cash and Cash Equivalents, End of Year	$	482		$	219		$	54
Supplemental Cash Flow Information
Cash paid for interest, net of amounts capitalized	$	133		$	147		$	155
Cash paid (refund) for income taxes		21			(30	)		9

The accompanying notes are an integral part of our combined and consolidated financial statements.

F-7

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Combined and Consolidated Statements of Changes in Equity

	Iberdrola USA, Inc. Stockholder
(Millions, except for number of shares)	Number of shares (*)		Additional paid-in capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total
Balances, December 31, 2011		243	$	10,632	$	559		$	(112	)	$	15		$	11,094
Net income		—		—		243			—			1			244
Other comprehensive income, net of tax		—		—		—			5			—			5
Comprehensive income															249
Dividends to non-controlling interests		—		—		—			—			(2	)		(2	)
Balances, December 31, 2012		243		10,632		802			(107	)		14			11,341
Net income (loss)		—		—		(65	)		—			1			(64	)
Other comprehensive income, net of tax		—		—		—			7			—			7
Comprehensive loss															(57	)
Capital contribution		—		746					—			—			746
Balances, December 31, 2013		243		11,378		737			(100	)		15			12,030
Net income		—		—		424			—			—			424
Other comprehensive income, net of tax		—		—		—			1			—			1
Comprehensive income															425
Capital contribution from non-controlling interests		—		—		—			—			4			4
Dividends to non-controlling interests		—		—		—			—			(3	)		(3	)
Balances, December 31, 2014		243	$	11,378	$	1,161		$	(99	)	$	16		$	12,456

^(*)  Par value of share amounts is $.01

The accompanying notes are an integral part of our combined and consolidated financial statements.

F-8

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements

Note 1. Background and Nature of Operations

Iberdrola USA, Inc. (IUSA or We) is an energy services holding company engaged through its principal subsidiaries IUSA Networks, Inc. (Networks) and Iberdrola Renewables Holding, Inc. (IRHI) in the regulated energy distribution, renewable energy generation (Renewables) and gas businesses (Gas), collectively (Renewables and Gas). IUSA is a wholly owned subsidiary of Iberdrola S.A. (Iberdrola), a corporation organized under the laws of the Kingdom of Spain. IUSA was organized in 1997 as Energy East Corporation under the laws of New York as the holding company for the principal operating utility companies.

Reorganization

On November 20, 2013, we completed a series of reorganizations (Reorganization) of entities under common control. The Reorganization included the transfer of IRHI from an affiliate of Iberdrola to IUSA, and the transfer of the principal operating utility companies from IUSA to Networks.

IUSA and IRHI were acquired by Iberdrola in 2008 and 2007, respectively, and they have been under common control of Iberdrola for all periods presented. Networks was formed as part of the Reorganization in November 2013. Networks is a public utility sub-holding company operating under the Public Utility Holding Company Act of 2005 with operations in New York and Maine. The wholly owned subsidiaries and the principal operating utility companies of Networks include: CMP Group - Central Maine Power Company (CMP), RGS - New York State Electric & Gas Corporation (NYSEG) and Rochester Gas & Electric Corporation (RGE). IRHI is the sub-holding company of the unregulated energy business that includes the renewable energy and the gas trading and storage businesses.

The transfer of a business among entities under common control is accounted for at carrying amount with retrospective adjustment of prior period financial statements similar to the manner in which a pooling-of-interest was accounted for under accounting principles generally accepted in the United States of America (U.S.GAAP).

Transaction with UIL Holdings Corporation (UIL Holdings)

On February 25, 2015, we announced that IUSA had entered into a definitive merger agreement (the Agreement) with UIL Holdings and Green Merger Sub, Inc. (Merger Sub), wholly owned subsidiary of IUSA, under which UIL Holdings will merge with and into Merger Sub. Subsequent to the transaction closing, Merger Sub will be the surviving corporation and will change its name to UIL Holdings Corporation and remain a direct or indirect wholly-owned subsidiary of IUSA. IUSA will then become a newly listed U.S. publicly-traded company. In connection with the merger, each issued and outstanding share of the common stock of UIL Holdings will be converted into the right to receive one validly issued share of common stock of the newly listed company and $10.50 in cash. Immediately following the consummation of the merger, former holders of UIL Holdings’ common stock will own approximately 18.5% of the newly listed company. The merger is subject to certain closing conditions, including the approval of the shareowners of UIL Holdings and other regulatory approvals.

Note 2. Basis of Presentation

The accompanying combined and consolidated financial statements have been prepared in accordance with U.S GAAP and are presented on a combined basis prior to the Reorganization, and on a consolidated basis subsequent to the Reorganization. For the periods prior to the Reorganization the combined financial statements include IUSA, IRHI and Networks (combined entities) all of which were under common control of Iberdrola, and for the periods subsequent to the Reorganization, the consolidated financial statements include IUSA and its

F-9

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

consolidated subsidiaries Networks and IRHI (consolidated entities). The combined financial statements have been prepared on a combined basis for the purpose of including them in a registration statement and to allow for comparability with the consolidated financial statements for the periods subsequent to the Reorganization. All intercompany transactions and accounts have been eliminated in all periods presented.

As a result of the common control transfers occurring as part of the Reorganization, management recorded the net assets of IRHI in these combined and consolidated financial statements at the historical accounting basis of Iberdrola. The historical accounting basis of Iberdrola includes purchase accounting adjustments related to Iberdrola’s acquisition of IRHI in 2007. At the time of the Reorganization, the holding of Networks was not considered to be a substantive operating entity as it did not hold any direct operations prior to it and the Networks businesses had always been a part of IUSA. As a result the net assets of Networks in these combined and consolidated financial statements are recorded at the historical accounting basis of IUSA, which do not include purchase accounting adjustments related to Iberdrola’s acquisition of Energy East in 2008.

Note 3. Summary of Significant Accounting Policies, New Accounting Pronouncements, and Use of Estimates

Significant Accounting Policies

We consider the following policies to be the most critical in understanding the judgments that are involved in preparing our combined and consolidated financial statements:

(a) Principles of consolidation and combination

We consolidate the entities in which we have a controlling financial interest, after the elimination of intercompany transactions. Investments in common stock where we have the ability to exercise significant influence, but not control, are accounted for using the equity method of accounting.

(b) Revenue recognition

Revenue from the sale of energy by our regulated utilities is recognized in the period during which the sale occurs. The calculation of revenue earned but not yet billed is based on the number of days not billed in the month, the estimated amount of energy delivered during those days and the estimated average price per customer class for that month. Differences between actual and estimated unbilled revenue are usually immaterial.

Revenues on sales of wholesale energy and energy related products and natural gas are recognized either when the service is provided or the product is delivered.

We also provide natural gas storage services to customers. The natural gas remains the property of these customers at all times. Customers pay a two part rate that includes (i) a fixed fee reserving the right to store natural gas in our facilities and, (ii) a per unit rate for volumes actually injected into or withdrawn from storage. The fixed fee component of the overall rate is recognized as revenue in the period the service is provided. The per-unit charge is recognized as revenue when the volumes are injected into or withdrawn from our storage facilities.

(c) Regulatory accounting

We account for our regulated utilities operations in accordance with the authoritative guidance applicable to entities with regulated operations that meet the following criteria: (i) rates are established or approved by a third-party

F-10

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

regulator; (ii) rates are designed to recover the entity’s cost of providing regulated services or products, and; (iii) there is a reasonable expectation that rates are set at levels that will recover the entity’s costs and be collected from customers. Regulatory assets represent incurred costs that have been deferred because of their probable future recovery from customers through regulated rates. Regulatory liabilities represent: (i) the excess recovery of costs or accrued credits that have been deferred because it is probable such amounts will be returned to customers through future regulated rates; or (ii) billings in advance of expenditures for approved regulatory programs.

Regulatory assets and liabilities are amortized and the related expense or revenue is recognized in the combined and consolidated statements of operations consistent with the recovery or refund included in customer rates. We believe that it is probable that our currently recorded regulatory assets and liabilities will be recovered or settled in future rates.

(d) Equity method investments

Joint ventures that do not meet consolidation criteria are accounted for using the equity method. Earnings (losses) recognized under the equity method are reflected in the combined and consolidated statements of operations as “Earnings (losses) from equity method investments”. Dividends received from joint ventures are recognized as a reduction in the carrying amount of the investment and are not recognized as dividend income.

(e) Goodwill and other intangible assets

Goodwill represents future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the fair value of any noncontrolling interest and the acquisition date fair value of any previously held equity interest in the acquiree over the fair value of the net identifiable assets acquired and liabilities assumed.

Goodwill is not amortized, but is subject to an assessment for impairment at least annually or more frequently if events occur or circumstances change that will more likely than not reduce the fair value of the reporting unit to which goodwill is assigned below its carrying amount. A reporting unit is an operating segment or one level below an operating segment and is the level at which goodwill is tested for impairment. In assessing goodwill for impairment we have the option of first performing a qualitative assessment to determine whether a quantitative assessment is necessary (step zero). If it is determined, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not greater than the carrying amount, no further testing is required. If we bypass step zero or perform the qualitative assessment, but determine that it is more likely than not that its fair value is less than its carrying amount, a quantitative two step fair value based test is performed. Step one compares the fair value of the reporting unit to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, step two is performed. Step two requires an allocation of fair value to the individual assets and liabilities using business combination accounting guidance to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than its carrying amount, an impairment loss is recorded as a reduction to goodwill and a charge to operating expense.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and impairment losses. The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized on a straight-line basis over the useful economic life, which ranges from four to forty years, and assessed for impairment whenever there is an indication that the intangible

F-11

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

asset may be impaired. The amortization expense on intangible assets with finite lives is recognized in the combined and consolidated statements of operations as the expense category that is consistent with the function of the intangible assets.

Indefinite life intangible assets are not subject to amortization and are instead tested for impairment on an annual basis or when impairment indicators exist.

(f) Property, plant and equipment

Property, plant and equipment are accounted for at historical cost. In cases where we are required to dismantle installations or to recondition the site on which they are located, the estimated cost of removal or reconditioning are added to the carrying amount of the asset with a credit to asset retirement obligations (ARO).

Development and construction of our various facilities are carried out in stages. Project costs are expensed during early stage development activities. Once certain development milestones are achieved and it is probable that we can obtain future economic benefits from a project, salaries and wages for persons directly involved in the project, and engineering, permits, licenses, wind measurement and insurance costs are capitalized. Development projects in construction are reviewed periodically for any indications of impairment.

Assets are transferred from “Construction work in progress” to “Property, plant and equipment” when they are available for service.

Wind turbine and related equipment costs, other project construction costs, and interest costs related to the project are capitalized during the construction period through substantial completion. AROs are recorded at the date projects achieve commercial operations.

The cost of plant, and equipment in use is depreciated on a straight-line basis, less any estimated residual value. The main asset categories are depreciated over the following estimated useful lives:

Major class	Asset Category	Estimated Useful Life (years)
Plant	Combined cycle plants	30-35
	Hydroelectric power stations	40-90
	Wind power stations	25
	Gas storage	25-40
	Transport facilities	33-75
	Distribution facilities	15-80
Equipment	Conventional meters and measuring devices	20-41
	Computer software	3-10
Other	Buildings	20-60
	Operations offices	5-32

Networks determine depreciation expense using the straight-line method, based on the average service lives of groups of depreciable property, which include estimated cost of removal, in service at each operating company. Consistent with FERC accounting requirements, Networks charge the original cost of utility plant retired or otherwise disposed of to accumulated depreciation.

We charge repairs and minor replacements to operating expenses, and capitalize renewals and betterments, including certain indirect costs.

F-12

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

(g) Impairment of long lived assets

We evaluate property, plant, and equipment and other long lived assets for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is required to be recognized if the carrying amount of the asset exceeds the undiscounted future net cash flows associated with that asset.

The impairment loss to be recognized is the amount by which the carrying amount of the long lived asset exceeds the asset’s fair value. Depending on the asset, fair value may be determined by use of a discounted cash flow model.

(h) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place in either the principal market for the asset or liability, or, in the absence of a principal market, in the most advantageous market for the asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset according to its highest and best use, or by selling it to another market participant that would use the asset according to its highest and best use.

We use valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the combined and consolidated financial statements are categorized within the fair value hierarchy based on the transparency of input to the valuation of an asset or liability as of the measurement date.

The three input levels of the fair value hierarchy are as follows:

• Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability either directly or indirectly, for substantially the full term of the contract.

• Level 3 - one or more inputs to the valuation methodology are unobservable or cannot be corroborated with market data.

Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

(i) Available for sale securities

Securities that do not qualify as either securities held-to-maturity or trading securities, and which have a readily available fair value, are classified as securities available-for-sale and reported at fair value, with unrealized gains and losses excluded from earnings and reported, net of taxes, in other comprehensive income or loss.

F-13

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

(j) Derivatives and hedge accounting

Derivatives are recognized on the balance sheets at their fair value, except for certain electricity commodity purchases and sales contracts for both capacity and energy (physical contracts) that qualify for, and are elected under, the normal purchases and normal sales exception. To be a derivative under the accounting standards for derivatives and hedging, an agreement would need to have a notional and an underlying, require little or no initial net investment and could be net settled. Changes in the fair value of a derivative contract are recognized in earnings unless specific hedge accounting criteria are met.

Derivatives that qualify and are designated for hedge accounting are classified as fair value or cash flow hedges. For fair value hedges, changes in fair values for both the derivative and the underlying hedged exposure are recognized in earnings each period. For cash flow hedges, the portion of the derivative gain or loss that is effective in offsetting the change in the hedged cash flows of the underlying exposure is deferred in Other Comprehensive Income (OCI) and later reclassified into earnings when the underlying transaction occurs. For all designated and qualifying hedges, we maintain formal documentation of the hedge and effectiveness testing in accordance with the accounting standards for derivatives and hedging. If we determine that the derivative is no longer highly effective as a hedge, hedge accounting will be discontinued prospectively. For cash flow hedges of forecasted transactions, we estimate the future cash flows of the forecasted transactions and evaluate the probability of the occurrence and timing of such transactions.

Changes in conditions or the occurrence of unforeseen events could require discontinuance of the hedge accounting or could affect the timing of the reclassification of gains or losses on cash flow hedges from OCI into earnings. Gains and losses from the ineffective portion of any hedge are recognized in earnings immediately. Changes in the fair value of electric and natural gas hedge contracts are recorded to derivative assets or liabilities with an offset to regulatory assets or regulatory liabilities in accordance with the requirements concerning accounting for regulated operations.

(k) Cash and cash equivalents

Cash and cash equivalents comprises cash, bank accounts, and other highly-liquid short-term investments. We consider all highly liquid investments with a maturity date of three months or less when acquired to be cash equivalents and those investments are included in “Cash and cash equivalents”. Restricted cash amounts are included as other non-current assets in the consolidated balance sheets.

(l) Accounts receivable and unbilled revenue, net

We record accounts receivable at amounts billed to customers. Certain accounts receivable and payable related to our wholesale activities associated with generation and delivery of electric energy and associated environmental attributes, origination and marketing, natural gas storage, hub services, and energy management, are subject to master netting agreements with counterparties, whereby we have the legal right to offset the balances, which are settled on a net basis. Receivables and payables subject to such agreements are presented in our consolidated balance sheets on a net basis.

Accounts receivable include amounts due under Deferred Payment Arrangements (DPA). A DPA allows the account balance to be paid in installments over an extended period of time, which generally exceeds one year, by negotiating mutually acceptable payment terms. The utility company generally must continue to serve a customer who cannot pay an account balance in full if the customer (i) pays a reasonable portion of the balance; (ii) agrees to pay the balance in installments; and (iii) agrees to pay future bills within thirty days until the DPA is paid in full. These accounts are part of the regular operating cycle and are classified as short term.

F-14

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The provision for bad debts account is established by using both historical average loss percentages to project future losses, and specific allowance is established for known credit issues. Amounts are written off when we believe that a receivable will not be recovered.

(m) Tax equity financing arrangements

We have undertaken several structured institutional partnership investment transactions that bring in external investors in certain of our wind farms in exchange for cash and notes receivable. Following an analysis of the economic substance of these transactions, we classify the consideration received at the inception of the arrangement as a liability in the consolidated balance sheets. Subsequently, this consideration is measured at amortized cost.

(n) Debentures, bonds and bank borrowings

Borrowings, debentures and bank borrowings are recorded as a liability equal to the proceeds of the borrowings. The difference between the proceeds and the face amount of the issued liability is treated as discount or premium and is amortized as interest expense or income over the life of the instrument. Incremental costs associated with issuance of the debt instruments are deferred and amortized over the same period as debt discount or premium.

(o) Inventory

Inventory comprises fuel and gas in storage and materials and supplies. Through our gas trading operations, we own natural gas that is stored in both self-owned and third-party owned underground storage facilities. This gas is recorded as inventory. Injections of inventory into storage are priced at the market purchase cost at the time of injection, and withdrawals of working gas from storage are priced at the weighted -average cost in storage. We continuously monitor the weighted-average cost of gas value to ensure it remains at, or below market value.

We also have materials and supplies inventories that are used for construction of new facilities and repairs of existing facilities. These inventories are also priced at weighted-average cost.

Inventory items are combined for the cash flow statement presentation purposes.

(p) Government grants

Our unregulated subsidiaries record government grants related to depreciable assets within deferred income and subsequently amortize them to earnings consistent with the useful life of the related asset. Our regulated subsidiaries record government grants as a reduction to utility plant to be recovered through rate base, in accordance with the prescribed FERC accounting.

In accounting for government grants related to operating and maintenance costs, amounts receivable are recognized as an offset to expenses in the combined and consolidated statements of operations in the period in which the expenses are incurred.

(q) Deferred income

Apart from government grants, we occasionally receive revenues from transactions in advance of the resulting obligations arising from the transaction. It is our policy to defer such revenues to the consolidated balance sheets and amortize them to earnings consistent with the obligations.

F-15

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

(r) Asset retirement obligations

The fair value of the liability for an ARO and a conditional ARO is recorded in the period in which it is incurred, capitalizing the cost by increasing the carrying amount of the related long lived asset. The ARO is associated with our long lived assets and primarily consists of obligations related to removal or retirement of asbestos, polychlorinated biphenyl-contaminated equipment, gas pipeline, cast iron gas mains, and electricity generation facilities. The liability is adjusted periodically to reflect revisions to either the timing or amount of the original estimated undiscounted cash flows over time, and to depreciate the capitalized cost over the useful life of the related asset. The liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement, the obligation will be either settled at its recorded amount or a gain or a loss will be incurred. Our regulated utilities defer any timing differences between rate recovery and depreciation expense and accretion as either a regulatory asset or a regulatory liability.

The term conditional ARO refers to an entity’s legal obligation to perform an asset retirement activity in which the timing or method of settlement are conditional on a future event that may or may not be within the entity’s control. If an entity has sufficient information to reasonably estimate the fair value of the liability for a conditional ARO, it must recognize that liability at the time the liability is incurred.

Our regulated utilities meet the requirements concerning accounting for regulated operations and we recognize a regulatory liability for the difference between removal costs collected in rates and actual costs incurred. These are classified as accrued removal obligations.

(s) Environmental remediation liability

In recording our liabilities for environmental remediation costs the amount of liability for a site is the best estimate, when determinable; otherwise it is based on the minimum liability or the lower end of the range when there is a range of estimated losses. Our environmental liabilities are recorded on an undiscounted basis. Our environmental liability accruals are expected to be paid through the year 2048.

(t) Post employment and other employee benefits

We sponsor defined benefit pension plans that cover the majority of our employees. We also provide health care and life insurance benefits through various postretirement plans for eligible retirees.

We evaluate our actuarial assumptions on an annual basis and consider changes based on market conditions and other factors. All of our qualified defined benefit plans are funded in amounts calculated by independent actuaries, based on actuarial assumptions proposed by management.

We account for defined benefit pension or other postretirement plans recognizing an asset or liability for the overfunded or underfunded plan status. For a pension plan, the asset or liability is the difference between the fair value of the plan’s assets and the projected benefit obligation. For any other postretirement benefit plan, the asset or liability is the difference between the fair value of the plan’s assets and the accumulated postretirement benefit obligation. Our utility operations reflect all unrecognized prior service costs and credits and unrecognized actuarial gains and losses as regulatory assets rather than in other comprehensive income, as management believes it is probable that such items will be recoverable through the ratemaking process. We use a December 31st measurement date for our benefits plans.

We amortize prior service costs for both the pension and other postretirement benefits plans on a straight-line basis over the average remaining service period of participants expected to receive benefits. We amortize

F-16

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

unrecognized actuarial gains and losses either over ten years from the time they are incurred, or using the standard amortization methodology under which amounts in excess of ten percent of the greater of the projected benefit obligation or market related value are amortized over the plan participants’ average remaining service to retirement.

(u) Income tax

IUSA and IRHI filed separate consolidated federal income tax returns that included the taxable income or loss of all their respective subsidiaries, which are 80% or more owned, for all tax periods prior to 2013. For the period of January 1, 2013 through November 20, 2013, IUSA, (excluding IRHI), filed a consolidated federal income tax return that included the taxable income or loss of all their subsidiaries, which are 80% or more owned. In addition, a consolidated federal income tax return, that included the taxable income or loss of IRHI and all of its subsidiaries for the entire 2013 tax year and the taxable income or loss of IUSA and all of its subsidiaries for the tax period of November 21, 2013 through December 31, 2013, was filed. Beginning with the 2014 tax year IUSA will file a consolidated federal income tax return that includes the taxable income or loss of all its subsidiaries, including IRHI, which are 80% or more owned.

We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities reflect the expected future tax consequences, based on enacted tax laws, of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts. In accordance with generally accepted accounting principles for regulated industries, our regulated subsidiaries have established a regulatory asset for the net revenue requirements to be recovered from customers for the related future tax expense associated with certain of these temporary differences. The investment tax credits are amortized over the estimated lives of the related assets.

Deferred tax assets and liabilities are measured at the expected tax rate for the period in which the asset or liability will be realized or settled, based on legislation enacted as of the balance sheet date. Changes in deferred income tax assets and liabilities that are associated with components of other comprehensive income (OCI) are charged or credited directly to OCI. Significant judgment is required in determining income tax provisions and evaluating tax positions. Our tax positions are evaluated under a more-likely-than-not recognition threshold before they are recognized for financial reporting purposes. Valuation allowances are recorded to reduce deferred tax assets when it is not more-likely-than-not that all or a portion of a tax benefit will be realized.

Certain states impose a franchise tax that is computed as the higher of a tax based on income or a tax based on capital. To the extent our state tax based on capital is in excess of the state tax based on income, we report such excess in taxes other than income taxes and taxes accrued in the accompanying combined and consolidated financial statements.

We account for sales tax collected from customers and remitted to taxing authorities on a net basis.

Uncertain tax positions have been classified as non-current unless expected to be paid within one year. Our policy is to recognize interest and penalties on uncertain tax positions as a component of interest expense in the combined and consolidated statements of operations.

New Accounting Standards and Interpretations

(a) Simplifying the presentation of debt issuance costs

The Financial Accounting Standards Board (FASB) issued an amendment in April 2015 that is intended to simplify the presentation of debt issuance costs. Instead of presenting debt issuance costs as a deferred charge

F-17

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

(that is, as an asset), the amendments require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with the presentation for debt discounts. The amendment is effective for public entities for financial statements issued for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The amendments require retrospective application and permit early adoption. We do not expect our adoption of the amendment to affect our results of operations, financial position, or cash flows.

(b) Amendments to the consolidation analysis

In February 2015 the FASB issued an amendment to improve targeted areas of the consolidation guidance and reduce the number of consolidation models. The amendments are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The adoption of the amendment is not expected to materially affect the results of operations, financial position, or cash flows.

(c) Pushdown accounting

In November 2014 the FASB issued an amendment on when and how an acquired entity that is a business or nonprofit activity, whether public or nonpublic, can apply pushdown accounting in its separate financial statements upon the occurrence of an event in which an acquirer, either and individual or an entity, obtains control of the acquired entity. The guidance provides an acquired entity with an option to apply pushdown accounting in its separate financial statements. As a result of the new amendment, which was effective when issued, we were not required to apply pushdown accounting to the acquisition of Energy East by Iberdrola in 2008.

(d) Discontinued operations and disposals of components of an entity

The FASB issued an amendment in April 2014 that change the requirements for the reporting of discontinued operations. The new definition of discontinued operations limits reporting to disposals of components that represent strategic shifts that have, or will have, a major effect on an entity’s operations and financial results. The amendments are effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of the amendment is not expected to materially affect the results of operations, financial position or cash flows.

(e) Revenue from contracts with customers

In May 2014 the FASB issued an amendment related to the recognition of revenue from contracts with customers and required disclosures. The core principle is for an entity to recognize revenue to represent the transfer of goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In April 2015, the FASB issued a proposal to defer by one year the effective date of this standard. On July 9, a majority of the FASB voted to approve a one-year deferral of the effective date of the revenue standard for all entities. Thus, the standard now will be effective for annual reporting periods beginning after December 15, 2017 and interim periods therein, with early adoption as of the original effective date permitted. We are currently evaluating how the adoption of the amendment will affect the results of operations, financial position, or cash flows.

(f) Presentation of an Unrecognized Tax Benefit

In July 2013 the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss (NOL) carryforward, a similar tax loss, or a tax credit carryforward exists. An

F-18

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

unrecognized tax benefit, or a portion of an unrecognized tax benefit, is to be presented as a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. The unrecognized tax benefit is to be presented as a liability and should not be combined with deferred tax assets to the extent that an NOL carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose. IUSA adopted these amendments effective January 1, 2014. The adoption of these amendments did not materially affect our results of operation, financial position or cash flows.

Use of Estimates and Assumptions

The preparation of our combined and consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the combined and consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) allowance for doubtful accounts and unbilled revenues; (2) asset impairments, including goodwill; (3) depreciable lives of assets; (4) income tax valuation allowances; (5) uncertain tax positions; (6) reserves for professional, workers’ compensation, and comprehensive general insurance liability risks; (7) contingency and litigation reserves; (8) fair value measurements; (9) earnings sharing mechanism; (10) environmental remediation liability; and (11) AROs. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our combined and consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside specialists to assist in our evaluations, as necessary. Actual results could differ from those estimates.

Union bargain agreements

We have approximately 48% of the employees covered by a collective bargaining agreement. Agreements which will expire within the coming year apply to approximately 29% of our employees.

Note 4. Industry Regulation

Electricity and Natural Gas Distribution

The Maine distribution rate stipulation, the Maine transmission Federal Energy Regulatory Commission (FERC) Return on Equity (ROE) case, the New York rate plans, Reforming Energy Vision (REV), and the New York Transmission Company (New York Transco) filings are some of the most important specific regulatory processes that affect Networks.

The revenues of Networks companies are essentially regulated, being based on tariffs established in accordance with administrative procedures set by the various regulatory bodies. The tariffs applied to regulated activities in the U.S. are approved by the regulatory commissions of the different states and are based on the cost of providing service. The revenues of each regulated utility are set to be sufficient to cover all its operating costs, including energy costs, finance costs, and the costs of equity, the last of which reflect our capital ratio and a reasonable ROE.

Energy costs that are set on the New York and New England wholesale markets are passed on to consumers. The difference between energy costs that are budgeted for and those that are actually incurred by the utilities is offset

F-19

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

by applying compensation procedures that result in either immediate or deferred tariff adjustments. These procedures apply to other costs, which are in most cases exceptional, such as the effects of extreme weather conditions, environmental factors, regulatory and accounting changes, and treatment of vulnerable customers, that are offset in the tariff process. Any New York revenues that allow a utility to exceed target returns, usually the result of better than expected cost efficiency, are generally shared between the utility and its customers, resulting in future tariff reductions.

Each of the five Networks supply companies must comply with regulatory procedures that differ in form but in all cases conform to the basic framework outlined above. Generally, tariff reviews cover various years and provide for a reasonable ROE, protection, and automatic adjustments for exceptional costs incurred and efficiency incentives.

CMP Distribution Rate Stipulation

On May 1, 2013, CMP submitted its required distribution rate request with the Maine Public Utilities Commission (MPUC). On July 3, 2014, after a fourteen month review process, CMP filed a rate stipulation agreement on the majority of the financial matters with the MPUC. The stipulation agreement was approved by the MPUC on August 25, 2014. The stipulation agreement also noted that certain rate design matters would be litigated, which the MPUC ruled on October 14, 2014.

The rate stipulation agreement provided for an annual CMP distribution tariff increase of 10.7% or $24.3 million. The rate increase was based on a 9.45% ROE and 50% equity capital. CMP was authorized to implement a Rate Decoupling Mechanism (RDM) which protects CMP from variations in sales due to energy efficiency and weather. CMP also adjusted its storm costs recovery mechanism whereby it is allowed to collect in rates a storm allowance and to defer actual storm costs when such storm event costs exceed $3.5 million. CMP and customers share storm costs that exceed a certain balance on a fifty-fifty basis, with CMP’s exposure limited to $3.0 million annually.

CMP has made a separate regulatory filing for a new customer billing system replacement. In accordance with the stipulation agreement, a new billing system is needed. CMP has filed a request for a separate rate recovery mechanism.

The rate stipulation does not have a predetermined rate term. CMP has the option to file for new distribution rates at its own discretion. The rate stipulation does not contain service quality targets or penalties. The rate stipulation also does not contain any earning sharing requirements.

Transmission - FERC ROE Proceeding

See Note 12 - Commitments and Contingent Liabilities - for a further discussion.

CMP’s transmission rates are determined by a tariff regulated by the FERC and administered by ISO New England, Inc (ISO-NE). Transmission rates are set annually pursuant to a FERC authorized formula that allows for recovery of direct and allocated transmission operating and maintenance expenses, and for a return of and on investment in assets. The FERC provided a base ROE of 11.14% and additional incentive adders applicable to assets based upon vintage, voltage and other factors.

F-20

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

NYSEG and RGE Rate Plans

On September 16, 2010, the New York Public Service Commission (NYPSC) approved a new rate plan for electric and natural gas service provided by NYSEG and RGE effective from August 26, 2010 through December 31, 2013. The rate plans contain continuation provisions beyond 2013 if NYSEG and RGE do not request new rates to go into effect and the current base rates will stay in place.

The revenue requirements were based on a ten-percent allowed ROE applied to an equity ratio of forty-eight-percent. If annual earnings exceed the allowed return, a tiered Earnings Sharing Mechanism (ESM) will capture a portion of the excess for the ratepayers’ benefit. The ESM is subject to specified downward adjustments if NYSEG and RGE fail to meet certain reliability and customer service measures. Key components of the rate plan include electric reliability performance mechanisms, natural gas safety performance measures, customer service quality metrics and targets, and electric distribution vegetation management programs that establish threshold performance targets. There will be downward revenue adjustments if NYSEG and RGE fail to meet the targets.

The 2010 rate plans established RDM, intended to remove company disincentives to promote increased energy efficiency. Under RDM, electric revenues are based on revenue per customer class rather than billed revenue, while natural gas revenues are based on revenue per customer. Any shortfalls or excesses between billed revenues and allowed revenues will be accrued for future recovery or refund.

In August 2010, NYSEG began amortizing $15.2 million per year of its $303.9 million theoretical excess depreciation reserve. On September 1, 2012, RGE began amortizing $5.25 million per year of its $105 million theoretical excess depreciation reserve. Both amortization amounts reflect a twenty year amortization period. Theoretical excess depreciation is the difference between actual accumulated depreciation taken to date and a theoretical reserve. The actual accumulated depreciation is the result of depreciation rates allowed in prior rate orders based on estimates of useful lives and net salvage values as determined in those cases. The theoretical reserve is the amount that would have accumulated if the depreciation rates in the new rate plan had been in place for the entire useful lives of the affected assets. Differences between the actual reserve and the theoretical reserve are normal aspects of utility ratemaking. The usual treatment is to flow any excess or deficiency back as an adjustment to depreciation expense over the remaining life of the property. However, in accordance with the new rate plan, NYSEG and RGE will moderate electric rates by recording the theoretical reserve amortization as a debit to accumulated depreciation and a credit to other revenues, and normalize a portion of the amortization from a tax perspective.

REV

In April 2014, the NYPSC commenced a proceeding entitled REV which is an initiative to reform New York State’s energy industry and regulatory practices. REV has been divided into two tracks, Track 1 for Market Design and Technology, and Track 2 for Regulatory Reform. REV proposes regulatory changes that are intended to promote more efficient use of energy, deeper penetration of renewable energy resources such as wind and solar, and wider deployment of distributed energy resources, such as micro grids, on-site power supplies and storage.

REV is also intended to promote greater use of advanced energy management products to enhance demand elasticity and efficiencies. Track 1 of this initiative involves a collaborative process to examine the role of distribution utilities in enabling market based deployment of distributed energy resources to promote load management and greater system efficiency, including peak load reductions. NYSEG and RGE are participating in the initiative with other New York utilities and are providing their unique perspective. NYPSC staff is currently conducting public statement hearings regarding REV across New York state.

F-21

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Various proceedings have also been initiated by the NYPSC which are REV related, and each proceeding has its own schedule. These proceedings include the Clean Energy Fund, Demand Response Tariffs, and Community Choice Aggregation.

Track 2 is undertaken in parallel with the Track 1, and examines changes in current regulatory, tariff, and market designs, and incentive structures to better align utility interests with achieving NYPSC’s policy objectives. The NYPSC staff straw proposal is anticipated in the third quarter of 2015. New York utilities will also be addressing related regulatory issues in their individual rate cases.

New York Transco

Affiliates of National Grid, Central Hudson, NYSEG, and RGE, together with an affiliate of Consolidated Edison and Orange and Rockland Utilities, are part of a new organization, New York Transco. New York Transco is focused on developing electric transmission to meet future electricity needs of all New Yorkers and will develop New York transmission projects upon receipt of all necessary regulatory approvals.

New York Transco members are requesting regulatory approval for a group of transmission projects expected to cost $1.7 billion, funded through debt and equity. NYSEG and RGE allocated twenty-percent equity contribution amounts to approximately $183 million over the period 2015 through 2018. Additional projects may be developed in the future. Equity investments will be expressly contingent on receiving necessary regulatory approvals and acceptable economic returns. The investment will be made through a Networks affiliate, Networks New York Transco, LLC, formed on November 3, 2014.

New York Transco filed with FERC in early December 2014. The filing requests a formula base ROE of 10.6%, plus one-hundred fifty basis points ROE incentives. The filing also requests recognition of construction work in process, abandoned plant, regulatory asset for pre-commercial costs, and sixty-percent equity for five years. Various parties, including the NYPSC, have protested the filing with FERC. We anticipate a FERC decision in 2015.

Minimum Equity Requirements for Regulated Subsidiaries

Our regulated utility subsidiaries (NYSEG, RGE, CMP and Maine Natural Gas) are each subject to a minimum equity ratio requirement that is tied to the capital structure assumed in establishing revenue requirements. The minimum equity ratio requirement has the effect of limiting the amount of dividends that can be paid and can, under certain circumstances, require that the parent contribute equity capital. The regulated utility subsidiaries are prohibited by regulation from lending to unregulated affiliates. The regulated utility subsidiaries have also agreed to minimum equity ratio requirements in certain borrowing agreements. These requirements are lower than the regulatory requirements. Movement of capital from our wholly owned unregulated subsidiaries is unrestricted.

Note 5. Regulatory Assets and Liabilities

Pursuant to the requirements concerning accounting for regulated operations, our utilities capitalize, as regulatory assets, incurred and accrued costs that are probable of recovery in future electric and natural gas rates. We base our assessment of whether recovery is probable on the existence of regulatory orders that allow for recovery of certain costs over a specific period, or allow for reconciliation or deferral of certain costs. When costs are not treated in a specific order we use regulatory precedent to determine if recovery is probable. Our operating utilities also record, as regulatory liabilities, obligations to refund previously collected revenue or to spend

F-22

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

revenue collected from customers on future costs. Substantially all assets or liabilities for which funds have been expended or received are either included in rate base or are accruing a carrying cost until they will be included in rate base. The primary items that are not included in rate base or accruing carrying costs are the regulatory assets for pension and other postretirement benefits, which reflect unrecognized actuarial gains and losses, environmental remediation costs which is primarily the offset of accrued liabilities for future spending, unfunded future income taxes, asset retirement obligations and hedge losses. The total amount of these items is $1,907 million.

Regulatory assets and other regulatory liabilities shown in the tables below result from various regulatory orders that allow for the deferral and or reconciliation of specific costs. Regulatory assets and regulatory liabilities are classified as current when recovery or refund in the coming year is allowed or required through a specific order or when the rates related to a specific regulatory asset or regulatory liability are subject to automatic annual adjustment.

Current and non-current regulatory assets as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014		2013
(Millions)
Current
Pension and other postretirement benefits cost deferrals	$	—	$	9
Storm costs		14		7
Deferred meter replacement costs		2		2
Legacy meter retirement deferral		2		3
Non by-passable charges		2		2
Unamortized losses on reacquired debt		3		4
Revenue decoupling mechanism		6		5
Rate reconciliation mechanism		3		2
Hedges losses		34		—
Temporary supplemental assessment surcharge		12		—
Other		2		1
Deferred income taxes regulatory		29		20
Total Current Regulatory Assets		109		55
Non-current
Pension and other postretirement benefits cost deferrals		125		87
Pension and other postretirement benefits		1,101		729
Storm costs		259		246
Deferred meter replacement costs		36		39
Unamortized losses on reacquired debt		25		28
Environmental remediation costs		247		221
Unfunded future income taxes		366		357
Asset retirement obligation		32		30
Deferred property tax		30		51
Federal tax depreciation normalization adjustment		128		98
Merger capital expense target customer credit		10		10
Other		40		29
Total Non-current Regulatory Assets	$	2,399	$	1,925

F-23

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

“Pension and other postretirement benefits” represent the actuarial losses on the pension and other postretirement plans that will be reflected in customer rates when they are amortized and recognized in future pension expenses. Because no funds have yet been expended for this regulatory asset, it does not accrue carrying costs and is not included within the rate base. “Pension and other postretirement benefits cost deferrals” include the difference between actual expense for pension and other postretirement benefits and the amount provided for in rates. The recovery of these amounts will be determined in future proceedings.

“Storm costs” for CMP, NYSEG, and RGE are allowed in rates based on an estimate of the routine costs of service restoration. The companies are also allowed to defer unusually high levels of service restoration costs resulting from major storms when they meet certain criteria for severity and duration. Since the approval of the 2010 rate plan in New York, NYSEG has experienced unusually high levels of restoration costs resulting from various storms including Hurricane Sandy, Hurricane Irene, and Tropical Storm Lee. NYSEG’s deferred storm costs, reflecting the excess of actual spending over amounts currently allowed in rates, was $5 million and $9 million for the years ended December 31, 2014 and 2013, respectively. NYSEG’s total deferral, including carrying costs, was $241 million and $221 million as of December 31, 2014 and 2013, respectively. The amortization will be determined in a future NYPSC proceeding. CMP deferred $15 million in 2014 for service restoration costs, primarily as a result of an ice storm in late December 2014. We have determined that the storm meets the criteria for deferral and future recovery. CMP’s total deferral, including carrying costs, was $32 million and $31 million as of December 31, 2014 and 2013, respectively. Recovery of CMP’s deferred storm costs in the amount of $28 million began with the effective date of its last rate case and will occur over a twenty-four month period. Recovery of incremental deferrals will be determined in a future proceeding.

“Deferred meter replacement costs” represent the deferral of the value of retired meters which were replaced by advanced metering infrastructure meters. This amount is being amortized at the related existing depreciation amounts.

“Unamortized losses on reacquired debt” represent deferred losses on debt reacquisitions that will be recovered over the remaining original amortization period of the reacquired debt.

“Environmental remediation costs” represent spending that has occurred and is eligible for future recovery in customer rates. Environmental costs are currently recovered through a reserve mechanism whereby projected spending is included in rates with any variance recorded as a regulatory asset or a regulatory liability. It also includes the anticipated future rate recovery of costs that are recorded as environmental liabilities since these will be recovered when incurred. Because no funds have yet been expended for the regulatory asset related to future spending, it does not accrue carrying costs and is not included within rate base. The amortization period will be established in future proceedings and will depend upon the timing of spending for the remediation costs.

“Unfunded future income taxes” represent unrecovered federal and state income taxes primarily resulting from regulatory flow through accounting treatment. The income tax benefits or charges for certain plant related timing differences, such as removal costs, are immediately flowed through to, or collected from, customers. This amount is being amortized as the amounts related to temporary differences that give rise to the deferrals are recovered in rates.

“Asset retirement obligation” represents the differences in timing of the recognition of costs associated with our AROs and the collection of such amounts through rates. This amount is being amortized at the related depreciation and accretion amounts of the underlying liability.

“Deferred property taxes” represent the customer portion of the difference between actual expense for property taxes and the amount provided for in rates. The amortization period is awaiting a future NYPSC rate proceeding.

F-24

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

“Federal tax depreciation normalization adjustment” represents the revenue requirement impact of the difference in the deferred income tax expense required to be recorded under the IRS normalization rules and the amount of deferred income tax expense that was included in cost of service for rates years covering 2011 forward. The recovery period will be determined in future NYPSC and MPUC rate proceedings.

Current and non-current regulatory liabilities as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014		2013
(Millions)
Current
Reliability support services (Cayuga)	$	18	$	7
Non by-passable charges		19		10
Energy efficiency portfolio standard		34		—
Gas supply charge and deferred natural gas cost		6		6
Plant decommissioning		13		—
Revenue decoupling mechanism		8		12
Revenue reconciliation mechanism transmission revenue true up		7		10
Seneca Lake asset sale gain account		—		6
Yankee DOE Phase I		23		18
Hedges losses		—		7
CMP transmission refund		16		—
Other		9		8
Total Current Regulatory Liabilities		153		84
Non-current
Accrued removal obligations		721		714
Asset sale gain account		19		20
Carrying costs on deferred income tax bonus depreciation		81		54
Economic development		33		28
Merger capital expense target customer credit account		17		17
Pension and other postretirement benefits		50		77
Positive benefit adjustment		51		51
New York State tax rate change		16		—
Post term amortization		20		—
Theoretical reserve flow thru impact		24		17
Plant decommissioning		—		13
Deferred property tax		51		57
Reserve for unfunded future income tax adjustment		13		26
Spent nuclear fuel		12		9
Other		98		68
Deferred income taxes regulatory		462		313
Total Non-current Regulatory Liabilities	$	1,668	$	1,464

“Reliability support services (Cayuga)” represent the difference between actual expenses for reliability support services and the amount provided for in rates. This will be refunded to customers within the next year.

“Non by-passable charges” represent the non by-passable fixed charge paid by all customers. An asset or liability is recognized resulting from differences between actual revenues and the underlying cost being recovered. This will be refunded to customers within the next year.

F-25

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

“Energy efficiency portfolio standard” represents the difference between revenue billed to customers through an energy efficiency charge and the costs of our energy efficiency programs as approved by the state authorities. This may be refunded to customers within the next year.

“Accrued removal obligations” represent the differences between asset removal costs recorded and amounts collected in rates for those costs. The amortization period is dependent upon the asset removal costs of underlying assets and the life of the utility plant.

“Asset sale gain account” represents the gain on NYSEG’s 2001 sale of its interest in Nine Mile Point 2 nuclear generating station. The net proceeds from the Nine Mile Point 2 nuclear generating station were placed in this account and will be used to benefit customers. The amortization period is awaiting a future NYPSC rate proceeding.

“Carrying costs on deferred income tax bonus depreciation” represent the carrying costs benefit of increased accumulated deferred income taxes created by the change in tax law allowing bonus depreciation. The amortization period is awaiting a future NYPSC rate proceeding.

“Economic development” represents the economic development program which enables NYSEG and RGE to foster economic development through attraction, expansion, and retention of businesses within its service territory. If the level of actual expenditures for economic development allocated to NYSEG and RGE varies in any rate year from the level provided for in rates, the difference is refunded to ratepayers. The amortization period is awaiting a future NYPSC rate proceeding.

“Merger capital expense target customer credit” account was created as a result of NYSEG and RGE not meeting certain capital expenditure requirements established in the order approving the purchase of Energy East by Iberdrola. The amortization period is awaiting a future NYPSC rate proceeding.

“Pension and other postretirement benefits” represent the actuarial gains on other postretirement plans that will be reflected in customer rates when they are amortized and recognized in future expenses. Because no funds have yet been received for this a regulatory liability is not reflected within rate base. It also represents the difference between actual expense for pension and other postretirement benefits and the amount provided for in rates. Recovery of these amounts will be determined in future proceedings.

“Positive benefit adjustment” resulted from Iberdrola’s 2008 acquisitions of Energy East. This is being used to moderate increases in rates. The amortization period is awaiting a future NYPSC rate proceeding.

“New York State tax rate change” represents excess funded accumulated deferred income tax balance caused by the 2014 New York State tax rate change from 7.1% to 6.5%. The amortization period is awaiting a future NYPSC rate proceeding.

“Post term amortization” represents the revenue requirement associated with certain expired joint proposal amortization items. The amortization period is awaiting a future NYPSC rate proceeding.

“Theoretical reserve flow thru impact” represents the differences from the rate allowance for applicable federal and state flow through impacts related to the excess depreciation reserve amortization. It also represents the carrying cost on the differences. The amortization period is awaiting a future NYPSC rate proceeding.

“Other” includes the reserve for the refund related to the FERC ROE proceedings, cost of removal being amortized through rates and various items subject to reconciliation including variable rate debt, Medicare subsidy benefits and stray voltage.

F-26

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Note 6. Goodwill and Intangible assets

Goodwill by reportable segment as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014		2013
(Millions)
Networks	$	979	$	979
Renewables		380		380
Gas		—		—
Other (a)		2		2
Total	$	1,361	$	1,361

^(a)  Does not represent a segment. It mainly includes Corporate and company eliminations.

As of December 31, 2014 and 2013, the gross amounts of goodwill were $979 million for Networks reportable segment, $3,340 million for Renewables and Gas reporting segments and $2 million for Corporation (which does not represent a segment), with accumulated impairment losses of $2,960 million for Renewables and Gas reporting segments.

Goodwill Impairment Assessment

For impairment testing purposes our reporting units are the same as reportable segments, except for Networks, which contains two reporting units, Maine and New York. The goodwill for the Maine reporting unit, resulted from the purchase of CMP by Energy East in 2000 and amounted to $325 million. Separately, the goodwill for the New York reporting unit resulted primarily from the purchase of RGE by Energy East in 2002 and amounted to $654 million.

Our annual impairment testing takes place as of September 30. Our step zero qualitative assessment involves evaluating key events and circumstances that could affect the fair value of our reporting units, as well as other factors. Events and circumstances evaluated include macroeconomic conditions, industry, regulatory and market considerations, cost factors and their effect on earnings and cash flows, overall financial performance as compared with projected results and actual results of relevant prior periods, other relevant entity specific events, and events affecting a reporting unit.

Our step one impairment testing includes various assumptions, primarily the discount rate, which is based on an estimate of our marginal, weighted average cost of capital, and forecasted cash flows. We test the reasonableness of the conclusions of our step one impairment testing using a range of discount rates and a range of assumptions for long term cash flows.

2014

We had no impairment of goodwill in 2014 as a result of our step 1 annual impairment test.

Networks

Based on the results of our step 1 impairment test conducted in 2014, the estimated fair value of each of the Networks reporting units was substantially in excess of their respective carrying value.

F-27

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Renewables

Based on the results of our step 1 impairment test for the Renewables reporting unit conducted in 2014, its estimated fair value exceeds carrying value by approximately 1%. The assumptions used to estimate fair value were based on projections incorporated in our current operating plans as well as other available information. The current operating plans included significant assumptions and estimates associated with sales growth, profitability and related cash flows, along with cash flows associated with taxes and capital spending. The discount rate used to estimate fair value was risk adjusted in consideration of the economic conditions of the reporting unit. We also considered other assumptions that market participants may use. By their nature, projections are uncertain. Potential events and circumstances, such as declining wind energy output and prices obtained per kWh, changes in incentives established to promote renewable energies and increases in capital expenditures per MW could have an adverse effect on our assumptions.

2013

Networks

As a result of our step zero qualitative assessment, it was not more likely than not that the fair value of each of the Networks reporting units was less than its carrying amount, and it was not necessary to perform the two-step goodwill impairment test. The step zero qualitative assessment was performed in 2013 considering the substantial excess of fair value over the carrying value that was demonstrated in the 2011 impairment test. The qualitative assessment considered key factors such as the level of interest rates, the regulatory environment including the allowed rate of return, and projections of future sales and capital spending. None of these factors had changed significantly since 2011.

Renewables

Based on the results of our step 1 impairment test for the Renewables reporting unit conducted in 2013, the estimated fair value exceeded the carrying value by approximately 11%.

Gas

Based on the results of our step 1 impairment test the Gas reporting unit fair value analysis resulted in an implied fair value of goodwill of $0 for this reporting unit, and consequently, a non-cash impairment charge in the amount of $163 million was recorded for the year ended December 31, 2013. The inputs used to determine the fair value of the Gas reporting unit were based on forecasted cash flows, which are classified as Level 3 in the fair value hierarchy. The main reason for the impairment was the projected long-term low margins for natural gas given the impact of shale gas in the North American energy market. We elected to suspend the gas storage facility construction projects of this reporting unit until this scenario substantially changes.

2012

Networks

As a result of our step zero qualitative assessment, it was not more likely than not that the fair value of each of the Networks reporting units was less than its carrying amount, and it was not necessary to perform the two-step goodwill impairment test. The step zero qualitative assessment was performed in 2012 considering the substantial excess of fair value for each reporting unit over the carrying value that was demonstrated in the 2011 impairment test. The qualitative assessment considered key factors such as the level of interest rates, the regulatory environment including the allowed rate of return, and projections of future sales and capital spending. None of these factors had changed significantly since 2011.

F-28

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Renewables

Based on the results of our step 1 impairment test the Renewables reporting unit fair value analysis resulted in an implied fair value of goodwill of $380 million. Consequently, non-cash impairment charges in the amount of $356 million were recorded for the year ended December 31, 2012. The inputs used to determine the fair value of this reporting unit were based on forecasted cash flows, which are classified as Level 3 in the fair value hierarchy. The reduction in the estimate of the fair value of goodwill was based on regulatory uncertainty related to the development of wind farm projects as well as future lower electricity pricing.

Gas

Based on the results of our step 1 impairment test the Gas reporting unit fair value analysis resulted in an implied fair value of goodwill of $163 million, and consequently, a non-cash impairment charge in the amount of $22 million was recorded for the year ended December 31, 2012. The inputs used to determine the fair value of this reporting unit were based on forecasted cash flows, which are classified as Level 3 in the fair value hierarchy. The reduction in the estimate of the fair value was based on the decline of medium to long term gas storage spreads (margin per billion cubic feet due to the seasonality of gas prices).

Intangible assets

Intangible assets include those assets acquired in business acquisitions and intangible assets acquired and developed from external third parties and from affiliated companies. Following is a summary of intangible assets:

As of December 31, 2014	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
(Millions)
Gas Storage rights	$	325	$	(117	)	$	208
Wind development		574		(220	)		354
Other		56		(49	)		7
Total Intangible Assets	$	955	$	(386	)	$	569

As of December 31, 2013	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
(Millions)
Gas Storage rights	$	322	$	(101	)	$	221
Wind development		568		(199	)		369
Other		53		(44	)		9
Total Intangible Assets	$	943	$	(344	)	$	599

Gas Storage rights are being amortized on a straight-line basis over a 40-year estimated life. Wind development costs, with the exception of future ‘pipeline’ development costs, are amortized on a straight-line basis in accordance with the life of the related assets. The development costs, totalling $14 million at December 31, 2013 and $12 million at December 31, 2014, are amortized when the assets are placed in service. Amortization expense for the years ended December 31, 2014, 2013 and 2012 amounted to $66 million, $72 million and $87 million, respectively.

F-29

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

We expect amortization expense for the five years subsequent to December 31, 2014, to be as follows:

Year ending December 31,
(Millions)
2015	$	43
2016		42
2017		39
2018		38
2019		37

Wind development costs written off totalled $36 million in 2012 and $42 million in 2013. These charges were included in Impairment of non-current assets in the combined and consolidated statements of operations.

Note 7. Property, Plant and Equipment

Property, plant and equipment as of December 31, 2014 consisted of:

As of December 31, 2014	Regulated			Nonregulated			Total
(Millions)
Electric generation, distribution, transmission and other	$	8,625		$	9,798		$	18,423
Natural gas transportation, distribution and other		1,723			648			2,371
Other common operating property		654			51			705
Total Property, Plant and Equipment in Service (a)		11,002			10,497			21,499
Total accumulated depreciation (b)		(3,491	)		(2,305	)		(5,796	)
Total Net Property, Plant and Equipment in Service		7,511			8,192			15,703
Construction work in progress		878			518			1,396
Total Property, Plant and Equipment	$	8,389		$	8,710		$	17,099

^(a)  Includes capitalized leases of $158 million primarily related to electric generation, distribution, transmission and other.

^(b)  Includes accumulated amortization of capitalized leases of $47 million.

Property, plant and equipment as of December 31, 2013 consisted of:

As of December 31, 2013	Regulated			Nonregulated			Total
(Millions)
Electric generation, distribution, transmission and other	$	8,087		$	9,759		$	17,846
Natural gas transportation, distribution and other		1,652			639			2,291
Other common operating property		628			47			675
Total Property, Plant and Equipment in Service (a)		10,367			10,445			20,812
Total accumulated depreciation (b)		(3,421	)		(1,918	)		(5,339	)
Total Net Property, Plant and Equipment in Service		6,946			8,527			15,473
Construction work in progress		941			267			1,208
Total Property, Plant and Equipment	$	7,887		$	8,794		$	16,681

F-30

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

^(a)  Includes capitalized leases of $155 million primarily related to electric generation, distribution, transmission and other.

^(b)  Includes accumulated amortization of capitalized leases of $39 million.

The fully depreciated items of property, plant and equipment in use amounted to $273 million as of December 31, 2014 and 2013. Capitalized interest costs were $12 million, $9 million, and $10 million for the years ended December 31, 2014, 2013 and 2012, respectively.

In view of the projected long-term low margins for natural gas as a result of the impact of shale gas in the North American energy market, in 2013 we abandoned the gas storage facility construction projects assigned to the gas reporting unit. Consequently, we impaired or wrote off certain gas storage projects and other facilities under construction for an amount of $382 million, included in “Impairment of non-current assets” in the combined and consolidated statements of operations for the year ended December 31, 2013.

We also impaired or wrote off amounts of $24 million, $33 million, and $47 million for the years ended December 31, 2014, 2013 and 2012 respectively, resulting from reassessment of the economic feasibility of its various Renewables development projects in construction.

Depreciation expense for the years ended December 31, 2014, 2013 and 2012 amounted to $563, $545 and $484 million, respectively.

Note 8. Asset retirement obligations

AROs are intended to meet the costs for dismantling and restoration work that we have committed to carry out at our operational facilities.

The reconciliation of ARO carrying amounts for the years ended December 31, 2014 and 2013 consisted of:

(Millions)
As of December 31, 2012	$	202
Liabilities settled during the year		(1	)
Accretion expense		14
Revisions in estimated cash flows		(6	)
As of December 31, 2013	$	209
Liabilities settled during the year		(1	)
Liabilities incurred during the year		6
Accretion expense		14
Revisions in estimated cash flows		6
As of December 31, 2014	$	234

Several of the wind generation facilities have restricted cash for purposes of settling ARO. Restricted cash related to ARO was $1.7 million and $1.5 million as of December 31, 2014 and 2013, respectively. These amounts have been included as other non-current assets in the consolidated balance sheets.

We have AROs for which a liability has not been recognized because the fair value cannot be reasonably estimated due to indeterminate settlement dates, including for the removal of hydroelectric dams due to structural inadequacy or for decommissioning; the removal of property upon termination of an easement, right-of-way or franchise; and costs for abandonment of certain types of gas mains.

F-31

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Note 9. Debt

Long- term debt as of December 31, 2014 and 2013 consisted of:

As of December 31,	Maturity Dates		2014				2013
(Millions)			Balances			Interest Rates	Balances			Interest Rates
First mortgage bonds - fixed (a)		2016-2043	$	1,405		3.07%-8.00%	$	1,406			3.07%-8.00%
Unsecured pollution control notes - fixed		2014-2015		132		2.125%-2.25%		152			2.125%-5.375%
Unsecured pollution control notes - variable		2026-2034		159		0.03%-0.461%		168			0.06%-0.465%
Other various non-current debt - fixed		2016-2037		889		3.24%-10.48%		895			3.24%-10.48%
Total Debt			$	2,585			$	2,621
Obligations under capital leases		2023		81		4.00%		102			4.00%
Unamortized debt premium, net				(2	)			(2	)
Less: debt due within one year, included in current liabilities				148				25
Total Non-current Debt			$	2,516			$	2,696

^(a)  The first mortgage bonds have pledged collateral of substantially all the respective utility’s properties of approximately $5,120 million.

The foregoing loan balances correspond to amounts drawn down and not repaid as of December 31, 2014 and 2013. We had undrawn loans and credit facilities maturing between 2018 and 2019 amounting to $886 million and $874 million as of December 31, 2014 and 2013, respectively.

Non-current debt including sinking fund obligations and capital lease payments becoming due during the next five years as of December 31, 2014 consisted of:

(Millions)
2015	2016	2017	2018	2019	Total
$148	$197	$214	$10	$310	$879

We make certain standard covenants to lenders in our third-party debt agreements, including, in certain agreements, covenants regarding the ratio of indebtedness to total capitalization. A breach of any covenant in the existing credit facilities or the agreements governing our other indebtedness would result in an event of default. Certain events of default may trigger automatic acceleration. Other events of default may be remedied by the borrower within a specified period or waived by the lenders and, if not remedied or waived, give the lenders the right to accelerate. Neither we nor any of our subsidiaries were in breach of covenants or of any obligation that could trigger the early redemption of our debt as of December 31, 2014 and 2013.

First Mortgage Bonds

In January 2015, CMP issued first mortgage bonds that were priced in October 2014 for $150 million with interest rates ranging from 3.15% to 4.07%.

Fair Value of Debt

The estimated fair value of debt amounted to $2,962 million and $2,866 million as of December 31, 2014 and 2013, respectively. The estimated fair value was determined, in most cases, by discounting the future cash flows at market interest rates. The interest rate curve used to make these calculations takes into account the risks

F-32

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

associated with the electricity industry and the credit ratings of the borrowers in each case. The fair value hierarchy for the fair value of debt is considered as Level 2, except for unsecured pollution control notes-variable, which are considered Level 3.

Short-term Debt

(a) Revolving credit facility

On May 30, 2012, we entered into a $300 million revolving credit facility for the purpose of providing for our liquidity needs and those of our unregulated subsidiaries. The facility has a termination date in May 2019. We pay an annual facility fee of $0.7 million. As of December 31, 2014 the facility was undrawn.

The revolving credit facility contains a covenant that requires us to maintain a ratio of consolidated indebtedness to consolidated total capitalization that does not exceed 0.65 to 1.00 at any time. For purposes of calculating this maximum ratio of consolidated indebtedness to consolidated total capitalization, the facility excludes from consolidated net worth the balance of AOCI as it appears on the consolidated balance sheets.

(b) Joint revolving credit facility

The principal operating utility wholly owned subsidiaries of Networks rely on bank provided revolving credit facilities to fund short-term liquidity needs. In July 2011, the three principal operating utility wholly owned subsidiaries jointly entered into a bank provided revolving credit facility (Joint Facility) that allows maximum aggregate borrowings of up to $600 million and expires in 2018. Each subsidiary is currently subject to a $200 million credit limit. Each borrower pays a facility fee ranging from fifteen to twenty basis points annually depending on the rating of its unsecured debt.

CMP and NYSEG established commercial paper programs with limits of $200 million. The Joint Facility serves as the backstop to these programs. These companies intend to use commercial paper as an alternative to revolving credit facilities and a source of short-term credit. The facilities have not been utilized as of December 31, 2014.

In the Joint Facility each joint borrower covenants not to permit, without the lender’s consent, its ratio of total indebtedness to total capitalization to exceed 0.65 to 1.00 at any time. For purposes of calculating the maximum ratio of consolidated indebtedness to total capitalization, the facility excludes from consolidated net worth the balance of AOCI as it appears on the consolidated balance sheets. The facility contains various other covenants including a restriction on the amount of secured indebtedness each borrower may maintain. Continued unremedied failure to comply with those covenants for five business days after written notice of such failure from the lender constitutes an event of default and would result in acceleration of maturity for the party in default. The balance outstanding on the revolving credit facility was $0 million and $12 million at December 31, 2014 and 2013, respectively.

(c) Iberdrola Financiación, S.A. credit facility

In August 2011, we entered into a revolving credit facility with Iberdrola Financiación, S.A., a subsidiary of Iberdrola, under which we may borrow up to $600 million. The facility terminates in August 2016. We pay a commitment fee on the facility of $1.2 million annually. The facility has never been utilized as of December 31, 2014.

F-33

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Note 10. Fair Value of Financial Instruments and Fair Value Measurements

We determine the fair value of our derivative assets and liabilities and available for sale noncurrent investments associated with Networks activities utilizing market approach valuation techniques:

• We measure the fair value of our noncurrent investments available for sale using quoted market prices in active markets for identical assets and include the measurements in Level 1. The investments primarily consist of money market funds. The investments which are Rabbi Trusts for deferred compensation plans primarily consist of money market funds.

• NYSEG and RGE enter into electric energy derivative contracts to hedge the forecasted purchases required to serve their electric load obligations. They hedge their electric load obligations using derivative contracts that are settled based upon Locational Based Marginal Pricing published by the New York Independent System Operator (NYISO). RGE hedges all its electric load obligations using contracts for a NYISO location where an active market exists. The forward market prices used to value RGE’s open electric energy derivative contracts are based on quoted prices in active markets for identical assets or liabilities with no adjustment required and therefore we include the fair value in Level 1. NYSEG has a combination of Level 1 and Level 2 fair values for its electric energy derivative contracts. A portion of its electric load obligations are exchange traded contracts in a NYISO location where an active market exists. The forward market prices used to value NYSEG’s open electric energy derivative contracts are based on quoted prices in active markets for identical assets or liabilities with no adjustment required and therefore we include the fair value in Level 1. A portion of NYSEG’s electric energy derivative contracts are non-exchange traded contracts that are valued using inputs that are directly observable for the asset or liability, or indirectly observable through corroboration with observable market data and therefore we include the fair value in Level 2.

• NYSEG and RGE enter into natural gas derivative contracts to hedge their forecasted purchases required to serve their natural gas load obligations. The forward market prices used to value open natural gas derivative contracts are exchange-based prices for the identical derivative contracts traded actively on the New York Mercantile Exchange (NYMEX). Because we use prices quoted in an active market we include the fair value measurements in Level 1.

• NYSEG, RGE and CMP enter into fuel derivative contracts to hedge their unleaded and diesel fuel requirements for their fleet vehicles. Exchange-based forward market prices are used but because a basis adjustment is added to the forward prices we include the fair value measurement for these contracts in Level 3.

We determine the fair value of our derivative assets and liabilities associated with Renewables and Gas activities utilizing market approach valuation techniques. Exchange-traded transactions, such as NYMEX futures contracts, that are based on quoted market prices in active markets for identical product with no adjustment are included in the Level 1 fair value. Contracts with delivery periods of two years or less which are traded in active markets and are valued with or derived from observable market data for identical or similar products such as over-the-counter NYMEX, foreign exchange swaps, and fixed price physical and basis and index trades are included in Level 2 fair value. Monthly data points will be included in this category provided they fall within the bid/ask data provided by brokers for seasonal strips and quarterly quotes. Trader marks that fall outside of a five-percent threshold of the average broker marks and fall outside of the widest bid/ask spreads will be adjusted to reflect the broker quotes. Any position that is initially classified as Level 2 will be evaluated before and after the provision of credit reserves with incremental value changes of ten-percent or more classified as Level 3. To be included in this category, market data, or a derivative thereof, must be available for the entire trade term. Contracts with delivery periods exceeding two years or that have unobservable inputs or inputs that cannot be

F-34

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

corroborated with market data for identical or similar products such as tolling arrangements with historical volatilities, park and loan arrangements that include the value of expired legs, and transactions with significant credit adjustments are included in Level 3 fair value. The valuation premise in this category will be based on market participant assumptions.

The financial instruments measured at fair value as of December 31, 2014 and 2013 consisted of:

As of December 31, 2014	Level 1			Level 2			Level 3			Total
(Millions)
Securities portfolio (available for sale)	$	33		$	—		$	—		$	33
Financial assets
Derivative financial instruments - power		—			48			41			89
Derivative financial instruments - gas		—			90			48			138
Total		—		$	138		$	89		$	227
Financial liabilities
Derivative financial instruments - power		(28	)		(8	)		—			(36	)
Derivative financial instruments - gas		(7	)		(66	)		(29	)		(102	)
Derivative financial instruments - other		—			—			(3	)		(3	)
Total	$	(35	)	$	(74	)	$	(32	)	$	(141	)

As of December 31, 2013	Level 1			Level 2			Level 3			Total
(Millions)
Securities portfolio (available for sale)	$	35		$	—		$	—		$	35
Financial assets
Derivative financial instruments - power		4			29			47			80
Derivative financial instruments - gas		1			21			49			71
Total	$	5		$	50		$	96		$	151
Financial liabilities
Derivative financial instruments - power		(1	)		(1	)		(26	)		(28	)
Derivative financial instruments - gas		(7	)		(129	)		(17	)		(153	)
Derivative financial instruments - other		—			—			—			—
Total	$	(8	)	$	(130	)	$	(43	)	$	(181	)

F-35

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The reconciliations of changes in the fair value of financial instruments based on Level 3 inputs for the years ended December 31, 2014, 2013 and 2012 consisted of:

(Millions)	2014			2013			2012
Fair value as of January 1,	$	53		$	5		$	17
Gains for the year recognized in revenues		11			21			27
Losses for the year recognized in revenues		(1	)		(3	)		(3	)
Total gains or losses for the period recognized in revenues		10			18			24
Gains recognized in OCI		—			—			5
Losses recognized in OCI		(3	)		—			—
Total gains or losses recognized in OCI		(3	)		—			5
Purchases		14			47			(19	)
Settlements		(26	)		(15	)		(24	)
Transfers out of Level 3 (a)		9			(2	)		2
Fair value as of December 31,	$	57		$	53		$	5
Gains (losses) for the year included in earnings attributable to the change in unrealized gains (losses) relating to financial instruments still held at the reporting date	$	10		$	18		$	24

^(a) Transfers out of Level 3 were the result of increased observability of market data.

For assets and liabilities that are recognized in the combined and consolidated financial statements at fair value on a recurring basis, we determine whether transfers have occurred between levels in the hierarchy by re-assessing categorization based on the lowest level of input that is significant to the fair value measurement as a whole at the end of each reporting period. There have been no transfers between Level 1 and Level 2 during the years reported.

Level 3 Fair Value Measurement

The tables below illustrate the significant sources of unobservable inputs used in the fair value measurement of our Level 3 derivatives. They represent the variability in prices for those transactions that fall into the illiquid period (beyond 2 years), using past and current views of prices for those future periods.

					Variability
Instruments	Instrument Description	Valuation Technique	Valuation Inputs	Index	Avg.		Max.		Min.
Fixed price power and gas swaps with delivery period > two years	Transactions with delivery periods exceeding two years	Transactions are valued against forward market prices on a discounted basis	Observable and extrapolated forward gas and power prices not all of which can be corroborated by market data for identical or similar products	NYMEX ($/MMBtu) SP15 ($/MWh)	$ $	4.33 43.27	$ $	5.47 59.12	$ $	3.34 30.04
				Mid C ($/MWh)	$	36.16	$	56.28	$	12.62
				Cinergy ($/MWh)	$	37.41	$	68.65	$	21.17

F-36

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Our Level 3 valuations primarily consist of NYMEX gas and fixed price power swaps with delivery periods extending through 2017. The gas swaps are used to hedge both gas inventory in firm storage and merchant wind positions. The power swaps are traded at liquid hubs in the West and Midwest and are used to hedge merchant wind production in those regions.

We performed a sensitivity analysis around the Level 3 gas and power positions to changes in the valuations inputs and concluded that no material change to the financial statements is expected given the following: (i) any changes in the fair value of the gas swaps hedging inventory would be expected to be largely offset by changes in the value of the inventory; (ii) any changes in the fair value of the gas swaps hedging merchant generation would be expected to be significantly offset by changes in the value of future power generation.

Future commodity prices are the significant unobservable inputs to fair value. Any significant increases in prices would result in a lower fair value of derivatives. Conversely, significant reductions in prices would result in a higher fair value of derivatives.

Two elements of the analytical infrastructure employed in valuing transactions are the price curves used in calculation of market value and the models themselves. Authorized trading points and associated forward price curves are maintained and documented by the Middle Office. Models used in valuation of the various products are developed and documented by the Structuring and Market Analysis group.

Transaction models are valued in part on the basis of forward price, correlation, and volatility curves. Descriptions of these curves and their derivations are maintained and documented by the Structuring and Market Analysis group. Forward price curves used in valuing the models are applied to the full duration of transactional models to a maximum of approximately thirty years.

Note 11. Derivative Instruments and Hedging

Our Networks, Renewables and Gas activities are exposed to certain risks, which are managed by using derivative instruments.

(a) Networks activities

NYSEG and RGE have a non by-passable wires charge adjustment that allows them to pass through rates any changes in the market price of electricity. They use electricity contracts, both physical and financial, to manage fluctuations in electricity commodity prices in order to provide price stability to customers. We include the cost or benefit of those contracts in the amount expensed for electricity purchased when the related electricity is sold. We record changes in the fair value of electric hedge contracts to derivative assets and or liabilities with an offset to regulatory assets and or regulatory liabilities, in accordance with the accounting requirements concerning regulated operations.

The loss recognized in regulatory assets for electricity derivatives was $28.8 million as of December 31, 2014. The loss recognized in regulatory assets and the gain recognized in regulatory liabilities for electricity derivatives was $0.2 million and $6.1 million, respectively, as of December 31, 2013. The loss reclassified from regulatory assets into income, which is included in electricity purchased, was $21.3 million, $2.2 million, and $28.4 million for the years ended December 31, 2014, 2013 and 2012, respectively.

NYSEG and RGE have purchased gas adjustment clauses that allow them to recover through rates any changes in the market price of purchased natural gas, substantially eliminating their exposure to natural gas price risk.

F-37

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

NYSEG and RGE use natural gas futures and forwards to manage fluctuations in natural gas commodity prices to provide price stability to customers. We include the cost or benefit of natural gas futures and forwards in the commodity cost that is passed on to customers when the related sales commitments are fulfilled. We record changes in the fair value of natural gas hedge contracts to derivative assets and or liabilities with an offset to regulatory assets and or regulatory liabilities in accordance with the accounting requirements for regulated operations.

The loss recognized in regulatory assets for natural gas hedges was $4.7 million as of December 31, 2014. The gain recognized in regulatory liabilities for natural gas hedges was $0.9 million as of December 31, 2013. The loss reclassified from regulatory assets into income, which is included in natural gas purchased, was $2.2 million, $1.8 million, and $12.1 million for the years ended December 31, 2014, 2013 and 2012, respectively.

The net notional volumes of the outstanding derivative instruments associated with Networks activities as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014		2013
(Millions)
Wholesale electricity purchase contracts (MWh)		6.6		4.5
Natural gas purchase contracts (Dth)		3.8		4.5
Other fuel purchase contracts (Gallons)		2.8		2.9

The location and amounts of derivatives designated as hedging instruments associated with Networks activities as of December 31, 2014 and 2013 consisted of:

	Asset Derivatives				Liability Derivatives
(Millions)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
As of December 31, 2014
Commodity contracts:
Electricity derivatives:
Current		Current assets	$	—		Current liabilities	$	20
Non-current		Other assets		—		Other liabilities		9
Natural gas derivatives:
Current		Current assets				Current liabilities		4
Non-current		Other assets		—		Other liabilities		1
Other contracts		Current assets		—		Current liabilities		3
Total			$	—			$	37
As of December 31, 2013
Commodity contracts:
Electricity derivatives:
Current		Current assets	$	7		Current liabilities		—
Non-current		Other assets		—		Other liabilities		1
Natural gas derivatives:
Current		Current assets		1		Current liabilities		—
Other contracts		Current assets				Current liabilities		1
Total			$	8			$	2

F-38

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The effect of derivatives in cash flow hedging relationships on OCI and income for the years ended December 31, 2014, 2013 and 2012 consisted of:

Year Ended December 31,	(Loss) Recognized in OCI on Derivatives			Location of (Loss) Reclassified from Accumulated OCI into Income		(Loss) Reclassified from Accumulated OCI into Income
(Millions)	Effective Portion (a)			Effective Portion (a)
2014
Interest rate contracts	$	—			Interest expense	$	(9	)
Commodity contracts:
Other		(4	)		Operating expenses		(1	)
Total	$	(4	)			$	(10	)
2013
Interest rate contracts	$	—			Interest expense	$	(11	)
Commodity contracts:
Other		—			Operating expenses		(1	)
Total	$	—				$	(12	)
2012
Interest rate contracts	$	—			Interest expense		(9	)
Commodity contracts:
Other		—			Operating expenses		—
Total	$	—				$	(9	)

^(a)  Changes in OCI are reported in pre-tax dollars.

The net loss in accumulated OCI related to previously settled forward starting swaps and accumulated amortization is $93.5 million, $102.5 million, and $113.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. We recorded $8.9 million, $11.2 million, and $9.3 million in net derivative losses related to discontinued cash flow hedges for the years ended December 31, 2014, 2013 and 2012, respectively. We will amortize approximately $8.9 million of discontinued cash flow hedges in 2015.

The unrealized loss of $3.3 million on hedge derivatives is reported in OCI because the forecasted transaction is considered to be probable for the year ended December 31, 2014. We expect that those losses will be reclassified into earnings within the next twelve months, the maximum length of time over which we are hedging our exposure to the variability in future cash flows for forecasted energy transactions.

The offsetting of derivative assets as of December 31, 2014 and 2013 consisted of:

As of December 31,	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet			Net Amounts of Assets Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet				Net Amount
								Financial     Instruments		Cash   Collateral   Pledged
(Millions)
2014
Derivatives	$	11	$	(11	)	$	—	$	—	$	—	$	—
2013
Derivatives		14		(6	)		8		—		—		8

F-39

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The offsetting of derivative liabilities as of December 31, 2014 and 2013 consisted of:

As of December 31,	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in the Balance Sheet			Gross Amounts Not Offset in the Balance Sheet				Net Amount
									Financial     Instruments		Cash   Collateral   Pledged
(Millions)
2014
Derivatives	$	(48	)	$	11	$	(37	)	$	—	$	37	$	—
2013
Derivatives		(8	)		6		(2	)		—		2		—

(b) Renewables and Gas activities

We sell fixed-price gas and power forwards to hedge our merchant wind assets from declining commodity prices for our Renewables business. We also purchase fixed-price gas and basis swaps and sell fixed-price power in the forward market to hedge the spark spread or heat rate of our merchant thermal assets. We also enter into tolling arrangements to sell the output of our thermal generation facilities.

Our gas business purchases and sells both fixed-price gas and basis swaps to hedge the value of contracted storage positions. The intent of entering into these swaps is to fix the margin of gas injected into storage for subsequent resale in future periods. We also enter into basis swaps to hedge the value of our contracted transport positions. The intent of buying and selling these basis swaps is to fix the location differential between the price of gas at the receipt and delivery point of the contracted transport in future periods.

Both Renewables and Gas have proprietary trading operations that enter into fixed-price power and gas forwards in addition to basis swaps. The intent is to speculate on fixed-price commodity and basis volatility in the U.S. commodity markets.

The net notional volumes of outstanding derivative instruments associated with Renewables and Gas activities as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014		2013
(MWh/Dth in Millions)
Wholesale electricity purchase contracts		2		3
Wholesale electricity sales contracts		7		8
Foreign exchange forward purchase contracts		—		5
Natural gas and other fuel purchase contracts		275		241
Financial power contracts		8		9
Basis swaps - purchases		160		207
Basis swaps - sales		161		198

F-40

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The fair values of derivative contracts associated with Renewables and Gas activities as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014			2013
(Millions)
Wholesale electricity purchase contracts	$	(12	)	$	5
Wholesale electricity sales contracts		44			20
Foreign exchange forward purchase contracts		(3	)		(2	)
Natural gas and other fuel purchase contracts		54			(54	)
Financial power contracts		48			21
Basis swaps - purchases		(4	)		(13	)
Basis swaps - sales		(4	)		(13	)
Total	$	123		$	(36	)

The offsetting of derivative assets as of December 31, 2014 and 2013 consisted of:

As of December 31,	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet			Net Amounts of Assets Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet						Net Amount
								Financial Instruments			Cash Collateral Pledged
(Millions)
2014
Derivatives	$	847	$	(620	)	$	227	$	(66	)	$	(73	)	$	88
2013
Derivatives		970		(827	)		143		(41	)		(11	)		91

The offsetting of derivative liabilities as of December 31, 2014 and 2013 consisted of:

As of December 31,	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in the Balance Sheet			Gross Amounts Not Offset in the Balance Sheet				Net Amount
									Financial Instruments		Cash Collateral Pledged
(Millions)
2014
Derivatives	$	(724	)	$	620	$	(104	)	$	66	$	1	$	(37	)
2013
Derivatives		(1,006	)		827		(179	)		41		82		(56	)

The effect of trading derivatives associated with Renewables and Gas activities for the years ended December 31, 2014, 2013 and 2012 consisted of:

Years Ended December 31,	2014			2013			2012
(Millions)
Wholesale electricity purchase contracts	$	(9	)	$	2		$	4
Wholesale electricity sales contracts		9			(1	)		(4	)
Financial power contracts		(2	)		(4	)		4
Financial and natural gas contracts		125			(21	)		(28	)
Total Gain (Loss)	$	123		$	(24	)	$	(24	)

F-41

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Such gains and losses are included in revenue in the combined and consolidated statements of operations.

The effect of non-trading derivatives associated with Renewables and Gas activities for the years ended December 31, 2014, 2013 and 2012 consisted of:

Years Ended December 31,	2014			2013			2012
(Millions)
Wholesale electricity purchase contracts	$	(8	)	$	9		$	3
Wholesale electricity sales contracts		15			(2	)		(22	)
Foreign exchange forward purchase contracts		—			—			(3	)
Financial power contracts		30			(19	)		(9	)
Natural gas and other fuel purchase contracts		(1	)		16			29
Total Gain (Loss)	$	36		$	4		$	(2	)

Such gains and losses are included in revenue and “Purchased Power and fuel used” operating expenses in the combined and consolidated statements of operations, depending upon the nature of the transaction.

(c) Counterparty credit risk management

NYSEG and RGE face risks related to counterparty performance on hedging contracts due to counterparty credit default. We have developed a matrix of unsecured credit thresholds that are dependent on the counterparty’s or the counterparty’s guarantor’s applicable credit rating, normally Moody or Standard & Poor’s. When our exposure to risk for a counterparty exceeds the unsecured credit threshold, the counterparty is required to post additional collateral or we will no longer transact with the counterparty until the exposure drops below the unsecured credit threshold.

We have various master netting arrangements in the form of multiple contracts with various single counterparties that are subject to contractual agreements that provide for the net settlement of all contracts through a single payment. Those arrangements reduce our exposure to a counterparty in the event of default on or termination of any single contract. For financial statement presentation purposes, we do not offset fair value amounts recognized for derivative instruments and fair value amounts recognized for the right to reclaim or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement. Under the master netting arrangements our obligation to return cash collateral was $0.2 million as of December 31, 2014 and 2013.

Certain of our derivative instruments contain provisions that require us to maintain an investment grade credit rating on our debt from each of the major credit rating agencies. If our debt were to fall below investment grade, we would be in violation of those provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit risk related contingent features that are in a liability position as of December 31, 2014 is $36.8 million, for which we have posted collateral. If the credit risk related contingent features underlying those agreements were triggered on December 31, 2014, we would receive a refund of collateral.

Note 12. Commitments and Contingent Liabilities

We are party to various legal disputes arising as part of our normal business activities. We do not provide for accrual of legal costs expected to be incurred in connection with a loss contingency.

F-42

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Transmission - FERC ROE Proceeding

CMP’s transmission rates are determined by a tariff regulated by the FERC and administered by ISO New England (ISO-NE). Transmission rates are set annually pursuant to a FERC authorized formula that allows for recovery of direct and allocated transmission operating and maintenance expenses, including return of and on investment in assets. The FERC provided a base ROE of 11.14% and additional incentive adders applicable to assets based upon vintage, voltage, and other factors.

Complaint I - In September 2011 the Massachusetts Attorney General filed a complaint with the FERC that the ROE was too high and should be lowered by 1.94%, to a value of 9.2%. CMP is a member of the New England Transmission Owners and is therefore subject to the outcome of the complaint proceeding. On October 16, 2014, the FERC issued an order in the ROE case which concluded:

• The base ROE is set at 10.57% effective October 16, 2014.

• There is an ROE cap on incentive returns of 11.74%, also effective October 16, 2014.

• The long-term growth rate used in the two-step discounted cash flows analysis should be Gross Domestic Product and is 4.39% in this proceeding. This aspect of their decision results from the paper hearing that FERC initiated in its June 2014 decision in this case.

• CMP must provide refunds for the period October 2011 through December 2012 with a base ROE of 10.57% and an ROE cap on incentives of 11.74%.

On March 3, 2015, the FERC issued an order on requests for rehearing of its October 16, 2014 decision. The March order upheld the FERC’s initial decision and further clarified that the 11.74% ROE cap will be applied on a project specific basis and not on a transmission owner’s total average return.

Complaint II - Filed December 27, 2012. On June 19, 2014, the FERC issued an order setting this case for settlement and hearing and set a refund effective date of December 27, 2012. The parties entered settlement negotiations which ended in late October 2014 when the parties were unable to reach agreement. The FERC has set a schedule for this case that calls for hearings in June 2015. The order estimates a decision by April 30, 2016, which date has subsequently been revised to September 2016.

Complaint III - Filed August 2014 by the initial complainants in Complaint II, reiterates the same positions in Complaint II. On November 24, 2014, the FERC issued an order setting the complaint for hearing, consolidating Complaints II and III, and establishing a refund effective date of July 31, 2014.

CMP reserved for refunds in 2013 and 2014. The 2013 reserve was $6.6 million associated with Complaint I. In 2014, CMP recorded an additional reserve as a regulatory liability of $29.9 million associated with Complaints I, II, and III. CMP’s reserved amounts reflect projected refund obligations that are consistent with the FERC’s March 3, 2015 final Complaint I decision.

NYPSC Staff Review of Earnings Sharing Calculations and Other Regulatory Deferrals

In December 2012, the NYPSC Staff (Staff) informed NYSEG and RGE that the Staff had conducted an audit of the companies’ annual compliance filings (ACF) for 2009 through August 31, 2010, and the first rate year of the current rate plan, September 1, 2010 through August 31, 2011. The Staff’s preliminary findings indicated adjustments to deferred balances primarily associated with storm costs and the treatment of certain incentive compensation costs for purposes of the 2011 ACF. The Staff’s findings approximate $9.8 million of adjustments to deferral balances and customer earnings sharing accruals. NYSEG and RGE reviewed the Staff’s adjustments

F-43

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

and work papers and provided a response in 2013. Staff has not yet replied to NYSEG’s and RGE’s response. NYSEG and RGE disagreed with certain staff conclusions and as a result have recorded a $3.4 million reserve in December 2012 in anticipation of settling the Staff issues. We cannot predict the ultimate outcome of this proceeding.

MNG rate case

On June 19, 2015 the Maine Commission staff issued their bench analysis in the rate proceeding proposing a disallowance in current rates of between approximately $10 million and $30 million of capital investment related to cost overages and low customer demand in the Augusta Maine expansion. The MNG rate filing is pending before the MPUC with a decision expected by the end of 2015.

Leases

Operating lease expense relating to operational facilities, office building leases, and vehicle and equipment leases was $48.7 million, $67.6 million and $41.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. Amounts related to contingent payments predominantly linked to electricity generation at the respective facilities was $20.4 million, $20.6 million and $12.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. Leases for most of the land on which wind farm facilities are located have various renewal and termination clauses.

Total future minimum lease payments as of December 31, 2014 consisted of:

(Millions)
Year	Operating Leases (a)		Capital Leases (a)		Total
2015	$	24	$	16	$	40
2016		24		9		33
2017		23		6		29
2018		22		5		27
2019		23		5		28
2020 and thereafter		257		58		315
Total	$	373	$	99	$	472

^(a)  Payments related to the period of remaining useful life of facilities are on an undiscounted basis.

In April 2013, we concluded a sale and subsequent lease-back transaction on one of our operating facilities for an initial cash receipt of $110 million. Under the terms of the agreement, we will simultaneously sell and then lease back the facility over a fifteen-year period, with an option to repurchase the facility at the end of year ten. During the lease period, we will continue to maintain and operate the entire facility. We accounted for this as a capital sale lease-back transaction, under which a lease payable liability is recognized which is offset by the increase in cash.

On January 16, 2014, as required by its regulator, NYSEG renewed a Reliability Support Services Agreement (RSS Agreement) with Cayuga Operating Company, LLC (Cayuga) for Cayuga to provide reliability support services to maintain necessary system reliability through June 2017. Cayuga owns and operates the Cayuga Generating Facility (Facility), a coal-fired generating station that includes two generating units. Cayuga will operate and maintain the RSS units and manage and comply with scheduling deadlines and requirements for maintaining the Facility and the RSS units as eligible energy and capacity providers and will comply with

F-44

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

dispatch instructions. NYSEG will pay Cayuga a monthly fixed price and will also pay for capital expenditures for specified capital projects. NYSEG will be entitled to a share of any capacity and energy revenues earned by Cayuga. We account for this arrangement as an operating lease. The net expense incurred under this operating lease was $19.8 million for the year ended December 31, 2014.

On December 31, 2014, we concluded the sale of our ten-percent undivided interest in Unit 1 of the Springerville power plant to Tucson Electric Power for $19.6 million. We had previously accounted for this plant as an operating lease. This transaction was recorded in “Other income and (expense)”.

Power, Gas, and Other Arrangements

Forward purchases and sales commitments under power, gas, and other arrangements as of December 31, 2014 consisted of:

(Millions)	Purchases								Sales
As of December 31,	Gas		Power		Other		Total		Gas		Power		Other		Total
2015	$	1,810	$	286	$	21	$	2,117	$	1,823	$	319	$	12	$	2,154
2016		222		102		11		335		296		127		3		426
2017		26		34		7		67		59		64		2		125
2018		24		30		4		58		21		20		2		43
2019		19		10		1		30		21		4		1		26
Thereafter		66		263		—		329		84		27		—		111
Totals	$	2,167	$	725	$	44	$	2,936	$	2,304	$	561	$	20	$	2,885

Guarantee Commitments to Third Parties

We and our subsidiaries are at times required to provide bank or corporate guarantees in the normal course of business. These include, but are not limited to, the following:

• Market Guarantees - guarantees given to cover risks of buying and trading electricity and gas with us or our subsidiaries.

• Performance Guarantees - guarantees given to secure fulfillment of obligations resulting from the exercise of our business activities or those of our subsidiaries.

At December 31, 2014 we had $14 million in externally backed guarantees. Management does not believe that we will be required to perform under these guarantees and as such has not recognized any associated liability.

IRHI has executed a guarantee and support agreement from Iberdrola, which obligates Iberdrola to provide any necessary financial support to IRHI to allow it to meet payment obligations on indebtedness that it may incur or for claims made against us pursuant to its obligations as a guarantor to its subsidiaries.

Property, Plant and Equipment

We have made future commitments to purchase property, plant, and equipment in order to continue to develop and grow our business. The amount of such future commitments was $168.3 million as of December 31, 2014.

F-45

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Note 13. Environmental Liability

Environmental laws, regulations and compliance programs may occasionally require changes in our operations and facilities and may increase the cost of electric and natural gas service. We do not provide for accruals of legal costs expected to be incurred in connection with loss contingencies.

The Environmental Protection Agency and various state environmental agencies, as appropriate, have notified us that we are among the potentially responsible parties that may be liable for costs incurred to remediate certain hazardous substances at twenty-three waste sites, which do not include sites where gas was manufactured in the past. Fourteen of the twenty-three sites are included in the New York State Registry of Inactive Hazardous Waste Disposal Sites; five sites are included in Maine’s Uncontrolled Sites Program and one site is included on the Massachusetts Non- Priority Confirmed Disposal Site list. The remaining sites are not included in any registry list. Finally, nine of the twenty-three sites are also included on the National Priorities list. Any liability may be joint and severable for certain sites.

We have recorded an estimated liability of $1 million related to nine of the twenty-three sites. We have paid remediation costs related to the remaining fourteen sites and do not expect to incur additional liabilities. We have recorded an estimated liability of $6 million related to another ten sites where we believe it is probable that we will incur remediation costs and or monitoring costs, although we have not been notified that we are among the potentially responsible parties or that we are regulated under State Resource Conservation and Recovery Act programs. It is possible the ultimate cost to remediate these sites may be significantly more than the accrued amount. Factors affecting the estimated remediation amount include the remedial action plan selected, the extent of site contamination, and the portion of remediation attributed to us.

We have a program to investigate and perform necessary remediation at our fifty-three sites where gas was manufactured in the past. Eight sites are included in the New York State Registry; eleven sites are included in the New York Voluntary Cleanup Program; three sites are part of Maine’s Voluntary Response Action Program and of those two sites are part of Maine’s Uncontrolled Sites Program. The remaining sites are not included in any registry list. We have entered into consent orders with various environmental agencies to investigate and where necessary remediate forty-seven of the fifty-three sites.

Our estimate for all costs related to investigation and remediation of the fifty-three sites ranges from a minimum of $312 million to $480 million as of December 31, 2014. Our estimate could change materially based on facts and circumstances derived from site investigations, changes in required remedial actions, changes in technology relating to remedial alternatives, and changes to current laws and regulations.

The liability to investigate and perform remediation at the known inactive gas manufacturing sites was $312 million and $280 million as of December 31, 2014 and 2013, respectively. We recorded a corresponding regulatory asset, net of insurance recoveries and the amount collected from FirstEnergy, as described below, because we expect to recover the net costs in rates. Our environmental liability accruals are recorded on an undiscounted basis and are expected to be paid through the year 2048.

FirstEnergy

NYSEG sued FirstEnergy under the Comprehensive Environmental Response, Compensation, and Liability Act to recover environmental cleanup costs at sixteen former manufactured gas sites. FirstEnergy’s liability was based on their status as successor to Associated Gas & Electric Company, a utility holding conglomerate that unlawfully dominated operations at the plants from approximately 1906 through 1942. In July 2011, the District

F-46

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Court issued a decision and order in NYSEG’s favor. Based on past and future clean-up costs at the sixteen sites in dispute, FirstEnergy would be required to pay NYSEG approximately $60 million if the decision were upheld on appeal. On September 9, 2011, FirstEnergy paid NYSEG $30 million, representing their share of past costs of $27 million and pre-judgment interest of $3 million.

FirstEnergy appealed the decision to the Second Circuit Court of Appeals. On September 11, 2014, the Second Circuit Court of Appeals affirmed the District Court’s decision in NYSEG’s favor, but modified the decision for nine sites, reducing NYSEG’s damages for incurred costs from $27 million to $22 million, excluding interest, and reducing FirstEnergy’s allocable share of future costs at these sites. NYSEG refunded FirstEnergy the excess $5 million in November 2014.

FirstEnergy remains liable for a substantial share of clean up expenses at nine MPG Energy sites. Because the District Court’s original damage award for incurred costs was based on 2009 figures, FirstEnergy now owes NYSEG an additional damages payment of approximately $16 million for cleanup costs incurred while the appeal was pending. FirstEnergy would also be liable for a share of future costs, which, based on current projections, would be $27 million. Both amounts are being treated as contingent assets and have not been recorded as either a receivable or a decrease to the environmental provision.

Century Indemnity and OneBeacon

On August 14, 2013, NYSEG filed suit in federal court against two excess insurers, Century Indemnity and OneBeacon, who provided excess liability coverage to NYSEG. NYSEG seeks payment for clean-up costs associated with contamination at twenty-two former manufactured gas plants. Based on estimated clean-up costs of $282 million, the carriers’ allocable share is approximately $89 million, excluding pre-judgment interest. Any recovery will be flowed through to NYSEG ratepayers.

Century and One Beacon have answered admitting issuance of the excess policies, but contesting coverage and providing documentation proving they received notice of the claims in the 1990s. We cannot predict the outcome of this matter.

Note 14. Income Taxes

Current and deferred taxes charged to expense for continuing operations for the years ended December 31, 2014, 2013 and 2012 consisted of:

Years Ended December 31,	2014			2013			2012
(Millions)
Current
Federal	($	10	)	($	22	)	$	10
State		31			(1	)		(23	)
Current taxes charged to expense (benefit)		21			(23	)		(13	)
Deferred
Federal		218			53			(114	)
State		82			40			47
Deferred taxes charged to expense (benefit)		300			93			(67	)
Production tax credit		(37	)		(42	)		(39	)
Investment tax credit		(2	)		(2	)		(2	)
Total Tax Expense (Benefit) for Continuing Operations	$	282		$	26		($	121	)

F-47

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The differences between tax expense of continuing operations and tax expense at the 35% statutory federal tax rate for the years ended December 31, 2014, 2013 and 2012 consisted of:

Years Ended December 31,	2014			2013			2012
(Millions)
Tax expense (benefit) at federal statutory rate	$	247		$	(13	)	$	17
Depreciation and amortization not normalized		15			24			(5	)
Investment tax credit amortization		(2	)		(2	)		(2	)
Tax return and audit adjustments		2			7			—
Production tax credits		(37	)		(42	)		(39	)
Tax equity financing arrangements		(11	)		(23	)		(16	)
Change in tax reserves		3			(2	)		(219	)
Impairment of non-deductible goodwill		—			38			133
Changes in New York tax law		41			—			—
State taxes, net of federal benefit		32			25			16
Other, net		(8	)		14			(6	)
Total Tax Expense (Benefit) for Continuing Operations	$	282		$	26		($	121	)

Deferred tax assets and liabilities as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014			2013
(Millions)
Current Deferred Income Tax Assets
Federal and state NOL’s	$	63		$	—
Regulatory		29			20
Other		5			26
Total Current Deferred Income Tax Assets	$	97		$	46
Less amounts classified as regulatory assets
Current deferred income taxes		29			20
Current Deferred Income Tax Assets	$	68		$	26
Non-current Deferred Income Tax Liabilities (Assets)
Property related	$	3,788		$	3,527
Unfunded future income taxes		150			142
Production tax and state tax credits		(317	)		(291	)
Accumulated deferred investment tax credits		16			17
Federal and state NOL’s		(1,203	)		(1,158	)
Joint Ventures/Partnerships		884			892
Nontaxable grant revenue		(622	)		(646	)
Other		71			(57	)
Non-current Deferred Income Tax Liabilities		2,767			2,426
Add: Valuation allowance		17			9
Total Non-current Deferred Income Tax Liabilities		2,784			2,435
Less amounts classified as regulatory liabilities
Non-current deferred income taxes		462			313
Non-current Deferred Income Tax Liabilities	$	2,322		$	2,122
Deferred tax assets	$	2,239		$	2,198
Deferred tax liabilities		4,926			4,587
Net Accumulated Deferred Income Tax Liabilities	$	2,687		$	2,389

F-48

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Valuation allowances are recorded to reduce deferred tax assets when it is not more-likely-than not that all or a portion of a tax benefit will be realized. A valuation allowance for the entire $9 million (net of federal benefit) carryforward of Maine Research and Development Super credits generated in tax years 2007 through 2012 was established as of December 31, 2012 with no change in this balance as of December 31, 2014 or 2013. In 2014 a valuation allowance of $8 million, (net of federal benefit), was established on various state NOLs.

The reconciliation of gross income tax reserves for the years ended December 31, 2014, 2013 and 2012 consisted of:

Years ended December 31,	2014			2013			2012
(Millions)
Beginning Balance	$	41		$	91		$	347
Increases for tax positions related to prior years		20			4			57
Reduction for tax position related to settlements with taxing authorities		(23	)		(54	)		(313	)
Ending Balance	$	38		$	41		$	91

The accounting guidance for uncertainty in income taxes provides that the financial effects of a tax position shall initially be recognized when it is more likely than not based on the technical merits the position will be sustained upon examination, assuming the position will be audited and the taxing authority has full knowledge of all relevant information.

Unrecognized income tax benefits represent income tax positions taken on income tax returns but not yet recognized in the combined and consolidated financial statements. We have unrecognized income tax benefits of $38 million, $41 million, and $91 million for the years ended December 31, 2014, 2013 and 2012, respectively. Accruals for interest and penalties on tax reserves were $3 million, $11 million, and $22 million for the years ended December 31, 2014, 2013 and 2012, respectively. If recognized, $7 million of the total gross unrecognized tax benefits would affect the effective tax rate.

The total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax benefits within 12 months of December 31, 2014 is estimated to be between $5 million and $14 million, primarily relating to the statute of limitation lapses and tax exam settlements.

During 2012, the Internal Revenue Service concluded its examination of IRHI for the 2008–2009 tax years, the results of which were reviewed by the Joint Committee on Taxation of the United State Congress and approved April 1, 2013. All federal tax returns filed by IRHI from the period ended March 31, 2004 to December 31, 2009, are closed for adjustment. Generally, the adjustment period for the individual states the company filed in is at least as long as the federal period.

On December 29, 2014, the Joint Committee on Taxation approved the examination of IUSA and its subsidiaries, without IRHI, for the tax years 1998 through 2009. The results of these audits, net of reserves already provided, were immaterial. All New York and Maine state returns, which were filed without IRHI, are closed through 2011.

At December 31, 2014, we had federal tax net operating losses of $3.4 billion, federal renewable energy credits, federal R&D tax credits and other federal credits of $311 million, state tax net operating losses of varying values in several jurisdictions and miscellaneous state tax credits of $17 million available to carry forward and reduce future income tax liabilities. The tax value of the state net operating losses is $136 million. For state purposes, we recognized a valuation allowance of $26 million. The federal and state net operating losses begin to expire in 2025, while the federal tax credits begin to expire in 2024.

F-49

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Note 15. Post-retirement and Similar Obligations

Networks have funded noncontributory defined benefit pension plans that cover substantially all Networks employees. The plans provide defined benefits based on years of service and final average salary for employees hired before 2002. Employees hired in 2002 or later are covered under a cash balance plan or formula where their benefit accumulates based on a percentage of annual salary and credited interest. During 2013, Networks announced that they would discontinue, effective December 31, 2013, the cash balance accruals for all non-union employees covered under the cash balance plans. CMP’s unionized employees covered under the cash balance plans ceased to receive accruals as of December 31, 2014. Their earned balances will continue to accrue interest but will no longer be increased by a percentage of earnings. Instead, they will receive a minimum contribution to their account under their respective company’s defined contribution plan. There was no change to the defined benefit plans for employees covered under the plans that provide defined benefits based on years of service and final average salary.

Networks have other postretirement health care benefit plans covering substantially all Networks’ employees. The healthcare plans are contributory and participants contributions are adjusted annually.

IRHI have funded defined benefit pension plans for eligible employees hired prior to January 1, 2008. The benefit is based on participant’s age, service, and five years average pay at the time of the freeze date of April 30, 2011. IRHI have other postretirement health care benefit plans covering eligible retirees and employees hired prior to January 1, 2008. Health and life insurance rates are based on age and service points at the time of retirement.

Obligations and funded status as of December 31, 2014 and 2013 consisted of:

	Pension Benefits						Postretirement Benefits
As of December 31,	2014			2013			2014			2013
(Millions)
Change in benefit obligation
Benefit obligation as of January 1,	$	2,316		$	2,629		$	385		$	435
Service cost		30			36			5			5
Interest cost		110			105			18			17
Plan participants’ contributions		—			—			4			4
Plan amendments		—			—			—			(2	)
Actuarial (gain) loss		439			(237	)		64			(38	)
Benefits paid		(275	)		(217	)		(41	)		(36	)
Benefit Obligation as of December 31,		2,620			2,316			435			385
Change in plan assets
Fair value of plan assets as of January 1,		2,223			2,244			128			120
Actual return on plan assets		163			188			4			12
Employer contributions		31			8			37			31
Plan participants’ contributions		—			—			4			4
Benefits paid		(274	)		(217	)		(40	)		(36	)
Withdrawal from VEBA		—			—			(4	)		(3	)
Fair Value of Plan Assets as of December 31,		2,143			2,223			129			128
Funded Status as of December 31,	$	(477	)	$	(93	)	$	(306	)	$	(257	)

F-50

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Amounts recognized as of December 31, 2014 and 2013 consisted of:

	Pension Benefits						Postretirement Benefits
As of December 31,	2014			2013			2014			2013
(Millions)
Non-current assets	$	—		$	52		$	—		$	—
Current liabilities		—			—			(5	)		(6	)
Non-current liabilities		(477	)		(145	)		(301	)		(251	)
Total	$	(477	)	$	(93	)	$	(306	)	$	(257	)

Networks offered terminated vested employees an option to receive their future pension benefit as a lump sum in 2013. Approximately $59.9 million of payments were made in 2013 as a result of terminated vested employees exercising the lump sum option. An additional $5.8 million was paid in 2014. The lump sum payments did not trigger settlement accounting.

Networks made a similar offer during 2014 to retired employees who are currently receiving benefits. Approximately $118.5 million of payments were made in 2014 as a result of retired employees exercising the lump sum option. The lump sum payments did not trigger settlement accounting.

Amounts recognized in OCI for the years ended December 31, 2014, 2013 and 2012 consisted of:

	Pension Benefits						Postretirement Benefits
Years Ended December 31,	2014		2013		2012		2014		2013		2012
(Millions)
Net loss	$	22	$	16	$	31	$	8	$	14	$	7

We have determined that all Networks’ regulated operating companies are allowed to defer as regulatory assets or regulatory liabilities items that would have otherwise been recorded in accumulated OCI pursuant to the accounting requirements concerning defined benefit pension and other postretirement plans.

Amounts recognized as regulatory assets or regulatory liabilities for the years ended December 31, 2014, 2013 and 2012 consisted of:

	Pension Benefits						Postretirement Benefits
Years Ended December 31,	2014		2013		2012		2014			2013			2012
(Millions)
Net loss	$	1,045	$	704	$	1,069	$	96		$	24		$	77
Prior service cost (credit)	$	12		16		20		(57	)		(67	)		(79	)

Our accumulated benefit obligation for all defined benefit pension plans was $2,436 million and $2,177 million as of December 31, 2014 and 2013, respectively. CMP’s and NYSEG’s postretirement benefits were partially funded as of December 31, 2014 and 2013. NYSEG had no withdrawals from its postretirement benefit fund during 2014 or 2013. CMP withdrew $4.1 million and $3.0 million to reimburse itself for a portion of benefits paid for in 2014 and 2013, respectively.

The projected benefit obligation and the accumulated benefit obligation exceeded the fair value of pension plan assets for all plans as of December 31, 2014 and for all plans except NYSEG’s plan as of December 31, 2013.

F-51

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The aggregate projected and accumulated benefit obligations and the fair value of plan assets for underfunded plans as of December 31, 2014 and 2013 consisted of:

	Projected Benefit Obligation Exceeds Fair Value of Plan Assets				Accumulated Benefit Obligation Exceeds Fair Value of Plan Assets
As of December 31,	2014		2013		2014		2013
(Millions)
Projected benefit obligation	$	2,620	$	834	$	2,620	$	834
Accumulated benefit obligation		2,436		774		2,436		774
Fair value of plan assets		2,143		689		2,143		689

Components of Networks’ net periodic benefit cost and other changes in plan assets and benefit obligations recognized in income and regulatory assets and liabilities as of December 31, 2014, 2013 and 2012 consisted of:

(Millions)	Pension Benefits									Postretirement Benefits
As of December 31,	2014			2013			2012			2014			2013			2012
Net Periodic Benefit Cost:
Service cost	$	30		$	36		$	31		$	4		$	5		$	4
Interest cost		107			102			107			17			16			20
Expected return on plan assets		(161	)		(166	)		(171	)		(7	)		(7	)		(6	)
Amortization of prior service cost (benefit)		4			4			5			(11	)		(14	)		(9	)
Amortization of net loss		94			120			110			—			3			6
Amortization of transition obligation		—			—			—			—			—			7
Net Periodic Benefit Cost		74			96			82			3			3			22
Other Changes in plan assets and benefit obligations recognized in regulatory assets and regulatory liabilities:
Net loss (gain)	$	434		$	(244	)	$	155		$	72		$	(50	)	$	21
Amortization of net (loss)		(94	)		(120	)		(110	)		—			(3	)		(6	)
Current year prior service cost		—			—			—			—			(2	)		(74	)
Amortization of prior service (cost)		(4	)		(4	)		(5	)		11			14			9
Amortization of transition obligation		—			—			—			—			—			(7	)
Total Other Changes		336			(368	)		40			83			(41	)		(57	)
Total Recognized	$	410		$	(272	)	$	122		$	86		$	(38	)	$	(35	)

F-52

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Components of IRHI’s net periodic benefit cost and other changes in plan assets and benefit obligations recognized in income and OCI as of December 31, 2014, 2013 and 2012 consisted of:

(Millions)	Pension Benefits									Postretirement Benefits
As of December 31,	2014			2013			2012			2014			2013			2012
Net Periodic Benefit Cost:
Service cost	$	—		$	—		$	—		$	1		$	1		$	1
Interest cost		2			2			3			1			1			1
Expected return on plan assets		(3	)		(3	)		(4	)		—			—			—
Amortization of prior service cost (benefit)		—			—			—			1			1			1
Amortization of net loss		—			1			—			1			—			—
Settlement charge		—			2			—			—			—			—
Net Periodic Benefit Cost (income)		(1	)		2			(1	)		4			3			3
Other Changes in plan assets and benefit obligations recognized in OCI:
Net loss (gain)		6			(12	)		11			(5	)		7			—
Amortization of net (loss)		—			(3	)		—			(1	)		—			—
Amortization of prior service (cost)		—			—			—			(1	)		(1	)		(1	)
Total Other Changes		6			(15	)		11			(7	)		6			(1	)
Total Recognized	$	5		$	(13	)	$	10		$	(3	)	$	9		$	2

The net periodic benefit cost for postretirement benefits represents the amount expensed for providing health care benefits to retirees and their eligible dependents. We include the net periodic benefit cost in other operating expenses net of capitalized portion.

Amounts expected to be amortized from regulatory assets or liabilities into net periodic benefit cost for the year ending December 31, 2015 consisted of:

Year Ended December 31, 2015	Pension Benefits		Postretirement Benefits
(Millions)
Estimated net loss	$	130	$	7
Estimated prior service cost (benefit)		3		(9	)

Amounts expected to be amortized from OCI into net periodic benefit cost for the year ending December 31, 2015 consisted of:

Year Ended December 31, 2015	Pension Benefits		Postretirement Benefits
(Millions)
Estimated net loss	$	1	$	1
Estimated prior service cost (benefit)		—		1

We expect that no pension benefit or postretirement benefit plan assets will be returned to us during the year ending December 31, 2015.

F-53

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The weighted-average assumptions used to determine benefit obligations as of December 31, 2014 and 2013 consisted of:

	Pension Benefits						Postretirement Benefits
As of December 31,	2014			2013			2014			2013
Discount rate - Networks		3.80	%		4.90	%		3.80	%		4.90	%
Discount rate - IRHI		3.90	%		5.00	%		3.90	%		5.00	%
Rate of compensation increase - Networks		4.10	%		4.20	%		—			—

The discount rate is the rate at which the benefit obligations could presently be effectively settled. We determined the discount rates by developing yield curves derived from a portfolio of high grade noncallable bonds with yields that closely match the duration of the expected cash flows of our benefit obligations.

The weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2014, 2013 and 2012 consisted of:

	Pension Benefits									Postretirement Benefits
Years Ended December 31,	2014			2013			2012			2014			2013			2012
Discount rate - Networks		4.90	%		4.10	%		4.75	%		4.90	%		4.10	%		4.75	%
Discount rate - IRHI		5.00	%		4.00	%		5.00	%		5.00	%		4.00	%		5.00	%
Expected long-term return on plan assets - Networks		7.50	%		7.50	%		7.75	%		—			—			—
Expected long-term return on plan assets - IRHI		6.90	%		6.50	%		7.25	%		6.50	%		6.25	%		6.75	%
Expected long-term return on plan assets - nontaxable trust - Networks		—			—			—			7.50	%		7.50	%		7.50	%
Expected long-term return on plan assets - taxable trust - Networks		—			—			—			5.00	%		5.00	%		4.75	%
Rate of compensation increase - Networks		4.20	%		4.00	%		4.00	%		—			—			—

We developed our expected long-term rate of return on plan assets assumption based on a review of long-term historical returns for the major asset classes, the target asset allocations, and the effect of rebalancing of plan assets discussed below. Our analysis considered current capital market conditions and projected conditions. CMP, NYSEG, and RGE amortize unrecognized actuarial gains and losses either over ten years from the time they are incurred, or using the standard amortization methodology under which amounts in excess of ten-percent of the greater of the projected benefit obligation or market related value are amortized over the plan participants’ average remaining service to retirement.

Assumed health care cost trend rates used to determine benefit obligations as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014	2013
Health care cost trend rate assumed for next year - Networks	7.75%/7.25%	8.0% - 7.5%
Health care cost trend rate assumed for next year - IRHI	7.75%/6.75%	7.75%
Rate to which cost trend rate is assumed to decline (ultimate trend rate) - Networks	4.5%	4.5%
Rate to which cost trend rate is assumed to decline (ultimate trend rate) - IRHI	4.75%	4.75%
Year that the rate reaches the ultimate trend rate - Networks	2027	2027
Year that the rate reaches the ultimate trend rate - IRHI	2025	2025

F-54

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The effects of a one-percent change in the assumed health care cost trend rates would have the following effects:

	1% Increase		1% Decrease
(Millions)
Effect on total of service and interest cost	$	1	$	(1	)
Effect on postretirement benefit obligation		10		(8	)

Contributions

We make annual contributions in accordance with our funding policy of not less than the minimum amounts as required by applicable regulations. We expect to contribute $1 million to our pension benefit plans during 2015.

Estimated Future Benefit Payments

Expected benefit payments and Medicare Prescription Drug, Improvement and Modernization Act of 2003 subsidy receipts reflecting expected future service as of December 31, 2014 consisted of

(Millions)	Pension Benefits		Postretirement Benefits		Medicare Act Subsidy Receipts
2015	$	151	$	27	$	—
2016		155		27		—
2017		159		27		—
2018		161		27		—
2019		163		28		—
2020 - 2024		832		139		2

Non-Qualified Pension Plans

We also sponsor various unfunded pension plans for certain current employees, former employees and former directors. The total liability for these plans, which is included in Other Non-current Liabilities was $43 million and $37 million at December 31, 2014 and 2013, respectively.

Plan Assets

Our pension benefits plan assets for Networks and IRHI are held in two master trusts. This provides for a uniform investment manager lineup and an efficient, cost effective means of allocating expenses and investment performance to each plan. Our primary investment objective is to ensure that current and future benefit obligations are adequately funded and with volatility commensurate with our risk tolerance. Preservation of capital and achievement of sufficient total return to fund accrued and future benefits obligations are of highest concern. Our primary means for achieving capital preservation is through diversification of the trusts’ investments while avoiding significant concentrations of risk in any one area of the securities markets. Further diversification is achieved within each asset group through utilizing multiple asset managers and systematic allocation to various asset classes and providing broad exposure to different segments of the equity, fixed income, and alternative investment markets.

Networks’ asset allocation policy is the most important consideration in achieving our objective of superior investment returns while minimizing risk. We have established a target asset allocation policy within allowable ranges for our pension benefits plan assets within broad categories of asset classes made up of Return-Seeking

F-55

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

and Liability-Hedging investments. Within the Return-Seeking category, we have targets of thirty-five-percent in equity securities and twenty-percent in equity alternative investments. The Liability-Hedging asset class has a target allocation percentage of forty-five-percent. Return-Seeking investments generally consist of domestic, international, global, and emerging market equities invested in companies across all market capitalization ranges. Return-Seeking assets also include investments in real estate, absolute return, and strategic markets. Liability-Hedging investments generally consist of long-term corporate bonds, annuity contracts, long-term treasury STRIPS, and opportunistic fixed income investments. Systematic rebalancing within the target ranges increases the probability that the annualized return on the investments will be enhanced, while realizing lower overall risk, should any asset categories drift outside their specified ranges.

IRHI’s investment portfolio contains a diversified blend of equity, fixed income, and other investments. Equity investments are diversified across U.S. and non-U.S. stocks, investment styles, and market capitalization ranges. Fixed income investments are primarily invested in U.S. bonds and may also include some non-U.S. bonds. Other asset classes, including real estate, absolute return, and real return, are used to enhance long-term returns while improving portfolio diversification. We primarily minimize the risk of large losses through diversification but also through monitoring and managing other aspects of risk through quarterly investment portfolio reviews, annual liability measurements, and periodic asset and liability studies.

The fair values of pension benefits plan assets, by asset category, as of December 31, 2014 consisted of:

As of December 31, 2014			Fair Value Measurements
(Millions)	Total		Level 1		Level 2		Level 3
Asset Category
Cash and cash equivalents	$	48	$	4	$	44	$	—
U.S. government securities		177		177		—		—
Common stocks		447		360		87		—
Registered investment companies		116		116		—		—
Corporate bonds		367		23		344		—
Preferred stocks		4		—		4		—
Common collective trusts		477		—		28		449
Partnerships/joint venture interests		79		—		—		79
Real estate investments		77		2		—		75
Other, principally annuity, fixed income		351		5		4		342
Total	$	2,143	$	687	$	511	$	945

F-56

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The fair values of pension benefits plan assets, by asset category, as of December 31, 2013 consisted of:

As of December 31, 2013			Fair Value Measurements
(Millions)	Total		Level 1		Level 2		Level 3
Asset Category
Cash and cash equivalents	$	43	$	1	$	42	$	—
U.S. government securities		188		188		—		—
Common stocks		634		453		181		—
Registered investment companies		115		115		—		—
Corporate bonds		236		11		225		—
Preferred stocks		2		2		—		—
Common/collective trusts		513		—		55		458
Partnership/joint venture interests		57		—		—		57
Real estate investments		70		3		—		67
Other, principally annuity, fixed income		365		27		1		337
Total	$	2,223	$	800	$	504	$	919

Valuation Techniques

We value our pension benefits plan assets as follows:

• Cash and cash equivalents - Level 1: at cost, plus accrued interest, which approximates fair value. Level 2: proprietary cash associated with other investments, based on yields currently available on comparable securities of issuers with similar credit ratings.

• U.S. government securities, Common stocks and Registered investment companies - at the closing price reported in the active market in which the security is traded.

• Corporate bonds - based on yields currently available on comparable securities of issuers with similar credit ratings.

• Mutual funds - based upon quoted market prices in active markets, which represent the Net Asset Value (NAV) of the shares held.

• Preferred stocks - at the closing price reported in the active market in which the individual investment is traded.

• Common/collective trusts and Partnership/joint ventures - using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is classified as Level 2 if the plan has the ability to redeem the investment with the investee at NAV per share at the measurement date. Redemption restrictions or adjustments to NAV based on unobservable inputs result in the fair value measurement being classified as Level 3 if those inputs are significant to the overall fair value measurement.

• Real estate investments - based on a discounted cash flow approach that includes the projected future rental receipts, expenses and residual values because the highest and best use of the real estate from a market participant view is as rental property.

• Other investments, principally annuity and fixed income - Level 1: at the closing price reported in the active market in which the individual investment is traded. Level 2: based on yields currently available on comparable securities of issuers with similar credit ratings. Level 3: when quoted prices are not available for

F-57

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

identical or similar instruments, under a discounted cash flows approach that maximizes observable inputs such as current yields of similar instruments but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

Fair value measurements using Level 3 inputs as of December 31, 2014, 2013 and 2012 consisted of:

(Millions)	Common Collective Trusts			Partnership Joint Venture Interests		Real Estate Investments		Other Investments			Total
As of December 31, 2012	$	250		$	50	$	59	$	319		$	678
Actual return on plan assets:
Relating to assets still held at reporting date		—			—		—		(2	)		(2	)
Relating to assets sold during the year		49			7		5		(7	)		54
Purchases, sales and settlements		159			—		3		27			189
As of December 31, 2013	$	458		$	57	$	67	$	337		$	919
Actual return on plan assets:
Relating to assets still held at reporting date		59			—		—		—			59
Relating to assets sold during the year		(48	)		3		6		5			(34	)
Purchases, sales and settlements		(20	)		19		2		—			1
As of December 31, 2014	$	449		$	79	$	75	$	342		$	945

Our postretirement benefits plan assets are held with trustees in multiple voluntary employees’ beneficiary association (VEBA) and 401(h) arrangements and are invested among and within various asset classes to achieve sufficient diversification in accordance with our risk tolerance. This is achieved for our postretirement benefits plan assets through the utilization of multiple institutional mutual and money market funds, providing exposure to different segments of the fixed income, equity and short-term cash markets. Approximately twenty-five-percent of the postretirement benefits plan assets are invested in VEBA and 401(h) arrangements that are not subject to income taxes with the remainder being invested in arrangements subject to income taxes.

Networks have established a target asset allocation policy within allowable ranges for postretirement benefits plan assets of forty-seven-percent equity securities, thirty-eight-percent fixed income, and fifteen-percent for all other investment types. The target allocations within allowable ranges are further diversified into twenty-percent large cap domestic equities, twelve-percent medium and small cap domestic equities, ten-percent international developed market, and five-percent emerging market equity securities. Fixed income investment targets and ranges are segregated into core fixed income at thirty-one-percent, global high yield fixed income at four-percent, and international developed market debt at three-percent. Other alternative investment targets are five-percent for real estate, five-percent for absolute return, and five-percent for tangible assets. Systematic rebalancing within target ranges increases the probability that the annualized return on investments will be enhanced, while realizing lower overall risk, should any asset categories drift outside their specified ranges.

F-58

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The fair value of other postretirement benefits plan assets, by asset category, as of December 31, 2014 consisted of:

As of December 31, 2014			Fair Value Measurements
(Millions)	Total		Level 1		Level 2		Level 3
Asset Category
Money market funds	$	4	$	4	$	—	$	—
Mutual funds, fixed		16		16		—		—
Government and corporate bonds		24		22		2		—
Mutual funds, equity		42		42		—		—
Common stocks		34		34		—		—
Mutual funds, other		8		8		—		—
Total	$	128	$	126	$	2	$	—

The fair values of other postretirement benefits plan assets, by asset category, as of December 31, 2013 consisted of:

As of December 31, 2013			Fair Value Measurements
(Millions)	Total		Level 1		Level 2		Level 3
Asset Category
Money market funds	$	6	$	6	$	—	$	—
Mutual funds, fixed		20		20		—		—
Government and corporate bonds		18		9		9		—
Mutual funds, equity		42		42		—		—
Common stocks		37		37		—		—
Mutual funds, other		5		5		—		—
Total	$	128	$	119	$	9	$	—

Valuation Techniques

We value our postretirement benefits plan assets as follows:

• Money market funds and mutual funds - based upon quoted market prices in active markets, which represent the NAV of shares held.

• Government bonds, and common stocks - at the closing price reported in the active market in which the security is traded.

• Corporate bonds - based on yields currently available on comparable securities of issuers with similar credit ratings.

Pension and postretirement benefit plan equity securities did not include any Iberdrola common stock as of December 31, 2014.

Defined contribution plans

We also have defined contribution plans defined as 401(k)s. The annual contributions made through these plans amounted to $20 million, $14 million and $15 million for 2014, 2013, and 2012 respectively.

F-59

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Note 16. Equity

Our share capital consisted of 243 shares, authorized and outstanding, wholly owned by Iberdrola S.A., each having a par value of $0.01, for a total value of additional paid in capital of $11,378 million as of December 31, 2014 and 2013, respectively. All ordinary shares have the same voting and economic rights. We have no treasury shares or convertible preferred shares as of December 31, 2014 or 2013. During 2013 IRHI issued shares to Iberdrola in return for $153 million in cash, $550 million in the form of a loan note and the remaining $10 million in accrued interest on the loan note. The loan note was an obligation of Networks and as a result of the reorganization in November 2013 the IRHI loan receivable and the Networks loan payable have been eliminated in the combined and consolidated financial statements.

Accumulated OCI (Loss)

Accumulated OCI for the years ended December 31, 2014, 2013 and 2012 consisted of:

Accumulated Other Comprehensive Income (Loss)	As of January 1, 2012			2012 Change			As of December 31, 2012			2013 Change			As of December 31, 2013			2014 Change			As of December 31, 2014
(Millions)
Loss on revaluation of defined benefit plans, net of income tax (expense) benefit of $5 for 2012, $(0.5) for 2013 and $(0.6) for 2014	$	(19	)	$	(8	)	$	(27	)	$	1		$	(26	)	$	1		$	(25	)
Loss for nonqualified pension plans, net of income tax (expense) benefit of $(1.0) for 2013 and $1.9 for 2014		(7	)		—			(7	)		(1	)		(8	)		(3	)		(11	)
Unrealized (loss) gain on derivatives qualified as cash flow hedges:
Unrealized (loss) during period on derivatives qualified as cash flow hedges, net of income tax (expense) benefit of $(3.7) for 2012 and $1.4 for 2014		(7	)		7			—			—			—			(2	)		(2	)
Reclassification adjustment for losses on settled cash flow hedges, net of income tax benefit of $3.7 for 2012, $4.6 for 2013 and $4.1 for 2014 (a)		(79	)		6			(73	)		7			(66	)		5			(61	)
Net unrealized (loss) gain on derivatives qualified as cash flow hedges		(86	)		13			(73	)		7			(66	)		3			(63	)
Accumulated Other Comprehensive (Loss) Income	$	(112	)	$	5		$	(107	)	$	7		$	(100	)		1		$	(99	)

^(a)  Reclassification is reflected in the operating expenses line item in the combined and consolidated statements of operations.

Note 17. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) available to Iberdrola USA, Inc. by the weighted-average number of shares of our common stock outstanding. We did not have any potentially-dilutive securities for the years ended December 31, 2014, 2013 and 2012.

F-60

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

We completed a series of reorganizations of entities under common control in November 2013. For purposes of computing net income (loss) per share, it is assumed that the Reorganization had occurred at the beginning of the earliest period presented consistent with the pooling of interest method. Therefore, the outstanding shares for the periods preceding the Reorganization reflect the series of reorganizations of entities under common control.

The calculations of basic and diluted earnings (loss) per share from continuing and discontinued operations attributable to Iberdrola USA, Inc., including a reconciliation of the numerators and denominators for the years ended December 31, 2014, 2013 and 2012 consisted of:

Years Ended December 31,	2014		2013			2012
(Millions, except for number of shares)
Numerator:
Net income (loss) from continuing operations available to Iberdrola USA, Inc.	$	424	$	(65	)	$	169
Net income from discontinued operations available to Iberdrola USA, Inc.		—		—			74
Denominator:
Weighted average number of shares outstanding - basic and diluted		243		243			243
Earnings per share from continuing and discontinued operations attributable to Iberdrola USA, Inc.
Net Income (Loss) Per Share, Basic and Diluted - Continuing Operations	$	1.7	$	(0.3	)	$	0.7
Net Income Per Share, Basic and Diluted - Discontinued Operations		—		—			0.3
Total	$	1.7	$	(0.3	)	$	1.0

Note 18. Tax equity financing arrangements

The sale of a membership interest in the tax equity financing arrangements (TEFs) represents the sale of an equity interest in a structure that is considered in substance real estate. Under existing guidance for real estate financings, the membership interests in the TEFs we sold to the third-party investors are reflected as a financing obligation in the consolidated balance sheets. We continue to fully consolidate the TEFs’ assets and liabilities in the consolidated balance sheets and to report the results of the TEFs’ operations in the combined and consolidated statements of operations. The presentation reflects revenues and expenses from the TEFs’ operations on a fully consolidated basis. The liabilities are increased for cash contributed by the third-party investors, interest accrued, and the federal income tax impact to the third-party investors of the allocation of taxable income. Interest is accrued on the balance using the effective interest method and the third-party investors’ targeted rate of return. The balance accrues interest at an average rate of 7.2% and 6.1% as of December 31, 2014 and 2013, respectively. The liabilities are reduced by cash distributions to the third-party investors, the allocation of production tax credits to the third-party investors, and the federal income tax impact to the third-party investors of the allocation of taxable losses. This treatment is expected to remain consistent over the terms of the TEFs.

We consider the following five structures to be TEFs: (1) Aeolus Wind Power I LLC, (2) Aeolus Wind Power II LLC, (3) Aeolus Wind Power III LLC, (4) Aeolus Wind Power IV LLC , and (5) Locust Ridge Wind Farms, LLC, (collectively, Aeolus). We retain a class of membership interest and day-to-day operational and management control of Aeolus, subject to investor approval of certain major decisions. The third-party investors do not receive a lien on any Aeolus assets and have no recourse against us for their upfront cash payments.

Wind power generation is subject to certain favorable tax treatments in the U.S. In order to monetize the tax benefits generated by Aeolus, we have entered into the Aeolus structured institutional partnership investment

F-61

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

transactions related to certain wind farms located throughout the U.S. Under the Aeolus structures, we contribute certain wind assets, relating both to existing wind farms and wind farms that are being placed into operation at the time of the relevant transaction, and other parties invest in the share equity of the Aeolus limited liability holding company. As consideration for their investment, the third parties pay us a specified amount of upfront cash and enter into fixed and or contingent notes.

The third party investors receive a disproportionate amount of the profit or loss, cash distributions and tax benefits resulting from the wind farm energy generation for a specified period of time under each Aeolus structure. For Aeolus wind farm structures the disproportionate returns of the investors represented a percentage of the cash flows and tax benefits from the Aeolus wind farm operations during the preferential return period, which continues until the investor entitled to the preferential return recovers its investment and achieves a cumulative annual after-tax return.

We cannot estimate the preferential return period for Aeolus wind farm structures, because the length of the preferential return period depends on estimated future cash flows and projected tax benefits. The majority of the profit and or loss, cash distributions, and tax benefits, if any, flip back to us at the end of the specified period.

During 2014, the investor returns on the Aeolus I structure successfully met the investor requirements, causing the structure to flip back to us, with the investor and we each retaining returns proportionate to our investments. The investor interest is now being recorded as a ten-percent noncontrolling interest, with a commensurate share of the portfolio returns.

Our Aeolus interests are not subject to any rights of investors which may restrict our ability to access or use the assets or to settle any existing liabilities associated with the interests.

One Aeolus transaction provides the third-party investor class with a contingent put option in case a specified event occurs as defined in the Aeolus agreements. If the put option were exercised, we would be obliged to buy the third-party investor’s member interest. All Aeolus transactions provide us with a call option to acquire the third-party investor’s member interest upon the occurrence of a specified event as defined in the Aeolus agreements. Such an event did occur in 2013 and we exercised our option to repurchase a portion of the holding of one of the third-party investors for $51.4 million.

Note 19. Grants, Government Incentives and Deferred Income

The changes in deferred income as of December 31, 2014 and 2013 consisted of:

(Millions)	Government grants			Other deferred income			Total
As of December 31, 2012	$	1,768		$	7		$	1,775
Additions		27			25			52
Recognized in income		(111	)		(13	)		(124	)
As of December 31, 2013		1,684			19			1,703
Additions		—			4			4
Recognized in income		(78	)		(8	)		(86	)
As of December 31, 2014	$	1,606		$	15		$	1,621

Within government grants we classify grants we received under Section 1603 of the American Recovery and Reinvestment Act of 2009, where the United States Department of Treasury (DOT) provides eligible parties the

F-62

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

option of claiming grants for specified energy property in lieu of tax credits, which we claimed for the majority of our qualifying properties. Deferred income has been recorded for the grant amounts and is amortized as an offset against depreciation expense using the straight-line method over the estimated useful life of the associated property to which the grants apply. We recognize a net deferred tax asset for the book to tax basis differences related to the property for income tax purposes.

We are required to comply with certain terms and conditions applicable to each grant and, if a disqualifying event should occur as specified in the grant’s terms and conditions, we are required to repay the grant funds to the DOT. We believe we are in compliance with each grant’s terms and conditions as of December 31, 2014 and 2013.

Other deferred income relates predominantly to gas storage transactions where revenues are recognized as services are provided.

Government grants related to depreciable assets and contributions in aid of construction treated as credits to property, plant and equipment in accordance with FERC requirements were $323 million and $286 million as of December 31, 2014 and 2013, respectively.

Note 20. Equity method investments

We have a 50-50 joint venture with Shell Wind Energy, Inc., which owns and operates a 162- megawatt (MW) wind farm located in southeast Colorado (Colorado Wind Ventures LLC), which commenced operations in January 2004. We account for this venture under the equity method of accounting. Our maximum exposure to loss is our net investment, of which the carrying amount was $66 million and $69 million as of December 31, 2014 and 2013, respectively.

We have two 50-50 joint ventures with Horizon Wind Energy, LLC, which own and operate the Flat Rock Windpower LLC and the Flat Rock Wind Power II LLC wind farms located in upstate New York. Flat Rock Wind Power LLC, which commenced operations in January 2006, has a 231-MW capacity. Flat Rock Wind Power II LLC commenced operations in September 2007 and has a 91-MW capacity. We account for the Flat Rock joint ventures under the equity method of accounting. Our maximum exposure to loss is our net investments, of which the carrying amount totaled $146 million and $156 million for Flat Rock Wind Power LLC, and $50 million and $53 million for Flat Rock Wind Power II LLC, as of December 31, 2014 and 2013, respectively.

Summarized combined financial information for these equity method investments is as follows:

Years ended December 31,	2014		2013			2012
(Millions)
Revenue	$	72	$	60		$	54
Loss from operations		—		(15	)		(14	)
Net loss		—		(15	)		(14	)

F-63

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

As of December 31,	2014			2013
(Millions)
Current assets	$	11		$	16
Non-current assets		571			610
Current liabilities		10			10
Non-current liabilities		48			60
Members’ equity		524			556
Ownership share		50	%		50	%
Equity method investment	$	262		$	278

None of our joint ventures have any contingent liabilities or capital commitments. Distributions received from equity method investments amounted to $19 million, $9 million, and $9 million for the years ended December 31, 2014, 2103, and 2012 respectively.

Note 21. Other Financial Statements Items

Other income and (expense)

Other income and (expense) for the years ended December 31, 2014, 2013 and 2012 consisted of:

Years ended December 31,	2014		2013		2012
(Millions)
Allowance for funds used during construction	$	17	$	14	$	13
Carrying costs on regulatory assets		29		29		22
Interest income on tax settlement		—		—		55
Other		6		11		27
Total Other income and (expense)	$	52	$	54	$	117

Accounts Receivable

Accounts receivable as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014			2013
(Millions)
Trade receivables	$	888		$	924
Other receivables		2			3
Provision for bad debts		(49	)		(58	)
Total Accounts Receivable	$	841		$	869

The provision for bad debts relates entirely to gas and electricity consumers and comprises an amount that has been reserved following historical averages of loss percentages.

F-64

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The change in the provision for bad debts as of December 31, 2014 and 2013 consisted of:

(Millions)
As of January 1, 2012	$	49
Current period provision		43
Write-off as uncollectable		(36	)
As of January 1, 2013	$	56
Current period provision		37
Write-off as uncollectable		(35	)
As of December 31, 2013		58
Current period provision		39
Write-off as uncollectable		(48	)
As of December 31, 2014	$	49

DPA receivable balances, net of the applicable reserve, were $40.1 million and $51.1 million at December 31, 2014 and 2013, respectively.

Prepayments and Other Current Assets

Prepayments and other current assets as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014		2013
(Millions)
Tax receivables - VAT	$	4	$	4
Other tax receivables		93		50
Broker margin accounts		57		8
Loans to third parties		17		37
Fixed-term deposits		25		23
Other pledged deposits		51		159
Prepaid expenses		22		28
Other		19		19
Total	$	288	$	328

Note 22. Segment Information

Our segment reporting structure uses our management reporting structure as its foundation to reflect how IUSA manages the business internally and is organized by type of business. We report our financial performance based on the following three reportable segments:

• Networks: including all the energy transmission and distribution activities, and any other regulated activity originated in New York and Maine carried out by the Group. The Networks reportable segment includes three rate regulated operating segments. These operating segments generally offer the same services distributed in similar fashions, have the same types of customers, have similar long-term economic characteristics and are subject to similar regulatory requirements, allowing these operations to be aggregated into one reportable segment.

• Renewables: activities relating to renewable energy, mainly wind energy generation and trading related with such activities.

F-65

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

• Gas: including gas trading and storage businesses carried on by the Group

Products and services are sold between reportable segments and affiliate companies at cost. The Chief Operating Decision Maker evaluates segment performance based on segment adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) defined as operating income (loss) from continuing operations plus depreciation and amortization and impairment of non-current assets per segment. Segment income, expense, and assets presented in the accompanying tables include all intercompany transactions that are eliminated in the combined and consolidated financial statements.

Segment information as of and for the year ended December 31, 2014 consisted of:

For the year ended December 31, 2014 (Millions)	Networks		Renewables		Gas		Other (a)			IUSA Consolidated
Revenue - external	$	3,396	$	1,180	$	12	$	6		$	4,594
Revenue - intersegment		1		9		72		(82	)		—
Impairment of noncurrent assets		—		24		—		1			25
Depreciation and amortization		275		332		22		—			629
Operating income (loss) from continuing operations		616		257		16		(4	)		885
Adjusted EBITDA		891		613		38		(3	)		1,539
Earnings from equity method investments		—		2		—		10			12
Capital expenditures		775		250		5		—			1,030
As of December 31, 2014
Property, plant and equipment		8,389		8,185		525		—			17,099
Equity method investments		—		262		—		—			262
Total assets	$	12,961	$	12,329	$	1,393	$	(2,431	)	$	24,252

^(a)  Does not represent a segment. It mainly includes Corporate and company eliminations.

Segment information as of and for the year ended December 31, 2013 consisted of:

For the year ended December 31, 2013 (Millions)	Networks		Renewables			Gas			Other (a)			IUSA Consolidated
Revenue - external	$	3,311	$	1,087		$	(98	)	$	13		$	4,313
Revenue - intersegment		8		10			71			(89	)		—
Impairment of noncurrent assets		—		75			545			—			620
Depreciation and amortization		257		333			26			1			617
Operating income (loss) from continuing operations		703		99			(647	)		1			156
Adjusted EBITDA		960		507			(76	)		2			1,393
Earnings (losses) from equity method investments		—		(7	)		—			4			(3	)
Capital expenditures		906		34			4			—			944
As of December 31, 2013
Property, plant and equipment		7,887		8,268			526			—			16,681
Equity method investments		—		278			—			—			278
Total assets	$	11,853	$	11,932		$	1,509		$	(2,085	)	$	23,209

^(a)  Does not represent a segment. It mainly includes Corporate and company eliminations.

F-66

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Segment information as of and for the year ended December 31, 2012 consisted of:

For the year ended December 31, 2012 (Millions)	Networks		Renewables			Gas			Other (a)			IUSA Consolidated
Revenue - external	$	3,070	$	939		$	34		$	12		$	4,055
Revenue - intersegment		10		—			—			(10	)		—
Impairment of noncurrent assets		—		441			22			—			463
Depreciation and amortization		232		303			32			4			571
Operating income (loss) from continuing operations		634		(271	)		(79	)		(33	)		251
Adjusted EBITDA		866		473			(24	)		(30	)		1,285
Earnings (losses) from equity method investments		—		(7	)		—			4			(3	)
Capital expenditures		989		789			11			—			1,789
As of December 31, 2012
Property, plant and equipment		7,244		8,696			693			—			16,633
Equity method investments		—		279			—			—			279
Total assets	$	11,426	$	11,549		$	1,891		$	(1,006	)	$	23,860

^(a)  Does not represent a segment. It mainly includes Corporate and company eliminations.

Note 23. Discontinued Operations

On April 25, 2012, we sold The Hartford Steam Corporation (HSC) and CNE Power 1 LLC (CNE) at an after-tax gain of $6 million. As part of the transaction, we also sold TEN Companies, Inc. (TEN) and The Energy Network, Inc, two intermediate holding companies, while retaining other subsidiaries of the intermediate holding companies. The total consideration received was $50.6 million. Goodwill allocated to HSC, a subsidiary of TEN, was $2.0 million.

On August 22, 2012, we sold Energetix, Inc. and NYSEG Solutions, Inc. at an after-tax gain of $64 million. The contract price was $101.2 million. The cash received included various working capital adjustments.

Discontinued operations also includes the operating results of Carthage Energy, sold in 2013, which results of operations were insignificant.

The discontinued operations described above were all reported under the “Other” segment.

F-67

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

The results of discontinued operations for the year ended December 31, 2012 consisted of:

Year Ended December 31,	2012
(Millions)
HSC, CNE and two intermediate holding companies
Revenues	$	10
Income from operations of discontinued businesses (including gain on disposal of $11)		11
Income tax expense (including taxes on sale of $5)		6
Income from discontinued operations		5
Energetix, Inc. and NYSEG Solutions, Inc.
Revenues		185
Income from operations of discontinued businesses (including gain on disposal of $108)		125
Income tax expense (including taxes on sale of $44)		51
Income from discontinued operations		74
Carthage Energy, LLC
Revenues		2
Loss from operations of discontinued business		(5	)
Loss from discontinued operations		(5	)
Totals for Discontinued Operations
Total revenues		197
Total gain from operations of discontinued businesses		131
Total income tax expense		57
Total Income From Discontinued Operations	$	74

Note 24. Related Party Transactions

We engage in related party transactions which are generally performed at cost and in accordance with applicable state and federal commission regulations.

Related party transactions for the years ended December 31, 2014, 2013 and 2012 consisted of:

Years Ended December 31,	2014					2013					2012
(Millions)	Sales To			Purchases From		Sales To			Purchases From		Sales To			Purchases From
Iberdrola Financiación, S.A.		—		$	2		—		$	2		—		$	2
Iberdrola Renovables Energia, S.L.		—			10		—			10		—			9
Iberdrola Canada Energy Services, Ltd		—			49		(2	)		75		(3	)		—
Iberdrola Ingeniería y Construcción, S.A. U.		—			—		(26	)		—		—			—
Scottish Power, Ltd		—			—		—			6		—			45
Other		(12	)		30		(16	)		33		—			20

In addition to the statements of operations items above we made purchases of turbines for wind farms from Gamesa Corporación Tecnológica, S.A, in which our ultimate parent Iberdrola has a 20% ownership. The amounts capitalized for these transactions were $226 million and $26 million as of December 31, 2014 and 2013, respectively.

F-68

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Combined and Consolidated Financial Statements (Continued)

Related party balances as of December 31, 2014 and 2013 consisted of:

As of December 31,	2014					2013
(Millions)	Owed By		Owed To			Owed By		Owed To
Iberdrola Canada Energy Services, Ltd	$	1	$	—		$	11	$	(9	)
Gamesa Corporación Tecnológica, S.A.		33		(223	)		6		(25	)
Iberdrola Energy Projects, Inc.		15		(15	)		9		(9	)
Other		1		(1	)		5		(4	)

Transactions with our parent company (included in Other), Iberdrola, relate predominantly to allocation of corporate services and management fees. Also included within the Purchases From category are charges for credit support relating to guarantees Iberdrola has provided to third parties guarantying our performance.

Transactions with Iberdrola Canada Energy Services predominantly relate to the purchase of gas for IRHI’s gas-fired generation facility at Klamath.

There have been no guarantees provided or received for any related party receivables or payables. These balances are unsecured and are typically settled in cash. Interest is not charged on regular business transactions but is charged on outstanding loan balances. There have been no impairments or provisions made against any affiliated balances.

IUSA manages its overall liquidity position as part of the broader Iberdrola Group and is a party to a cash pooling agreement with Bank Mendes Gans, N.V., similar to other Iberdrola subsidiaries. Cash surpluses remaining after meeting the liquidity requirements of IUSA and its subsidiaries may be deposited in the cash pooling account where such funds are available to meet the liquidity needs of other affiliates within the Iberdrola Group. Under the cash pooling agreement, affiliates with credit balances have pledged those balances to cover the debit balances of the other affiliated parties to the agreement.

F-69

Schedule I - Financial Statements of Parent

IBERDROLA USA, INC. (PARENT)

CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

(Millions)

Years Ended December 31,	2014			2013			2012
Operating Revenues	$	—		$	—		$	—
Operating Expenses
Operating expense		2			17			16
Taxes other than income taxes		2			(15	)		20
Total Operating Expenses		4			2			36
Operating Income		(4	)		(2	)		(36	)
Other Income and (expense)
Other income and (expense)		(1	)		6			25
Equity earnings (loss) of subsidiaries		515			(51	)		322
Interest expense		(34	)		(22	)		(59	)
Income Before Income Tax		476			(69	)		252
Income tax expense (benefit)		52			(4	)		9
Net Income (Loss)	$	424		$	(65	)	$	243

See accompanying notes to Schedule 1

F-70

Schedule I - Financial Statements of Parent

IBERDROLA USA, INC. (PARENT)

CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

(Millions)

Years Ended December 31,	2014		2013			2012
Net Income (Loss)	$	424	$	(65	)	$	243
Other comprehensive income of subsidiaries		1		7			5
Comprehensive Income (Loss)	$	425	$	(58	)	$	248

See accompanying notes to Schedule 1

F-71

Schedule I - Financial Statements of Parent

IBERDROLA USA, INC. (PARENT)

CONDENSED FINANCIAL INFORMATION OF PARENT

BALANCE SHEETS

AS OF DECEMBER 31, 2014 AND 2013

(Millions)

As of December 31,	2014			2013
Assets
Current Assets
Cash and cash equivalents	$	3		$	—
Accounts receivable, net		—			1
Accounts receivable from subsidiaries		3			1
Notes receivable from subsidiaries		771			292
Prepayments and other current assets		57			1
Total current assets		834			295
Investments in subsidiaries		12,771			12,455
Other assets
Deferred income taxes		84			63
Other		6			11
Total other assets		90			74
Total Assets	$	13,695		$	12,824
Liabilities
Current Liabilities
Notes payable to subsidiaries	$	652		$	350
Accounts payable to subsidiaries		3			1
Interest accrued subsidiaries		7			7
Taxes accrued		141			54
Other current liabilities		2			2
Total current liabilities		805			414
Other non-current liabilities
Deferred income taxes		98			43
Other		2			2
Total other non-current liabilities		100			45
Non-current debt with subsidiaries		350			350
Total non-current liabilities		450			395
Total Liabilities		1,255			809
Equity
Stockholder’s Equity:
Common stock		—			—
Additional paid-in capital		11,378			11,378
Retained earnings		1,161			737
Accumulated other comprehensive loss		(99	)		(100	)
Total Equity		12,440			12,015
Total Liabilities and Equity	$	13,695		$	12,824

See accompanying notes to Schedule 1

F-72

Schedule I - Financial Statements of Parent

IBERDROLA USA, INC. (PARENT)

CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

(Millions)

Years Ended December 31,	2014			2013			2012
Cash Flow from Operating Activities
Net income (loss)	$	424		$	(65	)	$	243
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization of other assets and liabilities		1			—			—
Deferred income taxes		24			61			6
Equity (earnings) loss of subsidiaries		(515	)		51			(322	)
Changes in current operating assets and liabilities:
Accounts receivable from subsidiaries		(2	)		—			—
Accounts payable and accrued liabilities		—			1			(9	)
Accounts payable to subsidiaries		2			(6	)		5
Interest accrued		—			—			9
Interest accrued to subsidiaries		(1	)		(12	)		(1	)
Taxes accrued		28			(46	)		89
Other current assets and liabilities		7			(1	)		(3	)
Net Cash provided by (used in) Operating Activities		(32	)		(17	)		17
Cash Flow from Investing Activities
Notes receivable from subsidiaries		(478	)		(95	)		(129	)
Investments in subsidiaries		—			(165	)		—
Return of capital from investments in subsidiaries		200			122			253
Other investments		11			5			21
Net Cash provided by (used in) Investing Activities		(267	)		(133	)		145
Cash Flow from Financing Activities
Proceeds (repayments) of short-term notes payable from subsidiaries, net		302			150			(55	)
Non-current debt with subsidiaries		—			(7	)		(100	)
Net Cash provided by (used in) Financing Activities		302			143			(155	)
Net Increase (Decrease) in Cash and Cash Equivalents		3			(7	)		7
Cash and Cash Equivalents, Beginning of Year		—		$	7			—
Cash and Cash Equivalents, End of Year	$	3			—		$	7
Supplemental Cash Flow Information
Cash paid for interest	$	25		$	31		$	42
Cash refund for income taxes		6			53			62

See accompanying notes to Schedule 1

F-73

Note 1. Basis of Presentation

Iberdrola USA, Inc. (IUSA) is a holding company and conducts substantially all of its business through its subsidiaries. Substantially all of its consolidated assets are held by such subsidiaries. Accordingly, its cash flow and its ability to meet its obligations are largely dependent upon the earnings of these subsidiaries and the distribution of other payment of such earnings to in the form of dividends, loans or advances or repayment of loans and advances from it. These condensed financial statements and related footnotes have been prepared in accordance with regulatory statute 210.12-04 of Regulation S-X. These statements should be read in conjunction with the combined and consolidated financial statements and notes thereto of Ibderola USA, Inc and subsidiaries (Group).

Iberdrola USA, Inc. indirectly or directly owns all of the ownership interests of its significant subsidiaries. Iberdrola USA, Inc. relies on dividends or loans from its subsidiaries to fund dividends to its primary shareholder.

Iberdrola USA, Inc.’s significant accounting policies are consistent with those of the Group. For the purposes of these condensed financial statements, the Company’s wholly owned and majority owned subsidiaries are recorded based upon its proportionate share of the subsidiaries net assets.

Note 2. Short-Term Credit Arrangements

IUSA Revolving Credit Facility

IUSA entered into a $300 million revolving credit facility on May 30, 2012 for the purpose of providing for its own liquidity needs and those of its unregulated subsidiaries. The facility has a termination date in May 2019. IUSA pays an annual facility fee of $0.7 million. As of December 31, 2014 the facility was undrawn.

IUSA’s revolving credit facility contains a covenant that requires it to maintain a ratio of consolidated indebtedness to consolidated total capitalization that does not exceed 0.65 to 1.00 at any time. For purposes of calculating this maximum ratio of consolidated indebtedness to consolidated total capitalization, the credit facility excludes from consolidated net worth the balance of AOCI as it appears in the consolidated balance sheets.

Iberdrola Financiación, S.A. credit facility

In August 2011, IUSA entered into a revolving credit facility with Iberdrola Financiación, S.A., a subsidiary of Iberdrola, under which IUSA may borrow up to $600 million. The facility terminates in August 2016. IUSA pays an annual commitment fee of $1.2 million on the facility. The facility has never been utilized as of December 31, 2014. IUSA was in compliance with all covenants as of December 31, 2014.

Note 3. Cash dividends paid by subsidiaries

Cash dividends paid by subsidiaries are as follows:

Years ended December 31,	2014		2013		2012
(In millions)
RGS	$	200	$	110	$	173
CMP Group		—		—		2
Other IUSA subsidiaries		—		12		78

F-74

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Condensed Consolidated Statements of Income

(unaudited)

Periods Ended March 31,	2015			2014
(Millions, except for number of shares)
Operating Revenues	$	1,227		$	1,556
Operating Expenses
Purchased power, natural gas and fuel used		392			521
Operations and maintenance		380			383
Impairment of non-current assets		—			2
Depreciation and amortization		175			155
Taxes other than income taxes		84			81
Total Operating Expenses		1,031			1,142
Operating Income		196			414
Other Income and (Expense)
Other income and (expense)		12			15
Earnings from equity method investments		1			8
Interest expense, net of capitalization		(61	)		(64	)
Income Before Income Tax		148			373
Income tax expense		42			172
Net Income		106			201
Less: Net income attributable to noncontrolling interests		—			1
Net Income Attributable to Iberdrola USA, Inc.	$	106		$	200
Earnings Per Common Share, Basic and Diluted	$	0.4		$	0.8
Weighted-average Number of Common Shares Outstanding:
Basic and diluted		243			243

The accompanying notes are an integral part of our condensed consolidated financial statements.

F-75

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

Periods Ended March 31,	2015			2014
(Millions)
Net Income	$	106			201
Other Comprehensive Income, Net of Tax
Amounts arising during the period, net of tax:
(Loss) on revaluation of defined benefit plans		(1	)		—
Reclassifications to net income net of tax:
Reclassification adjustment for loss on settled cash flow hedges		2			1
Other Comprehensive Income, Net of Tax		1			1
Comprehensive Income		107			202
Less: Comprehensive income attributable to noncontrolling interests		—			1
Comprehensive Income Attributable to Iberdrola USA, Inc.	$	107		$	201

The accompanying notes are an integral part of our condensed consolidated financial statements.

F-76

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Condensed Consolidated Balance Sheets

(unaudited)

As of	March 31, 2015			December 31, 2014
(Millions)
Assets
Current Assets
Cash and cash equivalents	$	655		$	482
Accounts receivable and unbilled revenues, net		855			841
Accounts receivable from affiliates		17			50
Derivative assets		95			134
Fuel and gas in storage		94			229
Materials and supplies		104			98
Deferred income taxes		129			68
Prepayments and other current assets		387			288
Regulatory assets		106			80
Deferred income taxes regulatory		33			29
Total Current Assets		2,475			2,299
Property, plant and equipment, at cost		21,867			21,499
Less: accumulated depreciation		(5,957	)		(5,796	)
Net Property, Plant and Equipment in Service		15,910			15,703
Construction work in progress		1,157			1,396
Total Property, Plant and Equipment		17,067			17,099
Equity method investments		259			262
Other investments		66			91
Regulatory assets		2,353			2,399
Other Assets
Goodwill		1,361			1,361
Intangible assets		560			569
Derivative assets		94			93
Other		71			79
Total Other Assets		2,086			2,102
Total Assets	$	24,306		$	24,252

The accompanying notes are an integral part of our condensed consolidated financial statements.

F-77

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.) Condensed Consolidated Balance Sheets

(unaudited)

As of	March 31, 2015			December 31, 2014
(Millions)
Liabilities
Current Liabilities
Current portion of debt	$	134		$	148
Tax equity financing arrangements		120			124
Interest accrued		35			39
Accounts payable		550			684
Accounts payable to affiliates		49			239
Taxes accrued		66			8
Derivative liability		93			103
Other current liabilities		225			275
Regulatory liabilities		188			153
Total Current Liabilities		1,460			1,773
Regulatory liabilities		1,299			1,206
Deferred income taxes regulatory		390			462
Other Non-current Liabilities
Deferred income taxes		2,495			2,322
Deferred income		1,599			1,621
Pension and other postretirement		787			785
Tax equity financing arrangements		259			277
Derivative liability		48			38
Asset retirement obligations		238			234
Environmental remediation costs		285			284
Other		260			278
Total Other Non-current Liabilities		5,971			5,839
Non-current Debt		2,623			2,516
Total Non-current Liabilities		10,283			10,023
Total Liabilities		11,743			11,796
Commitments and Contingencies		—			—
Equity
Stockholder’s Equity:
Common stock		—			—
Additional paid in capital		11,378			11,378
Retained earnings		1,267			1,161
Accumulated other comprehensive loss		(98	)		(99	)
Total Stockholder’s Equity		12,547			12,440
Non-controlling interests		16			16
Total Equity		12,563			12,456
Total Liabilities and Equity	$	24,306		$	24,252

The accompanying notes are an integral part of our condensed consolidated financial statements.

F-78

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Condensed Consolidated Statements of Cash Flows

(unaudited)

Periods Ended March 31,	2015			2014
(Millions)
Cash Flow from Operating Activities:
Net income	$	106		$	201
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		175			155
Accretion expenses		4			3
Regulatory assets/liabilities amortization		(11	)		(6	)
Regulatory assets/liabilities carrying cost		10			6
Pension cost		28			19
Earnings from equity method investments		(1	)		(8	)
Unrealized gains(losses) on marked to market derivative contracts		39			(89	)
Deferred taxes		77			179
Changes in current operating assets and liabilities
Decrease (increase) in accounts receivable and unbilled revenues, net		19			(253	)
Decrease (increase) in inventories		130			206
Decrease (increase) in other assets, net		(68	)		(88	)
Increase (decrease) in accounts payable		(78	)		(32	)
Increase (decrease) in other liabilities		(119	)		130
Increase (decrease) in taxes accrued		57			(8	)
Increase (decrease) in regulatory assets/liabilities		92			54
Net Cash Provided by Operating Activities		460			469
Cash Flow from Investing Activities:
Capital expenditures		(364	)		(264	)
Other investments and equity method investments		13			19
Other		—			(12	)
Net Cash used in Investing Activities		(351	)		(257	)
Cash Flow from Financing Activities:
Non-current note issuance		150			—
Proceeds (repayments) from other short-term debt, net		(59	)		40
Payments on tax equity financing arrangements		(27	)		(40	)
Net Cash Provided by Financing Activities		64			—
Net Increase in Cash and Cash Equivalents		173			212
Cash and Cash Equivalents, Beginning of Period		482			219
Cash and Cash Equivalents, End of Period	$	655		$	431
Supplemental Cash Flow Information
Cash paid for interest, net of amounts capitalized	$	34		$	37
Cash paid for income taxes		6			11

The accompanying notes are an integral part of our condensed consolidated financial statements.

F-79

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Condensed Consolidated Statements of Changes in Equity

(unaudited)

	Iberdrola USA, Inc. Stockholder
(Millions, except for number of shares )	Number of shares (*)		Additional paid-in capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Non controlling Interests		Total
As of December 31, 2013		243	$	11,378	$	737	$	(100	)	$	15	$	12,030
Net Income		—		—		200		—			1		201
Other comprehensive income, net of tax		—		—		—		1			—		1
Comprehensive income													202
As of March 31, 2014		243	$	11,378	$	937	$	(99	)	$	16	$	12,232
As of December 31, 2014		243	$	11,378	$	1,161	$	(99	)	$	16	$	12,456
Net Income		—		—		106		—			—		106
Other comprehensive income, net of tax		—		—		—		1			—		1
Comprehensive income													107
As of March 31, 2015		243	$	11,378	$	1,267	$	(98	)	$	16	$	12,563

^(*)  Par value of share amounts is $.01

The accompanying notes are an integral part of our condensed consolidated financial statements.

F-80

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1. Background and Nature of Operations

Iberdrola USA, Inc. (IUSA or We) is an energy services holding company engaged through its principal subsidiaries IUSA Networks, Inc. (Networks) and Iberdrola Renewables Holding, Inc. (IRHI) in the regulated energy distribution, renewable energy generation (Renewables) and gas businesses (Gas), collectively (Renewables and Gas). IUSA is a wholly owned subsidiary of Iberdrola S.A. (Iberdrola), a corporation organized under the laws of the Kingdom of Spain. IUSA was organized in 1997 as Energy East Corporation under the laws of New York as the holding company for the principal operating utility companies.

Transaction with UIL Holdings Corporation (UIL Holdings)

On February 25, 2015, we announced that IUSA had entered into a definitive merger agreement (the Agreement) with UIL Holdings and Green Merger Sub, Inc. (Merger Sub), wholly owned subsidiary of IUSA, under which UIL Holdings will merge with and into Merger Sub. Subsequent to the transaction closing, Merger Sub will be the surviving corporation and will change its name to UIL Holdings Corporation and remain a direct or indirect wholly-owned subsidiary of IUSA. IUSA will then become a newly listed U.S. publicly-traded company.

In connection with the merger, each issued and outstanding share of the common stock of UIL Holdings will be converted into the right to receive one validly issued share of common stock of the newly listed company and $10.50 in cash. Immediately following the consummation of the merger, former holders of UIL Holdings’ common stock will own approximately 18.5% of the newly listed company.

The merger is subject to certain closing conditions, including the approval of the shareowners of UIL Holdings and other regulatory approvals.

For the three month period ended March 31, 2015, we have incurred pre-tax merger related expenses of approximately $4 million which represented legal, investment bank and other merger-related costs.

Note 2. Basis of Presentation

The accompanying notes should be read in conjunction with notes to the combined and consolidated financial statements of Iberdrola USA, Inc. and subsidiaries (a wholly owned subsidiary of Iberdrola, S.A.) as of December 31, 2014 and 2013 and for the three years ended December 31, 2014.

The accompanying unaudited financial statements are prepared on a consolidated basis and include the accounts of IUSA and its consolidated subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The year end balance sheet data was derived from audited financial statements. The unaudited condensed consolidated financial statements for the interim period have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the interim condensed consolidated financial statements do not include all the information and footnote disclosures required by US GAAP for complete financial statements.

We believe that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly our condensed consolidated balance sheets, condensed consolidated statements of income, condensed consolidated statements of comprehensive income, condensed consolidated statements of

F-81

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

cash flows and condensed consolidated statements of equity for the interim periods described herein. All such adjustments are of a normal and recurring nature, except as otherwise disclosed. The results for the period ended March 31, 2015 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2015.

Note 3. Significant Accounting Policies and New Accounting Pronouncements

As of March 31, 2015 there have been no material changes to any significant accounting policies described in our combined and consolidated financial statements as of December 31, 2014 and 2013 and for the three years ended December 31, 2014. There have been no new accounting pronouncements issued since the approval of the combined and consolidated financial statements as of December 31, 2014 and 2013 and for the three years ended December 31, 2014, that we expect to have a material impact on our condensed consolidated interim financial statements.

Note 4. Regulatory Assets and Liabilities

Pursuant to the requirements concerning accounting for regulated operations, our utilities capitalize, as regulatory assets, incurred and accrued costs that are probable of recovery in future electric and natural gas rates. We base our assessment of whether recovery is probable on the existence of regulatory orders that allow for recovery of certain costs over a specific period, or allow for reconciliation or deferral of certain costs. When costs are not treated in a specific order we use regulatory precedent to determine if recovery is probable. Our operating utilities also record, as regulatory liabilities, obligations to refund previously collected revenue or to spend revenue collected from customers on future costs. Substantially all assets or liabilities for which funds have been expended or received are either included in rate base or are accruing a carrying cost until they will be included in rate base. The primary items that are not included in rate base or accruing carrying costs are the regulatory assets for pension and other postretirement benefits, which reflect unrecognized actuarial gains and losses, environmental remediation costs which is primarily the offset of accrued liabilities for future spending, unfunded future income taxes, asset retirement obligations and hedge losses. The total amount of these items is $1,913 million.

Regulatory assets and other regulatory liabilities shown in the tables below result from various regulatory orders that allow for the deferral and or reconciliation of specific costs. Regulatory assets and regulatory liabilities are classified as current when recovery or refund in the coming year is allowed or required through a specific order or when the rates related to a specific regulatory asset or regulatory liability are subject to automatic annual adjustment.

Current and non-current regulatory assets as of March 31, 2015 and December 31, 2014 consisted of:

As of	March 31, 2015		December 31, 2014
(Millions)
Current
Environmental remediation costs	$	35	$	—
Pension and other postretirement benefits cost deferrals		11		—
Storm costs		14		14
Temporary supplemental assessment surcharge		8		12
Hedges losses		14		34
Other		24		20
Deferred income taxes regulatory		33		29
Total Current Regulatory Assets		139		109

F-82

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

As of	March 31, 2015		December 31, 2014
(Millions)
Non-current
Environmental remediation costs		200		247
Pension and other postretirement benefits cost deferrals		120		125
Pension and other postretirement benefits		1,068		1,101
Storm costs		255		259
Deferred meter replacement costs		35		36
Unamortized losses on reacquired debt		25		25
Unfunded future income taxes		382		366
Asset retirement obligation		33		32
Deferred property taxes		32		30
Federal tax depreciation normalization adjustment		136		128
Merger capital expense target customer credit		15		10
Other		52		40
Total Non-current Regulatory Assets	$	2,353	$	2,399

“Environmental remediation costs” represent spending that has occurred and is eligible for future recovery in customer rates. Environmental costs are currently recovered through a reserve mechanism whereby projected spending is included in rates with any variance recorded as a regulatory asset or a regulatory liability. It also includes the anticipated future rate recovery of costs that are recorded as environmental liabilities since these will be recovered when incurred. Because no funds have yet been expended for the regulatory asset related to future spending, it does not accrue carrying costs and is not included within rate base. The amortization period will be established in future proceedings and will depend upon the timing of spending for the remediation costs.

“Pension and other postretirement benefits” represent the actuarial losses on the pension and other postretirement plans that will be reflected in customer rates when they are amortized and recognized in future pension expenses. Because no funds have yet been expended for this regulatory asset, it does not accrue carrying costs and is not included within the rate base. “Pension and other postretirement benefits cost deferrals” include the difference between actual expense for pension and other postretirement benefits and the amount provided for in rates. The recovery of these amounts will be determined in future proceedings.

“Storm costs” for Central Maine Power (CMP), New York State Electric and Gas (NYSEG) and Rochester Gas and Electric (RGE) are allowed in rates based on an estimate of the routine costs of service restoration. The companies are also allowed to defer unusually high levels of service restoration costs resulting from major storms when they meet certain criteria for severity and duration.

“Deferred meter replacement costs” represent the deferral of the value of retired meters which were replaced by advanced metering infrastructure meters. This amount is being amortized at the related existing depreciation amounts.

“Unamortized losses on reacquired debt” represent deferred losses on debt reacquisitions that will be recovered over the remaining original amortization period of the reacquired debt.

“Unfunded future income taxes” represent unrecovered federal and state income taxes primarily resulting from regulatory flow through accounting treatment. The income tax benefits or charges for certain plant related timing

F-83

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

differences, such as removal costs, are immediately flowed through to, or collected from, customers. This amount is being amortized as the amounts related to temporary differences that give rise to the deferrals are recovered in rates.

“Asset Retirement Obligations” represent the differences in timing of the recognition of costs associated with our AROs and the collection of such amounts through rates. This amount is being amortized at the related depreciation and accretion amounts of the underlying liability.

“Deferred property taxes” represents the customer portion of the difference between actual expense for property taxes and the amount provided for in rates. The amortization period is awaiting a future NYPSC rate proceeding.

Current and non-current regulatory liabilities as of March 31, 2015 and December 31, 2014 consisted of:

As of	March 31, 2015		December 31, 2014
(Millions)
Current
Reliability support services (Cayuga)	$	16	$	18
Plant decommissioning		12		13
Non by-passable charges		19		19
Energy efficiency portfolio standard		40		34
Gas supply charge and deferred natural gas cost		20		6
Revenue reconciliation mechanism transmission revenue true up		5		7
Yankee DOE phase I		17		23
Rate refund - FERC ROE proceeding		12		—
CMP transmission refund		17		16
Other		30		17
Total Current Regulatory Liabilities		188		153
Non-current
Accrued removal obligations		744		721
Asset sale gain account		21		32
Carrying costs on deferred income tax bonus depreciation		89		81
Economic development		34		33
Merger capital expense target customer credit		17		17
Pension and other postretirement benefits		54		50
Positive benefit adjustment		51		51
New York State tax rate change		17		16
Post term amortization		25		20
Theoretical reserve flow thru impact		54		24
Deferred property tax		59		51
Other		134		110
Deferred income taxes regulatory		390		462
Total Non-current Regulatory Liabilities	$	1,689	$	1,668

“Reliability support services (Cayuga)” represent the difference between actual expenses for reliability support services and the amount provided for in rates.

F-84

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

“Non by-passable charges” represent the non by-passable fixed charge paid by all customers. An asset or liability is recognized resulting from differences between actual revenues and the underlying cost being recovered. This will be refunded to customers within the next year.

“Energy efficiency portfolio standard” represents the difference between revenue billed to customers through an energy efficiency charge and the costs of our energy efficiency programs as approved by the state authorities.

“Accrued removal obligations” represent the differences between asset removal costs recorded and amounts collected in rates for those costs. The amortization period is dependent upon the asset removal costs of underlying assets and the life of the utility plant.

“Asset sale gain account” represents the gain on NYSEG’s 2001 sale of its interest in Nine Mile Point 2 nuclear generating station. The net proceeds from the Nine Mile Point 2 nuclear generating station were placed in this account and will be used to benefit customers. The amortization period is awaiting a future NYPSC rate proceeding.

“Carrying costs on deferred income tax bonus depreciation” represent the carrying costs benefit of increased accumulated deferred income taxes created by the change in tax law allowing bonus depreciation. The amortization period is awaiting a future NYPSC rate proceeding.

“Economic development” represents the economic development program which enables NYSEG and RGE to foster economic development through attraction, expansion, and retention of businesses within its service territory. If the level of actual expenditures for economic development allocated to NYSEG and RGE varies in any rate year from the level provided for in rates, the difference is refunded to ratepayers. The amortization period is awaiting a future NYPSC rate proceeding.

“Merger capital expense target customer credit” account was created as a result of NYSEG’s and RGE’s not meeting certain capital expenditure requirements established in the order approving the purchase of Energy East by Iberdrola. The amortization period is awaiting a future NYPSC rate proceeding.

“Pension and other postretirement benefits” represent the actuarial gains on other postretirement plans that will be reflected in customer rates when they are amortized and recognized in future expenses. Because no funds have yet been received for this a regulatory liability is not reflected within rate base. It also represents the difference between actual expense for pension and other postretirement benefits and the amount provided for in rates. Recovery of these amounts will be determined in future proceedings.

“Positive benefit adjustment” resulted from Iberdrola’s 2008 acquisitions of Energy East. This is being used to moderate increases in rates. The amortization period is awaiting a future NYPSC rate proceeding.

“New York State tax rate change” represents the excess funded accumulated deferred income tax balance caused by the 2014 New York State tax rate change from 7.1% to 6.5%. The amortization period is awaiting a future NYPSC rate proceeding.

“Post term amortization” represents the revenue requirement associated with certain expired joint proposal amortization items. The amortization period is awaiting a future NYPSC rate proceeding.

“Theoretical reserve flow thru impact” represent the differences from the rate allowance for applicable federal and state flow through tax impacts related to the excess depreciation reserve amortization. It also represents the carrying cost on the differences. The amortization period is awaiting a future NYPSC rate proceeding.

F-85

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

“Other” includes the reserve for the refund related to the FERC ROE proceedings, cost of removal being amortized through rates and various items subject to reconciliation including variable rate debt, Medicare subsidy benefits and stray voltage.

Note 5. Fair Value of Financial Instruments and Fair Value Measurements

We determine the fair value of our derivative assets and liabilities and available for sale noncurrent investments associated with Networks activities utilizing market approach valuation techniques:

• We measure the fair value of our noncurrent investments available for sale using quoted market prices in active markets for identical assets and include the measurements in Level 1. The investments primarily consist of money market funds. The investments which are Rabbi Trusts for deferred compensation plans primarily consist of money market funds.

• NYSEG and RGE enter into electric energy derivative contracts to hedge the forecasted purchases required to serve their electric load obligations. They hedge their electric load obligations using derivative contracts that are settled based upon Locational Based Marginal Pricing published by the New York Independent System Operator (NYISO). RGE hedges all its electric load obligations using contracts for a NYISO location where an active market exists. The forward market prices used to value RGE’s open electric energy derivative contracts are based on quoted prices in active markets for identical assets or liabilities with no adjustment required and therefore we include the fair value in Level 1. NYSEG has a combination of Level 1 and Level 2 fair values for its electric energy derivative contracts. A portion of its electric load obligations are exchange traded contracts in a NYISO location where an active market exists. The forward market prices used to value NYSEG’s open electric energy derivative contracts are based on quoted prices in active markets for identical assets or liabilities with no adjustment required and therefore we include the fair value in Level 1. A portion of NYSEG’s electric energy derivative contracts are non-exchange traded contracts that are valued using inputs that are directly observable for the asset or liability, or indirectly observable through corroboration with observable market data and therefore we include the fair value in Level 2.

• NYSEG and RGE enter into natural gas derivative contracts to hedge their forecasted purchases required to serve their natural gas load obligations. The forward market prices used to value open natural gas derivative contracts are exchange-based prices for the identical derivative contracts traded actively on the New York Mercantile Exchange (NYMEX). Because we use prices quoted in an active market we include the fair value measurements in Level 1.

• NYSEG, RGE and CMP enter into fuel derivative contracts to hedge their unleaded and diesel fuel requirements for their fleet vehicles. Exchange-based forward market prices are used but because a basis adjustment is added to the forward prices we include the fair value measurement for these contracts in Level 3.

We determine the fair value of our derivative assets and liabilities associated with Renewables and Gas activities utilizing market approach valuation techniques. Exchange-traded transactions, such as NYMEX futures contracts, that are based on quoted market prices in active markets for identical product with no adjustment are included in the Level 1 fair value. Contracts with delivery periods of two years or less which are traded in active markets and are valued with or derived from observable market data for identical or similar products such as over-the-counter NYMEX, foreign exchange swaps and fixed price physical and basis and index trades are included in Level 2 fair value. Monthly data points will be included in this category provided they fall within the bid/ask data provided by brokers for seasonal strips and quarterly quotes. Trader marks that fall outside of a five-percent threshold of the average broker marks and fall outside of the widest bid/ask spreads will be adjusted to reflect the broker quotes. Any position that is initially classified as Level 2 will be evaluated before and after the

F-86

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

provision of credit reserves with incremental value changes of ten-percent or more classified as Level 3. To be included in this category, market data, or a derivative thereof, must be available for the entire trade term. Contracts with delivery periods exceeding two years or that have unobservable inputs or inputs that cannot be corroborated with market data for identical or similar products such as tolling arrangements with historical volatilities, park and loan arrangements that include the value of expired legs, and transactions with significant credit adjustments are included in Level 3 fair value. The valuation premise in this category will be based on market participant assumptions.

The financial instruments measured at fair value as of March 31, 2015 and December 31, 2014 consisted of:

As of March 31, 2015	Level 1			Level 2			Level 3			Total
(Millions)
Securities Portfolio (available for sale)	$	34		$	—		$	—		$	34
Financial Assets
Derivative financial instruments - power		—			45			51			96
Derivative financial instruments - gas		2			49			42			93
Total		2			94			93			189
Financial Liabilities
Derivative financial instruments - power		(24	)		(4	)		(7	)		(35	)
Derivative financial instruments - gas		(3	)		(71	)		(29	)		(103	)
Derivative financial instruments - other		—			—			(3	)		(3	)
Total	$	(27	)	$	(75	)	$	(39	)	$	(141	)

As of December 31, 2014	Level 1			Level 2			Level 3			Total
(Millions)
Securities Portfolio (available for sale)	$	33		$	—		$	—		$	33
Financial Assets
Derivative financial instruments - power		—			48			41			89
Derivative financial instruments - gas		—			90			48			138
Total		—			138			89			227
Financial Liabilities
Derivative financial instruments - power		(28	)		(8	)		—			(36	)
Derivative financial instruments - gas		(7	)		(66	)		(29	)		(102	)
Derivative financial instruments - other		—			—			(3	)		(3	)
Total	$	(35	)	($	74	)	($	32	)	($	141	)

F-87

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The reconciliation of changes in the fair value of financial instruments based on Level 3 inputs for the periods ended March 31, 2015 and 2014 consisted of:

(Millions)	2015			2014
Fair Value as of January 1,	$	57		$	53
Gains for the period recognized in revenues		11			(11	)
Losses for the period recognized in revenues		(1	)		(9	)
Total gains or losses for the period recognized in revenues		10			(20	)
Gains recognized in OCI		1			—
Losses recognized in OCI		(1	)		—
Total Gains or Losses Recognized in OCI		—			—
Purchases		(1	)		3
Settlements		(3	)		(7	)
Transfers out of Level 3 (a)		(9	)		1
Fair Value as of March 31,	$	54		$	30
Gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to financial instruments still held at the reporting date	$	10		$	(20	)

^(a)  Transfers out of Level 3 were the result of increased observability of market data.

For assets and liabilities that are recognized in the condensed consolidated financial statements at fair value on a recurring basis, we determine whether transfers have occurred between levels in the hierarchy by re-assessing categorization based on the lowest level of input that is significant to the fair value measurement as a whole at the end of each reporting period. There have been no transfers between Level 1 and Level 2 during the periods reported.

Level 3 Fair Value Measurement

The tables below illustrate the significant sources of unobservable inputs used in the fair value measurement of our Level 3 derivatives. They represent the variability in prices for those transactions that fall into the illiquid period (beyond 2 years), using past and current views of prices for those future periods.

As of March 31, 2015
Instruments	Instrument Description	Valuation Technique	Valuation Inputs	Index	Variability
					Avg.		Max.		Min.
Fixed price power and gas swaps with delivery period > two years	Transactions with delivery periods exceeding two years	Transactions are valued against forward market prices on a discounted basis	Observable and extrapolated forward gas and power prices not all of which can be corroborated by market data for identical or similar products	NYMEX ($/MMBtu)	$	4.61	$	7.37	$	2.99
				SP15 ($/MWh)	$	47.39	$	80.28	$	24.45
				Mid C ($/MWh)	$	38.34	$	83.93	$	11.88
				Cinergy ($/MWh)	$	38.26	$	77.49	$	21.17

F-88

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

As of December 31, 2014
Instruments	Instrument Description	Valuation Technique	Valuation Inputs	Index	Variability
					Avg.		Max.		Min.
Fixed price power and gas swaps with delivery period > two years	Transactions with delivery periods exceeding two years	Transactions are valued against forward market prices on a discounted basis	Observable and extrapolated forward gas and power prices not all of which can be corroborated by market data for identical or similar products	NYMEX ($/MMBtu)	$	4.33	$	5.47	$	3.34
				SP15 ($/MWh)	$	43.27	$	59.12	$	30.04
				Mid C ($/MWh)	$	36.16	$	56.28	$	12.62
				Cinergy ($/MWh)	$	37.41	$	68.65	$	21.17

Our Level 3 valuations primarily consist of NYMEX gas and fixed price power swaps with delivery periods extending through 2017. The gas swaps are used to hedge both gas inventory in firm storage and merchant wind positions. The power swaps are traded at liquid hubs in the West and Midwest and are used to hedge merchant wind production in those regions.

We performed a sensitivity analysis around the Level 3 gas and power positions to changes in the valuations inputs and concluded that no material change to the financial statements is expected given the following: (i) any changes in the fair value of the gas swaps hedging inventory would be expected to be largely offset by changes in the value of the inventory; (ii) any changes in the fair value of the gas swaps hedging merchant generation would be expected to be significantly offset by changes in the value of future power generation.

Two elements of the analytical infrastructure employed in valuing transactions are the price curves used in calculation of market value and the models themselves. Authorized trading points and associated forward price curves are maintained and documented by the Middle Office. Models used in valuation of the various products are developed and documented by the Structuring and Market Analysis group.

Transaction models are valued in part on the basis of forward price, correlation and volatility curves. Descriptions of these curves and their derivations are maintained and documented by the Structuring and Market Analysis group. Forward price curves used in valuing the models are applied to the full duration of transactional models to a maximum of approximately thirty years.

Note 6. Derivative Instruments and Hedging

Our Networks, Renewables and Gas activities are exposed to certain risks, which are managed by using derivative instruments. All derivative instruments are recognized as either assets or liabilities at fair value on the condensed consolidated balance sheets in accordance with the accounting requirements concerning derivative instruments and hedging activities.

(a) Networks activities

NYSEG and RGE have a non by-passable wires charge adjustment that allows them to pass through rates any changes in the market price of electricity. They use electricity contracts, both physical and financial, to manage fluctuations in electricity commodity prices in order to provide price stability to customers. We include the cost or benefit of those contracts in the amount expensed for electricity purchased when the related electricity is sold. We record changes in the fair value of electric hedge contracts to derivative assets and or liabilities with an offset to regulatory assets and or regulatory liabilities, in accordance with the accounting requirements concerning regulated operations.

F-89

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The amount recognized in regulatory assets for electricity derivatives was a loss of $25.8 million as of March 31, 2015, and a gain of $24.2 million as of March 31, 2014. The amount reclassified from regulatory assets into income, which is included in electricity purchased, was a loss of $2.6 million for the period ended March 31, 2015, and a gain of $44.7 million for the period ended March 31, 2014.

NYSEG and RGE have purchased gas adjustment clauses that allow them to recover through rates any changes in the market price of purchased natural gas, substantially eliminating their exposure to natural gas price risk. NYSEG and RGE use natural gas futures and forwards to manage fluctuations in natural gas commodity prices to provide price stability to customers. We include the cost or benefit of natural gas futures and forwards in the commodity cost that is passed on to customers when the related sales commitments are fulfilled. We record changes in the fair value of natural gas hedge contracts to derivative assets and or liabilities with an offset to regulatory assets and or regulatory liabilities in accordance with the accounting requirements for regulated operations.

The amount recognized in regulatory assets for natural gas hedges was a loss of $2.3 million as of March 31, 2015, and a gain of $1.1 million as of March 31, 2014. The amount reclassified from regulatory assets into income, which is included in natural gas purchased, was a loss of $1.6 million for the period ended March 31, 2015, and a gain of $2.3 million for the period ended March 31, 2014.

The net notional volumes of the outstanding derivative instruments associated with Networks activities as of March 31, 2015 and December 31, 2014 consisted of:

As of	March 31, 2015		December 31, 2014
(Millions)
Wholesale electricity purchase contracts (MWh)		6.3		6.6
Natural gas purchase contracts (Dth)		3.9		3.8
Other fuel purchase contracts (Gallons)		3.7		2.8

The location and amounts of derivatives designated as hedging instruments associated with Networks activities as of March 31, 2015 and December 31, 2014 consisted of:

	Asset Derivatives				Liability Derivatives
(Millions)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
As of March 31, 2015
Commodity contracts:
Electricity derivatives:
Current		Current assets	$	—		Current liabilities	$	12
Non-current		Other assets		—		Other liabilities		14
Natural gas derivatives:
Current		Current assets		—		Current liabilities		2
Other contracts		Current assets		—		Other liabilities		3
Total			$	—			$	31

F-90

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

	Asset Derivatives				Liability Derivatives
(Millions)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
As of December 31, 2014
Commodity contracts:
Electricity derivatives:
Current		Current assets	$	—		Current liabilities	$	20
Non-current		Other assets		—		Other liabilities		9
Natural gas derivatives:
Current		Current assets		—		Current liabilities		4
Non-current		Other assets		—		Other liabilities		1
Other contracts		Current assets		—		Current liabilities		3
Total			$	—			$	37

The effect of derivatives in cash flow hedging relationships on Other Comprehensive Income (OCI) and income for the periods ended March 31, 2015 and 2014 consisted of:

Periods Ended March 31,	(Loss) Recognized in OCI on Derivatives			Location of (Loss) Reclassified from Accumulated OCI into Income		(Loss) Reclassified from Accumulated OCI into Income
(Millions)	Effective Portion (a)			Effective Portion (a)
2015
Interest rate contracts	$	—			Interest expense	$	(2	)
Commodity contracts:
Other		(1	)		Operating expenses		(1	)
Total	$	(1	)			$	(3	)
2014
Interest rate contracts	$	—			Interest expense	$	2
Commodity contracts:
Other		—			Operating expenses		—
Total	$	—				$	2

^(a)  Changes in OCI are reported on a pre-tax basis.

The net loss in accumulated OCI related to previously settled forward starting swaps and accumulated amortization is $97.8 million and $107.0 million as of March 31, 2015 and 2014, respectively. We recorded $2.2 million and $2.3 in net derivative losses related to discontinued cash flow hedges for the periods ended March 31, 2015 and 2014, respectively. We will amortize approximately $9.1 million of discontinued cash flow hedges in 2015.

The unrealized loss of $3.1 million on hedge activities is reported in OCI because the forecasted transaction is considered to be probable for the period ended March 31, 2015. We expect that those losses will be reclassified into earnings within the next twelve months, the maximum length of time over which we are hedging our exposure to the variability in future cash flows for forecasted energy transactions.

F-91

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The offsetting of derivative assets as of March 31, 2015 and December 31, 2014 consisted of:

As of	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet			Net Amounts of Assets Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet				Net Amount
								Financial Instruments		Cash Collateral Pledged
(Millions)
March 31, 2015
Derivatives	$	11	$	(11	)	$	—	$	—	$	—	$	—
December 31, 2014
Derivatives		11		(11	)		—		—		—		—

The offsetting of derivative liabilities as of March 31, 2015 and December 31, 2014 consisted of:

As of	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in the Balance Sheet			Gross Amounts Not Offset in the Balance Sheet				Net Amount
									Financial Instruments		Cash Collateral Pledged
(Millions)
March 31, 2015
Derivatives	$	(42	)	$	11	$	(31	)	$	—	$	31	$	—
December 31, 2014
Derivatives		(48	)		11		(37	)		—		37		—

(b) Renewables and Gas activities

We sell fixed-price gas and power forwards to hedge our merchant wind assets from declining commodity prices for our Renewables business. We also purchase fixed-price gas and basis swaps and sell fixed-price power in the forward market to hedge the spark spread or heat rate of our merchant thermal assets. We also enter into tolling arrangements to sell the output of our thermal generation facilities.

Our gas business purchases and sells both fixed-price gas and basis swaps to hedge the value of contracted storage positions. The intent of entering into these swaps is to fix the margin of gas injected into storage for subsequent resale in future periods. We also enter into basis swaps to hedge the value of our contracted transport positions. The intent of buying and selling these basis swaps is to fix the location differential between the price of gas at the receipt and delivery point of the contracted transport in future periods.

Both Renewables and Gas have proprietary trading operations that enter into fixed-price power and gas forwards in addition to basis swaps. The intent is to speculate on fixed-price commodity and basis volatility in the U.S. commodity markets.

Renewables will periodically designate derivative contracts as cash flow hedges for both its thermal and wind portfolios. To the extent that the derivative contracts are effective in offsetting the variability of cash flows associated with future power sales and gas purchases, the fair value changes are recorded in OCI. Any hedge ineffectiveness is recorded in current period earnings. For thermal operations, Renewables will periodically designate both fixed price NYMEX gas contracts and AECO basis swaps that hedge the fuel requirements of its Klamath facility. Renewables will also designate fixed price power swaps at various locations in the U.S. market to hedge future power sales from its Klamath facility and various wind farms.

F-92

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The net notional volumes of outstanding derivative instruments associated with Renewables and Gas activities as of March 31, 2015 and December 31, 2014 consisted of:

As of	March 31, 2015		December 31, 2014
(MWh/Dth in millions)
Wholesale electricity purchase contracts		4		2
Wholesale electricity sales contracts		9		7
Foreign exchange forward purchase contracts		89		—
Natural gas and other fuel purchase contracts		308		275
Financial power contracts		8		8
Basis swaps – purchases		162		160
Basis swaps – sales		134		161

The fair values of derivative contracts associated with Renewables and Gas activities as of March 31, 2015 and December 31, 2014 consisted of:

As of	March 31, 2015			December 31, 2014
(Millions)
Wholesale electricity purchase contracts	$	(5	)	$	(12	)
Wholesale electricity sales contracts		38			44
Foreign exchange forward purchase contracts		(5	)		(3	)
Natural gas and other fuel purchase contracts		(3	)		54
Financial power contracts		54			48
Basis swaps – purchases		(4	)		(4	)
Basis swaps – sales		4			(4	)
Total	$	79		$	123

The offsetting of derivative assets as of March 31, 2015 and December 31, 2014 consisted of:

As of	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet			Net Amounts of Assets Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet						Net Amount
								Financial Instruments			Cash Collateral Pledged
(Millions)
March 31, 2015
Derivatives	$	571	$	(382	)	$	189	$	(64	)	$	(44	)	$	81
December 31, 2014
Derivatives		847		(620	)		227		(66	)		(73	)		88

F-93

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The offsetting of derivative liabilities as of March 31, 2015 and December 31, 2014 consisted of:

As of	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in the Balance Sheet			Gross Amounts Not Offset in the Balance Sheet				Net Amount
									Financial Instruments		Cash Collateral Pledged
(Millions)
March 31, 2015
Derivatives	$	(492	)	$	382	$	(110	)	$	64	$	6	$	(40	)
December 31, 2014
Derivatives		(724	)		620		(104	)		66		1		(37	)

The effect of trading derivatives associated with Renewables and Gas activities for the periods ended March 31, 2015 and 2014 consisted of:

Periods Ended March 31,	2015			2014
(Millions)
Wholesale electricity purchase contracts	$	7		$	(4	)
Wholesale electricity sales contracts		(5	)		5
Financial power contracts		(1	)		6
Financial and natural gas contracts		(55	)		59
Total Gain (Loss)	$	(54	)	$	66

Such gains and losses are included in revenue in the condensed consolidated statements of income.

The effect of non-trading derivatives associated with Renewables and Gas activities for the periods ended March 31, 2015 and 2014 consisted of:

Periods Ended March 31,	2015			2014
(Millions)
Wholesale electricity purchase contracts	$	(1	)	$	(5	)
Wholesale electricity sales contracts		(3	)		—
Financial power contracts		5			(1	)
Natural gas and other fuel purchase contracts		6			10
Total Gain (Loss)	$	7		$	4

Such gains and losses are included in revenue and in “Purchased Power, natural gas and fuel used” operating expenses in the condensed consolidated statements of income, depending upon the nature of the transaction.

F-94

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The location and amounts of derivatives designated as hedging instruments associated with Renewables and Gas activities as of March 31, 2015 (no hedge accounting has been applied in 2014) consisted of:

	Asset Derivatives				Liability Derivatives
(Millions)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
As of March 31, 2015
Commodity contracts:
Electricity derivatives:
Current		Current assets	$	—		Current liabilities	$	—
Non-current		Other assets		1		Other liabilities		—
Total			$	1			$	—

The effect of derivatives in cash flow hedging relationships on OCI and income for the period ended March 31, 2015 (no hedge accounting has been applied in 2014) consisted of:

Period Ended March 31, 2015	Gain Recognized in OCI on Derivatives		Location of Gain Reclassified from Accumulated OCI into Income		Gain Reclassified from Accumulated OCI into Income
(Millions)	Effective Portion (a)		Effective Portion (a)
Interest rate contracts	$	—		Interest expense	$	—
Commodity contracts:
Electricity derivatives		1		Operating expenses		—
Total	$	1			$	—

^(a)  Changes in OCI are reporting on a pre-tax basis.

(c) Counterparty credit risk management

NYSEG and RGE face risks related to counterparty performance on hedging contracts due to counterparty credit default. We have developed a matrix of unsecured credit thresholds that are dependent on the counterparty’s or the counterparty’s guarantor’s applicable credit rating, normally Moody or Standard & Poor’s. When our exposure to risk for a counterparty exceeds the unsecured credit threshold, the counterparty is required to post additional collateral or we will no longer transact with the counterparty until the exposure drops below the unsecured credit threshold.

We have various master netting arrangements in the form of multiple contracts with various single counterparties that are subject to contractual agreements that provide for the net settlement of all contracts through a single payment. Those arrangements reduce our exposure to a counterparty in the event of default on or termination of any single contract. For financial statement presentation purposes, we do not offset fair value amounts recognized for derivative instruments and fair value amounts recognized for the right to reclaim or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement. Under the master netting arrangements our obligation to return cash collateral was $0.1 million and $0.2 million as of March 31, 2015 and December 31, 2014, respectively.

Certain of our derivative instruments contain provisions that require us to maintain an investment grade credit rating on our debt from each of the major credit rating agencies. If our debt were to fall below investment grade,

F-95

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

we would be in violation of those provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit risk related contingent features that are in a liability position as of March 31, 2015 is $31.3 million, for which we have posted collateral. If the credit risk related contingent features underlying those agreements were triggered on March 31, 2015, we would receive a refund of collateral.

Note 7. Contingencies

We are party to various legal disputes arising as part of our normal business activities. We do not provide for accrual of legal costs expected to be incurred in connection with a loss contingency.

Transmission - Federal Energy Regulatory Commission (FERC) Return on Equity (ROE) Proceeding

CMP’s transmission rates are determined by a tariff regulated by the FERC and administered by ISO New England (ISO-NE). Transmission rates are set annually pursuant to a FERC authorized formula that allows for recovery of direct and allocated transmission operating and maintenance expenses, including return of and on investment in assets. The FERC provided a base ROE of 11.14% and additional incentive adders applicable to assets based upon vintage, voltage, and other factors.

Complaint I - In September 2011 the Massachusetts Attorney General filed a complaint with the FERC that the ROE was too high and should be lowered by 1.94%, to a value of 9.2%. CMP is a member of the New England Transmission Owners and is therefore subject to the outcome of the complaint proceeding. On October 16, 2014, the FERC issued an order in the ROE case which concluded:

• The base ROE is set at 10.57% effective October 16, 2014.

• There is a ROE cap on incentive returns of 11.74%, also effective October 16, 2014.

• The long-term growth rate used in the two-step discounted cash flows analysis should be Gross Domestic Product and is 4.39% in this proceeding. This aspect of their decision results from the paper hearing that FERC initiated in its June 2014 decision in this case.

• CMP must provide refunds for the period October 2011 through December 2012 with a base ROE of 10.57% and a ROE cap on incentives of 11.74%.

On March 3, 2015, the FERC issued an order on requests for rehearing of its October 16, 2014 decision. The March order upheld the FERC’s initial decision and further clarified that the 11.74% ROE cap will be applied on a project specific basis and not on a transmission owner’s total average return.

Complaint II - Filed December 27, 2012. On June 19, 2014, the FERC issued an order setting this case for settlement and hearing and set a refund effective date of December 27, 2012. The parties entered settlement negotiations which ended in late October 2014 when the parties were unable to reach agreement. The FERC has set a schedule for this case that calls for hearings in June 2015. The order estimates a decision by April 30, 2016, which date has subsequently been revised to September 2016.

Complaint III - Filed August 2014 by the initial complainants in Complaint II, reiterates the same positions in Complaint II. On November 24, 2014, the FERC issued an order setting the complaint for hearing, consolidating Complaints II and III, and establishing a refund effective date of July 31, 2014.

F-96

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

CMP reserved for refunds in 2013 and 2014. The 2013 reserve was $6.6 million associated with Complaint I. In 2014, CMP recorded an additional reserve as a regulatory liability of $29.9 million associated with Complaints I, II, and III. CMP’s reserved amounts reflect projected refund obligations that are consistent with the FERC’s March 3, 2015 final Complaint I decision.

MNG rate case

On June 19, 2015 the Maine Commission staff issued their bench analysis in the rate proceeding proposing a disallowance in current rates of between approximately $10million and $30million of capital investment related to cost overages and low customer demand in the Augusta Maine expansion. The MNG rate filing is pending before the MPUC with a decision expected by the end of 2015.

Note 8. Environmental Liability

Environmental laws, regulations and compliance programs may occasionally require changes in our operations and facilities and may increase the cost of electric and natural gas service. We do not provide for accruals of legal costs expected to be incurred in connection with loss contingencies.

The Environmental Protection Agency and various state environmental agencies, as appropriate, have notified us that we are among the potentially responsible parties that may be liable for costs incurred to remediate certain hazardous substances at twenty-three waste sites. In addition, we have a program to investigate and perform necessary remediation at fifty-three sites where gas was manufactured in the past. We have entered into consent orders with various environmental agencies to investigate, and where necessary, remediate forty-seven of the fifty-three sites.

The total liability to investigate and perform remediation, as necessary, at all of these sites was $319 million as of March 31, 2015 and December 31, 2014, respectively. We recorded a corresponding regulatory asset, net of insurance recoveries and the amount collected from FirstEnergy, as described below, because we expect to recover the net costs in rates. Our environmental liability accruals are recorded on an undiscounted basis and are expected to be paid through the year 2048.

FirstEnergy

NYSEG sued FirstEnergy under the Comprehensive Environmental Response, Compensation, and Liability Act to recover environmental cleanup costs at sixteen former manufactured gas sites. FirstEnergy’s liability was based on their status as successor to Associated Gas & Electric Company, a utility holding conglomerate that unlawfully dominated operations at the plants from approximately 1906 through 1942. In July 2011, the District Court issued a decision and order in NYSEG’s favor. Based on past and future cleanup costs at the sixteen sites in dispute, FirstEnergy would be required to pay NYSEG approximately $60 million if the decision were upheld on appeal. On September 9, 2011, FirstEnergy paid NYSEG $30 million, representing their share of past costs of $27 million and pre-judgment interest of $3 million.

FirstEnergy appealed the decision to the Second Circuit Court of Appeals. On September 11, 2014, the Second Circuit Court of Appeals affirmed the District Court’s decision in NYSEG’s favor, but modified the decision for nine sites, reducing NYSEG’s damages for incurred costs from $27 million to $22 million, excluding interest, and reducing FirstEnergy’s allocable share of future costs at these sites. NYSEG refunded FirstEnergy the excess $5 million in November 2014.

F-97

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

FirstEnergy remains liable for a substantial share of clean-up expenses at nine MPG Energy sites. Because the District Court’s original damage award for incurred costs was based on 2009 figures, FirstEnergy now owes NYSEG an additional damages payment of approximately $16 million for cleanup costs incurred while the appeal was pending. FirstEnergy would also be liable for a share of future costs, which, based on current projections, would be $27 million. Both amounts are being treated as contingent assets and have not been recorded as either a receivable or a decrease to the environmental provision.

Century Indemnity and OneBeacon

NYSEG filed suit in federal court on August 14, 2013 against two excess insurers, Century Indemnity and OneBeacon, who provided excess liability coverage to NYSEG. NYSEG seeks payment for clean-up costs associated with contamination at twenty-two former manufactured gas plants. Based on estimated clean-up costs of $282 million, the carriers’ allocable share is approximately $89 million, excluding pre-judgment interest. Any recovery will be flowed through to NYSEG ratepayers.

Century and One Beacon have answered admitting issuance of the excess policies, but contesting coverage and providing documentation proving they received notice of the claims in the 1990s. We cannot predict the outcome of this matter.

Note 9. Post-retirement and Similar Obligations

We made pension contributions of $0.5 million for the period ended March 31, 2015. We expect to make additional contributions of $0.3 million during 2015.

The components of net periodic benefit cost for pension benefits for the periods ended March 31, 2015 and 2014 consisted of:

Periods Ended March 31,	2015			2014
(Millions)
Service cost	$	9		$	8
Interest cost		24			27
Expected return on plan assets		(39	)		(41	)
Amortization of:
Prior service costs		1			1
Actuarial loss		32			23
Net Periodic Benefit Cost	$	27		$	18

F-98

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The components of net periodic benefit cost for postretirement benefits for the periods ended March 31, 2015 and 2014 consisted of:

Periods Ended March 31,	2015			2014
(Millions)
Service cost	$	1		$	1
Interest cost		4			5
Expected return on plan assets		(2	)		(2	)
Amortization of:
Prior service costs		(2	)		(3	)
Actuarial loss		2			—
Net Periodic Benefit Cost	$	3		$	1

Note 10. Equity

Our share capital consisted of 243 shares, authorized and outstanding, wholly owned by Iberdrola S.A., each having a par value of $0.01, for a total value of additional paid in capital of $11,378 million as of March 31, 2015 and December 31, 2014. All shares have the same voting and economic rights. We have no treasury shares or convertible preferred shares as of March 31, 2015 or December 31, 2014.

Accumulated OCI (Loss)

Accumulated OCI for the periods ended March 31, 2015 and 2014 consisted of:

Accumulated Other Comprehensive Income (Loss)	As of December 31, 2013			2014 Change		As of March 31, 2014			As of December 31, 2014			2015 Change			As of March 31, 2015
(Millions)
Loss on revaluation of defined benefit plans, net of tax benefit of $0.9 for 2015	$	(26	)	$	—	$	(26	)	$	(25	)	$	(1	)	$	(26	)
Loss for nonqualified pension plans		(8	)		—		(8	)		(11	)		—			(11	)
Unrealized (loss) gain on derivatives qualified as cash flow hedges:
Unrealized (loss) during period on derivatives qualified as cash flow hedges		—			—		—			(2	)		—			(2	)
Reclassification adjustment for losses on settled cash flow hedges, net of income tax benefit of $1 for 2014 and $1 for 2015 (a)		(66	)		1		(65	)		(61	)		2			(59	)
Net unrealized (loss) gain on derivatives qualified as cash flow hedges		(66	)		1		(65	)		(63	)		2			(61	)
Accumulated Other Comprehensive (Loss) Income	$	(100	)		1	$	(99	)	$	(99	)		1		$	(98	)

^(a)  Reclassification is reflected in the operating expenses line item in the condensed consolidated statements of income

F-99

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Note 11. Net Income Per Share

Basic net income per share is computed by dividing net income available to Iberdrola USA, Inc. by the weighted-average number of shares of our common stock outstanding. We did not have any potentially-dilutive securities for the periods ended March 31, 2015 and 2014.

The calculations of basic and diluted earnings per share attributable to Iberdrola USA, Inc., including a reconciliation of the numerators and denominators for the periods ended March 31, 2015 and 2014 consisted of:

Periods ended March 31,	2015		2014
(Millions, except for number of shares)
Numerator:
Net income available to Iberdrola USA, Inc.	$	106	$	200
Denominator:
Weighted-average number of shares outstanding, basic and diluted		243		243
Net Income Per Share, Basic and Diluted	$	0.4	$	0.8

Note 12. Segment Information

Our segment reporting structure uses our management reporting structure as its foundation to reflect how IUSA manages the business internally and is organized by type of business. We report our financial performance based on the following three reportable segments:

• Networks: including all the energy transmission and distribution activities, and any other regulated activity originated in New York and Maine carried out by the Group. These operating segments generally offer the same services distributed in similar fashions, have the same types of customers, have similar long-term economic characteristics and are subject to similar regulatory requirements, allowing these operations to be aggregated into one reportable segment.

• Renewables: activities relating to renewable energy, mainly wind energy generation and trading related with such activities.

• Gas: including gas trading and storage businesses carried on by the Group.

Products and services are sold between reportable segments and affiliate companies at cost. The Chief Operating Decision Maker evaluates segment performance based on segment adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) defined as operating income (loss) plus depreciation and amortization and impairment of non-current assets per segment. Segment income, expense, and assets presented in the accompanying tables include all intercompany transactions that are eliminated in the condensed consolidated financial statements.

F-100

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Segment information as of and for the period ended March 31, 2015 consisted of:

For The Period Ended March 31, 2015	Networks		Renewables		Gas			Other (a)			IUSA Consolidated
(Millions)
Revenue - external	$	998	$	239	$	(10	)	$	—		$	1,227
Revenue - intersegment		5		1		9			(15	)		—
Impairment of non-current assets		—		—		—			—			—
Depreciation and amortization		86		83		5			1			175
Operating income (loss)		189		26		(15	)		(4	)		196
Adjusted EBITDA		275		109		(10	)		(3	)		371
Earnings from equity method investments		—		1		—			—			1
Capital expenditures		177		186		1			—			364
As of March 31, 2015
Property, plant and equipment		8,440		8,102		525			—			17,067
Equity method investments		—		259		—			—			259
Total assets	$	12,999	$	12,122	$	1,200		$	(2,015	)	$	24,306

^(a)  Does not represent a segment. It mainly includes Corporate and company eliminations.

Segment information for the period ended March 31, 2014 consisted of:

For The Period Ended March 31, 2014	Networks		Renewables		Gas		Other (a)			IUSA Consolidated
(Millions)
Revenue - external	$	1,130	$	315	$	105	$	6		$	1,556
Revenue - intersegment		—		2		22		(24	)		—
Impairment of non-current assets		—		2		—		—			2
Depreciation and amortization		67		82		5		1			155
Operating income		215		87		112		—			414
Adjusted EBITDA		282		171		117		1			571
Earnings from equity method investments		—		6		—		2			8
Capital expenditures		155		108		1		—			264
As of December 31, 2014
Property, plant and equipment		8,389		8,185		525		—			17,099
Equity method investments		—		262		—		—			262
Total assets	$	12,961	$	12,329	$	1,393	$	(2,431	)	$	24,252

^(a) Does not represent a segment. It mainly includes Corporate and company eliminations.

Note 13. Related Party Transactions

We engage in related party transactions which are generally performed at cost and in accordance with applicable state and federal commission regulations.

F-101

Iberdrola USA, Inc. and Subsidiaries

(A Wholly Owned Subsidiary of Iberdrola, S.A.)

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Related party transactions for the periods ended March 31, 2015 and 2014 consisted of:

Periods Ended March 31,	2015				2014
(Millions)	Sales To		Purchases From		Sales To		Purchases From
Iberdrola Canada Energy Services, Ltd	$	—	$	12	$	—	$	3
Iberdrola Renovables Energía, S.L.		—		2		—		2
Other		1		6		1		7

In addition to the statements of income items above we made purchases of turbines for wind farms from Gamesa Corporación Tecnológica, S.A., in which our ultimate parent Iberdrola has a 20% ownership. The amounts capitalized for these transactions were $0.4 million and $226 million as of March 31, 2015 and December 31, 2014, respectively.

Related party balances as of March 31, 2015 and December 31, 2014 consisted of:

As of	March 31, 2015					December 31, 2014
(Millions)	Owed By		Owed To			Owed By		Owed To
Iberdrola Canada Energy Services, Ltd.	$	3	$	—		$	1	$	—
Iberdrola, S.A.		—		(8	)		—		—
Iberdrola Renovables Energía, S.A.U.		—		(2	)		—		—
Gamesa Corporación Tecnológica, S.A.		9		(34	)		33		(223	)
Iberdrola Energy Projects, Inc.		5		(5	)		15		(15	)
Other		—		—			1		(1	)

Transactions with our parent company (included in Other), Iberdrola, relate predominantly to recharges of corporate services and management fees. Also included within the Purchases From category are charges for credit support relating to guarantees Iberdrola has provided to third parties guarantying our performance.

Transactions with Iberdrola Canada Energy Services predominantly relate to the purchase of gas for IRHI’s gas-fired generation facility at Klamath.

There have been no guarantees provided or received for any related party receivables or payables. These balances are unsecured and are typically settled in cash. Interest is not charged on regular business transactions but is charged on outstanding loan balances. There have been no impairments or provisions made against any affiliated balances.

IUSA manages its overall liquidity position as part of the broader Iberdrola Group and is a party to a cash pooling agreement with Bank Mendes Gans, N.V., similar to other Iberdrola subsidiaries. Cash surpluses remaining after meeting the liquidity requirements of IUSA and its subsidiaries may be deposited in the cash pooling account where such funds are available to meet the liquidity needs of other affiliates within the Iberdrola Group. Under the cash pooling agreement, affiliates with credit balances have pledged those balances to cover the debit balances of the other affiliated parties to the agreement.

F-102

Annex A

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

by

and

among

UIL HOLDINGS CORPORATION,

IBERDROLA USA, INC.

and

GREEN MERGER SUB, INC.

Dated as of February 25, 2015

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION			A-5
Section 1.1	Certain Definitions		A-5
Section 1.2	Certain Interpretations		A-18
ARTICLE II MERGER			A-19
Section 2.1	The Merger		A-19
Section 2.2	Charter Documents; Directors and Officers of Surviving Corporation		A-19
Section 2.3	Cancellation and Conversion of Stock		A-20
Section 2.4	Treatment of Stock Plans		A-22
Section 2.5	Directors of Green and Blue		A-23
Section 2.6	Adjustments		A-23
ARTICLE III CLOSING			A-23
Section 3.1	The Closing		A-23
ARTICLE IV MUTUAL REPRESENTATIONS AND WARRANTIES OF THE PARTIES			A-24
Section 4.1	Organization and Qualification		A-24
Section 4.2	No Conflicts; Approvals and Consents		A-24
Section 4.3	Subsidiaries and Joint Ventures		A-24
Section 4.4	Absence of Certain Changes or Events		A-25
Section 4.5	No Undisclosed Liabilities		A-25
Section 4.6	Legal Proceedings		A-25
Section 4.7	Information Supplied		A-26
Section 4.8	Permits; Compliance with Laws and Orders		A-26
Section 4.9	Taxes		A-26
Section 4.10	Employee Benefit Plans; ERISA		A-27
Section 4.11	Labor Matters		A-29
Section 4.12	Environmental Matters		A-29
Section 4.13	Insurance		A-30
Section 4.14	Energy Price Risk Management		A-30
Section 4.15	Material Contracts		A-30
Section 4.16	Brokers		A-32
Section 4.17	Real Property		A-32
Section 4.18	Intellectual Property		A-33
Section 4.19	Anti-Corruption; Anti-Money Laundering		A-34
ARTICLE V INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF BLUE AND GREEN			A-34
Section 5.1	Blue Capital Stock		A-34
Section 5.2	Authority of Blue		A-35
Section 5.3	Blue Required Statutory Approvals		A-36
Section 5.4	Blue SEC Reports, Financial Statements and Utility Reports		A-36
Section 5.5	Vote Required by Blue		A-38
Section 5.6	Opinion of Financial Advisors to Blue		A-38
Section 5.7	Anti-Takeover Provisions Inapplicable to Blue		A-38
Section 5.8	Green Capital Stock		A-39
Section 5.9	Authority of Green		A-39
Section 5.10	Green Required Statutory Approvals		A-39
Section 5.11	Financial Statements and Utility Reports of Green		A-40

A-ii

Section 5.12	Shared Assets and Services	A-42
Section 5.13	Employee Benefit Plans of Green	A-42
Section 5.14	Anti-Takeover Provisions Inapplicable to Green	A-42
Section 5.15	Organization and Qualification of Merger Sub	A-42
Section 5.16	No Conflicts with Respect to Merger Sub; Approvals and Consents of Merger Sub	A-43
Section 5.17	Green Renewables Contracts	A-43
Section 5.18	Ownership of Shares	A-43
Section 5.19	Available Funds	A-43
ARTICLE VI COVENANTS AND AGREEMENTS OF THE PARTIES		A-43
Section 6.1	Blue No Solicitation	A-43
Section 6.2	Green No Solicitation	A-46
Section 6.3	Preparation of the Proxy Statement and Form S-4; Provision of Green Financial Statements; Shareholder Meetings	A-47
Section 6.4	Conduct of Green Business Pending Closing	A-48
Section 6.5	Conduct of Blue Business Pending Closing	A-50
Section 6.6	Employee Benefits	A-53
Section 6.7	Notification	A-54
Section 6.8	Access	A-54
Section 6.9	Regulatory Approvals; Reasonable Best Efforts	A-55
Section 6.10	State Anti-Takeover Statutes	A-56
Section 6.11	Public Announcements	A-57
Section 6.12	Listing Application	A-57
Section 6.13	Directors and Officers	A-57
Section 6.14	Further Assistance	A-58
Section 6.15	Transaction Litigation	A-59
Section 6.16	Confidentiality Agreement	A-59
Section 6.17	Agreements Concerning Green and Merger Sub	A-59
Section 6.18	Section 16 Matters	A-60
Section 6.19	Governance; Charitable and Community Support	A-60
Section 6.20	Dividends	A-60
ARTICLE VII ADDITIONAL AGREEMENTS		A-60
Section 7.1	Nonsurvival	A-60
Section 7.2	No Other Representations	A-61
ARTICLE VIII CONDITIONS TO CLOSING		A-61
Section 8.1	Conditions to Each Party’s Obligation to Effect the Merger	A-61
Section 8.2	Conditions to Obligations of Green and Merger Sub	A-62
Section 8.3	Conditions to Obligations of Blue	A-63
ARTICLE IX TERMINATION		A-63
Section 9.1	Termination	A-63
Section 9.2	Effect of Termination	A-65
ARTICLE X FEES AND EXPENSES		A-65
Section 10.1	General	A-65
Section 10.2	Expenses	A-66
ARTICLE XI GENERAL PROVISIONS		A-66
Section 11.1	Governing Law; Consent to Jurisdiction; Specific Performance	A-66

A-iii

Section 11.2	Entire Agreement	A-67
Section 11.3	Waivers and Consents	A-67
Section 11.4	Notices	A-67
Section 11.5	Assignments, Successors and No Third-Party Rights	A-68
Section 11.6	Severability	A-68
Section 11.7	Counterparts	A-68

EXHIBITS

Exhibit A	Public Announcement.
Exhibit B	Amended Green Charter Documents.
Exhibit C	Stockholder Agreement Term Sheet.

A-iv

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (this “Agreement”), dated as of February 25, 2015, is by and among UIL Holdings Corporation, a Connecticut corporation (“Blue”), Iberdrola USA, Inc., a New York corporation (“Green”), and Green Merger Sub, Inc., a Connecticut corporation and a direct wholly-owned subsidiary of Green (“Merger Sub”). Each of Blue, Green and Merger Sub is referred to herein as a “Party” and together as the “Parties”.

R E C I T A L S

WHEREAS, Green owns one hundred percent (100%) of the issued and outstanding equity interests of (i) Iberdrola USA Group, LLC, a Delaware limited liability company (“Green Group”), (ii) Iberdrola USA Networks, Inc., a Maine corporation (“Green Networks”), and (iii) Iberdrola Renewables Holdings, Inc., a Delaware corporation (“Green Renewables”, and together with Green Group and Green Networks, the “Green Companies”);

WHEREAS, the board of directors of Blue (the “Blue Board”) has (i) adopted the Agreement and approved and determined that it is in the best interests of Blue for Blue to consummate the merger of Blue with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as wholly-owned subsidiary of Green, and the other transactions contemplated hereby and (ii) resolved, subject to Section 6.1, to recommend that Blue’s shareholders approve the Agreement and submit the Agreement to the shareholders of Blue for their approval, upon the terms and subject to the conditions set forth in this Agreement;

WHEREAS, pursuant to the Merger, each issued share of Blue Common Stock (as defined herein), other than those shares of Blue Common Stock held by Blue (as treasury shares or otherwise) shall be converted into the right to receive one share of Green Common Stock (as defined herein) and $10.50 in cash;

WHEREAS, Green’s board of directors and Merger Sub’s board of directors have each unanimously adopted this Agreement and approved the Merger, the issuance of Green Common Stock in the Merger and the other transactions contemplated hereby and determined that it is in the best interests of Green and Merger Sub, respectively, to consummate the Merger and the other transactions contemplated hereby; and

WHEREAS, for U.S. federal income tax purposes, the Parties intend that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the regulations promulgated thereunder, and that this Agreement be, and is adopted as, a “plan of reorganization” for purposes of Sections 354 and 361 of the Code and the regulations promulgated thereunder and Treasury Regulation Section 1.368-2(g).

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, on the terms and subject to the conditions of this Agreement, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.1 Certain Definitions. For all purposes of and under this Agreement, the following capitalized terms shall have the following respective meanings:

“2005 Act” means the Public Utility Holding Company Act of 2005, including all regulations promulgated thereunder.

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“Acceptable Confidentiality Agreement” means an agreement that is executed, delivered and effective after the execution, delivery and effectiveness of this Agreement, and which contains customary provisions that require any counter-party(ies) thereto (and any of its (their) representatives named therein) that receive material non-public information of or with respect to Blue or its Subsidiaries to keep such information confidential; provided that such confidentiality provisions are no less restrictive in the aggregate to such counter-party(ies) (and any of its (their) representatives named therein), and shall contain such other terms that are, in the aggregate, no less favorable to Blue than the terms of the Confidentiality Agreement (it being understood and agreed that such confidentiality agreement need not contain any standstill or similar provision so long as concurrently with entering into such confidentiality agreement, Blue agrees to amend the Confidentiality Agreement so that the standstill provisions applicable to Green are no more restrictive to Green than those contained in the Acceptable Confidentiality Agreement). Notwithstanding the foregoing, an “Acceptable Confidentiality Agreement” shall not include any provision calling for any exclusive right to negotiate with such party or having the effect of prohibiting Blue from satisfying its obligations hereunder.

“Act” means the Connecticut Business Corporation Act.

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by or is under common control with such Person. For purposes of the immediately preceding sentence, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by Contract or otherwise.

“Anti-Corruption Laws” means Laws relating to anti-bribery or anti-corruption (governmental or commercial), including laws that prohibit the corrupt payment, offer, promise, or authorization, acceptance, or agreement to accept the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any Government Official, foreign government employee or commercial entity or to anyone to obtain or retain business or other improper benefit or advantage, including the U.S. Foreign Corrupt Practices Act (15 U.S.C. §§78dd-1 et seq.), the U.K. Bribery Act of 2010, and all national and international laws enacted to implement the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.

“Average Blue Stock Price” means the average of the volume weighted averages of the trading prices of Blue Common Stock on the NYSE (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the Parties) on each of the ten (10) consecutive trading days ending on (and including) the trading day that immediately precedes the Closing Date.

“Beneficial Ownership” (and its correlative terms) shall have the meaning provided in Rule 13d-3 under the Exchange Act.

“Blue Common Stock” means common stock, of no par value, of Blue.

“Blue Deferred Compensation Plans” means the employee and director deferred compensation plans maintained or sponsored by Blue or any of its Subsidiaries.

“Blue Employee Benefit Plans” means any Plan entered into, established, maintained, sponsored, contributed to, or required to be contributed to, by Blue or any of its Subsidiaries with or for the benefit of any current or former employee or director or other service provider of Blue or any of its Subsidiaries and existing on the date of this Agreement or at any time subsequent thereto and, in the case of a Plan that is subject to Part 3 of Title I of ERISA, Section 412 of the Code or Title IV of ERISA, at any time during the six-year period preceding the date of this Agreement with respect to which Blue or any of its Subsidiaries has or would reasonably be expected to have any present or future actual or contingent liabilities.

A-6

“Blue Material Adverse Effect” means any (i) Change, individually or in the aggregate with any other Changes, that has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, condition (financial or otherwise) or results of operations of Blue and its Subsidiaries, taken as a whole or (ii) Change that would prevent, materially impair or materially delay the ability of Blue to consummate the Merger and the other Transactions; provided, however, that no Change (by itself or when aggregated or taken together with any and all other Changes) directly or indirectly resulting from, attributable to or arising out of any of the following shall be deemed to be, contribute towards or constitute a “Blue Material Adverse Effect,” and no Change (by itself or when aggregated or taken together with any and all other such Changes) directly or indirectly resulting from, attributable to or arising out of any of the following shall be taken into account when determining whether a “Blue Material Adverse Effect” has occurred or may, would or could occur (in the case of clauses (i) through (vii), to the extent such Changes do not disproportionately and adversely affect Blue and its Subsidiaries, taken as a whole, in any material respect relative to other companies operating in any industry or industries and geographies in which Blue operates):

(i) general economic conditions (or changes in such conditions) in the United States (or within the State of Connecticut or the Commonwealth of Massachusetts) or any other country or region in the world, or conditions in the global economy generally;

(ii) conditions (or changes in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world, including (A) changes in interest rates in the United States or any other country or region in the world and changes in exchange rates for the currencies of any countries, and (B) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world;

(iii) conditions (or changes in such conditions) in the industries in which Blue and its Subsidiaries conduct business;

(iv) Changes in international, national or regional wholesale or retail markets for electric power, capacity or fuel or related products;

(v) Changes in national or regional electric transmission or distribution systems;

(vi) political conditions (or changes in such conditions) in the United States (or within the State of Connecticut or the Commonwealth of Massachusetts) or any other country or region in the world or acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States (or within the State of Connecticut or the Commonwealth of Massachusetts) or any other country or region in the world;

(vii) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world;

(viii) changes in Law (or the interpretation thereof) or changes in GAAP or other accounting standards (or the interpretation thereof), in each case after the date of this Agreement;

(ix) any change in the credit rating of Blue (except that the underlying cause of any such change may, to the extent not otherwise excluded by clauses (i) through (viii) above or (x) through (xiii) below, be considered and taken into account in determining whether there has been a Blue Material Adverse Effect);

(x) the entry into, pendency of, actions contemplated by, or the performance of obligations required by this Agreement or consented to by Green or Merger Sub, including any loss or threatened loss of, or adverse change or threatened adverse change in, the relationship of Blue or any of its Subsidiaries with its customers, employees, regulators, financing sources, labor unions or suppliers; provided, however, that the exceptions in this clause (x) shall not apply to Blue’s representations and warranties in

A-7

Section 4.2, Section 4.10(e), Section 4.11 or Section 5.3, or, to the extent related to breaches of Section 4.2, Section 4.10(e), Section 4.11 or Section 5.3, Section 8.2(a);

(xi) any written proposal or commitment made by Green or its Affiliates, or by Blue or its Affiliates, to any Governmental Authority or imposed by any Governmental Authority, in each case, in accordance with this Agreement and in order to obtain the Blue Required Statutory Approval or Green Required Statutory Approval;

(xii) the failure of Blue to meet any internal or published projections, forecasts or revenues predictions (except that the underlying cause of any such failure may, to the extent not otherwise excluded by clauses (i) through (xi) above, or (xiii) below, be considered and taken into account in determining whether there has been a Blue Material Adverse Effect); or

(xiii) a decline in the price or trading volume of Blue Common Stock on the NYSE on or after the date of this Agreement (except that the underlying cause of any such decline may, to the extent not otherwise excluded by clauses (i) through (xii) above, be considered and taken into account in determining whether there has been a Blue Material Adverse Effect).

“Blue Parties” means, collectively, Blue, its Subsidiaries and its Joint Ventures, and each of them individually is a “Blue Party”.

“Blue Stock Plans” means the Blue 2008 Stock and Incentive Compensation Plan and the Blue Deferred Compensation Plans.

“Business Day” means any day that is not a Saturday, Sunday or other day on which the commercial banks in New York City, New York or Madrid, Spain are authorized or required by Law to close.

“Change” means a change, effect, event, circumstance or development.

“Charter Documents” means, with respect to any entity at any time, in each case as amended, modified and supplemented at that time, (i) the articles of association or certificate of formation, incorporation, partnership or organization (or the equivalent organizational documents) of that entity, (ii) the bylaws, partnership agreement or limited liability company agreement or regulations (or the equivalent governing documents) of that entity, and (iii) each document setting forth the designation, amount and relative rights, limitations and preferences of any class or series of that entity’s Equity Securities or of any rights in respect of that entity’s Equity Securities.

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidentiality Agreement” means the Confidentiality Agreement between Blue and Green Parent, dated November 20, 2014.

“Contract” means any legally binding agreement, contract, lease, instrument, note, license, arrangement, undertaking or other commitment of any nature.

“Controlled Group Liability” means any and all liabilities (i) under Title IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971 of the Code, and (iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code.

“Derivative Product” means any swap, cap, floor, collar, futures contract, forward contract, option or any other derivative financial instrument, Contract, based on any commodity, security, instrument, rate or index of any kind or nature whatsoever, whether tangible or intangible, including electricity, natural gas, fuel oil, coal, emissions allowances and offsets, and other commodities, currencies, interest rates and indices.

“Disclosure Schedule” means, if the Representing Party is Blue, the Blue Disclosure Schedule, and if the Representing Party is Green, the Green Disclosure Schedule.

A-8

“Employee Benefit Plans” means Blue Employee Benefit Plans when used with respect to a Blue Party and means Green Employee Benefit Plans when used with respect to a Green Party.

“Environmental Claim” means any and all administrative, regulatory or judicial actions, suits, orders, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance, liability or violation (written or oral) by any Person (including any Governmental Authority) alleging potential liability (including potential responsibility or liability for enforcement, investigatory costs, cleanup costs, governmental response costs, removal costs, remedial costs, natural resources damages, property damages, personal injuries or penalties) arising out of, based on or resulting from circumstances forming the basis of any actual or alleged noncompliance with, violation of, or liability under, any Environmental Law or Environmental Permit.

“Environmental Laws” means any federal, state, local, foreign or international Law regulating or protecting public or employee health and safety (including in the workplace), or regulating or protecting natural resources, wildlife, threatened or endangered species or the environment (including ambient air, surface water (including water management and runoff), groundwater, land surface or subsurface strata), regulating greenhouse gases, or regulating the distribution, labeling, registration, use, treatment, storage, disposal, recycling, removal, transport or handling of Materials of Environmental Concern, including, but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §s 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §s 5101 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §s 6901 et seq.), the Clean Water Act (33 U.S.C. §s 1251 et seq.), the Clean Air Act (42 U.S.C. §s 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. §s 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §s 136 et seq.), those portions of the Occupational Safety and Health Act (29 U.S.C. §s 651 et seq.) that address Materials of Environmental Concern, and the Oil Pollution Act of 1990 (33 U.S.C. §s 2701 et seq.) and the regulations promulgated pursuant thereto and any counterpart or similar local or state Laws.

“Environmental Permits” means Permits issued pursuant to applicable Environmental Law.

“Equity Securities” of any Person means, as applicable (i) any and all of its shares of capital stock, membership interests or other equity interests or share capital, (ii) any warrants, Contracts or other rights or options directly or indirectly to subscribe for or to purchase any capital stock, membership interests or other equity interests or share capital of such Person, (iii) all securities or instruments, directly or indirectly, exchangeable for or convertible or exercisable into, any of the foregoing or with any profit participation features with respect to such Person, or (iv) any share appreciation rights, phantom share rights or other similar rights with respect to such Person or its business.

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

“ERISA Affiliate” means all employers (whether or not incorporated) that would be treated together with Green or any of its Subsidiaries as a “single employer” within the meaning of Section 414 of the Code.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“FERC” means the Federal Energy Regulatory Commission.

“Final Order” means action by the relevant Governmental Authority that has not been reversed, stayed, enjoined, set aside, annulled or suspended and is legally binding and effective.

“GAAP” means generally accepted accounting principles for financial reporting in the United States consistently applied through the periods involved.

“Government Official” means (i) any official, officer, employee or representative of, or any person acting in an official capacity for or on behalf of, any Governmental Authority, (ii) any political party or party official or candidate for political office, or (iii) any official, officer, employee, or any person acting in an official capacity

A-9

for or on behalf of, any company, business, enterprise or other entity owned (in whole or in substantial part) controlled by or affiliated with a Governmental Authority.

“Governmental Authority” means shall mean (i) any government, (ii) any governmental or regulatory entity, body, department, commission, subdivision, board, bureau, administrative agency or instrumentality, (iii) any court, tribunal, judicial body, or an arbitrator or arbitration panel, (iv) any non-governmental self-regulatory agency or securities exchange, or (v) the North American Electric Reliability Corporation, in each of (i) through (iv) whether supranational, national, federal, state, county, municipal, provincial, and whether domestic or foreign.

“Green Common Stock” means ordinary shares, par value $0.01 per share, of Green.

“Green Employee Benefit Plans” means any Plan entered into, established, maintained, sponsored, contributed to or required to be contributed to by Green or any of its Subsidiaries with or for the benefit of any current or former employee or director or other service provider of Green or any of its Subsidiaries and existing on the date of this Agreement or at any time subsequent thereto and, in the case of a Plan that is subject to Part 3 of Title I of ERISA, Section 412 of the Code or Title IV of ERISA, at any time during the six-year period preceding the date of this Agreement with respect to which Green or any of its Subsidiaries has or would reasonably be expected to have any present or future actual or contingent liabilities.

“Green Material Adverse Effect” means any (i) Change, individually or in the aggregate with any other Changes, that has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, condition (financial or otherwise) or results of operations of Green and its Subsidiaries, taken as a whole or (ii) Change that would prevent, materially impair or materially delay the ability of the Green or Merger Sub to consummate the Merger and the other Transactions; provided, however, that no Change (by itself or when aggregated or taken together with any and all other Changes) directly or indirectly resulting from, attributable to or arising out of any of the following shall be deemed to be or constitute a “Green Material Adverse Effect,” and no Change (by itself or when aggregated or taken together with any and all other such Changes) directly or indirectly resulting from, attributable to or arising out of any of the following shall be taken into account when determining whether a “Green Material Adverse Effect” has occurred or may, would or could occur (in the case of clauses (i) through (vii), to the extent such Changes do not disproportionately and adversely affect Green and its Subsidiaries, taken as a whole, in any material respect relative to other companies operating in any industry or industries and geographies in which Green and its Subsidiaries operate):

(i) general economic conditions (or changes in such conditions) in the United States (or within the State of New York or the State of Maine) or any other country or region in the world, or conditions in the global economy generally;

(ii) conditions (or changes in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world, including (A) changes in interest rates in the United States or any other country or region in the world and changes in exchange rates for the currencies of any countries, and (B) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world;

(iii) conditions (or changes in such conditions) in the industries in which the Green and its Subsidiaries conduct business;

(iv) Changes in international, national or regional wholesale or retail markets for electric power, capacity or fuel or related products;

(v) Changes in national or regional electric transmission or distribution systems;

(vi) political conditions (or changes in such conditions) in the United States (or within the State of New York or the State of Maine) or any other country or region in the world or acts of war, sabotage or

A-10

terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States (or within the State of New York or the State of Maine) or any other country or region in the world;

(vii) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world;

(viii) changes in Law (or the interpretation thereof) or changes in GAAP or other accounting standards (or the interpretation thereof), in each case after the date of this Agreement;

(ix) any change in the credit rating of Green (except that the underlying cause of any such change may, to the extent not otherwise excluded by clauses (i) through (viii) above or (x) through (xiii) below, be considered and taken into account in determining whether there has been a Green Material Adverse Effect);

(x) the failure of Green or its Subsidiaries to meet any internal or published projections, forecasts or revenues predictions (except that the underlying cause of any such failure may, to the extent not otherwise excluded by clauses (i) through (ix) above or (xi) through (xiii) below, be considered and taken into account in determining whether there has been a Green Material Adverse Effect);

(xi) the entry into, pendency of, actions contemplated by, or the performance of obligations required by this Agreement or consented to by Blue, including any loss or threatened loss of, or adverse change or threatened adverse change in, the relationship of Green or any of its Subsidiaries with its customers, employees, regulators, financing sources, labor unions or suppliers; provided, however, that the exceptions in this clause (xi) shall not apply to Green’s representations and warranties in Section 4.2, Section 4.10(e), Section 4.11 or Section 5.10, or, to the extent related to breaches of Section 4.2, Section 4.10(e), Section 4.11 or Section 5.10, Section 8.3(a);

(xii) any written proposal or commitment made by Green or its Affiliates, or by Blue or its Affiliates, to any Governmental Authority or imposed by any Governmental Authority, in each case, in accordance with this Agreement and in order to obtain the Blue Required Statutory Approval or Green Required Statutory Approval; or

(xiii) the failure of Green or its Subsidiaries to meet any internal or published projections, forecasts or revenues predictions (except that the underlying cause of any such failure may, to the extent not otherwise excluded by clauses (i) through (xii) above, be considered and taken into account in determining whether there has been a Green Material Adverse Effect).

“Green Parent” means Iberdrola, S.A.

“Green Parties” means, collectively, Green, its Subsidiaries and its Joint Ventures, and each of them individually is a “Green Party”.

“Hazardous Materials” means (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, and polychlorinated biphenyls and (b) any chemical, material, substance or waste that is prohibited, limited or regulated by any Governmental Authority in relation to the protection of human health and the environment.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“IFRS” means International Financial Reporting Standards promulgated by the International Accounting Standards Board consistently applied through the periods involved.

“Indebtedness” means, without duplication, all indebtedness, determined in accordance with GAAP, including (i) borrowed money (other than intercompany indebtedness), whether current or funded, secured or

A-11

unsecured, and all obligations evidenced by bonds, debentures, notes or similar instruments, (ii) capital lease obligations, (iii) obligations evidenced by letters of credit, bankers’ acceptances or similar facilities to the extent drawn upon by the counterparty thereto, (iv) all obligations for the deferred purchase price of property or services (including all earn-outs, conditional sale agreements or other title retention agreements with respect to property), other than trade payables and receivables in the ordinary course of business consistent with customary trade practices, (v) all indebtedness secured by a purchase money mortgage or other Liens to secure all or part of the purchase price of property subject to such mortgage or Lien, (vi) all obligations pursuant to or evidenced by hedging agreements or interest rate or currency obligations, including swaps, hedges or similar arrangements, and (vii) any guarantee (whether or not secured by Liens) of or other assumption of liability for, or grant of an encumbrance or provision of collateral to secure, any of the foregoing.

“Intellectual Property” means all of the following whether arising under the Laws of the United States or of any other jurisdiction: (a) patents, patent applications (including patents issued thereon) and statutory invention registrations, including reissues, divisions, continuations, continuations in part, extensions and reexaminations thereof, and all rights therein provided by international treaties or conventions, (b) Trademarks, (c) copyrights (including copyrights in computer programs, software, computer code, documentation, drawings, specifications and data), moral rights, mask work rights, in each case, whether or not registered, and registrations and applications for registration thereof, and all rights therein provided by international treaties or conventions, (d) confidential and trade secret information, including confidential information regarding inventions, processes, formulae, models, methodologies, proprietary rights, technology, improvements, know-how, technical and business information, (e) all other intellectual and industrial property rights, whether or not subject to statutory registration or protection, and (f) the right to sue and collect damages for any past infringement of any of the foregoing.

“Joint Venture” of a Person shall mean any Person that is not a Subsidiary of such first Person, in which such first Person or one or more of its Subsidiaries owns directly or indirectly any Equity Securities, other than Equity Securities held for passive investment purposes that are less than 5% of each class of the outstanding voting securities or voting capital stock of such second Person.

“Knowledge” means (i) with respect to Blue, as to any matter in question, the actual knowledge of any of the individuals listed on Section 1.1(a) of Blue Disclosure Schedule, and (ii) with respect to Green, as to any matter in question, the actual knowledge of any of the individuals listed on Section 1.1(a) of Green Disclosure Schedule.

“Laws” means all applicable laws (including common law), statutes, treaties, codes, ordinances, decrees, rules, regulations, directives or other legal requirements issued, enacted, adopted, promulgated or implemented by any Governmental Authority, binding or affecting the Person referred to in the context in which such word is used; and “Law” means any one of them.

“Liability” means any liability, cost, expense, debt or obligation of any kind, character, or description, and whether known or unknown, accrued, matured, absolute, determined, determinable, contingent or otherwise, and regardless of when asserted or by whom.

“Lien” means any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, option, right of first or last offer, preemptive right or other restriction of similar nature (including any restriction on the transfer of any security or other asset, any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).

“Material Adverse Effect” means a Blue Material Adverse Effect when used with respect to a Blue Party and means a Green Material Adverse Effect when used with respect to a Green Party.

“Materials of Environmental Concern” means any chemicals, materials, greenhouse gases, substances, pollutants, contaminants or items in any form, whether solid, liquid, gaseous, semisolid, or any combination

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thereof, whether waste materials, raw materials, chemicals, finished products, by-products, or any other materials or articles, which are regulated under Environmental Laws, or which are listed, defined or otherwise designated as hazardous, toxic, dangerous, infectious or radioactive under Environmental Laws, including explosive substances, asbestos or asbestos-containing material, polychlorinated biphenyls, benzene, butadiene, radon gas, urea formaldehyde foam insulation, infectious or medical wastes, lead-containing paints or coatings, and any petroleum, petroleum hydrocarbons, crude oil petroleum derivatives, petroleum products, or by-products of petroleum refining.

“NYSE” means the New York Stock Exchange.

“Permitted Liens” means any of the following: (i) Liens for Taxes, assessments, governmental charges and utility charges or levies either not yet due or payable or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP, (ii) vendors’, mechanics’, carriers’, workmen’s, warehouseman’s, repairmen’s, materialmen’s, construction or similar Liens arising or incurred in the ordinary course of business relating to obligations which are not overdue for a period of more than 90 days or that are being contested in good faith and by appropriate proceedings, (iii) pledges, deposits or other Liens securing the performance of bids, trade contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation), (iv) Liens the existence of which are specifically disclosed in notes to consolidated financial statements, (v) all easements, covenants, permits, servitudes, licenses and rights of way and other similar restrictions, zoning, entitlements, exceptions, restrictions, imperfections of title and charges that would not, individually or in the aggregate, reasonably be expected to materially and adversely interfere with the present use of the assets of the affected Person and its Subsidiaries, taken as a whole, (vi) minor survey exceptions and matters as to real property of the affected Person and its Subsidiaries which would be disclosed by an accurate survey of such real property and do not materially impair the occupancy or current use of such real property, (vii) statutory Liens incurred or pledges, financial assurances, bonds or deposits made in favor of a Governmental Authority to secure the performance of obligations of the affected Person or any of its Subsidiaries under Environmental Laws to which any assets of the affected Person or any such Subsidiaries are subject, (viii) Liens arising under any lines of credit or other credit facilities or arrangements in effect on the date of this Agreement (or any replacement facilities thereto permitted pursuant to this Agreement), (ix) Liens described in Section 1.1(b) of the Disclosure Schedule and (x) with respect to the Material Owned Real Property, any matters disclosed in true and complete title reports and title searches made available by the applicable Party prior to the date of this Agreement.

“Person” means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government or agency or subdivision thereof or any other entity.

“Personal Information” means, in addition to any information defined or described by a Person, any of its Subsidiaries or Joint Ventures as “personal information” in any privacy notice or other public-facing statement by or on behalf of such Person, its Subsidiaries or Joint Ventures, all information identifying an individual or regarding an identified or identifiable individual (such as name, address, telephone number, email address, financial account number, government-issued identifier, and any other data used or intended to be used to identify, contact or precisely locate a person).

“Plan” means any employment, bonus, incentive compensation, deferred compensation, long term incentive, pension, profit sharing, retirement, stock purchase, stock option, stock ownership, stock appreciation rights, phantom stock, leave of absence, layoff, vacation, day or dependent care, legal services, cafeteria, life, health, medical, accident, disability, workmen’s compensation or other insurance, retention, severance, separation, termination, change of control or other benefit plan, agreement, practice, policy, program, scheme or arrangement of any kind, whether written or oral, including any “employee benefit plan” within the meaning of Section 3(3) of ERISA.

“Post-Closing Laws” means any Law for which no notification, filing or registration, consent, approval, declaration, Permit or authorization to, by or from any Governmental Authority is necessary or required to be

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made prior to the Closing by Blue, Green or any of their Affiliates in connection with the execution and delivery or the performance of this Agreement.

“Power Act” means the Federal Power Act, as amended, and including all regulations promulgated thereunder.

“Privacy Rules and Policies” means any privacy policies and any other terms applicable to the collection, retention, use, disclosure and distribution of Personal Information from individuals, and any laws related to the collection, use, access to, transmission, disclosure, alteration or handling of Personal Information.

“Release” means any spill, effluent, emission, leaking, pumping, pouring, emptying, escaping, dumping, injection, deposit, disposal, discharge, dispersal, leaching, abandoning, adding, or migration into the environment.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Significant Subsidiary” shall have the meaning set forth in Rule 1.02(w) of Regulation S-X promulgated pursuant to the Exchange Act.

“Subsidiary” means, with respect to any Person, any entity in which such Person owns, directly or indirectly, capital stock or other interests representing more than 50% of the aggregate equity interest in such entity.

“Tax Returns” means all returns, declarations, reports, statements and other documents (including any information return, claim for refund, amended return or declaration of estimated Taxes) filed or required to be filed with any Governmental Authority in respect of, any and all Taxes, including any and all attachments, amendments and supplements thereto.

“Taxes” means all federal, state, local or foreign taxes, charges, fees, levies, imposts, duties or other assessments of a similar nature, including income, gross receipts, sales, use, ad valorem, value-added, business, transfer, registration, goods and services, environmental (under Section 59A of the Code), accumulated earnings, personal holding company, excess profits, franchise, profits, license, withholding, payroll, employment, unemployment, social security, workers’ compensation, estimated, alternative minimum, add on minimum, intangible, escheat or unclaimed property, capital stock, net worth, excise, severance, stamp, occupation, premium, property, disability, Equity Securities or windfall profits taxes, customs duties or other taxes, assessments and similar governmental charges of any kind whatsoever, together with any interest and any penalties, additions to tax, fines or additional amounts imposed by any Governmental Authority.

“Trade Secrets” means confidential business information, trade secrets and know-how, including processes, schematics, business methods, formulae, drawings, prototypes, models, designs, unpatentable discoveries and inventions.

“Trademarks” means trademarks, service marks, trade names, service names, trade dress, logos and other identifiers of source, including all goodwill associated therewith, and any and all common law rights, and registrations and applications for registration thereof, all rights therein provided by international treaties or conventions, and all renewals of any of the foregoing and Internet domain names.

“Transactions” means the transactions contemplated by this Agreement (including the Merger).

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The terms listed below are defined in the Sections set forth opposite each such defined term.

2005 Act	Section 1.1
Acceptable Confidentiality Agreement	Section 1.1
Acquisition Proposal	Section 6.1(j)(i)
Act	Section 1.1
Adverse Recommendation Change	Section 6.1(c)
Affiliate	Section 1.1
Agreement	Preamble
Anti-Corruption Laws	Section 1.1
Average Blue Stock Price	Section 1.1
Beneficial Ownership	Section 1.1
Blue	Preamble
Blue 2014 Draft Form 10-K	Article IV
Blue Board	Recitals
Blue Common Stock	Section 1.1
Blue Contacts	Section 6.14(b)
Blue Deferred Compensation Plans	Section 1.1
Blue Disclosure Schedule	Article IV
Blue Employee Benefit Plans	Section 1.1
Blue Equity Right	Section 2.4(b)
Blue ESPP	Section 2.4(d)
Blue Financial Statements	Section 5.4(c)
Blue Material Adverse Effect	Section 1.1
Blue Material Contract	Section 4.15(a)
Blue Parties	Section 1.1
Blue Party	Section 1.1
Blue Performance Award	Section 2.4(c)
Blue Required Statutory Approvals	Section 5.3
Blue Restricted Shares	Section 2.4(a)
Blue SEC Reports	Section 5.4(a)
Blue Stock Awards	Section 2.4(b)
Blue Stock Plans	Section 1.1
Blue Voting Debt	Section 5.1(f)
Board Recommendation	Section 6.1(c)
Book Entry Shares	Section 2.3(b)(iii)
Broker Agreements	Section 4.16
Burdensome Effect	Section 6.9(b)
Business Day	Section 1.1
Cash Consideration	Section 2.3(a)(ii)
Certificate of Merger	Section 2.1(b)
Certificates	Section 2.3(b)(iii)
CFIUS	Section 5.3
Change	Section 1.1
Charter Documents	Section 1.1
Closing	Section 3.1
Closing Date	Section 3.1
Code	Section 1.1
Confidentiality Agreement	Section 1.1
Continuing Employee	Section 6.6(a)
Contract	Section 1.1
Controlled Group Liability	Section 1.1

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D&O Insurance	Section 6.13(b)
Derivative Product	Section 1.1
Disclosure Schedule	Section 1.1
Easement	Section 4.17(c)
Effective Time	Section 2.1(b)
Employee Benefit Plans	Section 1.1
Environmental Claim	Section 1.1
Environmental Laws	Section 1.1
Environmental Permits	Section 1.1
Equity Exchange Factor	Section 2.4(a)
Equity Securities	Section 1.1
ERISA	Section 1.1
ERISA Affiliate	Section 1.1
Exchange Act	Section 1.1
Exchange Agent	Section 2.3(b)(i)
Exchange Fund	Section 2.3(b)(ii)
Exon-Florio	Section 5.3
Expenses	Section 10.2
FERC	Section 1.1
Final Order	Section 1.1
Form S-4	Section 6.3(a)
GAAP	Section 1.1
Government Official	Section 1.1
Governmental Authority	Section 1.1
Green	Preamble
Green Business Combination	Section 6.2
Green Common Stock	Section 1.1
Green Companies	Recitals
Green Contacts	Section 6.14(b)
Green Disclosure Schedule	Article IV
Green Employee Benefit Plans	Section 1.1
Green Equity Right	Section 2.4(b)
Green Financial Statements	Section 5.11(e)
Green Group	Recitals
Green IFRS Financial Statements	Section 5.11(a)
Green Material Adverse Effect	Section 1.1
Green Material Contract	Section 4.15(a)
Green Networks	Recitals
Green Networks Financial Statements	Section 5.11(e)
Green Parent	Section 1.1
Green Parties	Section 1.1
Green Party	Section 1.1
Green Reconciliation Financial Statements	Section 5.11(c)
Green Renewables	Recitals
Green Renewables Contracts	Section 5.17
Green Required Statutory Approvals	Section 5.10
Green Voting Debt	Section 5.8(c)
Hazardous Materials	Section 1.1
HSR Act	Section 1.1
IFRS	Section 1.1
Indebtedness	Section 1.1
Indemnified Parties	Section 6.13(a)

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Intellectual Property	Section 1.1
Joint Venture	Section 1.1
Knowledge	Section 1.1
Law	Section 1.1
Laws	Section 1.1
Liability	Section 1.1
Lien	Section 1.1
Mark-to-Market Value	Section 4.14(c)
Material Adverse Effect	Section 1.1
Material Easement Real Property	Section 4.17(a)
Material Leased Real Property	Section 4.17(a)
Material Owned Real Property	Section 4.17(a)
Material Real Property	Section 4.17(a)
Materials of Environmental Concern	Section 1.1
Merger	Recitals
Merger Consideration	Section 2.3(a)(ii)
Merger Sub	Preamble
NYSE	Section 1.1
Options	Section 5.1(c)
Outside Date	Section 9.1(c)
Parties	Preamble
Party	Preamble
Permits	Section 4.8
Permitted Liens	Section 1.1
Person	Section 1.1
Personal Information	Section 1.1
Plan	Section 1.1
Post-Closing Laws	Section 1.1
Power Act	Section 1.1
Privacy Rules and Policies	Section 1.1
Proxy Statement	Section 6.3(a)
Real Property Lease	Section 6.4(b)(xiv)
Release	Section 1.1
Representatives	Section 6.1(a)
Representing Party	Article IV
Representing Party Material Contract	Section 4.15(a)
Representing Party Personnel	Section 4.10(e)
Restraints	Section 8.1(b)
Risk Management Guidelines	Section 4.14(a)
SEC	Section 1.1
Securities Act	Section 1.1
Shared Services Agreement	Section 6.17(e)
Shareholder Approval	Section 5.5
Shareholder Meeting	Section 6.3(a)
Significant Subsidiary	Section 1.1
SOX	Section 5.4(a)
Stock Consideration	Section 2.3(a)(ii)
Subsidiary	Section 1.1
Superior Proposal	Section 6.1(j)(ii)
Surviving Corporation	Section 2.1(a)
Takeover Notice Period	Section 6.1(d)
Tax Returns	Section 1.1

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Taxes	Section 1.1
Termination Fee	Section 10.1(d)(i)
Trade Secrets	Section 1.1
Trademarks	Section 1.1
Transaction Litigation	Section 6.15
Transactions	Section 1.1
Transition Committee	Section 6.14(b)

Section 1.2 Certain Interpretations.

(a) Unless otherwise indicated, all references herein to Articles, Sections, Annexes, Exhibits or Schedules shall be deemed to refer to Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement, as applicable.

(b) The words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(c) The terms defined in the singular have a comparable meaning when used in the plural, and vice versa.

(d) References herein to any gender include the other gender.

(e) Unless otherwise indicated, the words “include,” “includes” and “including,” when used herein, shall be deemed in each case to be followed by the words “without limitation”.

(f) The table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof.

(g) Unless otherwise indicated, all references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise requires.

(h) Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa.

(i) References to “$” and “dollars” are to the currency of the United States of America.

(j) Any dollar or percentage thresholds set forth herein shall not be used as a benchmark for the determination of what is or is not “material”, a “Blue Material Adverse Effect” or a “Green Material Adverse Effect” under this Agreement.

(k) The term “or” is not exclusive and has the meaning represented by the phrase “and/or”.

(l) When used herein, the word “extent” and the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such word or phrase shall not simply mean “if”.

(m) When used herein, the phrase “made available” shall mean provided by Blue or Green, as applicable, (i) via e-mail to the other Party or its Representatives, (ii) in a virtual dataroom established in connection with the Transactions or (iii) or at the offices of a Party or its Affiliates, in each of clauses (i), (ii) and (iii), as of 4:00 p.m., Eastern Time, on February 25, 2015.

(n) Each representation or warranty in Article IV or Article V made by a Representing Party relating to a Joint Venture of such Representing Party that is neither operated nor managed solely by such Representing Party or a Subsidiary of such Representing Party shall be deemed made only to the Knowledge of such Representing Party.

(o) The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, holding or rule of construction providing that

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ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document.

(p) The section headings and any table of contents contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(q) The language used in this Agreement shall be deemed to be the language the Parties have chosen to express their mutual intent, and no rule of strict construction will be applied against any Party.

ARTICLE II

MERGER

Section 2.1 The Merger.

(a) The Merger. Subject to the terms and conditions of this Agreement, which shall constitute an agreement and plan of merger for all purposes of the Act, and in accordance with the Act, at the Effective Time Blue shall merge with and into Merger Sub, and the separate corporate existence of Blue shall thereupon cease. From and after the Effective Time and in accordance with the Act, Merger Sub shall continue as the surviving corporation in the Merger (the “Surviving Corporation”) and a wholly-owned subsidiary of Green.

(b) Filing Certificate of Merger; Effective Time. Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Blue, Green and Merger Sub shall cause an appropriate certificate of merger (the “Certificate of Merger”), meeting the requirements of Section 33-819 of the Act, to be properly executed and filed with the Secretary of State of the State of Connecticut in accordance with such section and otherwise make all other filings or recordings as required by the Act in connection with the Merger. The Merger shall become effective upon the filing and acceptance of the Certificate of Merger (or at such later date and time as Blue and Green shall agree and shall set forth in the Certificate of Merger) (the “Effective Time”).

(c) Effects. The Merger shall have the effects set forth in this Agreement and Section 33-820 of the Act.

Section 2.2 Charter Documents; Directors and Officers of Surviving Corporation.

(a) Name of the Surviving Corporation. The name of the Surviving Corporation shall be “UIL Holdings Corporation”.

(b) Certificate of Incorporation of the Surviving Corporation. The certificate of incorporation of Merger Sub, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided by Law.

(c) Bylaws of Surviving Corporation. The bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until thereafter amended as provided by Law, by the certificate of incorporation of the Surviving Corporation, and by the bylaws of the Surviving Corporation.

(d) Directors of Surviving Corporation. From and after the Effective Time, the initial directors of the Surviving Corporation shall be the directors of Merger Sub immediately prior to the Effective Time until their successors shall have been duly elected or appointed or qualified or until their earlier death, resignation, or removal in accordance with the Surviving Corporation’s certificate of incorporation and bylaws.

(e) Officers of Surviving Corporation. From and after the Effective Time, the officers of Blue immediately prior to the Effective Time shall be the officers of the Surviving Corporation, each such officer to serve in such capacity until his or her earlier death, resignation or removal or until his or her successor is duly elected or appointed.

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Section 2.3 Cancellation and Conversion of Stock.

(a) Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any further action on the part of the holder of any Blue Common Stock, any Merger Sub common stock or any Green Common Stock:

(i) Cancellation of Blue Common Stock. Each issued share of Blue Common Stock that is owned by Blue (as a treasury share or otherwise, other than any shares owned on behalf of third parties) immediately prior to the Effective Time shall automatically be canceled and shall cease to exist, and no consideration shall be delivered or deliverable hereunder in connection with such cancellation.

(ii) Conversion of Remaining Blue Common Stock. Each issued and outstanding share of Blue Common Stock (other than the issued shares of Blue Common Stock referenced in Section 2.3(a)(i)) shall be converted into the right to receive (x) one (1) validly issued share of Green Common Stock, credited as fully paid, which, when issued, ranks pari passu in all respects with all of the shares of Green Common Stock then in issue (the “Stock Consideration”) and (y) $10.50 in cash (the “Cash Consideration” and, together with the Stock Consideration, the “Merger Consideration”).

(iii) Conversion of Merger Sub Common Stock. Each issued and outstanding share of common stock of Merger Sub shall be converted into one (1) validly issued, fully paid and nonassessable share of common stock, of no par value, of the Surviving Corporation.

(b) Surrender and Exchange of Shares.

(i) Following the date of this Agreement and in any event prior to the Effective Time, Blue shall select a bank or trust company, reasonably acceptable to Green (such approval not to be unreasonably withheld or delayed), to act as exchange agent in connection with the Merger (together with any other bank or trust company also so selected, the “Exchange Agent”) for the purpose of delivering or causing to be delivered to each holder of Blue Common Stock the shares of Green Common Stock and the Cash Consideration that such holder shall become entitled to receive with respect to such holder’s shares of Blue Common Stock pursuant to this Section 2.3. The Exchange Agent shall act as agent for each holder of shares of Blue Common Stock in connection therewith.

(ii) Immediately prior to the filing of the Certificate of Merger as contemplated by Section 2.1(b), at the direction of Green, there shall be deposited, with the Exchange Agent, from time to time, that amount of immediately available cash (such cash hereinafter referred to as the “Exchange Fund”) and number of shares of Green Common Stock as are deliverable pursuant to Section 2.3(a), and which, unless Green shall otherwise determine, shall be deposited with the Exchange Agent through the facilities of The Depository Trust Company. The Exchange Agent shall invest the Exchange Fund as directed by Green; provided that such investments shall be in obligations of or guaranteed by the United States of America. Any interest and other income resulting from such investment shall become a part of the Exchange Fund, and any amounts in excess of the amounts payable under Section 2.3(a)(ii) shall be promptly returned to the Surviving Corporation. To the extent that there are any losses with respect to any such investments, or the Exchange Fund diminishes for any reason below the level required for the Exchange Agent to make prompt cash payment under Section 2.3(a)(ii), Green shall promptly replace or restore the cash in the Exchange Fund so as to ensure that the Exchange Fund is at all times maintained at a level sufficient for the Exchange Agent to make such payments under Section 2.3(a)(ii).

(iii) Promptly after the Effective Time (and in any event within three (3) business days thereafter), the Surviving Corporation shall cause to be mailed by the Exchange Agent to each record holder, immediately prior to the Effective Time, of shares of Blue Common Stock that are represented by book entry (“Book Entry Shares”) or represented by certificates (“Certificates”), a form of letter of transmittal in customary form (as Green shall reasonably specify after consultation with Blue), which shall specify that delivery shall be effected, and risk of loss and title to Book Entry Shares or Certificates held by such holder representing such shares of Blue Common Stock shall pass, only upon

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actual and proper delivery of Book Entry Shares or Certificates (or satisfaction of the replacement requirements in lieu of the Certificates, as provided in Section 2.3(b)(viii)) to the Exchange Agent.

(iv) Each holder of shares of Blue Common Stock that are represented by Book Entry Shares or Certificates shall be entitled to receive in exchange for such holder’s shares of Blue Common Stock that are represented by Book Entry Shares or Certificates (or satisfaction of the replacement requirements in lieu of a Certificate, as provided in Section 2.3(b)(viii)), upon surrender to the Exchange Agent of a Book Entry Share or Certificate, together with a letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required pursuant to such instructions, the number of shares of Green Common Stock (which shall be in uncertificated book-entry form unless a physical certificate is requested) and the Cash Consideration deliverable in respect of such holder’s shares of Blue Common Stock represented by such holder’s properly surrendered Book Entry Shares or Certificates (or satisfaction of the replacement requirements in lieu of the Certificates, as provided in Section 2.3(b)(viii)) in accordance with Section 2.3(a), and Book Entry Shares or Certificates so surrendered shall forthwith be canceled, and Green’s register of members shall be updated accordingly.

(v) If delivery of shares of Green Common Stock and the Cash Consideration in respect of shares of Blue Common Stock represented by a Book Entry Share or Certificate is directed by the person in whose name the surrendered Book Entry Share or Certificate is registered to be made to a person other than the person in whose name the surrendered Book Entry Share or Certificate is registered, it shall be a condition of delivery that the Book Entry Share or Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the person requesting such payment or delivery shall have paid to the Exchange Agent any transfer and other Taxes required by reason of the delivery of the shares of Green Common Stock and the Cash Consideration to a person other than the registered holder of the Book Entry Share or Certificate surrendered or shall have established to the satisfaction of the Exchange Agent that such Tax either has been paid or is not applicable. Until so surrendered, each Book Entry Share and Certificate shall, after the Effective Time, represent for all purposes only the right to receive upon such surrender the applicable shares of Green Common Stock and the Cash Consideration, but shall not entitle its holder or any other person to any rights as a stockholder of Green or shareholder of Blue.

(vi) At the Effective Time, the stock transfer books of Blue shall be closed and thereafter there shall be no further registration of transfers of shares of Blue Common Stock that were outstanding prior to the Effective Time. After the Effective Time, Book Entry Shares and Certificates presented to the Surviving Corporation for transfer shall be canceled and exchanged for the consideration provided for, and in accordance with the procedures set forth, in this Section 2.3. The shares of Green Common Stock issued upon the surrender for exchange of Book Entry Shares and Certificates and the payment of the Cash Consideration in accordance with the terms of this Article II shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to the shares of Blue Common Stock formerly represented by such Book Entry Shares and Certificates.

(vii) No dividends or other distributions with respect to Green Common Stock deliverable with respect to the shares of Blue Common Stock shall be paid to the holder of any unsurrendered Book Entry Shares or Certificates until after those Book Entry Shares or Certificates are surrendered as provided in this Section 2.3. After surrender, there shall be delivered and/or paid to the holder of the Green Common Stock delivered in exchange therefor, without interest, (i) (A) at the time of surrender, the dividends or other distributions payable with respect to those shares of Green Common Stock with a record date on or after the date of the Effective Time and a payment date on or prior to the date of this surrender and not previously paid, and (B) at the appropriate payment date, the dividends or other distributions payable with respect to those shares of Green Common Stock with a record date on or after the date of the Effective Time but with a payment date subsequent to surrender and (ii) at the time of payment and delivery of such shares of Green Common Stock by the Exchange Agent pursuant to Section 2.3(b)(v), all dividends or other distributions with a record date prior to the Effective Time,

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that have been declared by Blue with respect to the Blue Common Stock in accordance with Section 6.5(b)(iv) hereof in all respects as well as with the other terms of this Agreement, but that have not been paid on such Blue Common Stock.

(viii) In the event that any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if requested by Green or the Exchange Agent, the posting by the holder of a bond in customary form and amount as indemnity against any claim that may be made with respect to the Certificate and compliance with such other reasonable replacement requirements established by the Exchange Agent, the Exchange Agent shall deliver in exchange for the lost, stolen or destroyed Certificate the applicable shares of Green Common Stock and the Cash Consideration deliverable in respect of the shares of Blue Common Stock represented by the Certificate pursuant to this Section 2.3.

(ix) Notwithstanding anything in this Agreement to the contrary, each of Green, Merger Sub, Blue, the Surviving Corporation and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any former holder of shares of Blue Common Stock or Blue Stock Awards pursuant to this Agreement any amounts as may be required to be deducted and withheld with respect to the making of this payment under the Code or under any provision of any Tax Law. Blue, the Surviving Corporation and its Subsidiaries shall cooperate with Green in coordinating the deduction and withholding of any Taxes required to be deducted and withheld under applicable Tax Law, including payroll Taxes relating to payments made in respect of Blue Stock Awards. To the extent that amounts are so withheld and paid over to the appropriate Governmental Authority, Green, Merger Sub, Blue, the Surviving Corporation or the Exchange Agent, as the case may be, shall be treated as though it withheld an appropriate amount of the type of consideration otherwise payable pursuant to this Agreement to any former holder of shares of Blue Common Stock or Blue Stock Awards, sold this consideration for an amount of cash equal to the fair market value of the consideration at the time of the deemed sale and paid these cash proceeds to the appropriate Governmental Authority.

(c) No Appraisal Rights. There are no appraisal rights available to holders of Blue Common Stock under the Act in connection with the Merger.

Section 2.4 Treatment of Stock Plans.

(a) Each award of restricted Blue Common Stock granted under the Blue Stock Plans that is outstanding and unvested or otherwise subject to forfeiture or other restrictions as of immediately prior to the Effective Time (the “Blue Restricted Shares”), other than those Blue Restricted Shares that vest by their terms upon the consummation of the Merger (which, for the avoidance of doubt, at the Effective Time shall be converted into only the right to receive the Merger Consideration), shall be converted into the right to receive the number of validly-issued restricted shares of Green Common Stock equal to the product (rounded up to the nearest whole number) of the number of such Blue Restricted Shares multiplied by the Equity Exchange Factor, provided, however, that any restricted shares of Green Common Stock received in respect of such Blue Restricted Shares shall be subject to the same terms and conditions (including vesting and forfeiture restrictions) as were applicable to the corresponding Blue Restricted Shares immediately prior to the Effective Time. For the purposes of this Agreement, the “Equity Exchange Factor” shall be the sum of one (1) plus a fraction, the numerator of which is the Cash Consideration and the denominator of which is the Average Blue Stock Price minus the Cash Consideration.

(b) Each award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards granted or deferred under a Blue Stock Plan and relating to shares of Blue Common Stock (any such award, a “Blue Equity Right” and such awards together with the Blue Restricted Shares, the “Blue Stock Awards”) that is outstanding immediately prior to the Effective Time shall cease to relate to or represent a right to receive shares of Blue Common Stock and shall be converted, at the Effective Time, into an award of restricted stock units, performance shares, stock units, phantom stock units or other similar rights or awards, as applicable, relating to shares of Green Common Stock (a “Green Equity Right”) of the same type and

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on the same terms and conditions as were applicable to the corresponding Blue Equity Right, except as adjusted hereby. The number of shares of Green Common Stock covered by each such Green Equity Right shall be equal in number to the product (rounded up to the nearest whole number) of the number of shares of Blue Common Stock subject to the corresponding Blue Equity Right multiplied by the Equity Exchange Factor.

(c) With respect to any Blue Stock Award that is, immediately prior to the Effective Time, subject to any performance-based vesting or other performance conditions (a “Blue Performance Award”), determination of performance shall be made pursuant to the terms of such Blue Performance Award.

(d) Blue shall take all actions necessary to provide that as of the Effective Time, no participant in the Blue Holdings Corporation 2012 Non-Qualified Employee Stock Purchase Plan (the “Blue ESPP”) will have any right under such plan to purchase or otherwise acquire any shares of Blue Common Stock thereunder and that no further payroll deductions will be made under the Blue ESPP. The Blue ESPP shall terminate as of the Effective Time.

(e) Prior to the Effective Time, Blue shall take all necessary actions for the adjustment of Blue Stock Awards under this Section 2.4 within its power and consistent with the terms of the Blue Stock Awards; provided that such actions shall expressly be conditioned upon the consummation of the Merger and shall be of no effect if this Agreement is terminated. Green shall reserve for issuance a number of shares of Green Common Stock at least equal to the number of shares of Green Common Stock that will be subject to Green Equity Rights as a result of the actions contemplated by this Section 2.4.

Section 2.5 Directors of Green and Blue. As of the Closing, the board of directors of Green shall consist of up to twelve (12) directors of which three (3) shall be directors who were members of the Blue Board immediately prior to the Closing selected by Green and the remainder shall be other directors selected by Green. As of the Closing, at least six (6) directors of Green shall be independent of Green and Green Parent within the meaning of the rules of the NYSE. From and after the Closing, Green will comply with any applicable Law with respect to the composition of its board of directors.

Section 2.6 Adjustments. Without limiting the effect of Section 6.4 and Section 6.5, if, between the date of this Agreement and the Effective Time, the outstanding shares of Green Common Stock (as contemplated to be adjusted by Section 6.17(c)) or Blue Common Stock shall have been changed into a different number of shares or a different class, by reason of any stock dividend or any subdivision, reclassification, split, combination, consolidation or exchange of shares, or any similar event shall have occurred, then any number or amount contained in this Agreement (including any exchange ratio) which is based upon the number of shares of Green Common Stock or shares of Blue Common Stock, as the case may be, will be appropriately adjusted to provide to Green Parent and the holders of Blue Common Stock the same economic effect as contemplated by this Agreement prior to such event; provided, however, that nothing in this Section 2.6 shall be construed to permit or authorize any Party to take, or authorize, any action that is not otherwise authorized or permitted to undertake pursuant to this Agreement.

ARTICLE III

CLOSING

Section 3.1 The Closing. The consummation of the Merger shall take place at a closing (the “Closing”) to take place at 10:00 a.m. (Eastern Time) at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, NY 10022 on the second (2^nd) Business Day after the satisfaction of the last to be satisfied of the conditions set forth in Article VIII (other than those conditions that, by their nature, are to be satisfied at the Closing, but subject to the satisfaction (or waiver by the Party entitled to waive, if permitted by applicable Law) of those conditions), or at such other location, date and time as Green and Blue shall mutually agree upon in writing. The date upon which the Closing shall actually occur pursuant hereto is referred to herein as the “Closing Date”.

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ARTICLE IV

MUTUAL REPRESENTATIONS AND WARRANTIES OF THE PARTIES

Except (i) in the case of any representation and warranty made by Blue, (x) as disclosed in the schedule delivered by Blue to Green on the date of this Agreement (the “Blue Disclosure Schedule”), or (y) as disclosed in any Blue SEC Report filed with or furnished to the SEC by Blue between January 1, 2014 and the date hereof or as disclosed in the draft Form 10-K for the fiscal year ended December 31, 2014 made available to Green on February 20, 2015 (the “Blue 2014 Draft Form 10-K”) (other than in any “risk factor” disclosure or any other forward looking statements set forth therein), and (ii) in the case of any representation or warranty made by Green, as disclosed in the schedule delivered by Green to Blue on the date of this Agreement (the “Green Disclosure Schedule”) (it being agreed that disclosure of any item in any section or subsection of a Disclosure Schedule shall be deemed to be disclosure with respect to any other section or subsection of such Disclosure Schedule to which the relevance of such item is reasonably apparent on its face), Blue hereby represents and warrants to Green and Merger Sub, and Green hereby represents and warrants to Blue (each of Blue and Green, in its capacity as the Party making the representations and warranties, the “Representing Party”) as follows:

Section 4.1 Organization and Qualification. The Representing Party is duly organized, validly existing and in good standing under the Laws of the state of its organization and has full power and authority to conduct its business as and to the extent now conducted and to own, use and lease its assets and properties. The Representing Party is duly qualified, licensed or admitted to do business and is in good standing (with respect to jurisdictions that recognize the concept of “good standing”) in each jurisdiction in which the ownership, use or leasing of its assets and properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary, except for such failures to be so qualified, licensed or admitted and in good standing (with respect to jurisdictions that recognize the concept of “good standing”) that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party.

Section 4.2 No Conflicts; Approvals and Consents. The execution and delivery of this Agreement by the Representing Party does not, and the performance by the Representing Party of its obligations hereunder and the consummation of the Transactions will not, conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, result in or give to any Person any right of payment or reimbursement, termination, revocation, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of the assets or properties of the Representing Party or any of its Subsidiaries or Joint Ventures under, any of the terms, conditions or provisions of (A) the respective Charter Documents of the Representing Party or any of its Subsidiaries or Joint Ventures, or (B) subject to the taking of the actions described in Section 5.3 by Blue and the taking of the actions described in Section 5.10 by Green and, in the case of Blue, the obtaining of the Shareholder Approval, (x) any Laws applicable to the Representing Party or any of its Subsidiaries or Joint Ventures or any of their respective assets or properties, other than any Post-Closing Laws, or (y) any Contract, Permit or other instrument to which the Representing Party or any of its Subsidiaries or Joint Ventures is a party or by which the Representing Party or any of its Subsidiaries or Joint Ventures or any of their respective assets or properties is bound, excluding from the foregoing clauses (x) and (y) such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party.

Section 4.3 Subsidiaries and Joint Ventures.

(a) Section 4.3(a) of the Disclosure Schedule sets forth a list of all the Representing Party’s Subsidiaries and Joint Ventures, including (i) the name of each such entity and its form and jurisdiction of organization, (ii) a brief description of the principal line or lines of business conducted by each such entity, and (iii) all Equity Securities held by any Person (including the Representing Party) in each such entity. Except (1) as set forth on Section 4.3(a) of the Disclosure Schedule or (2) for Equity Securities acquired after the date of this Agreement without violating any covenant or agreement set forth herein, none of the Representing Party nor any of its Subsidiaries or Joint Ventures directly or indirectly owns any Equity Securities in any Person.

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(b) Each of the Representing Party’s Subsidiaries and Joint Ventures is a legal entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization (to the extent the “good standing” concept is applicable). Each of the Representing Party’s Subsidiaries and Joint Ventures has the requisite power and authority to carry on its respective business as it is presently being conducted and to own, lease or operate its respective properties and assets. Each of the Representing Party and its Subsidiaries and Joint Ventures is duly qualified to do business and is in good standing in each jurisdiction where the character of its properties owned or leased or the nature of its activities make such qualification necessary (to the extent the “good standing” concept is applicable), except where the failure to be so qualified or in good standing, would not have, individually or in the aggregate, a Material Adverse Effect with respect to the Representing Party.

(c) The Charter Documents of the Representing Party’s Significant Subsidiaries are in full force and effect, and the Representing Party’s Significant Subsidiaries are in compliance with the provisions of their respective Charter Documents in all material respects.

(d) All of the outstanding Equity Securities of the Representing Party’s Significant Subsidiaries (and to the Knowledge of the Representing Party, its other Subsidiaries) and Joint Ventures, (i) are duly authorized, validly issued and fully paid and nonassessable, and (ii) are owned, directly or indirectly, by the Representing Party, free and clear of all Liens (other than Permitted Liens).

(e) There are no outstanding Contracts obligating the Representing Party or any of its Subsidiaries to acquire Equity Securities of any Person. Neither the Representing Party nor any of its Subsidiaries is a party to any Contract that obligates the Representing Party or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Equity Securities of the Representing Party or any of its Subsidiaries or Joint Ventures.

Section 4.4 Absence of Certain Changes or Events. Since December 31, 2014 through the date hereof, each of the Representing Party and its Subsidiaries has conducted its respective businesses in the ordinary course of business in a manner consistent with past practice and there has not been any change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect with respect to the Representing Party. Since December 31, 2014 through and including the date of this Agreement, no action has been taken with respect to the Representing Party or any of its Subsidiaries which, if taken after the date of this Agreement and prior to the Closing would, in respect of Blue, constitute a violation of Section 6.5(b)(i)-(vii), (xi) or (xv) or, in respect of Green, constitute a violation of Section 6.4(b)(i)-(vi), (ix), (xiii) or (xvii).

Section 4.5 No Undisclosed Liabilities. Neither the Representing Party nor any of its Subsidiaries has any Liabilities, other than (a) Liabilities reflected or otherwise reserved against in the Blue Financial Statements (if the Representing Party is Blue) or Green Financial Statements (if the Representing Party is Green), (b) Liabilities arising, permitted or contemplated under this Agreement or incurred in connection with the Transactions, (c) Liabilities incurred since September 30, 2014 in the ordinary course of business consistent with past practice that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Representing Party and (d) Liabilities that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Representing Party.

Section 4.6 Legal Proceedings. Except for Environmental Claims, which are the subject of Section 4.12, as of the date of this Agreement, (i) there are no pending or, to the Knowledge of the Representing Party, threatened, actions, suits, arbitrations or proceedings by or before any Governmental Authority relating to or affecting the Representing Party or any of its Subsidiaries or Joint Ventures or any of their respective assets and properties, nor to the Knowledge of the Representing Party are there any Governmental Authority investigations, inquiries or audits pending or threatened against, relating to or affecting, the Representing Party or any of its Subsidiaries or Joint Ventures or any of their respective assets and properties, that, in each case, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect with respect to the Representing Party, and (ii) none of the Representing Party nor any of its Subsidiaries or Joint

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Ventures or any of their respective assets is subject to any order of any Governmental Authority that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect with respect to the Representing Party.

Section 4.7 Information Supplied. None of the information supplied or to be supplied by the Representing Party for inclusion or incorporation by reference in the Proxy Statement or the Form S-4 will, at the date it is first mailed to Blue’s shareholders or on any other date of filing with the SEC, or at the time of the Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading; provided, however, that with respect to projected financial information, if any, provided by or on behalf of the Representing Party, the Representing Party represents only that such information was prepared in good faith by management of the Representing Party on the basis of assumptions believed by such management to be reasonable as of the time made.

Section 4.8 Permits; Compliance with Laws and Orders. The Representing Party, together with its Subsidiaries and Joint Ventures, holds all permits, licenses, certificates, notices, franchises, authorizations, approvals and similar consents from Governmental Authorities (“Permits”) necessary or required for the lawful conduct of their respective businesses, except for failures to hold such Permits that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party. The Representing Party and its Subsidiaries and Joint Ventures are, and since January 1, 2012 have been, in compliance with the terms of their Permits, except failures so to comply that, individually or in the aggregate, have not had, and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party. The Representing Party and its Subsidiaries and Joint Ventures are not, and since January 1, 2012 have not been, in violation of or default under any Law or order of any Governmental Authority, except for such violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party. The above provisions of this Section 4.8 do not relate to matters with respect to Environmental Permits and Environmental Laws, such matters being the subject of Section 4.12.

Section 4.9 Taxes.

(a) Each of the Representing Party and its Subsidiaries has timely filed, or has caused to be timely filed on its behalf, all income and other material Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate. To the Knowledge of the Representing Party, all material Taxes due and owing by the Representing Party and its Subsidiaries (whether or not shown on any Tax Return) have been timely paid.

(b) The most recent financial statements contained in the Blue SEC Reports filed prior to the date of this Agreement reflect, in accordance with GAAP, an adequate reserve for all Taxes payable by Blue and its Subsidiaries for all taxable periods through the date of such financial statements, and since such date, neither Blue nor any of its Subsidiaries has incurred any material liability for Taxes outside the ordinary course of business.

(c) There is no audit, examination, deficiency, refund litigation, proposed adjustment or matter in controversy with respect to any income or other material Taxes or income or other material Tax Return of the Representing Party or its Subsidiaries, and, to the Knowledge of the Representing Party, neither the Representing Party nor any of its Subsidiaries has received in the last two (2) years written notice of any claim made by a Governmental Authority in a jurisdiction where the Representing Party or any of its Subsidiaries, as applicable, does not file a Tax Return, that the Representing Party or such Subsidiary is or may be subject to taxation by that jurisdiction. No deficiency with respect to any Taxes has been proposed, asserted or assessed against the Representing Party or any of its Subsidiaries, and no requests for waivers of the time to assess any Taxes are pending.

(d) There are no outstanding written agreements, consents or waivers to extend the statutory period of limitations applicable to the assessment of any income or other material Taxes or deficiencies against the

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Representing Party or any of its Subsidiaries, and no power of attorney granted by either the Representing Party or any of its Subsidiaries with respect to any income or other material Taxes is currently in force.

(e) Neither the Representing Party nor any of its Subsidiaries is a party to any agreement providing for the allocation, indemnification or sharing of Taxes imposed on or with respect to any individual or other Person (other than (i) such agreements with customers, vendors, lessors or the like entered into in the ordinary course of business, and (ii) agreements with or among the Representing Party or any of its Subsidiaries), and neither the Representing Party nor any of its Subsidiaries (1) has been a member of an affiliated group (or similar state, local or foreign filing group) filing a consolidated U.S. federal income Tax Return (or similar state, local or foreign Tax Return) other than the group the common parent of which is the Representing Party or a Subsidiary of the Representing Party, or (2) has any liability for the Taxes of any Person (other than the Representing Party or any of its Subsidiaries) (x) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), or (y) as a transferee or successor, or otherwise.

(f) There are no material Liens for Taxes (other than Permitted Liens) on the assets of the Representing Party and its Subsidiaries.

(g) Neither the Representing Party nor any of its Subsidiaries (i) has requested or received any ruling related to Taxes from any Governmental Authority, or signed any binding agreement relating to Taxes with any Governmental Authority (including any advance pricing agreement) that reasonably could be expected to have a material impact on the Tax liability of the Representing Party or any of its Subsidiaries in a taxable period (or portion thereof) ending after the Closing Date, or (ii) is currently the beneficiary of any Tax holiday or other Tax reduction or incentive arrangement with any Governmental Authority that is material in nature.

(h) Neither the Representing Party nor any of its Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law) occurring during the two-year period ending on the date hereof.

(i) Neither the Representing Party nor any of its Subsidiaries has engaged in any “reportable transaction” within the meaning of Section 6011 of the Code and the Treasury Regulations promulgated thereunder during any open Tax periods.

(j) Neither the Representing Party nor any of its Subsidiaries will be required to include any material items of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) adjustment under Section 481 of the Code (or any similar provision of Tax Law) or any other change in method of accounting occurring prior to Closing, (ii) closing agreement described in Section 7121 of the Code (or any similar provision of Tax Law) entered into prior to Closing, (iii) installment sale or open transaction disposition occurring prior to Closing, (iv) use of the cash basis method of accounting prior to Closing, (v) election under Section 108(i) of the Code, or (vi) prepaid amount received prior to Closing.

(k) Neither the Representing Party nor any of its Subsidiaries has taken or agreed to take any action, and is not aware of any fact or circumstance, that would prevent or impede, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

Section 4.10 Employee Benefit Plans; ERISA.

(a) Section 4.10(a) of the Disclosure Schedule sets forth an accurate and complete list of each material Employee Benefit Plan. Each of the Representing Party’s Employee Benefit Plans has been established, operated and administered in accordance with its terms and is in compliance with ERISA, the Code and all other applicable Laws and all contributions required to be made under the terms of any of the Representing Party’s Employee Benefit Plans have been timely made or, if not yet due, have been properly reflected in the Blue Financial Statements (if the Representing Party is Blue) or the Green Financial Statements (if the Representing Party is Green), except, in each case, for instances of non-compliance that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing

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Party. Except for matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party, there are no pending, threatened or anticipated claims by or on behalf of any of the Representing Party’s Employee Benefit Plans, by any employee or beneficiary covered thereunder or otherwise involving any of the Representing Party’s Employee Benefit Plans (other than routine claims for benefits).

(b) With respect to each material Employee Benefit Plan, the Representing Party has made available to the other Party, to the extent applicable, accurate and complete copies of (1) the Employee Benefit Plan document, including any material amendments thereto, and all related trust documents, material insurance contracts or other funding vehicles, (2) a written description of such Employee Benefit Plan if such plan is not set forth in a written document, (3) the most recently prepared actuarial report, and (4) all material correspondence to or from any Governmental Authority received in the last three years with respect to any Employee Benefit Plan.

(c) Except for matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party, (i) each of the Representing Party’s Employee Benefit Plans intended to be “qualified” within the meaning of Section 401(a) of the Code is so qualified and each trust maintained thereunder is exempt from taxation under Section 501(a) of the Code, and (ii) with respect to any Employee Benefit Plan, neither the Representing Party nor any of its Subsidiaries has engaged in a transaction in connection with which the Representing Party or any of its Subsidiaries reasonably could be subject to either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code.

(d) No event has occurred, and there exists no condition or set of circumstances in connection with any of the Representing Party’s Employee Benefit Plans, that has had or would reasonably be expected to have a Material Adverse Effect with respect to the Representing Party.

(e) Except as set forth in Section 4.10(e) of the Disclosure Schedule, none of the execution and delivery of this Agreement, the performance by either party of its obligations hereunder or the consummation of the Merger and the other transactions contemplated by this Agreement (either alone or in conjunction with any other event, including any termination of employment on or following the Effective Time) will (i) entitle any current or former employee, officer, director, consultant or other individual service provider of the Representing Party (collectively with respect to such Representing Party, the “Representing Party Personnel”) to any additional compensation or benefit, (ii) accelerate the time of payment or vesting, or trigger any payment or funding, of any compensation or benefit or trigger any other obligation under any Employee Benefit Plan of the Representing Party, (iii) result in any breach or violation of, or default under, or limit the Representing Party’s right to amend, modify or terminate, any Employee Benefit Plan, (iv) result in any forgiveness or extension of indebtedness under or with respect to any Employee Benefit Plan of the Representing Party, or (v) result in an entitlement of any Representing Party Personnel to severance pay, unemployment compensation or any other payment or benefit.

(f) Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party, as of the date this representation is made or deemed made, there has been no amendment to, announcement relating to, or change in employee participation or coverage under, any Employee Benefit Plan of the Representing Party which would increase the expense of maintaining such plan above the level of the expense incurred therefor for the most recent fiscal year.

(g) No amount or benefit that could be, or has been, received (whether in cash or property or the vesting of property or the cancellation of indebtedness) by any Representing Party Personnel who is a “disqualified individual” within the meaning of Section 280G of the Code could be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code) as a result of the consummation of the transactions contemplated by this Agreement.

(h) No Employee Benefit Plan of the Representing Party provides for the gross-up of any Taxes imposed by Section 4999 of the Code that could apply in connection with the transactions contemplated by this Agreement.

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Section 4.11 Labor Matters. As of the date of this Agreement, there are no disputes, grievances or arbitrations pending or, to the Knowledge of the Representing Party, threatened between any of the Representing Party or any of its Subsidiaries or Joint Ventures, on the one hand, and any trade union or other representatives of its employees, on the other hand, and there is no charge or complaint pending or threatened in writing against the Representing Party or any of its Subsidiaries before the National Labor Relations Board or any similar Governmental Authority, except in each case as, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party, and, to the Knowledge of the Representing Party, as of the date of this Agreement, there are no material organizational efforts presently being made involving any of the employees of any of the Representing Party or any of its Subsidiaries or Joint Ventures. Neither the Representing Party nor any of its Subsidiaries is subject to any requirement (contractual or otherwise) to provide employee representation on its board of directors or similar governing body or the board of directors or similar governing body of the other Party following the Closing. The announcement or consummation of the transactions contemplated by this Agreement will not require the consent of, or advance notification to, any works councils, unions or similar labor organizations with respect to any employees of the Representing Party or its Subsidiaries. From December 31, 2010 to the date of this Agreement, there has been no work stoppage, strike, slowdown or lockout by or affecting employees of the Representing Party or any of its Subsidiaries or Joint Ventures except in each case as, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party, and as of the date of this Agreement, there is not ongoing any material work stoppage, strike, slowdown or lockout by or affecting employees of the Representing Party or any of its Subsidiaries and, to the Knowledge of the Representing Party, no such action has been threatened. Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party: (i) there are no litigations, lawsuits, claims, charges, complaints, arbitrations, actions, investigations or proceedings pending or, to the Knowledge of the Representing Party, threatened between or involving the Representing Party or any of its Subsidiaries or Joint Ventures and any of their respective current or former employees, independent contractors, applicants for employment or classes of the foregoing, (ii) the Representing Party and its Subsidiaries and Joint Ventures are in compliance with all applicable Laws, Contracts and policies respecting employment and employment practices, including, without limitation, all legal requirements respecting terms and conditions of employment, equal opportunity, workplace health and safety, wages and hours, child labor, immigration, discrimination, disability rights or benefits, facility closures and layoffs, workers’ compensation, labor relations, employee leaves and unemployment insurance, and (iii) since January 1, 2010, none of the Representing Party or any of its Subsidiaries or Joint Ventures has engaged in any “plant closing” or “mass layoff,” as defined in the Worker Adjustment Retraining and Notification Act or any comparable state or local Law, without complying with the notice requirements of such Laws.

Section 4.12 Environmental Matters.

(a) Each of the Representing Party, its Subsidiaries and Joint Ventures has been and is in compliance with, and has no Liability arising under, all applicable Environmental Laws, except where the failure to be in such compliance with or any such liability arising under applicable Environmental Laws, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party.

(b) Each of the Representing Party, its Subsidiaries and Joint Ventures has obtained all Environmental Permits necessary for the conduct of their operations as of the date of this Agreement, as applicable, and all such Environmental Permits are validly issued, in full force and effect, and the Representing Party, its Subsidiaries and Joint Ventures are in compliance with all terms and conditions of the Environmental Permits, except where the failure to obtain or comply with such Environmental Permits, or to maintain such Permits in good standing or, where applicable, to timely file a renewal application, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party.

(c) There is no Environmental Claim pending (i) against the Representing Party, or any of its Subsidiaries or Joint Ventures, (ii) against any Person whose liability for such Environmental Claim has been retained or assumed either contractually or by operation of law by the Representing Party or any of its

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Subsidiaries or Joint Ventures, or (iii) against any real or personal property or operations that the Representing Party or any of its Subsidiaries or Joint Ventures owns, leases or manages, in whole or in part, or, to the Knowledge of the Representing Party, formerly owned, leased or managed, in whole or in part, except in each case, for such Environmental Claims that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party.

(d) There have not been any Releases of any Hazardous Material that would be reasonably likely to form the basis of any Environmental Claim against the Representing Party or any of its Subsidiaries or Joint Ventures, in each case, except for such Releases that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party.

Section 4.13 Insurance. Except for failures to maintain insurance or self-insurance that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party, each of the Representing Party and its Subsidiaries has been continuously insured with financially responsible insurers or has self-insured, in each case in such amounts and with respect to such risks and losses as are customary for companies in the United States conducting the business conducted by the Representing Party and its Subsidiaries. Neither the Representing Party nor any of its Subsidiaries has received any notice of any pending or threatened (or is otherwise aware of any fact or occurrence that would trigger) cancellation, nonrenewal, termination or premium increase with respect to any insurance policy of the Representing Party or any of its Subsidiaries, and all such insurance policies are in full force and effect, except with respect to any cancellation, termination, nonrenewal or premium increase that, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Representing Party. Neither the Representing Party nor any of its Subsidiaries has been refused any insurance with respect to its respective business or assets.

Section 4.14 Energy Price Risk Management.

(a) The Representing Party has established risk parameters, limits and guidelines in compliance with the risk management policy (including commodity risk policies) approved by the board of directors of the Representing Party (the Representing Party’s “Risk Management Guidelines”) and monitors compliance by the Representing Party and its Subsidiaries with such energy price risk parameters, limits and guidelines. The Representing Party has made available its Risk Management Guidelines prior to the date of this Agreement.

(b) The Representing Party is in compliance in all material respects with its Risk Management Guidelines. As of the date of this Agreement, except for exceptions approved in accordance with the Representing Party’s Risk Management Guidelines, the Representing Party and its Subsidiaries are operating in compliance with the Representing Party’s Risk Management Guidelines in all material respects and all Derivative Products of the Representing Party or any of its Subsidiaries were entered into in accordance with the Risk Management Guidelines.

(c) Section 4.14(c) of the Disclosure Schedule sets forth the Mark-to-Market Value determined as of the close of business on December 31, 2014, which calculation fairly presents, in all material respects, the Mark-to-Market Value as of such date. As used in this Agreement, the term “Mark-to-Market Value” means, as of any date, the aggregate net amount of any non-cash loss or gain (to the extent the cash impact resulting from such loss or gain has not been realized) attributable to the change since the time the underlying transactions were entered into (with any payments made or received at such time being taken into account in determining such loss or gain) in fair value as of such date of the Derivative Products of the Representing Party and its Subsidiaries or other derivative instruments referred to in Financial Accounting Standards Accounting Standards Codification No. 815—Derivatives and Hedging of the Representing Party and its Subsidiaries (ASC No. 815), in the case of Blue, or IAS 39 – Financial Instruments: Recognition and Measurement, in the case of Green.

Section 4.15 Material Contracts.

(a) For purposes of this Agreement, the term “Representing Party Material Contract” shall mean any Contract to which the Representing Party or any of its Subsidiaries or Joint Ventures (and, in respect of clause

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(ii) below, if the Representing Party is Green, any Affiliates of Green to the extent it purports to bind Green or its Subsidiaries or Joint Ventures) is a party or bound by as of the date hereof (and if the Representing Party is Green, a “Green Material Contract”, and if the Representing Party is Blue, a “Blue Material Contract”):

(i) that is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC);

(ii) that (1) purports to limit in any material respect either the type of business in which the Representing Party or any of its Subsidiaries or Joint Ventures (including those Contracts of the Blue Parties that purport to so limit the Green Parties after the Effective Time) or any of their respective Affiliates may engage or the manner or geographic area in which any of them may so engage in any business, (2) would require the disposition of any material assets or line of business of the Representing Party or any of its Subsidiaries or Joint Ventures (including those Contracts of the Blue Parties that so require the Green Parties after the Effective Time) or any of their respective Affiliates as a result of the consummation of the Transactions, (3) is a material Contract that grants “most favored nation” status that, following the Effective Time, would impose obligations upon the Green Parties (including the Blue Parties), (4) prohibits or limits, in any material respect, the right of the Representing Party or any of its Subsidiaries or Joint Ventures (including those Contracts of the Blue Parties that so prohibit or limit any Green Party after the Effective Time) to make, sell or distribute any products or services or use, transfer, license or enforce any of their respective Intellectual Property rights, (5) relates to the development, ownership, licensing or use of any Intellectual Property that is material to the operation of the Representing Party or any of its Subsidiaries or Joint Ventures, (6) relates to the operation and maintenance of the information technology systems of the Representing Party or any of its Subsidiaries or Joint Ventures that are material to their respective operation, (7) is with a Governmental Authority (other than ordinary course Contracts with Governmental Authorities), (8) grants any right of first refusal or right of first offer or similar right or that limits or purports to limit the ability of any Representing Party or any of its Subsidiaries or Joint Ventures (or, after the Effective Time, any Green Party) to own, operate, lease, provide or receive services, or sell, transfer, pledge, or otherwise dispose of any material amount of its assets or its business, or (9) is approved by FERC as a special or nonconforming Contract or service agreement that deviates from standard tariffs;

(iii) that (1) has an aggregate principal amount, or provides for an aggregate obligation, in excess of $10,000,000 over the life of the Contract (but excluding Contracts for the procurement of gas or electricity the obligations under which are subject to review by, if the Representing Party is Blue, the Connecticut Public Utilities Regulatory Authority or the Massachusetts Department of Public Utilities or, if the Representing Party is Green, the New York Public Service Commission or the Maine Public Utilities Commission), (2) evidences Indebtedness in excess of $10,000,000, (3) guarantees any Indebtedness of a third party that is not, if the Representing Party is Blue, a Blue Party, or if the Representing Party is Green, a Green Party or (4) contains a covenant restricting the payment of dividends;

(iv) that involves the acquisition from another Person or disposition to another Person of any asset (including any entity or business) material to the Representing Party or any of its Subsidiaries or Joint Ventures, taken as a whole; or

(v) that is a lease or sublease of real or personal property requiring payments by or to the Representing Party or any of its Subsidiaries in excess of $250,000 during any fiscal year.

(b) None of the Representing Party, its Subsidiaries or Joint Ventures is in material breach of or material default under the terms of any of its Representing Party Material Contracts and no event has occurred that (with or without notice or lapse of time or both) would result in a material breach or default under any of its Representing Party Material Contracts. To the Knowledge of the Representing Party, no other party to its Representing Party Material Contracts is in material breach of or material default under the terms of any such Representing Party Material Contracts. This Agreement and the Transactions (including the Merger) will not trigger the right by any party to its Representing Party Material Contracts to terminate any such Representing

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Party Material Contract. Each of its Representing Party Material Contracts is a valid and binding obligation of the Representing Party, its Subsidiaries or Joint Ventures which is party thereto and, to the Knowledge of the Representing Party, of each other party thereto, and is in full force and effect and enforceable against the Representing Party, its Subsidiaries or Joint Ventures in accordance with its terms, except that such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and to general equitable principles, and except for such failures to be valid and binding, in full force and effect or enforceable that, individually or in the aggregate, do not, and would not reasonably be expected to, materially adversely impair the conduct of the business of the Representing Party and its Subsidiaries, taken as a whole, as presently conducted or materially impair or materially delay the consummation of the Transactions.

(c) Other than any Contract filed as an exhibit to the Blue SEC Reports prior to the date of this Agreement and other than this Agreement, each Representing Party has made available to the other party a true, complete and correct copy of each contract that is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to which the Representing Party or any of its Subsidiaries or Joint Ventures is a party or bound by as of the date hereof.

Section 4.16 Brokers. Except as disclosed in Section 4.16 of the Disclosure Schedule (the “Broker Agreements”), none of the Representing Party or any of its Subsidiaries or Joint Ventures nor any of their respective shareholders, members, directors, officers, employees or affiliates, has incurred or will incur on behalf of any of them any brokerage, finders’, advisory, commission or similar fee in connection with the Transactions.

Section 4.17 Real Property.

(a) Except in any such case as is not, individually or in the aggregate, reasonably likely to materially adversely impair the conduct of the business of the Representing Party and its Subsidiaries, taken as a whole, as presently conducted, the Representing Party or a Subsidiary of the Representing Party has (i) valid title to all material real property owned in fee by the Representing Party or its Subsidiaries (the “Material Owned Real Property”), (ii) valid title to the leasehold estate (as lessee) in all material real property and interests in real property leased or subleased by the Representing Party or its Subsidiaries as lessee or sublessee (the “Material Leased Real Property”), and (iii) valid title to the material real property easements owned by the Representing Party or its Subsidiaries (the “Material Easement Real Property” and, together with the Material Owned Real Property and Material Leased Real Property, the “Material Real Property”), in each case free and clear of all Liens, except Permitted Liens.

(b) Neither the Representing Party nor any of its Subsidiaries is obligated under, or a party to, any option, right of first refusal or other contractual right or obligation to sell, assign or dispose of any Material Owned Real Property, Material Leased Real Property or Material Easement Real Property (or any portion thereof) that, if such sale, assignment or disposition is consummated, would reasonably be expected, individually or in the aggregate, to materially adversely impair the conduct of the business of the Representing Party and its Subsidiaries, taken as a whole, as presently conducted.

(c) Except in any such case as is not, individually or in the aggregate, reasonably likely to materially adversely impair the conduct of the business of the Representing Party and its Subsidiaries, taken as a whole, as presently conducted or materially impair the consummation of the transactions contemplated by this Agreement, (i) each easement or subeasement for Material Easement Real Property (each, an “Easement”) is in full force and effect and is the valid and binding obligation of the Representing Party or its Subsidiaries, enforceable against the Representing Party or its Subsidiaries in accordance with its terms, and to the Knowledge of the Representing Party, the other party or parties thereto, subject to the effect of applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and to general equitable principles, (ii) no notices of default under any Easement have been received by the Representing Party or its Subsidiaries that have not been resolved and (iii) to the Knowledge of the Representing Party, no event has occurred which, with notice, lapse of time or both, would constitute a breach or default under any Easement by the Representing Party or its Subsidiaries.

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(d) With respect to the Material Real Property, neither the Representing Party nor any of its Subsidiaries has received any written notice of, nor to the Knowledge of the Representing Party does there exist as of the date of this Agreement, any pending, threatened or contemplated condemnation (other than condemnations in connection with municipal road improvement projects, state highway improvement projects or other public transportation projects) or similar proceedings, or any sale or other disposition of any Material Real Property or any part thereof in lieu of condemnation that, individually or in the aggregate, could reasonably be expected to materially adversely impair the conduct of the business of the Representing Party and its Subsidiaries, taken as a whole, as presently conducted or materially impair the consummation of the transactions contemplated by this Agreement. Except in any such case as is not, individually or in the aggregate, reasonably likely to materially adversely impair the conduct of the business of the Representing Party and its Subsidiaries, taken as a whole, as presently conducted, the Representing Party and its Subsidiaries have lawful rights of use and access to all land and other real property rights, subject to Permitted Liens, necessary to conduct their businesses as presently conducted.

Section 4.18 Intellectual Property.

(a) Except as to matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect with respect to the Representing Party: (i) the Representing Party and its Subsidiaries own all right, title and interest in and to the Trademarks and either own all right, title and interest in, or have sufficient rights to use, all Intellectual Property used in its business as presently, or currently contemplated to be, conducted, (ii) to the Knowledge of the Representing Party, the conduct of the Representing Party and its Subsidiaries does not and has not since January 1, 2012 (or earlier, if not currently resolved) infringed or otherwise violated the Intellectual Property rights of any third party, (iii) there is no litigation, opposition, cancellation, proceeding, objection or claim pending, asserted in writing or, to the Representing Party’s Knowledge, threatened against the Representing Party or its Subsidiaries concerning the ownership, validity, registrability, enforceability, infringement or use of, or licensed right to use, any Intellectual Property used by the Representing Party or its Subsidiaries, (iv) to the Representing Party’s Knowledge, no Person is violating any Intellectual Property right that the Representing Party or its Subsidiaries hold exclusively, and (v) the Representing Party and its Subsidiaries have taken commercially reasonable measures to protect the confidentiality of all Trade Secrets that are owned, used or held by the Representing Party or its Subsidiaries.

(b) Except as to matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect with respect to the Representing Party, to the Knowledge of the Representing Party: (i) the Representing Party and its Subsidiaries have implemented and maintain reasonable backup, security and disaster recovery and business continuity technology, policies and plans that are consistent with industry practices; (ii) the Representing Party and its Subsidiaries take such industry standard measures and other measures as are required by applicable Law and the policies of the Representing Party and its Subsidiaries to ensure the confidentiality of customer financial and other confidential information and that protect against the loss, theft and unauthorized access or disclosure of such information; (iii) the Representing Party and its Subsidiaries are in compliance with the Representing Party’s and its Subsidiaries’ privacy policies; (iv) none of the Representing Party or any of its Subsidiaries has received any written claims, notices or complaints regarding the Representing Party’s or its Subsidiaries’ information handling or security practices or the disclosure, retention, misuse or security of any Personal Information, or alleging a violation of any Person’s privacy, personal or confidentiality rights under any Person’s Privacy Rules and Policies, or otherwise by any Person, including the U.S. Federal Trade Commission, any similar foreign bodies, or any other Governmental Authority and (v) the Representing Party’s and its Subsidiaries’ computers, computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines, and all other information technology systems operate and perform in all material respects in accordance with their documentation and functional specifications and otherwise as required by the Representing Party or its Subsidiaries in connection with its business as presently conducted, and have not materially malfunctioned or failed since January 1, 2012, and there have been no unauthorized intrusions or breaches of security with respect to the such information technology systems.

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Section 4.19 Anti-Corruption; Anti-Money Laundering.

(a) None of the Representing Party or any of its Affiliates, Subsidiaries or Joint Ventures, or any of their respective Representatives, has since January 1, 2012, directly or indirectly, made, offered, promised, authorized, accepted or agreed to accept, directly or indirectly, any gift, payment, or transfer of any money or anything else of value, including any bribe, rebate, kickback, payoff or other similar unlawful payment, or provided any benefit, to or from anyone, intending that, in consequence, a relevant function or activity should be performed improperly or to reward such improper performance, to any Government Official, (i) for the purpose of (w) influencing any act or decision of that Government Official, (x) inducing that Government Official to do or omit to do any act in violation of his lawful duty, (y) securing any improper advantage, or (z) inducing that Government Official to use his or her influence with a Governmental Authority, (1) to affect or influence any act or decision of any Governmental Authority, or (2) to assist the Representing Party or any of its Affiliates, Subsidiaries or Joint Ventures in obtaining or retaining business with, or directing business to, any Person, or (ii) which would otherwise constitute or have the purpose or effect of public or commercial bribery, acceptance of or acquiescence in extortion, kickbacks or other unlawful or improper means of obtaining business or any improper advantage.

(b) The Representing Party and its Affiliates, Subsidiaries and Joint Ventures have maintained complete and accurate books and records with respect to payments to any Government Official and any payment to or other expenses involving agents, consultants, representatives, customers, employees and any other third parties acting on behalf of any Blue Party, in each case, in accordance with Anti-Corruption Laws and GAAP.

(c) None of the Representing Party or any of its Affiliates, Subsidiaries or Joint Ventures has either (A) (x) conducted or initiated any review, audit, or internal investigation, or (y) made a voluntary, directed, or involuntary disclosure to any Governmental Authority responsible for enforcing Anti-Corruption Laws, in each case with respect to any alleged act or omission arising under or relating to noncompliance with any Anti-Corruption Laws, or (B) received any inquiry, notice, request or citation from any Person alleging noncompliance with any Anti-Corruption Laws.

(d) Each of the Representing Party and its Affiliates, Subsidiaries and Joint Ventures is, and has been since January 1, 2012, in compliance with all applicable anti-money laundering legislation, regulations, rules or orders relating thereto for all other applicable jurisdictions, and maintains adequate internal controls to ensure such compliance.

ARTICLE V

INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF BLUE AND GREEN

Except (i) in the case of any representation and warranty made by Blue, (x) as disclosed in Blue Disclosure Schedule, or (y) as disclosed in any Blue SEC Report filed with or furnished to the SEC by Blue between January 1, 2014 and the date hereof or as disclosed in the Blue 2014 Draft Form 10-K (other than in any “risk factor” disclosure or any other forward looking statements set forth therein), and (ii) in the case of any representation or warranty made by Green, as disclosed in the Green Disclosure Schedule (it being agreed that disclosure of any item in any section or subsection of a Disclosure Schedule shall be deemed to be disclosure with respect to any other section or subsection of such Disclosure Schedule to which the relevant of such item is reasonably apparent on its face), Blue hereby represents and warrants to Green and Merger Sub, in respect of Section 5.1 through Section 5.7, and Green hereby represents and warrants to Blue, in respect of Section 5.8 through Section 5.19:

Section 5.1 Blue Capital Stock.

(a) The authorized capital stock of Blue consists of:

(i) 125,000,000 shares of Blue Common Stock, of which 56,546,266 shares (excluding any unvested Blue Restricted Shares) were outstanding as of the close of business on February 20, 2015; and

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(ii) 1,000,000 shares of preferred stock of the par value of $100.00 per share, 4,000,000 shares of preferred stock of the par value of $25.00 per share, and 4,000,000 shares of preference stock of the par value of $25.00 per share, in each case, none of which are outstanding as of the close of business on February 20, 2015.

(b) As of the close of business on February 20, 2015:

(i) no shares of Blue Common Stock were held in the treasury of Blue,

(ii) no shares of Blue Common Stock were subject to outstanding Options granted under the Blue Stock Plans;

(iii) there were 340,131 Blue Restricted Shares outstanding under the Blue Stock Plans;

(iv) there were 166,181 shares of Blue Common Stock subject to stock units or phantom stock units credited to the accounts of the participants in the Blue Deferred Compensation Plans;

(v) there were 511,860 shares of Blue Common Stock subject to outstanding performance share awards under the Blue Stock Plans;

(vi) there were no other shares of Blue Common Stock subject to outstanding Blue Equity Rights; and

(vii) there were no additional shares of Blue Common Stock reserved for issuance pursuant to the Blue Stock Plans. Since February 20, 2015, no shares of Blue Common Stock have been issued and no awards have been granted under the Blue Stock Plans.

(c) Except as disclosed in Section 5.1(b), there are no outstanding subscriptions, options, warrants, rights (including stock appreciation rights), preemptive rights or other Contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument, Contracts or agreement (together, “Options”), obligating any Blue Party to (A) issue or sell any Equity Securities of any Blue Party, (B) grant, extend or enter into any Option with respect thereto, (C) redeem or otherwise acquire any such Equity Securities, or (D) provide any amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Person (including any of their respective Subsidiaries). Neither Blue nor any of its Subsidiaries has granted registration rights to any Person.

(d) There are no voting trusts, proxies or other commitments, understandings, restrictions or arrangements to which Blue or any of its Subsidiaries is a party in favor of any Person other than Blue or a Subsidiary wholly-owned, directly or indirectly, by Blue with respect to the voting of or the right to participate in dividends or other earnings on any capital stock or other equity interests of Blue or any Subsidiary of Blue.

(e) Blue is a “holding company” as defined under Section 1262 of the 2005 Act.

(f) No Indebtedness of Blue or any of its Subsidiaries having the right to vote (or which is convertible into or exercisable for Equity Securities having the right to vote) (collectively, “Blue Voting Debt”) on any matters on which the Blue shareholders may vote is issued or outstanding nor are there any outstanding Options obligating Blue or any of its Subsidiaries to issue or sell any Blue Voting Debt or to grant, extend or enter into any Option with respect thereto.

(g) None of the Blue Restricted Shares has been granted since February 20, 2015, except as expressly permitted by this Agreement. All grants of Blue Restricted Shares were validly made and properly approved by the Blue Board (or a duly authorized committee or subcommittee thereof) in compliance with all applicable Laws and recorded on the consolidated financial statements of Blue in accordance with GAAP.

(h) No Subsidiary of Blue, and no Joint Venture of Blue, owns any stock in Blue.

Section 5.2 Authority of Blue. Blue has full corporate power and authority to enter into this Agreement, to perform its obligations hereunder and, subject to obtaining the Shareholder Approval, to consummate the Transactions. The execution, delivery and performance of this Agreement by Blue and the

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consummation by Blue of the Transactions have been duly and validly adopted and unanimously approved by the Blue Board, the Blue Board has adopted the Agreement and approved and determined that it is in the best interests of Blue for Blue to consummate the Transactions (including the Merger) and resolved to recommend that shareholders of Blue approve the Agreement and to submit the Agreement and the Transactions (including the Merger) to the shareholders of Blue for their approval, and no other corporate proceedings on the part of Blue or its shareholders are necessary or required to authorize the execution, delivery and performance of this Agreement by Blue and the consummation by Blue of the Transactions (including the Merger), other than obtaining the Shareholder Approval. This Agreement has been duly and validly executed and delivered by Blue and, assuming this Agreement constitutes the legal, valid and binding obligation of Green and Merger Sub, constitutes a legal, valid and binding obligation of Blue enforceable against Blue in accordance with its terms, except that such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and to general equitable principles. Blue does not have any “poison pills”, shareholder rights plans or agreements or similar rights in place.

Section 5.3 Blue Required Statutory Approvals. Except for (A) compliance with, and filings under, the HSR Act and the rules and regulations thereunder, (B) the filing with and, to the extent required, the declaration of effectiveness by the SEC of (1) the Proxy Statement, (2) the Form S-4, and (3) such reports under the Exchange Act as may be required in connection with this Agreement and the Transactions, (C) such filings and approvals as may be required under the rules and regulations of the NYSE, (D) compliance with and such filings as may be required by the Act, (E) notices to and filings under, and compliance with all requirements of the Committee on Foreign Investment in the United States (“CFIUS”), pursuant to the Section 721 of the Defense Production Act of 1950 as amended by Section 5021 of the Omnibus Trade and Competitiveness Act of 1988, and as amended by The Foreign Investment National Security Act of 2007 (“Exon-Florio”), (F) approvals required by the Connecticut Public Utilities Regulatory Authority and the Massachusetts Department of Public Utilities, (G) approval required by the FERC, and (H) such other items set forth on Section 5.3 of the Blue Disclosure Schedule (the items set forth above in clauses (A) through (H) collectively, the “Blue Required Statutory Approvals”), no notification, filing or registration, consent, approval, declaration, Permit or authorization to, by or from any Governmental Authority is necessary or required in connection with the execution and delivery of this Agreement by Blue, the performance by Blue of its obligations hereunder or the consummation of the Transactions (including the Merger) by Blue, other than any Post-Closing Law and other than such items that the failure to make or obtain, as the case may be, individually or in the aggregate, would not reasonably be expected to have a Blue Material Adverse Effect.

Section 5.4 Blue SEC Reports, Financial Statements and Utility Reports.

(a) Blue and its Subsidiaries have filed or furnished on a timely basis each form, report, schedule, registration statement, registration exemption, if applicable, definitive proxy statement and other document (together with all amendments thereof and supplements thereto) required to be filed or furnished by Blue or any of its Subsidiaries pursuant to the Securities Act or the Exchange Act with the SEC (the “Blue SEC Reports”) since January 1, 2012. As of their respective dates, after giving effect to any amendments or supplements thereto prior to the date hereof, the Blue SEC Reports (A) complied in all material respects with the requirements of the Securities Act and the Exchange Act, if applicable, as the case may be, and, to the extent applicable, the Sarbanes-Oxley Act of 2002 (“SOX”), and (B) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b) Each of the principal executive officer of Blue and the principal financial officer of Blue (or each former principal executive officer of Blue and each former principal financial officer of Blue, as applicable) has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act or Sections 302 and 906 of SOX and the rules and regulations of the SEC promulgated thereunder with respect to the Blue SEC Reports. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in SOX. Since January 1, 2012, neither Blue nor any of its Subsidiaries has

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arranged any outstanding “extensions of credit” to directors or executive officers within the meaning of Section 402 of SOX.

(c) Each of the audited consolidated financial statements and unaudited interim consolidated financial statements (including, in each case, the notes, if any, thereto) included in the Blue SEC Reports (the “Blue Financial Statements”) complied as to form in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto in effect at the time of filing or furnishing the applicable Blue SEC Report, was prepared in accordance with GAAP (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by the SEC on Form 8-K, Form 10-Q or any successor or like form under the Exchange Act) and fairly present (subject, in the case of the unaudited interim financial statements, to the absence of footnotes therein and to normal, recurring year-end audit adjustments that were not or are not expected to be, individually or in the aggregate, material) in all material respects the consolidated financial position of Blue and its consolidated subsidiaries as of the respective dates thereof and the consolidated results of their operations, cash flows and shareholders’ equity for the respective periods then ended.

(d) All filings required to be made by Blue or any of its Subsidiaries since January 1, 2012, under the 2005 Act, the Power Act, the Natural Gas Act of 1938, as amended, and including all regulations promulgated thereunder, the Natural Gas Policy Act of 1978, as amended, and including all regulations promulgated thereunder, and the Communications Act of 1934 have been filed, on a timely basis (taking into account all applicable grace periods), with the SEC, the FERC, the Department of Energy or any other Governmental Authority, as the case may be, including all forms, statements, reports, agreements (oral or written) and all documents, exhibits, amendments and supplements appertaining thereto, including all rates, tariffs, franchises, service agreements and related documents, and all such filings complied, as of their respective dates, with all applicable requirements of the applicable statute and the rules and regulations thereunder, except for filings the failure of which to make or the failure of which to make in compliance with all applicable requirements of the applicable Laws, individually or in the aggregate, have not had and would not reasonably be expected to have a Blue Material Adverse Effect.

(e) Section 5.4(e) of the Blue Disclosure Schedule sets forth, as of the date of this Agreement, (i) all rate filings pending as of the date of this Agreement related to any Blue Party before the FERC, the Connecticut Public Utilities Regulatory Authority or the Massachusetts Department of Public Utilities and each other material proceeding pending as of the date of this Agreement before the FERC, the Connecticut Public Utilities Regulatory Authority or the Massachusetts Department of Public Utilities relating to any Blue Party (other than those rate filings or other material proceedings of a general or industry-wide nature that also affect other entities engaged in a business similar to that of Blue or its Subsidiaries) and (ii) all tariffs (other than tariffs applicable to utilities generally in any jurisdiction in which any Blue Party operates) filed with respect to, or applicable to, the services provided by any Blue Party, and all agreements to provide service on non-tariff terms (and complete and correct copies of all such tariffs and agreements have been provided to Green). All charges that have been made for service and all related fees have been charged in accordance with the terms and conditions of valid and effective tariffs or valid and enforceable agreements for non-tariff charges and are not subject to refund, except for failures to have made such charges or charged such fees that, individually or in the aggregate, have not had and would not reasonably be expected to have a Blue Material Adverse Effect. Notwithstanding anything to the contrary in this Agreement, any multi-party proceedings and tariffs identified in writing to Green on or before March 11, 2015 that are required to be set forth in Section 5.4(e) of the Blue Disclosure Schedule shall be deemed to have been disclosed in Section 5.4(e) of the Blue Disclosure Schedule for purposes of this Section 5.4(e).

(f) Each of the Blue Parties under the jurisdiction of the FERC, the Connecticut Public Utilities Regulatory Authority or the Massachusetts Department of Public Utilities, is legally entitled to provide services in all areas (i) where it currently provides service to its customers, and (ii) as identified in their respective tariffs, service agreements and other Contracts with its customers, except for failures to be so entitled that, individually or in the aggregate, have not had and would not reasonably be expected to have a Blue Material Adverse Effect.

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(g) Blue has designed, established and maintains a system of internal control over financial reporting (as defined in Rules 13a–15(f) and 15d–15(f) of the Exchange Act) designed to provide reasonable assurances regarding the reliability of financial reporting as required by Rules 13a–15 of the Exchange Act. Blue (i) has designed, established and maintains disclosure controls and procedures (as defined in Rules 13a–15(e) and 15d–15(e) of the Exchange Act) to provide reasonable assurance that all information required to be disclosed by Blue in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to Blue’s management as appropriate to allow timely decisions regarding required disclosure and (ii) has disclosed, based on the most recent evaluation of its chief executive officer and its chief financial officer prior to the date of this Agreement, to Blue’s outside auditors and the audit committee of the Blue Board (x) any and all significant deficiencies in the design or operation of its internal controls over financial reporting that are reasonably likely to adversely affect Blue’s ability to record, process, summarize and report financial information and has identified for Blue’s outside auditors and audit committee of the Blue Board any material weaknesses in internal control over financial reporting and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in Blue’s internal control over financial reporting. Except for matters resolved prior to the date hereof, since January 1, 2013 through the date of this Agreement, to the Knowledge of Blue, (A) neither Blue nor any of its Subsidiaries nor any of their respective Representatives has received or otherwise had or obtained Knowledge of any material complaint, allegation or claim (whether written or oral) from any source regarding the accounting, or auditing practices, procedures, methodologies or methods of Blue or its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that Blue or any of its Subsidiaries has engaged in questionable accounting, internal accounting controls or auditing matters of Blue or any of its Subsidiaries, and no concerns (whether written or oral) from any of the Blue Parties’ employees regarding questionable accounting or auditing matters have been received by Blue or any of its Subsidiaries, and (B) no attorney representing Blue or any of its Subsidiaries, whether or not employed by any such entity, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by Blue, any of its Subsidiaries or any of their respective directors, officers or employees to the General Counsel or Chief Executive Officer of Blue.

(h) Blue is, and since January 1, 2012 has been, in compliance in all material respects with (i) SOX, and (ii) the applicable listing standards and corporate governance rules and regulations of the NYSE.

(i) The most recent financial statements contained in the Blue 2014 Draft Form 10-K reflect, in accordance with GAAP, an adequate reserve for all Taxes payable by Blue and its Subsidiaries for all taxable periods through the date of such financial statements, and since such date, neither Blue nor any of its Subsidiaries has incurred any material liability for Taxes outside the ordinary course of business.

Section 5.5 Vote Required by Blue. The affirmative vote of the holders of record of at least a majority of the shares of Blue Common Stock (the “Shareholder Approval”) is the only vote of the holders of any class or series of the capital stock of Blue required to approve this Agreement and the Transactions.

Section 5.6 Opinion of Financial Advisors to Blue. The Blue Board has received the opinion, dated on or about the date of this Agreement, of Morgan Stanley & Co. LLC, that, as of the date of such opinion and based on the assumptions, qualifications and limitations contained therein, the Merger Consideration to be received by the holders of Blue Common Stock is fair, from a financial point of view, to the holders of Blue Common Stock. A copy of such opinion has been made available to Green or will be made available to Green promptly after the date of this Agreement for informational purposes only.

Section 5.7 Anti-Takeover Provisions Inapplicable to Blue. Subject to the accuracy of Section 5.18, the Transactions are not subject to any “moratorium,” “control share,” “fair price,” “affiliate transactions,” “business combination” or other state antitakeover Laws.

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Section 5.8 Green Capital Stock.

(a) Green’s authorized and outstanding capital stock is as set forth in Section 5.8(a) of the Green Disclosure Schedule. All of Green’s issued and outstanding capital stock has been duly authorized, validly issued, fully paid and nonassessable. The Equity Securities set forth in Section 5.8(a) of the Green Disclosure Schedule constitute all of the issued and outstanding Equity Securities of Green. All of the issued and outstanding capital stock of Green is, and immediately prior to the Effective Time will be, owned by Green Parent.

(b) There are no outstanding Options obligating any Green Party to (A) issue or sell any Equity Securities of any Green Party, (B) grant, extend or enter into any Option with respect thereto, (C) redeem or otherwise acquire any such Equity Securities, or (D) provide any amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Person (including any of their respective Subsidiaries). Neither Green nor any of its Subsidiaries has granted registration rights to any Person.

(c) No Indebtedness of Green or any of its Subsidiaries having the right to vote (or which are convertible into or exercisable for Equity Securities having the right to vote) (collectively, “Green Voting Debt”) on any matters on which Green’s equityholders may vote are issued or outstanding nor are there any outstanding Options obligating Green or any of its Subsidiaries to issue or sell any Green Voting Debt or to grant, extend or enter into any Option with respect thereto.

(d) The authorized capital stock of Merger Sub consists solely of 1,000 shares of common stock, no par value per share, all of which are outstanding and have been duly authorized, validly issued, fully paid and nonassessable. All of the issued and outstanding capital stock of Merger Sub is, and immediately prior to the Effective Time will be, owned by Green. Merger Sub has not conducted any business prior to the date of this Agreement and has no, and prior to the Effective Time will have no, assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to this Agreement, the Merger and the other Transactions.

Section 5.9 Authority of Green.

(a) Each of Green and Merger Sub has full corporate power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the Transactions. The execution, delivery and performance of this Agreement by Green and Merger Sub and the consummation by Green and Merger Sub of the Transactions (including the Merger) have been duly and validly approved by all necessary corporate action, and no approval or consent of Green Parent or any Affiliate of Green Parent (other than Green, which approval or consent has been obtained) is needed in respect of the execution, delivery and performance of this Agreement by Green and Merger Sub and the consummation by Green and Merger Sub of the Transactions (including the Merger). This Agreement has been duly and validly executed and delivered by Green and Merger Sub and, assuming this Agreement constitutes the legal, valid and binding obligation of Blue, constitutes a legal, valid and binding obligation of Green and Merger Sub enforceable against Green and Merger Sub in accordance with its terms, except that such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and to general equitable principles.

(b) Prior to the Effective Time, Green will have, and will have procured, to the extent applicable, that its Affiliates will have, taken all necessary action to permit Green to issue the number of shares of Green Common Stock required to be issued pursuant to Article II. The Green Common Stock, when issued pursuant to this Agreement or otherwise, will be validly issued, fully paid and nonassessable, and no such issued shares of Green Common Stock will have been issued in violation of any preemptive right of subscription or purchase in respect thereof. Green Common Stock, when issued to holders of Blue Common Stock in connection with the Transactions, will be registered under the Securities Act and Exchange Act and registered or exempt from registration under any applicable state securities or “blue sky” Laws.

Section 5.10 Green Required Statutory Approvals. Except for (A) compliance with, and filings under, the HSR Act and the rules and regulations thereunder, (B) the filing with and, to the extent required, the declaration of effectiveness by the SEC of (1) the Proxy Statement, (2) the Form S-4, and (3) such reports under the

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Exchange Act as may be required in connection with this Agreement and the Transactions, (C) such filings and approvals as may be required under the rules and regulations of the NYSE, (D) compliance with and such filings as may be required by the Act, (E) notices to and filings under, and compliance with all requirements of CFIUS, pursuant to Exon-Florio, (F) approvals required by the Connecticut Public Utilities Regulatory Authority and the Massachusetts Department of Public Utilities, (G) approval required by the FERC, and (H) such other items set forth on Section 5.10 of the Green Disclosure Schedule (the items set forth above in clauses (A) through (H) collectively, the “Green Required Statutory Approvals”), no notification, filing or registration, consent, approval, declaration, Permit or authorization to, by or from any Governmental Authority is necessary or required in connection with the execution and delivery of this Agreement by Green or Merger Sub, the performance by Green or Merger Sub of its respective obligations hereunder or the consummation of the Transactions (including the Merger) by Green or Merger Sub, other than such items that the failure to make or obtain, as the case may be, individually or in the aggregate, would not reasonably be expected to have a Green Material Adverse Effect.

Section 5.11 Financial Statements and Utility Reports of Green.

(a) True, correct and complete copies of the audited consolidated statement of financial position as of December 31, 2014 of Green and its Subsidiaries and the audited consolidated statement of profit or loss for the year ended December 31, 2014 of Green and its Subsidiaries, each as prepared in accordance with IFRS consistently applied (collectively referred to as the “Green IFRS Financial Statements”) are set forth on Section 5.11(a) of the Green Disclosure Schedule.

(b) Each of the Green IFRS Financial Statements (i) has been prepared based on the applicable books and records of Green and its Subsidiaries (except as may be indicated in the notes thereto), (ii) has been prepared in accordance with IFRS consistently applied (except as may be indicated in the notes thereto), and (iii) fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of Green and its Subsidiaries as at the respective dates thereof and for the respective periods indicated therein, except as otherwise noted therein. Except as disclosed in the Green IFRS Financial Statements, none of Green nor any of its Subsidiaries maintains any “off-balance-sheet arrangement” within the meaning of Item 303 of Regulation S-K of the SEC.

(c) True, correct and complete copies of a reconciliation of the Green IFRS Financial Statements to comparable statements prepared in accordance with GAAP, together with a report of Green’s independent accountants thereon, are set forth on Section 5.11(c) of the Green Disclosure Schedule (collectively referred to as the “Green Reconciliation Financial Statements”).

(d) The information provided by Green to its external auditors relating to the Green Reconciliation Financial Statements and the information provided by Green’s external auditors regarding the IFRS and GAAP rules applicable to the Green Reconciliation Financial Statements are true and correct in all material respects. The pro forma GAAP statements reflected in the Green Reconciliation Financial Statements will not differ in any material respect from the Green audited GAAP financial statements as of and for the year ended December 31, 2014 to be included in the Form S-4.

(e) True, correct and complete copies of the audited consolidated statements of income, consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of cash flows and consolidated statements of changes in equity of Green Networks for the years ended December 31, 2013 and December 31, 2012 (collectively referred to as the “Green Networks Financial Statements” and, collectively with the Green IFRS Financial Statements and the Green Reconciliation Financial Statements, the “Green Financial Statements”) are set forth on Section 5.11(e) of the Green Disclosure Schedule.

(f) Each of the Green Networks Financial Statements (i) has been prepared based on the applicable books and records of Green Networks and its Subsidiaries (except as may be indicated in the notes thereto), (ii) has been prepared in accordance with GAAP consistently applied (except as may be indicated in the notes thereto), and (iii) fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of Green Networks and its Subsidiaries as at the respective dates thereof and for the respective

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periods indicated therein, except as otherwise noted therein. Except as disclosed in the Green Networks Financial Statements, none of Green Networks nor any of its Subsidiaries maintains any “off-balance-sheet arrangement” within the meaning of Item 303 of Regulation S-K of the SEC.

(g) All filings required to be made by Green or any of its Subsidiaries since January 1, 2012 under the 2005 Act, the Power Act, the Natural Gas Act of 1938, as amended, and including all regulations promulgated thereunder, the Natural Gas Policy Act of 1978, as amended, and including all regulations promulgated thereunder, and the Communications Act of 1934 have been filed, on a timely basis (taking into account all applicable grace periods), with the FERC, the Department of Energy or any other Governmental Authority, as the case may be, including all forms, statements, reports, agreements (oral or written) and all documents, exhibits, amendments and supplements appertaining thereto, including all rates, tariffs, franchises, service agreements and related documents, and all such filings complied, as of their respective dates, with all applicable requirements of the applicable statute and the rules and regulations thereunder, except for filings the failure of which to make or the failure of which to make in compliance with all applicable requirements of the applicable Laws, individually or in the aggregate, have not had and would not reasonably be expected to have a Green Material Adverse Effect.

(h) Section 5.11(h) of the Green Disclosure Schedule sets forth, as of the date of this Agreement, (i) all rate filings pending as of the date of this Agreement related to any Green Party before the FERC, the New York Public Service Commission or the Maine Public Utilities Commission and each other material proceeding pending as of the date of this Agreement before the FERC, the New York Public Service Commission or the Maine Public Utilities Commission relating to any Green Party (other than those rate filings or other material proceedings of a general or industry-wide nature that also affect other entities engaged in a business similar to that of Green or its Subsidiaries), and (ii) all tariffs (other than tariffs applicable to utilities generally in any jurisdiction in which any Green Party operates) filed with respect to, or applicable to, the services provided by any Green Party, and all agreements to provide service on non-tariff terms (and complete and correct copies of all such tariffs and agreements have been provided to Blue), and all charges that have been made for service and all related fees have been charged in accordance with the terms and conditions of valid and effective tariffs or valid and enforceable agreements for non-tariff charges and are not subject to refund, except for failures to have made such charges or charged such fees that, individually or in the aggregate, have not had and would not reasonably be expected to have a Green Material Adverse Effect.

(i) Each of the Green Parties under the jurisdiction of the FERC, the New York Public Service Commission or the Maine Public Utilities Commission is legally entitled to provide services in all areas (i) where it currently provides service to its customers, and (ii) as identified in their respective tariffs, service agreements and other Contracts with its customers, except for failures to be so entitled that, individually or in the aggregate, have not had and would not reasonably be expected to have a Green Material Adverse Effect.

(j) Green has designed, established and maintains a system of internal control over financial reporting designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP (or, in the case of the Green IFRS Financial Statements, IFRS) and provide reasonable assurance that all transactions are executed in accordance in all material respects with management’s general or specific authorization, all transactions are recorded as necessary to permit the preparation of the Green Financial Statements in conformity with GAAP (or, in the case of the Green IFRS Financial Statements, IFRS) and fraud is detected and prevented. Except for matters resolved prior to the date hereof, since January 1, 2012 through the date of this Agreement, to the Knowledge of Green, (A) neither Green nor any of its Subsidiaries nor any of their respective Representatives has received or otherwise had or obtained Knowledge of any material complaint, allegation or claim (whether written or oral) from any source regarding the accounting or auditing practices, procedures, methodologies or methods of Green or its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that Green or any of its Subsidiaries has engaged in questionable accounting, internal accounting controls or auditing matters of Green or any of its Subsidiaries, and no concerns (whether written or oral) from any of the Green Parties’ employees regarding questionable accounting or auditing matters have been received by Green or any of its Subsidiaries, and (B) no attorney representing Green or any of its Subsidiaries, whether or not employed by any such entity, has reported evidence of a material violation of securities Laws,

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breach of fiduciary duty or similar violation by Green, any of its Subsidiaries or any of their respective directors, officers or employees to the General Counsel or Chief Executive Officer of Green.

(k) Green has made available to Blue any management letters or other material written communications (including with respect to proposed adjustments) from the auditors to any of Green or any of its Subsidiaries, any officer of any of Green or any of its Subsidiaries or the board of directors (or equivalent body) of any of Green or its Subsidiaries since January 1, 2013, in any case regarding (A) any significant deficiencies in the design or operation of its internal controls over financial reporting that are reasonably likely to adversely affect, or to have adversely affected (in more than immaterial respects), Green’s ability to record, process, summarize and report financial information or any material weaknesses in internal control over financial reporting or (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Green’s internal control over financial reporting.

(l) The Green Financial Statements reflect, in accordance with GAAP (or, in the case of the Green IFRS Financial Statements, IFRS), an adequate reserve for all Taxes payable by Green and its Subsidiaries for all taxable periods through the date of such Green Financial Statements, and since such date, neither Green nor any of its Subsidiaries has incurred any material liability for Taxes outside the ordinary course of business.

Section 5.12 Shared Assets and Services. Section 5.12 of the Green Disclosure Schedule contains a list of (i) all assets or properties of Green Parent or any of its Subsidiaries or Joint Ventures (other than Green or any of its Subsidiaries or Joint Ventures) that are used in the business of Green or any of its Subsidiaries or Joint Ventures, (ii) all services that Green or any of its Subsidiaries or Joint Ventures provides to or receives from Green Parent or any of its Subsidiaries or Joint Ventures (other than Green or any of its Subsidiaries or Joint Ventures), and (iii) all Contracts to which Green or any of its Subsidiaries or Joint Ventures, on the one hand, and Green Parent or any of its Subsidiaries or Joint Ventures (other than Green or any of its Subsidiaries or Joint Ventures), on the other hand, are parties, except, in each case, for any such assets, properties and Contracts that are not, individually or in the aggregate, material to the conduct of the business of the Green Parties, taken as whole. The expenses and revenues under each of the Contracts listed on Section 5.12 of the Green Disclosure Schedule are accurately reflected in the Green IFRS Financial Statements included on Section 5.11(a) of the Green Disclosure Schedule.

Section 5.13 Employee Benefit Plans of Green. No Green Employee Benefit Plan is maintained outside the jurisdiction of the United States or covers any employee of Green or any of its Subsidiaries who resides or works outside of the United States. No Controlled Group Liability has been incurred by Green or its ERISA Affiliates that has not been satisfied in full, and no condition exists that presents a risk to Green or its ERISA Affiliates of incurring any such liability, except, in each case, as would not reasonably be expected to result, individually or in the aggregate, in a Green Material Adverse Effect. No purpose of the transactions contemplated by this Agreement is for any of Green Parent or its Affiliates to avoid Liability arising out of Title IV of ERISA.

Section 5.14 Anti-Takeover Provisions Inapplicable to Green. The Transactions are not subject to any “moratorium,” “control share,” “fair price,” “affiliate transactions,” “business combination” or other state antitakeover Laws.

Section 5.15 Organization and Qualification of Merger Sub. Merger Sub is duly organized, validly existing and in good standing under the Laws of the state of its organization and has full power and authority to conduct its business as and to the extent now conducted and to own, use and lease its assets and properties. Merger Sub is duly qualified, licensed or admitted to do business and is in good standing (with respect to jurisdictions that recognize the concept of “good standing”) in each jurisdiction in which the ownership, use or leasing of its assets and properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary, except for such failures to be so qualified, licensed or admitted and in good standing (with respect to jurisdictions that recognize the concept of “good standing”) that, individually or in the aggregate, have not had and would not reasonably be expected to have a Green Material Adverse Effect.

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Section 5.16 No Conflicts with Respect to Merger Sub; Approvals and Consents of Merger Sub. The execution and delivery of this Agreement by Merger Sub does not, and the performance by Merger Sub of its obligations hereunder and the consummation of the Transactions will not, conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, result in or give to any Person any right of payment or reimbursement, termination, revocation, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of the assets or properties of Merger Sub under, any of the terms, conditions or provisions of (A) the Charter Documents of Merger Sub, or (B) subject to the taking of the actions described in Section 5.10, (x) any Laws applicable to Merger Sub or any of its assets or properties, or (y) any Contract, Permit or other instrument to which Merger Sub is a party or by which Merger Sub or any of its assets or properties is bound, excluding from the foregoing clauses (x) - (y) such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Green Material Adverse Effect.

Section 5.17 Green Renewables Contracts. Section 5.17 of the Green Disclosure Schedule contains a chart setting forth the project, expiration year and megawatt volume for each contract that purports to bind any Green Party pursuant to which at least 10 megawatts of electric generation capacity of Green Renewables or any of its Subsidiaries or Joint Ventures has been contracted to a counterparty (the “Green Renewables Contracts”), which list is true, complete and correct in all material respects. Green has made available to Blue the annual gross margin for each of the next ten years for the Green Renewables Contracts on an aggregate basis. None of the Green Renewables Contracts contains a provision permitting the counterparty to such contract to reduce the amount of capacity that such counterparty is obligated to pay for or to reduce the capacity charge therefor pursuant to such contract or to terminate such contract for any reason other than due to a material breach by Green Renewables. None of Green Renewables nor any of its Affiliates is in material breach of or material default under the terms of any Green Renewables Contract and as of the date hereof no event has occurred that (with or without notice or lapse of time or both) would result in a material breach or default under any Green Renewables Contract. To the Knowledge of Green, no other party to any Green Renewables Contract is in material breach of or material default under the terms of any such Green Renewables Contract, and no other party to the Green Renewables Contracts has threatened to or is anticipated to reduce the amount of capacity that such counterparty is obligated to pay for or to reduce the capacity charge therefor pursuant to such contract or to terminate any Green Renewables Contract.

Section 5.18 Ownership of Shares. None of Green Parent, Green nor any of their respective Subsidiaries Beneficially Owns any Blue Common Stock.

Section 5.19 Available Funds. Green and Merger Sub have access to, and as of the Effective Time will have available to them, all funds necessary for the payment to the Exchange Agent of the aggregate Cash Consideration, all other amounts to be paid pursuant to Article II, and to satisfy all of their other obligations under this Agreement.

ARTICLE VI

COVENANTS AND AGREEMENTS OF THE PARTIES

Section 6.1 Blue No Solicitation.

(a) Blue shall, and shall cause each of its Subsidiaries and its and their respective officers, directors and employees to, and shall (and shall cause each of its Subsidiaries to) direct and use reasonable best efforts to cause each of Blue’s and its Subsidiaries’ respective investment bankers, accountants, attorneys, financial advisors and other advisors, agents and representatives (collectively, and together with Blue’s and its Subsidiaries’ respective officers, directors and employees, the “Representatives”) to (i) immediately cease and cause to be terminated all existing discussions or negotiations with any Person conducted heretofore with respect to, or that could reasonably be expected to lead to, any Acquisition Proposal, (ii) not solicit, initiate, knowingly facilitate or knowingly encourage any inquiries, offers or the making of any proposal (including by amending or granting any

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waiver or release under, or failing to enforce, any standstill or similar Contract with respect to any class of capital stock of Blue or any of its Subsidiaries (except to the extent permitted in accordance with the last sentence of this Section 6.1(a))) with respect to, or that could reasonably be expected to lead to, any Acquisition Proposal, (iii) not engage in or otherwise participate in any negotiations or discussions regarding, or that could reasonably be expected to lead to, any Acquisition Proposal, (iv) not furnish any nonpublic information regarding Blue or any of its Subsidiaries to any Person (other than Green or Merger Sub) in connection with or in response to any Acquisition Proposal, and (v) not approve, endorse or recommend any Acquisition Proposal except in connection with an Adverse Recommendation Change permitted pursuant to Section 6.1(c). Notwithstanding anything to the contrary in this Section 6.1(a), nothing in this Section 6.1(a) shall prohibit Blue, at any time prior to obtaining the Shareholder Approval, from (x) furnishing nonpublic information regarding Blue or its Subsidiaries to, or entering into or participating in discussions or negotiations with, any Person in response to an unsolicited, written Acquisition Proposal that the Blue Board concludes in good faith, after consultation with its financial advisors and outside counsel, constitutes, or could reasonably be expected to result in, an Acquisition Proposal if (A) the Blue Board concludes in good faith, after consultation with its financial advisors and outside legal counsel, that the Acquisition Proposal is or could reasonably be expected to lead to a Superior Proposal and that the failure to take such action could reasonably be expected to result in a breach of its fiduciary duties under applicable Law, (B) Blue furnishes any nonpublic information provided to the maker of such Acquisition Proposal only pursuant and subject to an Acceptable Confidentiality Agreement, and (C) Blue promptly (and, in any event, within forty-eight (48) hours) makes available to Green any non-public information concerning Blue or its Subsidiaries that Blue made available to such Person to the extent such information was not previously provided to Green; provided that Blue shall not provide any commercially sensitive non-public information to any competitor in connection with this Section 6.1, other than in accordance with “clean room” or similar procedures designed to limit any adverse effect on the sharing of information on Blue and its Subsidiaries, or (y) failing to enforce, or granting any waiver or release under, any standstill or similar Contract with any Person to the extent the Blue Board concludes in good faith, after consultation with its financial advisors and outside legal counsel, that taking such action could reasonably be expected to result in a possible Superior Proposal and that failing to take such action could reasonably be expected to result in a breach of its fiduciary duties under applicable Laws and to the extent such action is necessary to allow such Person to make a confidential proposal to the Blue Board.

(b) Blue shall promptly, and in no event later than twenty-four (24) hours after its receipt (including receipt by any of its Subsidiaries or its or their respective Representatives) of any Acquisition Proposal, or any request for nonpublic information relating to Blue or any of its Subsidiaries in connection with an Acquisition Proposal, advise Green orally and in writing of such Acquisition Proposal or request (including providing the identity of the Person making or submitting such Acquisition Proposal or request), and, (i) if it is in writing, a copy of such Acquisition Proposal and any related draft agreements or other documentation or materials delivered in connection therewith, or (ii) if it is oral, a reasonably detailed summary, including all material terms, thereof. Blue shall keep Green informed on a reasonably prompt basis with respect to any change to the material terms of any such Acquisition Proposal (and in no event later than twenty-four (24) hours following any such change).

(c) Except as otherwise provided in Section 6.1(d) or Section 6.1(e), neither the Blue Board nor any committee thereof may (i) (A) withhold, withdraw, change, qualify or modify in a manner adverse to Green, or publicly propose to withhold, withdraw, change, qualify or modify in a manner adverse to Green, the approval, recommendation or declaration of advisability by the Blue Board or any such committee thereof of this Agreement and the Transactions (the “Board Recommendation”), (B) recommend, adopt or approve, or propose publicly to recommend, adopt or approve any Acquisition Proposal, (C) fail to include the Board Recommendation in the Proxy Statement or (D) resolve, publicly propose or agree to do any of the foregoing (any action described in this clause (i) being referred to as a “Adverse Recommendation Change”), or (ii) (x) recommend, adopt or approve, or publicly propose to recommend, adopt or approve, or, other than an Acceptable Confidentiality Agreement and customary common interest agreement, allow Blue or any of its Subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or related to, or that is intended to (or would reasonably be expected to) lead to, any

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Acquisition Proposal or that would require Blue to abandon, terminate or fail to consummate the Transactions, or (y) resolve, agree or propose to do any of the foregoing.

(d) Notwithstanding anything in this Agreement to the contrary, the Blue Board or any committee thereof may, at any time prior to receipt of the Shareholder Approval, effect an Adverse Recommendation Change in respect of an Acquisition Proposal, if: (i) an Acquisition Proposal is made to Blue, (ii) the Blue Board or applicable committee thereof determines in good faith, after consultation with its financial advisors and outside legal counsel, that such offer constitutes a Superior Proposal and that the failure to take such action could reasonably be expected to result in a breach of its fiduciary duties under applicable Laws, (iii) Blue provides Green five (5) Business Days’ prior written notice of its intention to take and the rationale for such action, which notice shall include the information with respect to such Superior Proposal that is specified in Section 6.1(b) (it being understood that each time any material revision or amendment to the terms of the Acquisition Proposal determined to be a Superior Proposal is made, the five (5) Business Day period shall be extended for additional three (3) Business Days (for the first extension) or two (2) Business Days (for each subsequent extension) after notification of such change to Green), and (iv) at the end of the applicable periods described in clause (iii) (the “Takeover Notice Period”), the Blue Board again makes the determination in good faith, after consultation with its outside legal counsel and financial advisors (and after taking into account any adjustments or modifications proposed by Green during the Takeover Notice Period), that the Acquisition Proposal continues to be a Superior Proposal. Blue agrees that during the Takeover Notice Period, Blue shall negotiate in good faith with Green and its representatives, if requested by Green, regarding any adjustments or modifications to the terms of this Agreement.

(e) Notwithstanding anything in this Agreement to the contrary, the Blue Board may, at any time prior to the receipt of the Shareholder Approval, effect an Adverse Recommendation Change in response to any Change first occurring or becoming known to the Blue Board after the execution of this Agreement that materially affects or could reasonably be expected to materially affect (i) the business, assets, liabilities, condition (financial or otherwise) or results of operations of Blue and its Subsidiaries, taken as a whole, or Green and its Subsidiaries, taken as a whole or (ii) the shareholders of Blue (including the benefits of the Merger to Blue or the shareholders of Blue), in either case that (A) is material, individually or in the aggregate with any other such Changes first occurring or becoming known to the Blue Board after the execution of this Agreement and (B) does not involve or relate to an Acquisition Proposal if: (x) Blue provides Green five (5) Business Days’ prior written notice of its intention to take such action, which notice shall include all material information with respect to any such Changes and a reasonably detailed description of the Blue Board’s rationale for such action, and (y) at the end of the five (5) Business Day period described in clause (x), the Blue Board determines in good faith, after consultation with its financial advisors and outside legal counsel (after taking into account any adjustments or modifications to the terms of this Agreement proposed by Green during the period described in clause (x)), that the failure to take such action could reasonably be expected to result in a breach of its fiduciary duties under applicable Laws. During such five (5) Business Day period described in clause (x), Blue shall negotiate in good faith with Green and its representatives, if requested by Green, regarding any adjustments or modifications to the terms of this Agreement.

(f) [Intentionally Omitted]

(g) Nothing contained in this Section 6.1 or elsewhere in this Agreement shall prohibit Blue or the Blue Board (or any committee thereof), directly or indirectly through its Representatives, from disclosing to Blue’s shareholders a position contemplated by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act or making any disclosure to Blue’s shareholders if the Blue Board has determined, after consultation with its outside legal counsel, that the failure to do so could reasonably be expected to violate applicable Law; provided, however, that any such disclosure that constitutes an Adverse Recommendation Change shall be subject to the provisions of this Section 6.1 with respect thereto (it being understood and agreed that any disclosure of a position in connection with a tender offer or exchange offer, other than a “stop, look and listen” or similar communication of the type contemplated by Rule 14d-9(f) promulgated under the Exchange Act or a recommendation on Schedule 14D-9 against such tender offer or exchange offer made within ten (10) Business Days after the commencement thereof and in any event at least two (2) Business Days prior to the Shareholder

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Meeting, shall be deemed an Adverse Recommendation Change, unless the Blue Board expressly and concurrently reaffirms the Board Recommendation).

(h) The Parties agree that an Adverse Recommendation Change effected in accordance with Section 6.1(d) or Section 6.1(e) shall not in and of itself violate any other provision of this Agreement.

(i) In the event a breach of this Section 6.1 by any Representative of the Blue Parties becomes Known to Blue, Blue shall use its best efforts both to promptly cure, to the extent practicable, any prior breach and to cause such Representative to not commit any additional breaches of this Section 6.1.

(j) For purposes of this Agreement:

(i) “Acquisition Proposal” shall mean any bona fide proposal or offer from any Person relating to any (A) direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of assets or businesses of Blue or its Subsidiaries that, in the aggregate, constitute or generate 15% or more of the consolidated net revenue or earnings before interest, taxes, depreciation and amortization (on an estimated current replacement cost basis) for the preceding twelve (12) months of Blue and its Subsidiaries, taken as a whole, (B) direct or indirect acquisition or purchase of beneficial ownership of 15% or more of any class of Equity Securities (by vote or value) of Blue or any of its Significant Subsidiaries, (C) tender offer or exchange offer that if consummated would result in any Person beneficially owning, directly or indirectly, 15% or more of any class of Equity Securities (by vote or value) of Blue or any of its Significant Subsidiaries, (D) merger, consolidation, business combination, asset purchase, recapitalization, liquidation, dissolution, binding share exchange or similar transaction involving Blue or any of its Significant Subsidiaries pursuant to which any Person (or the stockholders of any Person) would own, directly or indirectly, 15% or more of the total voting power of the Equity Securities of Blue or any of its Significant Subsidiaries or the surviving entity in a merger with Blue or any of its Significant Subsidiaries or the resulting direct or indirect parent of Blue or such surviving entity, or (E) any combination of the foregoing, in each case other than the Transactions.

(ii) “Superior Proposal” means a bona fide written Acquisition Proposal that the Blue Board or committee thereof determines in good faith, after consultation with its financial advisors and outside legal counsel (taking into account (x) all relevant legal, financial, conditionality (including whether such Acquisition Proposal is subject to a financing condition), regulatory and other aspects of such Acquisition Proposal and the Merger and the other Transactions deemed in good faith to be relevant by the Blue Board to the consummation of such Acquisition Proposal, (y) the identity of the Person(s) making such Acquisition Proposal, and (z) the likelihood of completion of such Acquisition Proposal) would result in a transaction more favorable to Blue’s shareholders from a financial point of view than the Merger and the other Transactions (taking into account all of the terms of any proposal by Green to amend or modify the terms of the Merger and the other Transactions in response to such proposal or otherwise), except that the references to “15%” in the definition of “Acquisition Proposal” shall each be deemed to be a reference to “50%” and references to “Blue or any of its Significant Subsidiaries” in clauses (B), (C) and (D) of the definition of “Acquisition Proposal” shall be deemed to be references to “Blue”.

Section 6.2 Green No Solicitation. Green shall, and shall cause its Affiliates and Subsidiaries and its and their respective officers, directors and employees to, and shall (and shall cause each of its Affiliates and Subsidiaries to) direct and use reasonable best efforts to cause Green’s Representatives (other than Green’s and its Affiliates’ and Subsidiaries’ respective officers, directors and employees) to immediately cease and cause to be terminated all existing discussions or negotiations with any Person conducted heretofore with respect to, or that could reasonably be expected to lead to, any Green Business Combination. From the date of this Agreement until the earlier of the Closing and the date of termination of this Agreement, Green shall not, shall cause its Affiliates and Subsidiaries and its and their respective officers, directors and employees not to, and shall (and shall cause each of its Affiliates and Subsidiaries to) direct and use reasonable best efforts to cause Green’s Representatives (other than Green’s and its Affiliates’ and Subsidiaries’ respective officers, directors and

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employees) not to, directly or indirectly, (i) solicit, initiate, endorse, knowingly facilitate or knowingly encourage any Green Business Combination or any inquiries, offers or the making of any proposal with respect to, or that could reasonably be expected to lead to, any Green Business Combination, (ii) enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or related to, or that is intended to effect, any Green Business Combination or that would reasonably be expected to cause Green to abandon, terminate or fail to consummate the Transactions, (iii) enter into, initiate, continue, engage in or otherwise participate in any way in any discussions or negotiations regarding, or that could reasonably be expected to lead to, any Green Business Combination, or (iv) agree or propose to do any of the foregoing. As used herein, “Green Business Combination” shall mean (x) any acquisition or purchase, in a single transaction or a series of transactions of all or any material part of the Green Companies (regardless of whether such acquisition or purchase is by means of a sale of assets or a sale of Equity Securities of one or more of the Green Companies or their Subsidiaries), other than the Transactions or (y) any acquisition, purchase or corporate reorganization by the Green Companies or their Affiliates that could reasonably be expected to prevent, materially delay or materially impair the consummation of the Merger. Any act or omission by an Affiliate of Green that would be a violation of this Section 6.2 if taken by Green shall be a breach by Green of this Section 6.2.

Section 6.3 Preparation of the Proxy Statement and Form S-4; Provision of Green Financial Statements; Shareholder Meetings.

(a) As promptly as practicable after the date of this Agreement and in any event within one hundred (100) days of the date of this Agreement, Green shall prepare, and Green shall file with the SEC, a registration statement on Form S-4 to register the offer and sale of the shares of Green Common Stock pursuant to the Merger (together with any supplements or amendments thereto, the “Form S-4”). The Form S-4 will include a proxy statement prepared by Blue and provided for inclusion in the Form S-4 not later than 30 days after the date of this Agreement (together with any supplement or amendment thereto, the “Proxy Statement”) relating to the meeting of Blue’s shareholders to be held for the purpose of obtaining the Shareholder Approval (such meeting, the “Shareholder Meeting”) in accordance and in compliance with the Exchange Act and the rules and regulations thereunder. Each Party shall use its reasonable best efforts to have the Form S-4 declared effective under the Securities Act as promptly as practicable after the filing of the Form S-4, and promptly thereafter mail the Proxy Statement to Blue’s shareholders. Each of Green and Blue shall also use their respective reasonable best efforts to satisfy prior to the effective date of the Form S-4 all necessary state securities Law or “blue sky” notice requirements in connection with the Merger and the other Transactions. Each of Green and Blue shall promptly supply to the other in writing, for inclusion in the Proxy Statement and Form S-4, all information concerning its respective business required under the Securities Act and the Exchange Act, and the rules and regulations thereunder, to be included in the Proxy Statement and Form S-4; provided that neither Party shall use any such information for any other purpose if doing so would violate or cause the violation of applicable securities Laws. Each of Green and Blue shall furnish all information concerning itself as may reasonably be required in connection with such actions and the preparation of the Form S-4. Each Party agrees to correct promptly any information provided by it for use in the Form S-4 and Proxy Statement if and to the extent that such information shall have become false or misleading in any material respect or as otherwise required by applicable Law. Each of Green and Blue shall notify the other promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Proxy Statement or Form S-4 or for additional information related to the Proxy Statement or Form S-4 and will promptly supply the other Party with copies of all correspondence between it and its Affiliates or their respective officers, employees, legal advisors or agents, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement or Form S-4 or the Transactions. Prior to filing or mailing the Proxy Statement or Form S-4 (or any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, each of Green and Blue shall liaise and cooperate with the other Party and provide it with a reasonable opportunity to review and comment on such document or proposed response or compliance with any such request. If at any time prior to the Shareholder Meeting (in the case of the Proxy Statement) or the Closing (in the case of the Form S-4), any information relating to any Party or any of its respective Affiliates, directors or officers, should

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be discovered by such Party which should be set forth in an amendment or supplement to the Proxy Statement or Form S-4, so that such document would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, the Party which discovers such information shall promptly notify the other Party and an appropriate amendment or supplement describing such information shall be prepared, filed with the SEC and disseminated to the shareholders of Blue to the extent required by Law. After all the comments received from the SEC have been cleared by the SEC staff and all information required to be contained in the Proxy Statement or Form S-4 has been included therein by Blue and Green, if applicable, and the Form S-4 has been declared effective, Blue shall promptly file the definitive Proxy Statement with the SEC and cause the Proxy Statement to be mailed (including by electronic delivery if permitted) as promptly as practicable, to its shareholders of record, as of the record date established by the Blue Board pursuant to Section 6.3(b) and set forth in the Proxy Statement.

(b) As promptly as practicable following the date on which the SEC shall clear (whether orally or in writing) the Proxy Statement and declared the Form S-4 effective, unless the Blue Board has effected an Adverse Recommendation Change, Blue shall take all action in accordance with the federal securities Laws, the Act, and Blue’s Charter Documents necessary to establish a record date for, duly call, give notice of, convene and hold the Shareholder Meeting as soon as reasonably practical for purposes of seeking the Shareholder Approval and to solicit proxies pursuant to the Proxy Statement in connection therewith. Blue may adjourn or postpone, and at the request of Green shall adjourn or postpone, the Shareholder Meeting (i) to the extent necessary to ensure that any supplement or amendment to the Proxy Statement that it determines in good faith is required by applicable Law to be disseminated to its shareholders, or (ii) if there are insufficient shares of Blue Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the Shareholder Meeting; provided, that any adjournment or postponement at the request of Green shall be for not more than fifteen (15) days in the aggregate. Blue shall, through the Blue Board, make the Board Recommendation to Blue’s shareholders and the Board Recommendation shall be set forth in the Proxy Statement, except, in each case, to the extent that the Blue Board shall have made an Adverse Recommendation Change as permitted by Section 6.1(d) or Section 6.1(e).

Section 6.4 Conduct of Green Business Pending Closing.

(a) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 6.4(a) of the Green Disclosure Schedule, or (iii) as approved by Blue (which approval will not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX and the Effective Time, Green shall, and shall cause each of its Subsidiaries to, and Green shall exercise (and shall cause its Subsidiaries to exercise) any available rights with respect to any of its Joint Venture to cause each such Joint Venture to, (A) carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, and (B) use its commercially reasonable efforts, consistent with past practice, to keep available the services of its current officers, key employees and consultants, and preserve its current relationships with customers, suppliers and other Persons with whom it has significant business relations as is reasonably necessary to preserve substantially intact its business organization.

(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 6.4(b) of the Green Disclosure Schedule, or (iii) as approved in writing by Blue (which approval will not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX and the Effective Time, Green shall not, and shall cause its Subsidiaries not to, do any of the following, and shall exercise (and shall cause its Subsidiaries to exercise) any available rights with respect to its Joint Ventures to cause each such Joint Ventures not to (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, such action shall be expressly permitted under this Section 6.4):

(i) amend its Charter Documents except to conform to Exhibit B;

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(ii) issue, sell, pledge, dispose of, grant, deliver, transfer, encumber, or agree, authorize, or commit to the issue, sale pledge, disposition of, grant, delivery, transfer, or encumbrance of, (in each case, whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), any Equity Securities;

(iii) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, directly or indirectly, any shares of its Equity Securities;

(iv) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any Equity Securities, or make any other actual, constructive or deemed distribution in respect of its Equity Securities, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of Green to Green or one of its wholly-owned Subsidiaries;

(v) enter into any agreement with respect to the voting of its capital stock;

(vi) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

(vii) (A) incur or assume any long-term or short-term debt for borrowed monies or issue any debt securities in excess of $200,000,000 in the aggregate; provided that any debt so incurred must be voluntarily pre-payable without material premium, penalties or any other material costs, except for (1) debt incurred in the ordinary course of business under letters of credit, lines of credit or other credit facilities or arrangements in effect on the date of this Agreement, (2) loans or advances between Green and any of its direct or indirect Subsidiaries, or between any of its direct or indirect Subsidiaries and (3) any refinancing of long-term or short-term debt of Green or any of its Subsidiaries existing as of the date of this Agreement, provided that if such refinancing is completed prior to maturity, it shall be (i) on substantially similar terms or terms that are more favorable to Green or such Subsidiaries and (ii) for the same or lesser principal amount, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person in excess of $40,000,000 in the aggregate, except with respect to obligations of direct or indirect Subsidiaries of Green, (C) make any loans, advances or capital contributions to or investments in any other Person (other than Green or any of its direct or indirect Subsidiaries), except for business expense advances in the ordinary course of business consistent with past practice to employees of Green or any of its Subsidiaries, or (D) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);

(viii) authorize or make capital expenditures which are, in the aggregate, greater than 125% of the aggregate amount of capital expenditures scheduled to be made in Green capital expenditure budget for the period indicated as set forth in Section 6.4(b)(viii) of the Green Disclosure Schedule for the items previously budgeted except for (A) capital expenditures (1) to repair damage resulting from insured casualty events or (2) to make emergency repairs or investments required to maintain the safety and reliability of its assets or the continuity of its service in accordance with good utility practices or (B) capital expenditures in response to weather conditions or other emergencies;

(ix) settle any pending or threatened legal proceeding if such settlement exceeds $10,000,000 individually or $60,000,000 in the aggregate, except that (A) the foregoing shall not restrict Green’s ability to enter into settlements (1) in the ordinary course of business consistent with past practice or (2) in respect of any regulatory proceedings (including appeals) that would not reasonably be expected to have a Green Material Adverse Effect and (B) any amount that is reflected or reserved against in the Green Financial Statements in respect of such legal proceeding, or that is offset by insurance proceeds received in respect of such legal proceeding, shall in each case not be counted towards the $10,000,000 or $60,000,000 limitations set forth above;

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(x) except as may be required as a result of a change in applicable Law or in GAAP, make any material change in any of the accounting principles, policies, procedures or practices used by it or any annual Tax accounting period;

(xi) except as may be required as a result of a change in applicable Law or in GAAP, other than in the ordinary course of business consistent with past practice, (A) make, revoke, change or rescind any material Tax election, (B) file or amend any income or other material Tax Return or claim for refund except to the extent otherwise required by Law, or (C) (1) enter into any closing agreement affecting any material Tax liability or refund or (2) settle or compromise any material Tax liability or refund;

(xii) take, or omit to take, any action that would prevent or impede, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

(xiii) other than in the ordinary course of business consistent with past practice, (A) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or assets thereof in excess of $20,000,000 individually or $60,000,000 in the aggregate, or (B) sell, transfer, lease, license or otherwise dispose of any of its properties or assets, which are material to the Green Parties, taken as a whole;

(xiv) other than in the ordinary course of business consistent with past practice, enter into any Contract for the lease or purchase of real property or modify the terms of any lease or sublease for Material Leased Real Property (each, a “Real Property Lease”) of Green or any of its Subsidiaries;

(xv) fail to use its commercially reasonable efforts to maintain, in full force without interruption, its present insurance policies or comparable insurance coverage;

(xvi) other than as required by any Governmental Authority or in the ordinary course of business consistent with past practice, enter into, amend or modify in any material respect any Green Material Contract;

(xvii) enter into, amend, extend, renew or modify any Contract or transaction to which Green or any of its Subsidiaries or Joint Ventures, on the one hand, and Green Parent or any of its Subsidiaries or Joint Ventures (other than Green or any of its Subsidiaries or Joint Ventures), on the other hand, are parties, on other than an arm’s length basis; or

(xviii) enter into a Contract, or otherwise resolve or agree in any legally binding manner, to take any of the actions prohibited by this Section 6.4(b).

(c) Prior to making any written or oral communications to the directors, officers or employees of Blue or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, Green shall provide Blue with a copy of the intended communication, Blue shall have a reasonable period of time to review and comment on the communication, and Green shall consider any such comments in good faith.

(d) Notwithstanding the foregoing, nothing in this Agreement is intended to give Blue, directly or indirectly, the right to control or direct the business or operations of any Green Party at any time prior to the Effective Time. Prior to the Effective Time, the Green Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their own businesses and operations.

Section 6.5 Conduct of Blue Business Pending Closing.

(a) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 6.5(a) of the Blue Disclosure Schedule, or (iii) as approved by Green (which approval will not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX and the Effective Time, Blue shall, and shall cause each of its Subsidiaries to, and Blue shall exercise (and shall cause its Subsidiaries to exercise) any available rights with respect to its Joint Ventures to cause each such Joint

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Venture to, (A) carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, and (B) use its commercially reasonable efforts, consistent with past practice, to keep available the services of its current officers, key employees and consultants, and preserve its current relationships with customers, suppliers and other Persons with whom it has significant business relations as is reasonably necessary to preserve substantially intact its business organization.

(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 6.5(b) of the Blue Disclosure Schedule, or (iii) as approved in writing by Green (which approval will not be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX and the Effective Time, Blue shall not, and shall cause its Subsidiaries not to, do any of the following and shall exercise (and shall cause its Subsidiaries to exercise) any available rights with respect to its Joint Ventures to cause each such Joint Venture not to (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, such action shall be expressly permitted under this Section 6.5):

(i) amend its Charter Documents;

(ii) issue, sell, pledge, dispose of, grant, deliver, transfer, encumber, or agree, authorize, or commit to the issue, sale pledge, disposition of, grant, delivery, transfer, or encumbrance of, (in each case, whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), any Equity Securities;

(iii) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, directly or indirectly, any shares of its Equity Securities;

(iv) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any Equity Securities, or make any other actual, constructive or deemed distribution in respect of its Equity Securities, except for (A) cash dividends made by any direct or indirect wholly-owned Subsidiary of Blue to Blue or one of its wholly-owned Subsidiaries and (B) regular quarterly dividends in the same amounts as the regular quarterly dividends paid in 2014 and with record dates and payment dates consistent with the record date and payment date for each quarterly period ended December 31, 2014;

(v) enter into any agreement with respect to the voting of its capital stock;

(vi) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

(vii) (A) incur or assume any long-term or short-term debt for borrowed monies or issue any debt securities in excess of $50,000,000 in the aggregate; provided that any debt so incurred must be voluntarily pre-payable without material premium, penalties or any other material costs, except for (1) debt incurred in the ordinary course of business under letters of credit, lines of credit or other credit facilities or arrangements in effect on the date of this Agreement, (2) loans or advances between Blue and any of its direct or indirect Subsidiaries, or between any of its direct or indirect Subsidiaries and (3) any refinancing of long-term or short-term debt of Blue or any of its Subsidiaries existing as of the date of this Agreement, provided that if such refinancing is completed prior to maturity, it shall be (i) on substantially similar terms or terms that are more favorable to Blue or such Subsidiaries, (ii) for the same or lesser principal amount and (iii) prepayable by Blue or such Subsidiaries without a premium or penalty amount greater than the premium or penalty associated with the debt that is being refinanced, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person in excess of $10,000,000 in the aggregate, except with respect to obligations of direct or indirect Subsidiaries of Blue, (C) make any loans, advances or capital contributions to or investments in any other Person (other than Blue or any of its direct or indirect Subsidiaries), except for business expense advances in the ordinary course of business consistent with past practice to employees of Blue or any of its Subsidiaries, or (D) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);

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(viii) authorize or make capital expenditures which are, in the aggregate, greater than 125% of the aggregate amount of capital expenditures scheduled to be made in Blue’s capital expenditure budget for the period indicated as set forth in Section 6.5(b)(viii) of the Blue Disclosure Schedule for the items previously budgeted except for (A) capital expenditures (1) to repair damage resulting from insured casualty events or (2) to make emergency repairs or investments required to maintain the safety and reliability of its assets or the continuity of its service in accordance with good utility practices or (B) capital expenditures in response to weather conditions or other emergencies;

(ix) (A) increase in any respect the compensation, bonus or fringe benefits of any director, officer or employee of Blue or any of its Subsidiaries, other than (1) as required by any collective bargaining agreement or Blue Employee Benefit Plan or applicable Law, (2) increases in salaries, wages and bonuses of any director, officer or employee made in the ordinary course of business consistent with past practice, and (3) changes made in the ordinary course of business consistent with past practice to group employee benefit plans that do not discriminate in favor of executive level employees, or (B) enter into, adopt, renew or amend any Blue Employee Benefit Plan (other than a renewal occurring in accordance with the terms thereof) providing for the payment to any director, officer or employee compensation or benefits contingent, or the terms of which are materially altered, upon or in connection with the Merger;

(x) other than as required by Law or any collective bargaining agreement or pursuant to any Blue Employee Benefit Plan in existence on the date hereof or entered into after the date hereof to the extent expressly permitted by the terms of this Agreement, (A) pay any benefit not provided for under any Blue Employee Benefit Plan, except for payments and benefits provided to non-executive level employees in the ordinary course of business consistent with past practice, (B) take any action to fund or in any other way secure the payment of compensation or benefits under any Blue Employee Benefit Plan, (C) except in the ordinary course of business consistent with past practice with respect to non-executive level employees, exercise any discretion to accelerate the vesting or payment of any compensation or benefit under any Blue Employee Benefit Plan, (D) enter into or adopt any new employee benefit plan or arrangement or amend, modify or terminate (except as may be required (i) to avoid the imposition of any tax or penalty under Section 409A of the Code or (ii) by applicable Tax qualification requirements) any existing Blue Employee Benefit Plan, except in the case of this clause (D) in the ordinary course of business consistent with past practice with respect to employee benefit plans that either do not apply to executive level employees or that are broad based group benefit plans that do not discriminate in favor of executive level employees, (E) enter into or amend collective bargaining agreements with existing collective bargaining representatives or newly certified bargaining units regarding mandatory subjects of bargaining under applicable Law, in each case in a manner inconsistent with past practice to the extent permitted by Law (F) grant the right to receive any severance, termination or retention pay, or increases therein, except for severance or termination pay that may be agreed to be provided in the ordinary course of business consistent with past practice to terminating employees who are not executive level employees in exchange for a release of claims or (G) pay any benefit or grant, amend or modify any award, including in respect of stock options or other equity-related award, in each case described in subclauses (A) through (G) above for the benefit of any current or former director, officer or employee of Blue or any of its Subsidiaries;

(xi) settle any pending or threatened legal proceeding if such settlement exceeds $2,500,000 individually or $15,000,000 in the aggregate, except that (A) the foregoing shall not restrict Blue’s ability to enter into settlements (1) in the ordinary course of business consistent with past practice or (2) in respect of any regulatory proceedings (including appeals) that would not reasonably be expected to have a Blue Material Adverse Effect and (B) any amount that is reflected or reserved against in the Blue Financial Statements in respect of such legal proceeding, or that is offset by insurance proceeds received in respect of such legal proceeding, shall in each case not be counted towards the $2,500,000 or $15,000,000 limitations set forth above;

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(xii) except as may be required as a result of a change in applicable Law or in GAAP, make any material change in any of the accounting principles, policies, procedures or practices used by it or any annual Tax accounting period;

(xiii) except as may be required as a result of a change in applicable Law or in GAAP, other than in the ordinary course of business consistent with past practice, (A) make, revoke, change or rescind any material Tax election, (B) file or amend any income or other material Tax Return or claim for refund except to the extent otherwise required by Law, or (C) (1) enter into any closing agreement affecting any material Tax liability or refund or (2) settle or compromise any material Tax liability or refund;

(xiv) take, or omit to take, any action that would prevent or impede, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

(xv) other than in the ordinary course of business consistent with past practice, (A) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or assets thereof in excess of $5,000,000 individually or $15,000,000 in the aggregate, or (B) sell, transfer, lease, license or otherwise dispose of any of its properties or assets, which are material to the Blue Parties, taken as a whole;

(xvi) other than in the ordinary course of business consistent with past practice, enter into any Contract for the lease or purchase of real property or modify the terms of any Real Property Lease of Blue or any of its Subsidiaries;

(xvii) fail to use its commercially reasonable efforts to maintain, in full force without interruption, its present insurance policies or comparable insurance coverage;

(xviii) other than (A) as required by any Governmental Authority, (B) Contracts implementing any requirement of Law or the outcome of any regulatory proceeding or (C) in the ordinary course of business consistent with past practice, enter into, amend or modify in any material respect any Blue Material Contract; or

(xix) enter into a Contract, or otherwise resolve or agree in any legally binding manner, to take any of the actions prohibited by this Section 6.5(b).

(c) Prior to making any written or oral communications to the directors, officers or employees of Blue or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, Blue shall provide Green with a copy of the intended communication, Green shall have a reasonable period of time to review and comment on the communication, and Blue shall consider any such comments in good faith.

(d) Notwithstanding the foregoing, nothing in this Agreement is intended to give Green, directly or indirectly, the right to control or direct the business or operations of the Blue Parties at any time prior to the Effective Time. Prior to the Effective Time, the Blue Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their own businesses and operations.

Section 6.6 Employee Benefits.

(a) Green agrees that each employee of Blue or its Subsidiaries at the Effective Time shall, as of the Effective Time, be an employee of Green or its Subsidiaries and each such employee who continues to remain employed with Green or its Subsidiaries (a “Continuing Employee”) shall, during the period commencing at the Effective Time and ending twelve (12) months after the Effective Time (and for so long as such Continuing Employee remains employed with Green or its Subsidiaries), be provided with (1) base salary or base wage that is no less favorable than the base salary or base wage provided by Blue and its Subsidiaries to each such Continuing Employee immediately prior to the Effective Time, (2) target annual cash bonus and long-term incentive opportunities that are no less favorable in the aggregate than the target annual cash bonus and long-term incentive opportunities provided by Blue and its Subsidiaries to each such Continuing Employee

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immediately prior to the Effective Time (it being understood that long-term incentive opportunities need not be provided in the form of equity or equity-based grants), (3) defined contribution retirement, pension and vacation and other welfare benefits that are no less favorable in the aggregate than those provided by Blue and its Subsidiaries to such Continuing Employees immediately prior to the Effective Time and (4) severance benefits that are no less favorable than the severance benefits provided by Blue and its Subsidiaries to such Continuing Employees immediately prior to the Effective Time, subject in each case to the execution by a severed employee of a standard release of claims; provided, however, that the requirements of clauses (1) through (4) of this sentence shall not apply to Continuing Employees who are covered by a collective bargaining agreement.

(b) Green shall, or shall cause the Surviving Corporation or another of Green’s Affiliates to, (1) cause any pre-existing conditions or limitations and eligibility waiting periods under any group health plans of Green or its Affiliates to be waived with respect to the Continuing Employees and their eligible dependents, (2) give each Continuing Employee credit for the plan year in which the Effective Time occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Effective Time for which payment has been made and (3) give each Continuing Employee service credit for such Continuing Employee’s employment with Blue and its Subsidiaries for purposes of vesting, benefit accrual and eligibility to participate under each applicable Green benefit plan that corresponds to or replaces a Blue Employee Benefit Plan in which such Continuing Employee participated prior to the Effective Time, as if such service had been performed with Green and its Subsidiaries, except for benefit accrual under defined benefit pension plans, for purposes of qualifying for subsidized early retirement benefits or to the extent it would result in a duplication of benefits.

(c) Green shall, or shall cause the Surviving Corporation or another of Green’s Affiliates to, honor all employee benefit obligations to current and former employees under the Blue Employee Benefit Plans, in each case subject to the terms and conditions of such plans as they may be amended, modified or terminated from time to time in accordance with their terms, provided, however, for the avoidance of doubt, that no such amendments, modifications or terminations shall reduce or otherwise impact Green’s obligations pursuant to Section 6.6(a) hereof.

(d) Nothing contained in this Agreement is intended to (1) be treated as an amendment of any particular Blue Employee Benefit Plan, (2) prevent Green, the Surviving Corporation or any of their Affiliates from amending or terminating any of their benefit plans in accordance with their terms, (3) prevent Green, the Surviving Corporation or any of their Affiliates, after the Effective Time, from terminating the employment of any Continuing Employee, or (4) create any third-party beneficiary rights in any employee of Blue or Green or any of their respective Subsidiaries, any beneficiary or dependent thereof, or any collective bargaining representative thereof, with respect to the compensation, terms and conditions of employment and/or benefits that may be provided to any employee of Blue and its Subsidiaries by Blue or any Continuing Employee by Green, the Surviving Corporation or any of their Affiliates or under any benefit plan which Green, the Surviving Corporation or any of their Affiliates may maintain.

Section 6.7 Notification. Between the date of this Agreement and the Closing, each of Green and Blue shall promptly notify the other Party if such Party becomes aware of any event, fact or circumstance that would make the satisfaction of the conditions in Article VIII impossible or unlikely. This Section 6.7 and any notification provided pursuant hereto shall not modify or limit in any way the Parties rights or remedies under Article IV, Article V, Article VIII or Article IX.

Section 6.8 Access. At all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX and the Effective Time, Blue shall afford Green and its financial advisors, business consultants, legal counsel, accountants and other agents and representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books and records and personnel of Blue and Green shall afford Blue and its financial advisors, business consultants, legal counsel, accountants and other agents and representatives reasonable access during normal business hours, upon reasonable notice, to the books and records and personnel of Green; provided, however, that the Party providing access may restrict or otherwise prohibit access to any documents or information

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to the extent that (i) any applicable Law requires such Party to restrict or otherwise prohibit access to such documents or information, (ii) access to such documents or information would give rise to a material risk of waiving any attorney-client privilege other privilege applicable to such documents or information (in which event the Parties shall negotiate in good faith to seek alternative means to disclose such information as nearly as possible without affecting such attorney-client or such other privilege, including entry into a joint defense agreement), or (iii) access to a Contract to which such Party or any of its Subsidiaries is a Party or otherwise bound would violate or cause a default under, or give a third party the right terminate or accelerate the rights under, such Contract; provided, further, that such access shall be under the supervision of the designated personnel or representatives of the Party providing access (provided that no such supervision shall restrict or limit the scope and extent of rights of a Party pursuant to this Section 6.8); provided, further, that, to the extent practicable, all requests for information made pursuant to this Section 6.8 shall be directed to such Person or Persons as may be designated by the Party providing access, and the Party seeking access shall use its commercially reasonable efforts not to directly contact any other officer, director, employee, agent or representative of the Party providing access without the prior approval of such designated Person(s); and provided further, that no information or knowledge obtained by the Party requesting access in any investigation conducted pursuant to the access contemplated by this Section 6.8 shall affect or be deemed to modify any representation or warranty of the Party providing access set forth in this Agreement or otherwise impair the rights and remedies available to the Party requesting access hereunder. In the event that a Party does not provide access or information in reliance on the preceding sentence, it shall use its reasonable best efforts to communicate the applicable information to the Party requesting access in a way that would not violate the applicable Law or Contract or to waive such a privilege. Any investigation conducted pursuant to the access contemplated by this Section 6.8 shall be conducted in a manner that does not unreasonably interfere with the conduct of the business of the Party providing access or any of its Subsidiaries or create a risk of damage or destruction to any property or assets of such Party or any of its Subsidiaries. Any access to the properties of the Party providing access or any of its Subsidiaries shall be subject to such Party’s reasonable security measures and insurance requirements and shall not include the right to perform invasive testing without the such Party’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed). The terms and conditions of the Confidentiality Agreement shall apply to any information obtained by any Party or any of its financial advisors, business consultants, legal counsel, accountants and other agents and representatives in connection with any investigation conducted pursuant to the access contemplated by this Section 6.8. The Party providing access shall reimburse the Party seeking access promptly for any reasonable out-of-pocket expenses incurred by the Party seeking access in complying with any request by or on behalf of the Party seeking access in connection with this Section 6.8.

Section 6.9 Regulatory Approvals; Reasonable Best Efforts.

(a) Regulatory Approvals. Each Party shall cooperate and promptly prepare and file all necessary documentation to effect all necessary applications, notices, petitions and filings, and shall use reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things in order to, (i) obtain all approvals and authorizations of all Governmental Authorities necessary or advisable to consummate and make effective, in the most expeditious manner reasonably practicable, the Merger and the other Transactions, including the Blue Required Statutory Approvals and the Green Required Statutory Approvals, (ii) make all registrations and filings, and thereafter, make any other required registrations, filings or submissions, and pay any fees due in connection therewith, with any Governmental Authority necessary in connection with the consummation of the transactions contemplated by this Agreement, (iii) defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated by this Agreement, (iv) seek to have lifted or rescinded any injunction or restraining order which may adversely affect the ability of the Parties to consummate the transactions contemplated hereby, in each case until the issuance of a final, non-appealable order with respect thereto, and (v) execute and deliver any additional agreements or instruments reasonably necessary to consummate the transactions contemplated by this Agreement.

(b) Reasonable Best Efforts. In furtherance of the obligations set forth in Section 6.9(a), each of Green and Blue agrees that it will use its reasonable best efforts to take (and to cause its Subsidiaries and Affiliates to take) promptly any and all steps reasonably necessary, proper or advisable to obtain all approvals and

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authorizations of all Governmental Authorities necessary or advisable to consummate and make effective the Merger and the other Transactions, including the Blue Required Statutory Approvals and Green Required Statutory Approvals so as to enable the Parties to close the Transactions as promptly as reasonably practicable, including, if necessary, by proposing, negotiating, committing to and implementing, by way of operational restriction, consent decree, hold separate order, divestiture, undertaking or otherwise, all terms, conditions, liabilities, obligations, commitments, sanctions or undertakings in respect of Blue, Green and their respective Affiliates; provided that neither Blue nor any of its Subsidiaries shall agree to, or accept, any additional or different undertakings, agreements, commitments or conditions in connection with the Transactions pursuant to any settlement, negotiation, litigated proceeding or otherwise with any Person with respect to obtaining the Blue Required Statutory Approvals and/or the Green Required Statutory Approvals or any other approvals or authorizations described in the foregoing sentence without the prior written consent of Green. Without limiting the generality of the preceding sentences and subject thereto, Green and Blue shall file as promptly as practicable a joint voluntary notice in respect of the transactions contemplated hereby under Exon-Florio. Notwithstanding the obligations set forth in Section 6.9(a) and this Section 6.9(b): (1) Green and Blue shall not be required, in connection with obtaining any Blue Required Statutory Approvals or Green Required Statutory Approvals, to agree or consent to or accept any terms, conditions, liabilities, obligations, commitments, sanctions or undertakings as a condition to obtaining the Blue Required Statutory Approvals and the Green Required Statutory Approvals that, individually or in the aggregate, and taking into account any positive effects, would have, or be reasonably likely to have, a material and adverse effect on the business, assets, liabilities, properties, condition (financial or otherwise) or results of operations of a business that is 150% the size of, but otherwise identical to, Blue and its Subsidiaries, taken as a whole (a “Burdensome Effect”). Nothing in Section 6.9(a) or this Section 6.9(b) shall obligate Green or Blue or any of their respective Subsidiaries to take any action or agree to any commitment that is not conditioned on the Closing.

(c) Notwithstanding anything to the contrary in this Agreement, no Party, directly or indirectly through one or more of its Affiliates, shall take any action, including acquiring or making any investment in any person or any division or assets thereof, that would reasonably be expected to prevent, materially impair or materially delay the ability of the Parties to consummate the Merger and the other Transactions. Any act or omission by an Affiliate of Green or Blue that would be a violation of this Section 6.9(c) if taken by Green or Blue shall be a breach of this Section 6.9(c) by Green or Blue, respectively.

(d) Unless prohibited by applicable Law or by the applicable Governmental Authority, (i) to the extent reasonably practicable, neither Green nor Blue shall participate in or attend any meeting, or engage in any substantive discussion with any Governmental Authority (including any member of any Governmental Authority’s staff) in respect of this Agreement, the Merger or the other Transactions (including with respect to any of the actions referred to in Section 6.9(a) or, Section 6.9(b)) without providing prior notice of any such meeting or discussion to the other, (ii) in the event a Party is prohibited by applicable Law or by the applicable Governmental Authority from participating in or attending any such meeting or engaging in any such discussion, the other Party shall keep such Party reasonably and promptly apprised with respect thereto, (iii) the Parties shall cooperate in the filing of any substantive memoranda, white papers, filings, correspondence or other written communications explaining or defending this Agreement, the Merger or the other Transactions, articulating any regulatory or competitive argument or responding to requests or objections made by any Governmental Authority, and (iv) to the extent reasonably practicable, each Party shall provide the other Party copies of all correspondence, filings and communications between it and its Subsidiaries and Affiliates and their respective representatives, on the one hand, and any Governmental Authority (including any member of any Governmental Authority’s staff), on the other hand, with respect to this Agreement, the Merger or the other Transactions; provided that neither Party shall not be under an obligation to disclose confidential information with respect to its Affiliates to the other Party.

Section 6.10 State Anti-Takeover Statutes. Without limiting anything contain in this Agreement, each of Blue and Green shall (i) take all action within its power to ensure that no state anti-takeover statute or similar statute or regulation is or becomes applicable to this Agreement, the Merger or any of the other Transactions, and (ii) if any state anti-takeover statute or similar statute or regulation becomes applicable to this

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Agreement, the Merger or any of the other Transactions, take all action within its power to ensure that the Merger and the other Transactions may be consummated as promptly as reasonably practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation on the Merger and the other Transactions.

Section 6.11 Public Announcements. The mutual announcement of the Agreement and the Transactions shall be as agreed by Blue and Green and substantially in the form attached as Exhibit A to this Agreement. Green and Blue will consult with each other before issuing, and will provide each other reasonable opportunity to review, comment upon and concur with, any other press release or otherwise making any public statements with respect to this Agreement or the Transactions, and shall not issue any such press release or make any such written public statement prior obtaining the other Party’s written approval (which approval shall not be unreasonably withheld, conditioned or delayed), except (a) as the Parties or their respective Affiliates may be required, at the advice of counsel, to do by applicable Law, court order or by obligations pursuant to any listing agreement with any national securities exchange (in which case such party will, to the extent practicable, promptly inform the other Parties in writing in advance of such compelled disclosure), (b) with respect to any Adverse Recommendation Change, and (c) as is consistent with previous press releases, public disclosures or public statements made jointly by the Parties or otherwise in a manner consistent with this Section 6.11; provided, that, in each such case, to the extent practicable, the Party intending to make such release shall use its reasonable best efforts consistent with applicable Law to consult with the other Party in advance of such release with respect to the text thereof.

Section 6.12 Listing Application. Green shall prepare and submit to the NYSE a listing application covering the Green Common Stock to be issued pursuant to this Agreement. Each of Green and Blue shall furnish all information concerning itself as may reasonably be required in connection with such actions and the preparation of the listing application; provided, that neither Party shall use any such information for any other purpose without the prior written consent of the other Party or if doing so would violate or cause a violation of United States other applicable securities Laws. Green shall use its reasonable best efforts to cause the Green Common Stock to be issued pursuant to this Agreement to be approved for listing on the NYSE, subject to official notice of issuance, prior to the Effective Time.

Section 6.13 Directors and Officers.

(a) From and after the Effective Time, each of Green and the Surviving Corporation agrees that all rights to indemnification and exculpation now existing in favor of any current or former director or officer, or individuals performing equivalent functions, of Blue or any of its Subsidiaries with respect to their activities as such prior to the Closing Date, as provided in Blue’s Charter Documents in effect on the date of this Agreement and under Connecticut law, shall survive the Closing and each of Green and the Surviving Corporation agrees that it will indemnify and hold harmless each present and former director and officer of Blue or any of its Subsidiaries (in each case, when acting in such capacity), determined as of the Effective Time (the “Indemnified Parties”), against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent that Blue would have been permitted under the Laws of the State of Connecticut and its certificate of incorporation or by-laws in effect on the date of this Agreement to indemnify such Person (and Green or the Surviving Corporation shall also advance expenses as incurred to the fullest extent permitted under applicable Law; provided that the Person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Person is not entitled to indemnification); and provided, further, that any determination required to be made with respect to whether an officer’s or director’s conduct complies with the standards set forth under the Laws of the State of Connecticut and Blue’s certificate of incorporation and by-laws shall be made by independent counsel selected by the Surviving Corporation.

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(b) Prior to the Effective Time, Blue shall and, if Blue is unable to, Green shall cause the Surviving Corporation as of the Effective Time to obtain and fully pay for “tail” insurance policies with a claims period of at least six years from and after the Effective Time from an insurance carrier with the same or better credit rating as Blue’s current insurance carrier with respect to directors’ and officers’ liability insurance and fiduciary liability insurance (collectively, “D&O Insurance”) with benefits and levels of coverage at least as favorable as Blue’s policies existing on the date of this Agreement with respect to matters existing or occurring at or prior to the Effective Time (including in connection with this Agreement or the Transactions); provided, however, that in no event shall Blue or Green expend for such policies a premium amount in excess of 250% of the annual premiums currently paid by Blue for such insurance. If Blue and the Surviving Corporation for any reason fail to obtain such “tail” insurance policies as of the Effective Time, the Surviving Corporation shall, and Green shall cause the Surviving Corporation to, maintain in effect for a period of not less than six (6) years from and after the Effective Time the D&O Insurance in place as of the date of this Agreement with benefits and levels of coverage at least as favorable as provided in Blue’s policies existing as of the date of this Agreement, or the Surviving Corporation shall, and Green shall cause the Surviving Corporation to, use reasonable best efforts to purchase comparable D&O Insurance for such six (6)-year period with benefits and levels of coverage at least as favorable as provided in Blue’s policies existing as of the date of this Agreement; provided, however, that in no event shall Green or the Surviving Corporation be required to expend for such policies an annual premium amount in excess of 250% of the annual premiums currently paid by Blue for such insurance; and, provided further that if the annual premiums of such insurance coverage exceed such amount, the Surviving Corporation shall obtain a policy with the greatest coverage available for a cost not exceeding such amount.

(c) If Green or the Surviving Corporation or any of their respective successors or assigns (i) shall consolidate with or merge into any other corporation or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of its properties and assets to any individual, corporation or other entity, then, and in each such case, proper provisions shall be made so that the successors and assigns of Green or the Surviving Corporation shall assume all of the obligations set forth in this Section 6.13.

(d) The provisions of this Section 6.13 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his or her heirs, executors or administrators.

(e) The rights of the Indemnified Parties under this Section 6.13 shall be in addition to any rights such Indemnified Parties may have under the certificate of incorporation or by-laws of Blue or any of its Subsidiaries, or under any applicable Contracts or Laws.

Section 6.14 Further Assistance.

(a) From and after the date of this Agreement until the Closing, subject to the conditions and limitations and upon the terms of this Agreement, each Party shall use reasonable best efforts (subject to, and in accordance with, applicable Law) to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable Law to carry out the intent and purposes of this Agreement, to fulfill and satisfy each condition within the control of such Party and to consummate and make effective the Transactions. Without limiting the generality of the foregoing, subject to the conditions and limitations and upon the terms of this Agreement, each Party shall reasonably cooperate with the other Parties, shall execute and deliver such further documents, certificates, agreements and instruments and shall take such other actions as may be reasonably requested by the other Parties to evidence or reflect the transactions contemplated by this Agreement (including the execution and delivery of all documents, certificates, agreements and instruments reasonably necessary for all filings hereunder).

(b) As promptly as practicable after the date of this Agreement, Green and Blue shall establish a transition committee (the “Transition Committee”) consisting of two (2) representatives designated by each of Green and Blue. The activities of the Transition Committee shall include the development of regulatory plans and proposals, the facilitation of the transfer of information between the parties and other matters as the

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Transition Committee deems appropriate. At all times after the date of this Agreement until the Effective Time (or the earlier termination of this Agreement as provided in Article IX), there shall be two (2) representatives of Green on the Transition Committee that shall be designated by Green as the primary contact person for Blue at Green (the “Green Contact”) and two (2) representatives of Blue on the Transition Committee that shall be designated by Blue as the primary contact person for Green at Blue (the “Blue Contact”). In the event that either Green or Blue elects to request that the other consent to any action or matter involving such Party or any of its Subsidiaries or Joint Ventures as is contemplated by Section 6.4 or Section 6.5, as applicable, the Parties shall make all such requests to the Green Contacts or the Blue Contacts, as applicable, and each Party agrees that it will use its reasonable best efforts to cause its respective contact to respond as promptly as practicable to any such request, taking into account the nature of the request, the circumstances under which the request is made and the timing indicated in the request. The Green Contacts shall initially be Ignacio Estella and Juan Romero (and may be changed by Green from time to time by written notice from Green to Blue) and the Blue Contacts shall initially be Richard Nicholas and Linda Randell (and may be changed by Blue from time to time by written notice from Blue to Green).

Section 6.15 Transaction Litigation. In the event that any shareholder litigation related to this Agreement, the Merger or the other Transactions is brought, or to Blue’s Knowledge, threatened, against Blue and/or the members of the Blue Board after the date of this Agreement and prior to the Effective Time (the “Transaction Litigation”), Blue shall promptly notify Green of any such Transaction Litigation and shall give Green the opportunity to participate in the defense or settlement thereof. Blue shall not settle any Transaction Litigation without Green’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), except if such Transaction Litigation is settled solely for monetary damages entirely paid for with proceeds of insurance (other than the deductible under any insurance policy(ies) in effect as of the date of this Agreement).

Section 6.16 Confidentiality Agreement. The Confidentiality Agreement shall continue and remain in full force and effect until the Closing, upon which such agreement shall expire. In the event that this Agreement is terminated pursuant to the terms hereof prior to the Closing, (a) the restrictions provided for in Section 6 of the Confidentiality Agreement shall remain in effect until November 19, 2016, and (b) the other obligations and provisions of the Confidentiality Agreement shall remain in effect for two (2) years from the date of such termination.

Section 6.17 Agreements Concerning Green and Merger Sub.

(a) During the period from the date of this Agreement through the Effective Time, Merger Sub shall not engage in any activity or assume any liability of any nature except for activities or liabilities related to or in furtherance of this Agreement or the Transactions.

(b) Green hereby guarantees the due, prompt and faithful payment, performance and discharge by Merger Sub of, and the compliance by Merger Sub with, all of the covenants, agreements, obligations and undertakings of Merger Sub under this Agreement in accordance with the terms of this Agreement, and covenants and agrees to take all actions necessary or advisable within its power to ensure such performance and discharge by Merger Sub hereunder. Green shall, immediately following execution of this Agreement, approve this Agreement in its capacity as sole stockholder of Merger Sub in accordance with applicable Law and the articles of incorporation and bylaws of Merger Sub.

(c) Prior to the Closing Green shall issue additional shares of Green Common Stock to Green Parent, such that immediately after the Closing, after giving effect to the Merger and the other Transactions, Green Parent shall own an aggregate number of shares of Green Common Stock equal to 81.50% of all issued and outstanding shares of Green Common Stock.

(d) Prior to the Closing, Green shall amend its Charter Documents so that from and after the Closing they conform with Exhibit B.

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(e) Prior to the Closing, Green shall enter into a shared services agreement with Green Parent or one or more of its Affiliates regarding the provision of various corporate and other shared services to Green and its Subsidiaries on arm’s length basis and on financial and other material terms no less favorable to Green than applicable agreements or arrangements in respect of such corporate or other shared services existing as of the date of this Agreement and at costs no greater than those incurred and reflected in the Green Financial Statements, as applicable (the “Shared Services Agreement”), it being understood and agreed, for the avoidance of doubt, that such costs are subject to ordinary course, market adjustments made on an arm’s length basis. Prior to entering into such Shared Services Agreement, Green shall obtain the approval of a committee comprised solely of its independent directors for such services agreement and Green and such committee shall consult with Blue regarding the scope, nature and terms of the services to be provided thereunder.

(f) Prior to the Closing, Blue and Green shall negotiate in good faith and Green will enter into a stockholder agreement with Green Parent containing the terms set forth on Exhibit C hereto and such other terms as agreed by Blue, Green and Green Parent not inconsistent with those set forth on Exhibit C hereto.

Section 6.18 Section 16 Matters. The Blue Board and the board of directors of Green shall, prior to the Effective Time, each adopt resolutions consistent with the interpretive guidelines of the SEC pursuant to Rule 16b-3(d) and Rule 16b-3(e) under the Exchange Act to exempt for the purposes of Section 16 of the Exchange Act (i) the conversion of Blue Common Stock into Green Common Stock, (ii) the conversion of Blue Stock Awards set forth in Section 2.4 and (iii) the acquisition of Green Common Stock pursuant to the terms of this Agreement by officers and directors of Blue subject to the reporting requirements of Section 16(a) of the Exchange Act or by employees of Blue who may become an officer or director of Green subject to the reporting requirements of Section 16(a) of the Exchange Act. Each of Green and Blue shall provide to counsel for the other Party for its review copies of such resolutions to be adopted by its board of directors prior to such adoption and each Party shall provide the other Party with such information as shall be reasonably necessary for the board of directors of such Party to set forth the information required in the resolutions of such board of directors.

Section 6.19 Governance; Charitable and Community Support.

(a) Green shall offer, and take actions necessary to cause, Blue’s current Chief Executive Officer and at least two of Blue’s directors immediately prior to the Effective Time to serve on the board of Green as of the Effective Time and Blue’s current Chief Executive Officer to be elected the Chief Executive Officer of Green as of the Effective Time.

(b) During the four (4)-year period immediately following the Effective Time, Green shall provide, directly or indirectly, charitable contributions and traditional local community support within the service areas of Blue and each of its Subsidiaries that are utilities at levels substantially comparable to and no less than the levels of charitable contributions and community support provided by Blue and such Subsidiaries within their service areas within the four (4)-year period immediately prior to the date of this Agreement.

Section 6.20 Dividends. After the date of this Agreement, if Blue has not yet declared a record date in the fiscal quarter of the Closing in respect of a dividend with respect to shares of Blue Common Stock, Green shall declare the record date in respect of such dividend for shares of Green Common Stock in such quarter at the same time that Blue has historically declared such dividend for such applicable quarter.

ARTICLE VII

ADDITIONAL AGREEMENTS

Section 7.1 Nonsurvival. The representations, warranties, covenants and agreements of the Parties contained in this Agreement shall not survive beyond the Effective Time and there shall be no liability in respect thereof, whether such liability has accrued prior to or after the Effective Time, on the part of any Party, its Affiliates or any of their respective partners, members, officers, directors, agents or Representatives, except for those covenants and agreements that by their terms apply or are to be performed in whole or in part after the Effective Time.

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Section 7.2 No Other Representations. EACH PARTY SPECIFICALLY ACKNOWLEDGES AND AGREES THAT EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE IV OR ARTICLE V (AS MODIFIED BY THE BLUE DISCLOSURE SCHEDULE OR THE GREEN DISCLOSURE SCHEDULE, AS APPLICABLE), NONE OF THE PARTIES OR ANY OTHER PERSON MAKES, OR HAS MADE, ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO BLUE, GREEN OR THEIR RESPECTIVE SUBSIDIARIES OR THE TRANSACTIONS. EACH PARTY HEREBY DISCLAIMS, AND SPECIFICALLY ACKNOWLEDGES AND AGREES TO THE DISCLAIMER OF, ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY A PARTY OR ANY OF ITS AFFILIATES, OR ANY OF ITS OR THEIR RESPECTIVE STOCKHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES, AND OF ALL LIABILITY AND RESPONSIBILITY FOR ANY SUCH OTHER REPRESENTATION, WARRANTY, PROJECTION, FORECAST, STATEMENT, OR INFORMATION MADE, COMMUNICATED, OR FURNISHED (ORALLY OR IN WRITING) TO ANY PARTY OR ITS AFFILIATES OR REPRESENTATIVES (INCLUDING ANY OPINION, INFORMATION, PROJECTION, OR ADVICE THAT MAY HAVE BEEN OR MAY BE PROVIDED TO ANY OF THEM). EACH PARTY ACKNOWLEDGES THAT IT HAS CONDUCTED TO ITS SATISFACTION ITS OWN INDEPENDENT INVESTIGATION AND, IN MAKING ITS DETERMINATION TO PROCEED WITH THE TRANSACTIONS, EACH OF THE PARTIES HAS RELIED ON THE RESULTS OF ITS OWN INDEPENDENT INVESTIGATION. IN FURTHERANCE OF THE FOREGOING, AND NOT IN LIMITATION THEREOF, EACH OF THE PARTIES SPECIFICALLY ACKNOWLEDGES AND AGREES THAT NO PARTY MAKES, NOR HAS MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO ANY FINANCIAL PROJECTION OR FORECAST DELIVERED TO THE OTHER PARTY OR ITS AFFILIATES OR REPRESENTATIVES. EACH PARTY HEREBY WAIVES, ON BEHALF OF ITSELF AND ITS AFFILIATES, FROM AND AFTER THE CLOSING, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION IT MAY HAVE AGAINST THE OTHER, ITS STOCKHOLDERS, AFFILIATES OR ANY OFFICER, DIRECTOR, MANAGER, MEMBER, EMPLOYEE, AGENT, CONSULTANT OR REPRESENTATIVE OF ANY OF THE FOREGOING AND AGREES NO RECOURSE SHALL BE SOUGHT OR GRANTED AGAINST ANY OF THEM, RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT (INCLUDING THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED HEREIN, AND ANY CERTIFICATE, INSTRUMENT, OPINION OR OTHER DOCUMENTS DELIVERED HEREUNDER) AND THE TRANSACTIONS, WHETHER ARISING UNDER OR BASED UPON ANY FEDERAL, STATE, LOCAL OR FOREIGN LAW OR OTHERWISE (INCLUDING ANY RIGHT, WHETHER ARISING AT LAW OR IN EQUITY, TO SEEK INDEMNIFICATION, CONTRIBUTION, COST RECOVERY, DAMAGES, OR ANY OTHER RECOURSE OR REMEDY, INCLUDING AS MAY ARISE UNDER COMMON LAW).

ARTICLE VIII

CONDITIONS TO CLOSING

Section 8.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligation of each Party to effect the Merger is subject to the satisfaction or waiver by Blue and Green at or prior to the Closing of the following conditions:

(a) Shareholder Approval. The Shareholder Approval shall have been obtained.

(b) No Injunctions or Restraints. No (i) temporary restraining order or preliminary or permanent injunction or other order by any Governmental Authority of competent jurisdiction preventing consummation of the Merger, or (ii) applicable Law prohibiting, materially restraining or making illegal the consummation of the Merger (collectively, “Restraints”) shall be in effect.

(c) Statutory Approvals. The Blue Required Statutory Approvals identified in clauses (A), (F), (G) and (H) of the definition thereof and the Green Required Statutory Approvals identified in clauses (A), (F), (G) and (H) of the definition thereof shall have been obtained (including, in each case, the expiration or termination of the

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waiting periods (and any extensions thereof) under the HSR Act applicable to the Merger and the Transactions) at or prior to the Effective Time, and such approvals shall have become Final Orders.

(d) Exon-Florio. Review by CFIUS shall have been concluded, and the President of the United States of America shall not have taken action to block or prevent the consummation of the Transactions and no requirements or conditions to mitigate any national security concerns shall have been imposed.

(e) Effectiveness of Form S-4; Listing of Green Common Stock on the NYSE.

(i) The Form S-4 filed with the SEC by Green in connection with the offer of the Green Common Stock to be delivered as consideration pursuant to the Merger shall have become effective under the Securities Act, and no stop order with respect thereto shall be in effect; and

(ii) The Green Common Stock shall have been authorized for listing on the NYSE, subject to official notice of issuance.

Section 8.2 Conditions to Obligations of Green and Merger Sub. The obligation of Green and Merger Sub to effect the Merger is further subject to satisfaction (or waiver, in whole or in part, by Green and Merger Sub) of the following conditions:

(a) Representations and Warranties.

(i) Each of the representations and warranties of Blue set forth in this Agreement (other than the representations and warranties contained in Section 4.1, Section 5.1(a) through Section 5.1(c), Section 5.1(f) and Section 5.2, provided that, with respect to Section 5.1(b), Section 5.1(c) and Section 5.1(f), this parenthetical shall apply solely to the extent such representations and warranties relate to Blue and not any of its Subsidiaries) shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing (except that, in each case, representations and warranties that speak as of a specified date shall have been true and correct only on such date) except for such failures to be true and correct (when taken together and disregarding all qualifications and exceptions contained therein as to “materiality”, “Material Adverse Effect” or “Blue Material Adverse Effect”) that has not had, individually or in the aggregate, a Blue Material Adverse Effect.

(ii) The representations and warranties of Blue contained in Section 4.1, Section 5.1(a) through Section 5.1(c), Section 5.1(f) and Section 5.2 (provided that, with respect to Section 5.1(b), Section 5.1(c) and Section 5.1(f), this Section 8.2(a)(ii) shall apply solely to the extent such representations and warranties relate to Blue and not any of its Subsidiaries) shall be true and correct in all respects (except de minimis errors) as of the date of this Agreement and as of the Closing (except that, in each case, representations and warranties that speak as of a specified date shall have been true and correct only on such date), except such representations and warranties that are qualified by materiality, which shall be true and correct as written.

(b) Performance of Obligations of Blue. Blue shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing.

(c) No Blue Material Adverse Effect. There shall not have occurred after the date of this Agreement a Blue Material Adverse Effect.

(d) Closing Certificates. Green shall have received a certificate signed by an executive officer of Blue, dated the Closing Date, to the effect that the conditions set forth in Section 8.2(a), Section 8.2(b) and Section 8.2(c) have been satisfied.

(e) Burdensome Effect. The Final Orders granting the Blue Required Statutory Approvals identified in clauses (A), (F), (G) and (H) of the definition thereof and the Green Required Statutory Approvals identified in clauses (A), (F), (G) and (H) in the definition thereof shall not impose terms or conditions that, individually or in the aggregate, could reasonably be expected to have a Burdensome Effect.

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(f) Tax Opinion. Green shall have received an opinion of Latham & Watkins LLP, dated the Closing Date and based on facts, representations and assumptions described in such opinion, to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, Latham & Watkins LLP will be entitled to receive and rely upon customary certificates and representations of officers of Green and Blue.

Section 8.3 Conditions to Obligations of Blue. The obligation Blue to effect the Merger is further subject to satisfaction or waiver by Blue of the following conditions:

(a) Representations and Warranties.

(i) Each of the representations and warranties of Green set forth in this Agreement (other than the representations and warranties contained in Section 4.1, Section 5.8 and Section 5.9 shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing (except that, in each case, representations and warranties that speak as of a specified date shall have been true and correct only on such date) except for such failures to be true and correct (when taken together and disregarding all qualifications and exceptions contained therein as to “materiality”, “Material Adverse Effect” or “Green Material Adverse Effect”) that has not had, individually or in the aggregate, a Green Material Adverse Effect.

(ii) The representations and warranties of Green contained in Section 4.1, Section 5.8 and Section 5.9 shall be true and correct in all respects (except de minimis errors) as of the date of this Agreement and as of the Closing (except that, in each case, representations and warranties that speak as of a specified date shall have been true and correct only on such date), except such representations and warranties that are qualified by materiality, which shall be true and correct as written.

(b) Performance of Obligations of Green and Merger Sub. Each of Green and Merger Sub shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing.

(c) No Green Material Adverse Effect. There shall not have occurred after the date of this Agreement a Green Material Adverse Effect.

(d) Closing Certificates. Blue shall have received a certificate signed by an executive officer of Green, dated the Closing Date, to the effect that the conditions set forth in Section 8.3(a), and Section 8.3(b) and Section 8.3(c) have been satisfied.

(e) Burdensome Effect. The Final Orders granting the Blue Required Statutory Approvals identified in clauses (A), (F), (G) and (H) of the definition thereof and the Green Required Statutory Approvals identified in clauses (A), (F), (G) and (H) in the definition thereof shall not impose terms or conditions that, individually or in the aggregate, could reasonably be expected to have a Burdensome Effect.

(f) Tax Opinion. Blue shall have received an opinion of Sullivan & Cromwell LLP, dated the Closing Date and based on facts, representations and assumptions described in such opinion, to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, Sullivan & Cromwell LLP will be entitled to receive and rely upon customary certificates and representations of officers of Blue and Green.

ARTICLE IX

TERMINATION

Section 9.1 Termination. Notwithstanding any other provision of this Agreement, and notwithstanding the Shareholder Approval, this Agreement may be terminated and the Merger and the other Transactions abandoned at any time prior to the Effective Time:

(a) by mutual written agreement of Green and Blue;

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(b) by either Green or Blue in the event (i) any Governmental Authority has denied either a Blue Required Statutory Approval or Green Required Statutory Approval and such denial has become final and nonappealable; provided that the Party seeking to terminate this Agreement pursuant to this Section 9.1(b)(i) shall have used its reasonable best efforts to contest, appeal and change such denial, or (ii) any Law or Final Order permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger shall no longer be subject to rehearings or appeals; provided that the Party seeking to terminate this Agreement pursuant to this Section 9.1(b)(ii) shall have used its reasonable best efforts to contest, appeal and remove such Law or Final Order;

(c) by either Green or Blue in the event that the Merger shall not have been consummated by December 31, 2015 (the “Outside Date”), if the failure to consummate the Transactions on or before the Outside Date is not caused by any breach of this Agreement by the Party electing to terminate this Agreement pursuant to this Section 9.1(c); provided, that the Outside Date may be extended at the election of either Green or Blue by up to two (2) successive three (3)-month periods if (i) the conditions to the Closing set forth in Section 8.1(c) or Section 8.1(d) have not been satisfied, and (ii) all other conditions to the Closing set forth in Article VIII have been satisfied or are capable of being satisfied at the Closing; and provided further that the party seeking to terminate this Agreement pursuant to this Section 9.1(c) is not then in breach, in any material respect, of any of its material covenants or agreements contained in this Agreement.

(d) by Green in the event that the Blue Board has (i) failed (A) to make the Board Recommendation, (B) to include the Board Recommendation in the Proxy Statement, or (C) to publicly reaffirm the Board Recommendation within five (5) Business Days of receipt of a written request from Green during the period following the receipt by Blue of a bona fide Acquisition Proposal that has not been withdrawn and prior to the date on which Shareholder Approval is received (provided, that Green shall be entitled to make such a written request for reaffirmation only once with respect to each such Acquisition Proposal or material amendment thereto) or (ii) effected an Adverse Recommendation Change, whether or not permitted by the terms hereof;

(e) by Blue in the event that there shall have been a breach of any of the covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of Green or Merger Sub, which breach, either individually or in the aggregate, would result in, if occurring or continuing on the Closing Date, the failure of the conditions set forth in Section 8.1 or Section 8.3, and which is not cured within forty five (45) days following written notice to Green or by its nature or timing cannot be cured within such time period (provided that Blue is not then in breach, in any material respect, of any of its material covenants or agreements contained in this Agreement);

(f) by Green in the event that there shall have been a breach of any of the covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of Blue, which breach, either individually or in the aggregate, would result in, if occurring or continuing on the Closing Date, the failure of the conditions set forth in Section 8.1 or Section 8.2, and which is not cured within forty five (45) days following written notice to Blue or by its nature or timing cannot be cured within such time period (provided that none of Green or Merger Sub is then in breach, in any material respect, of any of their respective material covenants or agreements contained in this Agreement);

(g) by either Green or Blue in the event that the Shareholder Approval is not obtained at the Shareholder Meeting where such matter was presented to such shareholders for approval and properly voted upon; or

(h) by Blue prior to obtaining the Shareholder Approval if Blue effects an Adverse Recommendation Change to accept an Acquisition Proposal in accordance with Section 6.1(d); provided, that Blue shall pay the Termination Fee pursuant to Section 10.1(d)(i) concurrently with such termination.

The Party desiring to terminate this Agreement pursuant to this Section 9.1 shall give written notice of such termination to the other Party, specifying the provision or provisions hereof pursuant to which such termination is effected.

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Section 9.2 Effect of Termination. In the event of the termination and abandonment of this Agreement pursuant to Section 9.1, this Agreement shall become void and have no effect, except that (a) the provisions of Article X, this Section 9.2 and Article XI shall survive any such termination and abandonment, and (b) no such termination shall relieve the breaching party from liability resulting from any knowing and intentional breach by that party of this Agreement.

ARTICLE X

FEES AND EXPENSES

Section 10.1 General.

(a) Except as provided in this Article X, all fees and expenses incurred in connection with this Agreement and the Transactions shall be paid by the Party incurring such fees or expenses, whether or not the Merger is consummated.

(b) The Parties hereto acknowledge that the agreements contained in Section 10.1(d) and Section 10.2 are an integral part of the Transactions, and that without these agreements, they would not enter into this Agreement; accordingly, if Blue fails to pay promptly any amount payable by it pursuant to Section 10.1(d) or Section 10.2, or if Green fails to pay promptly any amount payable by it pursuant to Section 10.2, as the case may be, then the Party failing to make such prompt payment shall pay the other Party cumulative interest on the amount of the payment due at the prime rate published in the Wall Street Journal plus three percent (3%) accruing daily from the date such payment was due under this Agreement until the date of payment.

(c) The payment by Blue of the Termination Fee payable pursuant to Section 10.1(d) (and any Expenses payable to Green pursuant to Section 10.2) shall be the sole and exclusive remedy of Green in the event of termination of this Agreement pursuant to the bases specified in Section 10.1(d) (other than with respect to termination of this Agreement pursuant to Section 9.1(f)). In the event of termination of this Agreement pursuant to Section 9.1(f) (including in the event of termination of this Agreement pursuant to one or more other bases in addition to Section 9.1(f)), Green may elect to receive the Termination Fee payable pursuant to Section 10.1(d) (and any Expenses payable to Green pursuant to Section 10.2) or pursue its remedies at law. On payment of the Termination Fee, Blue (and Blue’s Affiliates and its and their respective current, former or future directors, officers, employees, shareholders and Representatives) shall have no further liability or obligation relating to or arising out of this Agreement or the Transactions.

(d) Termination Fee. Notwithstanding anything to the contrary in this Agreement, including Section 10.1 above, if:

(i) (x) Green terminates this Agreement pursuant to Section 9.1(d) or (y) Blue terminates this Agreement pursuant to Section 9.1(h), then, in each case, Blue shall pay to Green in same-day funds promptly upon delivery of the written notice of termination required by Section 9.1 an amount in cash equal to $75,000,000 (the “Termination Fee”); or

(ii) either Blue or Green terminates this Agreement pursuant to Section 9.1(b) or Section 9.1(c) (in each case, only if both (x) the condition set forth in Section 8.1(e)(i) was satisfied and remained satisfied to provide Blue with adequate time to hold a Shareholder Meeting prior to such termination and (y) the Shareholder Approval has not been obtained), Section 9.1(f) or Section 9.1(g), and, in any case, (A) prior to such termination, there has been an Acquisition Proposal, which Acquisition Proposal has not been publicly withdrawn at least ten (10) Business Days before the date of the Shareholder Meeting, and (B) within twelve (12) months of such termination Blue shall have consummated or entered into a definitive agreement to effect a transaction pursuant to an Acquisition Proposal (substituting, in each of (A) and (B), “50%” for “15%” in the definition of “Acquisition Proposal” and “Blue or any of its Significant Subsidiaries” for “Blue” in clauses (B), (C) and (D) of the definition of “Acquisition Proposal”), then Blue shall pay to Green the Termination Fee. Notwithstanding the foregoing, any Expenses previously paid by Blue to Green pursuant to Section 10.2 shall be credited toward, and offset against, the payment of the Termination Fee.

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(e) If the Termination Fee is due under Section 10.1(d)(i), it will be paid by wire transfer of same-day immediately available funds (A) in the case of a termination by Blue pursuant to Section 9.1(h), on the date on which this Agreement is terminated, or (B) in the case of a termination by Green pursuant to Section 9.1(d), as promptly as reasonably practicable following the date of termination of this Agreement (and, in any event, within one (1) Business Day thereof). If the Termination Fee is due under Section 10.1(d)(ii), it will be paid by wire transfer of same-day immediately available funds on the date of the earlier of the consummation of or the entry into a definitive agreement with respect to such Acquisition Proposal. In no event shall Blue be required to pay the Termination Fee more than once.

Section 10.2 Expenses. If this Agreement is terminated pursuant to (i) Section 9.1(f) or Section 9.1(g), then Blue shall, promptly, but in no event later than one (1) Business Day after the date of such termination and a written demand by Green therefor, or (ii) Section 9.1(e), then Green shall, promptly, but in no event later than one (1) Business Day after the date of such termination and a written demand by Blue, in either case, pay to the party making such demand, as applicable, all reasonable and documented out-of-pocket fees and expenses incurred by Green and its Affiliates or Blue and its Affiliate, as applicable, in connection with this Agreement or the Transactions (including with respect to obtaining financing), in an amount not to exceed $15,000,000 (provided that Green or Blue, as applicable, provides reasonable documentation therefor) (“Expenses”).

ARTICLE XI

GENERAL PROVISIONS

Section 11.1 Governing Law; Consent to Jurisdiction; Specific Performance.

(a) This Agreement, and all claims or causes of action (whether at Law, in contract or in tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof, shall be governed by and construed in accordance with the Laws of the State of New York, without regard to the any choice or conflict of law principles or rules (whether of the State of New York or any other jurisdiction) that would mandate the application of the Laws of any jurisdiction other than the State of New York, except that any matter relating to (i) the fiduciary obligations of the Blue Board shall be governed by the Laws of the State of Connecticut, and (ii) the mechanics of the Merger shall be governed by the Act.

(b) Each Party agrees that all claims arising out of or in connection with this Agreement (including the exhibits and annexes hereto and the disclosure schedules delivered in connection herewith) shall be brought in New York state court sitting in New York County or, if such state court does not have subject matter jurisdiction, the federal court sitting in New York County, New York. In connection with any action or proceeding in any such court, each Party (i) consents to the service of process or other papers in connection with such action or proceeding in the manner provided in Section 11.4 or in such other manner as permitted by Law, (ii) submits with regard to any such action or proceeding, generally and unconditionally, to the personal jurisdiction of such courts, and (iii) irrevocably waives, to the fullest extent permitted by applicable Law, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement in such court, any claim that the suit, action or proceeding in such court is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement, or the subject matter hereof, may not be enforced in or by such court pursuant to this Section 11.1.

(c) The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement (including the exhibits hereto and the disclosure schedules delivered in connection herewith) were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Parties acknowledge and agree that, to prevent breaches or threatened breaches by the Parties of any of their respective covenants or obligations set forth in this Agreement and to enforce specifically the terms and provisions of this Agreement, the Parties shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled in law or in equity. In connection with any request for specific

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performance or equitable relief by any Party, each of the other Parties waives any requirement for the security or posting of any bond in connection with such remedy.

(d) Each Party hereby waives its right to trial by jury in connection with any suit, action or proceeding relating to this Agreement or the transactions.

Section 11.2 Entire Agreement. This Agreement, including the exhibits, annexes and schedules hereto (and including the Confidentiality Agreement), constitutes the entire agreement of the Parties with respect to the subject matter hereof. This Agreement, including the exhibits, annexes and schedules hereto may not be modified, amended, altered or terminated except by a written instrument specifically referring to this Agreement signed by all the Parties.

Section 11.3 Waivers and Consents. All waivers and consents given hereunder shall be in writing. No waiver by any Party of any breach or anticipated breach of any provision hereof by any other Party shall be deemed a waiver of any other contemporaneous, preceding or succeeding breach or anticipated breach, whether or not similar. Except as provided in this Agreement, no action taken pursuant to this Agreement, including any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance by any other Party with any representations, warranties, covenants or agreements contained in this Agreement. The failure of any Party to assert any rights under this Agreement or otherwise shall not constitute a waiver of such rights.

Section 11.4 Notices. Except as otherwise provided in this Agreement, all notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and, in the case of delivery in person or by overnight courier, shall be deemed to have been duly given upon receipt) by delivery in person or overnight courier to the respective parties at the following addresses, delivery by electronic mail transmission to the respective parties at the following email addresses, or at such other address or email address for a party as shall be specified in a notice given in accordance with this Section 11.4; provided, however, that delivery by electronic mail transmission shall be deemed to have been duly given upon receipt only if promptly confirmed by telephone:

if to Green or Merger Sub, to:

Iberdrola USA, Inc.

52 Farm View Drive

New Gloucester, Maine 04260

Telephone: 207-688-6363

Attention: R. Scott Mahoney, Vice President, General Counsel and Secretary

Email: Scott.mahoney@iberdrolausa.com

with a copy to (which shall not constitute notice):

Iberdrola, S.A.

Tomás Redondo 1

28033 Madrid, Spain

Telephone: +(34) 91 325 77 64

Attention: Manuel Toledano

Email: mtoledano@iberdrola.es

and with a copy to (which shall not constitute notice):

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022-4834

Attention: David A. Kurzweil

Telephone: 212-906-1200

Email: david.kurzweil@lw.com

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if to Blue, to:

UIL Holdings Corporation

157 Church Street

P.O. Box 1564

New Haven, CT 06506-0901

Attention: Richard Nicholas, Executive Vice President and Chief Financial

Officer, and Sigrid Kun, Vice President, Assistant General Counsel and Corporate

Secretary

Telephone: 203-499-0790 / 203-499-5858

Email: richard.nicholas@uinet.com

            sigrid.kun@uinet.com

with a copy to (which shall not constitute notice):

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Attention: Joseph B. Frumkin

Telephone: 212-558-4000

Email: frumkinj@sullcrom.com

Section 11.5 Assignments, Successors and No Third-Party Rights. No Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other Parties. Any unauthorized purported assignment without shall be void. Subject to the preceding two sentences, this Agreement will apply to, be binding in all respects upon and inure to the benefit of the successors and permitted assigns of the Parties. Except as expressly provided in Section 6.13, nothing expressed or referred to in this Agreement will be construed to give any Person other than the Parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement, except such rights as shall inure to a successor or permitted assignee pursuant to this Section 11.5. Subject to the provisions of Article IX, the Parties expressly acknowledge and agree that, prior to the Effective Time, each of Green and Blue shall have the right, on behalf of its respective stockholders, to pursue damages against the other Parties for losses in the event of any breach of this Agreement by such Parties.

Section 11.6 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction or invalid or unenforceable in any situation shall, as to that jurisdiction or to that situation, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction or in any other situation. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

Section 11.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

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

UIL HOLDINGS CORPORATION, a Connecticut corporation
By:	/s/ James P. Torgerson
Name:	James P. Torgerson
Title:	President and Chief Executive Officer
IBERDROLA USA, INC., a New York corporation
By:	/s/ Robert Daniel Kump
Name:	Robert Daniel Kump
Title:	Chief Corporate Officer
By:	/s/ Pablo Canales Abaitua
Name:	Pablo Canales Abaitua
Title:	Chief Financial Officer
GREEN MERGER SUB, INC., a Connecticut corporation
By:	/s/ Ignacio Estella Rodilla
Name:	Ignacio Estella Rodilla
Title:	President
By:	/s/ Robert Scott Mahoney
Name:	Robert Scott Mahoney
Title:	General Counsel and Secretary

[Signature Page to Agreement and Plan of Merger]

Annex B

FORM OF SHAREHOLDER AGREEMENT

BY AND BETWEEN

IBERDROLA, S.A.

AND

IBERDROLA USA, INC.

DATED [●]

TABLE OF CONTENTS

Article I. CERTAIN DEFINITIONS; INTERPRETATIONS		B-3
Section 1.1	Certain Definitions	B-3
Section 1.2	Interpretations	B-8
Article II. REPRESENTATIONS AND WARRANTIES		B-8
Section 2.1	Representations and Warranties of the Company	B-8
Section 2.2	Representations and Warranties of the Shareholder	B-9
Article III. REGISTRATION RIGHTS		B-9
Section 3.1	Demand Registration Rights	B-9
Section 3.2	Piggyback Registration Rights	B-10
Section 3.3	Shelf Registration	B-11
Section 3.4	Suspension of Use of Registration Statement	B-13
Section 3.5	Withdrawal Rights	B-13
Section 3.6	Registration Procedures	B-14
Section 3.7	Registration Expenses	B-17
Section 3.8	Holdback Agreements	B-18
Section 3.9	Indemnification	B-18
Section 3.10	Rule 144	B-19
Article IV. PREEMPTIVE AND OTHER RIGHTS		B-19
Section 4.1	Preemptive Rights	B-19
Section 4.2	Shareholder Approval	B-22
Section 4.3	Other Purchase Rights	B-22
Section 4.4	Purchases by Certain Controlled Affiliates	B-22
Article V. CORPORATE GOVERNANCE		B-23
Section 5.1	Board Representation	B-23
Section 5.2	Specified Restrictions	B-24
Section 5.3	Waiver of Class Rights	B-25
Article VI. Other AGREEMENTS		B-25
Section 6.1	Transfer Restrictions	B-25
Section 6.2	Information Rights	B-26
Section 6.3	Other Business Activities	B-27
Article VII. EFFECTIVENESS AND TERMINATION		B-27
Section 7.1	Effectiveness	B-27
Section 7.2	Termination	B-27
Article VIII. MISCELLANEOUS		B-28
Section 8.1	Public Announcement	B-28
Section 8.2	Legend on Securities	B-28
Section 8.3	Application of Agreement to Additional Voting Securities	B-28
Section 8.4	Remedies	B-28
Section 8.5	Successors and Assigns	B-29
Section 8.6	Amendments; Waivers	B-29
Section 8.7	No Third Party Rights	B-29
Section 8.8	Notices	B-29
Section 8.9	Governing Law; Consent to Jurisdiction; Waiver of Jury Trial	B-30
Section 8.10	Disputes Resolution	B-30
Section 8.11	Construction	B-31
Section 8.12	Entire Agreement	B-32
Section 8.13	Severability	B-32
Section 8.14	Counterparts	B-32

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SHAREHOLDER AGREEMENT

This SHAREHOLDER AGREEMENT (this “Agreement”) is dated [●], by and between Iberdrola, S.A., a Spanish company (the “Shareholder”), and Iberdrola USA, Inc., a New York corporation (the “Company”). Each of the Shareholder and the Company is referred to herein as a “Party”, and together as the “Parties”.

R E C I T A L S

WHEREAS, UIL Holdings Corporation, a Connecticut corporation (“UIL”), the Company and Green Merger Sub, Inc., a Connecticut corporation and wholly-owned subsidiary of the Company (“Merger Sub”) have entered into an Agreement and Plan of Merger, dated as of February 25, 2015 (as it may be supplemented, amended or restated from time to time, the “Merger Agreement”), pursuant to which, among other things, UIL will merge with and into Merger Sub, the corporate existence of UIL will cease and each issued share of UIL’s common stock, of no par value (other than those shares held by UIL (as treasury shares or otherwise)), shall be converted into the right to receive (i) one (1) share of the common stock, par value $0.01 per share, of the Company (the “Common Stock”), and (ii) $10.50 in cash;

WHEREAS, pursuant to Section 6.17(f) of the Merger Agreement, prior to the closing of the transactions contemplated by the Merger Agreement (the “Closing”), the Company shall enter into this Agreement containing the terms set forth on Exhibit C to the Merger Agreement and such other terms agreed to by UIL, the Company and the Shareholder not inconsistent with those set forth on Exhibit C to the Merger Agreement;

WHEREAS, the Parties desire to establish in this Agreement certain rights and obligations with respect to the Common Stock to be Beneficially Owned (as defined herein) by the Shareholder and the Controlled Affiliates (as defined herein) following the Closing, and related matters concerning the Shareholder’s relationship with the Company; and

WHEREAS, UIL has consented to the terms of this Agreement and to the execution and delivery thereof by the Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I.

CERTAIN DEFINITIONS; INTERPRETATIONS

Section 1.1 Certain Definitions. For all purposes of and under this Agreement, the following capitalized terms shall have the following respective meanings:

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by or is under common control with such Person. For purposes of the immediately preceding sentence, the term “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise. For the avoidance of doubt, for purposes of this Agreement, no Person shall be deemed an Affiliate of another Person by virtue of the fact that both Persons own Common Stock.

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“Beneficially Own” means, with respect to any securities, having “beneficial ownership” of such securities for purposes of Rule 13d-3 under the Exchange Act as in effect on the date hereof and shall include securities that are beneficially owned, directly or indirectly, by a Counterparty (or any of such Counterparty’s Affiliates) under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which such Person or any of such Person’s Affiliates is a Receiving Party; provided, however, that the number of shares of Common Stock that a Person is deemed to be the beneficial owner of, or to beneficially own, in connection with a particular Derivatives Contract shall not exceed the number of Notional Common Shares with respect to such Derivatives Contract; provided, further, that the number of securities beneficially owned by each Counterparty (including its Affiliates) under a Derivatives Contract shall be deemed to include all securities that are beneficially owned, directly or indirectly, by any other Counterparty (or any of such other Counterparty’s Affiliates) under any Derivatives Contract to which such first Counterparty (or any of such first Counterparty’s Affiliates) is a Receiving Party, with this provision being applied to successive Counterparties as appropriate. Similar terms such as “Beneficially Owned”, “Beneficial Ownership” and “Beneficial Owner” shall have the corresponding meaning.

“Business Day” means any day that is not a Saturday, Sunday or other day on which the commercial banks in New York City, NY or Madrid, Spain are authorized or required by Law to close.

“Change of Control Transaction” means (a) the acquisition of the Company by another Person by means of any transaction or series of related transactions (including any stock acquisition, reorganization, merger or consolidation), that results in the holders of the Voting Securities of the Company immediately prior to such transaction or series of related transactions failing to represent, immediately after such transaction or series of transactions, a majority of the total outstanding voting securities of the surviving Person (or the ultimate parent entity thereof), (b) any transaction or series of related transactions, after giving effect to which, in excess of 50% of the Total Voting Power is Beneficially Owned directly, or indirectly through one or more Persons, by any Person and its Affiliates (other than the Shareholder and its Affiliates), or (c) a sale, lease, transfer, disposition or other conveyance of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis.

“Closing Shareholder Services” means the services provided by the Shareholder or its Affiliates (other than the Company and its Subsidiaries and Controlled Joint Ventures) to the Company and its Subsidiaries and Controlled Joint Ventures as of the date of this Agreement.

“Company Board” means the board of directors of the Company.

“Controlled Affiliate” means (a) the Shareholder, (b) any Subsidiary of the Shareholder, (c) any Person as to which the Shareholder, directly or indirectly, through one or more intermediaries, possesses the power to (i) vote the capital stock or other equity interests representing 50% or more of the capital stock or other equity interests of such Person, or (ii) designate, elect, appoint or otherwise select 50% or more of the members of the governing body of such Person. For the avoidance of doubt, for purposes of this Agreement, none of the Company and its Subsidiaries shall be deemed a Controlled Affiliate.

“Controlled Joint Ventures” means, with respect to any Person, any Person that is not a Subsidiary of such first Person, in which such first Person or one or more of its Subsidiaries owns directly or indirectly capital stock or other interests and that is controlled by such first Person. For purposes of the immediately preceding sentence, the term “control” (including, with correlative meanings, the terms “controlled by”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“Derivatives Contract” means a contract between two parties (the “Receiving Party” and the “Counterparty”) that is designed to produce economic benefits and risks to the Receiving Party that correspond substantially to the ownership by the Receiving Party of a number of shares of Voting Securities specified or

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referenced in such contract (the number corresponding to such economic benefits and risks, the “Notional Common Shares”), regardless of whether obligations under such contract are required or permitted to be settled through the delivery of cash, Voting Securities or other property, without regard to any short position under the same or any other Derivative Contract. For the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate federal governmental authority shall not be deemed to be Derivatives Contracts.

“Director” means a member of the Company Board.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the regulations promulgated thereunder.

“Free Writing Prospectus” means a free writing prospectus, as defined in Rule 405 under the Securities Act.

“Going Private Transaction” means any transaction (or series of related transactions) that results in the Voting Securities listed for trade on a securities exchange immediately prior to the consummation of such transaction (or series of related transactions), or the shares received as consideration in such transaction (or series of related transactions), not being listed for trade on a securities exchange(s) immediately following the consummation of such transaction (or series of related transactions).

“Governmental Authority” means (i) any government, (ii) any governmental or regulatory entity, body, department, commission, subdivision, board, bureau, administrative agency or instrumentality, (iii) any court, tribunal, judicial body, or an arbitrator or arbitration panel, or (iv) any non-governmental self-regulatory agency or securities exchange (including the NYSE), in each case, whether supranational, national, federal, state, county, municipal, provincial, and whether domestic or foreign.

“Independent Director” means any Director who is or would be considered “independent” under the rules of the NYSE (i) with respect to the Company and (ii) assuming such Director was a member of the board of directors of the Shareholder and not of the Company, with respect to the Shareholder.

“Laws” means all applicable laws (including common law), statutes, treaties, codes, ordinances, decrees, rules, regulations, directives or other legal requirements (including those of the SEC, the NYSE and any other securities exchange and securities commission in any jurisdiction) issued, enacted, adopted, promulgated or implemented by any Governmental Authority, binding or affecting the Person referred to in the context in which such word is used; and “Law” means any one of them.

“NYSE” means the New York Stock Exchange.

“Organizational Documents” means, with respect to any Person, such Person’s articles or certificate of association, incorporation, formation or organization, by-laws, limited liability company agreement, partnership agreement or other constituent document or documents, each in its currently effective form as amended from time to time.

“Person” means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government or agency or subdivision thereof or any other entity.

“Prospectus” means the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

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“Public Shareholders” means the shareholders of the Company other than the Shareholder and the Controlled Affiliates.

“Registrable Securities” means, at any time, (i) the shares of Common Stock that are Beneficially Owned by the Shareholder or the Controlled Affiliates, and (ii) any other security into or for which the securities referred to in clause (i) has been converted, substituted or exchanged, and any security issued or issuable with respect thereto, in each case, upon any Company stock dividend or stock split, reverse stock split, distribution, combination, consolidation, merger, recapitalization or any similar event; provided, that such securities shall cease to be Registrable Securities when (A) a Registration Statement registering such Registrable Securities under the Securities Act has been declared or becomes effective and such shares of Registrable Securities have been sold or otherwise Transferred by the holder thereof pursuant to such effective Registration Statement, (B) such Registrable Securities are sold or otherwise Transferred pursuant to Rule 144 under circumstances in which any legend borne by such shares of Registrable Securities relating to restrictions on the transferability thereof, under the Securities Act or otherwise, is removed by the Company, (C) such Registrable Securities shall cease to be outstanding, (D) such Registrable Securities are Transferred to any Person that is not a Controlled Affiliate, or (E) such Registrable Securities shall have been otherwise Transferred and may be publicly resold without registration under the Securities Act.

“Registration Statement” means any registration statement of the Company that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

“Representatives” means, with respect to any Person, such Person’s officers, directors, employees, accountants, counsel, advisors, consultants, agents and contractors.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Subject Issuance” means an issuance by the Company of additional Voting Securities other than issuances in connection with any stock split, subdivision, stock dividend (including dividends on preferred stock whether in the form of shares of preferred stock or common stock) or pro rata recapitalization (including any exchange of one or more series of preferred stock for another series of preferred stock) by the Company.

“Subject Securities” means the Voting Securities that are the subject of a particular Subject Issuance.

“Subsidiary” means, with respect to any Person, any entity in which such Person owns, directly or indirectly, capital stock or other interests representing more than 50% of the aggregate equity interest in such entity.

“Total Voting Power” means, at any time, the total number of Votes represented by all Voting Securities outstanding at such time.

“Transfer” means any direct or indirect, sale, transfer or other similar disposition (whether by merger, consolidation or otherwise by operation of law) to any Person; provided, however, that any Transfer of any equity interests of the Shareholder or any direct or indirect equity holder of the Shareholder, shall not be deemed to be a Transfer for purposes of this Agreement.

“Unaffiliated Committee” means a committee of the Company Board comprised solely of Independent Directors; provided, however, that Mr. Arnold L. Chase, for so long as he is a Director, shall be permitted to serve as a member of the Unaffiliated Committee irrespective of whether he qualifies as an Independent Director hereunder.

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“Votes” means votes entitled to be cast generally in the election of directors of the Company Board, assuming the conversion of any securities of the Company then convertible into Common Stock or shares of any other class of capital stock of the Company then entitled to vote generally in the election of directors.

“Voting Power” means, with respect to any Person, at any time, the ratio, expressed as a percentage, of (a) the Votes represented by the Voting Securities Beneficially Owned by such Person that are outstanding at such time to (b) the Total Voting Power outstanding at such time. Any references to, and the calculation of, the Shareholder’s Voting Power in this Agreement shall include, without duplication, the Voting Power of the Shareholder and any Voting Power of any of the Controlled Affiliates.

“Voting Securities” means (a) the Common Stock, and (b) shares of any other class of capital stock of the Company then entitled to vote generally in the election of directors.

The terms listed below are defined in the Sections set forth opposite each such defined term.

Term	Section
AAA Rules		8.10(b)
Additional Subject Securities Purchase		4.1(a)
Agreement		Preamble
Closing		Preamble
Common Stock		Preamble
Company		Preamble
Contractual Preemptive Rights		4.2
Demand Registration		3.1(a)
Demand Registration Statement		3.1(b)
Earliest Initiation Date		8.10(a)
Form S-3		3.3(a)
Legends		8.2(a)
Liabilities		3.9(a)
Liability		3.9(a)
Lockup Period		6.1(a)
Merger Agreement		Preamble
Merger Sub		Preamble
Notice Period		4.1(b)
NYSE Approval Expiration		4.2
NYSE Approval Resolution		4.2
Parties		Preamble
Party		Preamble
Piggyback Registration		3.2(a)
Piggyback Registration Statement		3.2(a)
Preemptive Rights Closing Date		4.1(c)
Registrable Amount		3.1(a)
Registration Expenses		3.7
Request for Arbitration		8.10(a)
S-3 Eligible		3.3(a)
Shareholder		Preamble
Shelf Registration Effectiveness Period		3.3(b)
Shelf Registration Statement		3.3(a)
Shelf Underwritten Offering		3.3(d)
Suspension Notice		3.4(b)
Suspension Period		3.4(a)
Transferee Adoption Agreement		4.4
UIL		Preamble
UIL Director		5.1(a)

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Section 1.2 Interpretations. Except as expressly set forth in this Agreement or unless the context expressly otherwise requires:

(a) Unless otherwise indicated, all references herein to Articles, Sections, Annexes, Exhibits or Schedules, shall be deemed to refer to Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement, as applicable.

(b) The words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(c) The terms defined in the singular have a comparable meaning when used in the plural, and vice versa.

(d) References herein to any gender include the other gender.

(e) Unless otherwise indicated, the words “include,” “includes” and “including,” when used herein, shall be deemed in each case to be followed by the words “without limitation”.

(f) References to “$” and “dollars” are to the currency of the United States of America.

(g) The table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof.

(h) With respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.

(i) The Company, on the one hand, and the Shareholder, on the other hand, have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by such Parties and no presumption or burden of proof shall arise favoring or disfavoring any such Party by virtue of the purported authorship of any provision of this Agreement.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

Section 2.1 Representations and Warranties of the Company. The Company represents and warrants to the Shareholder as of the date hereof as follows:

(a) The Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of New York and has all necessary corporate power and authority to enter into this Agreement and to carry out its obligations hereunder.

(b) This Agreement has been duly and validly authorized by the Company and all necessary and appropriate action has been taken by the Company to execute and deliver this Agreement and to perform its obligations hereunder.

(c) This Agreement has been duly executed and delivered by the Company and, assuming due authorization and valid execution and delivery by the Shareholder, is a valid and binding obligation of the Company, enforceable against it in accordance with its terms, except to the extent that the enforceability of this Agreement may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws from time to time in effect affecting generally the enforcement of creditors’ rights and remedies, (ii) general principles of equity, and (iii) Laws relating to rights to indemnity.

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Section 2.2 Representations and Warranties of the Shareholder. The Shareholder represents and warrants to the Company as of the date hereof as follows:

(a) The Shareholder is a company duly organized and validly existing under the Laws of Spain and has all necessary company power and authority to enter into this Agreement and to perform its obligations hereunder.

(b) This Agreement has been duly and validly authorized by the Shareholder and all necessary and appropriate action has been taken by the Shareholder to execute and deliver this Agreement and to perform its obligations hereunder.

(c) This Agreement has been duly executed and delivered by the Shareholder and, assuming due authorization and valid execution and delivery by the Company, is a valid and binding obligation of the Shareholder, enforceable against it in accordance with its terms, except to the extent that the enforceability of this Agreement may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws from time to time in effect affecting generally the enforcement of creditors’ rights and remedies, (ii) general principles of equity, and (iii) Laws relating to rights to indemnity.

ARTICLE III.

REGISTRATION RIGHTS

Section 3.1 Demand Registration Rights.

(a) Subject to Section 3.1(b), at any time, and from time to time, after the Closing, the Shareholder may, by written notice to the Company, request a registration under the Securities Act of all or part of the Registrable Securities, including any Registrable Securities held by a Controlled Affiliate (a “Demand Registration”); provided that a valid and effective Shelf Registration Statement shall not be available for the unrestricted (including as to volume, timing, recipients, manner of sale or otherwise that would not be applicable without a valid and effective Registration Statement) sale of such Registrable Securities at such time; and provided, further, that (A) the registration is for shares of Registrable Securities in the aggregate representing one percent (1%) or more of the number of shares of Common Stock outstanding at such time, or (B) the reasonably anticipated aggregate offering price of such underwritten registration, before underwriting discounts and commissions, is thirty million dollars ($30,000,000) or more (the percentage in (A) or the amount in (B), the “Registrable Amount”). Subject to the foregoing, such notice shall specify the aggregate amount of shares of Registrable Securities to be registered pursuant to the Demand Registration and intended method of distribution thereof, including an underwritten public offering, at the sole discretion of the Shareholder. The Shareholder agrees to promptly provide the Company with such information in connection with a Demand Registration as may be reasonably requested by the Company to ensure that the Demand Registration Statement complies with the requirements of applicable Law.

(b) After the Company’s receipt of the Shareholder’s written notice requesting a Demand Registration, the Company shall file as promptly as reasonably practicable, but subject to Section 3.4, on such registration form for which the Company is eligible under the rules and regulations of the SEC as shall be determined by the Company and reasonably acceptable to the Shareholder, including, to the extent permissible, an automatically effective registration statement or an existing effective registration statement filed with the SEC. The Company shall use its reasonable best efforts to have such registration statement declared effective as soon as reasonably practicable after receiving a request for a Demand Registration or, if an existing effective registration statement has previously been filed and remains effective that permits the Demand Registration without the filing of a new registration statement, the Company shall file as soon as reasonably practicable a prospectus supplement covering such number of shares of Registrable Securities as requested by the Shareholder to be included in the Demand Registration, subject to Section 3.1(a). The Registration Statement referred to above is hereinafter referred to as a “Demand Registration Statement”.

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(c) The Shareholder shall be entitled to request an unlimited amount of Demand Registrations pursuant to Section 3.1(a) until such time as the Shareholder Beneficially Owns less than a Registrable Amount; provided, however, that the Company will not be obligated to effect a requested Demand Registration or Shelf Underwritten Offering (i) more than three (3) times in any twelve (12)-month period or (ii) within 90 days after the effective date of a Demand Registration Statement or prospectus supplement thereunder, a Piggyback Registration Statement or a Shelf Underwritten Offering, in each case with respect to Registrable Securities. Except as set forth in Section 3.5, a registration shall not count as one (1) of the three (3) permitted Demand Registrations and Shelf Underwritten Offerings per twelve (12)-month period until (i) the related Demand Registration Statement has been declared effective by the SEC or, if applicable, the filing of the prospectus supplement, and (ii) unless the Demand Registration Statement remains effective for the ninety (90) day period set forth in Section 3.1(d).

(d) After any Demand Registration Statement filed pursuant to this Agreement has become effective or a prospectus supplement has been filed, the Company shall use its reasonable best efforts to keep such Demand Registration Statement continuously effective for a period of at least ninety (90) days (plus the duration of any Suspension Period) from the date on which the SEC declares such Demand Registration effective or, if applicable, from the date of filing of the prospectus supplement, or such shorter period that shall terminate when all of the Registrable Securities are sold subject to such Demand Registration Statement in accordance with the plan of distribution set forth therein.

(e) If, in connection with a Demand Registration, any managing underwriter (or, if such Demand Registration is not an underwritten offering, a nationally recognized investment bank engaged in connection with such Demand Registration) advises the Company, that, in its opinion, the inclusion of all of the securities, including securities of the Company that are not Registrable Securities, sought to be registered in connection with such Demand Registration would adversely affect the marketability of the Registrable Securities sought to be sold pursuant thereto, then the Company shall include in such registration statement only such securities as the Company is advised by such underwriter or investment bank can be sold without such adverse effect as follows and in the following order of priority: (i) first, up to the number of Registrable Securities requested to be included in such Demand Registration by the Shareholder, which, in the opinion of the managing underwriter can be sold without adversely affecting the marketability of the offering, (ii) second, securities the Company proposes to sell, and (iii) third, all other securities of the Company duly requested to be included in such registration statement, pro rata on the basis of the number of such other securities requested to be included or such other method determined by the Company.

(f) If a requested registration pursuant to this Section 3.1 involves an underwritten offering, the Company shall have the right to select the managing underwriter, or managing underwriters, to administer any Demand Registration; provided, that any such managing underwriter shall be a nationally recognized investment banking firm that is reasonably acceptable to the Shareholder. The managing underwriter or managing underwriters selected by the Company shall be deemed to be acceptable to the Shareholder unless notice to the contrary has been received by the Company within five business days after the Company has provided the Shareholder with notice of the identity of the managing underwriter or managing underwriters it has selected. The Shareholder shall have the exclusive right to approve the pricing of the Registrable Securities offered pursuant to any Demand Registration, the applicable underwriting discount and other financial terms of any Demand Registration.

Section 3.2 Piggyback Registration Rights.

(a) Whenever the Company proposes to publicly sell in an underwritten offering or register for sale any of its equity securities pursuant to a registration statement (a “Piggyback Registration Statement”) under the Securities Act (other than a registration statement on Form S-8 or Form S-4, or, in each case, pursuant to any similar successor forms thereto), whether for its own account or for the account of one or more securityholders of the Company (a “Piggyback Registration”), the Company shall give written notice to the Shareholder at least

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fifteen (15) Business Days (or if such notice period is not practicable under the circumstances, the Company shall use its reasonable best efforts to provide the maximum prior written notice as is reasonably practicable under the circumstances, but in no event less than ten (10) Business Days) prior to the initial filing of such Piggyback Registration Statement or the date of the commencement of any such offering of its intention to effect such sale or registration, including the anticipated filing date of the Piggyback Registration Statement, the estimated number, and the class, of shares of equity securities to be included in such Piggyback Registration Statement, the proposed method of distribution, the proposed managing underwriter or underwriters (if any) and a good faith estimate by the Company of the proposed minimum offering price of such securities and, subject to Section 3.2(b) and Section 3.2(c), shall include in such Piggyback Registration Statement all Registrable Securities (including any Registrable Securities held by any Controlled Affiliate) of the same class of the securities that are being registered and that are the subject of the offering with respect to which the Company has received a written request from the Shareholder for inclusion therein within five (5) Business Days of the Shareholder’s receipt of the Company’s notice. The Shareholder agrees to provide the Company with such information promptly in connection with a Piggyback Registration as may be reasonably requested by the Company to ensure that the Piggyback Registration Statement complies with the requirements of applicable Law. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion, without prejudice to the Shareholder’s right to immediately request a Demand Registration hereunder.

(b) If a Piggyback Registration is initiated as an underwritten primary registration on behalf of the Company, and the managing underwriter advises the Company that in its reasonable opinion the number of equity securities requested to be included in such registration exceeds the number that can be sold in such offering without having an adverse effect on the price or success of such offering, then the Company shall include in such registration the maximum number of shares that such underwriter advises in good faith can be so sold without having such adverse effect, allocated (i) first, to the equity securities the Company proposes to sell, (ii) second, to the equity securities (of the same class of the securities being registered and that are the subject of the offering) requested to be included in such Piggyback Registration by the Shareholder, and (iii) third, other equity securities (of the same class of the securities being registered and that are the subject of the offering) requested to be included in such Piggyback Registration by other security holders (other than the Shareholder) of the Company (if any), pro rata among such holders on the basis of the percentage of the then-outstanding shares requested to be registered by them or on such basis as such holders may agree among themselves and the Company. Such allocation is without prejudice to the Shareholder’s right to immediately request a Demand Registration hereunder.

(c) No registration of Registrable Securities effected pursuant to this Section 3.2 shall be deemed to have been effected pursuant to Section 3.1 or Section 3.3 or shall relieve the Company of any of its obligations under Section 3.1 or Section 3.3.

Section 3.3 Shelf Registration.

(a) At any time after the first (1^st) anniversary of the Closing, the Shareholder may by written notice delivered to the Company require the Company to (i) file as promptly as practicable, and to use its reasonable best efforts to cause to be declared effective by the SEC as soon as practicable after such filing, (x) a registration statement on Form S-3 or a successor form (any such form, a “Form S-3”), if the Company is then eligible to file registration statement on Form S-3 (“S-3 Eligible”), or (y) any other appropriate form under the Securities Act for the type of offering contemplated by the Shareholder, if the Company is not then S-3 Eligible, or (ii) use an existing Form S-3 filed with the SEC, in each case providing for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act relating to the offer and sale, from time to time, of all or part of the Registrable Securities; provided, that such Registrable Securities equal or exceed the Registrable Amount. The Registration Statement referred to above is hereinafter referred to as a “Shelf Registration Statement”.

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(b) Subject to Section 3.4, the Company will use its reasonable best efforts to keep the Shelf Registration Statement continuously effective until the date on which all Registrable Securities have been sold thereunder in accordance with the plan and method of distribution disclosed in the prospectus included in the Shelf Registration Statement, or otherwise (the “Shelf Registration Effectiveness Period”).

(c) At the request of the Shareholder, and until such time as the Shareholder Beneficially Owns less than a Registrable Amount, the Company shall prepare and file such additional Registration Statements as necessary to maintain continuously effective shelf registration statements, and use its reasonable best efforts to cause such Registration Statements to be declared effective by the SEC so that a Shelf Registration Statement remains continuously effective, subject to Section 3.4, with respect to resales of Registrable Securities as and for the periods required under Section 3.3(b), such subsequent Registration Statements to constitute a Shelf Registration Statement hereunder.

(d) At any time, and from time to time, during the Shelf Registration Effectiveness Period (except during a Suspension Period), the Shareholder may notify the Company of its intent to sell Registrable Securities covered by the Shelf Registration Statement (in whole or in part) in an underwritten offering (a “Shelf Underwritten Offering”); provided, that the Company shall not be obligated to participate in Shelf Underwritten Offerings or Demand Registrations (i) more than three (3) times in any twelve (12)-month period or (ii) within 90 days after the effective date of a Demand Registration Statement or prospectus supplement thereunder, a Piggyback Registration Statement or a Shelf Underwritten Offering, in each case with respect to Registrable Securities. Such notice shall specify the aggregate number of Registrable Securities requested to be registered in such Shelf Underwritten Offering. Upon receipt by the Company of such notice, the Company shall promptly comply with the applicable provisions of this Agreement, including those provisions of Section 3.7 relating to the Company’s obligation to make filings with the SEC, assist in the preparation and filing with the SEC of prospectus supplements and amendments to the Shelf Registration Statement, participate in “road shows”, agree to customary “lock-up” agreements with respect to the Company’s securities and obtain “comfort” letters, and shall take such other actions as are reasonably necessary or appropriate to permit the consummation of such Shelf Underwritten Offering as promptly as practicable. Each Shelf Underwritten Offering shall be for the sale of a number of Registrable Securities equal to or greater than the Registrable Amount. In any Shelf Underwritten Offering, the Company shall have the right to select the managing underwriter, or managing underwriters, to administer any Shelf Underwritten Offering; provided, that any such managing underwriter shall be a nationally recognized investment banking firm that is reasonably acceptable to the Shareholder. The Shareholder shall have the exclusive right to approve the pricing of the Registrable Securities offered pursuant to any Shelf Underwritten Offering, the applicable underwriting discount and other financial terms of any Shelf Underwritten Offering. The Shareholder agrees to provide the Company with such information promptly in connection with a Shelf Registration Statement or a Shelf Underwritten Offering as may be reasonably requested by the Company to ensure that such Shelf Registration Statement or Shelf Underwritten Offering complies with the requirements of applicable Law.

(e) If, in connection with a Shelf Underwritten Offering, any managing underwriter advises the Company, that, in its opinion, the inclusion of all of the securities, including securities of the Company that are not Registrable Securities, sought to be registered in connection with such Shelf Underwritten Offering would adversely affect the marketability or price of the Registrable Securities sought to be sold pursuant thereto, then the Company shall include in such Shelf Underwritten Offering only such securities as the Company is advised by such underwriter or investment bank can be sold without such adverse effect as follows and in the following order of priority: (i) first, up to the number of Registrable Securities requested to be included in such Shelf Underwritten Offering by the Shareholder, (ii) second, securities the Company proposes to sell, and (iii) third, all other securities of the Company duly requested to be included in such registration statement, pro rata on the basis of the number of such other securities requested to be included or such other method determined by the Company.

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Section 3.4 Suspension of Use of Registration Statement.

(a) The Company may postpone the filing or the effectiveness of a Demand Registration Statement (or suspend the use of any Prospectus or Shelf Registration Statement) (a “Suspension”), for a reasonable length of time not in excess of sixty (60) days, but in no event more than twice in any twelve (12)-month period if (i) based on the reasonable, good faith judgment of the Company Board, such postponement is necessary in order to avoid premature disclosure of a matter that the Company Board has determined would not be in the best interest of the Company to be disclosed at such time and, as a result of such determination, the Directors and executive officers of the Company are restricted from selling the Company’s securities during such additional period (other than pursuant to a preexisting 10b5-1 plan), (ii) the Company cannot obtain, after using its reasonable best efforts, financial information (or information used to prepare such information) from any third party necessary for inclusion in such Registration Statement or Prospectus, or (iii) if, in the reasonable, good faith judgment of the Company Board, the filing of such Registration Statement or Prospectus would reasonably be expected to (A) materially interfere with or materially delay a financing, merger, sale or acquisition of assets, recapitalization or other similar corporate action of the Company approved by the Company Board that is pending or expected by the Company to occur or be announced during the delay period, (B) require disclosure of material non-public information which, if disclosed at such time, would not be in the best interests of the Company or (C) have a material adverse effect on the Company or its business (any such period, a “Suspension Period”).

(b) In the event of a Suspension of a Demand Registration or Shelf Underwritten Offering, the Shareholder shall be entitled, at any time after receiving notice of such Suspension from the Company (a “Suspension Notice”), to withdraw its request for a Demand Registration or Shelf Underwritten Offering and, if such request is withdrawn, such Demand Registration or Shelf Underwritten Offering shall not count as one of the three (3) permitted Demand Registrations or Shelf Underwritten Offerings per twelve (12)-month period pursuant to Section 3.1(c) and Section 3.3(d).

(c) Upon delivery by the Company to the Shareholder of any Suspension Notice, the Shareholder shall, except as required by applicable Law, including any disclosure obligations under Section 13 of the Exchange Act, keep the fact of any such notice strictly confidential, and during any Suspension Period, promptly halt any offer, sale, trading or Transfer by it of any Registrable Securities pursuant to the Demand Registration Statement or Shelf Registration Statement (as applicable) for the duration of the Suspension Period set forth in such Suspension Notice (or until such Suspension Period shall be earlier terminated in writing by the Company) and promptly halt any use, publication, dissemination or distribution of any prospectus or prospectus supplement covering such Registrable Securities for the duration of the Suspension Period set forth in such Suspension Notice (or until such Suspension Period shall be earlier terminated in writing by the Company) and, if so directed by the Company, shall deliver to the Company any copies then in its possession of any such prospectus or prospectus supplement.

Section 3.5 Withdrawal Rights.

(a) After the Shareholder has notified or directed the Company to include any or all of its Registrable Securities in a Demand Registration or Shelf Underwritten Offering, it shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securities designated by it for registration or inclusion in such Demand Registration or Shelf Underwritten Offering by giving written notice to such effect to the Company prior to the effective date of such registration statement or the pricing of such Demand Registration or Shelf Underwritten Offering, provided that in the event of such a withdrawal with respect to all of such Registrable Securities where there are no other securities of the Company included (or to be included) in such Demand Registration or Shelf Underwritten Offering, (i) the Shareholder promptly reimburses the Company for all of the Company’s reasonable out-of-pocket documented Registration Expenses (other than internal expenses) with respect to such registration statement or Shelf Underwritten Offering and (ii) the Shareholder shall not make another request for a Demand Registration or Shelf Underwritten Offering with respect to Registrable Securities during the forty-five (45) days following the date of such withdrawal, and provided further that in no event shall

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the number of Registrable Securities included in a Demand Registration or Shelf Underwritten Offering after any such partial withdrawal be less than the Registrable Amount. In the event of any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration or Shelf Underwritten Offering and such Registrable Securities shall continue to be Registrable Securities for all purposes of this Agreement. No such withdrawal shall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn. Any registration statement withdrawn or not filed or Shelf Underwritten Offering not completed in accordance with an election by the Shareholder prior to the effectiveness of the applicable Demand Registration Statement or pricing of the applicable Shelf Underwritten Offering for any reason shall not be counted as one (1) of the three (3) permitted Demand Registrations and Shelf Underwritten Offerings per twelve (12)-month period pursuant to Section 3.1(c) and Section 3.3(d), provided the Shareholder satisfies the other requirements of this Section 3.5(a).

Section 3.6 Registration Procedures.

(a) Whenever the Shareholder requests that any Registrable Securities be registered or sold pursuant to this Agreement, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended offering, and pursuant thereto the Company shall as soon as reasonably practicable (unless otherwise stated below and except as otherwise provided in this Article III):

(i) prepare and file with the SEC, as applicable, (A) a Registration Statement on the appropriate form under the Securities Act for which the Company is eligible under the rules and regulations of the SEC as shall be determined by the Company, including, to the extent permissible, an automatically effective registration statement or an existing effective registration statement filed with the SEC, which shall be reasonably acceptable to the Shareholder, with respect to such Registrable Securities and the Company shall use its reasonable best efforts to cause such Registration Statement to become effective, and/or (B) the prospectus supplement to an existing effective registration statement filed with the SEC; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including any (I) Free Writing Prospectus, or (II) prospectus supplement for a shelf takedown) provide to the Shareholder and the managing underwriter(s), copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus, and the Shareholder (and the managing underwriter(s)) shall have the opportunity to review and comment thereon, and the Company shall (x) make such changes and additions thereto as may be reasonably requested by the Shareholder (and, if applicable, the managing underwriter(s)) prior to such filing, unless the Company reasonably objects to such changes or additions, and (y) except in the case of a registration under Section 3.2, not file any Registration Statement hereunder or Prospectus or amendments or supplements thereto to which the underwriters, if any, or the Shareholder shall reasonably object unless the failure to file would violate applicable Law;

(ii) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be reasonably necessary to keep such Registration Statement continuously effective (A) in the case of a Demand Registration Statement, for the period of time required by Section 3.1(d), (B) in the case of a Piggyback Registration Statement, for ninety (90) days from the date on which the SEC declares such Piggyback Registration Statement effective (plus the duration of any Suspension Period), or such shorter period as is necessary to complete the distribution of the securities covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended offering by the Shareholder set forth in such Registration Statement or prospectus supplement, or (C) in the case of a Shelf Registration Statement, for the period of time required by Section 3.3(d);

(iii) furnish to the Shareholder such number of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus) and such other documents as the Shareholder and any managing underwriter(s) may reasonably request in order to facilitate the disposition of the Registrable Securities;

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(iv) use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions (domestic or foreign) as the Shareholder and any underwriter(s) reasonably requests in writing and use its reasonable best efforts to do any and all other acts and things that may reasonably be necessary or advisable to enable the Shareholder and any underwriter(s) to consummate the disposition in such jurisdictions of the Registrable Securities; provided, however, that the Company shall not be required to, where it would not otherwise but for this Section 3.6(a)(iv) (A) qualify generally to do business in any jurisdiction, (B) subject itself to taxation in any such jurisdiction, (C) consent to general service of process in any such jurisdiction, or (D) take any action that would subject it to service of process in suits other than those arising out of the offer and sale of the securities covered by the registration statement;

(v) notify the Shareholder and any managing underwriter(s) at any time when a Prospectus relating thereto is required to be delivered or made available under the Securities Act, of the occurrence of any event as a result of which information furnished by the Company (or information otherwise known to the Company to contain an untrue statement of material fact or to omit to state any material fact necessary to make the statements therein not misleading) and used in the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein not misleading, and, without any further request from the Shareholder or any underwriter(s), the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

(vi) (A) enter into such customary agreements (including an underwriting agreement and “lock-up” agreements in customary form), which, if reasonably requested by the managing underwriter(s), shall include indemnification provisions in favor of underwriters and other Persons, (B) take all such other actions as the Shareholder or the managing underwriter(s) reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including causing senior management and other Company personnel (including Directors) to reasonably cooperate with the Shareholder and the underwriter(s) in connection with performing due diligence), and (C) cause its counsel to issue opinions of counsel addressed and delivered to the underwriter(s) in form, substance and scope as are customary for opinions of counsel of an issuer in underwritten offerings, subject to customary limitations, assumptions and exclusions;

(vii) if reasonably requested by the Shareholder, use its reasonable best efforts to cause officers of the Company to be available to participate in, and to reasonably cooperate with the managing underwriter(s) in connection with marketing activities that are customary for similar transactions (including select conference calls, one-on-one meetings with prospective purchasers and “road shows”);

(viii) make available for inspection by the Shareholder, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other agent retained by the Shareholder or such underwriter, at reasonable times and in a reasonable manner, all pertinent financial and other records, corporate documents and properties of the Company, and cause the Company’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss and to supply all information reasonably requested by the Shareholder, sales or placement agent, underwriter, attorney, accountant or agent to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act in connection with such Registration Statement; provided, that the foregoing investigation and information gathering shall be coordinated on behalf of such parties by one firm of counsel designated by and on behalf of such parties; and, provided, further, that if any such information is identified by the Company as being confidential or proprietary, each Person receiving such information shall agree, in customary form, to take such actions as are necessary to protect the confidentiality of such information if requested by the Company, unless (a) the release of such information is required (by deposition,

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interrogatory, requests for information or documents by a Governmental Authority, subpoena or similar process) to be disclosed by applicable Law, (b) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge, (c) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company, other than through a breach of this or any other agreement with the Company of which breach such Person has knowledge, or (d) such information is independently developed by such Person without the use of such confidential or proprietary information;

(ix) maintain or provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement or prospectus supplement, as applicable;

(x) if requested by the managing underwriter(s) of an underwritten offering, use its reasonable best efforts to cause to be delivered, upon the pricing of any underwritten offering, and at the time of closing of the sale of Registrable Securities pursuant thereto, “comfort” letters from the Company’s independent public accountants addressed to the underwriter(s) stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by “comfort” letters of the independent registered public accountants delivered in connection with primary underwritten public offerings;

(xi) cause all Registrable Securities covered by such registration to be listed on each securities exchange or inter-dealer quotation system on which similar securities issued by the Company are then listed;

(xii) promptly notify the Shareholder and any managing underwriter(s) (A) when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement, post-effective amendment to the Registration Statement or Free Writing Prospectus has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective, (B) of any written request by the SEC for amendments or supplements to the Registration Statement or Prospectus, (C) of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction, and (E) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in any material respect;

(xiii) use its reasonable best efforts to prevent, or obtain the withdrawal of, any stop order or other order suspending the use of any preliminary or final Prospectus;

(xiv) if reasonably requested by the Shareholder or any underwriter, promptly incorporate in the Registration Statement or any Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as the Shareholder or such underwriter may reasonably request to have included therein, including information relating to the “Plan of Distribution” of the Registrable Securities;

(xv) reasonably cooperate with the Shareholder and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority, Inc.; and

(xvi) use its reasonable best efforts to comply with all applicable securities Laws and make available to its securityholders party hereto, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder.

(b) The Company shall make available to the Shareholder (i) as soon as reasonably practicable after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, an executed copy of each Registration Statement and any amendment thereto, each preliminary Prospectus and Prospectus and each

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amendment or supplement thereto, each letter written by or on behalf of the Company to the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), and each item of correspondence from the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), in each case relating to such Registration Statement, and (ii) such number of copies of a Prospectus, including a preliminary Prospectus, and all amendments and supplements thereto and such other documents as the Shareholder or any underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities. The Company shall as soon as reasonably practicable notify the Shareholder of the effectiveness of each Registration Statement or any post-effective amendment or the filing of any prospectus supplement in connection therewith. The Company shall as soon as reasonably practicable respond to any and all comments received from the SEC or the staff of the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as reasonably practicable and shall file an acceleration request as soon as reasonably practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review. The Shareholder shall furnish to the Company information regarding the Shareholder and the distribution of such securities as the Company reasonably and in good faith determines is legally required, based on the advice of counsel, to be included (and only to the extent so required) in any Registration Statement or any Prospectus supplement in connection therewith, including any information required to be disclosed in order to make any information previously furnished to the Company by the Shareholder not materially misleading or which is necessary to cause such Registration Statement or prospectus supplement not to omit a material fact with respect to the Shareholder.

(c) Upon notice from the Company of the happening of any event of the kind described in clauses (B), (C), (D) or (E) of Section 3.6(a)(xii) or, and without limiting Section 3.4, upon notice from the Company of the happening of any event (including any event contemplated by Section 3.4(a)) as a result of which the Prospectus included in such Registration Statement (including any prospectus supplement in connection therewith, as applicable) contains an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein not misleading (such notice, also a “Suspension Notice”), the Shareholder shall forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement or Prospectus for a reasonable length of time until the Shareholder is advised in writing by the Company that the use of the Prospectus may be resumed and, if necessary, is furnished with a supplemented or amended Prospectus as contemplated by Section 3.6(a). If the Company shall give the Shareholder any such notice, the Company shall extend the period of time during which the Company is required to maintain the applicable Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date the Shareholder either is advised by the Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or amended Prospectus contemplated by Section 3.6(a) (also a “Suspension Period”). In any event, and without limiting Section 3.4, the Company shall not be entitled to deliver collectively more than a total of three (3) Suspension Notices under either Section 3.4 or this Section 3.6(c) in any twelve (12)-month period.

(d) The Shareholder’s right to participate in any underwritten offering pursuant to this Article III shall be conditioned on the Shareholder (i) entering into “lock-up” agreements in customary form and acting in accordance with the terms and conditions thereof and (ii) entering into an underwriting agreement in customary form and acting in accordance with the terms and conditions thereof, including the completion and execution of all questionnaires, powers-of-attorney and other documents reasonably required under the terms of such underwriting agreement.

Section 3.7 Registration Expenses. All expenses incident to the Company’s performance of or compliance with this Agreement, including all registration and filing fees (including SEC registration fees and Financial Industry Regulatory Authority, Inc. filing fees), fees and expenses incurred in connection with compliance with securities or blue sky laws, listing application fees, printing expenses, transfer agent’s and registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and

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disbursements of counsel for the Company and all accountants and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”), shall be borne by the Company, except as provided in Section 3.5. In addition, the Company shall pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which they are to be listed. Notwithstanding anything to the contrary contained herein, Registration Expenses shall not include any underwriting discounts or commissions or transfer taxes, if any, attributable to the sale of Registrable Securities. Except as provided in Section 3.5, the obligation of the Company to bear the expenses described in this Section 3.7 shall apply irrespective of whether a registration, once properly demanded, if applicable, becomes effective, is withdrawn or is suspended. For the avoidance of doubt, without limiting anything contained in this Section 3.7, the Shareholder’s expenses, including underwriting fees, legal fees, printing expenses and such other expenses that are not Registration Expanses shall be borne by the Shareholder.

Section 3.8 Holdback Agreements. If requested by the Company or the managing underwriter of an underwritten offering of the Company’s securities pursuant to this Article III, the Shareholder shall agree not to sell or otherwise transfer or dispose of any securities of the Company (other than pursuant to such underwritten offering) during the period five (5) days prior to and ninety (90) days (or such shorter period that the managing underwriter or the Company, as the case may be, requests) following the effective date of the Registration Statement relating to the underwritten offering of the Company’s securities or the date of filing the prospectus supplement in the case of a shelf takedown, as applicable, unless the managing underwriter agrees to such sale or distribution; provided, however, that the Shareholder shall not be obligated to comply with this Section 3.8 more than once in any twelve (12)-month period for any underwritten offering in which the Shareholder is not participating. At the request of the managing underwriter, if the Shareholder enters into a holdback agreement as set forth above, the Company will enter into an analogous agreement of the same duration.

Section 3.9 Indemnification.

(a) Subject to applicable Law, the Company shall indemnify, defend and hold harmless the Shareholder, its directors, officers, Affiliates, agents and representatives (and the partners, officers, directors, employees and shareholders thereof) from and against any and all losses, claims, damages, liabilities, fees (including reasonable attorneys’ fees) and expenses (including reasonable costs of investigation) (each, a “Liability” and collectively, “Liabilities”), arising out of or based upon any untrue, or allegedly untrue, statement of a material fact contained in any Registration Statement, preliminary Prospectus, Free Writing Prospectus or final Prospectus or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading under the circumstances such statements were made, except insofar as such Liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission contained in such Registration Statement, preliminary Prospectus, Free Writing Prospectus or final Prospectus in reliance on and in conformity with information furnished in writing to the Company by the Shareholder expressly for use therein, or by the Shareholder’s failure to furnish the Company, upon reasonable request, with the information with respect to the Shareholder, or any underwriter or Representative of the Shareholder, or the Shareholder’s intended method of distribution, that is the subject of the untrue statement or omission.

(b) The Shareholder shall indemnify, defend and hold harmless the Company, its directors, officers, agents and representatives from and against any and all Liabilities arising out of or based upon any untrue, or allegedly untrue, statement of a material fact contained in any Registration Statement, preliminary Prospectus, Free Writing Prospectus or final Prospectus or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading under the circumstances such statements were made, but only if such statement or alleged statement or omission or alleged omission was made in reliance on and in conformity with information furnished to the Company in writing by the Shareholder expressly for use therein.

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(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification, and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to any local counsel) for all parties indemnified by such indemnifying party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder.

(d) The indemnification provided for under this Section 3.9 shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities.

(e) If the indemnification provided for pursuant to this Section 3.9 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any Liabilities, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Liabilities in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that result in such Liabilities as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

(f) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in an underwriting agreement entered into with the Shareholder’s written consent in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

Section 3.10 Rule 144. The Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and it shall take such further action as the Shareholder may reasonably request to make available adequate current public information with respect to the Company meeting the public information requirements of Rule 144(c) under the Securities Act, to the extent required to enable the Shareholder or any of the Controlled Affiliates to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC.

ARTICLE IV.

PREEMPTIVE AND OTHER RIGHTS

Section 4.1 Preemptive Rights.

(a) Subject to Section 4.2, from and after the Closing, at any time that the Company effects a Subject Issuance, the Shareholder shall have the right to purchase from the Company for cash additional Subject Securities (in each instance, an “Additional Subject Securities Purchase”), such that following such respective Subject Issuance and such Additional Subject Securities Purchase, the Shareholder’s Voting Power will be the same as the Shareholder’s Voting Power immediately prior to such Subject Issuance.

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(b) Prior to any Subject Issuance, and no later than the date on which the Company Board approves such Subject Issuance, the Company shall provide the Shareholder with ten (10) Business Days’ prior written notice of such Subject Issuance or, if earlier, the expected date of entry by the Company into a binding agreement to effect such Subject Issuance (or if such notice period is not reasonably practicable under the circumstances, the maximum prior written notice as is reasonably practicable but, in no event, less than five (5) Business Days’ prior written notice) (such period between such notice and the date of the Subject Issuance or the expected date of entry into such contract, if applicable, the “Notice Period”) of such proposed Subject Issuance (including, in the case of a registered public offering and to the extent reasonably available, a copy of the prospectus included in the registration statement filed in respect of such offering or, in the case of an offering exempt from registration, the private placing memorandum or similar offering documents in respect of such offering), (i) describing (A) the anticipated amount of Subject Securities, price and other material terms upon which the Company offers to sell Subject Securities to the Shareholder, and (B) the number of Subject Securities the Shareholder is entitled to purchase pursuant to this Article IV, and (ii) containing a binding offer to sell Subject Securities to the Shareholder subject to the consummation of the Subject Issuance. If prior to any such Subject Issuance, there is a material change in the terms of such Subject Issuance, then prior to such Subject Issuance, the Company shall provide the Shareholder with fifteen (15) Business Days’ prior written notice (or if such notice period is not reasonably practicable under the circumstances, the maximum prior written notice as is reasonably practicable but, in no event, less than ten (10) Business Days’ prior written notice) describing such change (such period between such notice and the date of the Subject Issuance, also a “Notice Period”).

(c) The Shareholder may exercise its right to effect an Additional Subject Securities Purchase by providing written notice to the Company (i) in the event of a Subject Issuance for cash consideration, at least two (2) Business Days prior to the expiration of the Notice Period or (ii) in the event of a Subject Issuance for non-cash consideration, at least five (5) Business Days prior to the expiration of the Notice Period (or, if the Notice Period is less than five (5) Business Days, within two (2) Business Days of the date that such notice is given). The Shareholder’s notice must indicate the specific amount of Subject Securities that the Shareholder desires to purchase, subject to Section 4.1(a). Except as provided in Section 4.1(d) and Section 4.1(e), the Shareholder shall effect the Additional Subject Securities Purchase that it has elected to purchase concurrently with the Subject Issuance (the date of consummation of such transactions being referred to as the “Preemptive Rights Closing Date”). Subject to Section 4.1(e), if, in connection with any Subject Issuance, the Shareholder gives timely notice of its intent to exercise its right under this Section 4.1 but has not paid for and otherwise effected the Additional Subject Securities Purchase on the Preemptive Rights Closing Date, then the Shareholder shall be deemed to have waived its right to purchase such securities under this Section 4.1 with respect to such Subject Issuance; provided, however, that, subject to Section 4.1(e), the Company shall be entitled to specifically enforce the Shareholder’s exercise of its right to effect the Additional Subject Securities Purchase as set forth in the Shareholder’s notice.

(d) In the event the Notice Period is less than fifteen (15) Business Days and the Shareholder has delivered notice of its desire to effect an Additional Subject Securities Purchase, the Shareholder shall have the option, to be indicated in the notice delivered to the Company, to either (i) consummate the Additional Subject Securities Purchase on the Preemptive Rights Closing Date, or (ii) within six (6) months of the consummation of such Subject Issuance, make open market or privately negotiated purchases of Voting Securities; provided that following such open market or privately negotiated purchases, the Shareholder’s Voting Power will not exceed the Shareholder’s Voting Power immediately prior to such Subject Issuance.

(e) If and to the extent (but only to the extent) that the approval of any Governmental Authority is required for the Shareholder to effect an Additional Subject Securities Purchase for which the Shareholder has given timely notice to the Company of its election to exercise its rights under this Section 4.1 and the Shareholder has used reasonable best efforts to obtain such approval but such approval has not been obtained on or prior to the Preemptive Rights Closing Date, the Shareholder may deliver an irrevocable undertaking to effect the Additional Subject Securities Purchase on or before the date that is ten (10) Business Days following the receipt of such approval, and that the Shareholder shall use reasonable best efforts to obtain such approval as

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promptly as practicable, provided, that (i) if such approval is not obtained within ninety (90) Business Days after the Shareholder has given timely notice to the Company of its election to exercise its rights under this Section 4.1 and the Shareholder has complied in all material respects with its obligations under this Section 4.1(e), the Shareholder’s notice exercising its rights under this Section 4.1 shall be deemed withdrawn, and (ii) if such approval is obtained within such ninety (90) Business Day period but the receipt of such approval is subject to terms or conditions that are materially adverse to the Shareholder or any Controlled Affiliate, the Shareholder may withdraw such notice to the Company within such ninety (90) Business Day period; and if either clause (i) or (ii) applies, neither the Shareholder nor any Controlled Affiliate shall have any further right or obligation to effect such Additional Subject Securities Purchase and the Shareholder shall have the option, to be indicated in a notice delivered to the Company, in connection with any Subject Issuance, to the extent such shares could not be purchased by the Shareholder from the Company without such approval, for one (1) year after either clause (i) or (ii) applies, to make open market or privately negotiated purchases of Voting Securities; provided, that following such open market or privately negotiated purchases, the Shareholder’s Voting Power shall not exceed the Shareholder’s Voting Power immediately prior to such Subject Issuance.

(f) Except as provided in Section 4.1(g) or Section 4.3, if the Company effects a Subject Issuance and the Shareholder exercises its right to make an Additional Subject Securities Purchase, the Shareholder shall pay an amount per security equal to the cash consideration per security paid by the other purchaser or purchasers of Subject Securities in such Subject Issuance. In the case of an underwritten public offering or a private placement offering under Rule 144A of the Securities Act or similar transaction, the price paid by the Shareholder shall not include any underwriting or initial purchaser’s discount or fees (as disclosed in the final prospectus or offering memorandum).

(g) If the Company effects a Subject Issuance for non-cash consideration (or a combination of cash and non-cash consideration), and the Shareholder exercises its right to make an Additional Subject Securities Purchase, the Shareholder shall pay, per security in the Additional Subject Securities Purchase, the volume-weighted average price per share of Common Stock over the preceding twenty (20) trading days (from the date of the Preemptive Rights Closing Date) on which shares of Common Stock are traded, or able to be traded, on the NYSE (or, if not listed on the NYSE, such other securities exchange upon which shares of Common Stock are then listed or quoted).

(h) In the event that a proposed Subject Issuance is terminated or abandoned by the Company without the issuance of any Subject Securities, then the Shareholder’s purchase rights pursuant to this Section 4.1 shall also terminate as to such proposed Subject Issuance, and any funds in respect thereof paid to the Company by the Shareholder shall be refunded promptly and in full; provided, however, that to the extent the Shareholder has elected to make open market or privately negotiated purchases pursuant to Section 4.1(d), such termination shall not affect any binding transactions entered into by the Shareholder prior to receiving actual notice from the Company of such termination.

(i) Notwithstanding any other provision in this Section 4.1, to the extent the issuance of Voting Securities in an Additional Subject Securities Purchase in the manner contemplated by this Article IV would require, whether under the applicable rules of any stock exchange on which the Voting Securities are listed or otherwise, any approval by the shareholders of the Company that has not been obtained, the Shareholder may purchase in an Additional Subject Securities Purchase such number of Voting Securities as would be permitted without such approval and shall, until such approval is obtained, have the option, in connection with any such issuance of Voting Securities, and to the extent such shares are not purchased by the Shareholder from the Company, to make open market or privately negotiated purchases of Voting Securities, provided, that following such Additional Subject Securities Purchase and open market or privately negotiated purchases, the Shareholder’s Voting Power shall not exceed the Shareholder’s Voting Power immediately prior to such Subject Issuance.

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Section 4.2 Shareholder Approval. Prior to the execution of this Agreement, the Shareholder approved and adopted this Agreement for purposes of obtaining the required shareholder approval under the rules and regulations of the NYSE, including Section 312 of the NYSE Listed Company Manual (Shareholder Approval Policy), in order to permit the exercise of the Shareholder’s preemptive rights under Section 4.1(a) in respect of any Subject Issuance (the “Contractual Preemptive Rights”). Prior to the five (5)-year anniversary of the date of such approval and adoption of this Agreement (such date, the “NYSE Approval Expiration”) (or if the NYSE notifies the Company that such approval or adoption of this Agreement is or will no longer be valid in order to permit, without further approval of the shareholders of the Company, the exercise of the Contractual Preemptive Rights under this Agreement (including in any circumstance requiring shareholder approval of an issuance of common stock, or of securities convertible into or exercisable for common stock, to a “Related Party” as defined in Section 312.03 of the NYSE Listed Company Manual), promptly following such notification (and in any event, no later than the next regularly scheduled annual meeting of the Company)), the Company shall convene a meeting to consider and vote upon a special resolution approving and adopting this Agreement for all purposes under the rules and regulations of the NYSE, including Section 312 of the NYSE Listed Company Manual (Shareholder Approval Policy), or otherwise, so as to permit the exercise of the Contractual Preemptive Rights (each, a “NYSE Approval Resolution”) until the date that is the five (5)-year anniversary of the approval or adoption of such NYSE Approval Resolution. The Company agrees to use its reasonable best efforts to cause the adoption or passage of each NYSE Approval Resolution. If at any such meeting the NYSE Approval Resolution is not adopted or passed and the NYSE Approval Expiration occurs, (A) every year after such expiration, the Company shall convene a meeting of the shareholders of the Company to vote to adopt or pass a NYSE Approval Resolution and the Company shall take all action within its powers to cause the adoption or passage of such NYSE Approval Resolution, and (B) the Shareholder shall, until such NYSE Approval Resolution is adopted or passed, have the option, to be indicated in a notice delivered to the Company, in connection with any Subject Issuance and, to the extent such shares are not purchased by the Shareholder from the Company, to make open market or privately negotiated purchases of Voting Securities, provided, that following such open market or privately negotiated purchases, the Shareholder’s Voting Power shall not exceed the Shareholder’s Voting Power immediately prior to such Subject Issuance.

Section 4.3 Other Purchase Rights. In the event that a Subject Issuance consists of an issuance by the Company of additional Voting Securities in connection with any restricted stock, stock option, incentive or other award of Common Stock or other capital stock of the Company pursuant to the Company’s equity compensation plans or other employee, consultant or director compensation arrangements approved by the Company Board or a duly authorized committee thereof (whether such award was made before, or is made on or after, the date of this Agreement), and including in connection with the exercise of any options, warrants, or other securities convertible into, or exercisable or exchangeable for, equity securities of the Company, the preemptive rights set forth in Section 4.1 shall not apply but the Shareholder may within ninety (90) days of the consummation of such Subject Issuance, make open market or privately negotiated purchases of Voting Securities; provided, that following such open market or privately negotiated purchases, the Shareholder’s Voting Power shall not exceed the Shareholder’s Voting Power immediately prior to such Subject Issuance; provided, however, that if the Shareholder reasonably believes, after consultation with legal counsel, that to make such purchases within such ninety (90)-day period would violate applicable Law (including Section 10(b) of the Exchange Act and any other rules promulgated thereunder), such period shall be tolled until such time as the Shareholder reasonably believes, after consultation with legal counsel, that such purchases would not violate applicable Law (but, in any event, such period shall not be tolled for longer than six (6) months past the date of such Subject Issuance).

Section 4.4 Purchases by Certain Controlled Affiliates. Notwithstanding anything to the contrary in this Agreement, the Shareholder may assign its right to effect an Additional Subject Securities Purchase or to make open market or privately negotiated purchases pursuant to Section 4.1, Section 4.2 or Section 4.3 to one or more Controlled Affiliate(s) that agrees or agree, in customary form, to be bound by the terms of this Agreement (a “Transferee Adoption Agreement”). Upon the execution of such Transferee Adoption Agreement, such Person shall be deemed Shareholder under this Agreement. Notwithstanding any assignment pursuant to this Section 4.4, the Shareholder shall continue to be bound by this Agreement and shall not be released from any of its obligations hereunder.

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ARTICLE V.

CORPORATE GOVERNANCE

Section 5.1 Board Representation.

(a) Upon the Closing, the Company Board shall consist of up to twelve (12) Directors, which shall include (i) two (2) Directors who were members of the board of directors of UIL immediately prior to the Closing (other than the chief executive officer of UIL immediately prior to the Closing) selected by the Company (the “UIL Directors”), and (ii) the chief executive officer of UIL immediately prior to the Closing. The initial UIL Directors shall be [●] and [●].

(b) (i) For a period of five (5) years after the Closing, the Company Board shall consist of at least five (5) Independent Directors; provided that, solely for the purposes of this Section 5.1(b)(i), each of Mr. John E. Baldacci and Mr. Arnold L. Chase, to the extent he is a Director during such period, shall be deemed an “Independent Director” irrespective of whether he qualifies as an Independent Director hereunder.

(ii) Following the five (5)-year period described in Section 5.1(b)(i) above, the Company Board shall consist of at least four (4) Independent Directors provided that, solely for the purposes of this Section 5.1(b)(ii), either Mr. Baldacci or Mr. Chase (but not both), to the extent he is a Director during such period, shall be deemed an “Independent Director” irrespective of whether he qualifies as an Independent Director hereunder.

(iii) In the event of the resignation, removal or death of Mr. Baldacci and/or Mr. Chase (or their respective replacements on the Company Board), or if Mr. Baldacci and/or Mr. Chase (or their respective replacements on the Company Board) decide not to stand for reelection to the Company Board or are otherwise unable or unwilling to serve on the Company Board, the Stockholder shall nominate a person to serve on the Company Board in lieu thereof who qualifies as an Independent Director hereunder.

(c) For a period of three (3) years after the Closing, the Company Board shall nominate the two (2) UIL Directors for election to the Company Board, and the Shareholder shall vote its shares of Voting Securities in favor of such UIL Directors to be elected to the Company Board. In the event of the resignation, removal or death of any UIL Director serving on the Company Board during such three (3)-year period, such UIL Director’s replacement shall be nominated by vote of the Unaffiliated Committee, and the Shareholder shall vote its shares of Voting Securities in favor of such nominee to be elected to the Company Board for the duration of such three (3)-year period.

(d) The Company and the Shareholder shall take all actions within their respective power to cause the composition and powers of the Company Board and its committees to at all times satisfy and be subject to the requirements of applicable Law (including the rules of the NYSE), this Agreement and the Organizational Documents of the Company, as amended from time to time. For the avoidance of doubt, nothing in the foregoing shall restrict or limit the Company’s ability to amend its Organizational Documents from time to time in accordance with their terms and applicable Law.

(e) Subject to Section 5.1(a)-(d), and except as otherwise required by applicable Law, for so long as the Voting Power of the Shareholder is fifty percent (50%) or more, the Shareholder shall have the right to designate the individuals to be nominees for election to the Company Board (“Shareholder Designees”), and the Company and the Shareholder shall use their reasonable best efforts to cause such Shareholder Designees to be elected to the Company Board; provided that at any time when the Voting Power of the Shareholder is less than fifty percent (50%), (i) the Shareholder shall have the right to designate such number of Shareholder Designees equal to the Shareholder’s Voting Power multiplied by the total number of Directors that the Company would have if there were no vacancies on the Company Board, rounded to the nearest whole number (and in any event not less than one (1)) and (ii) the Shareholder shall vote all of its shares of Voting Securities in elections of Directors to be elected to the Company Board in favor of the nominees recommended by the Company Board.

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(f) Subject to Section 5.1(b), and except as otherwise required by applicable Law, for so long as the Voting Power of the Shareholder is fifty percent (50%) or more, in the event that a vacancy is created at any time by the death, disability, retirement, disqualification, resignation or removal (with or without cause), the Shareholder shall have the right to designate a replacement to fill such vacancy. The Company shall cause such vacancy to be filled by the replacement so designated and the Company Board shall promptly elect such designee to the Company Board. Any Shareholder Designee elected in accordance with this Section 5.1 shall hold office for the remainder of the full term in which the vacancy occurred or to which the new Shareholder Designee is elected, until his or her successor is elected or until his or her earlier resignation or removal in accordance with this Section 5.1. Without the consent of the Shareholder, neither the Company nor the Company Board shall appoint any other Person to fill any such vacancy.

(g) Except as otherwise expressly provided herein or as required by applicable Law or the Organizational Documents of the Company, for so long as the Voting Power of the Shareholder is fifty percent (50%) or more, the Shareholder and its Controlled Affiliates shall be entitled to exercise their Voting Power to change the size and composition of the Company Board.

(h) Subject to applicable Law, no Shareholder Designee shall be obligated to present any particular business opportunity to the Company that he or she becomes aware of by virtue of his or her position as an officer or employee of the Shareholder or its Affiliates.

(i) Any election by the Shareholder not to exercise (in whole or in part) the right to designate all or a portion of the Shareholder Designees shall not constitute a permanent waiver or relinquishment of such right. If the Shareholder elects not to exercise its right to designate a Shareholder Designee, the Company shall have no right to fill such vacancy.

(j) The Shareholder shall, and shall cause the Shareholder Designees to, use reasonable best efforts to timely provide the Company with accurate and complete information relating to the Shareholder and the Shareholder Designees that may be required to be disclosed by the Company under the Securities Act or the Exchange Act, including such information required to be furnished by the Company with respect to the Shareholder Designees in a proxy statement pursuant to Rule 14a-101 promulgated under the Exchange Act.

(k) The Company shall take all actions within its power not to permit any amendment to the Company’s Organizational Documents that would alter or modify in an adverse manner the Shareholder’s rights under this Article V without the written approval of the Shareholder.

Section 5.2 Specified Restrictions.

(a) The Shareholder and/or the Company shall not enter into or effectuate any Going Private Transaction (including any “squeeze-out” transaction of the Public Shareholders) without the prior approval of both (i) the majority of the members of the Unaffiliated Committee and (ii) a majority of the Votes represented by the Voting Securities then owned by the Public Shareholders.

(b) The Shareholder shall not cause the Company to, and the Company shall not, enter into or effectuate any transaction for the acquisition of the Company by another Person (including any stock acquisition, reorganization, merger or consolidation) that results in all shareholders of the Company exchanging their Voting Securities for cash or securities, unless all shareholders of the Company (including the Shareholder and the Controlled Affiliates) are entitled to the same per share consideration (in form and amount) to be received in such transaction by the Shareholder and its Affiliates (or if such consideration is not cash or publicly traded on a stock exchange in the United States, an equivalent cash amount).

(c) In addition to any other vote, consent or approval required by the Company’s Organizational Documents, this Agreement or applicable Law, the Company shall not enter into any transaction between, or involving both (i) the Company or any of its Subsidiaries or any of its Controlled Joint Ventures, and (ii) the

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Shareholder or an Affiliate of the Shareholder (other than the Company, its Subsidiaries and its Controlled Joint Ventures) unless such transaction is both (A) approved by a majority of the members of the Unaffiliated Committee and (B) on an arms’ length basis.

(d) From and after the Closing, the Closing Shareholder Services will not be provided at higher costs to the Company or its Subsidiaries or Controlled Joint Ventures than as reflected in the expenses shown in the Green IFRS Financial Statements (as such term in defined in the Merger Agreement), except (i) in the case of ordinary course market adjustments of such costs made on arm’s length basis, or (ii) as otherwise approved by the majority of the members of the Unaffiliated Committee.

Section 5.3 Waiver of Class Rights.

(a) The rights of the Shareholder under this Agreement are not rights attaching to the Voting Securities or any other securities of the Company held by the Shareholder or the Controlled Affiliates. The Voting Securities or any other securities of the Company held by the Shareholder or the Controlled Affiliates shall not constitute a separate class of equity share capital of the Company as a result of the rights of the Shareholder under this Agreement. Accordingly, the Shareholder shall not, and shall procure that the Controlled Affiliates shall not, claim or assert any such class rights that, in each case, the relevant shareholder(s) would not be able to claim or assert in the absence of this Agreement.

(b) If, notwithstanding the provisions of Section 5.3(a), a court of competent jurisdiction shall find that, due to the rights of the Shareholder under this Agreement, under applicable Law the Voting Securities or any other securities of the Company held by the Shareholder or the Controlled Affiliates do constitute a separate class of Voting Securities or any other securities of the Company, the Shareholder hereby undertakes to and covenants with the Company that it shall, and shall procure that the Controlled Affiliates shall, vote in favor of the relevant variation of class rights in accordance with any voting obligation to which it is subject under this Agreement.

ARTICLE VI.

OTHER AGREEMENTS

Section 6.1 Transfer Restrictions.

(a) For a period of eighteen (18) months after the Closing (the “Lockup Period”), the Shareholder shall not, and shall not permit its Affiliates to, Transfer any Voting Securities that are Beneficially Owned thereby, except for:

(i) Transfers made pursuant to a Change of Control Transaction in which all shareholders of the Company (including the Shareholder) are entitled to participate in such transaction (on a pro rata basis) and are entitled to the same per share consideration (in form and amount) to be received in such transaction by the Shareholder and its Affiliates (or if such consideration is not cash or publicly traded on a stock exchange in the United States, an equivalent cash amount);

(ii) Transfers to one or more Controlled Affiliates that agrees or agree to be bound by the terms of this Agreement by executing and delivering to the Company a Transferee Adoption Agreement; or

(iii) Transfers made after the date that is twelve (12) months after the Closing that have been approved by the majority of the members of the Unaffiliated Committee, after having received the advice of a nationally recognized independent investment banking firm in connection therewith.

(b) For a period of three (3) years after the Closing, the Shareholder shall not, and shall not permit the Controlled Affiliates to, Transfer more than an aggregate of ten percent (10%) of the outstanding Voting Securities in any transaction or series of transactions, unless all shareholders of the Company are entitled to

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participate in such transaction (on a pro rata basis) and are entitled to the same per share consideration as the Shareholder and its Affiliates (in form and amount) to be received in such transaction (or if such consideration is not cash or publicly traded on a stock exchange in the United States, an equivalent cash amount).

Section 6.2 Information Rights.

(a) The Company shall provide the Shareholder, on an ongoing and confidential basis, such access to and information with respect to the Company’s and its Subsidiaries’ businesses, operations, plans and prospects as the Shareholder may from time to time reasonably determine it requires in order to (1) appropriately manage and evaluate its investment in the Company, (2) comply with its reporting obligations to any applicable Governmental Authority, (3) comply with its internal policies from time to time, (4) support the Shareholder’s strategic planning, (5) prepare its tax returns, and/or (6) comply with its provision of information obligations pursuant to any financing facility binding upon the Shareholder, including (i) the right to routinely consult with senior management of the Company with respect to the Company’s and its Subsidiaries’ businesses and financial matters, including annual operating plans, and (ii) the right to inspect all books and records (including rating agencies and analysts reports) and all facilities and properties of the Company and its Subsidiaries, including to the extent necessary for the preparation of the Shareholder’s financial statements and securities filings, provided, however, that (x) any confidential information provided by the Company to the Shareholder pursuant to this Section 6.2 shall be used only by the Shareholder to manage and evaluate its investment in the Company, and to prepare its financial statements and securities filings and (y) the Shareholder shall, and shall cause its and its Controlled Affiliates’ Representatives to, keep confidential all information and documents of the Company and its Affiliates obtained by the Shareholder, unless (i) the release of such information is required (by deposition, interrogatory, requests for information or documents by a Governmental Authority, subpoena or similar process) to be disclosed by applicable Law, provided that the Shareholder shall furnish only such information that the Shareholder’s legal counsel advises is legally required, and shall in good faith take all reasonable steps necessary to seek confidential treatment of such information by any Governmental Authority to which it is required to be furnished, and provided, further, that the Shareholder shall notify the Company promptly upon becoming aware of such disclosure requirement or (ii) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge. Without limiting the foregoing, (x) as soon as available (and, in any event within sixty (60) days) after the end of each fiscal year of the Company (or the earlier date by which the information is required to be filed by the Exchange Act), the Company shall deliver to the Shareholder the annual financial statements required to be filed by the Company under the Exchange Act (or, if such financial statements are not required to be filed under the Exchange Act, such annual financial statements the Company would be required to file under the Exchange Act if the Company was subject to the reporting obligations of Section 13 of the Exchange Act), and (y) as soon as available after the first, second and third quarterly accounting periods in each fiscal year of the Company and in any event within forty-five (45) days (or the earlier date by which the information is required to be filed under the Exchange Act), the Company shall deliver the quarterly financial statements required to be filed by the Company under the Exchange Act (or, if such financial statements are not required to be filed under the Exchange Act, the financial statements the Company would be required to file under the Exchange Act if the Company was subject to the reporting obligations of Section 13 of the Exchange Act), together with such supporting detailed information as the Shareholder may reasonably request to enable it to prepare its own financial statements and securities filings. The Company shall reasonably cooperate with the Shareholder and the Controlled Affiliates and reasonably assist the Shareholder in connection with the inclusion of the Company’s financial statements and other information required in the Shareholder’s own financial statements and securities filings, including providing reasonable access to the Shareholder’s employees and outside accountants as may be required in connection therewith. The Shareholder shall reimburse the Company for all reasonable documented out-of-pocket costs and expenses incurred by the Company in connection with such cooperation and assistance. The Company may decline to provide the Shareholder with confidential, competitively sensitive information if providing such information, at the advice of the Company’s outside counsel, would be reasonably likely to violate applicable Law.

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(b) The Shareholder shall, upon request in writing by the Company, as promptly as practicable, provide to the Company any information regarding the Shareholder and the Controlled Affiliates that is required for the Company to comply with applicable Laws (but only to the extent required), including the rules of any national securities exchange or inter-dealer quotation system on which the Company’s securities may be listed or quoted; provided, however, that nothing in the foregoing shall obligate the Shareholder to provide the Company any records relating to the negotiation and consummation of the transactions contemplated by this Agreement and the Merger Agreement, including confidential communications with financial and other advisors and legal counsel representing the Shareholder or any of its Affiliates, and confidential information provided by the Shareholder to the Company shall be used only by the Company for such purposes.

(c) The Shareholder hereby acknowledges that it is aware, and will advise its Representatives who are informed as to the matters which are the subject of this Agreement, that the United States securities Laws prohibit any Person who is in possession of material, non-public information concerning the matters that are the subject of this Agreement from purchasing or selling securities of the Company or from communicating such information to any other Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell securities, and that the Shareholder intends for it and its Representatives to comply with the requirements of such Laws.

Section 6.3 Other Business Activities.

(a) For so long as the Voting Power of the Shareholder is fifty percent (50%) or more, the Shareholder shall not, and shall cause the other Controlled Affiliates not to, engage in actions that would reasonably be expected to impair the executive officers of the Company and its Subsidiaries from conducting the Company’s and its Subsidiaries’ business or operations in a manner substantially consistent with such business or operations as of immediately following the Closing.

(b) Subject to Section 6.3(a) and without limiting anything contained in the Organizational Documents of the Company and its Subsidiaries, the Company hereby recognizes and acknowledges that the Shareholder and its Affiliates own, engage or participate in businesses and business activities that compete, or may compete, with the businesses of the Company and its Subsidiaries. Accordingly, it is hereby acknowledged and agreed that neither the execution of this Agreement or the Merger Agreement, nor the consummation of the transactions contemplated hereby or thereby (including the Shareholder’s or the Controlled Affiliate’s ownership of Voting Securities) precludes or limits any of the Shareholders and its Affiliates from, directly or indirectly, owning, engaging or participating in any business or business activity at any time and in any geographical location, including such businesses or business activities that compete, or may compete, with the Company or its Subsidiaries or any of their respective businesses, except as expressly provided in Section 6.3(a).

ARTICLE VII.

EFFECTIVENESS AND TERMINATION

Section 7.1 Effectiveness. This Agreement shall take effect immediately upon the Closing and shall remain in effect until it is terminated pursuant to Section 7.2.

Section 7.2 Termination. At such time that the Shareholder’s Voting Power is twenty percent (20%) or less, all provisions of this Agreement, other than Section 3.9, Section 5.1(b), this Article VII and Article VIII (except for Section 8.1, Section 8.2 and Section 8.3), shall terminate; provided, that following termination of this Agreement the Shareholder shall have (i) one (1) additional Demand Registration, and (ii) unlimited piggyback registration rights pursuant to Section 3.2 in respect of any Piggyback Registration, and the provisions of Article III relating to such rights shall survive any termination of the other provisions of the Agreement until the earlier of such time that the Shareholder (A) ceases to own, directly or indirectly, a Registrable Amount, or (B) may sell all its remaining Registrable Securities without registration under the Securities Act.

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ARTICLE VIII.

MISCELLANEOUS

Section 8.1 Public Announcement. The Shareholder and the Company shall reasonably cooperate and work in good faith with one another when preparing public announcements (including press releases) relating to the other Party or the Shareholder’s investments in the Company.

Section 8.2 Legend on Securities.

(a) Each certificate representing Voting Securities Beneficially Owned by the Shareholder or any of the Controlled Affiliates and subject to the terms of this Agreement shall bear the following legends (the “Legends”) on the face thereof (it being understood that if such shares are not certificated, other appropriate restrictions shall be implemented to give effect to the provisions of this Section 8.2):

(i) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING, TRANSFER AND CERTAIN OTHER LIMITATIONS SET FORTH IN THAT CERTAIN SHAREHOLDER AGREEMENT, DATED [                    ], 2015, BETWEEN IBERDROLA USA, INC. AND IBERDROLA, S.A., AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE “AGREEMENT”), COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF IBERDROLA USA, INC.”

(ii) “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.”

(b) Upon any acquisition by the Shareholder or any Controlled Affiliate of Beneficial Ownership of Voting Securities, the Shareholder shall, or shall cause any such Controlled Affiliate to, submit the certificates representing such Voting Securities to the Company so that the Legends (to the extent required by this Section 8.2 and, in the case of Section 8.2(a)(ii), to the extent applicable) may be placed thereon (if not so endorsed upon issuance).

(c) Upon request of the Shareholder and receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that such Legend is no longer required under the Securities Act and applicable state laws, the Company shall promptly cause all or the applicable portion of the Legend to be removed from any certificate for any Voting Securities Beneficially Owned by the Shareholder or any of the Controlled Affiliates to be Transferred in accordance with the terms of this Agreement.

Section 8.3 Application of Agreement to Additional Voting Securities. Any additional Voting Securities of which the Shareholder or any of the Controlled Affiliates acquires Beneficial Ownership following the Closing shall be subject to this Agreement as fully as if such Voting Securities were Beneficially Owned by such Person as of the Closing.

Section 8.4 Remedies.

(a) Each Party acknowledges that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that it would be impossible to determine the amount of damages that would result from any breach of any of the provisions of this Agreement. Each Party therefore agrees that the remedy at law for any breach, or threatened breach, of any of such provisions would likely be inadequate and, accordingly, agrees that the other Party shall, in addition to any other rights or remedies which it may have, be entitled to seek such equitable and injunctive relief as may be available from any court of competent jurisdiction to compel specific performance of,

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or restrain the other Party and its Controlled Affiliates from violating, any of such provisions. In connection with any action or proceeding for injunctive relief, each Party hereby waives the claim or defense that a remedy at law alone is adequate and agrees, to the maximum extent permitted by law, to have each provision of this Agreement specifically enforced against it and its Controlled Affiliates, without the necessity of posting bond or other security, and consents to the entry of injunctive relief against it enjoining or restraining any breach or threatened breach of such provisions of this Agreement.

(b) All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any Party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such Party.

Section 8.5 Successors and Assigns. This Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the Parties and their respective successors and permitted assigns, and no such term or provision is for the benefit of, or intended to create any obligations to, any other Person, except as otherwise specifically provided in Section 3.9. Except as otherwise specifically provided in Section 4.4, neither this Agreement nor any rights or obligations hereunder shall be assignable by any Party without the prior written consent of the other Party, and the approval of any such assignment by the Shareholder shall require the approval of (i) the Company Board and (ii) a majority of the members of the Unaffiliated Committee.

Section 8.6 Amendments; Waivers. This Agreement may be amended only by an agreement in writing executed by the Company and the Shareholder; provided that any amendment of this Agreement shall require the approval of (i) the Company Board, and (ii) a majority of the members of the Unaffiliated Committee. Any Party may waive in whole or in part any benefit or right provided to it under this Agreement, such waiver being effective only if contained in a writing executed by the waiving Party. No failure by any Party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon breach thereof shall constitute a waiver of any such breach or of any other covenant, duty, agreement or condition, nor shall any delay or omission of any Party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

Section 8.7 No Third Party Rights. Except as provided in Section 3.9, nothing expressed or referred to in this Agreement is intended to, or will be, construed to give any Person other than the Parties to this Agreement any legal or equitable right, remedy or claim. The rights of third parties under Section 3.9 may be terminated, rescinded or modified by mutual agreement of the Parties, without the consent of any such third party.

Section 8.8 Notices. Except as otherwise provided in this Agreement, all notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and, in the case of delivery in person or by overnight courier, shall be deemed to have been duly given upon receipt) by delivery in person or overnight courier to the respective parties at the following addresses, delivery by electronic mail transmission to the respective parties at the following email addresses, or at such other address, or email address for a party as shall be specified in a notice given in accordance with this Section 8.8; provided, however, that delivery by electronic mail transmission shall be deemed to have been duly given upon receipt only if promptly confirmed by telephone:

if to the Shareholder:

Iberdrola, S.A.

Tomás Redondo 1

28033 Madrid, Spain

Telephone: +34 (91) 325 77 64

Attention: Manuel Toledano

Email: mtoledano@iberdrola.es

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if to the Company, to:

Iberdrola USA, Inc.

52 Farm View Drive

New Gloucester, Maine 04260

Telephone: 207-688-6363

Attention: R. Scott Mahoney, General Counsel

Email: scott.mahoney@iberdrolausa.com

Section 8.9 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

(a) This Agreement, and all claims or causes of action (whether at law, in contract or in tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof, shall be governed by and construed in accordance with the Laws of the State of New York, without regard to the any choice or conflict of law principles or rules (whether of the State of New York or any other jurisdiction) that would mandate the application of the Laws of any jurisdiction other than the State of New York. Subject to Section 8.10, the Parties hereby consent to personal jurisdiction in any action brought with respect to this Agreement and the transactions contemplated hereunder (including any action to enforce any arbitration award under this Agreement) in the competent courts of the State of New York, or, if such courts do not have subject matter jurisdiction, the federal courts sitting in the State of New York, and the Parties agree that service of process may be accomplished pursuant to Section 8.8. Notwithstanding anything to the contrary in this Section 8.9(a), if at any time hereafter the Company is redomiciled to Delaware, the phrase “State of New York” in this Section 8.9(a) shall automatically be replaced with the phrase “State of Delaware”.

(b) EACH PARTY HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT (INCLUDING IN CONNECTION WITH ANY ACTION TO ENFORCE AN ARBITRATORS’ DECISION OR AWARD PURSUANT TO Section 8.10).

Section 8.10 Disputes Resolution.

(a) The Parties agree that any and all disputes, controversies or claims arising out of or relating to this Agreement shall be submitted for mediation, and if the matter is not resolved through mediation, then it shall be submitted to the American Arbitration Association, for final and binding arbitration pursuant to the other provisions of this Section 8.10. Either Party, or the Unaffiliated Committee on behalf of the Company upon resolution approved by a majority of the members of the Unaffiliated Committee, may commence mediation by providing to the other Party a written request for mediation, setting forth the subject of the dispute and the relief requested. The Parties shall select a mediator and the procedures under which the mediation is to be conducted by mutual agreement, provided that if, on the date that is thirty (30) days after the written request for mediation is given, the Parties have not agreed upon a mediator and such procedures, then the Parties shall provide to the American Arbitration Association a written request for mediation under the American Arbitration Association’s Commercial Mediation Procedures, setting forth the subject of the dispute and the relief requested, and a neutral mediator shall be appointed by the American Arbitration Association administrator. The Parties will cooperate with the American Arbitration Association and with one another in scheduling the mediation proceedings. The Parties agree that they will participate in the mediation in good faith and that they will share equally in its costs. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the Parties, their Representatives, and by the mediator or any American Arbitration Association employees (including, for the avoidance of doubt, any true and correct translations thereof), are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the Parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or nondiscoverable as a result of its use in the mediation. Either Party, or the Unaffiliated Committee on behalf of the Company upon resolution approved by a majority of the members of the Unaffiliated Committee, may initiate

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arbitration by notice (a “Request for Arbitration”) to any other Party at any time following the initial mediation session or at any time following 45 days from the date of filing the written request for mediation, whichever occurs first (“Earliest Initiation Date”). The mediation may continue after the commencement of arbitration if the Parties so desire. At no time prior to the Earliest Initiation Date shall either side initiate an arbitration or litigation related to this Agreement except to pursue a provisional remedy that is authorized by law or by American Arbitration Association rules or by agreement of the Parties. However, this limitation is inapplicable to a Party if the other Party refuses to comply with the requirements of this Section 8.10(a). All applicable statutes of limitation and defenses based upon the passage of time shall be tolled until 15 days after the Earliest Initiation Date. The Parties will take such action, if any, required to effectuate such tolling. If a mediation or arbitration is commenced by the Unaffiliated Committee on behalf of the Company, the Unaffiliated Committee on behalf of the Company shall be empowered to do or cause to be done (or forebear from doing) any and all acts reasonably deemed by a majority of the members of the Unaffiliated Committee to be necessary or appropriate in furtherance of the purposes of the Company with respect to such mediation or arbitration, including without limitation determining to settle, resolve, withdraw or appeal such mediation or arbitration.

(b) Subject to Section 8.10(a), any and all disputes, controversies or claims arising out of, relating to or in connection with this Agreement or the negotiation, execution or performance hereof, including any dispute regarding its arbitrability, shall be exclusively and finally settled by arbitration administered by the American Arbitration Association, provided that a Request for Arbitration is given after the Earliest Initiation Date (except as otherwise provided in Section 8.10(a)). An arbitration shall be conducted in accordance with the American Arbitration Association rules governing commercial arbitration in effect at the time the Request for Arbitration is filed (the “AAA Rules”), except as they may be modified by the provisions of this Agreement. The place of the arbitration shall be New York City, New York. The arbitration shall be conducted by an arbitrator appointed by mutual agreement of the Parties; provided that in the event the Parties fail to agree on the appointment of an arbitrator within fifteen (15) days after delivery of the Request for Arbitration, such arbitrator shall be appointed by the American Arbitration Association pursuant to the AAA Rules. If the arbitrator is appointed by the American Arbitration Association, such arbitrator shall be a retired judge or justice from any United States federal jurisdiction. Any arbitrator shall have had no business relationship (other than acting as arbitrator or mediator) or familial relationship with any Party, or any Affiliate of any Party, or any Representative of any Party in a significant matter during the past ten (10) years. The arbitration shall commence within thirty (30) days after the appointment of the arbitrator; the arbitration shall be completed within sixty (60) days of commencement; and the arbitrator’s award shall be made within thirty (30) days following such completion. The Parties may mutually agree to extend the time limits specified in the foregoing Section 8.10(b).

(c) The arbitrators will apply the substantive law (and the law of remedies, if applicable) as provided in Section 8.9(a), and will be without power to apply any different substantive law, and, for the avoidance of doubt, shall maintain all proceedings in confidence. The arbitrators will render an award and a written opinion in support thereof. Such award shall include the costs related to the arbitration and reasonable attorneys’ fees and expenses to the prevailing Party. The arbitrators shall also have the authority to grant provisional remedies, including injunctive relief, and to award specific performance. The arbitrators may entertain a motion to dismiss and/or a motion for summary judgment by either Party, applying the standards governing such motions under the Federal Rules of Civil Procedure, and may rule upon any claim or counterclaim (or any portion thereof), without holding an evidentiary hearing, if, after affording the Parties an opportunity to present written submission and documentary evidence, the arbitrators conclude that there is no material issue of fact and that the claim or counterclaim (or a portion thereof) may be determined as a matter of law. The Parties waive, to the fullest extent permitted by law, any rights to appeal, or to review of, any arbitrators’ award by any court. The arbitrators’ award shall be final and binding, and judgment on the award may be entered in any court of competent jurisdiction. Notwithstanding anything in this Agreement to the contrary, either Party may seek injunctive relief, specific performance, or other equitable remedies from a court in accordance with Section 8.9(a).

Section 8.11 Construction. The language used in this Agreement shall be deemed to be the language the Parties have chosen to express their mutual intent, and no rule of strict construction will be applied against any Party.

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Section 8.12 Entire Agreement. This Agreement and the Merger Agreement constitute the entire agreement of the Parties with respect to the subject matter hereof. This Agreement supersedes all prior agreements and understandings between the Parties with respect to its subject matter. In the event of any inconsistency, discrepancy or contradiction between the provisions of the Merger Agreement and the provisions of this Agreement, the provisions of this Agreement shall control.

Section 8.13 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction or invalid or unenforceable in any situation shall, as to that jurisdiction or to that situation, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction or in any other situation. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

Section 8.14 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers as of the date set forth at the head of this Agreement.

  IBERDROLA, S.A.

  By:

  Name:

  Title:

  IBERDROLA USA, INC.

  By:

  Name:

  Title:

[Signature Page to Shareholder Agreement]

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Annex C

1585 Broadway

New York, NY 10036

CONFIDENTIAL

February 25, 2015

Board of Directors

UIL Holdings Corporation

157 Church Street

New Haven, Connecticut 06506

Members of the Board:

We understand that UIL Holdings Corporation (the “Company”), Iberdrola USA, Inc. (the “Buyer”) and Green Merger Sub, Inc., a wholly owned subsidiary of the Buyer (“Acquisition Sub”), propose to enter into an Agreement and Plan of Merger, substantially in the form of the draft dated February 25, 2015 (the “Merger Agreement”), which provides, among other things, that the Company shall merge with and into Acquisition Sub (the “Merger”) with Acquisition Sub surviving the Merger. Pursuant to the Merger, each outstanding share of common stock, no par value, of the Company (the “Company Common Stock”), other than shares held by the Company (as treasury shares or otherwise, other than any shares owned on behalf of third parties), will be converted into the right to receive (x) one validly issued ordinary share, par value $0.01 per share, of the Buyer (the “Buyer Common Stock”), subject to adjustment in certain circumstances (the “Stock Consideration”) and (y) $10.50 per share in cash (together with the Stock Consideration, the “Consideration”). The Merger Agreement also provides that immediately prior to the consummation of the Merger, the Buyer shall issue additional shares of Buyer Common Stock to its parent company (“Buyer Parent”) so that, after giving effect to the Merger, Buyer Parent shall own 81.50% of the outstanding shares of Buyer Common Stock. The terms and conditions of the Merger are more fully set forth in the Merger Agreement.

You have asked for our opinion as to whether the Consideration to be received by the holders of shares of the Company Common Stock pursuant to the Merger Agreement is fair from a financial point of view to the holders of shares of the Company Common Stock.

For purposes of the opinion set forth herein, we have:

1) Reviewed certain publicly available financial statements and other business and financial information of the Company and the Buyer, respectively;

2) Reviewed certain internal financial statements and other financial and operating data concerning the Company and the Buyer, respectively;

3) Reviewed certain financial projections prepared by the management of the Company with respect to the Company, and, based on modified financial projections received from the Buyer, with respect to the Buyer;

4) Reviewed information relating to certain strategic, financial and operational benefits anticipated from the Merger, prepared by the managements of the Company and the Buyer, respectively;

5) Discussed the past and current operations and financial condition and the prospects of the Company, including information relating to certain strategic, financial and operational benefits anticipated from the Merger, with senior executives of the Company;

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6) Discussed the past and current operations and financial condition and the prospects of the Buyer, including information relating to certain strategic, financial and operational benefits anticipated from the Merger, with senior executives of the Buyer;

7) Reviewed the pro forma impact of the Merger on the Buyer’s earnings per share, cash flow, consolidated capitalization and financial ratios;

8) Reviewed the reported prices and trading activity for the Company Common Stock;

9) Compared the financial performance of the Company and the Buyer and the prices and trading activity of the Company Common Stock with that of certain other publicly-traded companies comparable with the Company and the Buyer, respectively, and their securities;

10) Reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;

11) Participated in certain discussions and negotiations among representatives of the Company and the Buyer and their financial and legal advisors;

12) Reviewed the Merger Agreement, and certain related documents; and

13) Performed such other analyses, reviewed such other information and considered such other factors as we have deemed appropriate.

We have assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to us by the Company and the Buyer, and formed a substantial basis for this opinion. With respect to the financial projections, we have assumed that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company of the future financial performance of the Company and the Buyer. In addition, we have assumed that the Merger will be consummated in accordance with the terms set forth in the Merger Agreement without any waiver, amendment or delay of any terms or conditions that are material to our analysis, including, among other things, that the Merger will be treated as a tax-free reorganization, pursuant to the Internal Revenue Code of 1986, as amended. Morgan Stanley has assumed that in connection with the receipt of all necessary governmental, regulatory or other approvals and consents required for the proposed Merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed Merger. We are not legal, tax or regulatory advisors. We are financial advisors only and have relied upon, without independent verification, the assessment of the Buyer and the Company and their legal, tax and regulatory advisors with respect to legal, tax and regulatory matters. We express no opinion with respect to the fairness of the amount or nature of the compensation to any of the Company’s officers, directors or employees, or any class of such persons, relative to the Consideration to be received by the holders of shares of the Company Common Stock in the Merger. We have not made any independent valuation or appraisal of the assets or liabilities of the Company or the Buyer, nor have we been furnished with any such valuations or appraisals. Our opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof may affect this opinion and the assumptions used in preparing it, and we do not assume any obligation to update, revise or reaffirm this opinion.

In arriving at our opinion, we were not authorized to solicit, and did not solicit, interest from any party with respect to the acquisition, business combination or other extraordinary transaction, involving the Company. Our opinion also does not address the relative merits of the Merger as compared to any other alternative business transaction, or other alternatives, or whether or not such alternatives could be achieved or are available.

We have acted as financial advisor to the Board of Directors of the Company in connection with the Merger and will receive a fee for our services, a significant portion of which is contingent upon the closing of the Merger. In

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the two years prior to the date hereof, we have provided financial advisory and financing services for the Buyer and its affiliates and the Company and have received fees in connection with such services. Morgan Stanley and its affiliates are also currently providing financial advisory services to an affiliate of the Buyer in connection with a transaction that is unrelated to the Merger and is not material to the Buyer and its affiliates. Morgan Stanley may also seek to provide financial advisory and financing services to the Buyer and its affiliates and the Company in the future and expects to receive fees for the rendering of these services.

Please note that Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Our securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of the Buyer, Buyer Parent, the Company, or any other company, or any currency or commodity, that may be involved in the Merger, or any related derivative instrument.

This opinion has been approved by a committee of Morgan Stanley investment banking and other professionals in accordance with our customary practice. This opinion is for the information of the Board of Directors of the Company and may not be used for any other purpose without our prior written consent, except that a copy of this opinion may be included in its entirety in any filing the Company is required to make with the Securities and Exchange Commission in connection with the Merger if such inclusion is required by applicable law. In addition, Morgan Stanley expresses no opinion or recommendation as to how the shareholders of the Company should vote at the shareholders’ meeting to be held in connection with the Merger.

Based on and subject to the foregoing, we are of the opinion on the date hereof that the Consideration to be received by the holders of shares of the Company Common Stock pursuant to the Merger Agreement is fair from a financial point of view to the holders of shares of the Company Common Stock.

	Very truly yours,
MORGAN STANLEY & CO. LLC
By:	/s/ R. Todd Giardinelli
	R. Todd Giardinelli
	Managing Director

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.Indemnification of Directors and Officers

Section 721 of the New York Business Corporation Law, or NYBCL, provides that a corporation may indemnify a director or officer by a provision contained in the certificate of incorporation or bylaws or by a duly authorized resolution of its shareowners or directors or by agreement, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and material to the cause of action, or that such director or officer personally gained in fact a financial profit or other advantage to which he was not legally entitled.

The combined company’s amended and restated bylaws to be effective upon the completion of the merger will provide that the combined company will indemnify and hold harmless to the fullest extent authorized by the NYBCL, any person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he or she is or was a director or officer of the combined company or, while a director or officer of the combined company, is or was serving at the request of the combined company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against losses, costs and expenses actually and reasonably incurred by him or her in connection with the defense, resolution or settlement of such proceeding, if he or she acted in accordance with the certificate of incorporation and bylaws or otherwise acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of Iberdrola USA.

Section 722 of the NYBCL provides that a corporation may, except for stockholder derivative suits, indemnify its directors and officers made, or threatened to be made, a party to any action or proceeding, if the director or officer acted in good faith, for a purpose that he or she reasonably believed to be in or, in the case of service to another corporation or enterprise, not opposed to the best interests of the corporation, and, in criminal proceedings, had no reasonable cause to believe his or her conduct was unlawful. In the case of stockholder derivative suits, the corporation may indemnify a director or officer if he or she acted in good faith for a purpose that he or she reasonably believed to be in or, in the case of service to another corporation or enterprise, not opposed to the best interests of the corporation, except that no indemnification may be made in respect of (i) a threatened action, or a pending action that is settled or otherwise disposed of, or (ii) any claim, issue or matter as to which such individual has been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines, upon application, that, in view of all the circumstances of the case, the individual is fairly and reasonably entitled to indemnity for the portion of the settlement amount and expenses as the court deems proper.

Section 723 of the NYBCL provides, in general, that any individual who has been successful on the merits or otherwise in the defense of a civil or criminal action or proceeding will be entitled to indemnification. Except as provided in the preceding sentence, unless ordered by a court pursuant to Section 724 of the NYBCL, any indemnification under the NYBCL may be made only if indemnification is authorized in the specific case and after a finding that the director or officer met the requisite standard of conduct by the disinterested directors if a quorum is available, or, if the quorum so directs or is unavailable, (i) the board of directors upon the written opinion of independent legal counsel or (ii) the stockholders.

The combined company intends to maintain upon completion of the merger an officer’s and director’s liability insurance policy insuring its officers and directors against certain liabilities and expenses incurred by them in their capacities as such, and insuring the combined company under certain circumstances, in the event that indemnification payments are made to such officers and directors, in accordance with Section 726 of the NYBCL, which authorizes the purchase and maintenance of such insurance.

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The combined company has also entered into indemnification agreements, or the indemnification agreements, with certain of its directors and officers, each an “indemnitee.” The indemnification agreements, among other things, provide for indemnification if (i) the indemnitee was or is a party or is threatened to be made a party to any proceeding, against all expenses and liabilities actually incurred, or (ii) if the indemnitee was or is a party or is threatened to be made a party to any proceeding by or in the right of the combined company to procure a judgment in its favor by reason of the indemnitee’s status as a director, officer, employee or a similar corporate status (as such term is defined in the indemnification agreements), against all expenses and liabilities actually incurred.

The indemnification agreements do not provide for indemnification (a) if indemnification is requested under clause (i) above and it has been adjudicated finally by a court that the indemnitee failed to act in good faith and in a manner the indemnitee reasonably believed to be in or not opposed to the best interests of the combined company or, with respect to any criminal action or proceeding, the indemnitee had reasonable cause to believe that the indemnitee’s conduct was unlawful, (b) if indemnification is requested under clause (ii) above and it has been adjudicated finally by a court that (x) the indemnitee reasonably believed to be in or not opposed to the best interests of the combined company or, with respect to any criminal action or proceeding, the indemnitee had reasonable cause to believe that the indemnitee’s conduct was unlawful and/or indemnification is against public policy, (y) the indemnitee is liable to the combined company for a claim that the indemnitee received an improper personal benefit or improperly took advantage of a corporate opportunity (unless the court decides the indemnitee is nonetheless fairly and reasonably entitled to indemnity), or (z) the indemnitee is liable to the combined company for an accounting of profits made from the purchase or sale by the indemnitee of securities of the combined company.

Section 402(b) of the NYBCL permits corporations to eliminate or limit the personal liability of directors to the corporation or its stockholders for damages for any breach of duty in such capacity except liability of a director (i) whose acts or omissions were in bad faith, involved intentional misconduct or a knowing violation of law, (ii) who personally gained a financial profit or other advantage to which he or she was not legally entitled or (iii) whose acts violated Section 719 of the NYBCL.

The amended and restated certificate of incorporation of the combined company will provide that to the maximum extent permitted by the NYBCL, no director will be personally liable to the combined company or its stockholder for damages for any breach of duty (including fiduciary duty) as a director. If the NYBCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the combined company will be eliminated or limited to the fullest extent permitted by the NYBCL, as so amended.

The foregoing summaries are necessarily subject to the complete text of the NYBCL, the combined company’s restated certificate of incorporation and amended and restated bylaws, and the arrangements referred to above and are qualified in their entirety by reference thereto.

Item 21.Exhibits and Financial Statement Schedules

A list of the exhibits included as part of this registration statement is set forth in the Exhibit Index that immediately precedes such exhibits and is incorporated herein by reference.

Item 22.Undertakings

(1) The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

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(2) The registrant undertakes that every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933, and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(4) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions hereof, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(5) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(6) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New Gloucester, Maine, on July 17, 2015.

Iberdrola USA, Inc.
By:	/s/     Robert Daniel Kump
	Robert Daniel Kump
	Director and Chief Corporate Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in their respective capacities and on the respective dates indicated opposite their names. Each person whose signature appears below hereby authorizes each of Robert Daniel Kump and Pablo Canales Abaitua, each with full power of substitution, to execute in the name and on behalf of such person any amendment (including any post-effective amendment) to this Registration Statement and to file the same, with exhibits thereto, and other documents in connection therewith, making such changes in this Registration Statement as the Registrant deems appropriate, and appoints each of Robert Daniel Kump and Pablo Canales Abaitua, each with full power of substitution, attorney-in-fact to sign any amendment (including any post-effective amendment) to this Registration Statement and to file the same, with exhibits thereto, and other documents in connection therewith.

Signature	Title	Date
/s/     Robert Daniel Kump Robert Daniel Kump	Director and Chief Corporate Officer (Principal Executive Officer)	July 17, 2015
/s/     Pablo Canales Abaitua Pablo Canales Abaitua	Chief Financial Officer and Controller (Principal Financial and Accounting Officer)	July 17, 2015
/s/     Ignacio Sánchez Galán Ignacio Sánchez Galán	Chairman of the Board	July 17, 2015
/s/     John E. Baldacci John E. Baldacci	Director	July 17, 2015
/s/     Pedro Azagra Blázquez Pedro Azagra Blázquez	Director	July 17, 2015
/s/     Alfredo Elías Ayub Alfredo Elías Ayub	Director	July 17, 2015
/s/     Santiago Martinez Garrido Santiago Martinez Garrido	Director	July 17, 2015
/s/     Juan Carlos Rebollo Liceaga Juan Carlos Rebollo Liceaga	Director	July 17, 2015
/s/     José Sainz Armada José Sainz Armada	Director	July 17, 2015
/s/     Alan D. Solomont Alan D. Solomont	Director	July 17, 2015

EXHIBIT INDEX

Exhibit Number	Exhibit Description
2.1	Agreement and Plan of Merger, dated as of February 25, 2015, by and among Iberdrola USA, Inc., Green Merger Sub, Inc. and UIL Holdings Corporation (attached as Annex A to the proxy statement/prospectus included in this Registration Statement).
3.1	Certificate of Incorporation of Iberdrola USA, Inc.
3.2	Bylaws of Iberdrola USA, Inc.
3.3	Form of Amended and Restated Certificate of Incorporation of Iberdrola USA, Inc.*
3.4	Form of Amended and Restated Bylaws of Iberdrola USA, Inc.*
4.1	Specimen Common Stock Certificate*
5.1	Opinion of White & Case LLP as to the validity of shares to be issued.*
8.1	Opinion of Latham & Watkins LLP regarding certain federal income tax matters.*
8.2	Opinion of Sullivan & Cromwell LLP regarding certain federal income tax matters.*
10.1	Form of Shareholder Agreement, between Iberdrola USA, Inc. and Iberdrola, S.A. (attached as Annex B to the proxy statement/prospectus included in this Registration Statement).
10.2	Service Agreement, dated January 1, 2014, between Iberdrola USA Management Corporation and Iberdrola USA, Inc.
10.3	Lease, dated as of July 7, 2003, between October Corporation and Energy East Management Corporation.
10.4	First Amendment to Lease, effective as of July 10, 2012, between October Corporation and Iberdrola USA Management Corporation.
10.5	Second Amended and Restated Five-Year Revolving Credit Agreement, dated as of May 30, 2012, among Iberdrola USA, Inc., as Borrower, The Several Lenders from Time to Time Parties Hereto, Citibank N.A., as Administrative Agent, and Sovereign Bank, N.A. and TD Bank N.A., as Syndication Agents.
10.6	First Amendment to the Second Amended and Restated Five-Year Revolving Credit Agreement, dated as of May 7, 2013, among Iberdrola USA, Inc., Citibank N.A. and the other parties named therein.
10.7	Second Amendment to the Second Amended and Restated Five-Year Revolving Credit Agreement, dated as of November 25, 2013, among Iberdrola USA, Inc., Citibank, N.A., and other parties named therein.
10.8	Third Amendment to the Second Amended and Restated Five-Year Revolving Credit Agreement, dated as of April 1, 2015, among Iberdrola USA, Inc., Citibank, N.A. and the other parties named therein.
10.9	Five-Year Revolving Credit Agreement, dated July 15, 2011, among New York State Electric & Gas Corporation, Central Maine Power Company and Rochester Gas and Electric as Borrowers, the Lenders, JPMorgan Chase Bank N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, Banco Bilbao Vizcaya Argentaria S.A., New York Branch, Sovereign Bank, TD Bank, N.A., The Bank of New York Mellon, and Union Bank, N.A. as Co-Documentation Agents, and J.P. Morgan Securities LLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arrangers and Joint Bookrunners.
10.10	Amendment to Revolving Credit Agreement, dated July 28, 2011, among New York State Electric & Gas Corporation, Rochester Gas & Electric Corporation, Central Maine Power Company, the Lenders and JPMorgan Chase Bank, N.A. as Administrative Agent.

Exhibit Number	Exhibit Description
10.11	First Amendment and Extension Agreement, dated July 18, 2013, among New York State Electric & Gas Corporation, Rochester Gas and Electric Corporation, Central Maine Power Company, the Lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Banco Bilbao Vizcaya Argentaria S.A., New York Branch, Sovereign Bank (Santander Group), TD Bank, N.A., The Bank of New York Mellon and Union Bank, N.A., as Co-Documentation Agents.
10.12	Second Amendment and Extension Agreement, dated July 15, 2014, among New York State Electric & Gas Corporation, Rochester Gas and Electric Corporation, Central Maine Power Company, the Lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of New York America, N.A., as Syndication Agent, and Banco Bilbao Vizcaya Argentaria S.A., New York Branch, Santander Bank (formerly Sovereign Bank, N.A.), TD Bank, N.A., The Bank of New York Mellon and Union Bank, N.A., as Co-Documentation Agents.
10.13	Intra-Group Credit Facility Agreement, dated August 1, 2011, by and between Iberdrola Financiación S.A.U. and Iberdrola USA.
10.14	Accession Agreement, dated September 16, 2011, between Iberdrola Renewables Holdings, Inc. and Bank Mendes Gans N.V.
10.15	Guarantee and Support Agreement, dated April 3, 2008, between Iberdrola, S.A. and ScottishPower Holdings, Inc.
10.16	Amendment No. 1 to Guarantee and Support Agreement, dated May 27, 2010, between Iberdrola, S.A. and Iberdrola Renewables Holdings, Inc. (formerly known as ScottishPower Holdings, Inc.).
10.17	English Translation of Director Remuneration Policy of Iberdrola, S.A., as adopted by the Registrant.†*
10.18	English Translation of Senior Officer Remuneration Policy of Iberdrola, S.A., as adopted by the Registrant.†*
10.19	English Translation of Regulations for the “2014-2016 Strategic Bonus” for Senior Officers and Officers of Iberdrola, S.A. and Its Group of Companies.†*
10.20	Provisions to be Applied to U.S. Participants in Relation to the Regulations for the “2014-2016 Strategic Bonus” for Senior Officers and Officers of Iberdrola, S.A. and Its Group of Companies.†*
10.21	Iberdrola USA Networks, Inc. Annual Incentive Plan, amended and restated January 1, 2014.†*
10.22	Iberdrola USA, Inc. Performance Share Plan effective as of January 1, 2009.†*
10.23	Employment Agreement dated October 1, 2010 among Robert Daniel Kump, Iberdrola USA Networks, Inc. (formerly Iberdrola USA, Inc.) and Iberdrola USA Management Corporation.†*
10.24	Service Contract dated January 16, 2014 between Robert Daniel Kump and the Registrant.†*
10.25	Offer letter dated June 16, 2014 between Pablo Canales Abaitua and Iberdrola USA Management Corporation.†*
10.26	English Translation of International Assignment Letter dated March 23, 2012, as updated August 4, 2014, between Jose Maria Torres Suau and Iberdrola, S.A.†*
10.27	Employment Agreement dated March 1, 2008 between R. Scott Mahoney and Iberdrola USA Management Corporation (formerly Energy East Management Corporation).†*
10.28	Framework Agreement for the Provision of Corporate Services for Iberdrola and the Companies of its Group, and the Declaration of Acceptance, dated July 16, 2015.

Exhibit Number	Exhibit Description
10.29	Equipment Supply Agreement dated December 28, 2014 between Iberdrola Renewables, LLC and Gamesa Wind US, LLC.0
10.30	Umbrella Agreement to Sell and Purchase Wind Turbines dated June 30, 2015, between Gamesa Wind US LLC and Iberdrola Renewables, LLC.0
21.1	List of subsidiaries of Iberdrola USA, Inc.*
23.1	Consent of Ernst & Young, LLP, independent registered public accounting firm of Iberdrola USA, Inc.
23.2	Consent of PricewaterhouseCoopers, LLP, independent registered public accounting firm of UIL Holdings Corporation.
23.3	Consent of White & Case LLP (included in Exhibit 5.1).*
23.4	Consent of Latham & Watkins LLP (included in Exhibit 8.1).*
23.5	Consent of Sullivan & Cromwell LLP (included in Exhibit 8.2).*
24.1	Power of Attorney (included on signature page of this Registration Statement).
99.1	Form of Proxy Card for UIL Holdings Corporation.*
99.2	Opinion of Morgan Stanley & Co. LLC (attached as Annex C to the proxy statement/prospectus included in this Registration Statement).
99.3	Consent of Morgan Stanley & Co. LLC.

† Compensatory plan or agreement.

* To be filed by amendment.

⁰  Confidential treatment has been requested for portions of this document. The omitted portions of this document have been filed with the Securities and Exchange Commission.

The foregoing list of exhibits does not include instruments defining the rights of the holders of certain long-term debt of Iberdrola USA and its subsidiaries where the total amount of securities authorized to be issued under the instrument does not exceed ten percent (10%) of the total assets of Iberdrola USA and its subsidiaries on a consolidated basis; and Iberdrola USA hereby agrees to furnish a copy of each such instrument to the SEC on request.

EX-3.1

EXHIBIT 3.1

RESTATED CERTIFICATE OF INCORPORATION

Of

IBERDROLA USA, INC.

(a New York corporation)

Under Section 807 of the Business Corporation Law

Iberdrola USA, Inc., a corporation organized and existing under the laws of the State of New York, hereby certifies as follows:

1. The name of this corporation is Iberdrola USA, Inc. The name under which the corporation was originally incorporated was “NGE Resources, Inc.”

2. The corporation’s original Certificate of Incorporation was filed by the Department of State on September 23, 1997.

The Corporation’s Certificate of Incorporation has been amended to increase the aggregate number of shares which the Corporation shall have the authority to issue is two hundred forty-three (243) shares of common stock with the par value of $0.01 each. The amendment was authorized by the unanimous written consent of the Board of Directors and the written consent of the sole Stockholder of all outstanding shares of the Corporation, effective November 20, 2013.

3. The text of the Certificate of Incorporation of Iberdrola USA, Inc., is hereby restated with amendment to read as herein set forth in full:

1. The name of the corporation is Iberdrola USA, Inc. (the “Corporation”).

2. This Corporation is formed to engage in any lawful act or activity for which a corporation may be organized under the Business Corporation Law, provided that it is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

3. The office of the Corporation in the State of New York is located in the County of Albany.

4. The aggregate number of shares which the Corporation shall have the authority to issue is two hundred forty-three (243) shares of common stock with the par value of $0.01 each.

5. No director of the corporation shall be personally liable to the corporation or its shareholders for damages for any breach of duty as a director, provided that nothing contained in this Article Fifth shall eliminate or limit the

liability of any director if a judgment or other final adjudication adverse to the director establishes that the director’s acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that the director personally gained in fact a financial profit or other advantage to which the director was not legally entitled or that the director’s acts violated Section 719 of the Business Corporation Law. If the Business Corporation Law is amended after the date of the filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Business Corporation Law, as so amended. No repeal or modification of this Article Fifth shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any acts or omissions of such director occurring prior to such repeal or modification.

6. The Secretary of State of the State of New York is designated as the agent of the Corporation upon whom any process in any action or proceeding against it may be served. The post office address to which the Secretary of State shall mail a copy of any such process served upon him is 52 Farm View Drive, New Gloucester, ME 04260.

4. This restatement of the Corporation’s Certificate of Incorporation was authorized by a written consent in lieu of a meeting of the Board of Directors of the Corporation, effective the date hereof.

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IN WITNESS WHEREOF, the undersigned corporation has caused to be executed by its duly authorized officer this restated Certificate of Incorporation on this 20^th day of November, 2013.

IBERDROLA USA, INC. (a New York corporation)
By:	/s/ R. Scott Mahoney
	R. Scott Mahoney Vice President –
	General Counsel and Secretary

EX-3.2

EXHIBIT 3.2

By-Laws for Iberdrola USA, Inc.

Amended and Restated

January 8, 2014

ARTICLE ONE. THE SHARE CAPITAL AND THE SHARES; SHAREHOLDERS

Section 1.1. The share capital: Records of shareholder

1. Share Capital. The share capital may be increased or reduced by majority vote and resolution of the Board, subject to approval of an amendment of the Company’s Certificate of Incorporation by the Company’s Shareholders and the other requirements established for such events under New York law.

2. Record of Shareholders. The shares will be recorded in a book of registered shares kept at the office of the Company in the state of New York or at the office of its transfer agent or registrar in the State of New York, and the Board of the Company is entitled to issue an aggregate certificate to include all the shares held by any Shareholder as permitted under New York law.

Section 1.2. Shareholders

1. Annual Meeting. The Annual Meeting of the Shareholders of the Company shall be held within or without the State of New York at a location to be determined by the Board, on such date and time as may be fixed by the Board.

2. Written Consent of Shareholders Without a Meeting. Whenever under any provision of law or of these Bylaws Shareholders are required or permitted to take any action by vote, such action may be taken without a meeting on written consent or by electronic submission setting forth the action so taken, signed by the holders of all outstanding shares entitled to vote thereon.

3. Special Meetings. Special Meetings of the Shareholders may be called by the Board or by the Chairman or the Secretary at the written demand of a majority of the Board or at the written demand of the holders of at least ten percent (10%) of all outstanding shares entitled to vote on the action proposed to be taken at such meeting. Any such call or demand shall state the purpose or purposes of the proposed meeting. On failure of any officer above specified to call such Special Meeting when duly demanded, any signer of such demand may call such Special Meeting and give the notice thereof. Special meetings shall be held at such place within or without the State of New York as may be specified in the notice thereof. At any Special Meeting only such business may be transacted which is related to the purpose or purposes set forth in the notice thereof, but any Special Meeting may be called and held in conjunction with an Annual Meeting of the Shareholders.

4. Matters for Shareholder Voting.

a. The Shareholders may vote, in each case in accordance with the provisions of New York law and these Bylaws, on those matters that are properly brought before an Annual or Special Shareholder Meeting.

b. The Shareholders may propose for consideration at the Annual or Special Shareholder Meeting any matter not reserved to the Board by these Bylaws or applicable law.

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c. In particular, the Shareholders shall vote on the following matters, of which an affirmative vote by a majority of the votes cast by the shares at the time entitled to vote shall approve such proposed matter:

1º The election and removal of the Directors and the determination and change in number of Directors;

2º Adopt, amend or repeal the Bylaws;

3º Approve the winding up, merger, universal transfer of the assets and liabilities, split-off and transformation of the Company;

4º Any other matter submitted to the Shareholders for a decision by the Board as required by applicable law or otherwise.

5. Record Date for Meetings and Other Purposes. For the purpose of determining the Shareholders entitled to notice of or to vote at any meeting of Shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining Shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action, the Board may fix, in advance, a date as the record date for any such determination of Shareholders. Such date shall not be more than fifty (50) nor less than ten (10) days before the date of such meeting, nor more than fifty (50) days prior to any other action. If no record date is so fixed by the Board, (a) the record date for the determination of Shareholders entitled to notice of or to vote at a meeting of Shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is not given by reason of due waiver thereof, the day on which the meeting is held, and (b) the record date for determining Shareholders for any other purpose shall be at the close of business on the day on which the resolution of the Board relating thereto is adopted. A determination of Shareholders of record entitled to notice of or to vote at any meeting of Shareholders, made in accordance with this Section, shall apply to any adjournment thereof, unless the Board fixes a new record date under this Section for the adjourned meeting.

6. Notice of Meetings. Whenever Shareholders are required or permitted to take any action at a meeting, written notice shall be given stating the place, date and hour of the meeting and, unless it is the Annual Meeting, indicating that it is being issued by or at the direction of the person or persons calling the meeting. Notice of a Special Meeting (including any such meeting to be held in conjunction with an Annual Meeting) shall also state the purpose or purposes for which the meeting is called. A copy of the notice of any meeting shall be given, personally, by electronic communications or by first class mail, not less than ten (10) nor more than fifty (50) days before the date of the meeting, provided, however, that a copy of such notice may be given by third class mail not fewer than twenty-four (24) nor more than fifty (50) days before the date of the meeting to each Shareholder entitled to vote at such meeting. If mailed, such notice is given when deposited in the United States or other sovereign mail system, as appropriate, with postage thereon prepaid, directed to the Shareholder at its address as it appears on the record of Shareholders, or, if the Shareholder shall have filed with the Secretary of the Company a written request that notices to the Shareholder be mailed to some other address, then directed to the Shareholder at such other address. When a meeting is adjourned to another time or

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place, it shall not be necessary to give any notice of the adjourned meeting, if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. However, if after the adjournment the Board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each Shareholder of record on the new record date entitled to notice under this Section.

7. Waivers of Notice. Notice of any meeting of Shareholders need not be given to any Shareholder who submits a signed waiver of notice, in person or by proxy, whether before or after the meeting. The attendance of any Shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by such Shareholder.

8. Quorum at Meetings. Except as otherwise provided by law, the holders of a majority of the shares entitled to vote thereat shall constitute a quorum at any meeting of Shareholders for the transaction of any business, but the Shareholders present may adjourn any meeting to another time or place despite the absence of a quorum. When a quorum is once present to organize a meeting, it shall not be broken by the subsequent withdrawal of any Shareholders.

9. Presiding Officer and Secretary. At any meeting of the Shareholders, if neither the Chairman or a Vice Chairman of the Board nor the Chief Corporate Officer nor a Vice President nor a person designated by the Board to preside at the meeting shall be present, the Shareholders shall appoint a presiding officer for the meeting. If neither the Secretary nor an Assistant Secretary be present, the appointee of the person presiding at the meeting shall act as secretary of the meeting.

10. Proxies. Every Shareholder entitled to vote at a meeting of Shareholders or to express consent or dissent without a meeting may authorize another person or persons to act for such Shareholder by proxy. Every proxy shall be signed by the Shareholder or such Shareholder’s attorney-in-fact. No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Shareholder executing it, except as otherwise provided by law. Proxies shall be delivered to the Secretary of the Company or, if inspectors are appointed to act at a meeting, to the inspectors.

ARTICLE TWO. OFFICERS, AGENTS AND EMPLOYEES

Section 2.1. Structure of the Company’s Management

1. The business and affairs of the Company will be managed under the direction of its Board, In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board may exercise all such powers of the Company and do all such lawful acts and things as are not by law or by these Bylaws required to be exercised or done by the shareholders.

2. The Board may delegate all or some of the authorities delegable by Law or the Bylaws to the officers, agents and employees of the Company. The officers of the Company may include a Chief Corporate Officer, and a Secretary, and may also

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include a Chairman of the Board, one or more Vice Presidents, and one or more Assistant Secretaries and such other officers as the Board may from time-to-time designate. The officers shall be appointed by the Board at the first meeting of the Board after the Annual Meeting of the Shareholders in each year. The Board may also appoint other officers, agents and employees, who shall have such authority and perform such duties as may be prescribed by the Board. All officers shall hold office until the meeting of the Board following the next Annual Meeting of the Shareholders after their appointment and until their successors shall have been appointed and shall have qualified. Any two or more offices may be held by the same person, except the offices of the Chief Corporate Officer and Secretary. Any officer, agent or employee of the Company may be removed by the Board with or without cause. Such removal without cause shall be without prejudice to such person’s contract rights, if any, but the appointment of any person as an officer, agent or employee of the Company shall not of itself create contract rights. The compensation of officers, agents and employees appointed by the Board shall be fixed by the Board, but this power may be delegated to any officer, agent or employee as to persons under his or her direction or control. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties. All officers as between themselves and the Company shall have such authority and perform such duties in the management of the Company as may be provided in these Bylaws or, to the extent not so provided, by the Board.

3. Powers and Duties of the Chief Corporate Officer. The Chief Corporate Officer shall be appointed by the Board and shall have general organizational duties as shall be appointed by the Board, including to receive regular information on the activities of the Iberdrola USA group in order to support the corporate functions and lines of business in understanding the local legal, regulatory and market specifics in the US, to represent the company’s interest and act as a point of contact in the US, and to coordinate the activities of the Iberdrola USA group and its subsidiary companies. The Chief Corporate Officer may vote the shares or other securities of any other domestic or foreign corporation of any type or kind which may at any time be owned by the Company, may execute any Shareholders’ or other consents in respect thereof and may, in his or her discretion, delegate such powers by executing proxies or otherwise on behalf of the Company. The Board, by resolution from time to time, may confer like powers upon any other person or persons.

4. Powers and Duties of Vice Presidents. Each Vice President shall have such powers and perform such duties as the Board or the Chief Corporate Officer may prescribe. In the absence or inability to act of the Chief Corporate Officer (and of the Chairman of the Board, if there be one), unless the Board shall otherwise provide, the Vice President who has served in that capacity for the longest time, and who shall be present and able to act, shall perform all the duties and may exercise any of the powers of the Chief Corporate Officer. The performance of any such duty by a Vice President shall be conclusive evidence of his or her power to act.

5. Powers and Duties of the Secretary. The Secretary shall have charge of the minutes of all proceedings of the Shareholders and of the Board. He or she shall attend to the giving of all notices to Shareholders and Directors. He or she shall have charge of the seal of the Company and shall attest the same by his or her signature whenever

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required. He or she shall have charge of the record of Shareholders of the Company, and of such other books and papers as the Board may direct. He or she shall have all such powers and duties as generally are incident to the position of Secretary or as may be assigned to him or her by the Chief Corporate Officer or the Board.

6. Powers and Duties of Assistant Secretaries. In the absence or inability of the Secretary to act, any Assistant Secretary may perform all the duties and exercise all the powers of the Secretary. The performance of any such duty shall be conclusive evidence of his or her power to act. An Assistant Secretary shall also perform such other duties as the Secretary or the Board may assign to him or her.

ARTICLE THREE. THE BOARD OF DIRECTORS

Section 3.1. Election, number, composition and competencies of the Board of Directors

1. The Board of Directors will consist of a minimum of three (3) Directors and a maximum of eleven (11), who will be elected by a majority vote of the Shareholders subject to applicable laws and these Bylaws. The term of office of each Director shall be from the time of his or her election and qualification until the Annual Meeting of Shareholders next succeeding his or her election and until his or her successor shall have been elected and shall have qualified. At least one (1) of the Directors must be an Independent Director.

2. The number of Directors may be changed at any time and from time to time by vote of the Shareholders entitled to vote for the election of Directors, or, in the absence of a Shareholder designation, at any meeting of the Board by the vote of a majority of the entire Board, except that no decrease shall shorten the term of any incumbent Director.

3 Newly created directorships resulting from an increase in the number of Directors and vacancies occurring in the Board during the term of office, including without limitation the removal of Directors by the Shareholders without cause or Director resignation, may be filled either by vote of the Shareholders or by vote of the Directors. If the number of Directors then in office is less than a quorum, such newly created directorships and vacancies may be filled by vote of a majority of the Directors then in office or by majority vote of the Shareholders at any Annual or Special Meeting of the Shareholders. Such newly created Directorships will be subject to Shareholder approval at the next Annual Shareholder Meeting.

4. A Director may resign from his or her office at any time by delivering his or her resignation in writing to the Company, and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make such resignation effective.

Any or all of the Directors may be removed, for cause or without cause, by vote of the Shareholders. Any Director may be removed for cause by action of the Board.

5. The Board of Directors has the authority to adopt resolutions on all matters that have not been attributed by the Bylaws or the Law to the Shareholders.

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6. Independent Director. To be considered an independent Director, the Board of Directors of the Company must affirmatively determine that the Director does not, other than in his or her capacity as a member of the Board or any board committee, have any material relationship with the Company, including: (i) direct or indirect acceptance of any consulting, advisory, or other compensatory fee from the Company or any subsidiary thereof; or (ii) status as an affiliated person of the Company, any subsidiary of the Company, or of any Shareholder owning ten percent or more of any class of voting shares of the Company.

Section 3.2. Positions on the Board

1. The Board of Directors will elect a Chairman from among its members, and, if so decided, a Vice-chairman, to be proposed by the Chairman.

2. Powers and Duties of the Chairman of the Board. The Chairman of the Board shall preside at all meetings of the Shareholders and of the Board at which he or she is present and shall perform such other duties as the Board may designate.

3. Powers and Duties of the Vice Chairmen of the Board. Each Vice Chairman of the Board (if there be any) shall have such powers and perform such duties as the Board may prescribe. In the absence or disability of the Chairman of the Board, the Vice Chairman of the Board who has served in that capacity for the longest time and who shall be present and able to act, shall perform all the duties and exercise all the powers of the Chairman of the Board that follows from his or her capacity as Director of the Company.

Section 3.3. Meetings of the Board of Directors

1. Meetings. Meetings of the Board, regular or special, may be held at any place within or without the State of New York as the Board from time to time may fix or as shall be specified in the respective notice or waivers of notice thereof. Any one or more members of the Board or of any committee may participate in a meeting of such Board or committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at any such meeting of the Board or committee thereof. An Annual Meeting of the Board for the appointment of officers shall be held on the day on which the Annual Meeting of the Shareholders shall have been held, at the same place and as soon after the holding of such meeting of Shareholders as is practicable, and no notice thereof need be given. The Board may fix times and places for regular meetings of the Board and no notice of such meetings need be given. Special meetings of the Board shall be held whenever called by the Chairman or by at least one-third of the Directors then in office.

Notice of each such meeting shall be given by the Secretary or by a person calling the meeting to each Director by mailing the same not later than the second day before the meeting, or personally or by emailing or telephoning the same not later than the day before the meeting. Notice of a meeting need not be given to any Director who submits a signed waiver of notice whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him or her.

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2. Written Consent of Directors in Lieu of a Meeting. Any action required or permitted to be taken by the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee consent in writing or by electronic submission to the adoption of a resolution authorizing such action. Each resolution so adopted and the written consents thereto by the members of the Board of Directors or such committee shall be filed with the minutes of the proceedings of the Board of Directors or such committee.

3. Quorum and Voting. A majority of the entire Board shall constitute a quorum for the transaction of any business. Except as otherwise provided by law, the vote of a majority of the Directors present at a meeting at the time of the vote, if a quorum is present at such time, shall be the act of the Board, but a majority of the Directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. No notice of any such adjournment need be given.

The resolutions will be passed by majority of the Directors present at the meeting, except when applicable law provide for a higher majority. In the event of a tie in voting, the Chairman of the Board will have the deciding vote.

Section 3.4. Formalisation of the resolutions

1. The deliberations and the resolutions of the Board will be recorded in the minute book, and will be signed by the Chairman and the Secretary, or whosoever has the authority to act in their stead.

2. The certifications, total or partial, necessary to evidence the resolutions of the Board, will be issued and signed by the Secretary or the Assistant Secretary of the Board, and countersigned by the Chairman or, as appropriate, the Vice-chairman.

Section 3.5. Committees of the Board of Directors

1. The Board, by resolution adopted by a majority of the entire Board, may create and maintain committees composed of those designated from among its members. Each committee will be composed of one or more Directors designated by the Board of Directors, with the favourable vote of a majority of the Directors, and such positions will be renewed in the terms, manner and number as decided by the Board of Directors, which will also establish such committee’s rules of operation.

2. The Board may designate one or more Directors as alternate members of any such committee, who may replace any absent member or members at any meeting of such committee.

3. The Board may accordingly create and maintain an Executive Committee to which it may delegate, unless otherwise decided by the Board, all the authorities of the Board which are delegable in accordance with applicable law or these Bylaws.

4. The Board will establish a permanent Audit and Compliance Committee, made up of three (3) Directors appointed by the Board, including at least one independent Director.

The Audit and Compliance Committee will have a Chairman and a Secretary who will be appointed by the Board of Directors.

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The Directors who are members of the Audit and Compliance Committee will hold such post for as long as they remain as Directors of the Company, except as otherwise decided by the Board. The renewal, re-election and discharge of the Directors who are members of the Committee will be governed according to the decisions of the Board.

The Company will have a Compliance Unit that is an independent internal Unit functionally connected to the Audit and Compliance Committee. The Compliance Unit will have expertise in the field of regulatory compliance and the prevention and correction of illegal or fraudulent acts.

The Audit and Compliance Committee’s, responsibilities will include the following activities:

a) The Audit and Compliance Committee will oversee the Company’s Internal Audit Department. The Audit and Compliance Committee will report activities to the Board of Directors. The Audit and Compliance Committee shall ensure the independence and effectiveness of each internal audit, provide guidance and approve action plans and propose to the Board of Directors the appointment or removal of the Director of Internal Audit or the responsible person.

b) Monitor the preparation and presentation of regulated financial information, assessing any proposal for changes in accounting policies and practices and internal control systems related to risks relevant to the Company, in order to identify the main risks that should be managed and disclosed.

c) Analyze, together with the auditors, the significant weaknesses of the internal control system detected during the audit.

d) Establish appropriate relationships with the auditors to receive information on any issues that may jeopardize their independence, for consideration by the Audit and Compliance Committee, and any other matters related to the audit process and other communications provided by law and auditing standards in the remaining audit. In any case, receive annually from the auditors written confirmation of their independence from the Company or entities related to it directly or indirectly, as well as information on additional services of any kind provided to these entities by the auditors account, or by persons or entities related to them in accordance with the provisions of the legislation on auditing.

e) Issue annually, prior to the audit report, a report expressing an opinion on the independence of the auditors including during the provision of additional services referred to in the preceding paragraph.

f) Receive information from the Compliance Unit regarding any relevant matter relating to regulatory compliance and the prevention and correction of illegal or fraudulent acts.

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g) Review, through the Compliance Unit, policies and procedures of the company to prove its effectiveness in preventing misconduct and identify any policies or procedures that are more effective in promoting the highest ethical standards, for submission to the Board of Directors.

h) Review and endorse the annual operating budget of the Compliance Unit, for submission to the Board of Directors, and confirm that the Compliance Unit has the necessary human and material resources to carry out its functions, and ensure its independence and effectiveness.

i) Approve the annual plan of activities of the Compliance Unit.

j) Report on the proposed appointment of the Chief Compliance Officer.

k) Such other powers, if any, it has been assigned by the Board of Directors.

The Audit and Compliance Committee of the Company, as well as Internal Audit Department and the Compliance Unit, shall discharge their functions with complete independence, notwithstanding the establishment of a suitable information and cooperation framework for the discharge of their functions with the Audit and Risk Supervision Committee, the Corporate Social Responsibility Committee, the Internal Audit Area and the Compliance Unit of the parent company of the Group.

Section 3.6. Director’s general duties

Each Director shall perform his duties as a Director, including his duties as a member of any committee of the board upon which he may serve, in good faith and with that degree of care which an ordinarily prudent person in a like position would use under similar circumstances.

Section 3.7. Director’s duty of confidentiality

1. Directors must maintain confidentiality in respect of the deliberations of the Board of Directors and of the Committees of which they are members, as appropriate, and, in general, they will not disclose information, data, reports or background information to which they have had access in the performance of their position, or use such items for their own benefit or for the benefit of any third party, without prejudice to the transparency and reporting obligations imposed by applicable legislation.

2. The Directors’ obligation to maintain confidentiality will remain valid even after they cease to be Directors.

3. The Directors shall not disclose confidential operational information or confidential market information related to the transmission and distribution systems of the Company’s regulated utilities to unregulated affiliates, unless applicable regulations and circumstances allow for such information sharing.

Section 3.8. Conflicts of interest, transactions with Directors and transactions with the shareholders and with other companies belonging to its group

Subject to applicable law no director of the Company shall be deemed to have an interest in any transaction solely as a result of such transaction being entered into with an affiliated entity where such director serves as a director or officer and does not otherwise have any personal interest in the transaction.

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Section 3.9. Remuneration of the Directors

Directors may receive compensation for their services as Directors in such form and amounts and at such times as may be prescribed from time to time by the Board.

Section 3.10. Powers of information and inspection

Any person who shall have been a Shareholder of record of the Company upon at least five days’ written demand shall have the right to examine in person or by agent or attorney, during usual business hours, its minutes of the proceedings of its Shareholders and record of Shareholders and to make extracts there from for any purposes reasonably related to such person’s interest as a Shareholder.

Section 3.11. Assistance of experts

1. In performing his duties, a Director shall be entitled to rely on information, opinions, reports or statements including financial statements and other financial data, in each case prepared or presented by:

a) one or more officers or employees of the Company or any other company of which at least fifty percent of the outstanding shares of stock entitling the holders thereof to vote for the election of Directors is owned, directly or indirectly, by the Company, whom the Director believes to be reliable and competent in the matters presented;

b) counsel, public accountants, or other persons as to matters which the Director believes to be within such person’s professional or expert competence;

c) a committee of the board upon which he does not serve as to matters within its designated authority, which committee the Director believes to merit confidence, so long as in so relying he shall be acting in good faith and with such degree of care, but he shall not be considered to be acting in good faith if he has knowledge concerning the matter in question that would cause such reliance to be unwarranted.

2. A request for the engagement of an expert will be made through the Chairman or the Secretary of the Board of Directors, who may make it conditional on authorisation first being obtained from the Board of Directors, which may be denied for just cause, including for the following reasons:

a) The engagement of experts is not necessary for the proper performance of the duties entrusted to the Directors.

b) The cost of the engagement is unreasonable, in view of the importance of the problem and the Company’s assets and income.

c) The technical assistance received may be adequately provided by the Company’s experts and technicians.

d) It may imply a risk to the confidentiality of the information to be provided to the expert.

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ARTICLE FOUR. THE ANNUAL ACCOUNTS, DISTRIBUTION OF PROFITS, MISCELLANEOUS

Section 4.1. Financial year annual accounts

1. The financial year will begin on 1 January of each year and close on 31 December.

2. The Annual Accounts, and the Management Report will be prepared following the structure, the principles and the instructions contained in legislation in force.

Within the first three months of each year the Board of Directors will draft the Annual Accounts, the Management Report and the Proposal for Allocation of the Result. The Annual Accounts and the Management Report must be signed by all the Directors. If the signature of any Director is missing, this fact will be indicated in each document in which such signature is missing, indicating the reason for the absence.

Section 4.2. Auditors

1. The Annual Accounts and the Management Report must be reviewed by the Auditor.

2. The Auditor will be proposed by the Audit Committee, approved by the Board of Directors before the end of the year to be audited. The appointment will be for the specific initial period in accordance with the applicable Law. Once the initial term has elapsed, the Auditor may be re-appointed by the Board and re-approved by the Shareholders on the terms and for the periods provided by applicable law.

3. The Auditors will prepare a detailed report on the results of their audit, in accordance with legislation, regulations and rules applicable to audits.

Section 4.3. Indemnification

1. Any person made, or threatened to be made, a party to any action or proceeding, whether civil or criminal, by reason of the fact that he or she, or his testator or intestate, is or was a Director, officer or employee of the Company or serves or served any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity at the request of the Company, shall be indemnified by the Company against any and all judgments, fines, amounts paid in settlement, and expenses, including attorneys’ fees, actually and reasonably incurred as a result of or in connection with any such action or proceeding or any appeal therein, except as provided in the next paragraph. Except in the case of an action or proceeding against a director, officer, or employee specifically approved by the Board of Directors, the Company shall pay expenses incurred by or on behalf of such person in defending such a civil or criminal action or proceeding (including appeals) in advance of the final disposition of such action or proceeding, to the full extent permitted by law, in accordance with the restrictions noted herein and provided such person acted in good faith for a purpose which he or she reasonably believed to be in the best interests of the Company. Such payments shall be made promptly upon receipt by the Company, from time to time, of a written demand of such person for such advancement, together with an undertaking by or on behalf of such person to repay any expenses so advanced to the extent that the person receiving the advancement is ultimately found not to be entitled to indemnification for such expenses.

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2. Notwithstanding the foregoing, indemnification is prohibited if (i) such person engaged in conduct that, through a final judicial adjudication, is determined to constitute either a breach of such person’s duty of loyalty to the Company or its Shareholders or an act or omission committed in bad faith or which involves intentional misconduct or a knowing violation of the law; or (ii) indemnification would violate any provision of the Certificate of Incorporation, these Bylaws, any Board, and the Company shall advance his or her related expenses, to the full extent permitted by law, in accordance with the restrictions noted herein and provided such person acted in good faith for a purpose which he or she reasonably believed to be in the best interests of the Company.

Section 4.4. Amendments

1. These Bylaws may be adopted, amended or repealed by a majority of the votes cast by the Shareholders at the time entitled to vote in the election of any Directors.

2. Specific Bylaws may also be adopted, amended or repealed by the Board by such vote as may be therein specified. Any bylaw adopted by the Board may be amended or repealed by the Shareholders entitled to vote thereon.

Section 4.5. Transferring the share: Replacement of lost, stolen or destroyed certificates

1. Transferring the Shares. The shares of the Company may be transferred to any person, in accordance with the laws of New York and any other applicable Law or regulation. Transfers of shares on the record of the Shareholders of the Company shall be made only upon surrender to the Company of the certificate or certificates for such shares, duly endorsed or accompanied by proper evidence of succession assignment or authority to transfer.

2. Replacement of Lost, Stolen or Destroyed Certificates. The Company may issue a new certificate for shares in place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Board may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Company a bond sufficient to indemnify the Company against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate. The Board may require such owner to satisfy other reasonable requirements.

Section 4.6 Seal

The seal of the Corporation shall be circular in form and contain the name of the Corporation, the words “Corporate Seal” and “New York” and the year the Corporation was formed in the center. The Corporation may use the seal by causing it or a facsimile to be affixed or impressed or reproduced in any manner.

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EX-10.2

EXHIBIT 10.2

SERVICE AGREEMENT BETWEEN

IBERDROLA USA MANAGEMENT CORPORATION

AND IBERDROLA USA, INC.

This Service Agreement is made and entered into this 1^st day of January 2014 by and between Iberdrola USA Management Company (“Service Company”) and Iberdrola USA, Inc. (“Affiliate Company”).

WITNESSETH

WHEREAS, the Service Company was organized as a wholly-owned subsidiary service company of Iberdrola USA Networks, Inc., a subsidiary of Iberdrola USA, Inc., based upon authorization from the Securities and Exchange Commission (“SEC”) in accordance with the requirements of Section 13(b) of the Public Utility Holding Company Act of 1935 (“35 Act”); and

WHEREAS, the Energy Policy Act of 2005 (“EPAct 2005”) repealed the 35 Act and the Service Company now conducts business in accordance with applicable provisions of EPAct 2005, including but not limited to the Public Utility Holding Company Act of 2005 and the regulations of the Federal Energy Regulatory Commission (“FERC”); and

WHEREAS, Affiliate Company is a subsidiary company of Iberdrola USA, Inc. and an associate of Affiliate Company; and

WHEREAS, Service Company and Affiliate Company have entered into this Service Agreement whereby Affiliate Company agrees to provide and Service Company agrees to accept and pay for various services as provided herein at cost, with cost determined in accordance with applicable rules and regulations under the Act, which require Service Company to fairly and equitably allocate costs among all associate companies to which it renders services (collectively, the “Client Companies”), including Affiliate Company.

NOW THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties to this Service Agreement covenant and agree as follows:

ARTICLE I - SERVICES

Section 1.1 Affiliate Company shall furnish to Service Company, as requested by Service Company, upon the terms and conditions hereinafter set forth, such of the services described in Appendix A hereto, at such times, for such periods and in such manner as Service

Company may from time to time request and that Affiliate Company concludes it is able to perform. Affiliate Company shall also provide Service Company with such special services, so long as such special services do not materially add to those services described in Appendix A hereto, as may be requested by Service Company and that Affilate Company concludes it is able to perform. In supplying such services, Affiliate Company may arrange, where it deems appropriate, for the services of such experts, consultants, advisers, and other persons with necessary qualifications as are required for or pertinent to the provision of such services.

Section 1.2 Service Company shall take from Affiliate Company such of the services described in Appendix A, and such additional general or special services, as limited by subsection 1.1 hereof, as are requested from time to time by Service Company and that Affiliate Company concludes it is able to perform.

Section 1.3 The cost of the services described herein or contemplated to be performed hereunder shall be directly assigned, distributed or allocated by activity, project, program, internal order or other appropriate basis. Service Company shall have the right from time to time to amend or alter any activity, project, program or internal order provided that (i) any such amendment or alteration that results in a material change in the scope of the services to be performed or equipment to be provided is agreed to by Affiliate Company, (ii) the cost for the services covered by the activity, project, program or internal order shall include any expense incurred by Affiliate Company as a direct result of such amendment or alteration of the activity, project, program or internal order, and (iii) no amendment or alteration of an activity, project, program or internal order shall release Service Company from liability for all costs already incurred by or contracted for by Affiliate Company pursuant to the activity, project, program or internal order, regardless of whether the services associated with such costs have been completed.

Section 1.4 Affiliate Company shall determine in its sole discretion whether and how to maintain a staff trained and experienced in the services described in Appendix A.

ARTICLE II – COMPENSATION

Section 2.1 As compensation for the services to be rendered hereunder, Service Company shall pay to Affiliate Company all costs that reasonably can be identified and related to particular services performed by Affiliate Company for or on its behalf. The methods for assigning or allocating Affiliate Company costs to Service Company, as well as the method for Service Company to allocate costs to other associate companies, are set forth in Appendix A.

Section 2.2 It is the intent of this Service Agreement that charges for services shall be distributed, to the extent possible, based upon direct assignment. Other amounts incurred to provide services requested by Service Company after direct assignment may be allocated using the methods identified in Appendix A. The method of assignment or allocation of cost shall be subject to review by the Service Company annually, or more frequently if appropriate. Such method of assignment or allocation of costs may be modified or changed by the Service Company without the necessity of an amendment to this Service Agreement; provided that, in each instance, all services rendered hereunder shall be at actual cost thereof, fairly and equitably

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assigned or allocated, all in accordance with the requirements of the Act and any orders promulgated there under. The Service Company shall review with the Affiliate Company any proposed material change in the method of assignment or allocation of costs hereunder and the parties must agree to any such changes before they are implemented.

Section 2.3 Affiliate Company shall render a monthly report to Service Company that shall reflect the information necessary to identify the costs charged for that month in accordance with the Uniform System of Accounts for Mutual and Subsidiary Service Companies. Service Company shall remit to Affiliate Company all charges billed to it within 30 days of receipt of the monthly report. Any amounts not paid by the due date will be subject to a late charge of .5 % per month until the remittance is received.

Section 2.4 It is the intent of this Service Agreement that the payment for services rendered by Affiliate Company to Service Company under this Service Agreement shall cover the costs of providing the services requested including, but not limited to, salaries and wages, office supplies and expenses, outside services employed, property insurance, injuries and damages, employee pensions and benefits, miscellaneous general expenses, rents, maintenance of structures and equipment, depreciation and amortization, and compensation for use of capital as permitted by applicable laws and regulations.

Section 2.5 Affiliate Company and Service Company agree that the amount of compensation to be paid by Service Company hereunder is subject to the review and determination of the regulatory commission of the appropriate jurisdiction.

ARTICLE III- TERM

This Service Agreement shall become effective as of the date first written above, subject only to the receipt of any required regulatory approvals from any State regulatory commission with jurisdiction over Service Company, and shall continue in force until terminated by Affiliate Company or Service Company, upon not less than 90 days prior written notice to the other party. This Service Agreement shall also be subject to termination or modification at any time, without notice, if and to the extent performance under this Service Agreement may conflict with the Act or with any rule, regulation or order of the FERC or any State regulatory commission with jurisdiction over Service Company adopted before or after the date of this Service Agreement.

ARTICLE IV - MISCELLANEOUS

Section 4.1 All accounts and records of Service Company shall be kept in accordance with applicable rules and regulations promulgated by the FERC, in particular, the Uniform System of Accounts for Centralized Service Companies in effect from and after the date hereof.

Section 4.2 New direct or indirect subsidiaries of Iberdrola USA, Inc., which may come into existence after the effective date of this Service Agreement, may become additional associate companies of Service Company and subject to a service agreement with Service Company or the Affiliate Company. The parties hereto shall make such changes in the scope and character of the services to be rendered and the method of assigning, distributing or allocating costs of such services as specified in Appendix A, subject to the requirements of Section 2.2, as may become necessary to achieve a fair and equitable assignment, distribution, or allocation of Service Company costs among all associate companies including the new subsidiaries.

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Section 4.3 Affiliate Company shall permit Service Company access to its accounts and records including the basis and computation of allocations.

Section 4.4 Affiliate Company shall at all times keep confidential all information disclosed to it by Service Company in the performance of this Service Agreement regardless of whether it was stated to be confidential or not, except where required by law.

Section 4.5 If one Party (the “Pursuing Party”) gives notice to the other Party (the “Defending Party”) that there exists between them a dispute or difference arising out of or in connection with this Service Agreement (a “Dispute”) the Parties agree to use reasonable endeavors to negotiate the resolution of the Dispute. If they are unable to resolve the Dispute within twenty-one days from the original notice, both Parties shall refer the Dispute to its Board with a view to the Dispute being resolved by agreement between the directors of the Boards of the Pursuing Party and the Defending Party. If the Director’s are unable to resolve the Dispute within twenty-one days from the date of referral, provided that Service Company and Client Company are both at that time members of the IBERDROLA Group, then both Parties shall refer the Dispute to an executive director as nominated by a chief executive of IBERDROLA.

Section 4.6 Each party shall conduct itself in accordance with the highest ethical standards and principles as set forth in the Code of Ethics of Iberdrola, S.A. (“Code of Ethics”) and the Iberdrola USA Annex to the Code of Ethics (“Annex”) in connection with it’s performance under this Service Agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Service Agreement to be executed as of the date and year first above written.

IBERDROLA USA MANAGEMENT CORP.
BY:	/s/ Jose Maria Torres
Name:	Jose Maria Torres
Title:	Vice President and Chief Financial Officer
BY:	/s/ Robert P. Fitzgerald, Jr.
Name:	Robert P. Fitzgerald, Jr.
Title:	Assistant Controller

The undersigned Affiliate Company requests all services described in Appendix A and listed in the Internal Order Summary from Service Company. Services will begin January 1, 2014.

IBERDROLA USA, INC.
BY:	/s/ Robert D. Kump
Name:	Robert D. Kump
Title:	President and Chief Executive Officer
BY:	/s/ R. Scott Mahoney
Name:	R. Scott Mahoney
Title:	Director and Secretary

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Appendix A

Description of Services to be Provided in Accordance with the

Iberdrola USA Management Corporation Determination of

Charges for Such Services to the Client Companies

This document sets forth the methodologies used to accumulate the costs of services performed by Affiliate Company (“Affiliate Company”) and to assign or allocate such costs to associate companies within Iberdrola USA, Inc. (“Client Companies”).

Description of Services

A description of each of the services performed by Affiliate Company, which may be modified from time to time, is presented below.

1. Accounting Services such as establishing accounting policies, the maintenance of books and records, corporate financial consolidation, preparation of financial reports, annual capital and operating plan preparation (on a per company and corporate basis), fixed asset accounting, and compliance with applicable laws and regulations.

2. Audit Services include the management of an entity-wide framework of corporate controls.

3. Corporate Planning Services include the preparation of corporate plans, budgets and financial forecasts, monitoring trends and evaluating business opportunities.

4. Executive Services include general and administrative management and strategic planning.

5. Finance and Treasury Services include the coordination of activities relating to securities issuances, monitoring capital markets, cash management, bank reconciliation and administering insurance programs, and tax services for the coordination of income, property and revenue tax compliance and tax accounting.

6. Governmental Affairs Services include monitoring, reviewing and researching legislation and lobbying government officials.

7. Accounts Payable Services include the accurate and timely payment of invoices and employee expense reports, allocation of expenses to the proper general ledger accounts, production of annual reports to the IRS, maintenance of vendor information and source documents, processing checks and wire transfers, and performing bank reconciliations.

8. Human Resources Services include the establishment and administration of employee policies, the supervision of compliance with legal requirements in the areas of employment, compensation, benefits and employee health, welfare, and safety and contract negotiation and relations management with labor unions; and employee performance management program. May also maintain the employee master files relating to each employee as well as manage recruiting, training, and promotions.

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9. Corporate Security Services include the establishment of a security program and entity-wide governance framework to manage, oversee and assist the organization in meeting its corporate, legal, and regulatory responsibilities with regard to the protection of cyber, physical and information assets.

10. Payroll Services include the supervision and coordination of the calculations, records and control requirements necessary to generate payment of employee salaries and wages and to maintain relevant employee information.

11. Records Retention Services include coordinating and maintaining a program for ensuring safe on- and off-site records retention in accordance with applicable regulations.

12. Regulatory Management Services include coordination of the Client Companies’ rates and regulatory economics departments including rate-related compliance matters.

13. Legal Services include the coordination and direction of law and regulatory departments, legal support for all of the Client Companies, including managing litigation, contract review and negotiations and participating in state and federal regulatory proceedings.

14. Other Corporate Support Services may include corporate communications services.

15. Transmission and Supply Services include activities related to the coordination and direction of electric and/or gas transmission, storage, and supply functions.

16. Distribution Operation Services include activities related to the coordination and direction of electric and/or gas distribution operation functions.

17. Information Technology Services include centralized information technology services for the Client Companies such as Data Center Operations, IS Networking and Telecommunications systems operations and maintenance, software applications development and maintenance, technology development, end user support, and printing and mailing of utility customer bills.

18. Supply Chain Services include centralized purchasing services such as procurement of materials and supplies, fleet services, contract administration and materials management for the Client Companies.

19. Customer Services include call center operations including responding to Client Companies’ customer calls, customer billing, accounts receivable, credit and collections services, customer satisfaction monitoring and management of low income programs.

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20. Engineering Services include centralized customary engineering services including design engineering, general engineering, construction engineering and GIS technology development, meter services and testing and operations.

21. Commodity Planning Service includes coordination and direction of gas or electric supply planning and procurement at utility or non-utility companies.

Affiliate Company accounting, billing and cost allocation methods utilize the “Uniform System of Accounts for Mutual Service Companies and Subsidiary Service Companies” and are structured so as to comply with the FERC standards for service companies in registered holding-company systems.

Cost Assignment

Affiliate Company maintains an accounting system that enables costs to be identified by Internal Order (I/O) number. These I/O numbers will indicate whether the cost is a direct charge or the result of an allocated charge. The primary inputs to the accounting system are time reports, accounts payable invoices and journal entries. Charges for labor are calculated using the employees’ hourly rate. All Affiliate Company employees will maintain a record of their time. Employees will utilize separate internal orders to record their activities, including the services provided directly to Client Companies. All employees will charge their time on a daily basis using designated increments. The time sheets will be reviewed and approved by department supervisors. The wages of those employees, such as administrative assistants and secretaries, who generally assist employees who provide services directly to system companies, will be allocated based on the allocation of the wages of the employees they assist. Time records will be maintained for three years. Indirect attributable costs are charged to the services performed in proportion to the directly assigned costs or other appropriate cost allocations.

Costs will be accumulated by internal order number and assigned as follows:

1. Costs accumulated in an internal order number for services specifically performed for a single Client Company will be directly assigned or billed to that Client Company.

2. Costs accumulated in an internal order number for services specifically performed for two or more Client Companies will be distributed among those Client Companies using methods determined on a case-by-case basis consistent with the nature of the work performed and on one of the allocation methods described below.

3. Costs accumulated in an internal order number for services of a general nature, which are applicable to all Client Companies, will be allocated among all Client Companies, including the holding company, and billed to them using the global allocation factor.

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Cost Allocation

Affiliate Company uses cost allocation methods designed to fully distribute costs. Affiliate Company’s cost allocation methodology is comprised of the following three steps:

1. To “direct charge” all labor, materials and other expenses to Client Companies whenever feasible.

2. To allocate directly attributable costs to Client Companies based upon a measurable cost causing relationship, i.e., payroll department costs are allocated on the number of employees for each Client Company.

3. To allocate indirectly attributable costs that are common to all Client Companies, including the holding company, using the global allocation factor taking into consideration the relative size of each Client Company with regards to gross revenues, gross payroll expense and plant.

Costs that can be directly attributed to direct charges are allocated in proportion to the direct charges or other appropriate cost allocations. For example, direct labor charged to prepare testimony for a specific utility not only includes the direct payroll charge (the hourly rate times the hours reported) but also includes the cost of that individual’s proportional payroll overhead cost, and such other overheads as common asset usage, occupancy charges and management overhead charges (commonly referred in aggregate as an Administrative and General Overhead).

General and administrative costs that are not associated with a specific, identifiable, causal relationship are pooled and allocated to all system companies, including the holding company.

Allocation Methods

Allocations related to Direct Labor Charges

The following allocations will be applied to the Direct Labor Charges:

Payroll Overhead Charge will be calculated to recover costs associated with labor, such as pension, benefits, lost time and payroll taxes. The payroll overhead costs will be charged to Client Companies based on direct labor charges. The rate is computed by dividing the annual payroll overhead expenses by the annual base labor dollars.

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Other Allocations applied to Direct Labor Charges will consist of the following:

1. Common Asset Usage Overhead:

The Common Asset Usage Overhead allocates the cost of furniture and desktop equipment (including PC’s) used by Service Company. The rate is calculated by dividing the economic carrying costs of the assets by the total actual labor dollars of employees using those assets. This overhead is directly applied to all Service Company labor charged or allocated to Client Companies.

2. Occupancy Overhead:

The Occupancy Overhead allocates costs related to the workspace occupied by Service Company employees. The rate is calculated by dividing the economic carrying costs for the buildings by the total actual labor dollars of employees working in those buildings. This overhead is directly applied to all Service Company labor charged or allocated to Client Companies.

3. Management Overhead:

This overhead represents the management cost of a function within Service Company. It is based on the ratio of Service Company supervisory wages to all other wages. This fixed rate is applied to all direct labor charged to Client Companies.

An Alternative Allocation Applied to Direct Labor Charges or Other Direct Charges

An alternative allocation applied to direct labor charges or other direct charges is commonly referred to as an Administrative and General Support Adder. This overhead is a general overhead used in place of other specific administrative and general support overheads and is added to total costs of client services. The purpose is to recover indirect administrative and general expenses incurred and not otherwise charged directly to Client Companies for certain activities. The adder also includes expenses associated with office facilities, including furniture and office equipment, used in performing these administrative functions.

Allocations related to Distributed Services

The following ratios will be used to allocate costs for services not directly assigned but pooled and allocated based on a causal measurement:

Number of Employees Ratio – Based on the number of employees benefiting from the performance of a service. This ratio will be determined annually based on actual count of applicable employees at the end of the previous calendar year and may be adjusted periodically due to a significant change.

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Accounts Payable Ratio - Based on the number of invoices processed for each of the specific Client Companies. This ratio is determined annually based on the actual count of invoices at the end of the previous calendar year and may be adjusted periodically due to a significant change.

Number of Customers Ratio – Based on the number of customers at each Client Company benefiting from the performance of a service. This ratio will be determined annually based on the average annual customer count and may be adjusted periodically due to a significant change.

Global Allocation Factor – This formula will be determined annually based on the average of gross plant (original plant in service), gross payroll charges (salaries and wages, including overtime, shift premium and lost time, but excluding pension, payroll taxes and other employee benefits) and gross revenues during the previous calendar year and may be adjusted for any known and reasonable quantifiable events or at such time as may be required due to significant changes. This formula is commonly referred to as the Massachusetts Formula.

Regulated Global - 8 Allocation Factor – This formula is derived through utilization of the same data as the global allocation noted above, but it is limited to data of the eight regulated utility affiliates only. The eight utility companies include NYSEG, CMP, SCG, CNG, RGE, BGC, MNG, and NHGC.

Regulated Global – 6 Allocation Factor – This formula is derived through utilization of the same data as the Regulated Global – 8 allocation factor above, but it is limited to data of the following six utility subsidiaries: NYSEG, CMP, SCG, CNG, RGE, and BGC.

Regulated Global – 5 Allocation Factor – This formula is derived through utilization of the same data as the Regulated Global – 8 allocation factor above, but it is limited to data of the following five utility subsidiaries: NYSEG, CMP, SCG, CNG, and RGE.

Regulated Global – 4 Allocation Factor – This formula is derived through utilization of the same data as the Regulated Global – 8 allocation factor above, but it is limited to data of the following four utility subsidiaries: NYSEG, CMP, SCG, and CNG.

Commodity – Energy Supply Transaction System Allocation Factor – This formula is used to allocate the cost of management of the Energy Supply Transaction System to all Client Companies that benefit from this system. The formula is derived through utilization of the gas and/or electric supply costs of the Client Companies and reflects the proportion of such costs occurring between these entities.

Commodity - Global Allocation Factor – This formula is used to allocate the cost of commodity planning, procurement, and sale when the service is applicable to or benefits all Client Companies, regardless of whether they are a gas, electric, or combined company. The formula is derived through utilization of the gas and/or electric supply costs of the Client Companies and reflects the proportion of such costs occurring between these entities.

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Commodity - Regulated Gas Allocation Factor – This formula is used to allocate costs for gas commodity planning, procurement and sale for regulated gas utility Client Companies. The formula is derived through utilization of the gas supply costs of the regulated gas utility affiliates and reflects the proportion of such costs occurring between these entities.

Electric Allocation Factor – This formula is used to allocate costs for the coordination and direction of electric transmission issues for the benefit of regulated electric utility Client Companies and departments. The formula is derived through utilization of the same data as the global allocation noted above, but it is limited to data of electric operating companies or departments.

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EX-10.3

EXHIBIT 10.3

PINELAND LEASE

BASIC LEASE INFORMATION AND DEFINITIONS

Lease Date: July 7, 2003

Tenant: Energy East Management Corporation

Tenant’s Address: Corporate Drive, Kirkwood Industrial Park

Binghamton, New York, 13902

Landlord: October Corporation

Landlord’s Address: Three Canal Plaza

Portland, ME 04101

Managing Agent: CB Richard Ellis-Boulos Property Management

One Canal Plaza

Portland, ME 04101

(Phone: 207-871-1290)

Leased Premises: Approximately 60,913 square feet of rentable area (the “Leased Premises”) being all of the buildings known as Durham Hall and Freeport Hall located at 52 and 70 Farm View Drive, respectively as shown on the plan attached to the Lease as Exhibit A (the “Buildings”) in the complex known as Pineland, New Gloucester, Maine as shown on the plan attached to the Lease as Exhibit A-1 (“Pineland”). Notwithstanding the fact that certain water, sewer and storm water facilities and/or infrastructure serving Pineland may not be located within the boundaries of Pineland as depicted on Exhibit A-1 attached hereto, all such facilities and/or infrastructure are hereby included in the Pineland complex. Landlord and Tenant agree that the Leased Premises shall be deemed to contain approximately 60,913 square feet of rentable area. The Buildings shall be deemed to contain 60,913 square feet of rentable area. Pineland shall be deemed to contain approximately 262,252 square feet of rentable area. Included within the Leased Premises is the right to use the common entrances, hallways, restrooms, elevators, walkways and stairways in the Buildings and the sidewalks, driveways, parking areas and access roads located in Pineland in common with the Landlord and others who are entitled to use the same.

Lease Term: One hundred twenty (120) calendar months, (plus the partial calendar month, if any, immediately following the Commencement Date) commencing the earlier to occur of September 1, 2003 or the date Landlord sends Tenant a notice to the effect that Landlord has substantially completed all of

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Landlord’s Work described in Exhibit B which is attached hereto and incorporated herein, which notice shall be binding and conclusive upon Tenant in the absence of bad faith (the “Commencement Date”) and ending at 5:00 p.m. on the last day of the 120th full calendar month, subject to adjustment and earlier termination as provided in the Lease. Rent shall commence on the Commencement Date, as established. Substantially completed, as used in this paragraph, is defined to mean entirely completed except for minor items such as touch-up and finishing, the completion of which will not unreasonably interfere with Tenant’s normal business operations in the Leased Premises. At the request of either party, after the Commencement Date has been determined, the parties shall execute a Certificate of Lease Commencement Date substantially in the form of Exhibit D hereto.

Base Rent: Base Rent at a rate per square foot of rentable area (“RSF”) per year, payable in monthly installments, as follows:

Months	Annual Rental Rate	Monthly Installment
Commence Date – 12 13 – 24 25 – 36 37 – 48 49 – 60 61 – 72 73 – 84 85 – 96 97 – 108 109 – 120	$12.00 per RSF $12.36 per RSF $12.73 per RSF $13.11 per RSF $13.51 per RSF $13.91 per RSF $14.33 per RSF $14.76 per RSF $15.20 per RSF $15.66 per RSF	$60,913.00 $62,740.39 $64,618.54 $66,547.45 $68,577.89 $70,608.32 $72,740.27 $74,922.99 $77,156.47 $79,491.47

Utility Reimbursement Tenant shall pay for all charges for electricity associated with Tenant’s use of the Leased Premises, including without limitation, electricity for lights, heat, air conditioning, ventilation, and power, and telephone or other communication services used, rendered or supplied upon or in connection with the Leased Premises. In the event the Leased Premises are not separately metered for any one or more of these services, Tenant shall pay to Landlord, on a monthly basis, the cost of such services as shall be reasonably determined by Landlord.

Base Year for Common Area Maintenance Expenses: 2003

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Security Deposit: $60,913.00

Rent: Base Rent, Excess Common Area Maintenance Expenses, Utility Reimbursement and all other sums that Tenant may owe to Landlord under the Lease.

Permitted Use: Said Leased Premises shall be used only for general business offices of Tenant.

Tenant’s Proportionate Buildings’ Share: 100%, which is the percentage obtained by dividing (i) the 60,913 square feet of rentable area in the Leased Premises by (ii) the total 60,913 square feet of rentable area in the Buildings.

Tenant Proportionate Pineland Share: 23.23%, which is the percentage obtained by dividing (i) the 60,913 square feet of rentable area in the Lease Premises by (ii) the total 262,252 of rentable area in Pineland.

Landlord Build Out: Landlord will build out the Leased Premises in accordance with the terms of Exhibit “B,” in the manner shown in Exhibit “B-1”, and will bear the cost of such build-out, provided the same shall not exceed $913,695, or $15.00 per SF (the “Construction Allowance”). In accordance with the terms of Exhibit “B”: (i) Tenant shall pay the Excess Cost if the build out costs more than the Construction Allowance, and (ii) if the build out costs less than the Construction Allowance, Tenant may apply the difference toward other expenditures related to the Leased Premises. This section is intended to be a summary of Exhibit “B” and does not change or add to the terms of the Lease.

THE FOREGOING BASIC LEASE INFORMATION AND DEFINITIONS IS INCORPORATED INTO AND MADE A PART OF THE LEASE, BUT DOES NOT CONSTITUTE THE ENTIRE LEASE. TENANT ACKNOWLEDGES THAT IT HAS READ ALL OF THE PROVISIONS CONTAINED IN THE ENTIRE LEASE AND ALL EXHIBITS WHICH ARE A PART THEREOF AND AGREES THAT THIS LEASE, INCLUDING THE BASIC LEASE INFORMATION AND DEFINITIONS AND ALL EXHIBITS, REFLECTS THE ENTIRE UNDERSTANDING AND REASONABLE EXPECTATIONS OF LANDLORD AND TENANT REGARDING THE PREMISES. TENANT ALSO ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY TO REVIEW THIS LEASE PRIOR TO EXECUTION WITH LEGAL COUNSEL AND SUCH OTHER ADVISORS AS TENANT DEEMS APPROPRIATE. IN THE EVENT ANY CONFLICT EXISTS BETWEEN ANY BASIC LEASE INFORMATION AND THE LEASE THEN THE LEASE SHALL CONTROL.

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WITNESS:	LANDLORD:
	OCTOBER CORPORATION
/s/ Elizabeth C. Flaherty	By:	/s/ Owen W. Wells
		Owen W. Wells
		Its President
	TENANT:
	ENERGY EAST MANAGEMENT
	CORPORATION
/s/ Kenneth Jasinski	By:	/s/ Wesley W. von Schack
		Printed Name: Wesley W. von Schack
/s/ Richard R. Benson		Its: President & CEO

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LEASE

BY

OCTOBER CORPORATION

TO

ENERGY EAST MANAGEMENT CORPORATION

THIS LEASE AGREEMENT is made this 7th day of July, 2003, by and between October Corporation, a Maine nonprofit corporation with a place of business at Portland, Maine (hereinafter referred to as “Landlord”), and Energy East Management Corporation, a Delaware corporation with an office located at Pineland, New Gloucester, Maine, (hereinafter referred to as “Tenant”).

W I T N E S S E T H:

1. Leased Premises. Landlord leases to Tenant, in consideration of the Rent to be paid by Tenant and subject to the terms and conditions set forth herein, (including, without limitation, those terms and conditions set forth in Exhibits A, A-1, B, B-1, C and D attached hereto and incorporated herein), the Leased Premises.

2. Commencement and Term.

(a) The term of this Lease shall commence on the Commencement Date and shall be the Lease Term, unless earlier terminated by mutual agreement of the parties or as otherwise provided in this Lease.

(b) Prior to the Commencement Date, certain improvements to the Leased Premises shall be completed in accordance with the terms of Exhibit B and B-1 attached hereto and made a part hereof. Any Construction Allowance provided for in Exhibit B-1 shall be due only during the original Lease Term.

(c) Landlord agrees that Tenant may take possession of and occupy a portion of the Leased Premises prior to the Commencement Date with the prior approval of the Landlord, which approval shall not be unreasonably withheld, delayed, or conditioned, provided Tenant pays Landlord a pro rata portion of Base Rent in advance of such occupancy and otherwise agrees to abide by the applicable terms of this Lease. Such early occupancy by the Tenant shall not constitute an acceptance of the Leased Premises in toto, nor shall such early occupancy constitute the Commencement Date of this Lease.

3. Rent. Tenant covenants and agrees to pay to Landlord c/o its Managing Agent or at such other place as Landlord shall from time to time designate in writing, during the Lease Term, the Base Rent and, if applicable, the Utility Reimbursement, without holdback or set-off, in advance on the first day of each calendar month during the Lease Term. Other Rent shall be paid, without holdback or set-off, in accordance with the terms of this Lease. If any payment of Rent is received by Landlord more than ten (10) days after the date when such payment is due, a late charge of five percent (5%) of the past due payment shall be assessed, due and payable immediately and without notice.

4. Security Deposit. Upon the execution of this Lease, Tenant agrees to pay to Landlord the Security Deposit, which shall be held by Landlord throughout the Lease Term, as a security deposit for the faithful performance of all of Tenant’s obligations hereunder. Landlord shall have the right to apply all or any part of such deposit to the curing of any default that may then exist without prejudice to any other remedy which Landlord may have on account thereof. Whenever and as often as said Security Deposit is so used by Landlord to cure any such default, Tenant shall, within ten (10) days after Landlord’s request therefor, deposit additional funds with Landlord sufficient to restore the Security Deposit to its original amount. Tenant shall not be entitled to interest on said Security Deposit. Landlord shall remit the Security Deposit to Tenant within ten (10) days following the expiration of the Lease Term.

5. Common Area Maintenance Expenses.

(a) Landlord and Tenant acknowledge and agree that the terms of this Paragraph 5 are intended to fairly reimburse the Landlord for increases in Common Area Maintenance Expenses (defined below) relating to the Buildings and the Pineland Remainder (defined below) so the Landlord’s return on its capital investment is not diminished by increases in such Common Area Maintenance Expenses, and that these provisions are not intended to: (i) serve as a profit center for the Landlord, (ii) authorize inefficient procurement of goods, services, or improvements, (iii) authorize the imposition of costs, taxes, and expenses other than those relating specifically to the operation, as opposed to the ownership, of the Buildings and the Pineland Remainder as a first-class professional office complex, and\or (iv) authorize unfair, inequitable, or inconsistent treatment among tenants, except to the extent individual tenants negotiate changes to the Landlord’s standard lease terms and conditions.

(b) In addition to the Base Rent, Tenant shall also pay to Landlord as Additional Rent hereunder Tenant’s share of the amount of any increase in any calendar year in the total of all Common Area Maintenance Expenses incurred by Landlord in connection with: (i) the Buildings, and (ii) the remainder of Pineland (excluding the Buildings) (hereinafter, the “Pineland Remainder”), over and above the Common Area Maintenance Expenses in the Buildings and the Pineland Remainder, respectively, incurred by Landlord during the Base Year. Tenant’s share of such increase shall be (i) with respect to any increase in Common Area Maintenance Expenses in the Buildings, “Tenant’s Proportionate Buildings’ Share”, and (ii) with respect to any increase in Common Area Maintenance Expenses in the Pineland Remainder, “Tenant’s Proportionate Pineland Share” (hereinafter sometimes referred to collectively as “Tenant’s Proportionate Shares”). Prior to the start of each calendar year or as soon thereafter as possible, Landlord shall furnish the Tenant with a statement showing an estimate of all of said Common Area Maintenance Expenses for the Buildings and the Pineland Remainder to be paid by Landlord for that year and the amount by which such estimate exceeds the Base Year expenses. Tenant shall pay to Landlord Tenant’s Proportion Shares of such estimated excess, which shall not exceed 105% (except for increases related to real estate taxes, electricity, fuel, insurance, and snow removal costs, for which no such cap shall apply) of Tenant’s Proportionate Share of the actual Common Area Maintenance Expenses for the Buildings or the Pineland Remainder (as appropriate) for the prior year in equal monthly installments, on the first day of each and every month throughout each such calendar year. Within a reasonable period of time following the end of each calendar year during the Lease Term (but no later than six (6) months thereafter), Landlord shall submit to Tenant a statement showing actual Common Area

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Maintenance Expenses incurred by Landlord during the preceding year for the Buildings and the Pineland Remainder (the “Statement(s)”). In the event that actual excess Common Area Maintenance Expenses for the Building and/or the Pineland Remainder exceed the estimated excess Common Area Maintenance Expenses for such year, Tenant shall pay to Landlord, as additional Rent hereunder, Tenant’s share (as determined above) of such excess not to exceed 105% (except for increases related to real estate taxes, electricity, fuel, insurance and snow removal costs, for which no such cap shall apply) of Tenant’s Proportionate Share of the actual Common Area Maintenance Expenses for the Buildings or the Pineland Remainder (as appropriate) for the prior year, such amount to be paid within thirty (30) days after the date of receipt of the statement of actual Common Area Maintenance Expenses. If the actual excess Common Area Maintenance Expenses are less than the estimated excess Common Area Maintenance Expenses for the Buildings and/or the Pineland Remainder for such year, and Tenant is not in default of any material terms of this Lease, an amount equal to Tenant’s Proportionate Share of such difference shall be applied against the installment of Base Rent next falling due. Tenant shall have ninety (90) days following receipt of said Statement(s) to contest the validity of, or verify the accuracy of said Statement(s). Thereafter, the Statement(s) shall be conclusively deemed correct. No rights to contest or to verify shall be available to Tenant if Tenant is in default of any of its monetary obligations hereunder. If Tenant disputes such Statement(s), Tenant shall so notify the Landlord in writing stating that Tenant, or a third party representative, shall inspect and copy the Landlord’s accounting and other records of amounts set forth in the Statement. Tenant’s review of such records shall take place in the Landlord’s Office in Portland, Maine or at the Pineland Facility, and Landlord will provide the Tenant and its representatives with reasonable accommodations for such review and reasonable use of available office equipment, phone, and copier, at no charge. Landlord shall provide the Tenant with reasonable documentation supporting all expenses on the Statement(s) as Tenant may request, including any prior audit conducted by the Landlord for the year in question.

(c) Notwithstanding anything to the contrary contained in this Lease, Landlord acknowledges and agrees that: (i) only actual Common Area Maintenance Expenses relating to the Building will be used in calculating Tenant’s Proportionate Buildings’ Share pursuant to subsection (a), above, (ii) only actual Common Area Maintenance Expenses relating to the Pineland Remainder will be used in calculating Tenant’s Proportionate Pineland Share pursuant to subsection (a), above, and (iii) under no circumstances will any actual item of expense or cost be used in both calculations.

(d) In the event the rentable area of Pineland Remainder during the Base Year or any other calendar year during the Lease Term is less than one hundred percent (100%) occupied, then Common Area Maintenance Expenses for Pineland Remainder for the Base Year or other such calendar year shall be “grossed up” to the amount of Common Area Maintenance Expenses that, using reasonable projections, would normally be expected to be incurred during the Base Year or such calendar year if the rentable area of Pineland Remainder had been one hundred percent (100%) occupied for the entirety of such year with all tenants paying full rent (as contrasted with free rent, half rent, or the like) during such Base Year or other such calendar year and such projections shall be consistently applied. Only those components of Common Area Maintenance Expenses in Pineland Remainder that are affected by variations in occupancy levels shall be grossed up pursuant to this clause.

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(e) For purposes of this Paragraph 5, “Common Area Maintenance Expenses” shall mean all expenses and disbursements of every kind which Landlord pays or incurs in connection with the ownership, operation, maintenance, repair, replacement and security of the Buildings and the Pineland Remainder, respectively, including but not limited to, the following:

(i) All salaries, wages, fringe benefits, payroll taxes and worker’s compensation insurance premiums related thereto of and for Landlord’s or its Managing Agent’s employees engaged in the operation, repair, replacement, maintenance or security of the Buildings and the Pineland Remainder, as reasonably determined by Landlord;

(ii) All costs, including monies paid to utility companies, the Town of New Gloucester, and any other entities, of furnishing HVAC and hot water to the Leased Premises, as reasonably determined by Landlord;

(iii) All costs, including monies paid to utility companies, the Town of New Gloucester and any other entities, of furnishing electricity to the common areas of Pineland Remainder, and water and sewer services to the Buildings and Pineland Remainder, as reasonably determined by Landlord;

(iv) All costs of any insurance carried by Landlord related to the Buildings and Pineland Remainder or its operation, as reasonably prorated by Landlord;

(v) All costs, including material and equipment costs, for common area cleaning and janitorial services, trash removal from the Pineland Remainder, and for window cleaning, as reasonably determined by Landlord;

(vi) All costs of maintaining the Buildings and Pineland Remainder, including the operation and repair of elevators, heating, air-conditioning and hot water equipment and any other common Buildings and the Pineland Remainder equipment and all other repairs and replacements necessary to keep the Buildings and the Pineland Remainder in the same condition as at the Commencement Date;

(vii) All costs of snow removal, ice treatment, and ground maintenance (including landscaping) relating to the Buildings and the Pineland Remainder, as reasonably determined by Landlord;

(viii) All costs of the management of the Buildings and the Pineland Remainder, as reasonably prorated by the Landlord;

(ix) All costs of acquiring, maintaining, repairing and replacing all tools, equipment, supplies and materials used in the operation, maintenance, repair, replacement and security of the Buildings and the Pineland Remainder, as reasonably determined by Landlord;

(x) All costs of service and supply contracts relating to services and supplies referred to in subparagraphs (i) through (ix) hereinabove and relating in any way to the operation, maintenance and management of the Buildings and the Pineland Remainder by Landlord, as reasonably prorated by Landlord; and

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(xi) All taxes, betterments and assessments assessed and levied against the Buildings and the Pineland Remainder (which shall include personal property to the extent that elevators, heating and air-conditioning equipment, or similar Buildings or the Pineland Remainder appurtenances for the use and benefit of all of the occupants of the Buildings and the Pineland Remainder are classified as personal property for tax purposes and to the extent that any personal property, such as computers and other business equipment is used by the Landlord or its Property Manager in the operation of the Buildings and the Pineland Remainder), as reasonably determined by Landlord (“Real Estate Taxes”). In the event Landlord is required to pay to any taxing authority any amount as sales tax, gross receipt tax, or any tax of like nature specifically measured as a percentage of, or fraction of, or other factors based upon the rent payable hereunder (whether in lieu of, or in addition to real estate taxes) then such amounts shall be treated as Real Estate Taxes hereunder. Further, if the system of real estate taxation shall be altered or varied and any new tax shall be levied or imposed on the Buildings and the Pineland Remainder and/or Landlord in substitution for real estate taxes presently levied or imposed, then any such new tax or levy shall be included within the term “Real Estate Taxes” and the provisions of this Paragraph shall apply.

(f) Notwithstanding anything in the definition of “Common Area Maintenance Expenses” in this Lease to the contrary, Common Area Maintenance Expenses shall not include the following, except to the extent specifically permitted by a specific exception to the following:

(i) Any ground lease rental;

(ii) Costs of items considered capital repairs, replacements, improvements and equipment under generally accepted accounting principles consistently applied or otherwise (“Capital Items”);

(iii) Rentals for items (except when needed in connection with normal repairs and maintenance of permanent systems) which, if purchased rather than rented, would constitute a Capital Item which is specifically excluded in (ii) above;

(iv) Costs incurred by Landlord for the repair of damage to the Buildings or the Pineland Remainder to the extent the Landlord is, or should be, reimbursed by insurance proceeds;

(v) Costs, including permit, license, and inspection costs, incurred with respect to the installation of tenant or other occupants’ improvements in the Pineland Remainder or incurred in renovating or otherwise improving, decorating, painting, or redecorating vacant space for tenants or other occupants of Pineland Remainder;

(vi) Depreciation, amortization, and interest payments as determined in accordance with generally accepted accounting principles, consistently applied;

(vii) Marketing costs, including without limitation, leasing commissions, attorneys’ fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases and/or assignments, space planning costs, and other costs and expenses incurred in connection with lease, sublease, and/or assignment negotiations and transactions with Tenant or present or prospective tenants or other occupants of the Pineland Remainder;

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(viii) Expenses in connection with services or other benefits that are not offered to Tenant or for which Tenant is charged for directly, but which are provided to another tenant or occupant of the Pineland Remainder;

(ix) Costs incurred by Landlord due to the violation by Landlord or any other tenant of the Pineland Remainder of the terms and conditions of any lease of space in the Pineland Remainder;

(x) Interest, principal, points, and fees on debts or amortization on any mortgage or mortgages or any other debt instrument encumbering the Buildings or the Pineland Remainder;

(xi) Landlord’s general corporate overhead and general and administrative expenses;

(xii) The cost of any electric power used by any tenant in the Pineland Remainder in excess of the stipulated standard amounts, or electric power costs for which any tenant directly contracts with the local public service company or of which any tenant is separately metered or submetered and pays Landlord directly;

(xiii) Costs incurred in connection with upgrading the Buildings and/or the Pineland Remainder to comply with life, fire, and safety codes, ordinances, statutes or other laws including, without limitation, the ADA, including penalties or damages incurred due to such non-compliance except for regular maintenance, repair and inspection of such;

(xiv) Tax penalties incurred as a result of Landlord’s failure to make payments and/or to file any tax or informational returns when due;

(xv) Costs arising from the negligence or fault of other tenants or Landlord or its agents, or any vendors, contractors, or providers of materials or services selected, hired, or engaged by Landlord or its agents, including without limitation, the selection of materials in the Buildings and/or in the Pineland Remainder;

(xvi) Any and all costs arising from the presence of hazardous materials or substances (as defined by applicable federal, state, or local law, rule or regulation or judicial decision) in or about the Buildings or the Pineland Remainder including, without limitation, hazardous substances in the ground water or soil, not placed in the Pineland Remainder or the Buildings by Tenant;

(xvii) Costs arising from defects in the base, shell, or core of the Buildings or any other building situated on the Pineland Remainder, as well as any improvements installed by Landlord or repair thereof;

(xviii) Costs (including in connection therewith all attorneys’ fees and costs of settlement or judgments and payments in lieu thereof) arising from claims, disputes, or

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potential disputes in connection with potential or actual claims, litigation, or arbitrations pertaining to Landlord, the Buildings and/or the Pineland Remainder, except as the actions of the Tenant may be in issue;

(xix) Costs associated with the operation of the business of the entity that constitutes the Landlord as the same is distinguished from the costs of operating the Buildings or the Pineland Remainder, including corporate accounting and legal matters, costs of defending any lawsuits with, or claims by, any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging, or hypothecating any of Landlord’s interest in the Buildings or the Pineland Remainder, costs of any disputes between Landlord and its employees (if any) not engaged in operations at the Buildings or the Pineland Remainder, or outside fees of any kind paid in connection with disputes with other tenants;

(xx) Any other expenses or costs that, in accordance with generally accepted accounting principles, consistently applied, would not normally be treated as Operating Expenses by landlords of comparable buildings or property. In the event the cost of a repair exceeds fifty percent (50%) of the remaining book value of such unit of property, such repair shall be considered a capital expense.

(xxi) Any and all costs associated with the operation of the Athletic Center, the Commons and the Conference Center, all as shown on Exhibit A-1 attached hereto.

(g) In addition to Tenant’s rights as set forth in subparagraph 5(b) above, in the event Tenant’s independent auditor(s) and/or any regulatory bodies having jurisdiction over the Tenant initiate an audit, Tenant shall have the right to inspect and audit the books and records of the Landlord, for a period of up to three (3) years immediately preceding the calendar year for which Landlord delivers the most recent Common Area Maintenance Expenses statement, to verify that Tenant’s payment of Common Area Maintenance Expenses comport with the terms and conditions of this Lease, as well as to comply with any legal and regulatory requirements binding upon the Tenant. In no event shall Tenant be entitled to conduct an audit or inspection for a period earlier than three (3) years prior to the year in which Landlord delivers the most recent Common Area Maintenance Expense statement. Such audit or inspection may be performed by Tenant or its employees and\or Tenant’s independent auditor(s), as well as by such regulatory bodies having jurisdiction over the Tenant and their representatives. The location of any such audit or inspection will be as specified in subparagraph 5(b) above. Landlord shall provide reasonable cooperation and assistance in connection with any such audit or inspection, including such cooperation and assistance specified in subparagraph 5(b) above; provided, however, that if Tenant requests more than one (1) audit or inspection pursuant to this subparagraph (f) in a calendar year, Tenant shall bear the cost of copying charges and Landlord’s reasonable labor charges associated with such second audit or inspection.

6. Holdover. If Tenant continues to occupy the Leased Premises at the completion of the Lease Term, such continued occupancy shall be deemed a tenancy-at-will under the terms and conditions stated herein and shall be subject to a Base Rent equal to 150% of the Base Rent applicable at the end of the Lease Term until Tenant shall vacate the Leased Premises. Nothing contained in this Paragraph shall be deemed to constitute consent by Landlord to such occupancy or holdover by Tenant.

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7. Hazard Insurance. It is acknowledged and understood by the parties hereto that such insurance for fire and extended coverage as Landlord purchases with respect to the Buildings, Pineland and the Leased Premises shall be for the sole benefit of Landlord, and that such insurance shall not cover any personal property, trade fixtures, leasehold improvements, and other appurtenances located in the Leased Premises, and that in the event of damage to or loss of any such items, Landlord shall have no obligation to repair or replace same. Notwithstanding anything contained in Paragraph 16(a) hereof to the contrary, Tenant does hereby expressly release Landlord of and from and agrees to indemnify, hold harmless, and defend Landlord from any and all claims for damages or loss to any such items regardless of the cause thereof, including, without limitation, damage or loss due to theft, water, fire, explosion, sewer back up or any other hazard regardless of the cause thereof, except as and to the extent the foregoing arise from, or are attributable to, the willful misconduct of the Landlord, its employees, agents, or contractors. Notwithstanding anything contained in paragraph 16(a) hereof to the contrary, Landlord shall not be liable for any damage or loss resulting from business interruption at the Buildings and the Leased Premises arising out of or incident to the occurrence of any of the perils which can be covered by a business interruption policy, and Tenant does hereby expressly release Landlord of and from any and all liability for such damages or losses, except as and to the extent the foregoing arise from, or are attributable to, the willful misconduct of the Landlord, its employees, agents, or contractors. Landlord and Tenant agree that to the extent Tenant has an insurable interest in the Leased Premises, Tenant may obtain and maintain, at Tenant’s own expense and for Tenant’s own benefit, a policy of insurance insuring said interest.

8. Utilities and Interruption of Service.

(a) Tenant shall pay for all charges for electricity associated with Tenant’s use of the Leased Premises, including without limitation, electricity for lights, heat, air conditioning, ventilation, and power, and telephone, or other communication services used, rendered or supplied upon or in connection with the Leased Premises. In the event that the Leased Premises are not separately metered for any one or more of such services, Tenant shall pay to Landlord, on a monthly basis, its proportionate share of the cost of such services as shall be reasonably determined by Landlord.

(b) Landlord shall in no way be liable for any loss, expense, or damage (whether direct or indirect) that Tenant may sustain or incur by reason of any change, failure, interference, disruption, interruption, or defect in the supply or character of the electric energy or other utility services furnished to the Leased Premises or Buildings, regardless of its duration, or if the quantity or character of the electric energy or other utility services supplied by the existing or any future provider of such electricity or other utility services is no longer available or suitable for Tenant’s requirements. Additionally, any such change, failure, interference, disruption, interruption, defect, unavailability, or unsuitability mentioned in this paragraph shall not: (i) constitute an actual or constructive eviction of Tenant, in whole or in part; (ii) entitle Tenant to any abatement or diminution of Rent, or any other costs due from Tenant pursuant to this Lease; (iii) relieve or release Tenant from any of its obligations under this Lease; or (iv) entitle Tenant to terminate this Lease. Tenant hereby waives all benefits of any applicable existing or future law permitting the termination of this Lease due to any such change, failure, interference, disruption, interruption, defect, unavailability, or unsuitability as mentioned in this paragraph.

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Provided, however, that in the event any such failure or interruption in the supply of the electric energy or other utility services furnished results from the negligent or other acts or failure to act of the Landlord or its agents and continues for longer than five (5) days, Rent will abate during such period as such failure or interruption exists and Tenant is unable to use the Leased Premises for their intended purpose.

9. Landlord Services.

(a) Subject to limitations imposed by governmental rules, regulations, and guidelines applicable thereto, if any, Landlord shall provide, maintain, operate, and repair heating and air conditioning (“HVAC”) to the Leased Premises for normal comfort in office use during normal business hours (“Building Hours”), except for the date of observance of New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day (collectively, the “Holidays”).

(b) Landlord shall provide, maintain, and repair existing secondary electrical wiring and transformers up to and inclusive of the distribution panels that will provide power to the Tenant’s lighting fixtures, computer and communication systems, and incidental use equipment in the Leased Premises. Tenant shall have the right, at Tenant’s cost and expense, to install: (i) uninterrupted power supply equipment (“UPS”) in the Leased Premises, and (ii) a generator to serve such UPS equipment situated in a location outside of and adjoining the Building in a location reasonably acceptable to the Landlord; Tenant shall be responsible for maintaining such UPS equipment and generator. With respect to the generator located outside the Building, Tenant shall build an enclosure acceptable to Landlord to house said generator.

(c) Landlord shall provide hot and cold water from privately owned wells for drinking, lavatory, and toilet purposes in the Leased Premises, and shall maintain and repair the facilities and plumbing in the Buildings and Leased Premises that shall supply such water.

(d) At least annually, Landlord shall cause the exterior of the windows of the Buildings to be cleaned.

10. Repair, Maintenance and Cleaning. Tenant agrees that from and after the date that possession of the Leased Premises is delivered to Tenant, and until the end of the Lease Term, it will keep neat and clean and maintain in good order, condition and repair, and in compliance with all federal, state and local statutes, ordinances, rules and regulations currently in effect or hereinafter enacted, all portions of the Leased Premises and any and all alterations or improvements made by Tenant pursuant to Paragraph 11 below; provided, however, that under no circumstances will Tenant be required to make capital or structural repairs or improvements in the Leased Premises or elsewhere in the Pineland Remainder, nor shall Tenant be responsible for the maintenance and repair of equipment and facilities in the Leased Premises. Tenant agrees to pay the costs for cleaning and janitorial services relating to the Leased Premises, which services shall be provided or caused to be provided by Tenant. Landlord shall be responsible for all structural repairs to the Buildings and the Pineland Remainder deemed necessary by Landlord, except such repairs as are made necessary by the negligence or misconduct on the Leased Premises of Tenant, Tenant’s employees, agents, customers and invitees, which shall be Tenant’s sole responsibility and expense. The maintenance and repair of all equipment in the

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Leased Premises, including all heating, air conditioning, plumbing, electrical and mechanical fixtures and equipment, reasonable use and wear and damage by fire or casualty only excepted, shall be the responsibility of the Landlord.

11. Alterations, Renovations and Improvements.

(a) Tenant shall not make any alterations, renovations or improvements to the Leased Premises without obtaining Landlord’s prior written consent, which may be withheld in Landlord’s reasonable discretion. Tenant shall perform all such alterations, renovations and improvements in a good, workmanlike and reasonable manner, and in accordance with all applicable laws, codes and ordinances and provided further that Tenant shall indemnify and hold Landlord harmless from and against all claims, demands, costs and mechanic’s liens which may arise as a direct or indirect result of or in connection with such alterations, renovations and improvements, and Tenant shall assume all cost, liability and responsibility for such alterations, renovations and improvements. Any and all alterations, renovations and improvements which may be made or installed by either Landlord or Tenant upon the Leased Premises and which in any manner are attached to the floors, walls or ceilings (including, without limitation, any linoleum or other floor coverings of similar character which may be cemented or otherwise adhesively affixed to the floor) shall, at Landlord’s option, remain upon the Leased Premises, and at the expiration or termination of this Lease shall be surrendered with the Leased Premises as a part thereof without disturbance, molestation or injury. However, the usual trade fixtures and furniture, which may be installed in the Leased Premises prior to or during the term hereof at the cost of Tenant, may be removed by Tenant from the Leased Premises upon the expiration or termination of this Lease, subject to the provisions of Paragraph 14 below.

(b) Floor Load. Tenant agrees not to place a load upon the Leased Premises exceeding the load established by Landlord and not to remove any heavy items into, about, or out of the Leased Premises except in such manner and at such times as Landlord shall authorize.

12. Signs.

(a) Tenant shall not place any signs or displays within Pineland or on the exterior of or in the Leased Premises or the Buildings or any windows therein which signs or displays are visible from outside of the Buildings, without Landlord’s prior written consent, such consent not to be unreasonably withheld or delayed. Any such signage shall be at Tenant’s sole cost and expense. Tenant shall comply with all applicable laws with respect to such signage and shall also comply with any signage standards in use at the Buildings or within Pineland.

(b) Landlord shall, at Tenant’s expense, provide appropriate designations of Tenant’s location in the Buildings in the lobby and in other convenient and reasonable locations in the Buildings.

13. Americans With Disabilities Act Compliance.

(a) Notwithstanding anything set forth herein to the contrary, on and after the Commencement Date Tenant shall be responsible for the execution of and cost for any alteration to, or removal of architectural barriers from, the Leased Premises which is necessary to comply with the Americans with Disabilities Act of 1990 (42 U.S.C. §§ 12101-12117 and 12181-12213

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as may be amended from time to time) (the “Act”) and any comparable state or local law or regulation. Landlord shall provide that the Work performed pursuant to Exhibit B attached hereto will incorporate compliance with the Act.

(b) Landlord shall be responsible for the execution of and cost for any alteration to or removal of architectural barriers from the common areas of the Buildings and Pineland which is necessary to comply with the Act or any such state or local law or regulation.

14. Trade Fixtures. All trade fixtures and furniture erected on and/or attached to the Leased Premises by Tenant other than those items referred to in Paragraph 11 above, may be removed by Tenant at the termination of this Lease, provided (a) Tenant shall not then be in default in the performance of any of its obligations under this Lease, (b) such removal shall not permanently or substantially damage any portion of the Leased Premises as they existed prior to the commencement of the Lease Term, and any minor damage created by such removal shall be repaired by Tenant at Tenant’s expense prior to the expiration of the Lease Term, and (c) such removal shall be made before the expiration of the Lease Term.

15. Subletting and Assignment. Tenant shall not be entitled to assign this Lease or to sublet the Leased Premises or any portion thereof, without the prior written consent of Landlord. In the event that Landlord does give its consent to any such assignment or subletting, it is agreed that any excess of the rent or other charges payable to Tenant pursuant to such assignment or subletting over the amount of Rent owed by Tenant pursuant to this Lease shall be payable by Tenant to Landlord immediately upon receipt by Tenant. No assignment or sublease shall operate to release Tenant from any of its obligations under this Lease. Any corporate reorganization, except as provided in Paragraph 25 hereof, or merger or consolidation of Tenant into an affiliated organization or entity, or any transfer of Tenant or Tenant’s assets to an affiliate, or similar act or change in ownership or structure of Tenant shall not constitute an assignment or sublease within the meaning of this Paragraph, if such reorganization, merger, transfer, or assignment does not result in a change in the controlling ownership interest of Tenant by Energy East Corporation. Provided, however, that Tenant may assign this Lease without the Landlord’s prior consent, but upon advance notice thereto, to any current or future affiliate of Tenant. Any permitted sublease of all or any part of the Leased Premises must contain a waiver of claims against Landlord by the subtenant and require the subtenant’s insurer to issue waiver of subrogation rights endorsements to all policies of insurance carried in connection with the Leased Premises or the contents thereof. All waivers shall be in form and substance acceptable to Landlord.

As used herein and elsewhere in this Lease, the term “affiliate” and its derivatives shall mean any person or entity controlling, controlled by, or under common control with the Tenant through majority stock or other ownership interest, direct or indirect.

16. Indemnification, Liability, and Casualty Insurance.

(a) Tenant shall indemnify and hold Landlord harmless and, if requested by Landlord, defend Landlord with counsel reasonably satisfactory to Landlord, from and against any and all liabilities, losses, claims, causes of action, damages, costs, and expenses (including reasonable attorneys fees) incurred by or threatened against Landlord (i) arising out of any

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occurrence on the Leased Premises or the use of the Leased Premises by Tenant, its employees, agents, licensees, or invitees except to the extent caused by the negligence or willful misconduct of Landlord; or (ii) arising out of any omission, fault, neglect, or other misconduct of Tenant, its employees, agents, licensees, or invitees wherever occasioned except to the extent caused by the negligence or willful misconduct of Landlord. Tenant agrees that the foregoing agreement to indemnify, defend, and hold harmless extends to liabilities, losses, claims, causes of action, damages, costs and expenses (including reasonable attorneys fees) arising out of claims of Tenant’s employees without regard to any immunity, statutory or otherwise, including any immunity under the workers compensation laws of Maine or any other applicable jurisdiction. Tenant’s obligations under this paragraph shall survive the termination of this Lease for a period of one (1) year.

(b) Tenant agrees to maintain in full force during the Lease Term and any extension thereof a policy of Commercial General Liability Insurance on an occurrence or claims-made basis, with a deductible in an amount not to exceed $1,000.00, under which Tenant is named as an insured and Landlord and Landlord’s management company, CB Richard Ellis-Boulos Property Management, by an endorsement satisfactory to Landlord or provided on ISO Form 2026 (1185) or its equivalent, without modification, are named as additional insureds with respect to this Lease, in a minimum amount of One Million Dollars ($1,000,000.00) for injury or death of any one person or damage to property, and Two Million Dollars ($2,000,000.00) for injury to or death of more than one person in a single accident or occurrence (the general aggregate limit shall apply on a “per location” basis). Such policy shall contain a provision requiring that written notice be given to Landlord not less than thirty (30) days prior to cancellation, expiration or alteration of the policy. Tenant agrees to deliver to the Landlord a certificate of insurance evidencing such coverage and naming Landlord and CB Richard Ellis-Boulos Property Management as additional insureds on or before the Commencement Date and thereafter not less than thirty (30) days prior to the expiration of any such policy and at any time requested by Landlord. Landlord agrees that all or any portion of the aforementioned insurance requirements may be satisfied by the Tenant through a program of self-insurance, so long as Tenant or any guarantor of this Lease (“Guarantor”) has a sufficient net worth, as reasonably determined by Landlord, to cover the obligations of the Tenant and Guarantor under this Lease. The Landlord agrees the current net worth of the Guarantor, Energy East Corporation, is sufficient for purposes of this paragraph 16(b).

(c) Landlord agrees to maintain in full force during the Lease Term and any extension thereof, at its sole cost and expense, the following insurance coverages with insurers authorized to issue insurance in the State of Maine, rated “A-” or better by Bests:

(i) Property/Casualty Insurance to the extent of full replacement cost of the Building insuring Landlord against loss or damage by fire and lightning, and other perils covered by the broadest form of “extended coverage” or “all-risk” endorsements available in the State of Maine, including, but not limited to, damage by windstorm, explosion, aircrafts, smoke, sprinkler leakage, vandalism, malicious mischief and all other risks normally covered by these endorsements, provided that during the period of construction of the Landlord Build Out improvements set forth in Exhibit B, Landlord will provide, or will cause to be provided, builders’ risk or similar insurance to the full replacement cost thereof; and

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(ii) Landlord agrees to maintain in full force during the term hereof a policy of Commercial General Liability Insurance on an occurrence basis, with a deductible in an amount not to exceed $1,000.00, under which Landlord is named as an insured, in a minimum amount of One Million Dollars ($1,000,000.00) for injury or death to any one person or damage to property, and Two Million Dollars ($2,000,000.00) for injury to or death of more than one person in a single accident or occurrence (the general aggregate limit shall apply on a “per location” basis). If requested, Landlord agrees to deliver Evidence of Insurance (in ACORD Form 27) for such insurance to Tenant at the beginning of the term hereof and thereafter not less than thirty (30) days prior to the expiration of any such policy and at any other time requested by Tenant.

17. Use and Business Operation.

(a) Tenant agrees to use and occupy the Leased Premises for the Permitted Use, and for no other object or purpose without the written consent of Landlord, and further agrees not to use the Leased Premises for any purpose deemed extra hazardous or not covered by insurance in force, without the prior written consent of Landlord. Further, Tenant agrees that it shall at all times observe the Building Rules and Regulations attached hereto as Exhibit C.

(b) Landlord acknowledges and agrees that the Leased Premises may be used by employees and consultants of Tenant’s affiliates for purposes authorized hereunder and that such use shall not constitute an assignment or sublease of the Leased Premises as provided in this Lease; provided, however, that Tenant shall be responsible for the acts of such affiliate employee’s and consultants while on the Leased Premises.

18. Permits and Licenses. Tenant agrees to maintain in full force and effect, during the Lease Term and, if applicable, any Renewal Term, at Tenant’s cost and expense, any and all federal, state and local permits, licenses and registrations necessary for the use of the Leased Premises by Tenant pursuant to Paragraph 17 hereof.

19. Right to Enter. Tenant agrees to permit Landlord or its duly authorized agents to enter on the Leased Premises during Tenant’s normal business hours, without any prior notice, to examine the condition of said Leased Premises and to show the same to prospective tenants or purchasers, provided such access to the Leased Premises shall not unnecessarily interfere with Tenant’s use of the Leased Premises or the conduct of Tenant’s business activities thereon. In the event that Landlord wishes to enter the Leased Premises at any time other than Tenant’s normal business hours, Landlord shall give Tenant such prior notice as is reasonable under the circumstances except that in case of an emergency, Landlord shall be relieved of said notice obligation.

20. Attorneys Fees. In the event either party pursues the enforcement of any provision of the Lease, or in the event of a dispute between Landlord and Tenant arising out of the Lease, the prevailing party shall be entitled to recover from the losing party the full amount of all reasonable attorney’s fees, court costs or other expenses related thereto. Such costs shall be recoverable whether or not suit is actually filed.

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21. Total or Partial Destruction.

(a) If the Leased Premises shall be damaged by fire or other casualty covered by Landlord’s policies of fire and extended coverage insurance but are not thereby rendered untenantable in any part, Landlord shall cause such damage promptly to be repaired, and the Rent meanwhile shall be abated in accordance with the nature and proportion of the damage, until delivery of possession of the restored Leased Premises. If the Leased Premises shall be damaged or destroyed by a fire or casualty not covered by Landlord’s policies of fire and extended coverage insurance, or if said damage or destruction renders the Leased Premises untenantable, in whole or in part, then Landlord may, at its option, elect to repair such damage or destruction within one hundred and eighty (180) days after the occurrence of such damage or destruction, and the Rent meanwhile shall be abated in accordance with the nature and proportion of the damage, until delivery of possession of the restored Leased Premises. If Landlord does not elect to undertake such repairs, or is unable to complete such repairs within the time period specified, then either party hereto shall have the right, to be exercised by notice in writing delivered to the other party within thirty (30) days from and after either Landlord’s election not to repair or the expiration of such 180-day period, as applicable, to cancel this Lease, said cancellation to take effect thirty (30) days from and after the delivery of such notice, and in such event this Lease and the tenancy hereby created shall cease as of the aforesaid cancellation date, the Rent (which shall be abated as aforesaid) to be adjusted as of the date of delivery of said notice. In no event shall Landlord be obligated to expend for any repairs, restoration or reconstruction pursuant to this Paragraph an amount in excess of the insurance proceeds recovered by it and allocable to the damage to the Leased Premises after deduction therefrom of Landlord’s reasonable expenses in obtaining such proceeds.

(b) Landlord’s obligation to repair, restore or reconstruct the Leased Premises pursuant to the provisions of this Paragraph shall be limited to the Buildings shell and any improvements originally existing or constructed in or on the common areas and the Leased Premises by Landlord or contained therein on the Commencement Date of the Lease Term. Tenant, at Tenant’s expense, shall perform all repairs or restoration not required to be done by Landlord and shall promptly re-enter the Leased Premises and commence doing business in accordance with the provisions of this Lease. Landlord shall not be liable for delays occasioned by adjustment of losses with insurance carriers or by any other cause so long as Landlord shall proceed in good faith. Landlord shall not be liable to Tenant for any loss, direct or indirect, in business revenues or other incidental or consequential damages sustained by Tenant as a result of said repair, restoration or reconstruction or delays in completing said repairs, restoration or reconstruction.

(c) Tenant covenants that it will make good faith attempts to contact Landlord by telephone and by letter sent by regular mail within the time period specified herein to give notice to Landlord of any accident or damage, other than normal wear and tear, whether such damage is caused by insured or uninsured casualty, occurring in, on or about the Leased Premises within forty-eight (48) hours after Tenant has knowledge of the occurrence of such accident or damage.

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22. Eminent Domain.

(a) If the Leased Premises shall be taken in whole by condemnation or right of eminent domain, either party, upon written notice to the other, shall be entitled to terminate this Lease provided that such notice is given not later than thirty (30) days after Tenant has been deprived of possession. Should only a part of the Leased Premises be so taken or condemned, Landlord shall have the option after such taking or condemnation and the determination of Landlord’s award therein, to expend a portion or all of the net amount which may be awarded to Landlord in such condemnation proceedings as may be necessary to restore the Leased Premises to an architectural unit as nearly like their condition prior to the commencement of the Lease Term as shall be practicable (and the Rent meanwhile shall be abated in accordance with the nature and proportion of the taking or condemnation), or to terminate this Lease, effective thirty (30) days after notice of said termination to Tenant. Should the net amount so awarded to Landlord be insufficient to cover the cost of restoring the Leased Premises, Landlord may supply the amount of such insufficiency and restore the Leased Premises as above provided with all reasonable diligence, or terminate this Lease. Landlord shall notify Tenant of Landlord’s election with respect to restoration in the event of an insufficient award not later than ninety (90) days after the final determination of the amount of the award.

(b) In the event of any award for any taking of the Leased Premises in condemnation proceedings or by right of eminent domain, Landlord shall be entitled to receive and retain the amounts awarded for the Leased Premises and for Landlord’s business loss, and Tenant shall be entitled to receive and retain any amounts which may be specifically awarded to it in any such condemnation proceedings because of its business loss or the taking of its trade fixtures, furniture, or other property.

(c) In the event of any such taking of the Leased Premises, the Rent, or a fair and just proportion thereof according to the nature and extent of the damage sustained, shall be suspended or abated.

23. Limitation of Landlord’s Liability. In no event shall Landlord or Tenant be liable for incidental, consequential, or punitive damages. Without in any way limiting or impairing the effect of the other provisions of this Lease, it is hereby agreed that Tenant shall neither assert nor seek to enforce any claim arising out of this Lease or out of the use or occupancy of the Leased Premises, the Buildings, or other property of Landlord within Pineland against Landlord, its officers, directors, stockholders or affiliates, or any of its or their assets other than the value of Landlord’s interest in the Buildings and Landlord’s insurance coverage thereon and Tenant agrees to look solely to such interest and insurance coverage for the satisfaction of any claim arising out of this Lease or out of the use or occupancy of the Leased Premises, the Buildings, or other property of Landlord located within Pineland.

24. Waiver of Subrogation. Insofar as and to the extent that such agreement may be effective without invalidating or making it impossible to secure insurance coverage obtainable from responsible insurance companies doing business in the State of Maine, Landlord and Tenant agree that with respect to any loss covered by insurance then carried by them, respectively, the one carrying such insurance and suffering that loss releases the other of and from any and all claims with respect to such loss; and they further agree that their respective

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insurance companies shall have no right of subrogation against one another on account of such agreement even though extra premiums may result therefrom. If an extra premium is payable by Tenant or Landlord as a result of these provisions, neither party shall reimburse the other party for any such extra premium.

25. Landlord’s Remedies.

(a) It is covenanted and agreed that

(i) if Tenant shall neglect or fail to pay any amount of Rent due hereunder, or otherwise fails to perform or observe, or fails or neglects diligently to attempt to so perform or observe any of the material covenants, terms, provisions or conditions contained in this Lease and on Tenant’s part to be performed or observed within thirty (30) days after notice of default; provided, however, that if such neglect or failure is not capable of being cured within said thirty (30) day period then Tenant shall have an additional reasonable period of time, not to exceed sixty (60) days, to cure the same provided Tenant commences to cure within said thirty (30) day period and diligently and continually prosecutes the same to completion (except for payment of Rent or other charges or sums payable by Tenant, in which case said period shall be five (5) days after notice thereof and except that Landlord shall be relieved of its notice obligations under this Paragraph if it gives any such notice twice in any calendar year);

(ii) if the estate hereby created shall be taken on execution, by attachment or by other process of law, or if a petition in U.S. Bankruptcy Court shall be filed by Tenant, or if any assignment shall be made of the property of Tenant for the benefit of creditors;

(iii) if a receiver, guardian, conservator, trustee in involuntary bankruptcy or other similar officer shall be appointed by a court of competent jurisdiction to take charge of all or any substantial part of Tenant’s property;

(iv) if an involuntary petition shall be filed for the reorganization of Tenant under any provisions of the Federal Bankruptcy Code now or hereafter enacted, and such proceeding is not dismissed within sixty (60) days after it is begun, or if Tenant shall file a petition for such reorganization under any provisions of the Federal Bankruptcy Code now or hereafter enacted;

(v) if Tenant is merged or consolidated with any other non-affiliated entity, or there is a transfer of a controlling interest in Tenant to a non-affiliated entity, other than as permitted in Paragraph 15 hereof; or

(vi) if Tenant ceases business operations;

then, and in any of said cases (notwithstanding any license of any former breach of covenant or waiver of the benefit hereof or consent in a former instance), Landlord lawfully may, immediately or at any time thereafter, terminate this lease by sending written notice of termination to Tenant, or, in accordance with Maine law, enter into and upon the Leased Premises or any part thereof in the name of the whole and repossess the same as of its former estate, and expel Tenant and those claiming through or under it and remove it or their effects without being deemed guilty of any manner of trespass, and without prejudice to any remedies

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which might otherwise be used for collection of damages for breach of covenant, and upon entry as aforesaid or upon sending of such notice, this Lease shall terminate.

(b) Without limiting other remedies of Landlord, Tenant covenants that in case of such termination under subparagraph (a) Tenant shall, notwithstanding such termination, pay to Landlord for the remainder of the Lease Term (or Renewal Term, if applicable) on the last day of each calendar month the difference, if any, between the Rent which would have been due for such month had there been no such termination and the sum of the amount being received by Landlord as rental from the then occupants of the Leased Premises, if any. Landlord shall make reasonable efforts to secure a rental equal to the prevailing local rate for the Leased Premises. In addition, Tenant agrees to pay to Landlord as damages for any above-described breach, all costs of reletting the Leased Premises, including but not limited to commissions, attorneys fees, court costs and renovations to the Leased Premises to suit the new tenant.

(c) If Tenant shall default in the performance or observance of any covenant, agreement, or condition in this Lease contained on its part to be performed or observed, other than an obligation to pay money, and shall not cure any such default as provided herein, Landlord may, at its option, without waiving any claim for damages for breach of this Lease, at any time thereafter, cure such default. Any amount paid or any liability incurred by Landlord in so doing shall be deemed paid or incurred for the account of Tenant, and Tenant agrees to immediately reimburse Landlord therefor, as additional Rent, or save Landlord harmless therefrom.

(d) Landlord shall in no event be in default in the performance of any of its obligations hereunder unless and until Landlord shall have failed to perform, or failed diligently to attempt to perform, such obligations within thirty (30) days or such additional time as is reasonably required to correct any such default after notice by Tenant to Landlord properly specifying wherein Landlord has failed to perform any such obligation.

26. Landlord’s Right to Sell or Mortgage Fee.

(a) Nothing contained in this Lease shall limit or curtail Landlord’s right to sell, mortgage, or otherwise deal with its fee interest in the Leased Premises, or affect Landlord’s right to assign the net Rent payable under this Lease either as further collateral security under a fee mortgage or otherwise. Any such assignment of Rent shall be honored by Tenant.

(b) Landlord represents and warrants that, as of the effective date of this Lease and the Commencement Date, Landlord owns the fee interest in the Buildings, Pineland, and the Leased Premises, free and clear of any liens or mortgages. Landlord shall provide Tenant with written notice of any sale, mortgage, or other transaction involving Landlord’s fee interest in the Leased Premises, as well as any assignment of net Rent under this Lease.

27. Notices. All notices required to be given pursuant to this Lease, to be effective, shall be in writing and must be given only by one of the following methods: by hand or by certified mail, postage prepaid, return receipt requested, or by a reputable courier service which provides written evidence of delivery to the following addresses:

(i) To Tenant at the Leased Premises:

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with a copy to:

Energy East Management Corporation

Corporate Drive, Kirkwood Industrial Park

Binghamton, New York 13902

Attention: Managing Attorney

(ii) To Landlord at:

October Corporation

Three Canal Plaza

Portland, ME 04101

with a copy to:

CB Richard Ellis-Boulos Property Management

One Canal Plaza

Portland, Maine 04101

Any notice given pursuant to this Paragraph shall be deemed to have been given upon delivery (if delivered by hand), one (1) day after depositing the same with the courier service (if sent by overnight courier service) or three (3) days after when postmarked (if sent by mail), in accordance with the requirements of this Paragraph. Either party may, by such manner of notice, substitute persons or addresses for notice other than those listed above.

28.

(a) At any time, and from time to time, upon the written request of Landlord or any mortgagee, Tenant, within ten (10) business days of such written request, agrees to execute, acknowledge and deliver to Landlord and/or mortgagee, without charge, an estoppel certificate which shall contain (i) a certification that this Lease is unmodified and in full force and effect or, if modified, a statement of the nature of any such modification and a certification that this Lease, as so modified, is in full force and effect, (ii) the date to which the Rent and other charges payable by Tenant are paid in advance, if any, and (iii) an acknowledgment that there are not, to Tenant’s knowledge, any uncured events of default on the part of Landlord hereunder, or a specification of such events of default if any are claimed by Tenant. Tenant’s failure to deliver such certificate within the time frame set forth above shall, at Landlord’s option, be conclusive proof that this Lease is in full force and effect without modification except as may be represented by Landlord, that there are no uncured defaults in Landlord’s performance of Landlord’s obligations under this Lease, and that not more than one month’s Rent and other charges payable hereunder has been paid in advance.

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(b) If Landlord desires to finance, refinance, or sell the Buildings, or Pineland, or any part thereof, Tenant hereby agrees to deliver to any lender or purchaser designated by Landlord copies of Tenant’s most current publicly filed financial statements, or, if Tenant is not a publicly traded company, copies of financial statements containing such information as Tenant would be required to report for Tenant’s most-current fiscal year by governmental law or regulation if Tenant were a publicly traded company. All such financial statements shall be received by Landlord and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

29. Hazardous Waste. Tenant covenants and agrees that it will permit no hazardous or toxic waste, substance, material or matter, as those terms may be defined from time to time by applicable state, local or federal law to be brought, used, maintained or stored upon the Leased Premises. Subject to the waiver contained in Paragraph 23, Tenant hereby covenants and agrees to protect, exonerate, defend, indemnify and save Landlord harmless from and against any and all loss, damage, cost, expense or liability, including reasonable attorneys fees, court costs and clean-up costs, and including but not limited to, such loss, damage, cost, expense or liability based on personal injury, death, loss or damage to property suffered or incurred by any person, corporation or other legal entity, which may arise out of the removal or clean-up of any such waste, substance, material or matter placed upon or within the Leased Premises by Tenant, whether or not in violation of law, or as the result of a breach by Tenant of Tenant’s obligations under this Paragraph.

30. Subordination. This Lease, at Landlord’s option, shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation or security now or hereafter placed upon the Buildings and/or Pineland and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. Notwithstanding such subordination, Tenant’s right to quiet possession of the Leased Premises shall not be disturbed if Tenant is not in default and so long as Tenant shall pay the Rent and observe and perform all of the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If any mortgagee, trustee, or ground lessor shall elect to have this Lease made prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Tenant, this Lease shall be deemed prior to such mortgage, deed of trust, or ground lease, whether this Lease is dated prior to or subsequent to the date of said mortgage, deed of trust, or ground lease or the date of recording thereof. Tenant agrees to execute documents in a form reasonably acceptable to Tenant as are required to effectuate an attornment, a subordination or to make this Lease prior to the lien of any mortgage, deed of trust or ground lease, as the case may be.

31. Miscellaneous Provisions.

(a) Invalidity of Particular Provisions. If any term or provision of this Lease, or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

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(b) Governing Law. This Lease shall be governed exclusively by the provisions hereof and by the laws in effect in the State of Maine as those laws may be amended from time to time.

(c) Paragraph Headings. The Paragraph headings throughout this instrument are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation, construction, or meaning of the provisions of this Lease.

(d) Interpretation. Whenever in this Lease provision is made for the doing of any act by any party, it is understood and agreed that said act shall be done by such party at its own cost and expense, unless a contrary intent is expressed.

(e) Entire Agreement; Binding Effect. All negotiations, considerations, representations, and understandings between Landlord and Tenant are incorporated herein and may be modified or altered only by agreement in writing between Landlord and Tenant, and no act or omission of any employee or agent of Landlord shall alter, change, or modify any of the provisions hereof. All rights, obligations and liabilities contained herein given to, or imposed upon, Landlord and Tenant shall extend to and bind the several respective administrators, trustees, receivers, legal representatives, successors, heirs and permitted assigns of Landlord and Tenant, and if there shall be more than one tenant, they shall all be bound jointly and severally by the terms, covenants and agreements herein.

(f) Compliance with Laws. Subject to the remaining terms of this Lease, Tenant agrees to abide by and comply with all federal, state and local statutes, ordinances, rules and regulations applicable to Tenant’s use of the Leased Premises; provided, however, that under no circumstances will Tenant be required to make any structural or capital repairs or improvements to the Leased Premises in order to comply with this obligation. To the extent Tenant is authorized by the Landlord to use the Leased Premises for purposes other than for general office purposes, it is the responsibility of Tenant to determine all zoning information and secure all necessary permits and approvals for such proposed use of the Leased Premises. Landlord represents and warrants that, as of the effective date of this Lease and the Commencement Date, the Leased Premises are suitable for use for general office purposes.

(g) Basic Lease Information. The Basic Lease Information and Definitions form of even or near date accompanying this Lease is incorporated into and made a part of this Lease.

(h) Language. Words of any gender used in this instrument shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires.

(i) Memorandum of Lease. Landlord and Tenant agree that this Lease shall not be recordable. Landlord and Tenant shall, at the request of either of them, execute, acknowledge and deliver a Memorandum of Lease in recordable form for recording in the

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Cumberland County Registry of Deeds. The requesting party shall bear the expense of recording the Memorandum of Lease. The Memorandum of Lease shall expressly state that it is executed pursuant to the provisions contained in this Lease, and is not intended to vary the terms and conditions hereof. Landlord and Tenant shall, at the request of either of them, enter into an agreement in recordable form setting forth the actual commencement and termination dates of this Lease. Landlord and Tenant also agree to execute affidavits in recordable form with respect to the actual termination date of this Lease, if it should be terminated prior to the end of the original term.

(j) Timeliness of Landlord’s Notices. Landlord’s failure during the Lease Term to prepare and deliver any of the statements, notices or bills set forth in this Lease shall not in any way cause Landlord to forfeit or surrender its rights to collect any amount that may have become due and owing to it during the Lease Term.

32. Force Majeure. In any case where either party is required to perform any act pursuant to this Lease, except for Tenant’s monetary obligations hereunder, the time for the performance thereof shall be extended by a period of time equal to the period of any delay caused by or resulting from an act of God, war, civil commotion, fire or other casualty, labor difficulties, shortages of energy, labor, materials, or equipment, system failures or other problems with the Leased Premises or Pineland, government regulations, or delays caused by one party to the other, whether such period be designated by a fixed date, a fixed time, or as a reasonable date or time.

33. Landlord’s Additional Rights. In addition to all other rights that the Landlord has under this Lease and applicable law, and not by way of limitation, Landlord shall have the following rights:

(a) To decorate and to make inspections, repairs, alterations, additions, changes or improvements, whether structural or otherwise, in and about the Buildings, or any part thereof. To alter, improve, relocate or eliminate entranceways, approaches, sidewalks, service areas, driveways, parking areas, trails, access roads and other common areas used in connection with Pineland, the Buildings, or the Leased Premises, so long as Landlord does not materially interfere with Tenant’s ability to use or occupy the Leased Premises. To enter upon the Leased Premises for such purposes and, during the continuance of any such work, to temporarily close doors, entryways, common and public areas, and corridors in the Buildings; to interrupt or temporarily suspend Buildings and/or Pineland services and facilities; and to change the arrangement and location of sidewalks, driveways, parking areas, access roads, entrances or passageways, doors and doorways, corridors, elevators, stairs, restrooms or other public or common areas of the Buildings and/or Pineland. If any activity, interruption or suspension contemplated by this paragraph continues for longer than seven (7) days, Rent will abate during the period any such activity, interruption or suspension exists and Tenant is unable to occupy the Leased Premises due to such activity, interruption or suspension;

(b) To take such reasonable measures as Landlord deems advisable for the security of Pineland and the Buildings and its occupants, including without limitation searching all persons entering or leaving Pineland and/or the Buildings; evacuating the Buildings for cause, suspected cause, or for drill purposes; temporarily denying access to Pineland and/or the

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Buildings; and closing Pineland and/or the Buildings after normal business hours and on Saturdays, Sundays, and holidays, subject, however to Tenant’s right to enter when Pineland and/or the Buildings is closed after normal business hours under such reasonable regulations as Landlord may prescribe from time to time which may include by way of example, but not of limitation, that persons entering or leaving Pineland and/or the Buildings, whether or not during normal business hours, identify themselves to a security officer by registration or otherwise and that such persons establish their right to enter or leave Pineland and/or the Buildings; and

(c) To change the name by which the Buildings and/or Pineland is designated.

34. Quiet Enjoyment. Landlord covenants that Tenant, on paying the Rent and performing the material covenants of this Lease on its part to be performed, shall peaceably and quietly hold and enjoy the Leased Premises for the term aforesaid and any extension or renewal thereof, subject and subordinate to all provisions of this Lease, without interference by any persons or entities claiming by or through the Landlord.

35. Parking. Landlord grants Tenant a non-revocable license during the Lease Term to use up to two hundred (200) parking spaces in the Pineland parking lots. Tenant’s use of the parking spaces shall be subject to any and all reasonable rules and regulations now existing or hereafter enacted by Landlord for the use of the parking lots, provided, however, that at no time shall Tenant be required to pay any fee or rent for the use of the parking spaces. Tenant acknowledges and agrees that Tenant will not have any designated or assigned parking spaces in the parking lots.

36. Brokerage Commission. Landlord has entered into a separate brokerage commission agreement with CB Richard Ellis-The Boulos Company. Tenant represents that it has not had any dealings with brokers or agents in connection with the negotiations of this Lease other than CB Richard Ellis-The Boulos Company. Each party warrants and represents to the other that no brokerage commission is due to any person, firm, or entity with respect to this Lease except as set forth above and each party agrees to indemnify and hold the other party harmless with respect to any judgment, damages, legal fees, court costs, and any and all liabilities of any nature whatsoever arising from a breach of said representation.

37. Waiver of Jury Trial. Landlord and Tenant waive the right to a trial by jury in any action or proceeding based upon, or related to, the subject matter of this Lease. This waiver is knowingly, intentionally, and voluntarily made by Tenant and Tenant acknowledges that neither Landlord nor any person acting on behalf of Landlord has made any representations of fact to induce this waiver of trial by jury or in any way to modify or nullify its effect. Tenant further acknowledges that it has been represented (or has had the opportunity to be represented) in the signing of this Lease and in the making of this waiver by independent legal counsel, selected of its own free will, and that it has had the opportunity to discuss this waiver with counsel. Tenant further acknowledges that it has read and understands the meaning and ramifications of this waiver provision.

38. Condition Precedent and Tenant’s Right of Termination. Anything in this Lease to the contrary notwithstanding, Tenant may terminate this Lease and all obligations and agreements binding upon the Tenant in this Lease, upon ten (10) days’ prior written notice to the

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Landlord, if (i) the Maine Public Utilities Commission (“MPUC”) fails to issue a final order by the Commencement Date specifically granting the relief requested by Central Maine Power Company in its application in the proceeding entitled “CENTRAL MAINE POWER COMPANY, Request for Approval of Reorganization and of Affiliated Interest Transactions to Create Energy East Shared Services Corporation,” (Docket No. 2003-321) (hereinafter the “Proceeding”) on terms acceptable to the Tenant in it sole and absolute discretion, or (ii) if the final order in the Proceeding, whenever issued by the MPUC, is unsatisfactory to the Tenant as determined in Tenant’s sole and absolute discretion. Upon the effective termination date, this Lease and all obligations and agreements contained herein shall terminate without any further liability on the part of either party hereto; provided, however, in the event of such termination, Tenant shall reimburse Landlord for all costs, including the Construction Allowance and Excess Costs, related to completing the Work set forth in Exhibit B-1.

39. Exhibits. Tenant acknowledges that it has read and understands the meaning and ramifications of the terms and conditions set forth in Exhibits A, A-1, B, B-1, C and D.

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease or caused this Lease to be executed by the duly authorized undersigned representatives as an instrument under seal as of the day and year first written above.

WITNESS:	LANDLORD:
	OCTOBER CORPORATION
/s/ Elizabeth C. Flaherty	By:	/s/ Owen W. Wells
		Owen W. Wells
		Its President
	TENANT:
	ENERGY EAST MANAGEMENT CORPORATION
/s/ Kenneth Jasinski	By:	/s/ Wesley W. von Schack
		Printed Name: Wesley W. von Schack
/s/ Richard R. Benson		Its: President & CEO

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A-1

A-2

A-3

A-4

A-1-1

EXHIBIT “B”

LANDLORD BUILD OUT

1. Except as set forth in this Exhibit and the Lease, Tenant accepts the Leased Premises in their “as is” condition on the date of this Lease.

2. Landlord will build out the Leased Premises in accordance with the space plan heretofore approved by Landlord and Tenant, as outlined on Exhibit “B-1” (the “Space Plans”), and in accordance with Landlord’s standard finishes for the Building (the “Work”).

3. If a delay in the performance of the Work occurs (a) because of any change by Tenant, (b) because of any specification by Tenant of materials or installations in addition to Landlord’s standard finish-out materials, or (c) if Tenant otherwise delays completion of the Work, then, notwithstanding any provision to the contrary in this Lease, Tenant’s obligation to pay Rent hereunder shall commence on the scheduled Commencement Date. If the Leased Premises are not ready for occupancy and the Work is not substantially completed (as reasonably determined by Landlord) on the scheduled Commencement Date for any reason other than the reasons specified in the immediately preceding sentence, then the obligations of Landlord and Tenant shall continue in full force and Rent shall be abated until the date the Work is substantially completed, which date shall be the Commencement Date.

4. Landlord shall bear the entire cost of performing the Work depicted on Exhibit B-1, provided the same shall not exceed $913,695.00 ($15.00 per SF) (the “Construction Allowance”). Landlord shall advise the Tenant in writing in the event the entire cost of performing the Work depicted on the Space Plans is anticipated to exceed the Construction Allowance. In such event, the Tenant may elect to either (i) amend the Space Plans, subject to the Landlord’s approval, to reduce the cost of such Work to an amount which does not exceed the Construction Allowance, or (ii) in the event such cost exceeds the Construction Allowance, pay the difference by depositing such excess amount with Landlord prior to commencement of the Work. Tenant shall bear the entire cost in excess of the Construction Allowance (“Excess Cost”) incurred by Landlord in performing the Work because, (i) of an event specified in Section 3(a), (b), or (c) of this Exhibit, or (ii) the cost of performing the Work in accordance with the Space Plans exceeds the Construction Allowance. Tenant shall pay the Landlord an amount equal to 50% of the estimated Excess Cost to perform the Work as a result of any change to the Space Plans at the time of such change; Tenant shall pay to Landlord the remaining portion of Excess Cost incurred in performing the Work because of an event specified in Sections 3(a), (b), or (c) of this Exhibit upon substantial completion of the Work. In the event that the entire cost of performing the Work depicted on Exhibit B-1 is less the Construction Allowance, the difference between the actual entire cost and the Construction Allowance (the “Build Out Savings”) shall be available to Tenant for personal property and other expenses related to its lease of the Leased Premises; Landlord agrees to pay the Build Out Savings to Tenant or its designee, in whole or in part, within five (5) days following Tenant’s request therefore accompanied by a statement that Tenant intends to use the requested Build Out Savings for purposes related to its lease of the Leased Premises.

5. Landlord agrees to repair, replace, restore or rebuild any of the Work in which defects in material or workmanship may appear or to which damage may occur because of such defects, during the one (1) year period following the Commencement Date.

B-1

B-1-1

B-1-2

B-1-3

B-1-4

EXHIBIT “C”

BUILDING RULES AND REGULATIONS

The following rules and regulations shall apply to the Leased Premises, the Building and Pineland:

1. Access roads, driveways, sidewalks, doorways, vestibules, halls, stairways, and other similar areas shall not be obstructed by tenants or used by any tenant for purposes other than ingress and egress to and from their respective leased premises and for going from one to another part of the Building.

2. Plumbing, fixtures and appliances shall be used only for the purposes for which designed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or deposited therein. Damage resulting to any such fixtures or appliances from misuse by a tenant or its agents, employees or invitees, shall be paid by such tenant.

3. No signs, advertisements or notices shall be placed within Pineland or painted or affixed on or to any windows or doors or other part of the Building without prior written consent of Landlord. No nails, hooks or screws shall be driven or inserted in any part of the Building except by Building maintenance personnel. No curtains or other window treatments shall be placed between the glass and the building standard window treatments.

4. Landlord shall provide and maintain a directory for all tenants in the main lobby of the Building. Landlord shall provide and install, at tenant’s cost, all letters and numerals on the door or doors to the tenants’ premises. All such letters and numerals shall be in building standard graphics and no other graphics shall be used or permitted in connection with the tenant’s premises unless approved in writing by Landlord.

5. Landlord shall provide all door locks in each tenant’s leased premises, at the cost of such tenant, and no tenant shall place any additional door locks or replace or recard any locks in its leased premises without Landlord’s prior written consent. Landlord shall furnish to each tenant a reasonable number of cards to such tenant’s leased premises, at such tenant’s cost, and no tenant shall make a duplicate thereof. Tenant shall designate up to two (2) security representatives who shall each have authority to provide Landlord with the names and security clearances of employees working on the Leased Premises to enable Landlord to provide access cards to such employees; Tenant may change the identity of a security representative upon notice to the Landlord given in accordance with the Lease. Landlord agrees to process Tenant request(s) for access cards within sufficient time so as not to substantially disrupt Tenant’s or its employee(s)’ access to the Leased Premises.

6. Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by tenants of any bulky material, merchandise or materials which require use of elevators or stairways, or movement through the Building entrances or lobby shall be conducted under Landlord’s supervision at such times and in such a manner as Landlord may reasonably require. To the extent the Building contains a loading dock or docks, Landlord may require tenants to utilize such loading dock or docks for the movement in and out of the Building of furniture and office equipment or the receipt or dispatch by tenants of any bulky material, merchandise or materials. Each tenant assumes all risks of and shall be liable for all damage to

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articles moved and injury to persons engaged or not engaged in such movement, including equipment, property and personnel of Landlord if damaged or injured as a result of acts in connection with carrying out this service for such tenant.

7. Landlord may prescribe weight limitations and determine the locations for safes and other heavy equipment or items, which shall in all cases be placed in the Building so as to distribute weight in a manner acceptable to Landlord which may include the use of such supporting devices as Landlord may require. All damages to the Building caused by the installation or removal of any property of a tenant, or done by a tenant’s property while in the Building, shall be repaired at the expense of such tenant.

8. Corridor doors, when not in use, shall be kept closed. Nothing shall be swept or thrown into the corridors, halls, elevator shafts or stairways. No birds or animals shall be brought into or kept in, on or about any tenant’s leased premises. No portion of any tenant’s leased premises shall at any time be used or occupied as sleeping or lodging quarters.

9. Tenant shall cooperate with Landlord’s employees or agents in keeping the Leased Premises neat and clean. In the event Tenant is responsible for providing cleaning and janitorial services to the Leased Premises, Tenant shall not employ any person for the purpose of such cleaning other than one approved by Landlord.

10. To ensure orderly operation of the Building, no ice, mineral or other water, towels, newspapers, etc. shall be delivered to any leased premises except by persons approved by Landlord. Canvassing, soliciting and peddling in the Building and Pineland is prohibited and each tenant shall cooperate to prevent the same.

11. Tenant shall not make or permit its officers, employees, agents, invitees and visitors to make any improper, objectionable or unpleasant noises or odors in the Building or otherwise create any nuisance, annoy, disturb or interfere in any way with, other tenants or persons having business with them.

12. No machinery of any kind (other than normal office equipment) shall be operated by any tenant in its leased premises without Landlord’s prior written consent, nor shall any tenant use or keep in the Building any flammable or explosive fluid or substance.

13. Landlord will not be responsible for lost or stolen personal property, money or jewelry from tenant’s leased premises or public or common areas, regardless of whether such loss occurs when the area is locked against entry or not.

14. For purposes of the Building, normal business hours will be from 8:00 a.m. to 6:00 p.m., Monday through Friday, and 9:00 a.m. through 1:00 p.m. on Saturday. Heating or air conditioning service at hours other than normal business hours shall be paid for by the Tenant. HVAC shall meet the ASHRAE standards for comfort, excluding humidification.

15. Landlord shall provide Class ABC type fire extinguishers per code.

16. Smoking of any kind shall not be permitted in the Building.

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17. Admittance to the roof of the building is done only upon the written consent of Landlord.

18. If Tenant desires communications cabling, alarm or other utility or service connections installed or changed, such work shall be done at the expense of the Tenant, with the prior written approval and under the direction of the Landlord.

19. Landlord has the right, but not the obligations, to restrict Tenant from bringing into the Building or Pineland, or keeping on the Leased Premises, any weapon including but not limited to firearms, knives and similar items.

20. Landlord shall have the right to make such further rules and regulations as it deems reasonably necessary, provided they are uniformly promulgated and applied against all tenants of the Building, and further provided that: (i) Tenant’s prior written consent will be required before Tenant is obligated to comply with any rule or regulation that will result in payment of money or fees by Tenant (other than rules and regulations required by law), and (ii) Landlord shall provide Tenant with reasonable advance notice under the circumstances, but never less than thirty (30) days prior written notice, of any new rule or regulation binding upon the Tenant.

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EXHIBIT “D”

52 AND 70 FARM VIEW DRIVE

NEW GLOUCESTER, MAINE

DECLARATION OF LEASE COMMENCEMENT DATE

Attached to and made a part of the Lease dated the 7th day of June, 2003 entered into by and between October Corporation (“Landlord”) and Energy East Management Corporation (“Tenant”) for certain premises at 52 and 70 Farm View Drive, New Gloucester, Maine (the “Leased Premises”).

Landlord and Tenant do hereby declare that possession of the Leased Premises was accepted by Tenant on the 28th day of October, 2003 and the Lease is now in full force and effect. Tenant acknowledges that Landlord has fulfilled all of its obligations under the Lease that are required prior to possession of the Premises. The Commencement Date of the Lease is hereby established as October 1, 2003. The Lease Term shall terminate on September 30, 2013.

WITNESS:		WITNESS:
LANDLORD:		TENANT:
OCTOBER CORPORATION		ENERGY EAST MANAGEMENT CORPORATION
By:	/s/ Owen W. Wells	By:	/s/ Robert E. Rude
	Owen W. Wells		Printed Name: Robert E. Rude
	Its President		Its: Vice President & Controller

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GUARANTY

GUARANTY, dated as of July 7, 2013 (herein, together with all amendments, modifications and supplements hereto, called this Guaranty), from ENERGY EAST CORPORATION, a New York corporation (herein, together with any corporation succeeding thereto by consolidation, merger or acquisition of its assets substantially as an entirety, the “Guarantor”), at P.O. Box 12904, Albany, New York 12212-2904, to OCTOBER CORPORATION, a Maine nonprofit corporation, having an office at Portland, Maine (the “Lessor”).

The Lessor has leased approximately 60,913 square feet of rentable area being all of the buildings known as Durham Hall and Freeport Hall located at 52 and 70 Farm View Drive in the complex known as Pineland, New Gloucester, Maine shown or described in Schedule A hereto (the “Leased Premises”), to Energy East Management Corporation, a wholly-owned subsidiary of the Guarantor (herein, together with any corporations succeeding thereto by assignment, consolidation, merger or acquisition of their assets substantially as an entirety, the “Lessee”), pursuant to a Lease, dated as of the date hereof (herein, together with all amendments, modifications and supplements thereto and any memoranda or short forms thereof entered into for the purpose of recording, registration and/or filing, collectively called the “Lease”), between the Lessor and Lessee.

The execution and delivery of this Guaranty by the Guarantor is an inducement to the Lessor to enter into the Lease.

NOW, THEREFORE, in consideration of the premises, the Guarantor agrees with the Lessor as follows:

1. The Guarantor unconditionally and irrevocably guarantees that all sums, actual or contingent, stated in the Lease to be payable by the Lessee thereunder during the Lease Term will be promptly paid in full when due, in accordance with the provisions thereof, and that Lessee will perform and observe each and every covenant, agreement, term and condition in such Lease to be performed or observed by such Lessee during the Lease Term of such Lease and until time for performance of all provisions thereof shall have lapsed, whether during the Lease Term or thereafter. This Guaranty is irrevocable, unconditional and absolute, and if for any reason any such sums, or any part thereof, shall not be paid promptly when due, the Guarantor will immediately pay the same to the person or persons entitled thereto pursuant to the provisions of such Lease, subject to Lessee’s defense to such payment under the Lease or at law. Upon Lessee’s failure to perform or observe any covenant, agreement, term or condition in a Lease to be performed or observed by Lessee in violation of the terms of the Lease, the Guarantor will promptly perform and observe the same and cause the same promptly to be performed or observed. For the purposes of this Guaranty, the Lease and all of the obligations of the Lessee thereunder shall be deemed to continue regardless of the termination of the Lease: (i) as a result of the rejection or disaffirmance of the Lease by the Lessee or Lessee’s trustee in bankruptcy pursuant to bankruptcy law or any other law affecting creditor’s rights, (ii) by operation of law, or (iii) for any other reason without the express written consent of the Lessor to such termination.

2. The obligations, covenants, agreements and duties of the Guarantor under this Guaranty shall in no way be affected or impaired by reason of the happening from time to time of any of the following, although without notice to or the further consent of the Guarantor:

(a) the waiver by the Lessor of the performance or observance by Lessee of any of the agreements, covenants, terms or conditions contained in the Lease;

2

(b) the extension, in whole or in part, of the time for payment by Lessee of any sums owing or payable under the Lease, or of any other sums or obligations under or arising out of or on account of the Lease;

(c) any assignment of the Lease or subletting of the Leased Premises or any part thereof;

(d) the amendment, modification or supplement (whether material or otherwise) of any of the obligations of the Lessee under the Lease;

(e) the doing or the omission of any of the acts referred to in the Lease (including, without limitation, the giving of any consent referred to therein);

(f) any failure, omission or delay on the part of the Lessor to enforce, assert or exercise any right, power or remedy conferred on or available to the Lessor in or by the Lease, or any action on the part of the Lessor granting indulgence or extension in any form;

(g) the voluntary or involuntary liquidation, dissolution, sale of all or substantially all of the assets, marshaling of assets and liabilities, receivership, conservatorship, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding, affecting the Lessee or any of its assets; or

(h) the transfer of title to the Leased Premises.

3. The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any obligations or liabilities contracted or incurred by the Lessee.

4. This Guaranty may not be amended, modified or supplemented except by a written agreement duly executed by the Guarantor with the consent in writing of the Lessor.

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5. It is agreed that the liabilities and obligations of the Guarantor hereunder are 3 primary, and are enforceable either before, simultaneously with or after proceeding against the Lessee or against any property or security available to the Lessor, but subject at all times to the Lessee’s defenses pursuant to the Lease and at law.

6. The Guarantor covenants and agrees to pay all expenses and fees, including reasonable attorney’s fees, that may be incurred by the Landlord, or Landlord’s successors or assigns, in connection with successfully enforcing any of the terms and provisions of this Guaranty.

7. Any notice, demand or other communication required or permitted under this Guaranty shall be in writing and given by hand delivery, facsimile, overnight courier, or United States mail. All notices shall be properly addressed to the recipient, with all postage and other charges being paid by the party giving notice. Notices shall be effective when actually received by the party being notified. The addresses of the parties for purposes of notice are as follows:

If to Guarantor:

ENERGY EAST CORPORATION

P.O. Box 12904

Albany, New York 12212-2904

Attn: General Counsel (Re: Pinelands Lease)

If to Lessor:

OCTOBER CORPORATION

Three Canal Plaza

Portland, ME 04101

Either party may change its address by giving ten (10) days’ advance written notice to the other party.

8. Capitalized terms used herein without definition herein have the meanings ascribed thereto in the Agreement.

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IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the date and year first above written.

GUARANTOR:
ENERGY EAST CORPORATION
By:	/s/ Robert D. Kump
Name:	Robert D. Kump
Title:	V.P., Treasurer & Secretary

LESSOR:
OCTOBER CORPORATION
By:	/s/ Owen W. Wells
Name:	Owen W. Wells
Title:	President

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EX-10.4

EXHIBIT 10.4

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE (this “Amendment”) is made effective as of this 10th day of July, 2012 (the “Effective Date”), among OCTOBER CORPORATION, a Maine nonprofit corporation (the “Landlord”), and IBERDROLA USA MANAGEMENT CORPORATION, a Delaware corporation (the “Tenant”), and, for the purpose set forth in the joinder hereto, IBERDROLA USA, INC., a New York corporation (“Guarantor”).

WHEREAS, pursuant to a Lease dated July 7, 2003 (the “Lease”), Landlord leased to Energy East Management Corporation, a Delaware corporation, 60,913 square feet of rentable area (the “Leased Premises”), being all of the buildings known as Durham Hall and Freeport Hall, located at 52 Farm View Drive and 70 Farm View Drive, respectively (individually, a “Building” and collectively, the “Buildings”), in the development known as Pineland and located in New Gloucester, Maine, all as more fully described in the Lease; and

WHEREAS, the Lease was guaranteed by Energy East Corporation, a New York corporation, pursuant to a Guaranty dated July 7, 2003 (the “Guaranty”); and

WHEREAS, Energy East Corporation changed its name to Iberdrola USA, Inc. on November 30, 2009; and

WHEREAS, also on November 30, 2009, Energy East Management Corporation changed its name to Iberdrola USA Management Corporation; and

WHEREAS, on January 1, 2010, Iberdrola USA Management Corporation merged with Utility Shared Services Corporation, a Delaware corporation, and, pursuant to such merger, Utility Shared Services Corporation was the surviving corporation and succeeded to the interest of Energy East Management Corporation as the Tenant under the Lease; and

WHEREAS, also on January 1, 2010, Utility Shared Services Corporation changed its name to Iberdrola USA Management Corporation; and

WHEREAS, Landlord and Tenant desire to amend the Lease.

NOW, THEREFORE, the parties agree as follows:

1. Amended Lease Term. The Lease Term is hereby amended such that it is extended for a period of sixty (60) calendar months from the Effective Date of this Amendment, plus the partial calendar month during which the Effective Date of this Amendment occurs if the Effective Date of this Amendment is other than the first day of a calendar month (the period from the Effective Date of this Amendment through the end of said 60-calendar month period being referred to herein as the “Amended Lease Term”), subject to adjustment and earlier termination as provided in the Lease, as amended herein. The Amended Lease Term shall be on the same terms and conditions as are set forth in the Lease, as amended herein, and the phrase “Lease Term” or “Term,” as used in the Lease, shall be deemed to include the Amended Lease Term and, if applicable, the Renewal Term (as defined in this Amendment).

2. Early Termination Right

(a) Provided that Tenant is not in default of the Lease beyond applicable notice and/or cure periods, Tenant shall have the one-time right either to terminate the Lease in its entirety or to terminate the Lease in part with respect to the entirety of either of the Buildings effective as of the last day of the thirty-sixth (36^th) full calendar month of the Amended Lease Term (the “Early Termination Date”). In order to exercise such termination right, Tenant shall give written notice of termination (an “Early Termination Notice”) at least twelve (12) months prior to the Early Termination Date, which Early Termination Notice shall be accompanied by payment to Landlord of an early termination fee (the “Early Termination Fee”) as follows:

(i) in the event that Tenant gives an Early Termination Notice with respect to the entirety of the Leased Premises, the Early Termination Fee shall be $125,000.00;

(ii) in the event that Tenant gives an Early Termination Notice with respect to Freeport Hall, the Early Termination Fee shall be $70,000.00; and

(iii) in the event that Tenant gives an Early Termination Notice with respect to Durham Hall, the Early Termination Fee shall be $60,000.00.

(b) In the event that Tenant gives a timely Early Termination Notice with respect to the entirety of the Leased Premises and timely pays to Landlord the applicable Early Termination Fee, the Lease Term shall terminate as of the Early Termination Date, subject to adjustment and earlier termination as provided in the Lease.

(c) In the event that Tenant gives a timely Early Termination Notice with respect to Freeport Hall or with respect to Durham Hall, but not both, and timely pays to Landlord the applicable Early Termination Fee, then:

(i) Tenant shall vacate the Building with respect to which Tenant gave the Early Termination Notice and paid the Early Termination Fee on or prior to the Early Termination Date and shall surrender such Building to Landlord on the Early Termination Date in the same condition as Tenant is required to maintain the same during the Lease Term, free of all of Tenant’s personal property, “broom clean” and otherwise in accordance with the provisions of the Lease, and Tenant’s leasehold interest in and to such Building shall terminate on the Early Termination Date;

(ii) effective as of the Early Termination Date, Tenant’s non-revocable license to use parking spaces during the Lease Term pursuant to Section 35 of the Lease shall be changed from “up to 200 parking spaces” to (a) in the event that the Early Termination Notice is given with respect to Freeport Hall, “up to 90 parking spaces”; and (b) in the event that the Early Termination Notice is given with respect to Durham Hall, “up to 110 spaces”;

(iii) from and after the Early Termination Date, the Lease, as amended herein, shall remain in full force and effect with respect to the remainder of the Leased Premises, which shall thereafter be deemed to constitute the “Leased Premises” and the

“Building” for purposes of the Lease, and all references in the Lease to the term “Buildings” shall, with respect to periods after the Early Termination Date, be construed to mean the “Building”; and

(iv) effective as of the Early Termination Date, Tenant’s monthly installments of Base Rent shall be ratably adjusted by multiplying the applicable annual base rental rate by the number of square feet of rentable area remaining in the Leased Premises, Tenant’s Proportionate Building Share shall remain 100%, and Tenant’s Proportionate Pineland Share shall be recalculated by dividing (i) the number of square feet of rentable area remaining in the Leased Premises by (ii) the total 262,252 square feet of rentable area in Pineland (it being agreed that Freeport Hall shall be deemed to contain 33,326 square feet of rentable area and that Durham Hall shall be deemed to contain 27,587 square feet of rentable area).

(d) In the event that Tenant does not give Landlord a timely Early Termination Notice or in the event that Tenant does not timely pay to Landlord the applicable Early Termination Fee as provided in this Section 2, Tenant’s right to terminate the Lease in its entirety and Tenant’s right to terminate the Lease in part with respect to either of the Buildings as set forth in this Section 2 shall be void. Tenant acknowledges and agrees that Tenant declined to exercise its termination right under Section 38 of the Lease and that such termination right has been waived.

3. Base Rent for Amended Lease Term. The Base Rent payable by Tenant for the Amended Lease Term shall be at a rate per square foot of rentable area (“RSF”) per year, payable in monthly installments, as follows, and otherwise payable in accordance with the terms of the Lease:

Period	Annual Base Rental Rate		Monthly Installment
Amended Lease Term (Effective Date of this Amendment through 60th full calendar month)	$	12.54 per RSF	$	63,654.09

4. Base Year. During the Amended Lease Term, the Base Year for Common Area Maintenance Expenses shall be 2012.

5. Option to Extend Lease Term. Provided that Tenant (a) is not in default of the Lease, as amended herein, beyond applicable notice and/or cure periods; and (b) has neither sublet nor assigned any interest in the Lease or in the Leased Premises or any part thereof to any party regardless of whether permitted as of right or consented to by Landlord, Tenant shall have the option to extend the Lease Term for one (1) 3-year period (the “Renewal Term”), upon the same terms and conditions as are applicable during the Lease Term except that the Base Rent for the Renewal Term shall be in an amount to be mutually agreed upon by Landlord and Tenant at the time Tenant gives notice of its exercise of such option and except that Tenant shall have no further renewal rights unless otherwise agreed in writing by the parties. Notice of Tenant’s exercise of this option to extend the Lease Term for the Renewal Term must be sent to and

received by Landlord at least twelve (12) months prior to the expiration of the Amended Lease Term but not more than eighteen (18) months prior to the expiration of the Amended Lease Term. If Tenant fails to give Landlord said notice within the time provided in this Section or in the event that Landlord and Tenant are unable to agree upon the amount of the Base Rent for the Renewal Term, such option shall automatically become null and void.

6. Confirmation of Corporate Succession. Tenant represents that it is the successor by merger to Energy East Management Corporation (also known as Iberdrola USA Management Corporation prior to its merger with and into Utility Shared Services Corporation) and further represents that it is a wholly-owned subsidiary of Iberdrola USA, Inc., a New York corporation formerly known as Energy East Corporation.

7. Acknowledgments Regarding Leased Premises. Tenant acknowledges and agrees that Tenant has accepted the Leased Premises and is leasing the same in their current “as is” condition.

8. Surrender. Tenant shall vacate and surrender the Leased Premises to Landlord at the expiration or sooner termination of the Lease Term and the Leased Premises shall then be in the same condition as Tenant is required to maintain the same during the Lease Term, free of all of Tenant’s personal property, “broom clean,” and otherwise in accordance with the provisions of the Lease.

9. Brokerage. Tenant represents that Tenant has not engaged or otherwise had any dealings with any real estate brokers other than CB Richard Ellis - The Boulos Company in connection with the negotiation of this Amendment.

10. Capitalized Terms. Capitalized terms that are used but not defined in this Amendment shall have the meaning ascribed to such terms in the Lease.

11. Ratification. The Lease, as amended herein, remains in full force and effect and is hereby ratified and confirmed.

12. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns (but the foregoing shall not be construed as consent on the part of Landlord to any assignment by Tenant of the Lease, as amended herein).

13. Binding Effect; Construction. This Amendment shall not be effective unless and until it is executed and delivered by both Landlord and Tenant and the Joinder of Guarantor set forth below has been executed and delivered by Guarantor. Words of any gender used in this Amendment shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires. This Amendment shall be governed by and construed in accordance with the laws of the State of Maine, without regard or reference to conflicts of law principles.

14. Multiple Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, taken together, shall constitute a single instrument.

IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be executed by their duly authorized undersigned representatives as of the day and year first written above.

WITNESS:	LANDLORD:
	OCTOBER CORPORATION
/s/ Jere G. Michelson	By:	/s/ Craig N. Denekas
		Craig N. Denekas
		Its President
	TENANT:
	IBERDROLA USA MANAGEMENT CORPORATION
/s/ Anna M. Sabers	By:	/s/ Franklyn D. Reynolds
		Printed Name: Franklyn D. Reynolds
		Its: VP – General Services

JOINDER OF GUARANTOR

IBERDROLA USA, INC. (FORMERLY KNOWN AS ENERGY EAST CORPORATION) (“Guarantor”) hereby joins in this Amendment for the purposes of agreeing and confirming that the Guaranty remains in full force and effect with respect to the Lease, as amended herein, and that Guarantor continues to unconditionally and irrevocably guarantee that all sums, actual or contingent, stated in the Lease, as amended herein, to be payable by the Tenant thereunder, during the Lease Term (as extended hereunder, including the Renewal Term if applicable) will be promptly paid in full when due, in accordance with the provisions thereof and that Tenant will perform and observe each and every covenant, agreement, term and condition in the Lease, as amended herein, to be performed or observed by Tenant during the Lease Term (as extended hereunder, including the Renewal Term if applicable) and until time for performance of all provisions thereof shall have lapsed, whether during the Lease Term (as extended hereunder, including the Renewal Term if applicable) or thereafter. All references in the Guaranty to the “Lease” shall be construed to include this Amendment and all references in the Guaranty to the “Lease Term” shall be construed to include the Amended Lease Term and, if applicable, the Renewal Term.

	GUARANTOR:
	IBERDROLA USA, INC.
/s/ Robert Fitzgerald	By:	/s/ Jose Maria Torres
Robert Fitzgerald		Printed Name: Jose Maria Torres
		Its: CFO
	By:	/s/ Robert Kump
		Printed Name: Robert Kump
		Its: CEO

EX-10.5

EXHIBIT 10.5

$300,000,000

SECOND AMENDED AND RESTATED

FIVE-YEAR

REVOLVING CREDIT AGREEMENT

among

IBERDROLA USA, INC.

as Borrower

The Several Lenders

from Time to Time Parties Hereto,

CITIBANK, N.A.,

as Administrative Agent

and

SOVEREIGN BANK, N.A. and TD BANK, N.A.,

as Syndication Agents

Dated as of May 30, 2012

CITIGROUP GLOBAL MARKETS INC., and

SANTANDER INVESTMENT SECURITIES INC.

as Joint Lead Arrangers and Joint Bookrunners

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TABLE OF CONTENTS

		Page
SECTION 1. METHOD OF BORROWING AND PAYMENT OF FEES			1
1.01.	Commitments; Revolving Loans		1
1.02.	Borrowings		2
1.03.	Termination and Reduction of Commitments		2
1.04.	Extensions of Commitments		3
1.05.	Additional Commitments		4
SECTION 2. THE LOANS			5
2.01.	Notice and Provision of Revolving Loans		5
2.02.	Repayment of Loans		7
2.03.	Facility Fees, etc.		7
2.04.	Interest Rates and Payment Dates		7
2.05.	Computation of Interest and Fees		8
2.06.	Alternate Rate of Interest		8
2.07.	Continuation and Conversion of Revolving Loans		9
2.08.	Prepayments		10
2.09.	Reserve Requirements; Change in Circumstances		10
2.10.	Change in Legality		11
2.11.	New Office or Agency; Replacement of Lenders		12
2.12.	Indemnity		13
2.13.	Pro Rata Treatment		14
2.14.	Sharing of Setoffs		14
2.15.	Payments		15
2.16.	Taxes		15
2.17.	Swingline Loans		18
SECTION 3. LETTERS OF CREDIT			20
3.01.	L/C Commitment		20
3.02.	Procedure for Issuance of Letter of Credit		20
3.03.	Fees and Other Charges		21
3.04.	L/C Participations		21
3.05.	Reimbursement Obligation of the Borrower		22
3.06.	Obligations Absolute		23
3.07.	Letter of Credit Payments		23
3.08.	Applications		24
SECTION 4. REPRESENTATIONS AND WARRANTIES			24
4.01.	Corporate Existence and Power		24
4.02.	Due Authorization, Compliance with Law, Enforceable Obligations, etc.		24
4.03.	Financial Condition		25
4.04.	Litigation		25

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4.05.	Tax Returns	25
4.06.	Investment Company Act	25
4.07.	Other Agreements	25
4.08.	Federal Reserve Regulations	26
4.09.	No Material Misstatements	26
4.10.	Employee Benefit Plans	26
4.11.	Environmental and Safety Matters	26
4.12.	Ownership of Property; Liens	26
4.13.	Use of Proceeds	26
SECTION 5. CONDITIONS PRECEDENT		26
5.01.	Conditions Precedent to Effectiveness of Agreement	26
5.02.	Conditions to All Extensions of Credit	28
SECTION 6. AFFIRMATIVE COVENANTS		28
6.01.	Financial Statements; Certificates; Reports	29
6.02.	ERISA	30
6.03.	Payment of Obligations	30
6.04.	Maintenance of Existence; Compliance	30
6.05.	Maintenance of Ownership of Significant Subsidiaries	30
6.06.	Inspection of Property and Operations; Books and Records	30
6.07.	Environmental Laws	31
6.08.	Further Assurances	31
SECTION 7. NEGATIVE COVENANTS		31
7.01.	Financial Condition Covenant	31
7.02.	Sale of Assets; Merger	31
7.03.	Limitation on Liens	32
7.04.	Limitation on Transactions with Affiliates	33
7.05.	Sales and Leasebacks	33
7.06.	Changes in Fiscal Year	33
7.07.	Limitation on Restrictions on Distributions from Subsidiaries	33
7.08.	Limitation on Changes in Lines of Business	34
SECTION 8. EVENTS OF DEFAULT		34
SECTION 9. DEFINITIONS		36
9.01.	Defined Terms	36
9.02.	Terms Generally	50
SECTION 10. THE ADMINISTRATIVE AGENT		50
10.01.	Appointment and Authority of Administrative Agent	50
10.02.	Reliance by Administrative Agent; Delegation by Administrative Agent	50
10.03.	No Amendment to Administrative Agent’s Duties Without Consent	52
10.04.	Responsibilities of Administrative Agent	53

iii

10.05.	Proofs of Claim	53
10.06.	Rights as a Lender	54
10.07.	Credit Decision	54
10.08.	Resignation of Administrative Agent	54
10.09.	Issuing Lender and Swingline Lender	55
10.10.	No Other Duties	55
SECTION 11. MISCELLANEOUS		55
11.01	Notices.	55
11.02.	Successors and Assigns; Participations, Assignments and Designations	57
11.03.	Expenses; Indemnity	60
11.04.	Effectiveness	62
11.05.	Survival of Agreement; Benefit to Successors and Assigns	62
11.06.	Right of Setoff	62
11.07.	Waivers; Amendment	63
11.08.	Severability	64
11.09.	Headings	64
11.10.	Governing Law; Jurisdiction	64
11.11.	Counterparts	65
11.12.	Interest Rate Limitation	65
11.13.	Entire Agreement	65
11.14.	Waiver of Jury Trial	65
11.15.	USA PATRIOT Act	66
11.16.	Defaulting Lenders	66
11.17.	Cash Collateral	69

SIGNATURES

Schedule 1.01	Commitments
Schedule 11.01	Notice Addresses
EXHIBIT A	Form of Assignment and Acceptance
EXHIBIT B	Form of Compliance Certificate
EXHIBIT C-1	Form of Revolving Note
EXHIBIT C-2	Form of Swingline Note
EXHIBIT D	Form of Exemption Certificate
EXHIBIT E	Form of Extension Letter
EXHIBIT F	Form of Commitment Increase Supplement
EXHIBIT G	Form of Additional Lender Supplement

1

REVOLVING CREDIT AGREEMENT, dated as of May 30, 2012, among IBERDROLA USA, INC., a New York corporation (the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”), CITIBANK, N.A., as administrative agent (the “Administrative Agent”) and SOVEREIGN BANK, N.A. and TD BANK, N.A., as syndication agents.

W I T N E S S E T H:

WHEREAS, the Borrower is party to that certain $300,000,000 Amended and Restated Five-Year Revolving Credit Agreement, dated as of June 2, 2006 (as amended, supplemented, modified or waived prior to the date hereof, the “Existing Agreement”), among the Borrower, several lenders from time to time parties thereto, Citibank, N.A., as administrative agent, Bank of America, N.A., as syndication agent and HSBC Bank USA, National Association, UBS Securities LLC and Wachovia Bank, N.A., as co-documentation agents;

WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities existing under the Existing Agreement which remain outstanding or evidence repayment of any of such obligations and liabilities and that this Agreement amend and restate in its entirety the Existing Agreement and re-evidence the obligations of the Borrower outstanding thereunder;

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree that on the date hereof (as defined below) the Existing Agreement shall be, and hereby is, amended and restated in its entirety as follows:

SECTION 1. METHOD OF BORROWING AND PAYMENT OF FEES

1.01. Commitments; Revolving Loans.

(a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make revolving loans (“Revolving Loans”) to the Borrower at any time and from time to time from and including the date hereof to but excluding the Termination Date, or until the earlier termination of its Commitment, in an aggregate principal amount at any one time outstanding which, when added to such Lender’s Commitment Percentage of the L/C Obligations then outstanding, does not exceed the amount of its Commitment.

(b) The Revolving Loans made by the Lenders on any Borrowing Date that are ABR Loans shall be (i) in a minimum aggregate principal amount of $1,000,000, (ii) in an integral multiple of $500,000 in excess of the amount provided in clause (i) above or (iii) in an aggregate principal amount equal to the remaining balance of the Total Commitment, as the case may be. The Revolving Loans made by the Lenders on any Borrowing Date that are Eurodollar Loans shall be (A) in a minimum aggregate principal amount of $3,000,000 (or, if less, in the amount of the Total Commitments less the Total Extensions of Credit) or (B) in an integral multiple of $1,000,000 in excess of the amount provided in clause (A) above, as the case may be.

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1.02. Borrowings.

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments; provided, however, that the failure of any Lender to make any Revolving Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Revolving Loan required to be made by such other Lender).

(b) Each Revolving Loan shall be an ABR Loan or a Eurodollar Loan, as the Borrower may request, subject to and in accordance with Section 2.01. Each Lender may at its option fulfill its Commitment with respect to any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Revolving Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Revolving Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may be outstanding at the same time; provided, however, that the Borrower shall not be entitled to request any Borrowing that, if made, would result in an aggregate of more than ten separate Eurodollar Loans, and fifteen separate Revolving Loans in total, of any Lender being outstanding to the Borrower hereunder at any one time. For purposes of the foregoing, Eurodollar Loans having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Revolving Loans.

1.03. Termination and Reduction of Commitments.

(a) Upon at least three Business Days’ prior irrevocable written or facsimile notice to the Administrative Agent (which shall promptly be communicated by the Administrative Agent to the Lenders), the Borrower may at any time permanently terminate in whole, or from time to time permanently reduce in part, the Commitment of each Lender, ratably in accordance with the proportion that each Lender’s Commitment bears to the Total Commitment; provided that at no time shall the Extensions of Credit of any Lender exceed the Commitment of such Lender. If, after giving effect to any reduction of the Commitments, the Swingline Commitment exceeds the amount of the aggregate Commitments, the Swingline Commitment shall be automatically reduced by the amount of such excess. Each such partial reduction of the Commitments of the Lenders shall be in the aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess of $5,000,000.

(b) The Borrower shall pay to the Administrative Agent for the account of the Lenders, on the date of each termination or reduction, the Facility Fee on the amount of the Commitments so terminated or reduced accrued through the date of such termination or reduction.

(c) The Commitments shall be automatically terminated on the Termination Date, and the Swingline Commitment shall be automatically terminated on the Swingline Maturity Date, in each case unless sooner terminated pursuant to any other provision of this Section 1.03 or Section 8.

3

(d) Upon at least three Business Days’ prior irrevocable written or facsimile notice to the Administrative Agent (which shall promptly be communicated by the Administrative Agent to the Swingline Lender), the Borrower may at any time permanently terminate in whole, or from time to time permanently reduce in part, the Swingline Commitment; provided that any such partial reduction shall be in an aggregate amount of not less than $5,000,000 or, if greater, an integral multiple of $1,000,000 in excess thereof; provided further that at no time shall the aggregate outstanding Swingline Loans exceed the Swingline Commitment.

1.04. Extensions of Commitments.

(a) The Borrower may, by sending an Extension Letter in substantially the form of Exhibit E to the Administrative Agent (in which case the Administrative Agent shall promptly deliver a copy to each of the Lenders), not less than 30 days and not more than 60 days prior to each anniversary of the Closing Date, request that the Lenders extend the Termination Date then in effect (the “Current Termination Date”) so that it will occur one year after the Current Termination Date. Each Lender, acting in its sole discretion, shall advise in response to such extension request, by written notice to the Administrative Agent given not less than 15 days and not more than 30 days prior to the Current Termination Date or the next occurring anniversary of the Closing Date, as the case may be (such date on which a Lender may give notice of its intention to extend the Current Termination Date being referred to herein as the “Final Election Date”), whether or not such Lender agrees to such extension (each Lender that so advises the Administrative Agent that it will not extend the Current Termination Date being referred to herein as a “Non-Extending Lender”). Any Lender that does not advise the Administrative Agent by the Final Election Date shall be deemed to be a Non-Extending Lender. The election of any Lender to agree to such extension shall not obligate any other Lender to agree.

(b)    (i) In response to such extension request under Section 1.04(a), if Lenders holding Commitments that aggregate 50% or more of the Total Commitments of the Lenders on or prior to the Final Election Date have not agreed to extend the Termination Date, then the Current Termination Date shall not be so extended and the outstanding principal balance of all loans and other amounts payable hereunder shall be due and payable on the Current Termination Date.

(ii) In response to such extension request under Section 1.04(a), if Lenders holding Commitments that aggregate more than 50% of the Total Commitments on or immediately prior to the Final Election Date have agreed to extend the Current Termination Date, the Administrative Agent shall notify the Borrower of such agreement in writing no later than five days after the Final Election Date, and effective on the Current Termination Date or the next occurring anniversary of the Closing Date, as the case may be (the “Extension Date”), the Termination Date applicable to the Lenders that have agreed to such extension (such Lenders being referred to herein as “Continuing Lenders”) shall be the day that is one year after the Current Termination Date. In the event of such extension, the Commitments of each Non-Extending Lender shall terminate on the Current Termination Date applicable to such Non-Extending Lender, all Loans, L/C Obligations and other amounts payable hereunder to such Non-Extending Lender shall become due and payable on such Current Termination Date and the Total Commitments of the Lenders hereunder shall be reduced by the aggregate Commitments

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of Non-Extending Lenders so terminated on and after such Current Termination Date. Each Non-Extending Lender shall be required to maintain its original Commitments up to the Termination Date, or Current Termination Date, as applicable, to which such Non-Extending Lender had previously agreed.

(c) In the event that the conditions in Section 1.04(b)(ii) have been satisfied, the Borrower shall have the right on or before the Extension Date, at its own expense, to require any Non-Extending Lender to transfer and assign without recourse or representation (except as to title and the absence of Liens created by it) (in accordance with and subject to the restrictions contained in Section 11.02) all its interests, rights and obligations under the Loan Documents (including with respect to any Letter of Credit) to one or more banks, financial institutions or other entities (which may include any Lender) (each, an “Extension Lender”); provided that (w) such Extension Lender agrees that the Termination Date applicable to it shall be the day that is one year after the Current Termination Date, (x) such Extension Lender, if not already a Lender hereunder, shall be subject to the approval of the Administrative Agent, the Swingline Lender and each Issuing Lender (which consents shall not be unreasonably withheld), (y) such assignment shall become effective as of the Extension Date and (z) such Extension Lender shall pay to such Non-Extending Lender in immediately available funds on the effective date of such assignment the principal of and interest accrued to the date of payment on the Loans made by such Non-Extending Lender hereunder and all other amounts accrued for such Non-Extending Lender’s account or owed to it hereunder. Notwithstanding the foregoing, no extension of the Termination Date shall become effective unless, on the Extension Date, the conditions set forth in Section 5.02 shall be satisfied (with all references in such paragraphs to the making of a Loan or issuance of a Letter of Credit being deemed to be references to the extension of the Commitments on the Extension Date) and the Administrative Agent shall have received a certificate to that effect dated the Extension Date and executed by a responsible officer of the Borrower.

(d) Notwithstanding anything to the contrary in this Section 1.04, the Termination Date shall not be extended unless the aggregate Commitments of the Continuing Lenders and any other Extension Lenders are greater than or equal to the Total Extensions of Credit as of the Extension Date.

(e) There shall be no more than two extensions under this Section 1.04.

1.05. Additional Commitments.

(a) In the event that the Borrower wishes to increase the Commitments at any time when no Event of Default has occurred and is continuing, it shall notify the Administrative Agent in writing of the amount (the “Proposed Increase Amount”) of such proposed increase (such notice, a “Commitment Increase Notice”); provided that the aggregate amount of any such increase in Commitments shall be at least $10,000,000. The Borrower may offer to the existing Lenders and, with the consent of the Administrative Agent, the Swingline Lender and any Issuing Lenders (which consents shall not be unreasonably withheld), one or more additional banks, financial institutions or other entities the opportunity to participate in all or a portion of the Proposed Increase Amount pursuant to Section 1.05(b).

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(b) Any Lender that accepts an offer to it by the Borrower to increase its Commitment pursuant to Section 1.05(a) shall, in each case, execute a Commitment Increase Supplement with the Borrower and the Administrative Agent, substantially in the form of Exhibit F, whereupon such Lender shall be bound by and entitled to the benefits of this Agreement with respect to the full amount of its Commitment as so increased, and Schedule 1.01 shall be deemed to be amended to so increase the Commitment of such Lender.

(c) Any additional bank, financial institution or other entity which the Borrower selects to offer participation in the increased Commitment and which elects to become a party to this Agreement and provide a Commitment in an amount so offered and accepted by it pursuant to Section 1.05(a) shall execute an Additional Lender Supplement with the Borrower and the Administrative Agent, substantially in the form of Exhibit G, whereupon such bank, financial institution or other entity (herein called an “Additional Lender”) shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement, and Schedule 1.01 shall be deemed to be amended to add the name and Commitment of such Additional Lender; provided that the Commitment of any such Additional Lender shall be in an amount not less than $5,000,000.

(d) Notwithstanding anything to the contrary in this Section 1.05, (i) in no event shall any transaction effected pursuant to this Section 1.05 cause the Total Commitments to exceed $400,000,000, and (ii) no Lender shall have any obligation to increase its Commitment unless it agrees to do so in its sole discretion.

(e) Subject to the terms and conditions hereof, each Additional Lender and each Lender that executes a Commitment Increase Supplement or Additional Lender Supplement, as the case may be, pursuant to Section 1.05(b) (each, an “Accordion Lender”) shall, on the date upon which its Commitment or increased Commitment, as the case may be, becomes effective (its “Accordion Effective Date”), make a Revolving Loan to the Borrower, and the Borrower shall prepay outstanding Revolving Loans owing to the Lenders other than such Accordion Lender(s), in amounts such that, after giving effect to the making of such Revolving Loan by such Accordion Lender and the prepayment of outstanding Revolving Loans owing to Lenders other than such Accordion Lender(s), the aggregate principal amount of Revolving Loans owing to each Lender shall equal such Lender’s Commitment Percentage (determined after giving effect to the new or increased Commitment of such Accordion Lender(s)) of the aggregate amount of the Revolving Loans outstanding on such Accordion Effective Date. On such Accordion Effective Date, the Borrower shall pay to the Administrative Agent, for the account of the Lenders, any amounts owing to such Lenders pursuant to Section 2.12 in respect of Revolving Loans prepaid on such Accordion Effective Date pursuant to this Section 1.05(e).

SECTION 2. THE LOANS

2.01. Notice and Provision of Revolving Loans.

(a) The Borrower shall give the Administrative Agent written or facsimile notice (or telephone notice promptly confirmed in writing or by facsimile) (x) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York time, three Business Days before a proposed Borrowing by the Borrower, or (y) in the case of an ABR Borrowing, not later than 11:00 a.m.,

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New York time, on the day of a proposed Borrowing by the Borrower. Such notice shall be irrevocable and shall in each case refer to this Agreement and specify (i) whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business Day) and the amount thereof; and (iii) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect thereto. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is specified in any such notice, or with respect to any notice provided for under Section 2.07(a) hereof, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(b) Each Lender shall make a Revolving Loan in the amount required, as determined under Section 2.13, with respect to the Borrowing hereunder on the Borrowing Date by wire transfer of immediately available funds to the Administrative Agent in New York, New York, not later than 12:00 noon, New York time, and the Administrative Agent shall by 3:00 p.m., New York time, credit the amounts so received to the general deposit account of the Borrower with the Administrative Agent or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders. Unless the Administrative Agent shall have received notice from a Lender (x) in the case of a Eurodollar Loan, prior to the date of any such Borrowing, and (y) in the case of an ABR Loan, not later than 12:00 noon, New York time, on the date of any Borrowing, that such Lender will not make available to the Administrative Agent such Lender’s portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with this Section 2.01(b) and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date such amount is paid to the Administrative Agent, at (i) in the case of a payment to be made by the Borrower, the interest rate applicable at the time to the Revolving Loans comprising such Borrowing, and (ii) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its portion of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Revolving Loan as part of such Borrowing for purposes of this Agreement. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(c) Notwithstanding any other provisions of this Agreement, the Borrower shall not be entitled to request any Borrowing if the Interest Period requested with respect thereto would end after the Termination Date.

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2.02. Repayment of Loans.

(a) The outstanding principal balance of each Revolving Loan shall be payable on the Interest Payment Date with respect thereto unless such Revolving Loan is continued or converted in accordance with Section 2.07; provided that in any event the outstanding principal balance of each Revolving Loan shall be payable not later than the earlier of (i) the one-year anniversary of the Borrowing Date with respect to such Revolving Loan and (ii) the Termination Date. Each Revolving Loan shall bear interest on the outstanding principal balance thereof from the applicable Borrowing Date as set forth in Section 2.04.

(b) The aggregate outstanding principal of the Swingline Loans shall be payable not later than the earlier of (i) seven days after the Borrowing Date with respect to such Swingline Loan and (ii) the Swingline Maturity Date.

2.03. Facility Fees, etc.

(a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee (a “Facility Fee”) for the period from and including the Closing Date until all of the Loans have been repaid, the Letters of Credit terminated and the Commitments have been terminated, computed at the Facility Fee Rate on the Commitment Percentage of such Lender of the total amount of the Facility (drawn or undrawn), payable quarterly in arrears on the last day of each March, June, September and December, on the Termination Date, (and if applicable, thereafter on demand), commencing on the first of such dates to occur after the Closing Date. If any Commitment shall be reduced in part, the Facility Fee shall be paid in accordance with Section 1.03(b).

(b) The Borrower agrees to pay to the Administrative Agent the Fees in the amounts and on the dates previously agreed to in writing by the Borrower and the Administrative Agent.

(c) All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Lenders. Once paid, none of the Fees shall be refundable under any circumstances.

2.04. Interest Rates and Payment Dates.

(a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

(c) Each Swingline Loan shall bear interest, each day, equal to the LIBO Market Index Rate for such day plus the Applicable Margin in effect on such day with respect to a Eurodollar Loan.

(d) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing

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provisions of this Section 2.04 plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to ABR Loans plus 2%; and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any Fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to ABR Loans plus 2%; in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full.

(e) Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to Section 2.04(d) shall be payable from time to time on demand.

2.05. Computation of Interest and Fees.

(a) Interest and Fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the ABR, the LIBO Market Index Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change in interest rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.09(a).

2.06. Alternate Rate of Interest. If prior to the first day of any Interest Period the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or that such Eurodollar Rate is not available, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as practicable thereafter. If such notice is given, then (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Revolving Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Revolving Loans to Eurodollar Loans.

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2.07. Continuation and Conversion of Revolving Loans.

(a) The Borrower shall have the right, with respect to any Eurodollar Loan, at the end of any Interest Period with respect to such Revolving Loan , on three Business Days’ prior telephonic notice to the Administrative Agent (which shall be confirmed in writing on the next Business Day thereafter) (i) to continue such Revolving Loan into a subsequent Interest Period (provided that no Revolving Loan shall be continued into an Interest Period that ends on a date that is later than the earlier to occur of the one-year anniversary of the Borrowing Date with respect to such Revolving Loan and the Termination Date) or (ii) to convert such Revolving Loan into an ABR Loan.

(b) The Borrower shall have the right, with respect to any ABR Loan, at any time, on three Business Days’ prior telephonic notice to the Administrative Agent (which shall be confirmed in writing on the next Business Day thereafter), to convert such Revolving Loan into a Eurodollar Loan.

(c) Any notice required to be given by the Borrower to the Administrative Agent pursuant to this Section 2.07 shall be irrevocable. Any notice given by the Borrower to the Administrative Agent hereunder shall be promptly communicated by the Administrative Agent to the Lenders.

(d) In addition to the above notice requirements, any continuation or conversion by the Borrower pursuant to this Section 2.07 shall be subject to the following:

(i) no Event of Default shall have occurred and be continuing at the time of such continuation or conversion;

(ii) if less than all the Revolving Loans at the time outstanding shall be continued or converted, such continuation or conversion shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Loans of the Type being continued or converted held by the Lenders immediately prior to such continuation or conversion;

(iii) each conversion shall be effected by each Lender by applying the proceeds of the new ABR Loan or Eurodollar Loan, as the case may be, to the Revolving Loan being converted;

(iv) upon each conversion of an ABR Loan into a Eurodollar Loan, and upon the conversion of a Eurodollar Loan into an ABR Loan, the Borrower shall pay all accrued interest on such Revolving Loan being converted at the time of conversion;

(v) if the new Revolving Loan made in respect of a conversion shall be a Eurodollar Loan, the first Interest Period with respect thereto shall commence on the date of conversion;

(vi) any Revolving Loan which may not be continued as or converted into a Eurodollar Loan shall be automatically continued as or converted to an ABR Loan; provided that each Revolving Loan shall be paid in full not later than the earlier to occur of the one-year anniversary of the Borrowing Date with respect to such Revolving Loan and the Termination Date;

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(vii) a Eurodollar Loan may be converted to an ABR Loan only on the last day of an Interest Period; and

(viii) any conversion shall be subject to Section 1.01(b) hereof.

In the event that the Borrower shall not give notice to continue any Eurodollar Loan as a Eurodollar Loan into a subsequent Interest Period, or to convert any such Revolving Loan, such Revolving Loan (unless repaid) shall automatically become an ABR Loan at the expiration of the then current Interest Period.

2.08. Prepayments.

(a) The Borrower shall have the right, upon notice to the Administrative Agent, at any time and from time to time to prepay any Borrowing, in whole or in part, provided that such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Loans and (B) on the date of prepayment of ABR Loans and Swingline Loans); provided, however, that each partial prepayment shall be in an amount that is (i) an integral multiple of $500,000 and not less than $1,000,000, for any ABR Loan or Swingline Loan, or (ii) an integral multiple of $1,000,000 and not less than $3,000,000, for any Eurodollar Loan.

(b) On the date of any termination or reduction of the Commitments pursuant to Section 1.03, the Borrower shall pay or prepay so much of the Borrowings as shall be necessary in order that the aggregate principal amount of the Revolving Loans outstanding will not exceed the aggregate Commitments after giving effect to such termination or reduction.

(c) Each notice of prepayment shall specify the prepayment date and the principal amount of the Borrowing (or portion thereof) to be prepaid, shall be irrevocable and shall commit the Borrower to prepay such Borrowing by the amount stated therein on the date stated therein. All prepayments under this Section 2.08 shall be subject to Section 2.12 but otherwise without premium or penalty. All prepayments under this Section 2.08 shall be accompanied by accrued interest on the principal amount being prepaid to the date of payment. Each prepayment shall be made to the Administrative Agent, to be distributed to the Lenders, pro rata in accordance with the proportion that each Lender’s Loans of the Type prepaid bears to the aggregate amount of all Lenders’ Loans of such Type outstanding.

2.09. Reserve Requirements; Change in Circumstances.

(a) Notwithstanding any other provision herein, if any Change in Law shall (i) subject any Lender or any Issuing Lender to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or Swingline Loan or any Eurodollar Loan made by it, or change the basis of taxation of payments to any Lender of the principal of or interest on any Eurodollar Loan made by such Lender or any Fees or other amounts payable hereunder (other than changes in respect of taxes imposed on the overall net income of such Lender by the jurisdiction in which such Lender has its principal office or by any political subdivision or taxing authority therein); (ii) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by any Lender

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(except any reserve requirement reflected in the Eurodollar Rate hereunder) or any Issuing Lender; or (iii) impose on any Lender or any Issuing Lender or the interbank Eurodollar market any other condition, cost or expense affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein; and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Eurodollar Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or such Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then, upon prompt request of such Lender or Issuing Lender, the Borrower will pay to such Lender or Issuing Lender as provided in Section 2.09(c) such additional amount or amounts as will compensate such Lender or Issuing Lender for such additional costs incurred or reduction suffered.

(b) If any Lender or Issuing Lender determines that any Change in Law affecting such Lender or Issuing Lender or any Lending Office of such Lender or such Lender’s or Issuing Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s or Issuing Lender’s capital or on the capital of such Lender’s or Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by any Issuing Lender, to a level below that which such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Lender’s policies and the policies of such Lender’s or Issuing Lender’s holding company with respect to capital adequacy and liquidity), then from time to time, the Borrower shall pay as provided in Section 2.09(c) to such Lender or Issuing Lender such additional amount or amounts as will compensate such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company for any such reduction suffered.

(c) A certificate of each Lender or Issuing Lender signed by an officer of the respective Lender or Issuing Lender setting forth in reasonable detail such amount or amounts necessary to compensate such Lender or Issuing Lender or its holding company as specified in paragraph Section 2.09(a) or 2.09(b), as the case may be, shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay each Lender the amount shown as due on any such certificate delivered by it within 10 days after its receipt of the same.

(d) Failure or delay on the part of any Lender or Issuing Lender to demand compensation pursuant to this Section 2.09 shall not constitute a waiver of such Lender’s or Issuing Lender’s right to demand such compensation. The protection of this Section 2.09 shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed.

2.10. Change in Legality.

(a) Notwithstanding any other provision herein, if any Lender determines that any Change in Law shall make it unlawful for such Lender to make or maintain any Eurodollar Loan

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or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Loan, then, by prompt written notice to the Borrower and to the Administrative Agent, such Lender may:

(i) declare that Eurodollar Loans will not thereafter be made by such Lender hereunder, whereupon any request by the Borrower for a Eurodollar Borrowing shall, as to such Lender only, be deemed a request for an ABR Loan unless and until such declaration shall be subsequently withdrawn; and

(ii) require that all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which event all such Eurodollar Loans shall be automatically converted to ABR Loans as of the effective date of such notice as provided in Section 2.10(c).

(b) In the event any Lender shall give notice pursuant to Section 2.10(a), all payments and prepayments of principal that would otherwise have been applied to repay the Eurodollar Loans that would have been made by such Lender or the converted Eurodollar Loans of such Lender shall instead be applied to repay the ABR Loans made by such Lender in lieu of, or resulting from the conversion of, such Eurodollar Loans.

(c) For purposes of this Section 2.10, a notice to the Borrower by any Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day of the Interest Period currently applicable to such Eurodollar Loan; in all other cases such notice shall be effective on the date of receipt by the Borrower.

2.11. New Office or Agency; Replacement of Lenders.

(a) If any Lender (i) requests compensation under Section 2.09, (ii) gives notice pursuant to Section 2.10(a) or (iii) requires the Borrower to pay additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then in each case such Lender shall (at the request of the Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (x) would eliminate or reduce amounts payable pursuant to Section 2.09 or 2.16 or cause such Lender to withdraw its notice pursuant to Section 2.10(a), as the case may be, in the future, and (y) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay its pro rata share of the reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If any Lender requests compensation under Section 2.09, or if the Borrower is required to pay additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16 and, in each case, such Lender has declined or is unable to designate a different Lending Office in accordance with Section 2.11(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.02), all of its interests, rights and obligations

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under this Agreement and the other Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.02;

(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in L/C Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.12) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.09 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments thereafter;

(iv) such assignment does not conflict with applicable law; and

(v) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

2.12. Indemnity. The Borrower shall indemnify each Lender against any loss or expense which such Lender may sustain or incur as a consequence of (i) any failure by the Borrower to fulfill on the date of any Borrowing hereunder the applicable conditions set forth in Section 4, (ii) any failure by the Borrower to borrow or to refinance, convert, continue or prepay any Loan hereunder after irrevocable notice of such borrowing, refinancing, conversion, continuation or prepayment has been given pursuant to Section 2.01, 2.07 or 2.08, (iii) any payment, prepayment or conversion by the Borrower of a Eurodollar Loan required by any other provision of this Agreement or otherwise made or deemed made on a date other than the last day of the Interest Period applicable thereto, (iv) any default in payment or prepayment of the principal amount of any Loan or any part thereof or interest accrued thereon by the Borrower, as and when due and payable (at the due date thereof, whether by scheduled maturity, acceleration, irrevocable notice of prepayment or otherwise) or (v) the occurrence of any Event of Default with respect to the Borrower; including, in each case, any loss or reasonable expense sustained or incurred or to be sustained or incurred in liquidating or employing deposits from third parties acquired to effect or maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or reasonable expense shall include an amount equal to the excess, if any, as reasonably determined by such Lender, of (x) its cost of obtaining the funds for the Loan being paid, prepaid, converted or not borrowed, converted or continued (assumed to be the Eurodollar Rate applicable thereto)

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for the period from the date of such payment, prepayment, conversion or failure to borrow, convert or continue to the last day of the Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the Interest Period for such Loan which would have commenced on the date of such failure) over (y) the amount of interest (as reasonably determined by such Lender) that would be realized by such Lender in reemploying the funds so paid, prepaid, converted or not borrowed, converted or continued for such period or Interest Period, as the case may be. A certificate of any Lender setting forth in reasonable detail any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.12 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay each Lender the amount shown as due on any certificate within 15 days after its receipt of same.

2.13. Pro Rata Treatment. Except in the case of Swingline Loans, the Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Loans, each payment on account of any Facility Fee, each reduction of the Commitments and each refinancing of any Borrowing with, conversion of any Borrowing to, or continuation of any Borrowing as, a Borrowing of any Type shall be allocated pro rata among the Lenders in accordance with their respective applicable Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans), except in each case (i) as otherwise expressly contemplated by this Agreement and (ii) as required to give effect to the provisions of Sections 2.09, 2.10, 2.11 and 2.12. Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Lender’s Percentage of such Borrowing, to the next higher or lower whole dollar amount.

2.14. Sharing of Setoffs. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Revolving Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact and (b) purchase (for cash at face value) participations in the Revolving Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and other amounts owing them; provided that:

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this Section 2.14 shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in L/C Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

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The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

2.15. Payments.

(a) The Borrower shall make each payment (including principal of or interest on any Borrowing or any Fees or other amounts) hereunder not later than 12:00 p.m., New York time, on the date when due in dollars to the Administrative Agent, for the account of the Lenders or the Swingline Lender, as the case may be, at the Funding Office, in immediately available funds, without condition or deduction for any counterclaim, deduction, recoupment or setoff.

(b) Whenever any payment (including principal of or interest on any Borrowing or any Fees or other amounts) hereunder shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or Fees, if applicable.

2.16. Taxes.

(a) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made, in accordance with Section 2.15, free and clear of and without reduction or withholding for any and all present or future taxes, levies, imposts, duties, deductions, assessments, fees, withholdings or other charges imposed by any Governmental Authority, and all liabilities with respect thereto, including interest, additions to tax and penalties, excluding taxes imposed on the net income of the Administrative Agent or any Lender or Issuing Lender (or any transferee or assignee thereof, including a participation holder (any such entity being called a “Transferee”)) and any branch profits or franchise taxes imposed on the Administrative Agent or any Lender or Issuing Lender (or Transferee) by the United States or any jurisdiction under the laws of which the Administrative Agent or any such Lender or Issuing Lender (or Transferee) is organized or doing business in or any political subdivision thereof (all such nonexcluded taxes, levies, imposts, duties, deductions, assessments, fees, withholdings, charges and liabilities hereinafter referred to as “Taxes”). If the Borrower (or withholding agent) shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or Issuing Lender (or any Transferee) or the Administrative Agent, then (i) the sum payable shall be increased by the amount necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.16) such Lender or Issuing Lender (or Transferee) or the Administrative Agent (as the case may be) shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant taxing authority or other Governmental Authority in accordance with applicable law.

(b) Without limiting the provisions of Section 2.16(a), the Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law all present or future

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stamp or documentary taxes or any other excise or property taxes, charges or similar levies (hereinafter referred to as “Other Taxes”) that arise from any payment made by the Borrower hereunder or under any other Loan Document or from the execution, delivery, enforcement or registration of, or otherwise with respect to, this Agreement or any other Loan Document.

(c) The Borrower will indemnify each Lender and each Issuing Lender (or Transferee) and the Administrative Agent, within 10 Business Days after written demand therefor, for the full amount of any Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.16) paid by such Lender or Issuing Lender (or Transferee) or the Administrative Agent, as the case may be, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant taxing authority or other Governmental Authority. If any Lender or Issuing Lender (or Transferee) or the Administrative Agent determines, in its sole discretion, that is has received a refund in respect of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.16, it shall promptly notify the Borrower of such refund and shall, within 30 days after receipt of a request by the Borrower (or promptly upon receipt, if the Borrower has requested application for such refund pursuant hereto), pay such refund to the Borrower (but only to the extent of amounts that have been paid by the Borrower under this Section 2.16 with respect to such refund), net of all out-of-pocket expenses of such Lender or Issuing Lender (or Transferee) or the Administrative Agent, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of such Lender or Issuing Lender (or Transferee) or the Administrative Agent, agrees to repay such refund (plus penalties, interest or other charges imposed by the relevant Governmental Authority) to such Lender or Issuing Lender (or Transferee) or the Administrative Agent in the event such Lender or Issuing Lender (or Transferee) or the Administrative Agent is required to repay such refund to such Governmental Authority. Nothing contained in this Section 2.16(c) shall require any Lender or Issuing Lender (or Transferee) or the Administrative Agent to make available any of its tax returns (or any other information relating to taxes that it deems to be confidential) to the Borrower or any other Person.

(d) As soon as practicable, and in any event within 30 days after the date of any payment of Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower will furnish to the Administrative Agent, at its address referred to in Section 11.01, the original or a certified copy of a receipt issued by such Governmental Authority evidencing payment thereof, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section 2.16 shall survive the payment in full of the principal of and interest on all Loans made hereunder.

(f) Upon the written request of the Borrower, each Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non U.S. Lender”) shall deliver to each of the Borrower and the Administrative Agent (or, in the case of a Participant, to

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the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit D and a Form W-8BEN, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower under this Agreement and the other Loan Documents. In addition, each Non U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non U.S. Lender. Each Non U.S. Lender shall promptly notify each of the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Non U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non U.S. Lender is not legally able to deliver.

(g) A Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement or any other Loan Document shall deliver to each of the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

(h) The Borrower shall not be required to pay any additional amounts to any Lender (or Transferee) in respect of United States Federal withholding tax pursuant to Section 2.16(a) or to provide indemnification pursuant to Section 2.16(c) if the obligation to pay such additional amounts or to provide such indemnification would not have arisen but for a failure by such Lender (or Transferee) to comply with the provisions of Sections 2.16(f) and 2.16(g); provided, however, that the Borrower shall be required to pay those amounts or provide such indemnification to any Lender (or Transferee) that it was required to pay or indemnify hereunder prior to the failure of such Lender (or Transferee) to comply with the provisions of Sections 2.16(f) and 2.16(g).

(i) Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such taxes and without limiting the obligation of the Borrower to do so) and (ii) any taxes attributable to such Lender’s failure to comply with the provisions of Section 11.02(b) relating to the maintenance of a Participant Register, in either case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such taxes were correctly or legally imposed or asserted by the

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relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (i).

2.17. Swingline Loans.

(a) From and including the Closing Date to but excluding the Termination Date, the Swingline Lender agrees, on the terms and conditions hereinafter set forth, to make loans to the Borrower (each, a “Swingline Loan,” and collectively, the “Swingline Loans”), in an aggregate principal amount at any time outstanding not exceeding the Swingline Commitment. Swingline Loans may be made even if the Swingline Lender’s Extensions of Credit would exceed its Commitment at such time; provided that no Borrowing of Swingline Loans shall be made if, immediately after giving effect thereto, (i) the Total Extensions of Credit would exceed the Total Commitments at such time and (ii) the aggregate Swingline Loans outstanding would exceed the Swingline Commitment. Subject to and on the terms and conditions of this Agreement, the Borrower may borrow, repay (including by means of a Borrowing of Revolving Loans pursuant to Section 2.17(c)) and reborrow Swingline Loans at any time prior to the Termination Date; provided that the Borrower may not borrow Swingline Loans the proceeds of which are used to repay outstanding Swingline Loans.

(b) In order to obtain a Swingline Loan, the Borrower shall give the Administrative Agent (and the Swingline Lender, if the Person serving as the Swingline Lender is not also serving as the Administrative Agent) irrevocable notice (a “Swingline Borrowing Notice”) not later than 11:00 a.m., New York time, on the Borrowing Date of each Swingline Loan, specifying the aggregate amount of such Swingline Loan (which shall not be less than $500,000 and, if greater, shall be in an integral multiple of $100,000 in excess thereof (or, if less, in the amount of the unutilized Swingline Commitment)). Not later than 4:00 p.m., New York time, on the Borrowing Date, the Swingline Lender shall make available an amount equal to the amount of the requested Swingline Loan in funds immediately available to the Administrative Agent. The Administrative Agent will make the funds so received from the Swingline Lender available to the Borrower by crediting such funds on the Borrowing Date to the general deposit account of the Borrower with the Administrative Agent or by such pre-established mutually agreeable procedures between the Borrower and the Administrative Agent.

(c) With respect to any outstanding Swingline Loans, the Swingline Lender may at any time (whether or not an Event of Default has occurred and is continuing) in its sole and absolute discretion, and is hereby authorized and empowered by the Borrower to, cause a Borrowing of Revolving Loans to be made for the purpose of repaying such Swingline Loans by delivering to the Administrative Agent (and the Swingline Lender, if the Person serving as the Swingline Lender is not also serving as the Administrative Agent) and each other Lender (on behalf of, and with a copy to, the Borrower), not later than 11:00 a.m., New York time, on the day of the proposed Borrowing Date therefor, a notice (which shall be deemed to be a Borrowing Notice given by the Borrower) requesting the Lenders to make Revolving Loans (which shall be made initially as ABR Loans) on the Borrowing Date in an aggregate amount equal to the

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amount of such Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date such notice is given that the Swingline Lender requests to be repaid. Not later than 1:00 p.m., New York time, on the requested Borrowing Date, each Lender (other than the Swingline Lender) shall make available its Commitment Percentage of the Refunded Swingline Loans in funds immediately available to the Administrative Agent. To the extent the Lenders have made such amounts available to the Administrative Agent as provided hereinabove, the Administrative Agent will make the aggregate of such amounts available to the Swingline Lender in like funds as received by the Administrative Agent, which shall apply such amounts in repayment of the Refunded Swingline Loans. Notwithstanding any provision of this Agreement to the contrary, on the relevant Borrowing Date, the Refunded Swingline Loans shall be deemed to be repaid with the proceeds of the Revolving Loans made as provided above (including a Revolving Loan deemed to have been made by the Swingline Lender), and such Refunded Swingline Loans deemed to be so repaid shall no longer be outstanding as Swingline Loans but shall be outstanding as Revolving Loans. If any portion of any such amount repaid (or deemed to be repaid) to the Swingline Lender shall be recovered by or on behalf of the Borrower from the Swingline Lender in any proceeding under any Debtor Relief Law or otherwise, the loss of the amount so recovered shall be shared ratably among all the Lenders in the manner contemplated by Section 2.14.

(d) If, as a result of any proceeding under any Debtor Relief Law with respect to the Borrower, Revolving Loans are not made pursuant to Section 2.17(c) in an amount sufficient to repay any amounts owed to the Swingline Lender in respect of any outstanding Swingline Loans, or if the Swingline Lender is otherwise precluded for any reason from giving a notice on behalf of the Borrower as provided for hereinabove, the Swingline Lender shall be deemed to have sold without recourse, representation or warranty, and each Lender shall be deemed to have purchased and hereby agrees to purchase, a participation in such outstanding Swingline Loans in an amount equal to its Commitment Percentage of the unpaid amount thereof together with accrued interest thereon. Upon one Business Day’s prior notice from the Swingline Lender, each Lender (other than the Swingline Lender) shall make available to the Administrative Agent an amount, in immediately available funds, equal to its respective participation. To the extent the Lenders have made such amounts available to the Administrative Agent as provided hereinabove, the Administrative Agent will make the aggregate of such amounts available to the Swingline Lender in like funds as received by the Administrative Agent. In the event any such Lender fails to make available to the Administrative Agent the amount of such Lender’s participation as provided in this Section 2.17(d), the Swingline Lender shall be entitled to recover such amount on demand from such Lender, together with interest thereon for each day from the date such amount is required to be made available for the account of the Swingline Lender until the date such amount is made available to the Swingline Lender at the Federal Funds Effective Rate for the first three Business Days and thereafter at the ABR. Promptly following its receipt of any payment by or on behalf of the Borrower in respect of a Swingline Loan, the Swingline Lender will pay to each Lender that has acquired a participation therein such Lender’s Commitment Percentage of such payment.

(e) Notwithstanding any provision of this Agreement to the contrary, the obligation of each Lender (other than the Swingline Lender) to make Revolving Loans for the purpose of repaying any Refunded Swingline Loans pursuant to Section 2.17(c) and each such Lender’s obligation to purchase a participation in any unpaid Swingline Loans pursuant to Section 2.17(d)

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shall be absolute and unconditional and shall not be affected by any circumstance or event whatsoever, including (i) any set-off, counterclaim, recoupment, defense or other right that such Lender may have against the Swingline Lender, the Administrative Agent, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of any Default or Event of Default or (iii) the failure of the amount of such advance of Revolving Loans to meet the minimum Borrowing amount specified in Section 1.01(b).

SECTION 3. LETTERS OF CREDIT

3.01. L/C Commitment.

(a) Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the L/C Participants set forth in Section 3.04(a), agrees to issue letters of credit (collectively, “Letters of Credit”) for the account of the Borrower on any Business Day during the Commitment Period in such form as may be approved from time to time by the relevant Issuing Lender; provided that no Issuing Lender shall issue any Letters of Credit for account of the Borrower if, after giving effect to such issuance, (i) the Total Extensions of Credit would exceed the Total Commitments or (ii) the aggregate amount of the Available Commitments would be less than zero. Each Letter of Credit shall (A) be denominated in dollars and (B) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date that is five Business Days prior to the Termination Date; provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).

(b) No Issuing Lender shall at any time be obligated to issue any Letter of Credit if such issuance would conflict with, or cause such Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

3.02. Procedure for Issuance of Letter of Credit.

(a) The Borrower may from time to time request that an Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender at its address for notices specified herein the relevant Application therefor, completed to the satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender may request in connection therewith. Upon receipt of any Application, such Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall such Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by such Issuing Lender and the Borrower. Such Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof. Such Issuing Lender shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the L/C Participants, notice of the issuance of each Letter of Credit (including the amount thereof).

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(b) Except for non-substantive amendments to any Letter of Credit for the purpose of correcting errors or ambiguities or to allow for administrative convenience (which amendments each Issuing Lender may make in its discretion with the consent of the Borrower), the amendment, modification, supplement, extension or renewal of any Letter of Credit shall be deemed to be an issuance of such Letter of Credit. If any Letter of Credit contains a provision pursuant to which it is deemed to be automatically renewed unless notice of termination is given by the applicable Issuing Lender, such Issuing Lender shall timely give notice of termination if (i) as of close of business on the seventeenth day prior to the last day upon which such Issuing Lender’s notice of termination may be given to the beneficiaries of such Letter of Credit, the Issuing Lender has received a notice of termination from the Borrower or a notice from the Administrative Agent, any Lender or the Borrower that the conditions to issuance of such Letter of Credit have not been satisfied, or (ii) the renewed Letter of Credit would have a term not permitted by Section 3.01(a).

3.03. Fees and Other Charges.

(a) The Borrower will pay a fee on all outstanding Letters of Credit issued on the Borrower’s behalf at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Facility, shared ratably among the Lenders under such Facility and payable quarterly in arrears on the last day of each March, June, September and December after the issuance date and on the Termination Date. In addition, the Borrower shall pay to each Issuing Lender for its own account a fronting fee in an amount to be agreed between the Borrower and such Issuing Lender on the undrawn and unexpired amount of each Letter of Credit issued by such Issuing Lender, payable quarterly in arrears on the last day of each March, June, September and December after the issuance date and on the Termination Date.

(b) In addition to the foregoing fees, the Borrower shall pay to or reimburse each Issuing Lender for such normal, customary and reasonable costs and expenses as are incurred or charged by such Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit issued by such Issuing Lender on the Borrower’s behalf.

3.04. L/C Participations.

(a) Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce each Issuing Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from each Issuing Lender, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Commitment Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit and the amount of each draft paid by such Issuing Lender thereunder. Each L/C Participant agrees with each Issuing Lender that, if a draft is paid under any Letter of Credit for which such Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to such Issuing Lender upon demand at such Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Commitment Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. Each L/C Participant’s obligation to pay such amount shall be absolute and unconditional and shall not be affected by

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any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against such Issuing Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5.02, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

(b) If any amount required to be paid by any L/C Participant to the relevant Issuing Lender pursuant to Section 3.04(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit is paid to such Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to such Issuing Lender on demand an amount equal to the product of (i) such amount times (ii) the daily average Federal Funds Effective Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender times (iii) a fraction, the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to Section 3.04(a) is not made available to such Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, such Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans under the Facility. A certificate of such Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this Section 3.04(b) shall be conclusive in the absence of manifest error.

(c) Whenever, at any time after such Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.04(a), such Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by such Issuing Lender), or any payment of interest on account thereof, such Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by such Issuing Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return to such Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

3.05. Reimbursement Obligation of the Borrower. If any draft is paid under any Letter of Credit, the Borrower shall reimburse the Issuing Lender that issued such Letter of Credit for the amount of (i) the draft so paid plus (ii) any taxes, fees, charges or other costs or expenses incurred by such Issuing Lender in connection with such payment, not later than 3:00 p.m., New York time, on (x) if notice of such draft is received by the Borrower on a Business Day prior to 1:00 p.m., New York time, such Business Day, or (y) if clause (x) above does not apply, the Business Day immediately following the day that the Borrower receives such notice. Each such payment shall be made to such Issuing Lender at its address for notices referred to herein in dollars and in immediately available funds. Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at the rate set forth in (A) until the Business Day next succeeding the date of the relevant notice, Section 2.04(b), or (B) thereafter, Section 2.04(c).

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3.06. Obligations Absolute. The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against any Issuing Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with each Issuing Lender that no Issuing Lender shall be responsible for, and the Borrower’s Reimbursement Obligations under Section 3.05 shall not be affected by, among other things, (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, as the case may be, (ii) the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee, (iii) payment by the Issuing Lender under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. No Issuing Lender shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of such Issuing Lender; provided that the foregoing shall not be construed to excuse such Issuing Lender from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Lender’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of such Issuing Lender (as finally determined by a court of competent jurisdiction), such Issuing Lender shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Lender may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

3.07. Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the relevant Issuing Lender shall promptly notify the Borrower of the date and amount thereof. The responsibility of each Issuing Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit issued by such Issuing Lender shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

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3.08. Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Agreement, the provisions of this Agreement shall apply.

SECTION 4. REPRESENTATIONS AND WARRANTIES

The Borrower hereby represents and warrants that:

4.01. Corporate Existence and Power. Each of the Borrower and its Significant Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) is duly qualified to do business and is in good standing as a foreign corporation under the laws of each material jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification and (iii) has all requisite corporate power and authority and the legal right (A) to own its assets and carry on the business in which it is engaged and (B) in the case of the Borrower, to execute and deliver this Agreement and the other Loan Documents to which it is a party and perform its obligations under this Agreement and the other Loan Documents to which it is a party.

4.02. Due Authorization, Compliance with Law, Enforceable Obligations, etc.

(a) The execution and delivery of this Agreement and the other Loan Documents to which it is a party by the Borrower and the performance by the Borrower of its obligations under this Agreement and the other Loan Documents to which it is a party have been duly authorized by all necessary corporate action (including any necessary stockholder action) on the part of the Borrower, and do not and will not (i) violate (A) any provision of any law, rule, regulation (including any applicable public service or public utility law of New York or any other state, the Federal Power Act, and Regulation U and Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, decree, determination or award presently in effect having applicability to the Borrower, (B) the Certificate of Incorporation, as amended, or By-laws of the Borrower or (C) any material indenture, agreement or other instrument to which the Borrower is a party, or by which the Borrower or any of its property is bound, (ii) be in conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument or (iii) result in or require the creation or imposition of any lien of any nature upon any of the assets or properties of the Borrower or its Subsidiaries.

(b) This Agreement and the other Loan Documents to which the Borrower is a party have been duly executed and delivered by the Borrower and constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws or principles of equity relating to or affecting the enforcement of creditors’ rights or contractual obligations generally.

(c) The Borrower has obtained from all Governmental Authorities with jurisdiction all approvals, authorizations and consents and has made, or will make when due, all filings with such Governmental Authorities required in connection with the execution and delivery of this Agreement and the other Loan Documents to which it is a party by the Borrower and the

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performance by the Borrower of its obligations under this Agreement and the other Loan Documents to which it is a party (including approvals, authorizations, consents and filings (if any) required under any applicable public service or public utility law of New York or any other state and the Federal Power Act, each as amended from time to time, and the rules, orders and regulations issued in connection therewith), and all such approvals, authorizations and consents are final and in full force and effect.

4.03. Financial Condition. The Borrower has heretofore provided the Lenders with (i) audited consolidated financial statements of the Borrower and its Subsidiaries consisting of a consolidated balance sheet as at December 31, 2011, and the related consolidated statements of income, changes in common stock equity and cash flows certified by PricewaterhouseCoopers, LLP, independent certified public accountants and (ii) unaudited consolidated financial statements for the quarterly period ended March 31, 2012, together with related consolidated statements of income, changes in common stock equity and cash flows for the three-month period ending on such date. All such consolidated financial statements, including the related schedules and notes thereto, fairly present the consolidated financial position of the Borrower and its Subsidiaries as of the dates thereof and the results of its operations and changes in its common stock equity and cash flows for the periods then ended, all in accordance with GAAP applied on a consistent basis. Since December 31, 2011, there has not occurred any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

4.04. Litigation. There are no actions, suits or proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its properties by or before any court or any Federal, state, local, foreign or other governmental agency or regulatory authority which, if determined adversely to the Borrower, would have a material adverse effect on the financial condition or business of the Borrower or would materially impair the ability of the Borrower to perform its obligations under this Agreement or the other Loan Documents to which it is a party.

4.05. Tax Returns. The Borrower has filed or caused to be filed all Federal, state, local and foreign tax returns which, to its knowledge, are required to be filed and has paid or caused to be paid all taxes as shown on such returns or on any assessment received by it to the extent that such taxes have become due, except taxes the validity of which is being contested in good faith by appropriate proceedings and with respect to which the Borrower shall have set aside on its books such reserves as are required in accordance with generally accepted accounting principles with respect to any such tax.

4.06. Investment Company Act. The Borrower is not an “investment company” as that term is defined in, and is not otherwise subject to regulation under, the Investment Company Act of 1940, as amended.

4.07. Other Agreements. The Borrower is not in default with respect to any material indenture, mortgage, loan agreement or evidence of indebtedness to which it is a party or by which it or any of its properties may be bound, which default would materially adversely affect the Borrower’s financial condition.

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4.08. Federal Reserve Regulations. No part of the proceeds of any Loans will be used for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board.

4.09. No Material Misstatements. No information, report, financial statement, exhibit or schedule furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or the other Loan Documents or included therein or delivered pursuant thereto contained, contains or will contain any material misstatement of fact or omitted, omits or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were, are or will be made, not misleading.

4.10. Employee Benefit Plans. The Borrower is in compliance in all material respects with the applicable provisions of ERISA and the regulations and published interpretations thereunder. No Reportable Event has occurred as to which the Borrower was required to file a report with the PBGC.

4.11. Environmental and Safety Matters. The Borrower complies in all material respects with all, and has not violated in any material respects any, Environmental Laws, and is aware of no events, conditions or circumstances involving liability under or continued compliance with such Environmental Laws, or environmental pollution or contamination or human health or safety that could reasonably be expected to have a material adverse effect on the financial condition or business of the Borrower or would materially impair the ability of the Borrower to perform its obligations under this Agreement or the other Loan Documents to which it is a party.

4.12. Ownership of Property; Liens. Each of the Borrower and its Significant Subsidiaries has good title to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, except to the extent failure to have such title could not reasonably be expected to have a Material Adverse Effect, and none of such property is subject to any Lien except as permitted by Section 7.03.

4.13. Use of Proceeds. The proceeds of the Loans shall be used (i) to provide credit support for the Borrower’s commercial paper and (ii) for general corporate purposes of the Borrower. The Letters of Credit shall be used for general corporate purposes of the Borrower.

SECTION 5. CONDITIONS PRECEDENT

5.01. Conditions Precedent to Effectiveness of Agreement. The effectiveness of this Agreement and the obligations of the Lenders to make its initial Extensions of Credit hereunder are subject to the following conditions precedent:

(a) Credit Documents. The Administrative Agent shall have received (i) this Agreement, executed and delivered by the Administrative Agent, the Borrower and each Lender listed on Schedule 1.01 and (ii) duly executed copies of the other Loan Documents.

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(b) Existing Agreement. The Borrower hereby acknowledges by execution of this Agreement that all amounts outstanding, accrued or payable under the Existing Agreement shall be replaced with all amounts outstanding, accrued or payable under this Agreement.

(c) Representations and Warranties; No Default. On the Closing Date, (i) the representations and warranties set forth in Section 4 qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects on and as of such time with the same effect as though such representations and warranties had been made on and as of such time, (ii) no Event of Default, nor any event which upon notice or lapse of time or both would constitute an Event of Default, shall have occurred and be continuing on and as of such time and (iii) the Administrative Agent shall have received a certificate, dated the Closing Date and signed by any executive officer of the Borrower, confirming compliance with the foregoing clauses (i) and (ii).

(d) Charter Documents; Bylaws. The Administrative Agent shall have received a certificate of a secretary or assistant secretary of the Borrower certifying as to the incumbency and genuineness of the signature of each officer of the Borrower executing Credit Documents to which it is a party and certifying that attached thereto is a true, correct and complete copy of (i) the certificate of incorporation of the Borrower and all amendments thereto, certified as of a recent date by the Secretary of State of the State of New York, (ii) the bylaws or other governing document of the Borrower as in effect on the Closing Date, (iii) resolutions duly adopted by the board of directors of the Borrower authorizing and approving the transactions contemplated hereunder and the execution, delivery and performance of this Agreement and the other Credit Documents to which it is a party, (iv) each certificate required to be delivered pursuant to Section 5.01(e) and (v) such additional supporting documents as any Lender may reasonably request.

(e) Good Standing. The Administrative Agent shall have received (i) a long form good standing certified as of a recent date by the Secretary of State of the State of New York and (ii) such “bring-down” good standing certificates dated the Closing Date or the Business Day immediately preceding the Closing Date as the Administrative Agent shall reasonably require.

(f) Approvals. All governmental and third party approvals (including approvals (if any) required under any applicable public service or public utility law of New York or any other state or commonwealth and the Federal Power Act, as amended from time to time, and the rules, orders and regulations issued in connection therewith) necessary in connection with the continuing operations of the Borrower and its Subsidiaries and the transactions contemplated hereby shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent, invalidate or otherwise impose adverse conditions related to this Agreement (including the rights and remedies of the Lenders hereunder).

(g) Financial Statements. On or prior to the Closing Date, the Lenders shall have received (i) audited consolidated financial statements of the Borrower for the 2011 and 2010 fiscal years and (ii) unaudited interim consolidated financial statements of the Borrower for the quarterly period ended March 31, 2012.

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(h) Opinion of Counsel. Receipt by the Administrative Agent of an opinion, or opinions, satisfactory in form and content to the Administrative Agent and the Lenders, addressed to the Administrative Agent and each of the Lenders and dated as of the Closing Date, from Arístides Díaz, in-house counsel to the Borrower.

(i) Fees. The Lenders, the Arrangers and the Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel).

(j) PATRIOT Act. The Borrower shall have provided to the Administrative Agent and the Lenders the documentation and other information requested by the Administrative Agent in order to comply with requirements of the PATRIOT Act.

5.02. Conditions to All Extensions of Credit. The obligations of the Lenders to make or participate in any Extensions of Credit (including the initial Extension of Credit), convert or continue any Loan and/or the Issuing Lender to issue or extend any Letter of Credit are subject to the satisfaction of the following conditions precedent on the relevant borrowing, continuation, conversion, issuance or extension date:

(a) Representations and Warranties. On the date of the Borrowing or issuance of a Letter of Credit hereunder, the representations and warranties set forth in Section 4 (other than, in the case of extensions of credit (including issuances of Letters of Credit) made after the Closing Date, the representations and warranties made in (i) the last sentence of Section 4.03, (ii) Section 4.04 and (iii) Section 4.11) qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects on and as of such time with the same effect as though such representations and warranties had been made on and as of such time.

(b) No Default. On the date of the Borrowing or issuance of a Letter of Credit hereunder, no Event of Default, nor any event which upon notice or lapse of time or both would constitute an Event of Default, shall have occurred and be continuing at such time or after giving effect to any such extension of credit.

(c) Notices. The Administrative Agent shall have received a notice of borrowing or notice of conversion or continuation, or notice of issuance, as applicable, from the Borrower in accordance with Section 2.01(a), Section 2.07(a), or Section 3.02(a), as applicable.

Each Borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 5.02 hereof have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that from the date hereof and until payment in full of the principal of and interest on the Loans, the termination of the Commitments and while any Letter of Credit remains outstanding, unless the Borrower, acting through the Administrative Agent, shall obtain the written consent of the Required Lenders, the Borrower shall, and shall cause each of its Significant Subsidiaries to:

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6.01. Financial Statements; Certificates; Reports. Furnish to the Lenders:

(a) promptly upon becoming available, but in any event within 95 days after the end of each fiscal year of the Borrower, a copy of the audited consolidated balance sheet of the Borrower as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by PricewaterhouseCoopers LLP or other independent certified public accountants of nationally recognized standing;

(b) promptly upon becoming available, but in any event not later than 50 days after the end of each of the first three quarterly periods of each fiscal year of the Borrower, the unaudited consolidated balance sheet of the Borrower as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by the principal financial officer of the Borrower as being fairly stated in all material respects (subject to normal year-end audit adjustments);

(c) concurrently with the delivery of any financial statements pursuant to Section 6.01(a) and (b), a Compliance Certificate (i) stating that to the best of such officer’s knowledge, the Borrower during such period has observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition contained in this Agreement to be observed, performed or satisfied by it, and that such officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and (ii) containing information and calculations for determining compliance by the Borrower with the provisions of this Agreement referred to therein (including Section 7.01) as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may be;

(d) as soon as possible, and in any event within five Business Days after the principal financial officer, treasurer or assistant treasurer of the Borrower knows or has reason to know that any Reportable Event has occurred with respect to any Plan maintained in whole or in part for the employees of the Borrower or any Significant Subsidiary, a statement of the principal financial officer, treasurer or assistant treasurer of the Borrower, setting forth details as to such Reportable Event and the action which is proposed to be taken with respect thereto, together with a copy of the notice of such Reportable Event given to the PBGC;

(e) copies of each annual and other report with respect to any Plan requested by any Lender;

(f) promptly after receipt thereof, a copy of any notice which the Borrower or, to the knowledge of the Borrower, any Significant Subsidiary, may receive from the PBGC relating to the intention of the PBGC to terminate any Plan maintained in whole or in part for the benefit of employees of the Borrower or any Significant Subsidiary or to appoint a trustee to administer any such Plan;

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(g) promptly, from time to time, such other information regarding the operations, business, affairs and financial condition of the Borrower and any Significant Subsidiaries as any of the Lenders may reasonably request; and

(h) as soon as possible, and in any event within five Business Days after the principal financial officer, treasurer or assistant treasurer of the Borrower knows or has reason to know that any Event of Default, or any event which, upon notice or lapse of time or both, would constitute an Event of Default, has occurred, a statement of the principal financial officer, treasurer or assistant treasurer of the Borrower, setting forth details as to such Event of Default or event.

6.02. ERISA. Comply in all material respects with the applicable provisions of ERISA.

6.03. Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where (i) the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower or its Subsidiaries, as the case may be or (ii) the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.04. Maintenance of Existence; Compliance. Except as otherwise required by a Governmental Authority having jurisdiction over the Borrower or any of its Subsidiaries, (a) (i) preserve, renew and keep in full force and effect its corporate existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 7.02 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Notwithstanding anything to the contrary in this Section 6.04, the Borrower may consummate the Reorganization.

6.05. Maintenance of Ownership of Significant Subsidiaries. Take such action from time to time as shall be necessary to ensure that the Borrower at all times owns, directly or indirectly, all of the issued and outstanding shares of common stock of each Significant Subsidiary. Notwithstanding anything to the contrary in this Section 6.05, the Borrower may consummate the Reorganization.

6.06. Inspection of Property and Operations; Books and Records. (a) Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) upon the reasonable request of any Lender, permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records and to discuss the business, operations, properties and financial and other condition of the Borrower with officers and employees of the Borrower and with their independent certified public accountants.

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6.07. Environmental Laws. Comply in all material respects with, and ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws and with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, and obtain and comply in all material respects with and maintain, and ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.

6.08. Further Assurances. Until payment in full of the principal of and interest on the Loans, the termination of the Commitments and while any Letter of Credit remains outstanding, the Borrower shall execute any and all further documents, agreements and instruments, and take all such further actions, that may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to effectuate the transactions contemplated by the Loan Documents, all at the expense of the Borrower.

SECTION 7. NEGATIVE COVENANTS

The Borrower covenants and agrees that from the date hereof and until payment in full of the principal of and interest on the Loans, the termination of the Commitments and while any Letter of Credit remains outstanding, unless the Borrower, acting through the Administrative Agent, shall obtain the written consent of the Required Lenders, or except as otherwise required by a Governmental Authority having jurisdiction over the Borrower, the Borrower shall not, and shall not permit any of its Significant Subsidiaries to, directly or indirectly:

7.01. Financial Condition Covenant. Permit the ratio of Consolidated Indebtedness to Consolidated Total Capitalization of the Borrower to exceed 0.65 to 1.00 at any time.

7.02. Sale of Assets; Merger. In the case of the Borrower and any Significant Subsidiary (a) sell, lease, transfer or otherwise dispose of (whether in one transaction or a series of transactions) (i) all or materially all of its respective properties or assets, whether now owned or hereafter acquired, (ii) in the case of any Significant Subsidiary, its primary natural gas, transmission and/or energy services business, as applicable, (iii) any common stock of any Significant Subsidiary (other than to the Borrower or a Significant Subsidiary, or any directors or employees thereof) or (iv) any of its properties or assets, whether now owned or hereafter acquired, if the effect of such sale, lease, transfer or disposition would (A) after giving effect to such transaction, result in the Borrower’s senior unsecured long-term debt rating issued by S&P, Fitch or Moody’s to fall below BBB-, BBB- or Baa3, respectively, in the case of at least two of the aforementioned rating agencies (or, if senior unsecured debt ratings are unavailable for the Borrower, the senior secured long-term debt rating issued by S&P, Fitch or Moody’s to fall below BBB, BBB or Baa2, respectively, in the case of at least two of the aforementioned rating agencies) or (B) materially impair the ability of the Borrower to perform its obligations under this Agreement or under any other Loan Document, (b) consolidate with or merge with another corporation, except where the Borrower (or the Significant Subsidiary, as the case may be) is the surviving corporation and that, after giving effect to such consolidation or merger, no breach of Section 7.01, when calculated on a pro forma basis, would result therefrom, and no other Event of Default, nor any event which upon notice or lapse of time or both would constitute an Event of Default shall have occurred and be continuing or (c) permit any Capital Stock of any

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Significant Subsidiary to be issued to any Person other than the Borrower, any Significant Subsidiary or any directors or employees thereof. Notwithstanding anything to the contrary in this Section 7.02, the Borrower may consummate the Reorganization, provided that, the Borrower hereby agrees that after giving effect to such Reorganization, no breach of Section 7.01, when calculated on a pro forma basis, would result therefrom, and no other Event of Default, or any event which upon notice or lapse of time or both would constitute an Event of Default, shall have occurred and be continuing.

7.03. Limitation on Liens. In the case of the Borrower and its Significant Subsidiaries, create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except for (i) in the case of any Significant Subsidiary, Liens contemplated by or not prohibited by its applicable primary first mortgage bond indenture or equivalent instrument as in effect on the Closing Date and (ii) in the case of any Significant Subsidiary acquired after the Closing Date in connection with the Reorganization, any Liens contemplated by or not prohibited by the financing documents of such Significant Subsidiary existing at the time of the acquisition and provided that (x) such Liens are not incurred in contemplation of the Reorganization, (y) no such Lien is spread to cover any additional assets other than those assets that are encumbered prior to the Reorganization and (z) the aggregate principal amount of the obligations secured thereby shall not exceed $35,000,000 at any one time outstanding, and except for:

(a) Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower, in conformity with GAAP;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings;

(c) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

(d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower or any of its Significant Subsidiaries;

(f) Liens in existence on the date hereof, securing any Indebtedness outstanding on the date hereof, including any security interest granted to Citizens Leasing Corporation and/or General Electric Capital Corporation relating to CMP’s right, title and interest in any amounts payable by the U.S. Department of the Navy under Contract No. GS-OOP-96-BSD-0030, Agency ID#N62470-97-D-5018/JN12, dated May 17, 2000, as amended, provided that no such

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Lien is spread to cover any additional property after the Closing Date (other than pursuant to (i) the General Mortgage, dated September 1, 1918, between Rochester Gas and Electric Company and Deutsche Bank Trust Company Americas (formerly, Bankers Trust Company) and (ii) a New York State Electric & Gas Corporation senior secured indenture, agreement or similar instrument) and that the amount of Indebtedness secured thereby is not increased at any time beyond the amount permitted at such time by the applicable instrument described above;

(g) Liens securing Indebtedness, in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding, incurred to finance the acquisition of fixed or capital assets (including Capital Lease Obligations), provided that (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets and (ii) such Liens do not at any time encumber any property other than the property financed by such indebtedness;

(h) any interest or title of a lessor under any lease entered into in the ordinary course of business and covering only the assets so leased; and

(i) Liens created under any Loan Document.

7.04. Limitation on Transactions with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than the Borrower) unless such transaction is (a) subject to the jurisdiction of, and approved by, the Federal Energy Regulatory Commission under the Federal Power Act, as amended, or any state regulatory commission, (b) pursuant to the Reorganization, or (c) upon fair and reasonable terms no less favorable to the Borrower or such Significant Subsidiary, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate.

7.05. Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by the Borrower or any Significant Subsidiary of real or personal property that has been or is to be sold or transferred by the Borrower or such Significant Subsidiary to such Person or any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Borrower or such Significant Subsidiary, except to the extent such arrangement would not, collectively with all similar arrangements, reasonably be expected to materially impair the ability of the Borrower to perform its obligations under this Agreement.

7.06. Changes in Fiscal Year. Permit the fiscal year of the Borrower to end on a day other than December 31 or change the Borrower’s method of determining fiscal quarters.

7.07. Limitation on Restrictions on Distributions from Subsidiaries. Create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Significant Subsidiary to pay dividends or make any other distribution on its Capital Stock to the Borrower, other than any encumbrance or restriction pursuant to an agreement or instrument in effect at the Closing Date, or imposed by any Governmental Authority.

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7.08. Limitation on Changes in Lines of Business. Enter into any business, either directly or through any Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are engaged on the date of this Agreement or, from and after the date of the Reorganization, that IRHI and its Subsidiaries are engaged on the date of this Agreement or, in each case, that are reasonably related thereto.

SECTION 8. EVENTS OF DEFAULT

Each of the following events shall constitute an event of default hereunder (hereinafter called an Event of Default):

(a) failure by the Borrower to pay any amount of principal of any of the Loans or the Reimbursement Obligations, as and when due and payable; failure by the Borrower to pay any interest on any of the Loans or the Reimbursement Obligations, any Fee or any other amount owed under this Agreement, within five days after any such interest, Fee or other amount becomes due and payable;

(b) the Borrower shall fail to perform or observe any of its other covenants or agreements contained in this Agreement or any other Loan Document and such failure shall continue unremedied for 30 days (or in the case of failure to observe Section 7.01, for five Business Days) after the earlier of (i) a Financial Officer of the Borrower obtaining knowledge thereof and (ii) receipt by the Borrower of written notice thereof from the Administrative Agent or any Lender;

(c) any representation or warranty made by the Borrower herein or in any certificate or other instrument furnished in connection with this Agreement that is qualified as to materiality shall be incorrect or any such representation or warranty not so qualified shall be incorrect in any material respect when made or deemed made;

(d) default beyond any applicable grace period with respect to any Indebtedness of the Borrower and/or any Significant Subsidiary, the outstanding principal amount of which exceeds in the aggregate $50,000,000, or the performance of any obligation incurred in connection with any such Indebtedness, if the effect of such default is to permit the holder of such indebtedness to cause such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable, or if any such Indebtedness shall not be paid at maturity;

(e) the entry of a decree or order by a court having jurisdiction in the premises for relief in respect of the Borrower or any Significant Subsidiary under any Debtor Relief Law, or appointing a receiver, liquidator, assignee, trustee, custodian or sequestrator (or similar official) the Borrower or any Significant Subsidiary, or of any substantial part of their respective properties, or ordering the winding-up of or liquidation of the affairs of the Borrower or any Significant Subsidiary and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days;

(f) the filing by the Borrower or any Significant Subsidiary of a petition or answer or consent seeking relief under any Debtor Relief Law, or the consent by the Borrower or any Significant Subsidiary to the institution of proceedings thereunder or to the filing of any such

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petition or to the appointment or taking possession by a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of the Borrower or any Significant Subsidiary or of any substantial part of their respective properties, or the failure of the Borrower or any Significant Subsidiary generally to pay its debts as such debts become due, or the taking of corporate action by the Borrower or any Significant Subsidiary in furtherance of any such action;

(g) final judgment for the payment of money exceeding an aggregate of $25,000,000 shall be rendered or entered against the Borrower and/or any Significant Subsidiary and the same shall remain undischarged for a period of 60 days during which execution shall not be effectively stayed or contested in good faith;

(h) a Reportable Event shall have occurred with respect to any Plan that reasonably could be expected to result in a liability of the Borrower to the PBGC or to a Plan in an aggregate amount exceeding $25,000,000 and, within 30 days after the reporting of any such Reportable Event to the Administrative Agent, the Administrative Agent shall have notified the Borrower in writing that (i) the Required Lenders have made a determination that, on the basis of such Reportable Event, there are reasonable grounds (A) for the termination of such Plan by the PBGC, (B) for the appointment by the appropriate United States District Court of a trustee to administer such Plan or (C) for the imposition of a lien in favor of such Plan and (ii) as a result thereof an Event of Default exists hereunder; or a trustee shall be appointed by a United States District Court to administer any such Plan; or the PBGC shall institute proceedings to terminate any Plan; or

(i) permit any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (except for Iberdrola, S.A. or, from and after the date of the Reorganization, IB Finance (as defined in the definition of “Reorganization”)) to become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 20% of the outstanding common stock of the Borrower;

then, and in every such event and at any time thereafter during the continuance of such event, the Administrative Agent, shall, at the request of, or may, with the consent of, the Required Lenders, by written notice to the Borrower, take any or all of the following actions, at the same or different times: (A) terminate or reduce, as provided below, forthwith the Commitments of the Lenders hereunder with respect to the Borrower and the Swingline Commitment and (B) declare the Loans made to the Borrower and all other amounts accrued or owing by the Borrower under this Agreement (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be forthwith due and payable, whereupon such Loans and such other amounts shall become forthwith due and payable, both as to principal and interest with respect to such Loans, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding; provided, however, that upon the occurrence of the events in paragraph (e) or (f) of this Section 8 both of the preceding actions will automatically take place without any notice to the Borrower or any action by the Administrative Agent or any Lender. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred, the Borrower shall at such time deposit in a cash

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collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the other Loan Documents. Upon the cure by the Borrower of all Events of Default, or after all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrower hereunder and under the other Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto). Amounts deposited in the cash collateral account shall bear interest at a rate equal to the rate generally offered by the Administrative Agent for deposits equal to the amount deposited by the Borrower in the cash collateral account.

SECTION 9. DEFINITIONS

9.01. Defined Terms. As used in this Agreement, the terms listed in this Section 9.01 shall have the respective meanings set forth in this Section 9.01.

“ABR” shall mean, for any day (or, if such day is not a Business Day, as of the next preceding Business Day), a rate per annum equal to the highest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus 0.5% and (iii) the Eurodollar Rate applicable for an Interest Period of one month plus 1.0%. For purposes hereof: “Prime Rate” shall mean the rate of interest per annum publicly announced from time to time by the Reference Lender as its prime rate in effect at its principal office in New York (the Prime Rate not being intended to be the lowest rate of interest charged by the Reference Lender in connection with extensions of credit to debtors). Any change in the ABR due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“ABR Borrowing” shall mean a Borrowing comprised of ABR Loans.

“ABR Loan” shall mean a Loan bearing interest at the ABR.

“Accordion Effective Date” shall have the meaning assigned to it in Section 1.05(e).

“Accordion Lender” shall have the meaning assigned to it in Section 1.05(e).

“Act” shall have the meaning assigned to such term in Section 11.12.

“Additional Lender” shall have the meaning assigned to it in Section 1.05(c).

“Administrative Questionnaire” shall mean an administrative questionnaire in a form supplied by the Administrative Agent.

“Affiliate” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under

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common control with the person specified. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. “Controlled” shall have a meaning correlative thereto.

“Agreement” shall mean this Second Amended and Restated Revolving Credit Agreement, as amended, supplemented or otherwise modified from time to time.

“Applicable Margin” shall mean for each Type of Loan, the rate per annum set forth under the relevant column heading below which corresponds with the most current rating of the Borrower’s senior unsecured long-term debt issued by S&P, Fitch and Moody’s respectively.

Ratings	Applicable Margin for Eurodollar Loans	Applicable Margin for ABR Loans
³A/A/A2	0.900%		0	%
A-/A-/A3	1.000%		0	%
BBB+/BBB+/Baa1	1.075%		0.075	%
BBB/BBB/Baa2	1.275%		0.275	%
BBB-/BBB-/Baa3	1.475%		0.475	%
£BB+/BB+/Ba1	1.650%		0.650	%

Changes in the Applicable Margin shall become effective on the date on which S&P, Fitch and/or Moody’s changes the rating it has issued for the Borrower’s senior unsecured long-term debt. If all three agencies issue a rating and the three ratings fall in different levels, the Applicable Margin shall be based upon the level indicated by the middle rating. If all three agencies issue a rating and ratings from two agencies are at the same level (the “Majority Level”) and the rating from the third agency is at a different level, the Applicable Margin shall be based upon the Majority Level. If only two of such three agencies issue a rating, the Applicable Margin shall be based on the higher of such rating, provided that if the higher rating is two or more levels above the lower rating, the Applicable Margin shall be based upon the next level below the higher of the two. If only one of such three agencies issues a rating, such rating shall apply. If the Borrower does not have a senior unsecured long-term debt rating, the Applicable Margin shall be based on the level one level below the Borrower’s senior secured long-term debt rating.

“Application” shall mean an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to open a Letter of Credit.

“Approved Fund” means any Fund that is administered or manage by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Assignee” shall have the meaning assigned to it in Section 11.02(c).

“Assignment and Acceptance” shall mean an assignment and acceptance, substantially in the form of Exhibit A.

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“Assignor” shall have the meaning assigned to it in Section 11.02(c).

“Available Commitment” shall mean as to any Lender at any time, an amount equal to the excess, if any, of (i) such Lender’s Commitment then in effect over (ii) such Lender’s Extensions of Credit then outstanding.

“Board” shall mean the Board of Governors of the Federal Reserve System of the United States.

“Borrower” shall have the meaning assigned to it in the recitals hereof.

“Borrowing” shall mean a group of Loans of a single Type made by the Lenders (or a Swingline Loan made by the Swingline Lender) on a single date and as to which a single Interest Period is in effect.

“Borrowing Date” shall mean, with respect to any Loan, the date on which such Loan is disbursed.

“Business Day” shall mean any day (other than a day which is a Saturday, Sunday or legal holiday in the State of New York) on which Lenders are open for business in New York City; provided, however, that, when used in connection with a Eurodollar Loan or Swingline Loan, the term “Business Day” shall also exclude any day on which Lenders are not open for dealings in dollar deposits in the London interbank market.

“Capital Lease Obligations” shall mean as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Lenders or Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and each applicable Issuing Lender shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and each applicable Issuing Lender. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or

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application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Closing Date” shall mean the first date all the conditions precedent in Section 5.01 are satisfied or waived in accordance with Section 11.07.

“CMP” shall mean Central Maine Power Company.

“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time.

“Commitment” shall mean, as to any Lender, the obligation of such Lender, if any, to make Loans, to make Refunded Swingline Loans and participate in Letters of Credit and Swingline Loans in an aggregate principal amount not to exceed the amount set forth under the heading “Commitment” opposite such Lender’s name on Schedule 1.01 or in the Assignment and Acceptance pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof.

“Commitment Increase Notice” shall have the meaning assigned to it in Section 1.05(a).

“Commitment Percentage” shall mean, as to any Lender at any time, the percentage that such Lender’s Commitment then constitutes of the Total Commitments or, at any time after the Commitments shall have expired or terminated, the percentage that the aggregate principal amount of such Lender’s Loans then outstanding constitutes of the aggregate principal amount of the Loans then outstanding; provided that, in the event that the Loans are paid in full prior to the reduction to zero of the Total Extensions of Credit, the Commitment Percentages shall be determined in a manner designed to ensure that the other outstanding Extensions of Credit shall be held by the Lenders on a comparable basis.

“Commitment Period” shall mean the period from and including the Closing Date to but excluding the day that is five Business Days prior to the Termination Date.

“Compliance Certificate” shall mean a certificate duly executed by the principal financial officer, treasurer or assistant treasurer of the Borrower substantially in the form of Exhibit B.

“Consolidated Indebtedness” shall mean at any date, all Indebtedness of the Borrower and its Subsidiaries at such date, determined on a consolidated basis in accordance with GAAP, excluding debt and interest expense arising from the application of Financial Interpretation Number 45 or 46 of the Financial Accounting Standards Board.

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“Consolidated Net Income” shall mean at any date, the consolidated net income, if any, after taxes, of the Borrower and its Subsidiaries for such period determined in accordance with GAAP; provided, that Consolidated Net Income shall not be reduced or increased by the amount of any non-cash extraordinary charges or credits that would otherwise be deducted from or added to revenue in determining such Consolidated Net Income.

“Consolidated Net Worth” shall mean at any date, all amounts that would, in conformity with GAAP, be included on a consolidated balance sheet of the Borrower and its Subsidiaries under stockholders’ equity determined at such date; provided, however, that in any event (and notwithstanding a change in GAAP subsequent to the date of this Agreement) amounts attributable to the Borrower’s and its Subsidiaries’ preferred stock shall be included in Consolidated Net Worth; provided further that Consolidated Net Worth shall exclude the balance of “Accumulated Other Comprehensive Income/Loss” as it would appear on the consolidated balance sheet of the Borrower on such determination date of Consolidated Net Worth.

“Consolidated Total Capitalization” shall mean, with respect to the Borrower at any date, the sum of the Consolidated Net Worth of the Borrower and the Consolidated Indebtedness of the Borrower.

“Continuing Lenders” shall have the meaning assigned to it in Section 1.04(b).

“Contractual Obligation” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Current Termination Date” shall have the meaning assigned to it in Section 1.04(a).

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” shall mean any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Defaulting Lender” shall mean, subject to Section 11.16(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Lender, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due; (b) has notified the Borrower, the Administrative Agent, any Issuing Lender or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lenders’ obligation to fund a Loan hereunder and states that such position is based on such Lender’s

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determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied); (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower); or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such equity interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 11.16(b)) upon delivery of written notice of such determination to the Borrower, each Issuing Lender, the Swingline Lender and each Lender.

“dollars” or “$” shall mean lawful money of the United States of America.

“Eligible Assignee” shall mean any Person that meets the requirements to be an Assignee under Section 11.02 (subject to such consents, if any, as may be required thereunder).

“Environmental Laws” shall mean any and all foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment (including natural resources, wetlands, flora and fauna), as now or may at any time hereafter be in effect.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

“Eurocurrency Reserve Requirements” shall mean, for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

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“Eurodollar Base Rate” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Reuters Screen LIBOR01 Page (or any successor page) that represents an average British Bankers Association Interest Settlement Rate for Dollar deposits as of 11:00 a.m., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on such screen, the “Eurodollar Base Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 11:00 a.m., New York time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

“Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Loans.

“Eurodollar Loan” shall mean any Loan bearing interest at the Eurodollar Rate.

“Eurodollar Rate” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):

Eurodollar Base Rate

1.00 - Eurocurrency Reserve Requirements

“Event of Default” shall mean any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Exchange Act” shall have the meaning assigned to it in Section 8(i).

“Existing Agreement” shall have the meaning assigned to it in the recitals hereof.

“Extension Date” shall have the meaning assigned to it in Section 1.04(b).

“Extension Lender” shall have the meaning assigned to it in Section 1.04(c).

“Extensions of Credit” shall mean as to any Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding and (b) such Lender’s Commitment Percentage of the L/C Obligations and Swingline Loans then outstanding.

“Facility” shall mean the Commitments and the Loans made thereunder.

“Facility Fee” shall have the meaning assigned to such term in Section 2.03(a).

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“Facility Fee Rate” shall mean the rate per annum set forth below which corresponds with the most current rating of the Borrower’s senior unsecured long-term debt issued by S&P, Fitch and Moody’s, respectively.

Ratings	Facility Fee Rate
³A/A/A2		0.100	%
A-/A-/A3		0.125	%
BBB+/BBB+/Baa1		0.175	%
BBB/BBB/Baa2		0.225	%
BBB-/BBB-/Baa3		0.275	%
<BB+/BB+/Ba1		0.350	%

Changes in the Facility Fee Rate shall become effective on the date on which S&P, Fitch and/or Moody’s changes the rating it has issued for the Borrower’s senior unsecured long-term debt. If all three agencies issue a rating and the three ratings fall in different levels, the Facility Fee Rate shall be based upon the level indicated by the middle rating. If all three agencies issue a rating and ratings from two agencies are at the same level (the “Majority Level”) and the rating from the third agency is at a different level, the Facility Fee Rate shall be based upon the Majority Level. If only two of such three agencies issue a rating, the Facility Fee Rate shall be based on the higher of such rating; provided that if the higher rating is two or more levels above the lower rating, the Facility Fee Rate shall be based upon the next level below the higher of the two. If only one of such three agencies issues a rating, such rating shall apply. If the Borrower does not have a senior unsecured long-term debt rating, the Facility Fee Rate shall be based on the level one level below the Borrower’s senior secured long-term debt rating.

“Federal Funds Effective Rate” shall mean for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Reference Lender from three federal funds brokers of recognized standing selected by it.

“Fees” shall mean the Facility Fees, fees on all outstanding Letters of Credit and other fees separately agreed to in writing by the (x) Borrower and (y) Santander Investment Securities Inc., Sovereign Bank, N.A. or the Administrative Agent.

“Final Election Date” shall have the meaning assigned to it in Section 1.04(a).

“Financial Officer” shall mean the chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of the Borrower or any vice president of the Borrower whose primary responsibility is for financial matters.

“Fitch” shall mean Fitch Investor Services, Inc. (or any successor thereto).

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender other than L/C

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Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to any Swingline Lender, such Defaulting Lender’s Commitment Percentage of outstanding Swingline Loans made by such Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.

“Funding Office” shall mean the office of the Administrative Agent specified in Schedule 11.01 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

“GAAP” shall mean generally accepted accounting principles, applied on a consistent basis.

“Governmental Authority” shall mean any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

“Guarantee Obligation” shall mean, as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

“Hedge Agreements” shall mean all interest rate swaps, caps or collar agreements or similar arrangements dealing with interest rates or currency exchange rates or the exchange of nominal interest obligations, either generally or under specific contingencies.

“Indebtedness” shall mean of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the

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deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party under acceptances, letters of credit, surety bonds or similar arrangements, (g) the liquidation value of all preferred Capital Stock of such Person that is redeemable at the option of the holder thereof or that has any mandatory dividend, redemption or other required payment that could be required thereunder prior to the date that is one year after the Termination Date, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, and (j) for the purposes of Section 8(d) only, all obligations of such Person in respect of Hedge Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor. Indebtedness shall not include Indebtedness of the Borrower arising from the application of Financial Interpretation Number 45 of the Financial Accounting Standards Board, Financial Interpretation Number 46 of the Financial Accounting Standards Board or Issue No. 01-08 of the Emerging Issues Task Force (EITF).

“Interest Payment Date” shall mean (a) as to any ABR Loan, the last day of each March, June, September and December to occur while such Loan is outstanding and the Termination Date, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Eurodollar Loan or any Swingline Loan, the date of any repayment or prepayment made in respect thereof.

“Interest Period” shall mean (a) as to any Eurodollar Borrowing, the period commencing on the date of such Borrowing or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be, and ending 2 weeks or 1, 2, 3 or 6 months thereafter, as the Borrower may elect, and (b) as to any ABR Borrowing, the period commencing on the date of such Borrowing and ending on the earliest of (i) the next succeeding March 31, June 30, September 30 or December 31, (ii) the Termination Date and (iii) the date such Borrowing is repaid or prepaid in accordance with Sections 2.02 or 2.08; provided, however, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

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“IRHI” shall mean Iberdrola Renewables Holdings, Inc.

“Issuing Lender” shall mean any Lender that agrees to act in such capacity as issuer of any Letter of Credit and is acceptable to the Administrative Agent and to the Borrower in such capacity, and its successors in such capacity.

“L/C Obligations” shall mean at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.05.

“L/C Participants” shall mean the collective reference to all the Lenders other than the Issuing Lender.

“Lenders” shall have the meaning as defined in the preamble hereto; provided, that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include the Swingline Lender in such capacity.

“Lending Office” shall mean (a) initially, for each Lender, its branch office or offices located as of the date hereof at its address set forth in such Lender’s Administrative Questionnaire and (b) subsequently, such other branch (or affiliate) of each Lender as such Lender may designate by notice in writing to the Borrower and the Administrative Agent as the branch (or affiliate) from which ABR Loans or Eurodollar Loans will thereafter be made hereunder and for the account of which all payments by the Administrative Agent of principal of, and interest on, ABR Loans or Eurodollar Loans, as the case may be, will thereafter be made.

“Letters of Credit” shall have the meaning assigned in Section 3.01(a).

“LIBO Market Index Rate” shall mean, for any day, the rate of interest for one-month dollar deposits appearing on Reuters Screen LIBOR01 Page (or any successor page) determined as of 11:00 a.m., London time, for such day, or if such day is not a Business Day, then the immediately preceding Business Day (or if not so reported, then as determined by the Administrative Agent from another recognized source or interbank quotation).

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“Loan Documents” shall mean this Agreement and the Notes.

“Loans” shall mean any or all of the Revolving Loans and the Swingline Loans.

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“Material Adverse Effect” shall mean a material adverse effect on (a) the business, property, operations or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole or (b) the validity or enforceability of the Loan Documents or the rights and remedies of the Administrative Agent and the Lenders thereunder.

“Maximum Rate” shall have the meaning assigned to such term in Section 11.12.

“Minimum Collateral Amount” shall mean, with respect to the Borrower at any time, (i) with respect to Cash Collateral, an amount equal to the sum of (x) 105% of the Fronting Exposure of all Issuing Lenders with respect to Letters of Credit issued on account of the Borrower and outstanding at such time and (y) the Fronting Exposure of the Swingline Lender with respect to Swingline Loans made to the Borrower and outstanding at such time and (ii) otherwise, an amount determined by the Administrative Agent, the Issuing Lenders and the Swingline Lender in their sole discretion.

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.

“Non-Consenting Lender” shall mean any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all affected Lenders in accordance with the terms of Section 11.07 and (ii) has been approved by the Required Lenders.

“Non-Defaulting Lender” shall mean, at any time, each Lender that is not a Defaulting Lender at such time.

“Non-Extending Lender” shall have the meaning assigned to it in Section 1.04(a).

“Non-U.S. Lender” shall have the meaning assigned to it in Section 2.16(f).

“Notes” shall mean the collective reference to the Revolving Notes and the Swingline Note.

“NYSEG” shall mean New York State Electric & Gas Corporation.

“Other Taxes” shall have the meaning assigned to it in Section 2.16(b).

“Participant” shall have the meaning assigned to it in Section 11.02(b).

“Participant Register” shall have the meaning assigned to it in Section 11.02(b).

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Person” shall mean any natural person, corporation, business trust, joint venture, association, company, partnership or government, or any agency or political subdivision thereof.

“Plan” shall mean any pension plan subject to the provisions of Title IV of ERISA or Section 412 of the Code which is maintained for employees of the Borrower or any Significant Subsidiary.

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“Proposed Increase Amount” shall have the meaning assigned to it in Section 1.05(a).

“Reference Lender” shall mean Citibank, N.A.

“Refunded Swingline Loans” shall have the meaning assigned to it in Section 2.17(c).

“Register” shall have the meaning assigned to it in Section 11.02(d).

“Regulation U” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Reimbursement Obligation” shall mean the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 3.05 for amounts drawn under Letters of Credit.

“Related Party” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Reorganization” shall mean the transactions consisting of (i) the establishment of Scottish Power Renewable Holdings, Ltd. (currently intended to be renamed IB Finance UK, Ltd.) (“IB Finance”) as an intermediate holding company that is a wholly owned Subsidiary of Iberdrola S.A. and that directly owns 100% of the Capital Stock of the Borrower, (ii) the contribution of IRHI, along with the renewables and gas businesses held by it, to the Borrower as a wholly owned direct Subsidiary thereof, (iii) the establishment of a new intermediate holding company, incorporated and domiciled in the United States and intended to be named Iberdrola Networks, Inc., as a wholly owned direct Subsidiary of the Borrower, a “sister” Subsidiary to IRHI, and the direct owner of 100% of the Capital Stock of each entity that is a Subsidiary of the Borrower on the date hereof, and (iv) such actions as are reasonably related to the consummation of the foregoing.

“Reportable Event” shall mean any reportable event as defined in Section 4043(b) of ERISA or the regulations issued thereunder with respect to a Plan.

“Required Lenders” shall mean at any time, the holders of more than 50% of the Commitments then in effect, or, at any time the Commitments have terminated, the holders of more than 50% of the Total Extensions of Credit. The Commitment and the Total Extensions of Credit of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

“Requirement of Law” shall mean, as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Revolving Loan” shall have the meaning assigned to such term in Section 1.01(a).

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“Revolving Note” means, if requested by any Lender, the promissory note of the Borrower in favor of the Lender in substantially the form of Exhibit C-1, together with any amendments, modifications and supplements thereto, substitutions therefor and restatements thereof.

“RG&E” shall mean Rochester Gas and Electric Corporation.

“S&P” shall mean Standard & Poor’s Rating Services, a division of McGraw-Hill, Inc.

“Significant Subsidiary” shall mean, at any particular time, any Subsidiary of the Borrower that would be a “significant subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, including, without limitation, IRHI, Iberdrola Renewables, LLC, NYSEG, RG&E and CMP.

“Subsidiary” shall mean, with respect to any Person (herein referred to as the “parent”), any corporation, partnership, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, controlled or held, or (b) which is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. For purposes of this definition, the term “Controlled” shall mean the exercise of, or having the ability to exercise, a controlling influence over the management or policies of any such corporation, partnership, association or other business entity. Unless otherwise qualified, all references to a “Subsidiary” or “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

“Swingline Commitment” means $50,000,000 or, if less, the aggregate Revolving Credit Commitments at the time of determination, as such amount may be reduced at or prior to such time pursuant to the terms hereof.

“Swingline Lender” shall mean any Lender that agrees to act in such capacity as maker of Swingline Loans and is acceptable to the Administrative Agent and to the Borrower in such capacity, and its successors in such capacity.

“Swingline Loans” has the meaning given to such term in Section 2.17(a).

“Swingline Maturity Date” means the fifth Business Day prior to the Termination Date.

“Swingline Note” means, if requested by the Swingline Lender, the promissory note of the Borrower in favor of the Swingline Lender in substantially the form of Exhibit C-2, together with any amendments, modifications and supplements thereto, substitutions therefor and restatements thereof.

“Taxes” shall have the meaning assigned to it in Section 2.16(a).

“Termination Date” shall mean May 30, 2017, as such date may be extended from time to time with respect to some or all of the Lenders pursuant to Section 1.04.

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“Total Commitments” shall mean, as of a given date, the aggregate Commitments of the Lenders on such date.

“Total Extensions of Credit” shall mean, at any time, the aggregate amount of the Extensions of Credit of the Lenders outstanding at such time.

“Transferee” shall have the meaning assigned to it in Section 2.16(a).

“Type”, when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, “Rate” shall include the Eurodollar Rate, LIBO Market Index Rate and the ABR.

9.02. Terms Generally. The definitions in Section 9.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time, including the word “consolidated,” as such term is applicable to the Borrower.

SECTION 10. THE ADMINISTRATIVE AGENT

The Lenders and the Administrative Agent agree among themselves as follows:

10.01. Appointment and Authority of Administrative Agent. Each of the Lenders and the Issuing Lenders hereby irrevocably appoints Citibank, N.A. to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Except as set forth in Section 10.08, the provisions of this Section 10 are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lenders, and Borrower shall not have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

10.02. Reliance by Administrative Agent; Delegation by Administrative Agent.

(a) The Administrative Agent shall, in the absence of knowledge to the contrary, be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, communication, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it

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in good faith to be genuine and to have been signed, sent or otherwise authenticated by the proper Person(s). The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

(b) The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 10 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Facility as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents

Neither the Administrative Agent nor any of its directors, officers, employees or agents shall be liable as such for any action taken or omitted by any of them except for its or his own gross negligence or willful misconduct, or be responsible for any recitals, statements, representations or warranties herein or the contents of any document delivered in connection herewith, or be liable for failing to ascertain or to make any inquiry concerning the performance or observance by the Borrower of any of the terms, conditions, covenants or agreements contained in this Agreement or any other Loan Documents. The Administrative Agent shall not be responsible to the Lenders or the holders of any Notes for the due execution, genuineness, validity, enforceability or effectiveness of this Agreement or such Notes. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof until it shall have received from the payee of such Note notice, given as provided herein, of the transfer thereof in compliance with Section 11.02. The Administrative Agent shall in all cases be fully protected in acting, or refraining from acting, in accordance with written instructions signed by the Required Lenders and, except as otherwise specifically provided herein, such instructions and any action or inaction pursuant thereto shall be binding on all the Lenders and each subsequent holder of any Note. Neither the Administrative Agent nor any of its directors, officers, employees or agents shall have any responsibility to the Borrower on account of the failure of or delay in performance or breach by any Lender of any of its obligations hereunder or to any Lender on account of the failure of or delay in performance or breach by any other Lender or the Borrower of any of their respective obligations hereunder or under the other Loan Documents.

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The Lenders hereby acknowledge that the Administrative Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement unless it shall be requested in writing to do so by the Required Lenders.

10.03. No Amendment to Administrative Agent’s Duties Without Consent.

(a) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(b) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 8 or 11.07) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Borrower, a Lender or an Issuing Lender.

(c) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability,

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effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 5 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

(d) The Administrative Agent shall not be bound by any waiver, amendment, supplement or modification of this Agreement that affects its duties as Administrative Agent under this Agreement unless it shall have given its prior written consent as Administrative Agent thereto.

10.04. Responsibilities of Administrative Agent. The Administrative Agent is hereby expressly authorized by the Lenders, without hereby limiting any implied authority, (i) to receive on behalf of the Lenders all payments of principal of and interest on the Loans and all other amounts due to the Lenders hereunder, and promptly to distribute to each Lender its proper share of each payment so received in like funds, and (ii) to promptly distribute to each Lender copies of all notices, financial statements and other materials delivered by the Borrower pursuant to this Agreement as received by the Administrative Agent. In the event that (x) the Borrower fails to pay when due the principal of or interest on any Loan or any Fees or (y) the Administrative Agent receives notice from the Borrower, any Lender or any Issuing Lender of the occurrence of an Event of Default or other condition or event, in each case the Administrative Agent shall promptly give written notice thereof to the Lenders and shall take such action with respect to such Event of Default or other condition or event as it shall be directed in writing to take by the Required Lenders; provided, however, that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may take such action or refrain from taking such action with respect to such Event of Default or other condition or event as it shall deem advisable in the best interests of the Lenders. The Administrative Agent shall promptly deliver any bill required to be delivered by the Administrative Agent to the Borrower.

10.05. Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lenders and the Administrative Agent under Sections 2.03, 3.03 and 11.03) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.03 and 11.03.

10.06. Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

10.07. Credit Decision. Each Lender and Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking any action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. Each of the Lenders agrees that the Administrative Agent shall not have any responsibility for the accuracy or adequacy of any information contained in any document, or any oral information, supplied to such Lender by the Borrower directly or through the Administrative Agent.

10.08. Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lender and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in New York, New York, having a combined capital and surplus of at least $500,000,000, or an Affiliate of any such bank with an office in New York, New York. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

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(b) With effect from the Resignation Effective Date (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) except for any indemnity payments owed to the retiring Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and Issuing Lender directly, until such time, if any, as the Required Lenders or the retiring Administrative Agent appoint a successor Administrative Agent as provided for in Section 10.08(a). Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Administrative Agent (other than any rights to indemnity payments owed to the retiring Administrative Agent), and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable by the Borrower to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Section 10 and Section 11.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

10.09. Issuing Lender and Swingline Lender. The provisions of this Section 10 (other than Section 10.05) shall apply to the Issuing Lender and the Swingline Lender mutatis mutandis to the same extent as such provisions apply to the Administrative Agent.

10.10. No Other Duties. Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers or Syndication Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Lender hereunder.

SECTION 11. MISCELLANEOUS

11.01 Notices.

(a) Any notice shall be conclusively deemed to have been received by a party hereto and be effective on the day on which delivered to such party at the address set forth below (or at such other address as such party shall specify to the other parties in writing):

(i) if to the Administrative Agent, any Issuing Lender, or the Swingline Lender, at the address thereof set forth in Schedule 11.01;

(ii) if to any of the Lenders, at the address specified in its Administrative Questionnaire, or if a Lender is a Lender by virtue of an assignment, to it at its address (or facsimile number) set forth in the Assignment and Acceptance pursuant to which such Lender shall have become a party hereto; and

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(iii) if to the Borrower, to it at Iberdrola USA Management Corporation, 52 Farm View Drive, New Gloucester, ME 04260, Attention: Director - Corporate Finance (Facsimile No. 207-688-4354).

All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile or other telegraphic communications equipment of the sender, or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 11.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 11.01.

(b) Notices and other communications to the Lenders and the Issuing Lenders hereunder may be delivered or furnished by electronic communications (including email and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or Issuing Lender pursuant to Section 2 if such Lender or Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under Section 2 by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgement) and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its email address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c) Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

(d) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Lenders and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”). The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its

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Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material that the Borrower provides to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent any Lender or any Issuing Lender by means of electronic communications pursuant to this Section 11.01, including through the Platform.

11.02. Successors and Assigns; Participations, Assignments and Designations.

(a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders, the Administrative Agent, all future holders of the Loans and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 11.02(c), (ii) by way of participation in accordance with the provisions of Section 11.02(b) or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.02(f) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 11.02(b) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Any Lender may, without the consent of or notice to the Borrower or the Administrative Agent, in accordance with applicable law, at any time sell participations to any Person (other than a natural person or the Borrower or any Affiliate or Subsidiary of the Borrower) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement to the other parties to this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible for the performance thereof, (iii) such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Loan Documents and (iv) the Borrower, the Administrative Agent, the Issuing Lenders and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents. In no event shall any Participant under any such participation have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by the Borrower therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Loans or any fees payable hereunder, or postpone the date of the final maturity of the Loans, in each case to the extent subject to such participation. The Borrower agrees that if amounts outstanding under this Agreement and the Loans are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each

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Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participation in amounts owing under this Agreement to the same extent as if the amount of its participation were owing directly to it as a Lender under this Agreement; provided that, in purchasing such participation, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 2.14 as fully as if it were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits of Sections 2.09, 2.10, 2.12 and 2.16 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it was a Lender; provided that, in the case of Section 2.16, such Participant shall have complied with the requirements of said Section; provided further that no Participant shall be entitled to receive any greater amount pursuant to Section 2.09, 2.10, 2.12 or 2.16 than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(ii) Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that requires the consent of all Lenders pursuant to Section 11.07 that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.09 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.02(c); provided that such Participant agrees to be subject to the provisions of Section 2.11 as if it were an Assignee under Section 11.02(c). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.06 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.14 as though it were a Lender.

(c) (i) Any Lender (an “Assignor”) may, in accordance with applicable law, at any time and from time to time assign to any Lender, any Affiliate of any Lender or any

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Approved Fund or, with the consent of the Borrower, the Administrative Agent, the Swingline Lender and the Issuing Lenders (which, in the case of the Borrower or the Administrative Agent, shall not be unreasonably withheld or delayed) (provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof), to any other Person (other than the Borrower, any Subsidiary or Affiliate of the Borrower, any Defaulting Lender or any other Person who, upon becoming a Lender hereunder, would constitute any of the foregoing, or any natural person) (an “Assignee”) all or any part of its rights and obligations under this Agreement pursuant to an Assignment and Acceptance, executed by such Assignee, such Assignor and any other Person whose consent is required pursuant to this Section 11.02(c), and delivered to the Administrative Agent for its acceptance and recording in the Register; provided that no such assignment to an Assignee (other than any Lender, any affiliate of any Lender or any Approved Fund) shall be in an aggregate principal amount of less than $5,000,000 (other than in the case of an assignment of all of a Lender’s interests under this Agreement), unless otherwise agreed by the Borrower and the Administrative Agent. For purposes of the proviso contained in the preceding sentence, the amount described therein shall be aggregated in respect of each Lender and its related Approved Funds, if any. Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment and/or Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of an Assignor’s rights and obligations under this Agreement, such Assignor shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.09, 2.12, 2.16 and 11.03. Notwithstanding any provision of this Section 11.02, the consent of the Borrower and the Administrative Agent shall not be required for any assignment that occurs when an Event of Default shall have occurred and be continuing with respect to the Borrower.

(ii) In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Revolving Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable Assignee and Assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each Issuing Lender, each Swingline Lender and each other Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Revolving Loans and participations in Letters of Credit and Swingline Loans in accordance with its Commitment Percentage. Notwithstanding the foregoing, in the event that any

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assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this Section 11.02(c)(ii), then the Assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

(d) The Administrative Agent shall, acting solely for this purpose as an agent of the Borrower, maintain at its address referred to in Schedule 11.01 a copy of each Assignment and Acceptance delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitment of, and the principal amount of the Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. Any assignment of any Loan, whether or not evidenced by a Note, shall be effective only upon appropriate entries with respect thereto being made in the Register (and each Note shall expressly so provide). Any assignment or transfer of all or part of a Loan evidenced by a Note shall be registered on the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon one or more new Notes shall be issued to the designated Assignee.

(e) Upon its receipt of an Assignment and Acceptance executed by an Assignor, an Assignee and any other Person whose consent is required by Section 11.02(c), together with payment to the Administrative Agent of a registration and processing fee of $3,500, the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) record the information contained therein in the Register on the effective date determined pursuant thereto.

(f) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this Section 11.02 concerning assignments of Loans and Notes relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with applicable law. The parties to this Agreement further acknowledge that any such pledge or assignment shall not release such Lender from any of its obligations hereunder or substitute any pledge or assignee for such Lender as a party hereto.

(g) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in Section 11.02(f).

11.03. Expenses; Indemnity.

(a) The Borrower agrees to pay all reasonable out-of-pocket expenses incurred (i) by the Administrative Agent in connection with the preparation of this Agreement or in connection with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby contemplated shall be consummated), including the reasonable fees and disbursements of counsel to the Administrative Agent, (ii) by any Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (ii) by the Administrative Agent or any Lender in

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connection with the enforcement or protection of their rights in connection with this Agreement or in connection with the Loans made or any Notes issued hereunder, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and the Lenders.

(b) The Borrower agrees to indemnify the Administrative Agent, each Lender, each Issuing Lender and each Related Party of any of the foregoing Persons (each such person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, charges and disbursements, incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower) other than such Indemnitee and its Related Parties arising out of, in any connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds of therefrom (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand to not strictly comply with the terms of such Letter of Credit), (iii) any violation of, or noncompliance with, any Environmental Law, any actual or alleged presence or release of hazardous materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any environmental liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c) The provisions of this Section 11.03 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any of the other Loan Documents, or any investigation made by or on behalf of the Administrative Agent or any Lender. All amounts due under this Section 11.03 shall be payable on written demand therefor.

(d) To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Section 11.03(a) or 11.03(b) to be paid by it to the Administrative Agent (or any sub-agent thereof), any Issuing Lender, any Swingline Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such Issuing Lender, such Swingline Lender or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the aggregate Extensions of Credit at such time) of such unpaid amount (including any such unpaid amount in

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respect of a claim asserted by such Lender); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), such Issuing Lender or such Swingline Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), such Issuing Lender or any such Swingline Lender in connection with such capacity.

(e) To the fullest extent permitted by applicable law, the Borrower shall not assert, and each of them hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit, or the use of the proceeds thereof. No Indemnitee referred to in Section 11.03(b) shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

11.04. Effectiveness. This Agreement shall become effective on the Closing Date, and thereafter shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent, the Swingline Lenders and each Lender.

11.05. Survival of Agreement; Benefit to Successors and Assigns. All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by the Lenders of the Loans herein contemplated and the execution and delivery to the Lenders of any Notes evidencing such Loans and shall continue in full force and effect so long as any portion of any of such Notes is outstanding and unpaid and the Commitments have not been terminated. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party and all covenants, promises and agreements by or on behalf of the Borrower which are contained in this Agreement shall bind and inure to the benefit of the successors and assigns of the Lenders; provided, however, that no interest, rights or duties herein may be assigned by the Borrower without the prior written approval of all the Lenders.

11.06. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Lender, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender, such Issuing Lender or any such Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or such Issuing Lender or their respective Affiliates, irrespective of whether or not such Lender, such Issuing Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or such Issuing Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so

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set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 11.16 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercise such right of setoff. The rights of each Lender, each Issuing Lender and their respective Affiliates under this Section 11.06 are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Lender or their respective Affiliates may have. Each Lender and Issuing Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

11.07. Waivers; Amendment.

(a) No failure or delay of the Administrative Agent or any Lender in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies which they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 11.07(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

(b) Except for increasing the Commitments in accordance with the procedures specified in Section 1.05 and replacing any Lender in accordance with the procedures specified in Section 2.11, neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders; provided, however, that no such agreement shall (i) decrease the principal amount of, or extend the maturity of, or any scheduled principal payment date or date for the payment of any interest on, any Loan or Reimbursement Obligation, or waive or excuse any such payment or any part thereof, or decrease rate of interest on any Loan or Reimbursement Obligation, without the prior written consent of each Lender directly affected thereby, (ii) change or extend the Commitment or decrease the Facility Fee of any Lender without the prior written consent of such Lender, or (iii) amend or modify the provisions of Section 2.13 or this Section 11.07 or the definition of “Required Lenders,” without the prior written consent of each Lender; provided further that no such agreement shall (x) amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Swingline Lender or any Issuing Lender hereunder, without the prior written consent of such Person, or (y) amend, modify or waive any provision of Section 3, without the written consent of each Issuing Lender. Any waiver, amendment or modification authorized by this Section 11.07 shall apply equally to each of the Lenders and shall be binding upon the Borrower, the Lenders, the Swingline Lenders, the Administrative Agent and all future holders of the Loans.

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(c) Any request by the Borrower for a modification, amendment or waiver of any provision of this Agreement or any other Loan Document shall be made in writing to the Administrative Agent and the Administrative Agent shall promptly communicate such request to the Lenders. Any such waiver, consent or approval granted by the Required Lenders (and such other Persons as may be required under this Section 11.07) shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in the same, similar or other circumstances.

(d) No waiver by the Administrative Agent or any Lender or Issuing Lender of any breach or default of or by the Borrower under this Agreement shall be deemed a waiver of any other previous breach or default or any thereafter occurring.

11.08. Severability. In the event any one or more provisions contained in this Agreement or any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

11.09. Headings. The Section headings in this Agreement are for convenience only and shall not affect the construction hereof.

11.10. Governing Law; Jurisdiction.

(a) This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be construed in accordance with and governed by the laws of the State of New York.

(b) The Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Lender, any Issuing Lender or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Lender or any Issuing Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

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(c) The Borrower irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in Section 11.10(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 11.01. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law

11.11. Counterparts. This Agreement may be executed in two or more counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute but one agreement. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (e.g. “.pdf” or “.tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

11.12. Interest Rate Limitation. Notwithstanding anything herein or in any other Loan Document to the contrary, if at any time the applicable interest rate, together with all Fees and charges which are treated as interest under applicable law (collectively the “Charges”), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by any Lender, shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by such Lender in accordance with applicable law, the rate of interest payable under the Loan held by such Lender, together with all Charges payable to such Lender, shall be limited to the Maximum Rate.

11.13. Entire Agreement. This Agreement, the other Loan Documents, any separate letter agreements with respect to fees payable to the Administrative Agent and any Assignment and Acceptance (executed pursuant to Section 11.02 of this Agreement) constitute the entire contract between the Borrower, the Administrative Agent, the Issuing Lenders and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any Issuing Lender or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

11.14. Waiver of Jury Trial. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory). Each party hereto (i) certifies that no representative, agent or attorney of any other Person has represented, expressly or otherwise, that such other Person would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Agreement and the other Loan Documents by, among other things, the mutual waivers and certifications in this Section 11.14.

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11.15. USA PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001), as amended from time to time (the “PATRIOT Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Act.

11.16. Defaulting Lenders.

(a) Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i) Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.

(ii) Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.06 shall be applied at such time or times as may be determined by the Administrative Agent as follows:

(A) first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder;

(B) second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Lender or the Swingline Lender hereunder;

(C) third, to Cash Collateralize the Issuing Lenders’ or Swingline Lender’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 11.17;

(D) fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;

(E) fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Lenders’

67

and Swingline Lender’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued and Swingline Loans made under this Agreement, in accordance with Section 11.17;

(F) sixth, to the payment of any amounts owing to the Lenders, the Issuing Lenders or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lenders or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement;

(G) seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and

(H) eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction;

provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to Section 11.16(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 11.16(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) (A) Each Defaulting Lender shall be entitled to receive a Facility Fee for any period during which that Lender is a Defaulting Lender only to extent allocable to the sum of (1) the outstanding principal amount of the Revolving Loans funded by it and (2) its Commitment Percentage of the stated amount of Letters of Credit and Swingline Loans for which it has provided Cash Collateral pursuant to Section 11.17.

(B) Each Defaulting Lender shall be entitled to receive fees on outstanding Letters of Credit for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 11.17.

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(C) With respect to any Facility Fee or fee on an outstanding Letter of Credit not required to be paid to any Defaulting Lender pursuant to this Section 11.16(a)(iii), the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to Section 11.16(a)(iv), (y) pay to each Issuing Lender and the Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Lender’s or the Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv) All or any part of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Commitment Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 5.02 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time) and (y) such reallocation does not cause the Extensions of Credit of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v) If the reallocation described in Section 11.16(a)(iv) cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lenders’ Fronting Exposure applicable to the Borrower, and (y) second, Cash Collateralize the Issuing Lenders’ Fronting Exposure applicable to the Borrower in accordance with the procedures set forth in Section 11.17.

(b) If the Borrower, the Administrative Agent, the Swingline Lender and each Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to Section 11.16(a)(iv), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; provided further that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

69

(c) So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) no Issuing Lender shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

11.17. Cash Collateral.

(a) At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent, the Swingline Lender or any Issuing Lender (with a copy to the Administrative Agent) the Borrower shall Cash Collateralize the Swingline Lender’s and Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 11.16(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount applicable to the Borrower.

(b) The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Lenders and the Swingline Lender, and agrees to maintain, a first priority security interest in all Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of L/C Obligations and Swingline Loans, to be applied pursuant to Section 11.17(c). If at any time the Administrative Agent determines that Cash Collateral applicable to the Borrower is subject to any right or claim of any Person other than the Administrative Agent, the Issuing Lenders and the Swingline Lender as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

(c) Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 11.17 or Section 11.16 (i) in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided or (ii) in respect of Swingline Loans shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Swingline Loans (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which Cash Collateral was so provided, in each case prior to any other application of such property as may otherwise be provided for herein.

(d) Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Lender’s or the Swingline Lender’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 11.17 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the

70

applicable Lender) or (ii) the determination by the Administrative Agent and each Issuing Lender or the Swingline Lender, as the case may be, that there exists excess Cash Collateral; provided that, subject to Section 11.16, the Person providing Cash Collateral and each Issuing Lender or the Swingline Lender, as the case may be, may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations; provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, all as of the day and year first above written.

IBERDROLA USA, INC.
By:	/s/ José María Torres
Name:	José María Torres
Title:	Chief Financial Officer
By:	/s/ Robert D. Kump
Name:	Robert D. Kump
Title:	Chief Executive Officer

CITIBANK, N.A., as Administrative Agent and as a Lender
By:	/s/ Maureen Maroney
Name:	Maureen Maroney
Title:	Authorized Signatory
SOVERIGN BANK, N.A., as a Lender
By:	/s/ William Maag
Name:	William Maag
Title:	Senior Vice President
Bank of America, N.A., as a Lender
By:	/s/ Mike Mason
Name:	Mike Mason
Title:	Director
JPMORGAN CHASE BANK, N.A., as a Lender
By:	/s/ James W. Peterson
Name:	James W. Peterson
Title:	Executive Director
BANCO BILBAO VIZCAYA ARGENTARIA, S.A. New York Branch, as a Lender
By:	/s/ Paul A. Rodríguez
Name:	Paul A. Rodríguez
Title:	Vice President
By:	/s/ Guilherme Gobbo
Name:	Guilherme Gobbo
Title:	Vice President

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a Lender
By:	/s/ Robert J. MacFarlane
Name:	Robert J. MacFarlane
Title:	Vice President
TD Bank, N.A., as a Lender
By:	/s/ Todd Antico
Name:	Todd Antico
Title:	Senior Vice President
HSBC Bank USA, N.A., as a Lender
By:	/s/ Christopher M. Samms
Name:	Christopher M. Samms
Title:	Senior Vice President ID # 9426
LLOYDS TSB BANK PLC, as a Lender
By:	/s/ Dennis McClellan
Name:	Dennis McClellan
Title:	Assistant Vice President – M040
By:	/s/ Julia R. Franklin
Name:	Julia R. Franklin
Title:	Vice President – F014

Schedule 1.01

Commitments

Lender	Commitment
Citibank, N.A.	$	42,500,000.00
Sovereign Bank, N.A.	$	42,500,000.00
Bank of America, N.A.	$	33,000,000.00
JPMorgan Chase Bank, N.A.	$	33,000,000.00
Banco Bilbao Vizcaya Argentaria, S.A., New York Branch	$	33,000,000.00
The Bank of Tokyo-Mitsubishi UFJ, Ltd.	$	33,000,000.00
TD Bank, N.A.	$	33,000,000.00
HSBC Bank USA N.A.	$	25,000,000.00
Lloyds TSB Bank plc	$	25,000,000.00
Total Commitment	$	300,000,000.00

Schedule 11.01

Notice Addresses

Administrative Agent Loan Administration Citibank, N.A. 1615 Brett Road, Building III New Castle, DE, 19720, United States Phone: (302) 894-6052 Fax: (212) 894-0961 Email: global.loans.support@citi.com

A-1

EXHIBIT A

FORM OF

ASSIGNMENT AND ACCEPTANCE

            , 20    

Reference is made to the Revolving Credit Agreement, dated as May [    ], 2012 (the “Credit Agreement”), among IBERDROLA USA, INC., a New York corporation (the “Borrower”), the Lenders listed in Schedule 1.01 thereof (the “Lenders”) and CITIBANK, N.A., as administrative agent.

Terms defined in the Credit Agreement are used herein with the same meanings.

[●] (the “Assignor”) and [●] (the “Assignee”) agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, a [●]% interest in and to all the Assignor’s rights and obligations under the Credit Agreement as of the Effective Date (as defined below) (including, without limitation, such percentage interest in the Commitment of the Assignor on the Effective Date and such percentage interest in each Loan owing to the Assignor outstanding on the Effective Date together with such percentage interest in all unpaid interest and Facility Fees accrued to the Effective Date).

2. The Assignor (i) represents that as of the date hereof, its Commitment (without giving effect to assignments thereof which have not yet become effective) is $[●] and the outstanding principal balance of its Loans (unreduced by any assignments thereof which have not yet become effective) is $[●]; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto, other than that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Credit Agreement, any Note or any other instrument or document furnished pursuant hereto or thereto.

3. The Assignee (i) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (ii) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.01 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (iii) agrees that it will, independently and without reliance upon the Assignor or any other Person which has become a Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; and (iv) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with their terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

A-2

4. The effective date of this Assignment and Acceptance shall be [●] (the “Effective Date”).

5. Upon acceptance and recording pursuant to paragraph (e) of Section 11.02 of the Credit Agreement, from and after the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the Notes or any other instrument or document furnished pursuant hereto or thereto and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.

6. This Assignment and Acceptance shall be governed by and construed in accordance with the laws of State of New York.

[NAME OF ASSIGNOR]

By:

Name:

Title:

[Address of Assignor]

[NAME OF ASSIGNEE]

By:

Name:

Title:

[Address of Assignee]

[Acknowledged and consented to this      day of                 ,         .

[NAME OF CONSENTING PARTY]

By:

Name:

Title: ] ¹

¹  Insert if required pursuant to Section 11.02(c) of the Credit Agreement.

B-1

EXHIBIT B

FORM OF

COMPLIANCE CERTIFICATE

This Compliance Certificate is delivered pursuant to Section 6.01(c) of the Revolving Credit Agreement, dated as of May [ ], 2012 (the “Credit Agreement”), among IBERDROLA USA, INC., a New York corporation (the “Borrower”), the Lenders listed in Schedule 1.01 thereof, and CITIBANK, N.A., as administrative agent.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

1. I am the duly elected, qualified and acting [principal financial officer][treasurer][assistant treasurer] of the Borrower.

2. I have reviewed and am familiar with the contents of this Certificate.

3. I have reviewed the terms of the Credit Agreement and the other Loan Documents and have made or caused to be made under my supervision, a review in reasonable detail of the transactions and condition of the Borrower during the accounting period covered by the financial statements attached hereto as Attachment 1 (the “Financial Statements”). Such review did not disclose the existence during or at the end of the accounting period covered by the Financial Statements, and I have no knowledge of the existence, as of the date of this Certificate, of any condition or event which constitutes a Default or Event of Default[, except as set forth below].

4. To the best of my knowledge, the Borrower during such accounting period has observed or performed in all material respects all of its covenants and other agreements, and has satisfied every condition contained in the Credit Agreement and the other Loan Documents to which it is party to be observed, performed or satisfied by it.

5. Attached hereto as Attachment 2 are the computations showing compliance with the covenant set forth in Section 7.01 of the Credit Agreement as of the last day of the fiscal [quarter] [year].

IN WITNESS WHEREOF, I have executed this Certificate this             day of             , 20    .

Name:

Title:

Attachment 1

to Compliance Certificate

[Attach Financial Statements]

Attachment 2

to Compliance Certificate

The information described herein is as of             ,         , and pertains to the period from             ,          to             ,         .

[Set forth Covenant Calculations]

C-1-1

EXHIBIT C-1

FORM OF REVOLVING NOTE

$            

[●]

FOR VALUE RECEIVED, the undersigned, IBERDROLA USA, INC., hereby promises to pay to the order of [●] (the “Lender”) on the Termination Date, as defined in the Credit Agreement referred to below, at the office of Citibank, N.A., located at [●], in lawful money of the United States and in immediately available funds, the principal amount of the lesser of (a) [●] DOLLARS ($[●]) and (b) the aggregate unpaid principal amount of all Revolving Loans of the Lender outstanding under the Credit Agreement.

The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time from the date hereof at the rates, and on the dates, specified in the Credit Agreement.

The holder of this Note is authorized to record the Borrowing Date, Type and amount of each Revolving Loan of the Lender outstanding under the Credit Agreement, the date and amount of each payment or prepayment of principal hereof, and the date of each interest rate conversion or continuation pursuant to Section 2.07 of the Credit Agreement and the principal amount subject thereto, on the schedules annexed hereto and made a part hereof and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided that the failure of the Lender to make any such recordation (or any error in such recordation) shall not affect the obligations of the Borrower hereunder or under the Credit Agreement.

This Note is one of the Notes referred to in the Revolving Credit Agreement, dated as of May [    ], 2012 (the “Credit Agreement”), among, inter alia, IBERDROLA USA, INC., a New York corporation (the “Borrower”), the Lenders listed in Schedule 1.01 thereof (the “Lenders”) and CITIBANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and is subject to the provisions thereof and is subject to optional and mandatory prepayment in whole or in part as provided therein. Terms used herein which are defined in the Credit Agreement shall have such defined meanings unless otherwise defined herein or unless the context otherwise requires.

Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided therein.

All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind.

C-1-2

THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT AGREEMENT.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

IBERDROLA USA, INC.

By:

Name:

Title:

By:

Name:

Title:

Schedule A to

Revolving Note

LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS

Date Amount of
ABR Loans Amount
Converted to
ABR Loans Amount of
Principal of ABR
Loans Repaid Amount of ABR Loans
Converted to Eurodollar
Loans Unpaid Principal
Balance of ABR
Loans Notation
Made By

Schedule B to

Revolving Note

EURODOLLAR LOANS

AND REPAYMENTS OF EURODOLLAR LOANS

Date Amount of
Eurodollar Loans Amount
Converted to
Eurodollar Loans Interest Period and
Eurodollar Rate
with
Respect Thereto Amount of
Principal of
Eurodollar Loans
Repaid Amount of
Eurodollar Loans
Converted to ABR
Loans Unpaid Principal
Balance of
Eurodollar Loans Notation
Made By

C-2-1

EXHIBIT C-2

FORM OF SWINGLINE NOTE

$            

[●]

FOR VALUE RECEIVED, the undersigned, IBERDROLA USA, INC., hereby promises to pay to the order of [●] (the “Swingline Lender”) on the earlier of (i) seven days after the Borrowing Date, as defined in the Credit Agreement referred to below or (ii) the fifth Business Day prior to the Termination Date, as defined in the Credit Agreement referred to below, at the office of Citibank, N.A., located at [●], in lawful money of the United States and in immediately available funds, the principal amount of the lesser of (a) [●] DOLLARS ($[●]) and (b) the aggregate unpaid principal amount of all Swingline Loans of the Swingline Lender outstanding under the Credit Agreement.

The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time from the date hereof at the rates, and on the dates, specified in the Credit Agreement.

The holder of this Note is authorized to record the Borrowing Date, Type and amount of each Swingline Loan of the Swingline Lender outstanding under the Credit Agreement, the date and amount of each payment or prepayment of principal hereof, on the schedule annexed hereto and made a part hereof and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided that the failure of the Swingline Lender to make any such recordation (or any error in such recordation) shall not affect the obligations of the Borrower hereunder or under the Credit Agreement.

This Note is one of the Notes referred to in the Revolving Credit Agreement, dated as of May [    ], 2012 (the “Credit Agreement”), among, inter alia, IBERDROLA USA, INC., a New York corporation (the “Borrower”), the Lenders listed in Schedule 1.01 thereof, and CITIBANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and is subject to the provisions thereof and is subject to optional and mandatory prepayment in whole or in part as provided therein. Terms used herein which are defined in the Credit Agreement shall have such defined meanings unless otherwise defined herein or unless the context otherwise requires.

Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided therein.

All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind.

THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST

C-2-2

BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT AGREEMENT.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

IBERDROLA USA, INC.

By:

Name:

Title:

By:

Name:

Title:

Schedule A to

Swingline Note

LOANS, CONVERSIONS AND REPAYMENTS OF SWINGLINE LOANS

Date Amount of
Swingline Loans Amount of
Principal of Swingline
Loans Repaid Unpaid Principal Balance of
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Made By

D-1

EXHIBIT D

FORM OF EXEMPTION CERTIFICATE

Reference is made to the Revolving Credit Agreement, dated as of May [    ], 2012 (the “Credit Agreement”), among IBERDROLA USA, INC., a New York corporation, the Lenders listed in Schedule 1.01 thereof and CITIBANK, N.A., as administrative agent. Terms defined in the Credit Agreement are used herein with the same meanings.

                 (the “Non-U.S. Lender”) is providing this certificate pursuant to Section 2.16(f) of the Credit Agreement. The Non-U.S. Lender hereby represents and warrants that:

1. The Non-U.S. Lender is the sole record and beneficial owner of the Loans or the obligations evidenced by Note(s) in respect of which it is providing this certificate.

2. The Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”). In this regard, the Non-U.S. Lender further represents and warrants that:

(a) the Non-U.S. Lender is not subject to regulatory or other legal requirements as a bank in any jurisdiction; and

(b) the Non-U.S. Lender has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to any Governmental Authority, any application made to a rating agency or qualification for any exemption from tax, securities law or other legal requirements;

3. The Non-U.S. Lender is not a 10-percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code; and

4. The Non-U.S. Lender is not a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code.

D-2

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below.

[NAME OF NON-U.S. LENDER]

By:

Name:

Title:

Date:             

E-1

EXHIBIT E

FORM OF EXTENSION LETTER

Citibank, N.A.

[Address]

Attention: [To be inserted]

Ladies and Gentlemen:

This notice shall constitute a request pursuant to Section 1.04(a) of the Revolving Credit Agreement, dated as of May [    ], 2012 among IBERDROLA USA, INC., a New York corporation, the Lenders listed in Schedule 1.01 thereof and CITIBANK, N.A., as administrative agent. Terms defined in the Credit Agreement are used herein with the same meanings.

The undersigned hereby request that the Lenders extend the Termination Date to [●].

IBERDROLA USA, INC.

By:

Name:

Title:

By:

Name:

Title:

F-1

EXHIBIT F

FORM OF COMMITMENT INCREASE SUPPLEMENT

COMMITMENT INCREASE SUPPLEMENT (this “Supplement”), dated [●], to the Revolving Credit Agreement, dated as of May [    ], 2012 (the “Credit Agreement”), among IBERDROLA USA, INC., a New York corporation (the “Borrower”), the Lenders listed in Schedule 1.01 thereof (the “Lenders”) and CITIBANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H :

WHEREAS, pursuant to the provisions of Section 1.05(b) of the Credit Agreement, the undersigned may increase the amount of its Commitment in accordance with the terms thereof by executing and delivering to the Borrower and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

WHEREAS, the undersigned now desires to increase the amount of its Commitment under the Credit Agreement;

NOW THEREFORE, the undersigned hereby agrees as follows:

1. The undersigned agrees, subject to the terms and conditions of the Credit Agreement and the satisfaction of the following conditions precedent, that on the date this Supplement is accepted by each Borrower and the Administrative Agent it shall have its Commitment increased by $[●], thereby making the amount of its Commitment $[●]:

a. The Administrative Agent shall have received this notice, executed and delivered by the Borrower and each Lender party hereto.

b. The Administrative Agent shall have received a certificate of a secretary or assistant secretary of the Borrower certifying as to the incumbency and genuineness of the signature of each officer of the Borrower executing Credit Documents to which it is a party and certifying that attached thereto is a true, correct and complete copy of (i) the certificate of incorporation of the Borrower and all amendments thereto, certified as of a recent date by the Secretary of State of the State of New York, (ii) the bylaws or other governing document of the Borrower as in effect on the date of this Supplement, (iii) resolutions duly adopted by the board of directors of the Borrower authorizing and approving the increase in Commitments, (iv) a long form good standing certified as of a recent date by the Secretary of State of the State of New York and (v) such additional supporting documents as each Lender party hereto may reasonably request.

2. Terms defined in the Credit Agreement shall have their defined meanings when used herein.

F-2

IN WITNESS WHEREOF, the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

[INSERT NAME OF LENDER]

By:

Title:

F-3

Agreed and accepted this          day of

            ,         .

IBERDROLA USA, INC.

By:

Name:

Title:

By:

Name:

Title:

Acknowledged this          day of

            ,         .

CITIBANK, N.A.,

as Administrative Agent

By:

Name:

Title:

G-1

EXHIBIT G

FORM OF ADDITIONAL LENDER SUPPLEMENT

ADDITIONAL LENDER SUPPLEMENT, dated [●] (this “Supplement”), to the Revolving Credit Agreement, dated as of May [    ], 2012 (the “Credit Agreement”), among IBERDROLA USA, INC., a New York corporation (the “Borrower”), the Lenders listed in Schedule 1.01 thereof (the “Lenders”), and CITIBANK, N.A., as administrative agent (the “Administrative Agent”). Terms defined in the Credit Agreement are used herein with the same meanings.

W I T N E S S E T H :

WHEREAS, the Credit Agreement provides in Section 1.05(c) thereof that a bank, financial institution or other entity, selected by the Borrower and with the consent of the Administrative Agent and any Issuing Lender (which consents shall not be unreasonably withheld), although not originally a party thereto, may become a party to the Credit Agreement, by executing and delivering to each Borrower and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

WHEREAS, the undersigned Additional Lender was not an original party to the Credit Agreement but now desires to become a party thereto;

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

The undersigned Additional Lender agrees to be bound by the provisions of the Credit Agreement and agrees that it shall, on the date this Supplement is accepted by the Borrower and acknowledged by the Administrative Agent, become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with a Commitment of $[●].

The undersigned Additional Lender (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to subsection 5.12 or 6.01 thereof, as applicable, and has reviewed such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

G-2

The undersigned’s address for notices for the purposes of the Credit Agreement is as follows:

Each Borrower hereby represents and warrants that no Default or Event of Default has occurred and is continuing on and as of the date hereof.

This Supplement shall be governed by, and construed in accordance with, the laws of the State of New York.

This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.

G-3

IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

[INSERT NAME OF ADDITIONAL LENDER]

By:

Name:

Title:

Agreed and accepted this          day of

            ,         .

IBERDROLA USA, INC.

By:

Name:

Title:

By:

Name:

Title:

G-4

Acknowledged this          day of

            ,         .

CITIBANK, N.A.,

as Administrative Agent

By:

Name:

Title:

EX-10.6

EXHIBIT 10.6

FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT, dated as of May 7, 2013 (this “Amendment”), to the SECOND AMENDED AND RESTATED FIVE-YEAR REVOLVING CREDIT AGREEMENT, dated as of May 30, 2012 (as may be amended, supplemented or modified from time to time, the “Credit Agreement”), among IBERDROLA USA, INC., a New York corporation (the “Company”), CITIBANK, N.A., as administrative agent (the “Administrative Agent”), the several banks and other financial institutions or entities from time to time parties thereto (the “Lenders”) and the other parties named therein.

RECITALS

WHEREAS, the Company, the Lenders, the Administrative Agent, and the other parties named therein are party to the Credit Agreement; and

WHEREAS, the Company has requested certain amendments to the Credit Agreement to (i) permit the replacement of GAAP and implementation of the Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and (ii) extend the Termination Date to May 30, 2018; and the Required Lenders have agreed to make such amendments on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Defined Terms. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

2. Accounting Amendment. Subject to the satisfaction of the conditions precedent set forth in Section 4 below, on the Accounting Amendment Effective Date (as defined below), it is agreed that the Credit Agreement shall be amended as follows:

(a) All references to “GAAP” (other than the definition of “GAAP” in Section 9.01 of the Credit Agreement and as set forth in Section 2(c) of this Amendment) and “generally accepted accounting principles” in the Credit Agreement shall be deleted and replaced with “IFRS”.

(b) Section 9.01 of the Credit Agreement is hereby amended by inserting the following definitions in the correct alphabetical positions:

““Accounting Amendment Effective Date” shall have the meaning provided in the First Amendment, dated as of May     , 2013, among the Borrower, certain Lenders and the Administrative Agent.”

““IFRS” shall mean the International Financial Reporting Standards issued by the International Accounting Standards Board, as in effect from time to time.”

(c) the last sentence of Section 9.02 is hereby amended by inserting immediately prior to the period thereof the following:

“provided that it is agreed and understood that any calculation or determination made prior to the Accounting Amendment Effective Date using reference to GAAP shall remain as previously calculated or determined in accordance with such GAAP.”

3. Extension Amendment. Subject to the satisfaction of the conditions precedent set forth in Section 5 below, on the Extension Amendment Effective Date (as defined below), it is agreed that Section 9.01 of the Credit Agreement is hereby amended by deleting the definition of “Termination Date” in its entirety and replacing it with the following:

““Termination Date” shall mean the earlier of (a)(i) with respect to any Continuing Lender, May 30, 2018, as such date may be extended from time to time with respect to such Continuing Lenders pursuant to Section 1.04 or (ii) with respect to any Non-Extending Lender, May 30, 2017, as such date may be extended from time to time with respect to such Non-Extending Lenders pursuant to Section 1.04 and (b) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise).”

4. Conditions to Effectiveness of the Accounting Amendment. The Accounting Amendment shall become effective as of the date (the “Accounting Amendment Effective Date”) when, and only when, each of the following conditions precedent shall have been satisfied:

(a) The Administrative Agent shall have received an executed counterpart hereof from the Company and the Required Lenders;

(b) The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, a one-time reconciliation of the balance sheet and income statement of the Company reflecting the material changes resulting from the adoption of IFRS for the fiscal year ended December 31, 2012;

(c) On the Accounting Amendment Effective Date, the representations and warranties set forth in Section 6 hereof shall be true and correct in all material respects; and

(d) Since December 31, 2012, both immediately before and after giving effect to this Accounting Amendment, there has not occurred any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

5. Conditions to Effectiveness of the Extension Amendment. The Extension Amendment shall become effective as of the date (the “Extension Amendment Effective Date” and, together with the Accounting Amendment Effective Date, the “Effective Dates”) when, and only when, each of the following conditions precedent shall have been satisfied:

2

(a) The Administrative Agent shall have received (i) an executed counterpart hereof from the Company, (ii) an executed Extension Letter in accordance with Section 1.04 of the Credit Agreement and (iii) executed counterparts hereof from the Required Lenders in accordance with Section 1.04 of the Credit Agreement, each agreeing to extend the Current Termination Date;

(b) On the Extension Amendment Effective Date, the representations and warranties set forth in Section 6 hereof shall be true and correct in all material respects; and

(c) Since December 31, 2012, both immediately before and after giving effect to this Extension Amendment, there has not occurred any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

6. Representations and Warranties. The Company hereby represents and warrants, on and as of each Effective Date, that (i) the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of each Effective Date, both immediately before and after giving effect to this Amendment (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such date), (ii) this Amendment has been duly authorized, executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company enforceable against it in accordance with its terms and (iii) no Event of Default shall have occurred and be continuing on any Effective Date, both immediately before and after giving effect to this Amendment.

7. Acknowledgement and Confirmation of the Company. The Company hereby confirms and agrees that, after giving effect to this Amendment, the Credit Agreement and the other Loan Documents to which it is a party remain in full force and effect and enforceable against the Company in accordance with their respective terms and shall not be discharged, diminished, limited or otherwise affected in any respect, and represents and warrants to the Lenders that it has no knowledge of any claims, counterclaims, offsets, or defenses to or with respect to its obligations under the Loan Documents, or if the Company has any such claims, counterclaims, offsets, or defenses to the Loan Documents or any transaction related to the Loan Documents, the same are hereby waived, relinquished, and released in consideration of the execution of this Amendment. This acknowledgement and confirmation by the Company is made and delivered to induce the Administrative Agent and the Lenders to enter into this Amendment, and the Company acknowledges that the Administrative Agent and the Lenders would not enter into this Amendment in the absence of the acknowledgement and confirmation contained herein. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

8. Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

3

9. Headings. Headings and captions used in this Amendment are included for convenience of reference only and shall not be given any substantive effect.

10. Governing Law; Submission To Jurisdiction. This Amendment shall be construed in accordance with and governed by the laws of the State of New York.

11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT.

12. Expenses. The Company agrees to pay all reasonable out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation of this Amendment (whether or not the transactions hereby contemplated shall be consummated) including the reasonable fees and disbursements of counsel to the Administrative Agent.

13. Counterparts; Integration. This Amendment may be executed and delivered via facsimile or electronic mail with the same force and effect as if an original were executed and may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. This Amendment constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

4

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers, all as of the day and year first above written.

IBERDROLA USA, INC.
By:	/s/ Robert D. Kump
Name:	Robert D. Kump
Title:	Chief Executive Officer
By:	/s/ Jose Maria Torres
Name:	Jose Maria Torres
Title:	Chief Financial Officer

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CITIBANK, N.A., as Administrative Agent
By:	/s/ Maureen Maroney
Name:	Maureen Maroney
Title:	Vice President

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

x By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

CITIBANK, N.A., as a Lender
By:	/s/ Maureen Maroney
Name:	Maureen Maroney
Title:	Vice President

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

x By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

SOVEREIGN BANK, N.A., as a Lender
By:	/s/ William Maag
Name:	William Maag
Title:	Senior Vice President

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

x By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

Bank of America, N.A., as a Lender
By:	/s/ Jerry Wells
Name:	Jerry Wells
Title:	Vice President

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

¨ By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

JPMORGAN CHASE BANK, N.A., as a Lender
By:	/s/ Tasvir Hasan
Name:	Tasvir Hasan
Title:	Vice President

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

x By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

BANCO BILBAO VIZCAYA ARGENTARIA, S.A. New York Branch, as a Lender
By:	/s/ Guilherme Gobb
Name:	Guilherme Gobb
Title:	Vice President
By:	/s/ Nurys Maleni
Name:	Nurys Maleni
Title:	VP

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

x By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

The Bank of Tokyo-Mitsubishi UFJ, Ltd., as a Lender
By:	/s/ Robert MacFarlane
Name:	Robert MacFarlane
Title:	Vice President

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

x By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

TD Bank, N.A., as a Lender
By:	/s/ David Perlman
Name:	David Perlman
Title:	Senior Vice President

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

x By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Christopher Samms
Name:	Christopher Samms
Title:	Senior Vice President (#9426)

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

CONSENTING LENDERS:

By executing this Amendment, the undersigned institution agrees to the terms of the Accounting Amendment and the Credit Agreement as amended thereby.

CONTINUING LENDERS:

x By checking this box, the undersigned institution (i) agrees to the extension of the Termination Date to May 30, 2018 and (ii) agrees to the terms of the Extension Amendment and the Credit Agreement as amended thereby. Any Lender that does not check this box shall be deemed to be a Non-Extending Lender.

Lloyds TSB Bank plc, as a Lender
By:	/s/ Dennis McClellan
Name:	Dennis McClellan
Title:	Assistant Vice President – M0840
By:	/s/ Joel Slomko
Name:	Joel Slomko
Title:	Assistant Vice President – S088

SIGNATURE PAGE TO

FIRST AMENDMENT TO

CREDIT AGREEMENT

EX-10.7

EXHIBIT 10.7

SECOND AMENDMENT AND WAIVER

SECOND AMENDMENT AND WAIVER, dated as of November 25, 2013 (this “Amendment and Waiver”), to the SECOND AMENDED AND RESTATED FIVE-YEAR REVOLVING CREDIT AGREEMENT, dated as of May 30, 2012 (as amended by the First Amendment, dated as of May 15, 2013, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among IBERDROLA USA, INC., a New York corporation (the “Borrower”), CITIBANK, N.A., as administrative agent (the “Administrative Agent”), the several banks and other financial institutions or entities from time to time parties thereto (the “Lenders”) and the other parties named therein.

RECITALS

WHEREAS, the Borrower, the Lenders, the Administrative Agent, and the other parties named therein are party to the Credit Agreement;

WHEREAS, the Borrower has requested certain amendments to the Credit Agreement to permit the replacement of GAAP and implementation of the Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board;

WHEREAS, the Borrower has requested that the Lenders waive compliance with Section 6.01(a) of the Credit Agreement as set forth herein; and

WHEREAS, the Required Lenders have agreed to such amendments and waiver on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Defined Terms. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

2. Accounting Amendment. Subject to the satisfaction of the conditions precedent set forth in Section 4 below, on the Amendment and Waiver Effective Date (as defined below), it is agreed that the Credit Agreement shall be amended as follows:

(a) All references to “GAAP” (other than the definition of “GAAP” in Section 9.01 of the Credit Agreement and as set forth in Section 2(d) of this Amendment) and “generally accepted accounting principles” in the Credit Agreement shall be deleted and replaced with “IFRS”.

(b) Section 9.01 of the Credit Agreement is hereby amended by inserting the following definitions in the correct alphabetical positions:

““Second Amendment and Waiver Effective Date” shall have the meaning provided in the Second Amendment, dated as of November 25, 2013, among the Borrower, certain Lenders and the Administrative Agent.”

““IFRS” shall mean the International Financial Reporting Standards issued by the International Accounting Standards Board, as in effect from time to time.”

(c) clause (iii) of the definition of “Reorganization” appearing in Section 9.01 of the Credit Agreement is hereby amended by replacing the phrase “Iberdrola Networks, Inc.” with the following:

“Iberdrola USA Networks, Inc. (or such other name as may be disclosed to the Administrative Agent prior to formation)”.

(d) the last sentence of Section 9.02 is hereby amended by inserting immediately prior to the period thereof the following:

“provided that it is agreed and understood that any calculation or determination made prior to the Second Amendment and Waiver Effective Date using reference to GAAP shall remain as previously calculated or determined in accordance with such GAAP”.

3. Waiver to the Credit Agreement. Subject to the satisfaction of the conditions precedent set forth in Section 4 below, as of the Amendment and Waiver Effective Date, the Lenders hereby waive compliance with Section 6.01(a) of the Credit Agreement solely with respect to the fiscal year of the Borrower ended December 31, 2013; provided that the foregoing waiver shall not be deemed to modify or affect the obligations of the Borrower and its Subsidiaries to comply with each and every obligation, covenant, duty, or agreement under the Credit Agreement and the other Loan Documents, in each case as amended, restated, supplemented or otherwise modified, from and after the date hereof (after giving effect to this Amendment and Waiver).

4. Conditions to Effectiveness of the Amendment and Waiver. The Amendment and Waiver shall become effective as of the date (the “Amendment and Waiver Effective Date”) when, and only when, each of the following conditions precedent shall have been satisfied:

(a) The Administrative Agent shall have received an executed counterpart hereof from the Borrower and the Required Lenders;

(b) The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, the audited consolidated balance sheet of Iberdrola Renewables Holdings, Inc. and its consolidated Subsidiaries as at the last day of the fiscal year ending December 31, 2013, and the related audited consolidated statements of income and of cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by Pricewaterhouse Coopers LLP or other independent certified public accountants of nationally recognized standing, and all financial statements delivered pursuant to this Section 4(b) shall be complete and correct in all material respects and shall be prepared in reasonable detail in accordance with IFRS applied (except as approved by such accountants or officer, as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods reflected therein and with prior periods;

2

(c) The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, the audited consolidated balance sheet of a Maine corporation that will be formed in connection with the Reorganization and is currently intended to be named Iberdrola USA Networks, Inc. (“IUSA Networks”), and its consolidated Subsidiaries as at the last day of the fiscal year ending December 31, 2013, and the related audited consolidated statements of income and of cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by Pricewaterhouse Coopers LLP or other independent certified public accountants of nationally recognized standing, and all financial statements delivered pursuant to this Section 4(c) shall be complete and correct in all material respects and shall be prepared in reasonable detail in accordance with GAAP applied (except as approved by such accountants or officer, as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods reflected therein and with prior periods;

(d) The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, the unaudited consolidated balance sheets of the Borrower and its consolidated Subsidiaries, Iberdrola USA Networks and its consolidated Subsidiaries and Iberdrola Renewables Holdings, Inc. and its consolidated Subsidiaries, in each case as at the last day of the fiscal year ending December 31, 2013 and the related unaudited consolidated statements of income and of cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous year, certified by the principal financial officer of the Borrower as being fairly stated in all material respects (subject to normal year-end audit adjustments), and all financial statements delivered pursuant to this Section 4(d) shall be complete and correct in all material respects and shall be prepared in reasonable detail in accordance with IFRS applied (except as approved by such accountants or officer, as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods reflected therein and with prior periods;

(e) The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, a one-time reconciliation of the balance sheet and income statement of the Borrower reflecting the material changes resulting from the adoption of IFRS for the fiscal year ended December 31, 2013;

(f) Concurrently with the delivery of the financial statements pursuant to Sections 4(b), (c) and (d) above, a Compliance Certificate (i) stating that to the best of such officer’s knowledge, the Borrower during the fiscal year ending December 31, 2013 has observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition contained in the Credit Agreement to be observed, performed or satisfied by it, and that such officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and (ii) containing information and calculations for determining compliance by the Borrower with the provisions of the Credit Agreement referred to therein (including Section 7.01 of the Credit Agreement) as of the last day of the fiscal year of the Borrower ending December 31, 2013;

(g) On the Amendment and Waiver Effective Date, the representations and warranties set forth in Section 5 below shall be true and correct in all material respects; and

3

(h) Since December 31, 2012, both immediately before and after giving effect to this Amendment and Waiver, there has not occurred any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

5. Representations and Warranties. The Borrower hereby represents and warrants, on and as of the Amendment and Waiver Effective Date, that (i) the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the Amendment and Waiver Effective Date, both immediately before and after giving effect to this Amendment and Waiver (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such date), (ii) this Amendment and Waiver has been duly authorized, executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower enforceable against it in accordance with its terms and (iii) no Event of Default shall have occurred and be continuing on the Amendment and Waiver Effective Date, both immediately before and after giving effect to this Amendment and Waiver.

6. Acknowledgement and Confirmation of the Borrower. The Borrower hereby confirms and agrees that, after giving effect to this Amendment and Waiver, the Credit Agreement and the other Loan Documents to which it is a party remain in full force and effect and enforceable against the Borrower in accordance with their respective terms and shall not be discharged, diminished, limited or otherwise affected in any respect, and represents and warrants to the Lenders that it has no knowledge of any claims, counterclaims, offsets, or defenses to or with respect to its obligations under the Loan Documents, or if the Borrower has any such claims, counterclaims, offsets, or defenses to the Loan Documents or any transaction related to the Loan Documents, the same are hereby waived, relinquished, and released in consideration of the execution of this Amendment and Waiver. This acknowledgement and confirmation by the Borrower is made and delivered to induce the Administrative Agent and the Lenders to enter into this Amendment and Waiver, and the Borrower acknowledges that the Administrative Agent and the Lenders would not enter into this Amendment and Waiver in the absence of the acknowledgement and confirmation contained herein. This Amendment and Waiver shall constitute a Loan Document under the terms of the Credit Agreement.

7. Amendment and Limited Waiver. This Amendment and Waiver is a one-time waiver and does not constitute an amendment of any other provision of the Credit Agreement or the other Loan Documents, a waiver of any other provision of the Credit Agreement or the other Loan Documents, or any other right, power or remedy of the Lenders thereunder. This Amendment and Waiver is limited as specified herein and shall not constitute a modification, acceptance or waiver of any other provision of the Loan Documents.

8. Severability. In case any provision of or obligation under this Amendment and Waiver shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

9. Headings. Headings and captions used in this Amendment and Waiver are included for convenience of reference only and shall not be given any substantive effect.

10. Governing Law; Submission To Jurisdiction. This Amendment and Waiver shall be construed in accordance with and governed by the laws of the State of New York.

4

11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT AND WAIVER OR ANY OTHER LOAN DOCUMENT.

12. Expenses. The Borrower agrees to pay all reasonable out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation of this Amendment and Waiver (whether or not the transactions hereby contemplated shall be consummated) including the reasonable fees and disbursements of counsel to the Administrative Agent.

13. Counterparts; Integration. This Amendment and Waiver may be executed and delivered via facsimile or electronic mail with the same force and effect as if an original were executed and may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. This Amendment and Waiver constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

5

IN WITNESS WHEREOF, the parties hereto have caused this Amendment and Waiver to be duly executed by their duly authorized officers, all as of the day and year first above written.

IBERDROLA USA, INC.
By:	/s/ Jose M. Torres
Name:	Jose M. Torres
Title:	CFO
By:	/s/ Robert Kump
Name:	Robert Kump
Title:	CEO
CITIBANK, N.A., as Administrative Agent and as a Lender
By:	/s/ Michael Vondriska
Name:	Michael Vondriska
Title:	Vice President
Santander Bank, N.A., as a Lender
By:	/s/ Daniela Hofer-Gautschi
Name:	Daniela Hofer-Gautschi
Title:	VP
Bank of America, N.A., as a Lender
By:	/s/ Jerry Wells
Name:	Jerry Wells
Title:	Vice President

SIGNATURE PAGE TO

AMENDMENT AND WAIVER TO

CREDIT AGREEMENT

JPMORGAN CHASE BANK, N.A., as a Lender
By:	/s/ Tasvir Hasan
Name:	Tasvir Hasan
Title:	Vice President
BANCO BILBAO VIZCAYA ARGENTARIA, S.A. New York Branch, as a Lender
By:	/s/ Brian Crowley
Name:	Brian Crowley
Title:	Executive Director
By:	/s/ Luca Sacchi
Name:	Luca Sacchi
Title:	Executive Director
The Bank of Tokyo-Mitsubishi UFJ, Ltd., as a Lender
By:	/s/ Robert J. MacFarlane
Name:	Robert J. MacFarlane
Title:	Vice President
TD Bank, N.A., as a Lender
By:	/s/ David Perlman
Name:	David Perlman
Title:	Senior Vice President

SIGNATURE PAGE TO

AMENDMENT AND WAIVER TO

CREDIT AGREEMENT

HSBC Bank USA, National Association, as a Lender
By:	/s/ Alexander Rea
Name:	Alexander Rea
Title:	Senior Vice President
Lloyds Bank plc, formerly known as Lloyds TSB Bank plc, as a Lender
By:	/s/ Stephen Giacolone
Name:	Stephen Giacolone
Title:	Assistant Vice President – G011
By:	/s/ Karen Weich
Name:	Karen Weich
Title:	Vice President – W011

SIGNATURE PAGE TO

AMENDMENT AND WAIVER TO

CREDIT AGREEMENT

EX-10.8

EXHIBIT 10.8

THIRD AMENDMENT TO CREDIT AGREEMENT

THIRD AMENDMENT, dated as of April 1, 2015 (this “Amendment”), to the SECOND AMENDED AND RESTATED FIVE-YEAR REVOLVING CREDIT AGREEMENT, dated as of May 30, 2012 (as amended by the First Amendment, dated as of May 15, 2013, as further amended by the Second Amendment and Waiver, dated as of November 25, 2013, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among IBERDROLA USA, INC., a New York corporation (the “Borrower”), CITIBANK, N.A., as administrative agent (the “Administrative Agent”), the several banks and other financial institutions or entities from time to time parties thereto (the “Lenders”) and the other parties named therein.

RECITALS

WHEREAS, the Borrower, the Lenders, the Administrative Agent, and the other parties named therein are party to the Credit Agreement;

WHEREAS, the Borrower has requested certain amendments to the Credit Agreement to permit the replacement of IFRS and implementation of GAAP; and

WHEREAS, the Required Lenders have agreed to such amendments on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Defined Terms. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

2. Accounting Amendment. Subject to the satisfaction of the conditions precedent set forth in Section 3 below, on the Third Amendment Effective Date (as defined below), it is agreed that the Credit Agreement shall be amended as follows:

(a) All references to “IFRS” (other than the definition of “IFRS” in Section 9.01 of the Credit Agreement and as set forth in Section 2(c) of this Amendment) in the Credit Agreement shall be deleted and replaced with “GAAP”.

(b) Section 9.01 of the Credit Agreement is hereby amended by inserting the following definition in the correct alphabetical position:

““Third Amendment Effective Date” shall have the meaning provided in the Third Amendment, dated as of April 1, 2015, among the Borrower, certain Lenders and the Administrative Agent.”

(c) the proviso to the last sentence of Section 9.02 is hereby deleted in its entirety and replaced with the following:

“provided that it is agreed and understood that any calculation or determination made after the Second Amendment and Waiver Effective Date but prior to the Third Amendment Effective Date using reference to IFRS shall remain as previously calculated or determined in accordance with such IFRS”.

3. Conditions to Effectiveness of the Amendment. The Amendment shall become effective as of the date (the “Third Amendment Effective Date”) when, and only when, each of the following conditions precedent shall have been satisfied:

(a) The Administrative Agent shall have received an executed counterpart hereof from the Borrower and the Required Lenders;

(b) On the Third Amendment Effective Date, the representations and warranties set forth in Section 4 below shall be true and correct in all material respects; and

(c) Since December 31, 2014, both immediately before and after giving effect to this Amendment, there has not occurred any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

4. Representations and Warranties. The Borrower hereby represents and warrants, on and as of the Third Amendment Effective Date, that (i) the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the Third Amendment Effective Date, both immediately before and after giving effect to this Amendment (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such date), (ii) this Amendment has been duly authorized, executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower enforceable against it in accordance with its terms and (iii) no Event of Default shall have occurred and be continuing on the Third Amendment Effective Date, both immediately before and after giving effect to this Amendment.

5. Acknowledgement and Confirmation of the Borrower. The Borrower hereby confirms and agrees that, after giving effect to this Amendment, the Credit Agreement and the other Loan Documents to which it is a party remain in full force and effect and enforceable against the Borrower in accordance with their respective terms and shall not be discharged, diminished, limited or otherwise affected in any respect, and represents and warrants to the Lenders that it has no knowledge of any claims, counterclaims, offsets, or defenses to or with respect to its obligations under the Loan Documents, or if the Borrower has any such claims, counterclaims, offsets, or defenses to the Loan Documents or any transaction related to the Loan Documents, the same are hereby waived, relinquished, and released in consideration of the execution of this Amendment. This acknowledgement and confirmation by the Borrower is made and delivered to induce the Administrative Agent and the Lenders to enter into this Amendment, and the Borrower acknowledges that the Administrative Agent and the Lenders would not enter into this Amendment in the absence of the acknowledgement and confirmation contained herein. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

6. Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

2

7. Headings. Headings and captions used in this Amendment are included for convenience of reference only and shall not be given any substantive effect.

8. Governing Law; Submission To Jurisdiction. This Amendment shall be construed in accordance with and governed by the laws of the State of New York.

9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT.

10. Expenses. The Borrower agrees to pay all reasonable out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation of this Amendment (whether or not the transactions hereby contemplated shall be consummated) including the reasonable fees and disbursements of counsel to the Administrative Agent.

11. Counterparts; Integration. This Amendment may be executed and delivered via facsimile or electronic mail with the same force and effect as if an original were executed and may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. This Amendment constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers, all as of the day and year first above written.

IBERDROLA USA, INC.
By:	/s/ Howard A Coon
Name:	Howard A Coon
Title:	Treasurer
By:	/s/ Pablo Canales
Name:	Pablo Canales
Title:	CFO
CITIBANK, N.A., as Administrative Agent and as a Lender
By:	/s/ Richard Rivera
Name:	Richard Rivera
Title:	Vice President
SANTANDER BANK, N.A., as a Lender
By:	/s/ William Maag
Name:	William Maag
Title:	Managing Director

SIGNATURE PAGE TO

THIRD AMENDMENT TO

CREDIT AGREEMENT

Bank of America, N.A., as a Lender
By:	/s/ James B. Meanor
Name:	James B. Meanor
Title:	Managing Director
JPMORGAN CHASE BANK, N.A., as a Lender
By:	/s/ Tasvir Hasan
Name:	Tasvir Hasan
Title:	Vice President
Banco Bilbao Vizcaya Argentaria, S.A., New York Branch, as a Lender
By:	/s/ Mauricio Benitez
Name:	Mauricio Benitez
Title:	Director
By:	/s/ Veronica Ineera
Name:	Veronica Ineera
Title:	Managing Director
The Bank of Tokyo-Mitsubishi UFJ, Ltd., as a Lender
By:	/s/ Robert J. MacFarlane
Name:	Robert J. MacFarlane
Title:	Vice President

SIGNATURE PAGE TO

THIRD AMENDMENT TO

CREDIT AGREEMENT

TD Bank, N.A., as a Lender
By:	/s/ David Perlman
Name:	David Perlman
Title:	Senior Vice President
HSBC Bank USA N.A., as a Lender
By:	/s/ Alexander Rea
Name:	Alexander Rea
Title:	Senior Vice President
LLOYDS BANK PLC, as a Lender
By:	/s/ Erin Doherty
Name:	Erin Doherty
Title:	Assistant Vice President – D006
By:	/s/ Daven Popat
Name:	Daven Popat
Title:	Senior Vice President – P003

SIGNATURE PAGE TO

THIRD AMENDMENT TO

CREDIT AGREEMENT

EX-10.9

EXHIBIT 10.9

$600,000,000

REVOLVING CREDIT AGREEMENT

among

NEW YORK STATE ELECTRIC &

GAS CORPORATION,

ROCHESTER GAS AND

ELECTRIC CORPORATION,

CENTRAL MAINE POWER COMPANY,

as Borrowers

The Several Lenders

from Time to Time Parties Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

BANK OF AMERICA, N.A.,

as Syndication Agent,

and

BANCO BILBAO VIZCAYA ARGENTARIA S.A., NEW YORK BRANCH,

SOVEREIGN BANK (SANTANDER GROUP),

TD BANK, N.A.,

THE BANK OF NEW YORK MELLON, and

UNION BANK, N.A.,

as Co-Documentation Agents

Dated as of July 15, 2011

J.P. MORGAN SECURITIES LLC, and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

as Joint Lead Arrangers and Joint Bookrunners

TABLE OF CONTENTS

		Page
SECTION 1. METHOD OF BORROWING AND PAYMENT OF FEES			1
1.01	Commitments; Revolving Loans		1
1.02	Borrowings		2
1.03	Termination and Reduction of Commitments; Sublimits		2
1.04	Extensions of Commitments		3
1.05	Additional Commitments		4
1.06	Adjustments of Sublimits		5
SECTION 2. THE LOANS			6
2.01	Notice and Provision of Revolving Loans		6
2.02	Repayment of Loans		7
2.03	Facility Fees, etc		7
2.04	Interest Rates and Payment Dates		8
2.05	Computation of Interest and Fees		8
2.06	Alternate Rate of Interest		9
2.07	Continuation and Conversion of Revolving Loans		9
2.08	Prepayments		10
2.09	Reserve Requirements; Change in Circumstances		11
2.10	Change in Legality		12
2.11	New Office or Agency; Replacement of Lenders		12
2.12	Indemnity		14
2.13	Pro Rata Treatment		14
2.14	Sharing of Setoffs		15
2.15	Payments		15
2.16	Taxes		16
2.17	Swingline Loans		18
SECTION 3. LETTERS OF CREDIT			20
3.01	L/C Commitment		20
3.02	Procedure for Issuance of Letter of Credit		21
3.03	Fees and Other Charges		21
3.04	L/C Participations		22
3.05	Reimbursement Obligation of the Borrowers		23
3.06	Obligations Absolute		23
3.07	Letter of Credit Payments		24
3.08	Applications		24
SECTION 4. REPRESENTATIONS AND WARRANTIES			24
4.01	Corporate Existence and Power		24
4.02	Due Authorization, Compliance with Law, Enforceable Obligations, etc		24
4.03	Financial Condition		25
4.04	Litigation		25

-i-

TABLE OF CONTENTS

(continued)

		Page
4.05	Tax Returns		26
4.06	Investment Company Act		26
4.07	Other Agreements		26
4.08	Federal Reserve Regulations		26
4.09	No Material Misstatements		26
4.10	Employee Benefit Plans		26
4.11	Environmental and Safety Matters		26
4.12	Ownership of Property; Liens		26
4.13	Use of Proceeds		27
SECTION 5. CONDITIONS PRECEDENT			27
5.01	Conditions Precedent to Effectiveness of Agreement		27
5.02	Conditions to All Extensions of Credit		28
SECTION 6. AFFIRMATIVE COVENANTS			29
6.01	Financial Statements; Certificates; Reports		29
6.02	ERISA		30
6.03	Payment of Obligations		30
6.04	Maintenance of Existence; Compliance		30
6.05	Inspection of Property and Operations; Books and Records		30
6.06	Environmental Laws		31
6.07	Further Assurances		31
SECTION 7. NEGATIVE COVENANTS			31
7.01	Financial Condition Covenant		31
7.02	Sale of Assets; Merger		31
7.03	Limitation on Liens		32
7.04	Limitation on Transactions with Affiliates		32
7.05	Sales and Leasebacks		33
7.06	Limitation on Changes in Lines of Business		33
SECTION 8. EVENTS OF DEFAULT			33
SECTION 9. DEFINITIONS			35
9.01	Defined Terms		35
9.02	Terms Generally		49
SECTION 10. THE ADMINISTRATIVE AGENT			50
10.01	Appointment and Authority of Administrative Agent		50
10.02	Reliance by Administrative Agent; Delegation by Administrative Agent		50
10.03	No Amendment to Administrative Agent’s Duties Without Consent		51
10.04	Responsibilities of Administrative Agent		52

-ii-

TABLE OF CONTENTS

(continued)

		Page
10.05	Proofs of Claim		53
10.06	Rights as a Lender		53
10.07	Credit Decision		54
10.08	Resignation of Administrative Agent		54
10.09	Issuing Lender and Swingline Lender		55
10.10	No Other Duties		55
SECTION 11. MISCELLANEOUS			55
11.01	Notices		55
11.02	Successors and Assigns; Participations, Assignments and Designations		56
11.03	Expenses; Indemnity		60
11.04	Effectiveness		61
11.05	Survival of Agreement; Benefit to Successors and Assigns		61
11.06	Right of Setoff		62
11.07	Waivers; Amendment		62
11.08	Severability		63
11.09	Headings		63
11.10	Governing Law; Jurisdiction		63
11.11	Counterparts		64
11.12	Interest Rate Limitation		64
11.13	Entire Agreement		65
11.14	Waiver of Jury Trial		65
11.15	USA PATRIOT Act		65
11.16	Defaulting Lenders		65
11.17	Cash Collateral		68

-iii-

SIGNATURES
Schedule 1.01	Commitments
Schedule 4.04	Litigation
Schedule 4.11	Environmental and Safety Matters
Schedule 11.01	Notice Addresses
EXHIBIT A	Form of Assignment and Acceptance
EXHIBIT B	Form of Compliance Certificate
EXHIBIT C-1	Form of Revolving Note
EXHIBIT C-2	Form of Swingline Note
EXHIBIT D	Form of Exemption Certificate
EXHIBIT E	Form of Extension Letter
EXHIBIT F	Form of Commitment Increase Supplement
EXHIBIT G	Form of Additional Lender Supplement
EXHIBIT H	Form of Sublimit Adjustment Letter

-iv-

REVOLVING CREDIT AGREEMENT, dated as of July 15, 2011, among NEW YORK STATE ELECTRIC & GAS CORPORATION, a New York corporation (“NYSEG”), ROCHESTER GAS AND ELECTRIC CORPORATION, a New York corporation (“RG&E”), CENTRAL MAINE POWER COMPANY, a Maine corporation (“CMP”; together with NYSEG, and RG&E, the “Borrowers”; each, a “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”), JPMORGAN CHASE BANK, N.A., as administrative agent (the “Administrative Agent”), BANK OF AMERICA, N.A., as syndication agent (the “Syndication Agent”) and BANCO BILBAO VIZCAYA ARGENTARIA S.A., NEW YORK BRANCH, SOVEREIGN BANK (SANTANDER GROUP), TD BANK, N.A., THE BANK OF NEW YORK MELLON and UNION BANK, N.A., as co-documentation agents (the “Co-Documentation Agents”).

W I T N E S S E T H:

WHEREAS, each Borrower has requested, and, subject to the terms and conditions hereof, the Administrative Agent and the Lenders have agreed, to extend certain credit facilities to the Borrowers on the terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, such parties hereby agree as follows:

SECTION 1. METHOD OF BORROWING AND PAYMENT OF FEES

1.01 Commitments; Revolving Loans.

(a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make revolving loans (“Revolving Loans”) to each Borrower at any time and from time to time from and including the date hereof to but excluding the Termination Date, or until the earlier termination of its Commitment, in an aggregate principal amount at any one time outstanding not to exceed the amount of its Commitment; provided that (i) the aggregate principal amount of all Loans to and L/C Obligations of NYSEG outstanding at any time shall not exceed the NYSEG Sublimit, (ii) the aggregate principal amount of all Loans to and L/C Obligations of RG&E outstanding at any time shall not exceed the RG&E Sublimit, (iii) the aggregate principal amount of all Loans to and L/C Obligations of CMP outstanding at any time shall not exceed the CMP Sublimit and (iv) the Total Extensions of Credit shall not exceed the Total Commitments. Loans made to any Borrower shall be the several obligations of such Borrower.

(b) The Revolving Loans made by the Lenders on any Borrowing Date that are ABR Loans shall be (i) in a minimum aggregate principal amount of $1,000,000, (ii) in an integral multiple of $500,000 in excess of the amount provided in clause (i) above or (iii) in an aggregate principal amount equal to the remaining balance of the Total Commitment, as the case may be. The Revolving Loans made by the Lenders on any Borrowing Date that are Eurodollar Loans shall be (A) in a minimum aggregate principal amount of $3,000,000 (or, if less, in the amount of the Total Commitments less the Total Extensions of Credit) or (B) in an integral multiple of $1,000,000 in excess of the amount provided in clause (A) above, as the case may be.

1

1.02 Borrowings.

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments; provided, however, that the failure of any Lender to make any Revolving Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Revolving Loan required to be made by such other Lender).

(b) Each Revolving Loan shall be an ABR Loan or a Eurodollar Loan, as such Borrower may request, subject to and in accordance with Section 2.01. Each Lender may at its option fulfill its Commitment with respect to any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Revolving Loan; provided that any exercise of such option shall not affect the obligation of such Borrower to repay such Revolving Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may be outstanding at the same time; provided, however, that no Borrower shall be entitled to request any Borrowing that, if made, would result in an aggregate of more than ten separate Eurodollar Loans of any Lender being outstanding to such Borrower hereunder at any one time. For purposes of the foregoing, Eurodollar Loans having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Revolving Loans.

1.03 Termination and Reduction of Commitments; Sublimits.

(a) Upon at least three Business Days’ prior irrevocable written or facsimile notice to the Administrative Agent (which shall promptly be communicated by the Administrative Agent to the Lenders), the Borrowers may at any time permanently terminate in whole, or from time to time permanently reduce in part, the Commitment of each Lender in respect of each Borrower, ratably in accordance with the proportion that each Lender’s Commitment bears to the Total Commitment; provided that such termination or reduction of Commitments shall have the effect of reducing or terminating each Borrower’s Sublimit in a pro rata amount; provided further that at no time shall the Extensions of Credit of any Lender exceed the Commitment of such Lender. If, after giving effect to any reduction of the Commitments, the Swingline Commitment exceeds the amount of the aggregate Commitments, the Swingline Commitment shall be automatically reduced by the amount of such excess. Each such partial reduction of the Commitments of the Lenders shall be in the aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess of $5,000,000.

(b) Each of the Borrowers shall pay to the Administrative Agent for the account of the Lenders, on the date of each termination or reduction, the applicable Facility Fee on the amount of the Commitments so terminated or reduced accrued through the date of such termination or reduction.

(c) The Commitments shall be automatically terminated on the Termination Date, and the Swingline Commitment shall be automatically terminated on the Swingline Maturity Date, in each case unless sooner terminated pursuant to any other provision of this Section 1.03 or Section 8.

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(d) Upon at least three Business Days’ prior irrevocable written or facsimile notice to the Administrative Agent (which shall promptly be communicated by the Administrative Agent to the Swingline Lender), the Borrowers may at any time permanently terminate in whole, or from time to time permanently reduce in part, the Swingline Commitment; provided that any such partial reduction shall be in an aggregate amount of not less than $5,000,000 or, if greater, an integral multiple of $1,000,000 in excess thereof; provided further that at no time shall the aggregate outstanding Swingline Loans exceed the Swingline Commitment.

1.04 Extensions of Commitments.

(a) The Borrowers may, by sending an Extension Letter in substantially the form of Exhibit E to the Administrative Agent (in which case the Administrative Agent shall promptly deliver a copy to each of the Lenders), not less than 30 days and not more than 60 days prior to each anniversary of the Closing Date, request that the Lenders extend the Termination Date then in effect (the “Current Termination Date”) so that it will occur one year after the Current Termination Date. Each Lender, acting in its sole discretion, shall advise in response to such extension request, by written notice to the Administrative Agent given not less than 15 days and not more than 30 days prior to the Current Termination Date or the next occurring anniversary of the Closing Date, as the case may be (such date on which a Lender may give notice of its intention to extend the Current Termination Date being referred to herein as the “Final Election Date”), whether or not such Lender agrees to such extension (each Lender that so advises the Administrative Agent that it will not extend the Current Termination Date being referred to herein as a “Non-Extending Lender”). Any Lender that does not advise the Administrative Agent by the Final Election Date shall be deemed to be a Non-Extending Lender. The election of any Lender to agree to such extension shall not obligate any other Lender to agree.

(b)    (i) In response to such extension request under Section 1.04(a), if Lenders holding Commitments that aggregate 50% or more of the Total Commitments of the Lenders on or prior to the Final Election Date have not agreed to extend the Termination Date, then the Current Termination Date shall not be so extended and the outstanding principal balance of all loans and other amounts payable hereunder shall be due and payable on the Current Termination Date.

(ii) In response to such extension request under Section 1.04(a), if Lenders holding Commitments that aggregate more than 50% of the Total Commitments on or immediately prior to the Final Election Date have agreed to extend the Current Termination Date, the Administrative Agent shall notify each Borrower of such agreement in writing no later than five days after the Final Election Date, and effective on the Current Termination Date or the next occurring anniversary of the Closing Date, as the case may be (the “Extension Date”), the Termination Date applicable to the Lenders that have agreed to such extension (such Lenders being referred to herein as “Continuing Lenders”) shall be the day that is one year after the Current Termination Date. In the event of such extension, the Commitments of each Non-Extending Lender shall terminate on the Current Termination Date applicable to such Non-Extending Lender, all Loans, L/C Obligations and other amounts payable hereunder to such Non-Extending Lender shall become due and payable on such Current Termination Date and the Total Commitments of the Lenders hereunder shall be reduced by the aggregate Commitments

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of Non-Extending Lenders so terminated on and after such Current Termination Date. Each Non-Extending Lender shall be required to maintain its original Commitments up to the Termination Date, or Current Termination Date, as applicable, to which such Non-Extending Lender had previously agreed.

(c) In the event that the conditions in Section 1.04(b)(ii) have been satisfied, the Borrowers shall have the right on or before the Extension Date, at their own expense, to require any Non-Extending Lender to transfer and assign without recourse or representation (except as to title and the absence of Liens created by it) (in accordance with and subject to the restrictions contained in Section 11.02) all its interests, rights and obligations under the Loan Documents (including with respect to any Letter of Credit) to one or more banks, financial institutions or other entities (which may include any Lender) (each, an “Extension Lender”); provided that (w) such Extension Lender agrees that the Termination Date applicable to it shall be the day that is one year after the Current Termination Date, (x) such Extension Lender, if not already a Lender hereunder, shall be subject to the approval of the Administrative Agent, the Swingline Lender and each Issuing Lender (which consents shall not be unreasonably withheld), (y) such assignment shall become effective as of the Extension Date and (z) such Extension Lender shall pay to such Non-Extending Lender in immediately available funds on the effective date of such assignment the principal of and interest accrued to the date of payment on the Loans made by such Non-Extending Lender hereunder and all other amounts accrued for such Non-Extending Lender’s account or owed to it hereunder. Notwithstanding the foregoing, no extension of the Termination Date shall become effective unless, on the Extension Date, the conditions set forth in Section 5.02 shall be satisfied (with all references in such paragraphs to the making of a Loan or issuance of a Letter of Credit being deemed to be references to the extension of the Commitments on the Extension Date) and the Administrative Agent shall have received certificates to that effect with respect to each Borrower dated the Extension Date and executed by a responsible officer of such Borrower.

(d) Notwithstanding anything to the contrary in this Section 1.04, the Termination Date shall not be extended unless the aggregate Commitments of the Continuing Lenders and any other Extension Lenders are greater than or equal to the Total Extensions of Credit as of the Extension Date.

(e) There shall be no more than two extensions under this Section 1.04.

1.05 Additional Commitments.

(a) In the event that the Borrowers wish to increase the Commitments at any time when no Event of Default has occurred and is continuing, they shall notify the Administrative Agent in writing of the amount (the “Proposed Increase Amount”) of such proposed increase (such notice, a “Commitment Increase Notice”); provided that the aggregate amount of any such increase in Commitments shall be at least $10,000,000. The Borrowers may offer to the existing Lenders and, with the consent of the Administrative Agent, the Swingline Lender and any Issuing Lenders (which consents shall not be unreasonably withheld), one or more additional banks, financial institutions or other entities the opportunity to participate in all or a portion of the Proposed Increase Amount pursuant to Section 1.05(b).

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(b) Any Lender that accepts an offer to it by the Borrowers to increase its Commitment pursuant to Section 1.05(a) shall, in each case, execute a Commitment Increase Supplement with each Borrower and the Administrative Agent, substantially in the form of Exhibit F, whereupon such Lender shall be bound by and entitled to the benefits of this Agreement with respect to the full amount of its Commitment as so increased, and Schedule 1.01 shall be deemed to be amended to so increase the Commitment of such Lender.

(c) Any additional bank, financial institution or other entity which the Borrowers select to offer participation in the increased Commitment and which elects to become a party to this Agreement and provide a Commitment in an amount so offered and accepted by it pursuant to Section 1.05(a) shall execute an Additional Lender Supplement with each Borrower and the Administrative Agent, substantially in the form of Exhibit G, whereupon such bank, financial institution or other entity (herein called an “Additional Lender”) shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement, and Schedule 1.01 shall be deemed to be amended to add the name and Commitment of such Additional Lender; provided that the Commitment of any such Additional Lender shall be in an amount not less than $5,000,000.

(d) Notwithstanding anything to the contrary in this Section 1.05, (i) in no event shall any transaction effected pursuant to this Section 1.05 cause the Total Commitments to exceed $900,000,000, (ii) in no event shall the aggregate principal amount of Loans and L/C Obligations owed by any Borrower exceed such Borrower’s Sublimit and (iii) no Lender shall have any obligation to increase its Commitment unless it agrees to do so in its sole discretion.

(e) Subject to the terms and conditions hereof, each Additional Lender and each Lender that executes a Commitment Increase Supplement or Additional Lender Supplement, as the case may be, pursuant to Section 1.05(b) (each, an “Accordion Lender”) shall, on the date upon which its Commitment or increased Commitment, as the case may be, becomes effective (its “Accordion Effective Date”), make Revolving Loans to each Borrower, and each Borrower shall prepay outstanding Revolving Loans owing to the Lenders other than such Accordion Lender(s), in amounts such that, after giving effect to the making of such Revolving Loans by such Accordion Lender and the prepayment of outstanding Revolving Loans owing to Lenders other than such Accordion Lender(s), the aggregate principal amount of Revolving Loans owing to each Lender shall equal such Lender’s Commitment Percentage (determined after giving effect to the new or increased Commitment of such Accordion Lender(s)) of the aggregate amount of the Revolving Loans outstanding on such Accordion Effective Date. On such Accordion Effective Date, each Borrower shall pay to the Administrative Agent, for the account of the Lenders, any amounts owing to such Lenders pursuant to Section 2.12 in respect of Revolving Loans prepaid on such Accordion Effective Date pursuant to this Section 1.05(e).

(f) At the time the Borrowers submit a Commitment Increase Notice, they shall advise the Lenders of the proposed new Sublimits.

1.06 Adjustments of Sublimits. The Borrowers may from time to time so long as no Event of Default exists with respect to any Borrower, upon not less than five Business Days’ notice to the Administrative Agent in a Sublimit Adjustment Letter in substantially the form of Exhibit H (in which case the Administrative Agent shall promptly deliver a copy to each of the

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Lenders), change their respective Sublimits; provided that (i) the aggregate amount of the Sublimits shall equal but not exceed the Total Commitments, (ii) each Sublimit shall be an integral multiple of $5,000,000, (iii) the NYSEG Sublimit shall not exceed $200,000,000, (iv) the RG&E Sublimit shall not exceed $100,000,000 and (v) the CMP Sublimit shall not exceed $350,000,000; provided further that, notwithstanding the foregoing clauses (iii), (iv) and (v), the NYSEG Sublimit, RG&E Sublimit and CMP Sublimit may be increased in accordance with Section 1.05(f).

SECTION 2. THE LOANS

2.01 Notice and Provision of Revolving Loans.

(a) Each Borrower shall give the Administrative Agent written or facsimile notice (or telephone notice promptly confirmed in writing or by facsimile) (x) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York time, three Business Days before a proposed Borrowing by such Borrower, or (y) in the case of an ABR Borrowing, not later than 11:00 a.m., New York time, on the day of a proposed Borrowing by such Borrower. Such notice shall be irrevocable and shall in each case refer to this Agreement and specify (i) whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business Day) and the amount thereof; and (iii) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect thereto. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is specified in any such notice, or with respect to any notice provided for under Section 2.07(a) hereof, then such Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(b) Each Lender shall make a Revolving Loan in the amount required, as determined under Section 2.13, with respect to each Borrowing hereunder on the Borrowing Date by wire transfer of immediately available funds to the Administrative Agent in New York, New York, not later than 12:00 noon, New York time, and the Administrative Agent shall by 3:00 p.m., New York time, credit the amounts so received to the general deposit account of such Borrower with the Administrative Agent or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders. Unless the Administrative Agent shall have received notice from a Lender (x) in the case of a Eurodollar Loan, prior to the date of any such Borrowing, and (y) in the case of an ABR Loan, not later than 12:00 noon, New York time, on the date of any Borrowing, that such Lender will not make available to the Administrative Agent such Lender’s portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with this Section 2.01(b) and the Administrative Agent may, in reliance upon such assumption, make available to such Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender and such Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from and including the date such amount is made available to such Borrower to but excluding the date such amount is paid to the Administrative Agent, at (i) in the case of a payment to be made by such Borrower, the interest rate applicable at the time to the Revolving Loans comprising such Borrowing, and (ii) in

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the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. If such Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period. If such Lender pays its portion of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Revolving Loan as part of such Borrowing for purposes of this Agreement. Any payment by such Borrower shall be without prejudice to any claim such Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(c) Notwithstanding any other provisions of this Agreement, no Borrower shall be entitled to request any Borrowing if the Interest Period requested with respect thereto would end after the Termination Date.

2.02 Repayment of Loans.

(a) The outstanding principal balance of each Revolving Loan shall be payable on the Interest Payment Date with respect thereto unless such Revolving Loan is continued or converted in accordance with Section 2.07; provided that in any event the outstanding principal balance of each Revolving Loan shall be payable not later than the earlier of (i) the one-year anniversary of the Borrowing Date with respect to such Revolving Loan and (ii) the Termination Date. Each Revolving Loan shall bear interest on the outstanding principal balance thereof from the applicable Borrowing Date as set forth in Section 2.04.

(b) The aggregate outstanding principal of the Swingline Loans shall be payable not later than the earlier of (i) seven days after the Borrowing Date with respect to such Swingline Loan and (ii) the Swingline Maturity Date.

2.03 Facility Fees, etc.

(a) Each Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee (a “Facility Fee”) for the period from and including the Closing Date until all of the Loans have been repaid, the Letters of Credit terminated and the Commitments have been terminated, computed at the Facility Fee Rate on the Commitment Percentage of such Lender of the total amount of the Facility (drawn or undrawn) multiplied by such Borrower’s Fee Percentage then in effect, payable quarterly in arrears on the last day of each March, June, September and December, on the Termination Date, (and if applicable, thereafter on demand), commencing on the first of such dates to occur after the Closing Date. If any Commitment shall be reduced in part, the Facility Fee shall be paid in accordance with Section 1.03(b).

(b) Each Borrower agrees to pay to the Administrative Agent the Fees in the amounts and on the dates previously agreed to in writing by such Borrower and the Administrative Agent.

(c) All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Lenders. Once paid, none of the Fees shall be refundable under any circumstances.

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2.04 Interest Rates and Payment Dates.

(a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

(c) Each Swingline Loan shall bear interest equal to the ABR plus the Applicable Margin.

(d)(i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section 2.04 plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to ABR Loans plus 2%; and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any Fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to ABR Loans plus 2%; in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full.

(e) Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to Section 2.04(d) shall be payable from time to time on demand.

2.05 Computation of Interest and Fees.

(a) Interest and Fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify each Borrower and the Lenders of each determination of an Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify each Borrower and the Lenders of the effective date and the amount of each such change in interest rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on each Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of any Borrower, deliver to such Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.09(a).

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2.06 Alternate Rate of Interest. If prior to the first day of any Interest Period the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the relevant Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or that such Eurodollar Rate is not available, the Administrative Agent shall give telecopy or telephonic notice thereof to such Borrower and the Lenders as soon as practicable thereafter. If such notice is given, then (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Revolving Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall such Borrower have the right to convert Revolving Loans to Eurodollar Loans.

2.07 Continuation and Conversion of Revolving Loans.

(a) Each Borrower shall have the right, with respect to any Eurodollar Loan made to such Borrower, at the end of any Interest Period, on three Business Days’ prior telephonic notice to the Administrative Agent (which shall be confirmed in writing on the next Business Day thereafter) (i) to continue such Revolving Loan into a subsequent Interest Period (provided that no Revolving Loan shall be continued into an Interest Period that ends on a date that is later than the earlier to occur of the one-year anniversary of the Borrowing Date with respect to such Revolving Loan and the Termination Date) or (ii) to convert such Revolving Loan into an ABR Loan.

(b) Each Borrower shall have the right, with respect to any ABR Loan made to such Borrower, at any time, on three Business Days’ prior telephonic notice to the Administrative Agent (which shall be confirmed in writing on the next Business Day thereafter), to convert such Revolving Loan into a Eurodollar Loan.

(c) Any notice required to be given by any Borrower to the Administrative Agent pursuant to this Section 2.07 shall be irrevocable. Any notice given by any Borrower to the Administrative Agent hereunder shall be promptly communicated by the Administrative Agent to the Lenders.

(d) In addition to the above notice requirements, any continuation or conversion by such Borrower pursuant to this Section 2.07 shall be subject to the following:

(i) no Event of Default shall have occurred and be continuing at the time of such continuation or conversion;

(ii) if less than all the Revolving Loans at the time outstanding shall be continued or converted, such continuation or conversion shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Loans of the Type being continued or converted held by the Lenders immediately prior to such continuation or conversion;

(iii) each conversion shall be effected by each Lender by applying the proceeds of the new ABR Loan or Eurodollar Loan, as the case may be, to the Revolving Loan being converted;

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(iv) upon each conversion of an ABR Loan into a Eurodollar Loan, and upon the conversion of a Eurodollar Loan into an ABR Loan, such Borrower shall pay all accrued interest on such Revolving Loan being converted at the time of conversion;

(v) if the new Revolving Loan made in respect of a conversion shall be a Eurodollar Loan, the first Interest Period with respect thereto shall commence on the date of conversion;

(vi) any Revolving Loan which may not be continued as or converted into a Eurodollar Loan shall be automatically continued as or converted to an ABR Loan; provided that each Revolving Loan shall be paid in full not later than the earlier to occur of the one-year anniversary of the Borrowing Date with respect to such Revolving Loan and the Termination Date;

(vii) a Eurodollar Loan may be converted to an ABR Loan only on the last day of an Interest Period; and

(viii) any conversion shall be subject to Section 1.01(b) hereof.

In the event that any Borrower shall not give notice to continue any Eurodollar Loan as a Eurodollar Loan into a subsequent Interest Period, or to convert any such Revolving Loan, such Revolving Loan (unless repaid) shall automatically become an ABR Loan at the expiration of the then current Interest Period.

2.08 Prepayments.

(a) Each Borrower shall have the right, upon notice to the Administrative Agent, at any time and from time to time to prepay any Borrowing, in whole or in part, provided that such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Loans and (B) on the date of prepayment of ABR Loans and Swingline Loans); provided, however, that each partial prepayment shall be in an amount that is (i) an integral multiple of $500,000 and not less than $1,000,000, for any ABR Loan or Swingline Loan, or (ii) an integral multiple of $1,000,000 and not less than $3,000,000, for any Eurodollar Loan.

(b) If, on the date of any termination or reduction of the Commitments pursuant to Section 1.03, the aggregate principal amount of all Loans to and L/C Obligations of any Borrower outstanding at any time exceeds such Borrower’s Sublimit (such excess, an “Over-Advance”), then such Borrower shall (i) pay or prepay so much of the Loans in an amount equal to the lesser of such Over-Advance and the aggregate principal amount of all Loans outstanding to such Borrower and (ii) Cash Collateralize its L/C Obligations in amount equal to the difference of such Over-Advance minus the amount of Loans prepaid pursuant to clause (i) above.

(c) Each notice of prepayment shall specify the prepayment date and the principal amount of each Borrowing (or portion thereof) to be prepaid, shall be irrevocable and shall commit such Borrower to prepay such Borrowing by the amount stated therein on the date stated therein. All prepayments under this Section 2.08 shall be subject to Section 2.12 but otherwise

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without premium or penalty. All prepayments under this Section 2.08 shall be accompanied by accrued interest on the principal amount being prepaid to the date of payment. Each prepayment shall be made to the Administrative Agent, to be distributed to the Lenders, pro rata in accordance with the proportion that each Lender’s Loans of the Type prepaid bears to the aggregate amount of all Lenders’ Loans of such Type outstanding.

2.09 Reserve Requirements; Change in Circumstances.

(a) Notwithstanding any other provision herein, if any Change in Law shall (i) subject any Lender or any Issuing Lender to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or Swingline Loan or any Eurodollar Loan made by it, or change the basis of taxation of payments to any Lender of the principal of or interest on any Eurodollar Loan made by such Lender or any Fees or other amounts payable hereunder (other than changes in respect of taxes imposed on the overall net income of such Lender by the jurisdiction in which such Lender has its principal office or by any political subdivision or taxing authority therein); (ii) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by any Lender (except any reserve requirement reflected in the Eurodollar Rate hereunder) or any Issuing Lender; or (iii) impose on any Lender or any Issuing Lender or the interbank Eurodollar market any other condition, cost or expense affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein; and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Eurodollar Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or such Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then, upon prompt request of such Lender or Issuing Lender, such Borrower will pay to such Lender or Issuing Lender as provided in Section 2.09(c) such additional amount or amounts as will compensate such Lender or Issuing Lender for such additional costs incurred or reduction suffered.

(b) If any Lender or Issuing Lender determines that any Change in Law affecting such Lender or Issuing Lender or any Lending Office of such Lender or such Lender’s or Issuing Lender’s holding company, if any, regarding capital requirements, has or would have the effect of reducing the rate of return on such Lender’s or Issuing Lender’s capital or on the capital of such Lender’s or Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by any Issuing Lender, to a level below that which such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Lender’s policies and the policies of such Lender’s or Issuing Lender’s holding company with respect to capital adequacy), then from time to time, each Borrower shall pay as provided in Section 2.09(c) to such Lender or Issuing Lender such additional amount or amounts as will compensate such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company for any such reduction suffered.

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(c) A certificate of each Lender or Issuing Lender signed by an officer of the respective Lender or Issuing Lender setting forth in reasonable detail such amount or amounts necessary to compensate such Lender or Issuing Lender or its holding company as specified in paragraph Section 2.09(a) or 2.09(b), as the case may be, shall be delivered to the relevant Borrower and shall be conclusive absent manifest error. Such Borrower shall pay each Lender the amount shown as due on any such certificate delivered by it within 10 days after its receipt of the same.

(d) Failure or delay on the part of any Lender or Issuing Lender to demand compensation pursuant to this Section 2.09 shall not constitute a waiver of such Lender’s or Issuing Lender’s right to demand such compensation. The protection of this Section 2.09 shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed.

2.10 Change in Legality.

(a) Notwithstanding any other provision herein, if any Lender determines that any Change in Law shall make it unlawful for such Lender to make or maintain any Eurodollar Loan or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Loan, then, by prompt written notice to each Borrower and to the Administrative Agent, such Lender may:

(i) declare that Eurodollar Loans will not thereafter be made by such Lender hereunder, whereupon any request by any Borrower for a Eurodollar Borrowing shall, as to such Lender only, be deemed a request for an ABR Loan unless and until such declaration shall be subsequently withdrawn; and

(ii) require that all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which event all such Eurodollar Loans shall be automatically converted to ABR Loans as of the effective date of such notice as provided in Section 2.10(c).

(b) In the event any Lender shall give notice pursuant to Section 2.10(a), all payments and prepayments of principal that would otherwise have been applied to repay the Eurodollar Loans that would have been made by such Lender or the converted Eurodollar Loans of such Lender shall instead be applied to repay the ABR Loans made by such Lender in lieu of, or resulting from the conversion of, such Eurodollar Loans.

(c) For purposes of this Section 2.10, a notice to any Borrower by any Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day of the Interest Period currently applicable to such Eurodollar Loan; in all other cases such notice shall be effective on the date of receipt by such Borrower.

2.11 New Office or Agency; Replacement of Lenders.

(a) If any Lender (i) requests compensation under Section 2.09, (ii) gives notice pursuant to Section 2.10(a) or (iii) requires the Borrower to pay additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16,

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then in each case such Lender shall (at the request of the Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (x) would eliminate or reduce amounts payable pursuant to Section 2.09 or 2.16 or cause such Lender to withdraw its notice pursuant to Section 2.10(a), as the case may be, in the future, and (y) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Each Borrower hereby agrees to pay its pro rata share of the reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If any Lender requests compensation under Section 2.09, or if any Borrower is required to pay additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16 and, in each case, such Lender has declined or is unable to designate a different Lending Office in accordance with Section 2.11(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.02), all of its interests, rights and obligations under this Agreement and the other Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

(i) the Borrowers shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.02;

(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in L/C Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.12) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the applicable Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.09 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments thereafter;

(iv) such assignment does not conflict with applicable law; and

(v) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the applicable Borrower to require such assignment and delegation cease to apply.

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2.12 Indemnity.

(a) Each Borrower shall indemnify each Lender against any loss or expense which such Lender may sustain or incur as a consequence of (i) any failure by such Borrower to fulfill on the date of any Borrowing hereunder the applicable conditions set forth in Section 4, (ii) any failure by such Borrower to borrow or to refinance, convert, continue or prepay any Loan hereunder after irrevocable notice of such borrowing, refinancing, conversion, continuation or prepayment has been given pursuant to Section 2.01, 2.07 or 2.08, (iii) any payment, prepayment or conversion by such Borrower of a Eurodollar Loan required by any other provision of this Agreement or otherwise made or deemed made on a date other than the last day of the Interest Period applicable thereto, (iv) any default in payment or prepayment of the principal amount of any Loan or any part thereof or interest accrued thereon by such Borrower, as and when due and payable (at the due date thereof, whether by scheduled maturity, acceleration, irrevocable notice of prepayment or otherwise) or (v) the occurrence of any Event of Default with respect to such Borrower; including, in each case, any loss or reasonable expense sustained or incurred or to be sustained or incurred in liquidating or employing deposits from third parties acquired to effect or maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or reasonable expense shall include an amount equal to the excess, if any, as reasonably determined by such Lender, of (x) its cost of obtaining the funds for the Loan being paid, prepaid, converted or not borrowed, converted or continued (assumed to be the Eurodollar Rate applicable thereto) for the period from the date of such payment, prepayment, conversion or failure to borrow, convert or continue to the last day of the Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the Interest Period for such Loan which would have commenced on the date of such failure) over (y) the amount of interest (as reasonably determined by such Lender) that would be realized by such Lender in reemploying the funds so paid, prepaid, converted or not borrowed, converted or continued for such period or Interest Period, as the case may be. A certificate of any Lender setting forth in reasonable detail any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.12 shall be delivered to the relevant Borrower and shall be conclusive absent manifest error. Such Borrower shall pay each Lender the amount shown as due on any certificate within 15 days after its receipt of same.

(b) Payments made by any Borrower under this Section 2.12 shall be the several obligation of such Borrower and no Borrower shall have any liability for, or shall guarantee any obligation of, any other Borrower.

2.13 Pro Rata Treatment. Except in the case of Swingline Loans, each Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Loans, each payment on account of any Facility Fee, each reduction of the Commitments and each refinancing of any Borrowing with, conversion of any Borrowing to, or continuation of any Borrowing as, a Borrowing of any Type shall be allocated pro rata among the Lenders in accordance with their respective applicable Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans), except in each case (i) as otherwise expressly contemplated by this Agreement and (ii) as required to give effect to the provisions of Sections 2.09, 2.10, 2.11 and 2.12. Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Lender’s Percentage of such Borrowing, to the next higher or lower whole dollar amount.

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2.14 Sharing of Setoffs. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Revolving Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact and (b) purchase (for cash at face value) participations in the Revolving Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and other amounts owing them; provided that:

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this Section 2.14 shall not be construed to apply to (x) any payment made by a Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in L/C Disbursements to any assignee or participant, other than to a Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

2.15 Payments.

(a) Each Borrower shall make each payment (including principal of or interest on any Borrowing of such Borrower or any Fees or other amounts owing by such Borrower) hereunder not later than 12:00 p.m., New York time, on the date when due in dollars to the Administrative Agent, for the account of the Lenders or the Swingline Lender, as the case may be, at the Funding Office, in immediately available funds, without condition or deduction for any counterclaim, deduction, recoupment or setoff.

(b) Whenever any payment (including principal of or interest on any Borrowing of such Borrower or any Fees or other amounts owing by such Borrower) hereunder shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or Fees, if applicable.

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2.16 Taxes.

(a) Any and all payments by or on account of any obligation of any Borrower hereunder or under any other Loan Document shall be made, in accordance with Section 2.15, free and clear of and without reduction or withholding for any and all present or future taxes, levies, imposts, duties, deductions, assessments, fees, withholdings or other charges imposed by any Governmental Authority, and all liabilities with respect thereto, including interest, additions to tax and penalties, excluding taxes imposed on the net income of the Administrative Agent or any Lender or Issuing Lender (or any transferee or assignee thereof, including a participation holder (any such entity being called a “Transferee”)) and any branch profits or franchise taxes imposed on the Administrative Agent or any Lender or Issuing Lender (or Transferee) by the United States or any jurisdiction under the laws of which the Administrative Agent or any such Lender or Issuing Lender (or Transferee) is organized or doing business in or any political subdivision thereof (all such nonexcluded taxes, levies, imposts, duties, deductions, assessments, fees, withholdings, charges and liabilities hereinafter referred to as “Taxes”). If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or Issuing Lender (or any Transferee) or the Administrative Agent, then (i) the sum payable shall be increased by the amount necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.16) such Lender or Issuing Lender (or Transferee) or the Administrative Agent (as the case may be) shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall timely pay the full amount deducted to the relevant taxing authority or other Governmental Authority in accordance with applicable law.

(b) Without limiting the provisions of Section 2.16(a), each Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (hereinafter referred to as “Other Taxes”) that arise from any payment made by such Borrower hereunder or under any other Loan Document or from the execution, delivery, enforcement or registration of, or otherwise with respect to, this Agreement or any other Loan Document.

(c) Each Borrower will indemnify each Lender and each Issuing Lender (or Transferee) and the Administrative Agent, within 10 Business Days after written demand therefor, for the full amount of any Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.16) paid by such Lender or Issuing Lender (or Transferee) or the Administrative Agent, as the case may be, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant taxing authority or other Governmental Authority. If any Lender or Issuing Lender (or Transferee) or the Administrative Agent determines, in its sole discretion, that is has received a refund in respect of any Taxes or Other Taxes as to which it has been indemnified by any Borrower or with respect to which any Borrower has paid additional amounts pursuant to this Section 2.16, it shall promptly notify such Borrower of such refund and shall, within 30 days after receipt of a request by such Borrower (or promptly upon receipt, if such Borrower has requested application for such refund pursuant hereto), pay such refund to such Borrower (but only to the extent of amounts that have been paid by such Borrower under this Section 2.16 with

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respect to such refund), net of all out-of-pocket expenses of such Lender or Issuing Lender (or Transferee) or the Administrative Agent, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that such Borrower, upon the request of such Lender or Issuing Lender (or Transferee) or the Administrative Agent, agrees to repay such refund (plus penalties, interest or other charges imposed by the relevant Governmental Authority) to such Lender or Issuing Lender (or Transferee) or the Administrative Agent in the event such Lender or Issuing Lender (or Transferee) or the Administrative Agent is required to repay such refund to such Governmental Authority. Nothing contained in this Section 2.16(c) shall require any Lender or Issuing Lender (or Transferee) or the Administrative Agent to make available any of its tax returns (or any other information relating to taxes that it deems to be confidential) to any Borrower or any other Person.

(d) As soon as practicable, and in any event within 30 days, after the date of any payment of Taxes or Other Taxes by any Borrower to a Governmental Authority, such Borrower will furnish to the Administrative Agent, at its address referred to in Section 11.01, the original or a certified copy of a receipt issued by such Governmental Authority evidencing payment thereof, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section 2.16 shall survive the payment in full of the principal of and interest on all Loans made hereunder.

(f) Upon the written request of any Borrower, each Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non U.S. Lender”) shall deliver to each of the Borrowers and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit D and a Form W-8BEN, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrowers under this Agreement and the other Loan Documents. In addition, each Non U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non U.S. Lender. Each Non U.S. Lender shall promptly notify each of the Borrowers at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrowers (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Non U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non U.S. Lender is not legally able to deliver.

(g) A Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which such Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement or any other Loan Document shall deliver to each of the Borrowers (with a copy to the Administrative

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Agent), at the time or times prescribed by applicable law or reasonably requested by any Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by any Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by such Borrower or the Administrative Agent as will enable such Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

(h) No Borrower shall be required to pay any additional amounts to any Lender (or Transferee) in respect of United States Federal withholding tax pursuant to Section 2.16(a) or to provide indemnification pursuant to Section 2.16(c) if the obligation to pay such additional amounts or to provide such indemnification would not have arisen but for a failure by such Lender (or Transferee) to comply with the provisions of Sections 2.16(f) and 2.16(g); provided, however, that each Borrower shall be required to pay those amounts or provide such indemnification to any Lender (or Transferee) that it was required to pay or indemnify hereunder prior to the failure of such Lender (or Transferee) to comply with the provisions of Sections 2.16(f) and 2.16(g).

(i) The obligations of the Borrowers under this Section 2.16 shall be the several obligations of each Borrower and no Borrower shall have any liability for, or shall guarantee any obligation of, any other Borrower.

2.17 Swingline Loans.

(a) From and including the Closing Date to but excluding the Termination Date, the Swingline Lender agrees, on the terms and conditions hereinafter set forth, to make loans to the Borrowers (each, a “Swingline Loan,” and collectively, the “Swingline Loans”), in an aggregate principal amount at any time outstanding not exceeding the Swingline Commitment. Swingline Loans may be made even if the Swingline Lender’s Extensions of Credit would exceed its Commitment at such time; provided that no Borrowing of Swingline Loans shall be made if, immediately after giving effect thereto, (i) the Total Extensions of Credit would exceed the Total Commitments at such time and (ii) the aggregate Swingline Loans outstanding would exceed the Swingline Commitment. Subject to and on the terms and conditions of this Agreement, the Borrowers may borrow, repay (including by means of a Borrowing of Revolving Loans pursuant to Section 2.17(c)) and reborrow Swingline Loans at any time prior to the Termination Date; provided that no Borrower may borrow Swingline Loans the proceeds of which are used to repay outstanding Swingline Loans.

(b) In order to obtain a Swingline Loan, a Borrower shall give the Administrative Agent (and the Swingline Lender, if the Person serving as the Swingline Lender is not also serving as the Administrative Agent) irrevocable notice (a “Swingline Borrowing Notice”) not later than 11:00 a.m., New York time, on the Borrowing Date of each Swingline Loan, specifying the aggregate amount of such Swingline Loan (which shall not be less than $500,000 and, if greater, shall be in an integral multiple of $100,000 in excess thereof (or, if less, in the amount of the unutilized Swingline Commitment)). Not later than 4:00 p.m., New York time, on the Borrowing Date, the Swingline Lender shall make available an amount equal to the amount

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of the requested Swingline Loan in funds immediately available to the Administrative Agent. The Administrative Agent will make the funds so received from the Swingline Lender available to such Borrower by crediting such funds on the Borrowing Date to the general deposit account of such Borrower with the Administrative Agent or by such pre-established mutually agreeable procedures between such Borrower and the Administrative Agent.

(c) With respect to any outstanding Swingline Loans, the Swingline Lender may at any time (whether or not an Event of Default has occurred and is continuing) in its sole and absolute discretion, and is hereby authorized and empowered by the Borrowers to, cause a Borrowing of Revolving Loans to be made for the purpose of repaying such Swingline Loans by delivering to the Administrative Agent (and the Swingline Lender, if the Person serving as the Swingline Lender is not also serving as the Administrative Agent) and each other Lender (on behalf of, and with a copy to, the applicable Borrower), not later than 11:00 a.m., New York time, on the day of the proposed Borrowing Date therefor, a notice (which shall be deemed to be a Borrowing Notice given by the applicable Borrower) requesting the Lenders to make Revolving Loans (which shall be made initially as ABR Loans) on the Borrowing Date in an aggregate amount equal to the amount of such Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date such notice is given that the Swingline Lender requests to be repaid. Not later than 1:00 p.m., New York time, on the requested Borrowing Date, each Lender (other than the Swingline Lender) shall make available its Commitment Percentage of the Refunded Swingline Loans in funds immediately available to the Administrative Agent. To the extent the Lenders have made such amounts available to the Administrative Agent as provided hereinabove, the Administrative Agent will make the aggregate of such amounts available to the Swingline Lender in like funds as received by the Administrative Agent, which shall apply such amounts in repayment of the Refunded Swingline Loans. Notwithstanding any provision of this Agreement to the contrary, on the relevant Borrowing Date, the Refunded Swingline Loans shall be deemed to be repaid with the proceeds of the Revolving Loans made as provided above (including a Revolving Loan deemed to have been made by the Swingline Lender), and such Refunded Swingline Loans deemed to be so repaid shall no longer be outstanding as Swingline Loans but shall be outstanding as Revolving Loans. If any portion of any such amount repaid (or deemed to be repaid) to the Swingline Lender shall be recovered by or on behalf of the applicable Borrower from the Swingline Lender in any proceeding under any Debtor Relief Law or otherwise, the loss of the amount so recovered shall be shared ratably among all the Lenders in the manner contemplated by Section 2.14.

(d) If, as a result of any proceeding under any Debtor Relief Law with respect to any Borrower, Revolving Loans are not made pursuant to Section 2.17(c) in an amount sufficient to repay any amounts owed to the Swingline Lender in respect of any outstanding Swingline Loans, or if the Swingline Lender is otherwise precluded for any reason from giving a notice on behalf of any Borrower as provided for hereinabove, the Swingline Lender shall be deemed to have sold without recourse, representation or warranty, and each Lender shall be deemed to have purchased and hereby agrees to purchase, a participation in such outstanding Swingline Loans in an amount equal to its Commitment Percentage of the unpaid amount thereof together with accrued interest thereon. Upon one Business Day’s prior notice from the Swingline Lender, each Lender (other than the Swingline Lender) shall make available to the Administrative Agent an amount, in immediately available funds, equal to its respective participation. To the extent the Lenders have made such amounts available to the Administrative Agent as provided

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hereinabove, the Administrative Agent will make the aggregate of such amounts available to the Swingline Lender in like funds as received by the Administrative Agent. In the event any such Lender fails to make available to the Administrative Agent the amount of such Lender’s participation as provided in this Section 2.17(d), the Swingline Lender shall be entitled to recover such amount on demand from such Lender, together with interest thereon for each day from the date such amount is required to be made available for the account of the Swingline Lender until the date such amount is made available to the Swingline Lender at the Federal Funds Effective Rate for the first three Business Days and thereafter at the ABR. Promptly following its receipt of any payment by or on behalf of the Borrower in respect of a Swingline Loan, the Swingline Lender will pay to each Lender that has acquired a participation therein such Lender’s Commitment Percentage of such payment.

(e) Notwithstanding any provision of this Agreement to the contrary, the obligation of each Lender (other than the Swingline Lender) to make Revolving Loans for the purpose of repaying any Refunded Swingline Loans pursuant to Section 2.17(c) and each such Lender’s obligation to purchase a participation in any unpaid Swingline Loans pursuant to Section 2.17(d) shall be absolute and unconditional and shall not be affected by any circumstance or event whatsoever, including (i) any set-off, counterclaim, recoupment, defense or other right that such Lender may have against the Swingline Lender, the Administrative Agent, any Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of any Default or Event of Default or (iii) the failure of the amount of such advance of Revolving Loans to meet the minimum Borrowing amount specified in Section 1.01(b).

SECTION 3. LETTERS OF CREDIT

3.01 L/C Commitment.

(a) Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the L/C Participants set forth in Section 3.04(a), agrees to issue letters of credit (collectively, “Letters of Credit”) for the account of any Borrower on any Business Day during the Commitment Period in such form as may be approved from time to time by the relevant Issuing Lender; provided that no Issuing Lender shall issue any Letters of Credit for account of a Borrower if, after giving effect to such issuance, (i) the sum of (x) the aggregate principal amount of all Loans to such Borrower outstanding at such time plus (y) the L/C Obligations of such Borrower would exceed such Borrower’s Sublimit, (ii) the Total Extensions of Credit would exceed the Total Commitments or (iii) the aggregate amount of the Available Commitments would be less than zero. Each Letter of Credit shall (A) be denominated in dollars and (B) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date that is five Business Days prior to the Termination Date; provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).

(b) No Issuing Lender shall at any time be obligated to issue any Letter of Credit if such issuance would conflict with, or cause such Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

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3.02 Procedure for Issuance of Letter of Credit.

(a) Each Borrower may from time to time request that an Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender at its address for notices specified herein the relevant Application therefor, completed to the satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender may request in connection therewith. Upon receipt of any Application, such Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall such Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by such Issuing Lender and such Borrower. Such Issuing Lender shall furnish a copy of such Letter of Credit to such Borrower promptly following the issuance thereof. Such Issuing Lender shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the L/C Participants, notice of the issuance of each Letter of Credit (including the amount thereof).

(b) Except for non-substantive amendments to any Letter of Credit for the purpose of correcting errors or ambiguities or to allow for administrative convenience (which amendments each Issuing Lender may make in its discretion with the consent of the applicable Borrower), the amendment, modification, supplement, extension or renewal of any Letter of Credit shall be deemed to be an issuance of such Letter of Credit. If any Letter of Credit contains a provision pursuant to which it is deemed to be automatically renewed unless notice of termination is given by the applicable Issuing Lender, such Issuing Lender shall timely give notice of termination if (i) as of close of business on the seventeenth day prior to the last day upon which such Issuing Lender’s notice of termination may be given to the beneficiaries of such Letter of Credit, the Issuing Lender has received a notice of termination from the applicable Borrower or a notice from the Administrative Agent, any Lender or any Borrower that the conditions to issuance of such Letter of Credit have not been satisfied, or (ii) the renewed Letter of Credit would have a term not permitted by Section 3.01(a).

3.03 Fees and Other Charges.

(a) Each Borrower will pay a fee on all outstanding Letters of Credit issued on such Borrower’s behalf at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Facility, shared ratably among the Lenders and payable quarterly in arrears on the last day of each March, June, September and December after the issuance date and on the Termination Date. In addition, such Borrower shall pay to each Issuing Lender for its own account a fronting fee in an amount to be agreed between such Borrower and such Issuing Lender on the undrawn and unexpired amount of each Letter of Credit issued by such Issuing Lender, payable quarterly in arrears on the last day of each March, June, September and December after the issuance date and on the Termination Date.

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(b) In addition to the foregoing fees, each Borrower shall pay to or reimburse each Issuing Lender for such normal, customary and reasonable costs and expenses as are incurred or charged by such Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit issued by such Issuing Lender on such Borrower’s behalf.

3.04 L/C Participations.

(a) Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce each Issuing Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from each Issuing Lender, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Commitment Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit and the amount of each draft paid by such Issuing Lender thereunder. Each L/C Participant agrees with each Issuing Lender that, if a draft is paid under any Letter of Credit for which such Issuing Lender is not reimbursed in full by such Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to such Issuing Lender upon demand at such Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Commitment Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. Each L/C Participant’s obligation to pay such amount shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against such Issuing Lender, the Borrowers or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5.02, (iii) any adverse change in the condition (financial or otherwise) of the Borrowers or any of them, (iv) any breach of this Agreement or any other Loan Document by any Borrower or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

(b) If any amount required to be paid by any L/C Participant to the relevant Issuing Lender pursuant to Section 3.04(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit is paid to such Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to such Issuing Lender on demand an amount equal to the product of (i) such amount times (ii) the daily average Federal Funds Effective Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender times (iii) a fraction, the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to Section 3.04(a) is not made available to such Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, such Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans under the Facility. A certificate of such Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this Section 3.04(b) shall be conclusive in the absence of manifest error.

(c) Whenever, at any time after such Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.04(a), such Issuing Lender receives any payment related to such

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Letter of Credit (whether directly from such Borrower or otherwise, including proceeds of collateral applied thereto by such Issuing Lender), or any payment of interest on account thereof, such Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by such Issuing Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return to such Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

3.05 Reimbursement Obligation of the Borrowers. If any draft is paid under any Letter of Credit, the applicable Borrower shall reimburse the Issuing Lender that issued such Letter of Credit for the amount of (i) the draft so paid plus (ii) any taxes, fees, charges or other costs or expenses incurred by such Issuing Lender in connection with such payment, not later than 3:00 p.m., New York time, on (x) if notice of such draft is received by such Borrower on a Business Day prior to 1:00 p.m., New York time, such Business Day, or (y) if clause (x) above does not apply, the Business Day immediately following the day that such Borrower receives such notice. Each such payment shall be made to such Issuing Lender at its address for notices referred to herein in dollars and in immediately available funds. Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at the rate set forth in (A) until the Business Day next succeeding the date of the relevant notice, Section 2.04(b), or (B) thereafter, Section 2.04(c).

3.06 Obligations Absolute. Each Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that such Borrower may have or have had against any Issuing Lender, any beneficiary of a Letter of Credit or any other Person. Each Borrower also agrees with each Issuing Lender that no Issuing Lender shall be responsible for, and each Borrower’s Reimbursement Obligations under Section 3.05 shall not be affected by, among other things, (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, as the case may be, (ii) the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among such Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of such Borrower against any beneficiary of such Letter of Credit or any such transferee, (iii) payment by the Issuing Lender under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, such Borrower’s obligations hereunder. No Issuing Lender shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of such Issuing Lender; provided that the foregoing shall not be construed to excuse such Issuing Lender from liability to such Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by such Borrower to the extent permitted by applicable law) suffered by such Borrower

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that are caused by such Issuing Lender’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of such Issuing Lender (as finally determined by a court of competent jurisdiction), such Issuing Lender shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Lender may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

3.07 Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the relevant Issuing Lender shall promptly notify such Borrower of the date and amount thereof. The responsibility of each Issuing Lender to such Borrower in connection with any draft presented for payment under any Letter of Credit issued by such Issuing Lender shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

3.08 Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Agreement, the provisions of this Agreement shall apply.

SECTION 4. REPRESENTATIONS AND WARRANTIES

Each Borrower hereby severally represents and warrants that:

4.01 Corporate Existence and Power. Such Borrower (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) is duly qualified to do business and is in good standing as a foreign corporation under the laws of each material jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification and (iii) has all requisite corporate power and authority and the legal right (A) to own its assets and carry on the business in which it is engaged and (B) to execute and deliver this Agreement and the other Loan Documents to which it is a party and perform its obligations under this Agreement and the other Loan Documents to which it is a party.

4.02 Due Authorization, Compliance with Law, Enforceable Obligations, etc.

(a) The execution and delivery of this Agreement and the other Loan Documents to which it is a party by such Borrower and the performance by such Borrower of its obligations under this Agreement and the other Loan Documents to which it is a party have been duly authorized by all necessary corporate action (including any necessary stockholder action) on the part of such Borrower, and do not and will not (i) violate (A) any provision of any law, rule, regulation (including any applicable public service or public utility law of New York, Maine or any other state, the Federal Power Act, and Regulation U and Regulation X of the Board of

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Governors of the Federal Reserve System), order, writ, judgment, decree, determination or award presently in effect having applicability to such Borrower, (B) the Certificate of Incorporation, as amended, or By-laws of such Borrower or (C) any material indenture, agreement or other instrument to which such Borrower is a party, or by which such Borrower or any of its property is bound, (ii) be in conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument or (iii) result in or require the creation or imposition of any lien of any nature upon any of the assets or properties of such Borrower.

(b) This Agreement and the other Loan Documents to which such Borrower is a party have been duly executed and delivered by such Borrower and constitute the legal, valid and binding obligations of such Borrower, enforceable against such Borrower in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws or principles of equity relating to or affecting the enforcement of creditors’ rights or contractual obligations generally.

(c) Such Borrower has obtained from all Governmental Authorities with jurisdiction all approvals, authorizations and consents and has made, or will make when due, all filings with such Governmental Authorities required in connection with the execution and delivery of this Agreement and the other Loan Documents to which it is a party by such Borrower and the performance by such Borrower of its obligations under this Agreement and the other Loan Documents to which it is a party (including approvals, authorizations, consents and filings (if any) required under any applicable public service or public utility law of New York, Maine or any other state and the Federal Power Act, each as amended from time to time, and the rules, orders and regulations issued in connection therewith), and all such approvals, authorizations and consents are final and in full force and effect.

4.03 Financial Condition. Such Borrower has heretofore provided the Lenders with (i) audited consolidated financial statements of such Borrower consisting of a consolidated balance sheet as at December 31, 2010, and the related consolidated statements of income, changes in common stock equity and cash flows certified by PricewaterhouseCoopers, LLP, independent certified public accountants and (ii) unaudited consolidated financial statements for the quarterly period ended March 31, 2011, together with related consolidated statements of income, changes in common stock equity and cash flows for the respective three-month period ending on such dates. All such consolidated financial statements, including the related schedules and notes thereto, fairly present the consolidated financial position of such Borrower as of the dates thereof and the results of its operations and changes in its common stock equity and cash flows for the periods then ended, all in accordance with GAAP applied on a consistent basis. Since December 31, 2010, there has not occurred any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

4.04 Litigation. Except as disclosed on Schedule 4.04, there are no actions, suits or proceedings pending or, to the knowledge of such Borrower, threatened against or affecting such Borrower or any of its properties by or before any court or any Federal, state, local, foreign or other governmental agency or regulatory authority which, if determined adversely to such Borrower, would have a material adverse effect on the financial condition or business of such Borrower or would materially impair the ability of such Borrower to perform its obligations under this Agreement or the other Loan Documents to which it is a party.

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4.05 Tax Returns. Such Borrower has filed or caused to be filed all Federal, state, local and foreign tax returns which, to its knowledge, are required to be filed and has paid or caused to be paid all taxes as shown on such returns or on any assessment received by it to the extent that such taxes have become due, except taxes the validity of which is being contested in good faith by appropriate proceedings and with respect to which such Borrower shall have set aside on its books such reserves as are required in accordance with generally accepted accounting principles with respect to any such tax.

4.06 Investment Company Act. Such Borrower is not an “investment company” as that term is defined in, and is not otherwise subject to regulation under, the Investment Company Act of 1940, as amended.

4.07 Other Agreements. Such Borrower is not in default with respect to any material indenture, mortgage, loan agreement or evidence of indebtedness to which it is a party or by which it or any of its properties may be bound, which default would materially adversely affect such Borrower’s financial condition.

4.08 Federal Reserve Regulations. No part of the proceeds of any Loans will be used for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board.

4.09 No Material Misstatements. No information, report, financial statement, exhibit or schedule furnished by or on behalf of such Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or the other Loan Documents or included therein or delivered pursuant thereto contained, contains or will contain any material misstatement of fact or omitted, omits or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were, are or will be made, not misleading.

4.10 Employee Benefit Plans. Such Borrower is in compliance in all material respects with the applicable provisions of ERISA and the regulations and published interpretations thereunder. No Reportable Event has occurred as to which such Borrower was required to file a report with the PBGC.

4.11 Environmental and Safety Matters. Except as disclosed on Schedule 4.11, such Borrower is aware of no events, conditions or circumstances involving environmental pollution or contamination or employee health or safety that it reasonably believes would have a material adverse effect on the financial condition or business of such Borrower or would materially impair the ability of such Borrower to perform its obligations under this Agreement or the other Loan Documents to which it is a party.

4.12 Ownership of Property; Liens. Such Borrower has good title to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, except to the extent failure to have such title could not reasonably be expected to have a Material Adverse Effect, and none of such property is subject to any Lien except as permitted by Section 7.03.

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4.13 Use of Proceeds. The proceeds of the Loans shall be used (i) to provide credit support for such Borrower’s commercial paper and (ii) for general corporate purposes of such Borrower. The Letters of Credit shall be used for general corporate purposes of such Borrower.

SECTION 5. CONDITIONS PRECEDENT

5.01 Conditions Precedent to Effectiveness of Agreement. The effectiveness of this Agreement and the obligations of the Lenders to make its initial Extensions of Credit hereunder are subject to the following conditions precedent:

(a) Credit Documents. The Administrative Agent shall have received (i) this Agreement, executed and delivered by the Administrative Agent, each Borrower and each Lender listed on Schedule 1.01 and (ii) duly executed copies of the other Loan Documents.

(b) Existing Agreement. All amounts outstanding, accrued or payable under the Existing Agreement shall be repaid in full and the Existing Agreement and the commitments and letters of credit thereunder terminated, and the Administrative Agent shall have received a pay-off letter in form and substance satisfactory to it evidencing such repayment and termination.

(c) Representations and Warranties; No Default. On the Closing Date, (i) the representations and warranties set forth in Section 4 qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects on and as of such time with the same effect as though such representations and warranties had been made on and as of such time, (ii) no Event of Default, nor any event which upon notice or lapse of time or both would constitute an Event of Default, shall have occurred and be continuing on and as of such time and (iii) the Administrative Agent shall have received a certificate, dated the Closing Date and signed by the Treasurer of each Borrower, confirming compliance with the foregoing clauses (i) and (ii).

(d) Charter Documents; Bylaws. The Administrative Agent shall have received a certificate of a secretary or assistant secretary of each Borrower certifying as to the incumbency and genuineness of the signature of each officer of such Borrower executing Credit Documents to which it is a party and certifying that attached thereto is a true, correct and complete copy of (i) the articles or certificate of incorporation or formation of such Borrower and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation or formation, (ii) the bylaws or other governing document of such Borrower as in effect on the Closing Date, (iii) resolutions duly adopted by the board of directors of such Borrower authorizing and approving the transactions contemplated hereunder and the execution, delivery and performance of this Agreement and the other Credit Documents to which it is a party and (iv) each certificate required to be delivered pursuant to Section 5.01(e).

(e) Good Standing. The Administrative Agent shall have received copies of certificates of good standing, existence or its equivalent with respect to each Borrower certified as of a recent date by the appropriate Governmental Authorities of its jurisdiction of incorporation.

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(f) Approvals. All governmental and third party approvals (including approvals (if any) required under any applicable public service or public utility law of New York or Maine or any other state or commonwealth and the Federal Power Act, as amended from time to time, and the rules, orders and regulations issued in connection therewith) necessary in connection with the continuing operations of each Borrower and the transactions contemplated hereby shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent, invalidate or otherwise impose adverse conditions related to this Agreement (including the rights and remedies of the Lenders hereunder).

(g) Financial Statements. On or prior to the Closing Date, the Lenders shall have received (i) audited consolidated financial statements of such Borrowers for the 2010 and 2009 fiscal years and (ii) unaudited interim consolidated financial statements of such Borrowers for the quarterly period ended March 31, 2011.

(h) Opinion of Counsel. Receipt by the Administrative Agent of an opinion, or opinions, satisfactory in form and content to the Administrative Agent and the Lenders, addressed to the Administrative Agent and each of the Lenders and dated as of the Closing Date, from Aristides Diaz, in-house counsel to the Borrowers.

(i) Fees. The Lenders, the Arrangers and the Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel).

(j) PATRIOT Act. Each Borrower shall have provided to the Administrative Agent and the Lenders the documentation and other information requested by the Administrative Agent in order to comply with requirements of the PATRIOT Act.

5.02 Conditions to All Extensions of Credit. The obligations of the Lenders to make or participate in any Extensions of Credit (including the initial Extension of Credit), convert or continue any Loan and/or the Issuing Lender to issue or extend any Letter of Credit are subject to the satisfaction of the following conditions precedent on the relevant borrowing, continuation, conversion, issuance or extension date:

(a) Representations and Warranties. On the date of each Borrowing or issuance of a Letter of Credit hereunder, the representations and warranties set forth in Section 4 (other than, in the case of extensions of credit (including issuances of Letters of Credit) made after the Closing Date, the representations and warranties made in (i) the last sentence of Section 4.03, (ii) Section 4.04 and (iii) Section 4.11) qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects on and as of such time with the same effect as though such representations and warranties had been made on and as of such time.

(b) No Default. On the date of each Borrowing or issuance of a Letter of Credit hereunder, no Event of Default, nor any event which upon notice or lapse of time or both would constitute an Event of Default, shall have occurred and be continuing at such time or after giving effect to any such extension of credit.

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(c) Notices. The Administrative Agent shall have received a notice of borrowing or notice of conversion or continuation, or notice of issuance, as applicable, from the Borrower in accordance with Section 2.01(a), Section 2.07(a), or Section 3.02(a), as applicable.

Each Borrowing by and issuance of a Letter of Credit on behalf of each Borrower hereunder shall constitute a representation and warranty by such Borrower as of the date of such extension of credit that the conditions contained in this Section 5.02 hereof have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

Each Borrower, severally but not jointly, covenants and agrees that from the date hereof and until payment in full of the principal of and interest on the Loans, the termination of the Commitments and while any Letter of Credit remains outstanding, unless such Borrower, acting through the Administrative Agent, shall obtain the written consent of the Required Lenders, each Borrower shall:

6.01 Financial Statements; Certificates; Reports. Furnish to the Lenders:

(a) promptly upon becoming available, but in any event within 95 days after the end of each fiscal year of such Borrower, a copy of the audited consolidated balance sheet of such Borrower as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by PricewaterhouseCoopers LLP or other independent certified public accountants of nationally recognized standing;

(b) promptly upon becoming available, but in any event not later than 50 days after the end of each of the first three quarterly periods of each fiscal year of such Borrower, the unaudited consolidated balance sheet of such Borrower as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by the principal financial officer of such Borrower as being fairly stated in all material respects (subject to normal year-end audit adjustments);

(c) concurrently with the delivery of any financial statements pursuant to Section 6.01(a) and (b), a Compliance Certificate of such Borrower executed by the principal financial officer of such Borrower (i) stating that to the best of such principal financial officer’s knowledge, such Borrower during such period has observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition contained in this Agreement to be observed, performed or satisfied by it, and that such principal financial officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and (ii) containing information and calculations for determining compliance by such Borrower with the provisions of this Agreement referred to therein (including Section 7.01) as of the last day of the fiscal quarter or fiscal year of such Borrower, as the case may be;

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(d) as soon as possible, and in any event within five Business Days after the principal financial officer, treasurer or assistant treasurer of such Borrower knows or has reason to know that any Reportable Event has occurred with respect to any Plan maintained in whole or in part for the employees of such Borrower, a statement of the principal financial officer, treasurer or assistant treasurer of such Borrower, setting forth details as to such Reportable Event and the action which is proposed to be taken with respect thereto, together with a copy of the notice of such Reportable Event given to the PBGC;

(e) copies of each annual and other report with respect to any Plan requested by any Lender;

(f) promptly after receipt thereof, a copy of any notice which such Borrower may receive from the PBGC relating to the intention of the PBGC to terminate any Plan maintained in whole or in part for the benefit of employees of such Borrower or to appoint a trustee to administer any such Plan;

(g) promptly, from time to time, such other information regarding the operations, business, affairs and financial condition of such Borrower as any of the Lenders may reasonably request; and

(h) as soon as possible, and in any event within five Business Days after the principal financial officer, treasurer or assistant treasurer of such Borrower knows or has reason to know that any Event of Default, or any event which, upon notice or lapse of time or both, would constitute an Event of Default, has occurred, a statement of the principal financial officer, treasurer or assistant treasurer of such Borrower, setting forth details as to such Event of Default or event.

6.02 ERISA. Comply in all material respects with the applicable provisions of ERISA.

6.03 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where (i) the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such Borrower or (ii) the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.04 Maintenance of Existence; Compliance. Except as otherwise required by a Governmental Authority having jurisdiction over such Borrower, (a) (i) preserve, renew and keep in full force and effect its corporate existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 7.02 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

6.05 Inspection of Property and Operations; Books and Records. (a) Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) upon the reasonable request of any Lender, permit representatives

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of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records and to discuss the business, operations, properties and financial and other condition of such Borrower with officers and employees of such Borrower and with their independent certified public accountants.

6.06 Environmental Laws. Comply in all material respects with, and ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws and with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, and obtain and comply in all material respects with and maintain, and ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.

6.07 Further Assurances. Until payment in full of the principal of and interest on the Loans, the termination of the Commitments and while any Letter of Credit remains outstanding, such Borrower shall execute any and all further documents, agreements and instruments, and take all such further actions, that may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to effectuate the transactions contemplated by the Loan Documents, all at the expense of such Borrower.

SECTION 7. NEGATIVE COVENANTS

Each Borrower, severally but not jointly, covenants and agrees that from the date hereof and until payment in full of the principal of and interest on the Loans, the termination of the Commitments and while any Letter of Credit remains outstanding, unless such Borrower, acting through the Administrative Agent, shall obtain the written consent of the Required Lenders, or except as otherwise required by a Governmental Authority having jurisdiction over such Borrower, such Borrower shall not:

7.01 Financial Condition Covenant. Permit the ratio of Consolidated Indebtedness to Consolidated Total Capitalization of such Borrower to exceed 0.65 to 1.00 at any time.

7.02 Sale of Assets; Merger. (a) Sell, lease, transfer or otherwise dispose of (whether in one transaction or a series of transactions) (i) all or materially all of its respective properties or assets, whether now owned or hereafter acquired or (ii) any of its properties or assets, whether now owned or hereafter acquired, if the effect of such sale, lease, transfer or disposition would (A) after giving effect to such transaction, result in such Borrower’s senior unsecured long-term debt rating issued by either S&P, Fitch or Moody’s to fall below BBB-, BBB- or Baa3, respectively (or, if senior unsecured debt ratings are unavailable for such Borrower, the senior secured long-term debt rating issued by S&P, Fitch or Moody’s to fall below BBB, BBB or Baa2, respectively) or (B) materially impair the ability of such Borrower to perform its obligations under this Agreement or under any other Loan Document or (b) consolidate with or merge with another corporation, except where such Borrower is the surviving corporation and that, after giving effect to such consolidation or merger, no breach of Section 7.01, when calculated on a pro forma basis, would result therefrom, and no other Event of Default, nor any event which upon notice or lapse of time or both would constitute an Event of Default shall have occurred and be continuing.

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7.03 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except for Liens created under the CMP First Mortgage Bond Indenture and the RG&E First Mortgage Bond indenture, and except for:

(a) Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of such Borrower, in conformity with GAAP;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings;

(c) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

(d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of such Borrower;

(f) Liens in existence on the date hereof, securing any Indebtedness outstanding on the date hereof, including any security interest granted to Citizens Leasing Corporation and/or General Electric Capital Corporation relating to CMP’s right, title and interest in any amounts payable by the U.S. Department of the Navy under Contract No. GS-OOP-96-BSD-0030, Agency ID#N62470-97-D-5018/JN12, dated May 17, 2000, as amended, provided that no such Lien is spread to cover any additional property after the Closing Date (other than pursuant to any Borrower Senior Secured Indebtedness) and that the amount of Indebtedness secured thereby is not increased;

(g) Liens securing Indebtedness, in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding, incurred to finance the acquisition of fixed or capital assets (including Capital Lease Obligations), provided that (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets and (ii) such Liens do not at any time encumber any property other than the property financed by such indebtedness; and

(h) any interest or title of a lessor under any lease entered into in the ordinary course of business and covering only the assets so leased; and

(i) Liens created under any Loan Document.

7.04 Limitation on Transactions with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate unless such transaction is (a)

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subject to the jurisdiction of, and approved by, the Federal Energy Regulatory Commission under the Federal Power Act, as amended, or any state regulatory commission, or (b) otherwise permitted under this Agreement, and upon fair and reasonable terms no less favorable to such Borrower than it would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate.

7.05 Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by such Borrower of real or personal property that has been or is to be sold or transferred by such Borrower to such Person or any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Borrower, except to the extent such arrangement would not, collectively with all similar arrangements, reasonably be expected to materially impair the ability of such Borrower to perform its obligations under this Agreement.

7.06 Limitation on Changes in Lines of Business. Enter into any business, except for those businesses in which such Borrower engaged on the date of this Agreement or that are reasonably related thereto.

SECTION 8. EVENTS OF DEFAULT

With respect to each Borrower each of the following events shall constitute an event of default hereunder (hereinafter called an Event of Default) with respect to such Borrower:

(a) failure by such Borrower to pay any amount of principal of any of the Loans or the Reimbursement Obligations, as and when due and payable; failure by such Borrower to pay any interest on any of the Loans or the Reimbursement Obligations, any Fee or any other amount owed under this Agreement, within five Business Days after any such interest, Fee or other amount becomes due and payable;

(b) such Borrower shall fail to perform or observe any of its other covenants or agreements contained in this Agreement or any other Loan Document and such failure shall continue unremedied for 30 days (or in the case of failure to observe Section 7.01, for five Business Days) after the earlier of (i) a Financial Officer of such Borrower obtaining knowledge thereof and (ii) receipt by such Borrower of written notice thereof from the Administrative Agent or any Lender;

(c) any representation or warranty made by such Borrower herein or in any certificate or other instrument furnished in connection with this Agreement that is qualified as to materiality shall be incorrect or any such representation or warranty not so qualified shall be incorrect in any material respect when made or deemed made;

(d) default beyond any applicable grace period with respect to any Indebtedness of such Borrower issued pursuant to the RG&E First Mortgage Bond Indenture, the CMP First Mortgage Bond Indenture or any other Borrower Senior Secured Indebtedness, or the performance of any obligation incurred in connection with any such Indebtedness, if the effect of such default is to permit the trustee under the RG&E First Mortgage Bond Indenture, the CMP First Mortgage Bond Indenture or any other Borrower Senior Secured Indebtedness to cause such Indebtedness to become due prior to its stated maturity or any such Indebtedness shall not be paid at maturity;

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(e) default beyond any applicable grace period with respect to any Indebtedness of such Borrower, the outstanding principal amount of which exceeds in the aggregate $25,000,000, or the performance of any obligation incurred in connection with such Indebtedness if the effect of such default is to accelerate the maturity of such indebtedness or to permit the holder thereof, or a trustee or agent on its behalf, to cause such indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable, or if any such Indebtedness shall not be paid at maturity;

(f) the entry of a decree or order by a court having jurisdiction in the premises for relief in respect of such Borrower under any Debtor Relief Law, or appointing a receiver, liquidator, assignee, trustee, custodian or sequestrator (or similar official) such Borrower, or of any substantial part of their respective properties, or ordering the winding-up of or liquidation of the affairs of such Borrower and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days;

(g) the filing by such Borrower of a petition or answer or consent seeking relief under any Debtor Relief Law, or the consent by such Borrower to the institution of proceedings thereunder or to the filing of any such petition or to the appointment or taking possession by a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of such Borrower or of any substantial part of their respective properties, or the failure of such Borrower generally to pay its debts as such debts become due, or the taking of corporate action by such Borrower in furtherance of any such action;

(h) final judgment for the payment of money exceeding an aggregate of $25,000,000 shall be rendered or entered against such Borrower and the same shall remain undischarged for a period of 60 days during which execution shall not be effectively stayed or contested in good faith;

(i) a Reportable Event shall have occurred with respect to any Plan that reasonably could be expected to result in a liability of such Borrower to the PBGC or to a Plan in an aggregate amount exceeding $25,000,000 and, within 30 days after the reporting of any such Reportable Event to the Administrative Agent, the Administrative Agent shall have notified such Borrower in writing that (i) the Required Lenders have made a determination that, on the basis of such Reportable Event, there are reasonable grounds (A) for the termination of such Plan by the PBGC, (B) for the appointment by the appropriate United States District Court of a trustee to administer such Plan or (C) for the imposition of a lien in favor of such Plan and (ii) as a result thereof an Event of Default exists hereunder; or a trustee shall be appointed by a United States District Court to administer any such Plan; or the PBGC shall institute proceedings to terminate any Plan; or

(j) permit any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (except for Iberdrola USA, Inc. (f/k/a Energy East Corporation) and Iberdrola, S.A.) to become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 20% of the outstanding common stock of such Borrower;

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then, and in every such event and at any time thereafter during the continuance of such event, the Administrative Agent, shall, at the request of, or may, with the consent of, the Required Lenders, by written notice to such Borrower, take any or all of the following actions, at the same or different times: (A) terminate or reduce, as provided below, forthwith the Commitments of the Lenders hereunder with respect to such Borrower and the Swingline Commitment and (B) declare the Loans made to such Borrower and all other amounts accrued or owing by such Borrower under this Agreement (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be forthwith due and payable, whereupon such Loans and such other amounts shall become forthwith due and payable, both as to principal and interest with respect to such Loans, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding; provided, however, that upon the occurrence of the events in paragraph (f) or (g) of this Section 8 both of the preceding actions will automatically take place without any notice to such Borrower or any action by the Administrative Agent or any Lender; and provided further that if an event of default shall have occurred and be continuing with respect to one Borrower, but not the other Borrowers (the “Non-Defaulting Borrower”), the Administrative Agent shall reduce the total outstanding Commitments of the Lenders hereunder to an amount which is not less that the Non-Defaulting Borrower’s Sublimit, as described in Section 1.01(a). For the avoidance of doubt, provisions in this Agreement including the term “Event of Default” are intended to refer to Events of Default with respect to the Borrower affected by such provision. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred, such Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of such Borrower hereunder and under the other Loan Documents. Upon the cure by such Borrower of all Events of Default, or after all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of such Borrower hereunder and under the other Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to such Borrower (or such other Person as may be lawfully entitled thereto). Amounts deposited in the cash collateral account shall bear interest at a rate equal to the rate generally offered by the Administrative Agent for deposits equal to the amount deposited by such Borrower in the cash collateral account.

SECTION 9. DEFINITIONS

9.01 Defined Terms. As used in this Agreement, the terms listed in this Section 9.01 shall have the respective meanings set forth in this Section 9.01.

“ABR” shall mean, for any day, a rate per annum equal to the highest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus 0.5%

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and (iii) the Eurodollar Rate applicable for an Interest Period of one month plus 1.0%. For purposes hereof: “Prime Rate” shall mean the rate of interest per annum publicly announced from time to time by the Reference Lender as its prime rate in effect at its principal office in New York (the Prime Rate not being intended to be the lowest rate of interest charged by the Reference Lender in connection with extensions of credit to debtors). Any change in the ABR due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“ABR Borrowing” shall mean a Borrowing comprised of ABR Loans.

“ABR Loan” shall mean a Loan bearing interest at the ABR.

“Accordion Effective Date” shall have the meaning assigned to it in Section 1.05(e).

“Accordion Lender” shall have the meaning assigned to it in Section 1.05(e).

“Act” shall have the meaning assigned to such term in Section 11.12.

“Additional Lender” shall have the meaning assigned to it in Section 1.05(c).

“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

“Affiliate” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the person specified. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. “Controlled” shall have a meaning correlative thereto.

“Agreement” shall mean this Revolving Credit Agreement, as amended, supplemented or otherwise modified from time to time.

“Applicable Margin” shall mean for each Type of Loan, the rate per annum set forth under the relevant column heading below which corresponds with the most current rating of such Borrower’s senior unsecured long-term debt issued by S&P, Fitch and Moody’s respectively.

Ratings	Applicable Margin for Eurodollar Loans	Applicable Margin for ABR Loans
>A/A/A2	0.875%	0%
A-/A-/A3	0.975%	0%
BBB+/BBB+/Baa1	1.050%	0.050%
BBB/BBB/Baa2	1.250%	0.250%
BBB-/BBB-/Baa3	1.450%	0.450%
<BB+/BB+/Ba1	1.600%	0.600%

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Changes in the Applicable Margin shall become effective on the date on which S&P, Fitch and/or Moody’s changes the rating it has issued for such Borrower’s senior unsecured long-term debt. If all three agencies issue a rating and the three ratings fall in different levels, the Applicable Margin shall be based upon the level indicated by the middle rating. If all three agencies issue a rating and ratings from two agencies are at the same level (the “Majority Level”) and the rating from the third agency is at a different level, the Applicable Margin shall be based upon the Majority Level. If only two of such three agencies issue a rating, the Applicable Margin shall be based on the higher of such rating, provided that if the higher rating is two or more levels above the lower rating, the Applicable Margin shall be based upon the next level below the highest of the two. If only one of such three agencies issues a rating, such rating shall apply. If a Borrower does not have a senior unsecured long-term debt rating, the Applicable Margin shall be based on the level one level below such Borrower’s senior secured long-term debt rating.

“Application” shall mean an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to open a Letter of Credit.

“Approved Fund” means any Fund that is administered or manage by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Assignee” shall have the meaning assigned to it in Section 11.02(c).

“Assignment and Acceptance” shall mean an assignment and acceptance, substantially in the form of Exhibit A.

“Assignor” shall have the meaning assigned to it in Section 11.02(c).

“Available Commitment” shall mean as to any Lender at any time, an amount equal to the excess, if any, of (i) such Lender’s Commitment then in effect over (ii) such Lender’s Extensions of Credit then outstanding.

“Board” shall mean the Board of Governors of the Federal Reserve System of the United States.

“Borrower” shall have the meaning assigned to it in the recitals hereof.

“Borrower Senior Secured Indebtedness” shall mean any Indebtedness of NYSEG, RG&E and CMP secured by any Lien on property owned or acquired by them; provided that the aggregate principal amount of Indebtedness secured by such Liens shall not exceed $250,000,000 for NYSEG, $175,000,000 for RG&E and $100,000,000 for CMP at any one time outstanding.

“Borrowing” shall mean a group of Loans of a single Type made by the Lenders (or a Swingline Loan made by the Swingline Lender) on a single date and as to which a single Interest Period is in effect.

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“Borrowing Date” shall mean, with respect to any Loan, the date on which such Loan is disbursed.

“Business Day” shall mean any day (other than a day which is a Saturday, Sunday or legal holiday in the State of New York) on which Lenders are open for business in New York City; provided, however, that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which Lenders are not open for dealings in dollar deposits in the London interbank market.

“Capital Lease Obligations” shall mean as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Lenders or Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and each applicable Issuing Lender shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and each applicable Issuing Lender. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Closing Date” means the first date all the conditions precedent in Section 5.01 are satisfied or waived in accordance with Section 11.07.

“CMP” shall have the meaning assigned to it in the recitals hereof.

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“CMP First Mortgage Bond Indenture” shall mean the Indenture of Mortgage and Deed of Trust, dated as of May 1, 2009 between CMP and The Bank of New York Mellon Trust Company, N.A., as supplemented from time to time.

“CMP Sublimit” shall mean $300,000,000, as such amount may be adjusted from time to time pursuant to Section 1.06.

“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time.

“Commitment” shall mean, as to any Lender, the obligation of such Lender, if any, to make Loans, to make Refunded Swingline Loans and participate in Letters of Credit and Swingline Loans in an aggregate principal amount not to exceed the amount set forth under the heading “Commitment” opposite such Lender’s name on Schedule 1.01 or in the Assignment and Acceptance pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof.

“Commitment Increase Notice” shall have the meaning assigned to it in Section 1.05(a).

“Commitment Percentage” shall mean, as to any Lender at any time, the percentage that such Lender’s Commitment then constitutes of the Total Commitments or, at any time after the Commitments shall have expired or terminated, the percentage that the aggregate principal amount of such Lender’s Loans then outstanding constitutes of the aggregate principal amount of the Loans then outstanding; provided that, in the event that the Loans are paid in full prior to the reduction to zero of the Total Extensions of Credit, the Commitment Percentages shall be determined in a manner designed to ensure that the other outstanding Extensions of Credit shall be held by the Lenders on a comparable basis.

“Commitment Period” shall mean the period from and including the Closing Date to but excluding the day that is five Business Days prior to the Termination Date.

“Compliance Certificate” shall mean a certificate duly executed by the principal financial officer of such Borrower substantially in the form of Exhibit B.

“Consolidated Indebtedness” shall mean, with respect to any Borrower at any date, all Indebtedness of such Borrower at such date, determined on a consolidated basis in accordance with GAAP, excluding debt and interest expense arising from the application of Financial Interpretation Number 45 or 46 of the Financial Accounting Standards Board.

“Consolidated Net Income” shall mean, with respect to any Borrower at any date, the consolidated net income, if any, after taxes, of such Borrower for such period determined in accordance with GAAP; provided, that Consolidated Net Income shall not be reduced or increased by the amount of any non-cash extraordinary charges or credits that would otherwise be deducted from or added to revenue in determining such Consolidated Net Income.

“Consolidated Net Worth” shall mean, with respect to any Borrower at any date, all amounts that would, in conformity with GAAP, be included on a consolidated balance sheet of such Borrower under stockholders’ equity determined at such date; provided, however, that in

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any event (and notwithstanding a change in GAAP subsequent to the date of this Agreement) amounts attributable to such Borrower’s preferred stock shall be included in Consolidated Net Worth; provided further that Consolidated Net Worth shall exclude the balance of “Accumulated Other Comprehensive Income/Loss” as it would appear on the consolidated balance sheet of such Borrower on such determination date of Consolidated Net Worth.

“Consolidated Total Capitalization” shall mean, with respect to any Borrower at any date, the sum of the Consolidated Net Worth of such Borrower and the Consolidated Indebtedness of such Borrower.

“Continuing Lenders” shall have the meaning assigned to it in Section 1.04(b).

“Contractual Obligation” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Current Termination Date” shall have the meaning assigned to it in Section 1.04(a).

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” shall mean any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Defaulting Lender” shall mean, subject to Section 11.16(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the applicable Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Lender, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due; (b) has notified any Borrower, the Administrative Agent, any Issuing Lender or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lenders’ obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied); (c) has failed, within three Business Days after written request by the Administrative Agent or any Borrower, to confirm in writing to the Administrative Agent and each Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and each Borrower); or (d) has, or has a direct or indirect parent company that has, (i) become the subject

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of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such equity interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 11.16(b)) upon delivery of written notice of such determination to each Borrower, each Issuing Lender, the Swingline Lender and each Lender.

“dollars” or “$” shall mean lawful money of the United States of America.

“Eligible Assignee” means any Person that meets the requirements to be an Assignee under Section 11.02 (subject to such consents, if any, as may be required thereunder).

“Environmental Laws” shall mean any and all foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time hereafter be in effect.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

“Eurocurrency Reserve Requirements” shall mean, for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

“Eurodollar Base Rate” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Reuters Screen LIBOR01 Page (or any successor page) that represents an average British Bankers Association Interest Settlement Rate for Dollar deposits as of 11:00 a.m., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on such screen, the “Eurodollar Base Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such

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availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 11:00 a.m., Charlotte time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

“Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Loans.

“Eurodollar Loan” shall mean any Loan bearing interest at the Eurodollar Rate.

“Eurodollar Rate” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):

Eurodollar Base Rate

1.00 - Eurocurrency Reserve Requirements

“Event of Default” shall mean any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Exchange Act” shall have the meaning assigned to it in Section 8(j).

“Existing Agreement” means the Second Amended and Restated Credit Agreement dated as of May 16, 2007 among the Borrowers, the several lenders party thereto and Wells Fargo Bank, National Association as administrative agent.

“Existing L/C Issuer” shall mean Wachovia Bank, National Association.

“Extension Date” shall have the meaning assigned to it in Section 1.04(b).

“Extension Lender” shall have the meaning assigned to it in Section 1.04(c).

“Extensions of Credit” shall mean as to any Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding and (b) such Lender’s Commitment Percentage of the L/C Obligations and Swingline Loans then outstanding.

“Facility” shall mean the Commitments and the Loans made thereunder.

“Facility Fee” shall have the meaning assigned to such term in Section 2.03(a).

“Facility Fee Rate” shall mean the rate per annum set forth below which corresponds with the most current rating of such Borrower’s senior unsecured long-term debt issued by S&P, Fitch and Moody’s, respectively.

Ratings	Facility Fee Rate
³A/A/A2		0.125	%
A-/A-/A3		0.150	%
BBB+/BBB+/Baa1		0.200	%
BBB/BBB/Baa2		0.250	%
BBB-/BBB-/Baa3		0.300	%
£BB+/BB+/Ba1		0.400	%

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Changes in the Facility Fee Rate shall become effective on the date on which S&P, Fitch and/or Moody’s changes the rating it has issued for such Borrower’s senior unsecured long-term debt. If all three agencies issue a rating and the three ratings fall in different levels, the Facility Fee Rate shall be based upon the level indicated by the middle rating. If all three agencies issue a rating and ratings from two agencies are at the same level (the “Majority Level”) and the rating from the third agency is at a different level, the Facility Fee Rate shall be based upon the Majority Level. If only two of such three agencies issue a rating, the Facility Fee Rate shall be based on the higher of such rating; provided that if the higher rating is two or more levels above the lower rating, the Facility Fee Rate shall be based upon the next level below the highest of the two. If only one of such three agencies issues a rating, such rating shall apply. If a Borrower does not have a senior unsecured long-term debt rating, the Facility Fee Rate shall be based on the level one level below such Borrower’s senior secured long-term debt rating.

“Federal Funds Effective Rate” shall mean for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Reference Lender from three federal funds brokers of recognized standing selected by it.

“Fee Percentage” shall mean, with respect to each Borrower, a fraction the numerator of which is such Borrower’s Sublimit and the denominator of which is the aggregate amount of the Sublimits.

“Fees” shall mean the Facility Fees, fees on all outstanding Letters of Credit and other fees separately agreed to in writing by the Borrowers and the Administrative Agent.

“Final Election Date” shall have the meaning assigned to it in Section 1.04(a).

“Financial Officer” shall mean the chief financial officer, principal accounting officer, treasurer or controller of the Borrower or any vice president of the Borrower whose primary responsibility is for financial matters.

“Fitch” shall mean Fitch Investor Services, Inc. (or any successor thereto).

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to any Swingline Lender, such Defaulting Lender’s Commitment Percentage of outstanding Swingline Loans made by such Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.

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“Funding Office” shall mean the office of the Administrative Agent specified in Schedule 11.01 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to each Borrower and the Lenders.

“GAAP” shall mean generally accepted accounting principles, applied on a consistent basis.

“Governmental Authority” shall mean any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

“Guarantee Obligation” shall mean, as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the such Borrower in good faith.

“Hedge Agreements” shall mean all interest rate swaps, caps or collar agreements or similar arrangements dealing with interest rates or currency exchange rates or the exchange of nominal interest obligations, either generally or under specific contingencies.

“Indebtedness” shall mean of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any

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conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party under acceptances, letters of credit, surety bonds or similar arrangements, (g) the liquidation value of all preferred Capital Stock of such Person that is redeemable at the option of the holder thereof or that has any mandatory dividend, redemption or other required payment that could be required thereunder prior to the date that is one year after the Termination Date, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, and (j) for the purposes of Section 8(e) only, all obligations of such Person in respect of Hedge Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor. Indebtedness shall not include Indebtedness of a Borrower arising from the application of Financial Interpretation Number 45 of the Financial Accounting Standards Board, Financial Interpretation Number 46 of the Financial Accounting Standards Board or Issue No. 01-08 of the Emerging Issues Task Force (EITF).

“Interest Payment Date” shall mean (a) as to any ABR Loan, the last day of each March, June, September and December to occur while such Loan is outstanding and the Termination Date, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Eurodollar Loan, the date of any repayment or prepayment made in respect thereof.

“Interest Period” shall mean (a) as to any Eurodollar Borrowing, the period commencing on the date of such Borrowing or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be, and ending 2 weeks or 1, 2, 3 or 6 months thereafter, as each Borrower may elect, and (b) as to any ABR Borrowing, the period commencing on the date of such Borrowing and ending on the earliest of (i) the next succeeding March 31, June 30, September 30 or December 31, (ii) the Termination Date and (iii) the date such Borrowing is repaid or prepaid in accordance with Sections 2.02 or 2.08; provided, however, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

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“Issuing Lender” shall mean JPMorgan Chase Bank, N.A., Bank of America, N.A. or any of their respective affiliates, or any other Lender acceptable to the Administrative Agent and to the Borrowers, in its capacity as issuer of any Letter of Credit.

“L/C Obligations” shall mean at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.05.

“L/C Participants” shall mean the collective reference to all the Lenders other than the Issuing Lender.

“Lenders” shall have the meaning as defined in the preamble hereto; provided, that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include the Swingline Lender in such capacity.

“Lending Office” shall mean (a) initially, for each Lender, its branch office or offices located as of the date hereof at its address set forth in such Lender’s Administrative Questionnaire and (b) subsequently, such other branch (or affiliate) of each Lender as such Lender may designate by notice in writing to the Borrowers and the Administrative Agent as the branch (or affiliate) from which ABR Loans or Eurodollar Loans will thereafter be made hereunder and for the account of which all payments by the Administrative Agent of principal of, and interest on, ABR Loans or Eurodollar Loans, as the case may be, will thereafter be made.

“Letters of Credit” shall have the meaning assigned in Section 3.01(a).

“LIBO Rate” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Reuters BBA LIBOR Rates page 3750 (or any successor page) that represents an average British Bankers Association Interest Settlement Rate for Dollar deposits as of 11:00 a.m., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on such screen, the “LIBO Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 11:00 a.m., New York time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“Loan Documents” shall mean this Agreement and the Notes.

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“Loans” means any or all of the Revolving Loans and the Swingline Loans.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, property, operations or condition (financial or otherwise) of each Borrower taken as a whole or (b) the validity or enforceability of the Loan Documents or the rights and remedies of the Administrative Agent and the Lenders thereunder.

“Maximum Rate” shall have the meaning assigned to such term in Section 11.12.

“Minimum Collateral Amount” means, with respect to any Borrower at any time, (i) with respect to Cash Collateral, an amount equal to the sum of (x) 105% of the Fronting Exposure of all Issuing Lenders with respect to Letters of Credit issued on account of such Borrower and outstanding at such time and (y) the Fronting Exposure of the Swingline Lender with respect to Swingline Loans made to such Borrower and outstanding at such time and (ii) otherwise, an amount determined by the Administrative Agent, the Issuing Lenders and the Swingline Lender in their sole discretion.

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all affected Lenders in accordance with the terms of Section 11.07 and (ii) has been approved by the Required Lenders.

“Non-Defaulting Borrower” shall have the meaning assigned to such term in Section 8.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Non-Extending Lender” shall have the meaning assigned to it in Section 1.04(a).

“Non-U.S. Lender” shall have the meaning assigned to it in Section 2.16(f).

“Notes” shall mean the collective reference to the Revolving Notes and the Swingline Note.

“NYSEG” shall have the meaning assigned to it in the recitals hereof.

“NYSEG Sublimit” shall mean $200,000,000, as such amount may be adjusted from time to time pursuant to Section 1.06.

“Other Taxes” shall have the meaning assigned to it in Section 2.16(b).

“Participant” shall have the meaning assigned to it in Section 11.02(b).

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Person” shall mean any natural person, corporation, business trust, joint venture, association, company, partnership or government, or any agency or political subdivision thereof.

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“Plan” shall mean any pension plan subject to the provisions of Title IV of ERISA or Section 412 of the Code which is maintained for employees of a Borrower.

“Proposed Increase Amount” shall have the meaning assigned to it in Section 1.05(a).

“Reference Lender” shall mean JPMorgan Chase Bank, N.A.

“Refunded Swingline Loans” shall have the meaning assigned to it in Section 2.17(c).

“Register” shall have the meaning assigned to it in Section 11.02(d).

“Regulation U” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Reimbursement Obligation” shall mean the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 3.05 for amounts drawn under Letters of Credit.

“Related Party” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Reportable Event” shall mean any reportable event as defined in Section 4043(b) of ERISA or the regulations issued thereunder with respect to a Plan.

“Required Lenders” shall mean at any time, the holders of more than 50% of the Commitments then in effect, or, at any time the Commitments have terminated, the holders of more than 50% of the Total Extensions of Credit. The Commitment and the Total Extensions of Credit of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

“Requirement of Law” shall mean, as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Revolving Loan” shall have the meaning assigned to such term in Section 1.01(a).

“Revolving Note” means, if requested by any Lender, the promissory note of a Borrower in favor of the Lender in substantially the form of Exhibit C-1, together with any amendments, modifications and supplements thereto, substitutions therefor and restatements thereof.

“RG&E” shall have the meaning assigned to it in the recitals hereof.

“RG&E First Mortgage Bond Indenture” shall mean the General Mortgage dated as of September 1, 1918, between RGE (executed under its then name, “Rochester Railway and Light Company”) and Deutsche Bank Trust Company Americas, as trustee (as successor trustee to Bankers Trust Company), as supplemented from time to time.

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“RG&E Sublimit” shall mean $100,000,000, as such amount may be adjusted from time to time pursuant to Section 1.06.

“S&P” shall mean Standard & Poor’s Rating Services, a division of McGraw-Hill, Inc.

“Sublimit” shall mean the NYSEG Sublimit, the RG&E Sublimit, or the CMP Sublimit.

“Swingline Commitment” means $150,000,000 or, if less, the aggregate Revolving Credit Commitments at the time of determination, as such amount may be reduced at or prior to such time pursuant to the terms hereof.

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as maker of Swingline Loans, and its successors in such capacity.

“Swingline Loans” has the meaning given to such term in Section 2.17(a).

“Swingline Maturity Date” means the fifth Business Day prior to the Termination Date.

“Swingline Note” means, if requested by the Swingline Lender, the promissory note of a Borrower in favor of the Swingline Lender in substantially the form of Exhibit C-2, together with any amendments, modifications and supplements thereto, substitutions therefor and restatements thereof.

“Taxes” shall have the meaning assigned to it in Section 2.16(a).

“Termination Date” shall mean July 15, 2016, as such date may be extended from time to time with respect to some or all of the Lenders pursuant to Section 1.04.

“Total Commitments” shall mean, as of a given date, the aggregate Commitments of the Lenders on such date.

“Total Extensions of Credit” shall mean, at any time, the aggregate amount of the Extensions of Credit of the Lenders outstanding at such time.

“Transferee” shall have the meaning assigned to it in Section 2.16(a).

“Type”, when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, “Rate” shall include the Eurodollar Rate and the ABR.

9.02 Terms Generally. The definitions in Section 9.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time, including the word “consolidated,” as such term is applicable to such Borrower.

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SECTION 10. THE ADMINISTRATIVE AGENT

The Lenders and the Administrative Agent agree among themselves as follows:

10.01 Appointment and Authority of Administrative Agent. Each of the Lenders and the Issuing Lenders hereby irrevocably appoints JPMorgan Chase Bank, N.A. to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Except as set forth in Section 10.08, the provisions of this Section 10 are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lenders, and no Borrower shall have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

10.02 Reliance by Administrative Agent; Delegation by Administrative Agent.

(a) The Administrative Agent shall, in the absence of knowledge to the contrary, be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, communication, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it in good faith to be genuine and correct and to have been signed, sent or otherwise authenticated by the proper Person(s). The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for a Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

(b) The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 10 shall apply to any

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such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Facility as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents

Neither the Administrative Agent nor any of its directors, officers, employees or agents shall be liable as such for any action taken or omitted by any of them except for its or his own gross negligence or willful misconduct, or be responsible for any recitals, statements, representations or warranties herein or the contents of any document delivered in connection herewith, or be liable for failing to ascertain or to make any inquiry concerning the performance or observance by the Borrowers of any of the terms, conditions, covenants or agreements contained in this Agreement or any other Loan Documents. The Administrative Agent shall not be responsible to the Lenders or the holders of any Notes for the due execution, genuineness, validity, enforceability or effectiveness of this Agreement or such Notes. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof until it shall have received from the payee of such Note notice, given as provided herein, of the transfer thereof in compliance with Section 11.02. The Administrative Agent shall in all cases be fully protected in acting, or refraining from acting, in accordance with written instructions signed by the Required Lenders and, except as otherwise specifically provided herein, such instructions and any action or inaction pursuant thereto shall be binding on all the Lenders and each subsequent holder of any Note. Neither the Administrative Agent nor any of its directors, officers, employees or agents shall have any responsibility to the Borrowers on account of the failure of or delay in performance or breach by any Lender of any of its obligations hereunder or to any Lender on account of the failure of or delay in performance or breach by any other Lender or the Borrowers of any of their respective obligations hereunder or under the other Loan Documents.

The Lenders hereby acknowledge that the Administrative Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement unless it shall be requested in writing to do so by the Required Lenders.

10.03 No Amendment to Administrative Agent’s Duties Without Consent.

(a) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or

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percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(b) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 8 or 11.07) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the applicable Borrower, a Lender or an Issuing Lender.

(c) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 5 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

(d) The Administrative Agent shall not be bound by any waiver, amendment, supplement or modification of this Agreement that affects its duties as Administrative Agent under this Agreement unless it shall have given its prior written consent as Administrative Agent thereto.

10.04 Responsibilities of Administrative Agent. The Administrative Agent is hereby expressly authorized by the Lenders, without hereby limiting any implied authority, (i) to receive on behalf of the Lenders all payments of principal of and interest on the Loans and all other amounts due to the Lenders hereunder, and promptly to distribute to each Lender its proper share of each payment so received in like funds, and (ii) to promptly distribute to each Lender copies of all notices, financial statements and other materials delivered by the Borrowers pursuant to this Agreement as received by the Administrative Agent. In the event that (x) a Borrower fails to

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pay when due the principal of or interest on any Loan or any Fees or (y) the Administrative Agent receives notice from a Borrower, any Lender or any Issuing Lender of the occurrence of an Event of Default or other condition or event, in each case the Administrative Agent shall promptly give written notice thereof to the Lenders and shall take such action with respect to such Event of Default or other condition or event as it shall be directed in writing to take by the Required Lenders; provided, however, that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may take such action or refrain from taking such action with respect to such Event of Default or other condition or event as it shall deem advisable in the best interests of the Lenders. The Administrative Agent shall promptly deliver any bill required to be delivered by the Administrative Agent to the relevant Borrower.

10.05 Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lenders and the Administrative Agent under Sections 2.03, 3.03 and 11.03) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.03 and 11.03.

10.06 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, any Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

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10.07 Credit Decision. Each Lender and Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking any action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. Each of the Lenders agrees that the Administrative Agent shall not have any responsibility for the accuracy or adequacy of any information contained in any document, or any oral information, supplied to such Lender by the Borrowers directly or through the Administrative Agent.

10.08 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lender and the Borrowers. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor, which shall be a bank with an office in New York, New York, having a combined capital and surplus of at least $500,000,000, or an Affiliate of any such bank with an office in New York, New York. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b) With effect from the Resignation Effective Date (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and Issuing Lender directly, until such time, if any, as the Required Lenders or the retiring Administrative Agent appoint a successor Administrative Agent as provided for in Section 10.08(a). Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by each Borrower to a successor Administrative Agent shall be the same as those payable by such Borrower to its predecessor unless otherwise agreed between such Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Section 10 and Section 11.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

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10.09 Issuing Lender and Swingline Lender. The provisions of this Section 10 (other than Section 10.05) shall apply to the Issuing Lender and the Swingline Lender mutatis mutandis to the same extent as such provisions apply to the Administrative Agent.

10.10 No Other Duties. Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers, Co-Documentation Agents or Syndication Agent listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Lender hereunder.

SECTION 11. MISCELLANEOUS

11.01 Notices.

(a) Any notice shall be conclusively deemed to have been received by a party hereto and be effective on the day on which delivered to such party at the address set forth below (or at such other address as such party shall specify to the other parties in writing):

(i) if to the Administrative Agent, any Issuing Lender, or the Swingline Lender, at the address thereof set forth in Schedule 11.01;

(ii) if to any of the Lenders, at the address specified in its Administrative Questionnaire, or if a Lender is a Lender by virtue of an assignment, to it at its address (or facsimile number) set forth in the Assignment and Acceptance pursuant to which such Lender shall have become a party hereto;

(iii) if to RG&E or NYSEG, to it at 89 East Avenue, Rochester, New York 14649, Attention: Joseph J. Syta, Vice President – Controller and Treasurer (Facsimile No. 585-724-8285), with a copy to Iberdrola USA Management Corporation, 52 Farm View Drive, New Gloucester, ME 04260, Attention: Director - Corporate Finance (Facsimile No. 207-688-4354); and

(iv) if to CMP, to it at 83 Edison Drive, Augusta, Maine 04336, Attention: Eric Stinneford, Vice President – Treasurer, Controller and Clerk (Telecopy No. 207-621-4714), with a copy to Iberdrola USA Management Corporation, 52 Farm View Drive, New Gloucester, ME 04260, Attention: Director - Corporate Finance (Facsimile No. 207-688-4354).

All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile or other telegraphic communications equipment of the sender, or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 11.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 11.01.

(b) Notices and other communications to the Lenders and the Issuing Lenders hereunder may be delivered or furnished by electronic communications (including email and

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Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or Issuing Lender pursuant to Section 2 if such Lender or Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under Section 2 by electronic communication. The Administrative Agent or the relevant Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgement) and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its email address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c) Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

(d) Each Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Lenders and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”). The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of such Borrower’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material that any Borrower provides to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent any Lender or any Issuing Lender by means of electronic communications pursuant to this Section 11.01, including through the Platform.

11.02 Successors and Assigns; Participations, Assignments and Designations.

(a) This Agreement shall be binding upon and inure to the benefit of each Borrower, the Lenders, the Administrative Agent, all future holders of the Loans and their respective

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successors and assigns, except that no Borrower may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 11.02(c), (ii) by way of participation in accordance with the provisions of Section 11.02(b) or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.02(f) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 11.02(b) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)    (i) Any Lender may, without the consent of or notice to the Borrowers or the Administrative Agent, in accordance with applicable law, at any time sell participations to any Person (other than a natural person or any Borrower or any Affiliate or Subsidiary of any Borrower) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement to the other parties to this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible for the performance thereof, (iii) such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Loan Documents and (iv) the Borrowers, the Administrative Agent, the Issuing Lenders and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents. In no event shall any Participant under any such participation have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by the Borrowers therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Loans or any fees payable hereunder, or postpone the date of the final maturity of the Loans, in each case to the extent subject to such participation. Each Borrower agrees that if amounts outstanding under this Agreement and the Loans are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participation in amounts owing under this Agreement to the same extent as if the amount of its participation were owing directly to it as a Lender under this Agreement; provided that, in purchasing such participation, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 2.14 as fully as if it were a Lender hereunder. Each Borrower also agrees that each Participant shall be entitled to the benefits of Sections 2.09, 2.10, 2.12 and 2.16 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it was a Lender; provided that, in the case of Section 2.16, such Participant shall have complied with the requirements of said Section; provided further that no Participant shall be entitled to receive any greater amount pursuant to Section 2.09, 2.10, 2.12 or 2.16 than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred, unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent.

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(ii) Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that requires the consent of all Lenders pursuant to Section 11.07 that affects such Participant. Each Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.09 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.02(c); provided that such Participant agrees to be subject to the provisions of Section 2.11 as if it were an Assignee under Section 11.02(c). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.06 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.14 as though it were a Lender.

(c)    (i) Any Lender (an “Assignor”) may, in accordance with applicable law, at any time and from time to time assign to any Lender, any Affiliate of any Lender or any Approved Fund or, with the consent of the Borrowers, the Administrative Agent, the Swingline Lender and the Issuing Lenders (which, in the case of the Borrowers or the Administrative Agent, shall not be unreasonably withheld or delayed) (provided that each Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof), to any other Person (other than any Borrower, any Subsidiary or Affiliate of any Borrower, any Defaulting Lender or any other Person who, upon becoming a Lender hereunder, would constitute any of the foregoing, or any natural person) (an “Assignee”) all or any part of its rights and obligations under this Agreement pursuant to an Assignment and Acceptance, executed by such Assignee, such Assignor and any other Person whose consent is required pursuant to this Section 11.02(c), and delivered to the Administrative Agent for its acceptance and recording in the Register; provided that no such assignment to an Assignee (other than any Lender, any affiliate of any Lender or any Approved Fund) shall be in an aggregate principal amount of less than $5,000,000 (other than in the case of an assignment of all of a Lender’s interests under this Agreement), unless otherwise agreed by the Borrowers and the Administrative Agent. For purposes of the proviso contained in the preceding sentence, the amount described therein shall be aggregated in respect of each Lender and its related Approved Funds, if any. Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment and/or Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of an Assignor’s rights and obligations under this Agreement, such Assignor shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.09, 2.12, 2.16 and 11.03. Notwithstanding any

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provision of this Section 11.02, the consent of any Borrower and the Administrative Agent shall not be required for any assignment that occurs when an Event of Default shall have occurred and be continuing with respect to such Borrower.

(ii) In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations or other compensating actions, including funding, with the consent of each Borrower and the Administrative Agent, the applicable pro rata share of Revolving Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable Assignee and Assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each Issuing Lender, each Swingline Lender and each other Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Revolving Loans and participations in Letters of Credit and Swingline Loans in accordance with its Commitment Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this Section 11.02(c)(ii), then the Assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

(d) The Administrative Agent shall, acting solely for this purpose as an agent of the Borrowers, maintain at its address referred to in Schedule 11.01 a copy of each Assignment and Acceptance delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitment of, and the principal amount of the Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. Any assignment of any Loan, whether or not evidenced by a Note, shall be effective only upon appropriate entries with respect thereto being made in the Register (and each Note shall expressly so provide). Any assignment or transfer of all or part of a Loan evidenced by a Note shall be registered on the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon one or more new Notes shall be issued to the designated Assignee.

(e) Upon its receipt of an Assignment and Acceptance executed by an Assignor, an Assignee and any other Person whose consent is required by Section 11.02(c), together with payment to the Administrative Agent of a registration and processing fee of $3,500, the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) record the information contained therein in the Register on the effective date determined pursuant thereto.

(f) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this Section 11.02 concerning assignments of Loans and Notes relate only to

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absolute assignments and that such provisions do not prohibit assignments creating security interests, including any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with applicable law. The parties to this Agreement further acknowledge that any such pledge or assignment shall not release such Lender from any of its obligations hereunder or substitute any pledge or assignee for such Lender as a party hereto.

(g) Each Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in Section 11.02(f).

11.03 Expenses; Indemnity.

(a) Each Borrower, severally but not jointly, agrees to pay all reasonable out-of-pocket expenses incurred (i) by the Administrative Agent in connection with the preparation of this Agreement or in connection with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby contemplated shall be consummated), including the reasonable fees and disbursements of counsel to the Administrative Agent, (ii) by any Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (ii) by the Administrative Agent or any Lender in connection with the enforcement or protection of their rights in connection with this Agreement or in connection with the Loans made or any Notes issued hereunder, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and the Lenders.

(b) Each Borrower, severally but not jointly, agrees to indemnify the Administrative Agent, each Lender, each Issuing Lender and each Related Party of any of the foregoing Persons (each such person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, charges and disbursements, incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Borrower) other than such Indemnitee and its Related Parties arising out of, in any connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds of therefrom (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand to not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of hazardous materials on or from any property owned or operated by such Borrower or any of its Subsidiaries, or any environmental liability related in any way to such Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by such Borrower and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by a Borrower against an

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Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c) The provisions of this Section 11.03 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any of the other Loan Documents, or any investigation made by or on behalf of the Administrative Agent or any Lender. All amounts due under this Section 11.03 shall be payable on written demand therefor.

(d) To the extent that any Borrower for any reason fails to indefeasibly pay any amount required under Section 11.03(a) or 11.03(b) to be paid by it to the Administrative Agent (or any sub-agent thereof), any Issuing Lender, any Swingline Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such Issuing Lender, such Swingline Lender or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the aggregate Extensions of Credit at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), such Issuing Lender or such Swingline Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), such Issuing Lender or any such Swingline Lender in connection with such capacity.

(e) To the fullest extent permitted by applicable law, no Borrower shall assert, and each of them hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit, or the use of the proceeds thereof. No Indemnitee referred to in Section 11.03(b) shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

11.04 Effectiveness. This Agreement shall become effective on the Closing Date, and thereafter shall be binding upon and inure to the benefit of each Borrower, the Administrative Agent, the Swingline Lenders and each Lender.

11.05 Survival of Agreement; Benefit to Successors and Assigns. All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by the Lenders of the Loans herein contemplated and the execution and delivery to the Lenders of any Notes evidencing such Loans and shall continue in full force and effect so long as any portion of any of such Notes is outstanding and unpaid and the Commitments have not been terminated. Whenever in this Agreement any of the parties

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hereto is referred to, such reference shall be deemed to include the successors and assigns of such party and all covenants, promises and agreements by or on behalf of each Borrower which are contained in this Agreement shall bind and inure to the benefit of the successors and assigns of the Lenders; provided, however, that no interest, rights or duties herein may be assigned by the Borrowers without the prior written approval of all the Lenders.

11.06 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Lender, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender, such Issuing Lender or any such Affiliate to or for the credit or the account of such Borrower against any of and all the obligations of such Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or such Issuing Lender or their respective Affiliates, irrespective of whether or not such Lender, such Issuing Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or such Issuing Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 11.16 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercise such right of setoff. The rights of each Lender, each Issuing Lender and their respective Affiliates under this Section 11.06 are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Lender or their respective Affiliates may have. Each Lender and Issuing Lender agrees to notify the applicable Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

11.07 Waivers; Amendment.

(a) No failure or delay of the Administrative Agent or any Lender in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies which they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 11.07(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

(b) Except for increasing the Commitments in accordance with the procedures specified in Section 1.05 and replacing any Lender in accordance with the procedures specified

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in Section 2.11, neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders; provided, however, that no such agreement shall (i) decrease the principal amount of, or extend the maturity of, or any scheduled principal payment date or date for the payment of any interest on, any Loan or Reimbursement Obligation, or waive or excuse any such payment or any part thereof, or decrease rate of interest on any Loan or Reimbursement Obligation, without the prior written consent of each Lender directly affected thereby, (ii) change or extend the Commitment or decrease the Facility Fee of any Lender without the prior written consent of such Lender, or (iii) amend or modify the provisions of Section 2.13 or this Section 11.07 or the definition of “Required Lenders,” without the prior written consent of each Lender; provided further that no such agreement shall (x) amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Swingline Lender or any Issuing Lender hereunder, without the prior written consent of such Person, or (y) amend, modify or waive any provision of Section 3, without the written consent of each Issuing Lender. Any waiver, amendment or modification authorized by this Section 11.07 shall apply equally to each of the Lenders and shall be binding upon the Borrowers, the Lenders, the Swingline Lenders, the Administrative Agent and all future holders of the Loans.

(c) Any request by any Borrower for a modification, amendment or waiver of any provision of this Agreement or any other Loan Document shall be made in writing to the Administrative Agent and the Administrative Agent shall promptly communicate such request to the Lenders. Any such waiver, consent or approval granted by the Required Lenders (and such other Persons as may be required under this Section 11.07) shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Borrower in any case shall entitle such Borrower to any other or further notice or demand in the same, similar or other circumstances.

(d) No waiver by the Administrative Agent or any Lender or Issuing Lender of any breach or default of or by any Borrower under this Agreement shall be deemed a waiver of any other previous breach or default or any thereafter occurring.

11.08 Severability. In the event any one or more provisions contained in this Agreement or any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

11.09 Headings. The Section headings in this Agreement are for convenience only and shall not affect the construction hereof.

11.10 Governing Law; Jurisdiction.

(a) This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be construed in accordance with and governed by the laws of the State of New York.

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(b) Each Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Lender, any Issuing Lender or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Lender or any Issuing Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Borrower or its properties in the courts of any jurisdiction.

(c) Each Borrower irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in Section 11.10(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 11.01. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law

11.11 Counterparts. This Agreement may be executed in two or more counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute but one agreement. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (e.g. “.pdf” or “.tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

11.12 Interest Rate Limitation. Notwithstanding anything herein or in any other Loan Document to the contrary, if at any time the applicable interest rate, together with all Fees and charges which are treated as interest under applicable law (collectively the “Charges”), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by any Lender, shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by such Lender in accordance with applicable law, the rate of interest payable under the Loan held by such Lender, together with all Charges payable to such Lender, shall be limited to the Maximum Rate.

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11.13 Entire Agreement. This Agreement, the other Loan Documents, any separate letter agreements with respect to fees payable to the Administrative Agent and any Assignment and Acceptance (executed pursuant to Section 11.02 of this Agreement) constitute the entire contract between each Borrower, the Administrative Agent, the Issuing Lenders and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any Issuing Lender or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

11.14 Waiver of Jury Trial. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory). Each party hereto (i) certifies that no representative, agent or attorney of any other Person has represented, expressly or otherwise, that such other Person would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Agreement and the other Loan Documents by, among other things, the mutual waivers and certifications in this Section 11.14.

11.15 USA PATRIOT Act. Each Lender hereby notifies each Borrower that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001), as amended from time to time (the “PATRIOT Act”), it is required to obtain, verify and record information that identifies such Borrower, which information includes the name and address of such Borrower and other information that will allow such Lender to identify such Borrower in accordance with the Act.

11.16 Defaulting Lenders.

(a) Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i) Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.

(ii) Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.06 shall be applied at such time or times as may be determined by the Administrative Agent as follows:

(A) first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder;

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(B) second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Lender or the Swingline Lender hereunder;

(C) third, to Cash Collateralize the Issuing Lenders’ or Swingline Lender’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 11.17;

(D) fourth, as the applicable Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;

(E) fifth, if so determined by the Administrative Agent and the applicable Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Lenders’ and Swingline Lender’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued and Swingline Loans made under this Agreement, in accordance with Section 11.17;

(F) sixth, to the payment of any amounts owing to the Lenders, the Issuing Lenders or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lenders or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement;

(G) seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to any Borrower as a result of any judgment of a court of competent jurisdiction obtained by such Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and

(H) eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction;

provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to Section 11.16(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a

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Defaulting Lender or to post Cash Collateral pursuant to this Section 11.16(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) (A) Each Defaulting Lender shall be entitled to receive a Facility Fee for any period during which that Lender is a Defaulting Lender only to extent allocable to the sum of (1) the outstanding principal amount of the Revolving Loans funded by it and (2) its Commitment Percentage of the stated amount of Letters of Credit and Swingline Loans for which it has provided Cash Collateral pursuant to Section 11.17.

(B) Each Defaulting Lender shall be entitled to receive fees on outstanding Letters of Credit for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 11.17.

(C) With respect to any Facility Fee or fee on an outstanding Letter of Credit not required to be paid to any Defaulting Lender pursuant to this Section 11.16(a)(iii), the applicable Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to Section 11.16(a)(iv), (y) pay to each Issuing Lender and the Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Lender’s or the Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv) All or any part of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Commitment Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 5.02 are satisfied at the time of such reallocation (and, unless any Borrower shall have otherwise notified the Administrative Agent at such time, each Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time) and (y) such reallocation does not cause the Extensions of Credit of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v) If the reallocation described in Section 11.16(a)(iv) cannot, or can only partially, be effected, each Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lenders’ Fronting Exposure applicable to such Borrower, and (y) second, Cash Collateralize the Issuing Lenders’ Fronting Exposure applicable to such Borrower in accordance with the procedures set forth in Section 11.17.

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(b) If each Borrower, the Administrative Agent, the Swingline Lender and each Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to Section 11.16(a)(iv), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of any Borrower while that Lender was a Defaulting Lender; provided further that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c) So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) no Issuing Lender shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

11.17 Cash Collateral.

(a) At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent, the Swingline Lender or any Issuing Lender (with a copy to the Administrative Agent) each Borrower shall Cash Collateralize the Swingline Lender’s and Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 11.16(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount applicable to such Borrower.

(b) Each Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Lenders and the Swingline Lender, and agrees to maintain, a first priority security interest in all Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of L/C Obligations and Swingline Loans, to be applied pursuant to Section 11.17(c). If at any time the Administrative Agent determines that Cash Collateral applicable to any Borrower is subject to any right or claim of any Person other than the Administrative Agent, the Issuing Lenders and the Swingline Lender as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, such Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

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(c) Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 11.17 or Section 11.16 (i) in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided or (ii) in respect of Swingline Loans shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Swingline Loans (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which Cash Collateral was so provided, in each case prior to any other application of such property as may otherwise be provided for herein.

(d) Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Lender’s or the Swingline Lender’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 11.17 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender) or (ii) the determination by the Administrative Agent and each Issuing Lender or the Swingline Lender, as the case may be, that there exists excess Cash Collateral; provided that, subject to Section 11.16, the Person providing Cash Collateral and each Issuing Lender or the Swingline Lender, as the case may be, may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations; provided further that to the extent that such Cash Collateral was provided by any Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, all as of the day and year first above written.

NEW YORK STATE ELECTRIC & GAS CORPORATION
By:	Mark S. Lynch
Name:	Mark S. Lynch
Title:	President
By:	/s/ Joseph J. Syta
Name:	Joseph J. Syta
Title:	Vice President, Controller & Treasurer
ROCHESTER GAS AND ELECTRIC CORPORATION
By:	Mark S. Lynch
Name:	Mark S. Lynch
Title:	President
By:	/s/ Joseph J. Syta
Name:	Joseph J. Syta
Title:	Vice President, Controller & Treasurer
CENTRAL MAINE POWER COMPANY
By:	/s/ Sara J. Burns
Name:	Sara J. Burns
Title:	President and Chief Executive Officer
By:	/s/ Eric N. Stinneford
Name:	Eric N. Stinneford
Title:	Vice President, Treasurer, Controller & Clerk

Signature Page to Credit Agreement

JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender
By:	/s/ James W. Peterson
Name:	JAMES W. PETERSON
Title:	VICE PRESIDENT
BANK OF AMERICA, N.A., as Syndication Agent and as a Lender
By:	/s/ Mike Mason
Name:	Mike Mason
Title:	Director
Banco Bilbao Vizcaya Argentaria, S.A., New York Branch, as a Lender
By:	/s/ Michael Oka
Name:	MICHAEL OKA
Title:	EXECUTIVE DIRECTOR
By:	/s/ Paul A. Rodriguez
Name:	PAUL A. RODRIGUEZ
Title:	VICE PRESIDENT
Sovereign Bank, as a Lender
By:	/s/ Alister Moreno
Name:	Alister Moreno
Title:	Global Banker

Signature Page to Credit Agreement

TD Bank, N.A., as a Lender
By:	/s/ Marla Willner
Name:	Marla Willner
Title:	Senior Vice President
THE BANK OF NEW YORK MELLON, as Co-Documentation Agent and as a Lender
By:	/s/ John N. Watt
Name:	JOHN N. WATT
Title:	VICE PRESIDENT
Union Bank, N.A., as a Lender
By:	/s/ Michael Agrims
Name:	Michael Agrims
Title:	Vice President
Citibank, N.A., as a Lender
By:	/s/ Anita J. Brickell
Name:	Anita J. Brickell
Title:	Vice President
DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender
By:	/s/ Philippe Sandmeier
Name:	Philippe Sandmeier
Title:	Managing Director

Signature Page to Credit Agreement

By:	/s/ Lawrence Williamson
Name:	Lawrence Williamson
Title:	Managing Director
HSBC Bank USA, National Association, as a Lender
By:	/s/ Alexander Rea
Name:	Alexander Rea
Title:	Director # 19168

Signature Page to Credit Agreement

Schedule 1.01

Lender	Commitment
JPMorgan Chase Bank, N.A.	$	77,500,000.00
Bank of America, N.A.	$	77,500,000.00
Banco Bilbao Vizcaya Argentaria S.A., New York Branch	$	62,000,000.00
Sovereign Bank (Santander Group)	$	62,000,000.00
TD Bank, N.A.	$	62,000,000.00
The Bank of New York Mellon	$	62,000,000.00
Union Bank, N.A.	$	62,000,000.00
Citibank, N.A.	$	45,000,000.00
Deutsche Bank AG New York Branch	$	45,000,000.00
HSBC Bank USA, National Association	$	45,000,000.00
Total Commitment	$	600,000,000.00

Schedule 4.04

Litigation

None.

Schedule 4.11

Environmental and Safety Matters

None.

Schedule 11.01

Notice Addresses

Administrative Agent,   Issuing Lender or   Swingline Lender Primary Contact:   Leslie Hill 1111 Fannin Street, Floor 10 Houston, TX, 77002-6925, United States Phone: 713-750-2318 Fax: 713-427-6307 Email: Leslie.d.hill@chase.com   Secondary Contact:   John Ngo 1111 Fannin Street, Floor 10 Houston, TX, 77002-6925, United States Phone: 713-750-2931 Fax: 713-427-6307 Email: John.ngo@jpmchase.com

EX-10.10

EXHIBIT 10.10

AMENDMENT TO REVOLVING CREDIT AGREEMENT

This AMENDMENT TO REVOLVING CREDIT AGREEMENT (this “Amendment”), is dated as of July 28, 2011, and entered into between NEW YORK STATE ELECTRIC & GAS CORPORATION, a New York corporation (“NYSEG”), ROCHESTER GAS AND ELECTRIC CORPORATION, a New York corporation (“RG&E”), CENTRAL MAINE POWER COMPANY, a Maine corporation (“CMP”; together with NYSEG and RG&E, the “Borrowers”; each, a “Borrower”), the LENDERS (as defined in the hereinafter defined Credit Agreement) party hereto and JPMORGAN CHASE BANK, N.A., as administrative agent (the “Administrative Agent”).

RECITALS

WHEREAS, the Borrowers, the several lenders from time to time parties thereto (the “Lenders”) and the Administrative Agent, inter alia, are party to the Revolving Credit Agreement dated as of July 15, 2011 (the “Credit Agreement”); and

WHEREAS, the Borrowers, the Lenders and the Administrative Agent have agreed to make certain amendments to the Credit Amendment on the terms and conditions hereof.

STATEMENT OF AGREEMENT

In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Defined Terms. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

2. Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 2(e), it is agreed that the Credit Agreement shall be amended as follows:

(a) Section 2.04(c) of the Credit Agreement shall be amended by deleting it in its entirety and replacing it with the following:

“(c) Each Swingline Loan shall bear interest, each day, equal to the LIBO Market Index Rate for such day plus the Applicable Margin in effect on such day with respect to a Eurodollar Loan.”

(b) Section 2.05(a) of the Credit Agreement shall be amended by inserting the phrase “, LIBO Market Index Rate” after the term “ABR” in the third sentence thereof.

(c) Section 9.01 of the Credit Agreement shall be amended as follows:

(i) The definition of “Business Day” shall be amended by inserting the phrase “or Swingline Loan” after the phrase “Eurodollar Loan”.

(ii) The definition of “Interest Payment Date” shall be amended by inserting the phrase “or any Swingline Loan” after the phrase “as to any Eurodollar Loan” in clause (d) thereof.

(iii) The definition of “Type” shall be amended by inserting the phrase “, LIBO Market Index Rate” after the phrase “Eurodollar Rate”.

(d) Section 9.01 of the Credit Agreement shall be amended by inserting the following definition in appropriate alphabetical order:

“LIBO Market Index Rate” means, for any day, the rate of interest for one-month dollar deposits appearing on Reuters Screen LIBOR01 Page (or any successor page) determined as of 11:00 a.m., London time, for such day, or if such day is not a Business Day, then the immediately preceding Business Day (or if not so reported, then as determined by the Administrative Agent from another recognized source or interbank quotation).

(e) Section 9.01 of the Credit Agreement shall be further amended by deleting the definition of “LIBO Rate” in its entirety.

3. Conditions. The amendments set forth in Section 2 shall become effective as of the date (the “Effective Date”) when, and only when, each of the following conditions precedent shall have been satisfied:

(a) The Administrative Agent shall have received, dated as of the Effective Date, an executed counterpart hereof from each of the Borrowers and the Lenders;

(b) Since December 31, 2010, both immediately before and after giving effect to this Amendment, there has not occurred any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect; and

(c) The Administrative Agent shall have received all fees required to be paid and all reasonable out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation of this Amendment for which invoices have been presented, including the reasonable fees and disbursements of counsel to the Administrative Agent.

4. Representations and Warranties. Each Borrower hereby represents and warrants, on and as of the Effective Date, that (i) the representations and warranties contained in the Credit Agreement and the other Loan Documents qualified as to materiality are true and correct and those not so qualified are true and correct in all material respects, both immediately before and after giving effect to this Amendment (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such date); (ii) this Amendment has been duly authorized, executed and delivered by such Borrower and constitutes the legal, valid and binding obligation of such Borrower enforceable against it in accordance with its terms; and (iii) no Default or Event of Default shall have occurred and be continuing, both immediately before and after giving effect to this Amendment.

5. Acknowledgement and Confirmation. Each Borrower hereby confirms and agrees that, after giving effect to this Amendment, the Credit Agreement and the other Loan Documents to which it is a party remain in full force and effect and enforceable against such Borrower in accordance with their respective terms and shall not be discharged, diminished, limited or otherwise affected in any respect, and represents and warrants to the Lenders that it has no knowledge of any claims, counterclaims, offsets, or defenses to or with respect to its obligations

under the Loan Documents, or if such Borrower has any such claims, counterclaims, offsets, or defenses to the Loan Documents or any transaction related to the Loan Documents, the same are hereby waived, relinquished, and released in consideration of the execution of this Amendment. This acknowledgement and confirmation by the Borrowers is made and delivered to induce the Administrative Agent and the Lenders to enter into this Amendment, and each Borrower acknowledges that the Administrative Agent and the Lenders would not enter into this Amendment in the absence of the acknowledgement and confirmation contained herein.

6. Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

7. Headings. Headings and captions used in this Amendment are included for convenience of reference only and shall not be given any substantive effect.

8. Governing Law; Submission To Jurisdiction. This Amendment shall be construed in accordance with and governed by the laws of the State of New York.

9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT.

10. Counterparts; Integration. This Amendment may be executed and delivered via facsimile or electronic mail with the same force and effect as if an original were executed and may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. This Amendment constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

[ Remainder of Page Intentionally Left Blank; Signature Page Follows ]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers, all as of the day and year first above written.

NEW YORK STATE ELECTRIC & GAS CORPORATION
By:	/s/ Mark S. Lynch
Name:	Mark S. Lynch
Title:	President
By:	/s/ Joseph J. Syta
Name:	Joseph J. Syta
Title:	Vice President, Controller & Treasurer
ROCHESTER GAS AND ELECTRIC CORPORATION
By:	/s/ Mark S. Lynch
Name:	Mark S. Lynch
Title:	President
By:	/s/ Joseph J. Syta
Name:	Joseph J. Syta
Title:	Vice President, Controller & Treasurer
CENTRAL MAINE POWER COMPANY
By:	/s/ Sara J. Burns
Name:	Sara J. Burns
Title:	President and Chief Executive Officer
By:	/s/ Eric N. Stinneford
Name:	Eric N. Stinneford
Title:	Vice President, Treasurer, Controller & Clerk

Amendment to Revolving Credit Agreement

JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender
By:	/s/ James W. Peterson
Name:	James W. Peterson
Title:	Vice President
BANK OF AMERICA, N.A., as Syndication Agent and as a Lender
By:	/s/ Mike Mason
Name:	Mike Mason
Title:	Director
BANCO BILBAO VIZCAYA ARGENTARIA, S.A., NEW YORK BRANCH, as a Lender
By:	/s/ Michael D’Anna
Name:	Michael D’Anna
Title:	Executive Director
By:	/s/ Adriana Alaix
Name:	Adriana Alaix
Title:	Vice President
SOVEREIGN BANK, as a Lender
By:	/s/ Alister Moreno
Name:	Alister Moreno
Title:	Global Banker

Amendment to Revolving Credit Agreement

TD BANK, N.A., as a Lender
By:	/s/ Marla Willner
Name:	Marla Willner
Title:	Senior Vice President
THE BANK OF NEW YORK MELLON, as a Lender
By:	/s/ John Watt
Name:	John N. Watt
Title:	Vice President
UNION BANK, N.A., as a Lender
By:	/s/ Matthew Curtin
Name:	Matthew Curtin
Title:	Assistant Vice President
CITIBANK, N.A., as a Lender
By:	/s/ Anita J. Brickell
Name:	Anita J. Brickell
Title:	Vice President
DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender
By:	/s/ Philippe Sandmeier
Name:	Philippe Sandmeier
Title:	Managing Director
By:	/s/ Ming K. Chu
Name:	Ming K. Chu
Title:	Vice President

Amendment to Revolving Credit Agreement

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Alexander Rea
Name:	Alexander Rea
Title:	Director

Amendment to Revolving Credit Agreement

EX-10.11

EXHIBIT 10.11

FIRST AMENDMENT AND EXTENSION AGREEMENT

THIS FIRST AMENDMENT AND EXTENSION AGREEMENT, dated as of July 18, 2013 (this “Agreement”), among NEW YORK STATE ELECTRIC & GAS CORPORATION, a New York corporation (“NYSEG”), ROCHESTER GAS AND ELECTRIC CORPORATION, a New York corporation (“RG&E”), CENTRAL MAINE POWER COMPANY, a Maine corporation (“CMP”; together with NYSEG, and RG&E, the “Borrowers”; each, a “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”), JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”), BANK OF AMERICA, N.A., as syndication agent, and BANCO BILBAO VIZCAYA ARGENTARIA S.A., NEW YORK BRANCH, SOVEREIGN BANK (SANTANDER GROUP), TD BANK, N.A., THE BANK OF NEW YORK MELLON and UNION BANK, N.A., as co-documentation agents.

RECITALS

A. The Borrowers, the Lenders and other financial institutions party thereto and the Administrative Agent are parties to that certain Revolving Credit Agreement dated as of July 15, 2011 (as amended by the Amendment to Revolving Credit Agreement dated as of July 28, 2011, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings given to them in the Credit Agreement as they may be modified pursuant to this Agreement.

B. The Borrowers have requested a one-year extension of the Termination Date pursuant to Section 1.04 of the Credit Agreement and certain other amendments to the Credit Agreement and the Lenders signatory hereto have approved such request.

STATEMENT OF AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. EXTENSION

Pursuant to Section 1.04 of the Credit Agreement, the Borrowers provided written notice to the Administrative Agent of its request to extend the Termination Date not less than 30 days and not more than 60 days prior to the anniversary of the Closing Date occurring on July 15, 2013. As of the date hereof, Lenders (the “Extending Lenders”) holding more than fifty percent (50%) of the Total Commitments have approved the Borrowers’ request to extend the Termination Date and, subject to the satisfaction of the conditions precedent set forth in Section 3, but notwithstanding any other conditions thereto or requirements related thereto contained in Section 1.04(c) of the Credit Agreement, the Termination Date as to the Extending Lenders shall be extended for an additional year from the Current Termination Date to July 15, 2017. The Termination Date as to any Non-Extending Lender remains unchanged.

SECTION 2. AMENDMENTS

(a) Subject to the satisfaction of the conditions precedent set forth in Section 3 (other than Section 3(d)), the following is hereby inserted as new Section 6.08 of the Credit Agreement:

“6.08 Compliance with Laws.

(a) Conduct, and ensure that each of its Subsidiaries will conduct, its business in compliance with Anti-Corruption Laws.

(b) Maintain, and ensure that each of its Subsidiaries will maintain, policies and procedures designed to promote and achieve compliance with Anti-Corruption Laws.

(c) Have, and ensure that each of its Subsidiaries will have, appropriate controls and safeguards in place designed to prevent any proceeds of any Loans or Letters of Credit from being used contrary to the representations and undertakings set forth herein.

(d) Comply, and ensure that each of its Subsidiaries will comply, in all material respects with all foreign and domestic laws, rules and regulations (including, without limitation, the USA Patriot Act, foreign exchange control regulations, foreign asset control regulations and other trade-related regulations) now or hereafter applicable to the Borrower and its Subsidiaries or the Loans, Letters of Credit and other transactions contemplated hereby or Borrower’s execution, delivery and performance of the Loan Documents.”

(b) Subject to the satisfaction of the conditions precedent set forth in Section 3 (other than Section 3(d)), the following is hereby inserted as new Section 7.07 of the Credit Agreement:

“7.07 Anti-Money Laundering Laws.

(a) Use, or permit any of its Subsidiaries to use, directly or indirectly use the proceeds of the Loans or the Letters of Credit:

(i) for any purpose which would breach the U.K Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions;

(ii) to fund, finance or facilitate any activities, business or transaction of or with any Person on any Sanctions List or in any country that is subject to Sanctions, or otherwise in violation of Sanctions, as such Sanctions Lists or Sanctions are in effect from time to time; or

(iii) in any other manner that will result in the violation of any applicable Sanctions by the Administrative Agent, any Issuing Lender or any Lender.

(b) Use, or permit any of its Subsidiaries to use, funds or assets obtained directly or indirectly from transactions with or otherwise relating to (i) Persons on any Sanctions List, or (ii) any country that is subject to Sanctions, to pay or repay any amount owing to the Administrative Agent, any Issuing Lender or any Lender hereunder.”

(c) Subject to the satisfaction of the conditions precedent set forth in Section 3 (other than Section 3(d)), Section 9.01 of the Credit Agreement is hereby amended by inserting the following definitions in proper alphabetical order:

““Anti-Corruption Laws” shall mean all laws, rules, and regulations of any jurisdiction applicable to the Borrowers and their respective Subsidiaries concerning or relating to bribery or corruption.”

““OFAC” shall mean the Office of Foreign Assets Control of the U.S. Department of Treasury.”

““Sanctions” shall mean:

(i) economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the US government and administered by OFAC, (b) the United Nations Security Council, (c) the European Union or (d) Her Majesty’s Treasury of the United Kingdom; and

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(ii) economic or financial sanctions imposed, administered or enforced from time to time by the US State Department, the US Department of Commerce or the US Department of the Treasury.”

““Sanctions List” shall mean any of the lists of specifically designated nationals or designated persons or entities (or equivalent) held by the US government and administered by OFAC, the US State Department, the US Department of Commerce or the US Department of the Treasury or the United Nations Security Council or any similar list maintained by the European Union, any other EU Member State or any other U.S. government entity, in each case as the same may be amended, supplemented or substituted from time to time.”

(d) Subject to the satisfaction of the conditions precedent set forth in Section 3 (other than Section 3(d)), Section 9.01 of the Credit Agreement is hereby amended by deleting “2 weeks or” from the third line of the definition of “Interest Period” therein.

SECTION 3. CONDITIONS PRECEDENT

The extension of the Termination Date pursuant to Section 1 shall become effective as of the date when, and only when, each of the following conditions precedent shall have been satisfied (the “Effective Date”) and the amendments to the Credit Agreement pursuant to Section 2 shall become effective as of the date when, and only when, each of the following conditions precedent (other than Section 3(d)) shall have been satisfied :

(a) The Administrative Agent (or its counsel) shall have received from the Borrowers and the Extending Lenders holding more than fifty percent (50%) of the Total Commitments either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic image scan transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(b) The Borrower shall have paid:

(A) to the Administrative Agent, for the account of each Extending Lender, an extension fee in the amount of 0.06% of such Extending Lender’s Commitment as of the Effective Date, which extension fee once paid will be fully earned and nonrefundable; and

(B) all other fees and reasonable expenses of the Administrative Agent and the Lenders required under the Credit Agreement and any other Loan Document to be paid on or prior to the Effective Date (including reasonable fees and expenses of counsel) in connection with this Agreement.

(c) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by a responsible officer of each Borrower, confirming that the conditions set forth in Section 5.02 of the Credit Agreement are satisfied (with all references in such paragraphs to the making of a Loan or issuance of a Letter of Credit being deemed to be references to the extension of the Commitments on the Effective Date).

(d) The Borrowers shall have received all approvals, permits and consents of any Governmental Authorities or other Persons required in connection with the execution and delivery of this Agreement and the effectiveness of the extension of the Termination Date contemplated by Section 1.

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SECTION 4. MISCELLANEOUS

(A) GOVERNING LAW. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

(b) Full Force and Effect. Except as expressly modified hereby, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof on the date hereof. As used in the Credit Agreement, “hereinafter,” “hereto,” “hereof,” and words of similar import shall, unless the context otherwise requires, mean the Credit Agreement after giving effect to this Agreement. Any reference to the Credit Agreement or any of the other Loan Documents herein or in any such documents shall refer to the Credit Agreement and Loan Documents as modified hereby. This Agreement is limited as specified and shall not constitute or be deemed to constitute an amendment, modification or waiver of any provision of the Credit Agreement except as expressly set forth herein. This Agreement shall constitute a Loan Document under the terms of the Credit Agreement.

(c) Expenses. The Borrower agrees on demand (i) to pay all reasonable fees and disbursements of counsel to the Administrative Agent, and (ii) to reimburse the Administrative Agent for all reasonable out-of-pocket costs and expenses, in each case, in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents delivered in connection herewith.

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

(e) Successors and Assigns. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto.

(f) Construction. The headings of the various sections and subsections of this Agreement have been inserted for convenience only and shall not in any way affect the meaning or construction of any of the provisions hereof. The provisions of Section 9.02 of the Credit Agreement are hereby incorporated by reference as if fully set forth herein.

(g) Counterparts. This Agreement may be executed in two or more counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute but one agreement. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (e.g. “.pdf” or “.tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrowers and the Administrative Agent.

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

NEW YORK STATE ELECTRIC & GAS CORPORATION
By:	/s/ Mark S. Lynch
Name:	Mark S. Lynch
Title:	President
By:	/s/ Joseph J. Syta
Name:	Joseph J. Syta
Title:	Vice President
ROCHESTER GAS AND ELECTRIC CORPORATION
By:	/s/ Mark S. Lynch
Name:	Mark S. Lynch
Title:	President
By:	/s/ Joseph J. Syta
Name:	Joseph J. Syta
Title:	Vice President
CENTRAL MAINE POWER COMPANY
By:	/s/ Sara J. Burns
Name:	Sara J. Burns
Title:	President and CEO
By:	/s/ Eric N. Stinneford
Name:	Eric N. Stinneford
Title:	Vice President, Treasurer, Controller and Clerk

Iberdrola OpCo First Amendment and Extension Agreement

JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender
By:	/s/ Tasvir Hasan
Name:	Tasvir Hasan
Title:	Vice President
BANK OF AMERICA, N.A., as Syndication Agent and as a Lender
By:	/s/ Jerry Wells
Name:	Jerry Wells
Title:	Vice President
CITIBANK, N.A., as a Lender
By:	/s/ D. Scott McMurtry
Name:	D. Scott McMurtry
Title:	Vice President
SOVEREIGN BANK, N.A., as a Lender
By:	/s/ William Maag
Name:	William Maag
Title:	Senior Vice President
TD BANK, N.A., as a Lender
By:	/s/ David Perlman
Name:	David Perlman
Title:	Senior Vice President

Iberdrola OpCo First Amendment and Extension Agreement

THE BANK OF NEW YORK MELLON, as a Lender
By:	/s/ Richard K. Fronapfel, Jr.
Name:	Richard K. Fronapfel, Jr.
Title:	Vice President
UNION BANK, N.A., as a Lender
By:	/s/ Harvey Horowitz
Name:	Harvey Horowitz
Title:	VP
DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender
By:	/s/ Ming K. Chu
Name:	Ming K. Chu
Title:	Vice President
By:	/s/ Virginia Cosenza
Name:	Virginia Cosenza
Title:	Vice President
HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Christopher Samms
Name:	Christopher Samms
Title:	Senior Vice President, #9426

Iberdrola OpCo First Amendment and Extension Agreement

EX-10.12

EXHIBIT 10.12

SECOND AMENDMENT AND EXTENSION AGREEMENT

THIS SECOND AMENDMENT AND EXTENSION AGREEMENT, dated as of July 15, 2014 (this “Agreement”), among NEW YORK STATE ELECTRIC & GAS CORPORATION, a New York corporation (“NYSEG”), ROCHESTER GAS AND ELECTRIC CORPORATION, a New York corporation (“RG&E”), CENTRAL MAINE POWER COMPANY, a Maine corporation (“CMP”; together with NYSEG, and RG&E, the “Borrowers”; each, a “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”), JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”), BANK OF AMERICA, N.A., as syndication agent, and BANCO BILBAO VIZCAYA ARGENTARIA S.A., NEW YORK BRANCH, SANTANDER BANK, N.A. (FORMERLY SOVEREIGN BANK, N.A.), TD BANK, N.A., THE BANK OF NEW YORK MELLON and UNION BANK, N.A., as co-documentation agents.

RECITALS

A. The Borrowers, the Lenders and other financial institutions party thereto and the Administrative Agent are parties to that certain Revolving Credit Agreement dated as of July 15, 2011 (as amended by the Amendment to Revolving Credit Agreement dated as of July 28, 2011, and the First Amendment and Extension Agreement dated as of July 18, 2013, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings given to them in the Credit Agreement as they may be modified pursuant to this Agreement.

B. The Borrowers have requested a one-year extension of the Termination Date pursuant to Section 1.04 of the Credit Agreement and certain other amendments to the Credit Agreement and the Lenders signatory hereto have approved such request.

STATEMENT OF AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. EXTENSION

Pursuant to Section 1.04 of the Credit Agreement, the Borrowers provided written notice to the Administrative Agent of its request to extend the Termination Date not less than 30 days and not more than 60 days prior to the anniversary of the Closing Date occurring on July 15, 2014. As of the date hereof, Lenders (the “Extending Lenders”) holding more than fifty percent (50%) of the Total Commitments have approved the Borrowers’ request to extend the Termination Date and, subject to the satisfaction of the conditions precedent set forth in Section 3, but notwithstanding any other conditions thereto or requirements related thereto contained in Section 1.04(c) of the Credit Agreement, the Termination Date as to the Extending Lenders shall be extended for an additional year from the Current Termination Date to July 15, 2018. The Termination Date as to any Non-Extending Lender remains unchanged.

SECTION 2. AMENDMENTS

Subject to the satisfaction of the conditions precedent set forth in Section 3 (other than Section 3(d)), Section 1.06 is hereby amended and restated in its entirety as follows:

“1.06 Adjustments of Sublimits. The Borrowers may from time to time so long as no Event of Default exists with respect to any Borrower, upon not less than five Business Days’ notice to the Administrative Agent in a Sublimit Adjustment Letter in substantially the form of

Exhibit H (in which case the Administrative Agent shall promptly deliver a copy to each of the Lenders), change their respective Sublimits; provided that (i) the aggregate amount of the Sublimits shall equal but not exceed the Total Commitments, (ii) each Sublimit shall be an integral multiple of $5,000,000, (iii) the NYSEG Sublimit shall not exceed $200,000,000, (iv) the RG&E Sublimit shall not exceed $200,000,000 and (v) the CMP Sublimit shall not exceed $250,000,000; provided further that, notwithstanding the foregoing clauses (iii), (iv) and (v), the NYSEG Sublimit, RG&E Sublimit and CMP Sublimit may be increased in accordance with Section 1.05(f).

SECTION 3. CONDITIONS PRECEDENT

The extension of the Termination Date pursuant to Section 1 shall become effective as of the date when, and only when, each of the following conditions precedent shall have been satisfied (the “Effective Date”), and the amendments to the Credit Agreement pursuant to Section 2 shall become effective as of the date when, and only when, each of the following conditions precedent (other than Section 3(d)) shall have been satisfied:

(a) The Administrative Agent (or its counsel) shall have received from the Borrowers and the Extending Lenders holding more than fifty percent (50%) of the Total Commitments either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic image scan transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(b) The Borrower shall have paid:

(A) to the Administrative Agent, for the account of each Extending Lender, an extension fee in the amount of 0.06% of such Extending Lender’s Commitment as of the Effective Date, which extension fee once paid will be fully earned and nonrefundable; and

(B) all other fees and reasonable expenses of the Administrative Agent and the Lenders required under the Credit Agreement and any other Loan Document to be paid on or prior to the Effective Date (including reasonable fees and expenses of counsel) in connection with this Agreement.

(c) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by a responsible officer of each Borrower, confirming that the conditions set forth in Section 5.02 of the Credit Agreement are satisfied (with all references in such paragraphs to the making of a Loan or issuance of a Letter of Credit being deemed to be references to the extension of the Commitments on the Effective Date).

(d) The Borrowers shall have received all approvals, permits and consents of any Governmental Authorities or other Persons required in connection with the execution and delivery of this Agreement and the effectiveness of the extension of the Termination Date contemplated by Section 1.

SECTION 4. MISCELLANEOUS

(A) GOVERNING LAW. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

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(b) Full Force and Effect. Except as expressly modified hereby, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof on the date hereof. As used in the Credit Agreement, “hereinafter,” “hereto,” “hereof,” and words of similar import shall, unless the context otherwise requires, mean the Credit Agreement after giving effect to this Agreement. Any reference to the Credit Agreement or any of the other Loan Documents herein or in any such documents shall refer to the Credit Agreement and Loan Documents as modified hereby. This Agreement is limited as specified and shall not constitute or be deemed to constitute an amendment, modification or waiver of any provision of the Credit Agreement except as expressly set forth herein. This Agreement shall constitute a Loan Document under the terms of the Credit Agreement.

(c) Expenses. The Borrowers agree on demand (i) to pay all reasonable fees and disbursements of counsel to the Administrative Agent, and (ii) to reimburse the Administrative Agent for all reasonable out-of-pocket costs and expenses, in each case, in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents delivered in connection herewith.

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

(e) Successors and Assigns. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto.

(f) Construction. The headings of the various sections and subsections of this Agreement have been inserted for convenience only and shall not in any way affect the meaning or construction of any of the provisions hereof. The provisions of Section 9.02 of the Credit Agreement are hereby incorporated by reference as if fully set forth herein.

(g) Counterparts. This Agreement may be executed in two or more counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute but one agreement. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (e.g. “.pdf” or “.tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrowers and the Administrative Agent.

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

NEW YORK STATE ELECTRIC & GAS CORPORATION
By:	/s/ Joseph J. Syta
Name:	Joseph J. Syta
Title:	Vice President, Controller & Treasurer
By:	/s/ Mark S. Lynch
Name:	Mark S. Lynch
Title:	President and Chief Executive Officer
ROCHESTER GAS AND ELECTRIC CORPORATION
By:	/s/ Joseph J. Syta
Name:	Joseph J. Syta
Title:	Vice President, Controller & Treasurer
By:	/s/ Mark S. Lynch
Name:	Mark S. Lynch
Title:	President and Chief Executive Officer
CENTRAL MAINE POWER COMPANY
By:	/s/ Eric N. Stinneford
Name:	Eric N. Stinneford
Title:	Vice President, Treasurer, Controller and Clerk
By:	/s/ Sara J. Burns
Name:	Sara J. Burns
Title:	President and Chief Executive Officer

Iberdrola OpCo Second Amendment and Extension Agreement

JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender
By:	/s/ Tasvir Hasan
Name:	Tasvir Hasan
Title:	Vice President
BANK OF AMERICA, N.A., as Syndication Agent and as a Lender
By:	/s/ Jerry Wells
Name:	Jerry Wells
Title:	Vice President
CITIBANK, N.A., as a Lender
By:	/s/ Anita Brickell
Name:	Anita Brickell
Title:	Vice President
SANTANDER BANK, N.A., as a Lender
By:	/s/ William Maag
Name:	William Maag
Title:	Senior Vice President
TD BANK, N.A., as a Lender
By:	/s/ David Perlman
Name:	David Perlman
Title:	Senior Vice President

Iberdrola OpCo Second Amendment and Extension Agreement

THE BANK OF NEW YORK MELLON, as a Lender
By:	/s/ Richard K. Fronapfel, Jr.
Name:	Richard K. Fronapfel, Jr.
Title:	Vice President
BANCO BILBAO VIZCAYA ARGENTARIA, S.A., NEW YORK BRANCH, as a Lender
By:	/s/ Nurys Maleki
Name:	Nurys Maleki
Title:	Vice President
By:	/s/ Verónica Incera
Name:	Verónica Incera
Title:	Managing Director
The Bank of Tokyo-Mitsubishi UFJ, Ltd. as a Lender
By:	/s/ Robert J. MacFarlane
Name:	Robert J. MacFarlane
Title:	Vice President
DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender
By:	/s/ Ming K. Chu
Name:	Ming K. Chu
Title:	Vice President
By:	/s/ Virginia Cosenza
Name:	Virginia Cosenza
Title:	Vice President

Iberdrola OpCo Second Amendment and Extension Agreement

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Alexander Rea
Name:	Alexander Rea
Title:	Senior Vice President Multinationals #19168

Iberdrola OpCo Second Amendment and Extension Agreement

EX-10.13

EXHIBIT 10.13

INTRA-GROUP CREDIT FACILITY AGREEMENT

US$600,000,000

Dated this 1^st day of August, 2011,

BY AND BETWEEN

OF THE ONE PART,

Iberdrola Financiación S.A.U. (“the Lender”), having its registered office at Bilbao, Calle Gardoqui nº 8 and holding NIF A95573283, properly represented by Ms. Itziar Arriola Alicbar and Mr. Javier Pastor under a current power of attorney, which they hereupon produce as evidence, executed before the Bilbao notary Mr. José Antonio Isusi Ezcurdia, on the 20 day of July, 2009, under protocol number 3.382;

AND, OF THE OTHER PART,

Iberdrola USA, INC. (the “Borrower”), a New York corporation and holding a United States Federal Tax identification number of 14-1798693, properly represented by Mr. Robert D. Kump and Mr Danial Alcain, as officers of the Company.

The Lender and the Borrower will be referred to, together, as “the Parties”.

RECITALS

I. Whereas the Borrower has requested from the Lender a committed credit facility on arm’s length terms in the amount of US$600,000,000 (Six Hundred Million United States Dollars) for general corporate purposes.

II. Whereas the Lender, in the context of the various services it provides in the interests of all companies of its group, has agreed to grant the credit facility referred to in the foregoing recital.

III. Now, therefore, the parties have agreed to enter into this Intra-Group Credit Facility Agreement (“the Agreement”) under and subject to the following terms and conditions.

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TERMS AND CONDITIONS

1. SUBJECT-MATTER

Under this Agreement the Lender grants to the Borrower a credit facility in the maximum amount of US$600,000,000, Six Hundred Million United States Dollars (the “Facility Amount”).

The Lender agrees to provide up to the Facility Amount, in one or a series of tranches, to the Borrower under the terms of this Agreement, and the Borrower undertakes to repay the amounts drawn under the Agreement and to pay appropriate interest and expenses as and when due in accordance with the Agreement.

The amounts drawn under the Agreement will be used for general corporate purposes.

2. DRAW-DOWNS

The Borrower may draw down the Facility Amount by sending a communication to the Lender (to the attention of Mr Pablo Sanchez Maxi, at the address set out below) signed by Mr Robert D. Kump and / or Mr Daniel Alcain, or their designees. Such communication must be sent three business days in advance of the day on which it is intended to draw down the funds.

Such communication must specify the credit facility amount intended to be drawn down, the draw-down date, the interest period and the funding instructions.

3. DURATION AND EARLY REPAYMENT

This credit facility has a duration of 5 years.

At all events, upon the 1^st day of August, 2016, the Agreement will expire with final effect. The Borrower must then repay any amounts it has drawn down and pay any interest and other amounts due under this Agreement.

Notwithstanding the above, the Borrower could at any time repay in whole or in part the credit facility with 10 days prior written notice. Upon receipt of such notice, the Lender will inform the appropriate account for the Borrower to transfer said amounts.

In case of early repayment the Borrower shall also pay all interests and incurred costs therefore accrued to the Lender.

The credit facility will be revolving. The Borrower will be able to avail itself of further draw-downs as and when the amounts of earlier draw-downs are repaid.

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4. FEES AND INTEREST

a. Interest periods

Every draw down shall specify a draw down period. Each draw down interest period will be for either, 1, 2, 3 or 6 calendar months from the specified draw down date.

b. Rate of interest

The applicable interest rate (the “Applicable Rate”) for each draw-down will be USD LIBOR (London Interbank Offered Rate) (the “Reference Rate”) for the chosen draw-down interest period, as defined below, plus a Borrowing Margin.

The Reference Rate means the money market reference rate for the United States Dollars resulting from the application of the convention prevailing at the given time it now being the convention that the Reference Rate is indicated on Telerate screen/Reuters at 11.00 am (London Time) for U.S. Dollar deposits of the interest period chosen – and displayed on that screen two business days before the first day of the respective interest period.

For these purposes, a “business day” in the interbank market is a day on which banks are open for business in both Madrid and New York.

c. Substitute Reference Rate setting procedure

If Reference Rate is not published as contemplated in clause (b), the reference rate applicable for the purpose of calculating the rate of Applicable Rate will be the USD LIBOR rate published for the draw-down interest period closest below the draw-down interest period originally chosen and for which a quotation is available, a closer draw-down interest period having priority over a more distant draw-down interest period. The substitute Reference Rate, so calculated, will be used to calculate the Applicable Rate for that interest period according to the rules of calculation as those set out in clause (b) and this clause for the Reference Rate being replaced.

If it is not practicable to determine the substitute Reference Rate as directed in the foregoing paragraph, there will be applied to each interest period the rates used or published in the market from time to time for transactions of the same or a similar nature, amount and term, subject to the same rules of calculation set out above.

d. Communication and acceptance of the Reference Rate of interest

Once having calculated the Reference Rate by any of the procedures set out in the foregoing clause in response to the Borrower’s prior timely request, the Lender will communicate such Reference Rate to the Borrower by any of the means set out in clause (e). The Borrower must forthwith by that same means communicate its acceptance of the Reference Rate thus arrived at.

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e. Settlement of interest

At each settlement the total amount of accrued interest will be calculated using the following formula: principal drawn, multiplied by the Applicable Rate, multiplied by the actual number of days in the settlement period over three hundred and sixty.

Interest will be settled in respect of completed periods in arrears as counted from the date of each draw-down, and will be paid on the last day of each period, together with the repayment of each draw-down, although the final settlement may be made upon the maturity of the credit facility.

f. Up-Front Fee

As an inducement to enter into this arrangement and to maintain liquidity resources available to the Borrower, the Borrower will pay to the lender $1,500,000 (One Million Five Hundred Thousand U.S. Dollars) in a one-time up-front fee at the execution of this agreement. Thereafter, the Borrower shall pay to the Lender, quarterly in-arrears, a Commitment Fee calculated as the Facility Amount, multiplied by the applicable Commitment Fee rate, multiplied by the actual number of days in the settlement period over three hundred and sixty.

g. Borrowing Margin

The applicable Borrowing Margin and Commitment Fee Rate shall be determined based on the rating of Borrower’s senior unsecured debt by Moody’s and S&P. In the event that the ratings are at a different level, the higher of the two ratings will apply.

	(in basis points)
Rating Level	Commitment Fee		Borrowing Margin
A/A2 or above		12.5		87.5
A-/A3		15.0		97.5
BBB+/Baa1		20.0		105.0
BBB/Baa2		25.0		125.0
BBB-/Baa3		30.0		145.0
BB+/Ba1 or below		40.0		160.0

5. COMMUNICATIONS

The addresses and telephone and facsimile numbers of the Lender and the Borrower are as follows:

Lender

- Person in charge of monitoring: Pablo Sanchez Maxi

- Address: Tomas Redondo 1, 28033 Madrid, Spain

- Facsimile: + 34 91 784 27 39

- Telephone: +34 91784 23 14

- E-mail: backoffice.financiero@iberdrola.es

4

Borrower

- Person in charge of monitoring: Kathleen Powers

- Address: 70 Farm View Drive, New Gloucester, ME 04260

- Facsimile: (207) 688-6118

- Telephone: (207) 688-4338

- Email: kathleen.powers@iberdrolausa.com

Any change to the addresses or telephone or facsimile numbers set out above will be without effect until it is notified in writing to the other party and the latter acknowledges receipt in like manner.

6. EVENTS OF EARLY TERMINATION

The maturity indicated in clause 4(b) notwithstanding, the Lender may declare this credit facility Agreement to have matured early in the following events:

(i) Non-payment when due of principal, interest and expenses agreed under this Agreement.

(ii) Breach of any of the Borrower’s obligations under this Agreement, in particular, the obligation relating to the purpose of the Facility Amount.

(iii) Impairment of the solvency of the Borrower, in the Lender’s view.

(iv) Court proceedings are instituted against the Borrower entailing attachment or enforcement.

(v) Declaration of insolvency proceedings against the Borrower, application for deferment, out-of-court composition with the Borrower’s creditors, liquidation of a material portion of the Borrower’s assets, or any other similar action or proceedings that may lead to the same results; or if all or a part of the Borrower’s assets have an attachment ordered against them or suffer a material diminution in value.

(vi) For any reason, the Borrower discontinues its business or passes a resolution to effect its winding-up, liquidation, merger or absorption, or the closure, spin-off or split of a material part of its establishments or of its total assets without receiving equivalent consideration in exchange, or a material change or modification of its objects or legal form.

Decrease of the Lender’s shareholding in the Borrower to below [51] % for whatever reason

In the event the Agreement terminates early in accordance with this clause, the Borrower must, within the ten (10) business days following the day on which the Borrower received the Lender’s notice of termination, repay to the Lender the full outstanding amount of the credit facility, plus interest, late-payment interest and other expenses and monies owed by the Borrower to the Lender under this Agreement.

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7. EXPENSES

The Borrower will bear such expenses of any kind as now or in future may attach to this type of transaction, and any court or out-of-court costs as may be caused to the Lender by reason of this Agreement or the pursuance of actions seeking entire or partial performance of the Agreement.

8. APPLICABLE LAW AND JURISDICTION

This Agreement is subject to Spanish law. The contracting parties waive their own forums and expressly submit to the jurisdiction of the courts of Madrid.

In witness whereof, the parties execute this Agreement in two counterparts on the date and at the place first above written.

Signed at Madrid
Iberdrola Financiación, S.A.U.
By:	/s/ Pablo Sanchez
Name:	Pablo Sanchez
Title:
By:	/s/ Gladys Galan
Name:	Gladys Galan
Title:
By:	/s/ Jon Barrondo Arechaga
Name:	Jon Barrondo Arechaga
Title:	Authorised Signatory
By:	/s/ José Antonio Del Olmo Ruiz
Name:	José Antonio Del Olmo Ruiz
Title:	Authorised Signatory

Signed at New York
Iberdrola Financiación, S.A.U.
By:	/s/ Robert Kump
Name:	Robert Kump
Title:	President & CEO
By:	/s/ Daniel Alcain
Name:	Daniel Alcain
Title:	CFO

6

EX-10.14

EXHIBIT 10.14

Iberdrola Renewables Holdings Inc

Iberdrola S.A.

and

Bank Mendes Gans N.V.

Accession Agreement

September 16, 2011

ACCESSION AGREEMENT

This Agreement is made this 16^th day of September 2011 between:

(1) Iberdrola Renewables Holdings Inc, a company incorporated under the laws of the State of Delaware, United States of America, with its registered office and place of business at 1125 NW Couch Street Suite 700, Portland, OR, 97209, United States of America (the “New Customer”);

(2) Iberdrola S.A., a company incorporated under the laws of Spain, with its registered office and place of business at C/Menorca 19, Planta 13, Valencia, 46023, Spain (the “Principal Customer”);

and

(3) Bank Mendes Gans N.V., a company limited by shares incorporated under the laws of The Netherlands, with its registered office and place of business at Herengracht 619, 1017 CE Amsterdam, The Netherlands (the “Bank”);

WHEREAS:

(A) the New Customer forms part of the same group of companies as the Principal Customer and the Customers referred to in the Cash Pooling Agreement dated November 20, 2009, a copy of which is attached to this Agreement (the “Cash Pooling Agreement”);

(B) pursuant to Clause 14 of the Cash Pooling Agreement the New Customer wishes to become a party to the Cash Pooling Agreement,

IT IS AGREED AS FOLLOWS:

1. Terms defined in the Cash Pooling Agreement shall have the same meanings when used in this Agreement.

2. The New Customer hereby becomes a party to the Cash Pooling Agreement and as from the date of the execution of this Agreement the term Customers shall include the New Customer.

3. The Principal Customer hereby unconditionally and irrevocably guarantees to and in favor of the Bank the Secured Liabilities of the New Customer.

4. As security for the payment of the Secured Liabilities, the New Customer hereby pledges to the Bank, by way of a first ranking right of pledge any and all present and future claims of the New Customer on the Bank arising under or in connection with the Accounts.

5. By way of the execution of this Agreement the Bank acknowledges that it has been notified of the pledge made.

6. New Customer hereby expressly authorizes accordingly and in the same manner and to the same effect as set out in Clauses 5.3 and 5.4 of the Cash Pooling Agreement, each of the Principal Customer, the Cash Pooling Coordinator and the Bank respectively.

7. Clause 19 of the Cash Pooling Agreement shall mutatis mutandis apply to this Agreement.

IN WITNESS WHEREOF this Agreement has been executed on the first date above written.

Bank Mendes Gans N.V.
/s/ R.M. Kors	/s/ F. Veerman
R.M. Kors	F. Veerman
Executive Vice President	Director
Iberdrola S.A.
/s/ Jon Barrondo Arechaga	/s/ Javier Julio Pastor Zuazaga
signed by:	signed by:
title:	title:
Iberdrola Renewables Holdings Inc
/s/ Clay Coleman	/s/ Trevor I. Mihalik
Clay S. Coleman	Trevor I. Mihalik
title: Authorized Representative	SVP Finance

Iberdrola Renovables S.A.

the other Customers

and

Bank Mendes Gans N.V.

Cash Pooling Agreement

November 20, 2009

CASH POOLING AGREEMENT

This Agreement is made this 20^th day of November 2009 between:

(1)	(a)	Iberdrola Renovables S.A., a company incorporated under the laws of Spain, with its registered office and place of business at C/Menorca 19, Planta 13, Valencia, 46023, Spain (the “Principal Customer”):
	(b)	Rokas Construcions, S.A., a company incorporated under the laws of Greece, with its registered office and place of business at 3 Rizareiou Str, Halandri, Athens, 15233, Greece;
	(c)	Rokas Aeoliki Viotia, S.A., a company incorporated under the laws of Greece, with its registered office and place of business at 3 Rizareiou Str, Halandri, Athens, 15233, Greece;
	(d)	Rokas Aeoliki Evia, S.A., a company incorporated under the laws of Greece, with its registered office and place of business at 3 Rizareiou Str, Halandri, Athens, 15233, Greece;
	(e)	Rokas Aeoliki, S.A., a company incorporated under the laws of Greece, with its registered office and place of business at 3 Rizarciou Str, Halandri, Athens, 15233, Greece;
	(f)	Rokas Aeoliki Kriti, S.A., a company incorporated under the laws of Greece with its registered office and place of business at 3 Rizareiou Str, Halandri, Athens, 15233, Greece;
	(g)	Rokas Aeoliki Zarakes, S.A., a company incorporated under the laws of Greece, with its registered office and place of business at 3 Rizareiou Str, Halandri, Athens, 15233, Greece;
	(h)	Energiaki Alogorachis Anonimi Eteria, a company incorporated under the laws of Greece, with its registered office and place of business at 3 Rizareiou Str, Halandri, Athens, 15233, Greece;
	(i)	Rokas Iliaki II, Ltd, a company incorporated under the laws of Greece, with its registered office and place of business at 3 Rizareiou Str, Halandri, Athens, 15233, Greece;
	(j)	C. Rokas, S.A., a company incorporated under the laws of Greece, with its registered office and place of business at 3 Rizareiou Str, Halandri, Athens, 15233, Greece;

(together with the Principal Customer referred to as the “Customers”):

and

(2) Bank Mendes Gans N.V., a company limited by shares incorporated under the laws of The Netherlands, with its registered office and place of business at Herengracht 619, 1017 CE Amsterdam, The Netherlands (the “Bank”);

WHEREAS:

(A) the Customers have requested the Bank to apply a set-off system for the calculation of interest with respect to debit balances and credit balances in bank accounts with the Bank (the “Set-Off System”);

(B) in relation to the Set-Off System, the Principal Customer have requested the Bank to apply a sweeping arrangement for the sweeping of balances in bank accounts with banks in various jurisdictions (the “Sweeping Arrangement”);

(C) the Customers have further requested the Bank to offer browser based banking services through the Bank’s browser based communication channel “Megabank”;

(D) the Bank is prepared to apply the Set-Off System, the browser based banking services through Megabank and the Sweeping Arrangement on the following terms and conditions,

IT IS AGREED AS FOLLOWS:

1. Definitions and Interpretation

1.1 Unless the context otherwise requires, in this Agreement the following terms shall have the following meanings:

“Accession Agreement”: the Agreement in the form attached as the Exhibit by way of which a New Customer may become a party to this Agreement;

“Accounts”: the bank accounts held with the Bank in the name of the Customers, which shall be denominated in such currencies as each of the Customer shall elect, provided such currencies shall at all times be freely convertible into USD;

“Business Day”: a day on which banks are open for business in Amsterdam, The Netherlands;

“Cash Pooling Coordinator”: the cash pooling coordinator appointed by the Principal Customer for the purposes of the operation of the Set-Off System and the Sweeping Operations;

“Electronic Banking Conditions”: the general terms and conditions applicable to any Megabank services or any other electronic services rendered by the Bank to the Customers;

“Local Accounts”: the bank accounts in the name of the Customers with the Local Banks, which shall be denominated in such currencies as the Customers shall elect, provided such currencies shall at all times be freely convertible into EUR;

“Local Bank Agreement”: the contractual arrangement signed between the Bank, a Customer and the relevant Local Bank in which the relationship between the Bank, the Customer and the Local Bank is set out;

“Local Banks”: the banks with which the Local Accounts shall be held;

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“Maximum Sweeping Amount”: the maximum amount to be swept to cover a debit position of the Customer in the Local Account;

“Megabank Operating Instructions”: the browser based banking operating instructions in respect of any Megabank services of the Bank which form an integral part of the Operating Manual and which apply to any Megabank services rendered by the Bank to the Customers under the terms of this Agreement;

“Megabank services”: the browser based banking services rendered by the Bank to the Customers by means of the browser based communication channel “Megabank”, security software, security calculators or tokens, user-ID and password options, or any other means designated by the Bank, which services may include payment and reporting services and multibank reporting services, as set out in the Operating Manual;

“New Customers”: the group companies of the Principal Customer which may become a party to this Agreement pursuant to an Accession Agreement;

“Operating Manual”: the operating manual of the Bank attached as Schedule 1 inclusive of any Megabank Operating Instructions and Sweeping Instructions on the basis of which the Set-Off System and any Megabank services shall be operated;

“Overall Balance”: the overall balance of each of the Accounts translated into EUR;

“Secured Liabilities”: any and all present and future obligations and liabilities of each of the Customers to the Bank arising under or in connection with the Accounts;

“Set-Off Date”: the third Business Day of each calendar month on which the interest shall be re-calculated as more particularly described in Clause 4.1;

“Sweeping Letter”: the contractual arrangement signed between the Bank and a Customer in which the relationship between the Bank and the Customer is set out;

“Sweeping Operations”: the services provided by the Bank under the Sweeping Arrangement as more particularly described in Clause 6.1;

“Sweeping Procedure Agreement”; the contractual arrangement by means of either a Local Bank Agreement or a Sweeping Letter in which the details of the Sweeping Operations per Customer and the relevant Local Account are set out;

“S.W.I.F.T.”: Society for Worldwide Interbank Financial Telecommunication s.c., a society which provides for a worldwide communications network service for its members subject to standardised contractual terms and conditions;

“Target Balance”: the target amount in the Local Account, as agreed under the Sweeping Procedure Agreement, to be reached as a result of the sweeping services under this Agreement;

“Third Party Bank”: any bank of good standing, other than Bank Mendes Gans N.V., where a Customer holds a bank account in its name; and

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“Trigger Amount”: the minimum required amount in the Local Account, whether debit or credit, as agreed under the Sweeping Procedure Agreement, to initiate the sweeping services under this Agreement.

1.2 In this Agreement clause headings are inserted for convenience only and shall not affect the construction of this Agreement.

2. Accounts and Local Bank Accounts

2.1 At the request of the Principal Customer the Bank shall open one or more Accounts for each of the Customers.

2.2 The Accounts may show balances to the credit and to the debit of the Customers, provided the Overall Balance shall at all times show a zero or a credit balance and that any debit balances allowed in the Accounts shall be on a daily revocable basis.

2.3 Each of the Customers has opened one or more Local Accounts with one or more Local Banks.

2.4 It is a requirement for any Sweeping Arrangement to be established that the Customer, its Local Bank and the Bank shall enter into a Sweeping Procedure Agreement arranging for the set up of the Sweeping Operations under this Agreement with any Local Bank. Any Sweeping Arrangement or Sweeping Operations shall at all times be subject to Clause 2.2 above.

2.5 In the Sweeping Procedure Agreement the Maximum Sweeping Amounts (subject to Clause 2.7) and the Trigger Amount and Target Balances of the Customers shall be agreed upon.

2.6 The Bank may change or revoke the Maximum Sweeping Amounts of the Customers, after previous agreement of the Principal Customer.

2.7 Each of the Customers acknowledges that under the Sweeping Arrangement any payment orders in relation to the Local Accounts are to be given prior to such times on each Business Day as shall be set out in the Sweeping Procedure Agreement.

3. Interest

Interest shall accrue from day to day on credit balances and debit balances in the Accounts at the rate of (a) the Bank’s base rate for the relevant currency minus 0% over credit balances in the Accounts and (b) the Bank’s base rate for the relevant currency plus 0.95% over debit balances in the Accounts and shall be booked to each of the Accounts monthly in arrears on the next succeeding Set-Off Date.

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4. Set-Off System

4.1 On each Set-Off Date the interest calculated pursuant to Clause 3 shall be re-calculated as follows for each day of the previous calendar month:

(a) for each day the Overall Balance shall be positive the interest over debit balances in the Accounts shall be re-calculated on the basis of the interest rate referred to in Clause 3 applicable to credit balances in the Accounts;

(b) without prejudice to Clause 2.2, for each day the Overall Balance shall be negative the interest over credit balances in the Accounts shall be recalculated on the basis of the interest rate referred to in Clause 3 applicable to debit balances in the Accounts,

4.2 The balance of the interest calculated pursuant to Clause 3 and the interest recalculated pursuant to Clause 4.1, shall be booked by the Bank to an Account designated by the Cash Pooling Coordinator.

5. Operating Procedure for Set-Off System, Megabank services and Sweeping Operations

5.1 The Set-Off System, Megabank services and Sweeping Operations shall be operated on the basis of the Operating Manual and each of the Customers shall at all times comply with the procedures set out in the Operating Manual and with any technical and security requirements set by the Bank for rendering the Megabank services.

5.2 For the purposes of this Agreement the Principal Customer shall appoint a Cash Pooling Coordinator and the Bank may at all times rely on any of the instructions given or information obtained from the Cash Pooling Coordinator.

5.3 Each of the Customers hereby expressly authorizes the Principal Customer and the Cash Pooling Coordinator to examine balances and full transaction information of each of its Accounts, and of its Local Accounts designated by it in writing to the Bank, which shall at any time be included in the Payment and Reporting services and/or Multibank reporting services.

5.4 Each of the Customers hereby expressly authorizes the Bank to receive, process and to make available in Megabank to each of the authorized Customers individually with respect to their own Accounts and their own designated Local Accounts, and to the Principal Customer and the Cash Pooling Coordinator collectively with respect to any and all Accounts and any and all designated Local Accounts, any balances and full transaction information of the Accounts and designated Local Accounts, subject to Clause 5.5 below, for the purposes of rendering the Payment and Reporting services and Multibank reporting services pursuant to this Agreement.

5.5 Each Customer shall request its Local Bank in writing to report balances and full transaction information of the Customer’s Local Account(s) designated by it and held with such Local Bank, to the Bank on a daily basis, substantially in the form as set out in

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Schedule 2 to this Agreement. The Bank may act upon such authorization until it has received prior written notice of the Customer’s revocation of such authorization with respect to any such designated accounts.

6. Sweeping Operations

6.1 Under this Agreement on each such Business Day the Bank shall perform the following services:

(a) in accordance with the Sweeping Procedure Agreement, on each designated Business Day the Bank shall obtain information from the Local Banks as to the debit positions and credit positions of the Customers in the Local Accounts;

(b) in case any of the Local Accounts shows a credit position in excess of the applicable Trigger Amount on any such Business Day as set out in the Sweeping Procedure Agreement, the Bank shall issue a payment request in order to debit the relevant Local Account up to the applicable Target Balance; and

(c) in case any of the Local Accounts shows a debit position in excess of the applicable Trigger Amount on any such Business Day, the Bank shall make a payment in the relevant Local Account equal to the amount required to correspond to the applicable Target Balance, provided that the applicable Maximum Sweeping Amount shall not be exceeded.

6.2 In respect of the positions in the Local Accounts the Bank may at all times rely on the information provided by or obtained from the Local Banks.

7. Guarantee

7.1 The Principal Customer hereby unconditionally and irrevocably guarantees to and in favor of the Bank the payment by the other Customers of the Secured Liabilities and agrees to pay, upon receipt of the Bank’s written request for payment, provided that such request is duly signed by the Bank and indicates the exact amount of the credit balances and the debit balances due as per the date of making a request for payment the same to the Bank, within 10 (ten) calendar days from the date of receipt of such request, up to an amount in aggregate not exceeding EUR 200,000,000 (two hundred million euros).

7.2 The Bank and the Principal Customer agree that Clause 7.1 is valid only as long as the Principal Customer has a valid guarantee from ING Bank N.V. that will pertain to this Agreement. The Bank and the Principal Customer further agree that the Bank has the right to adjust its payment procedure (as described in Clause 18.3 of this Agreement), without prejudice to 18.3, in case Clause 7.1 is not valid.

8. Collateral

8.1 As security for the payment of the Secured Liabilities each of the Customers hereby pledges to the Bank, by way of a first ranking right of pledge, any and all present and future claims of the Customers on the Bank arising from or in connection with the Accounts.

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8.2 By way of the execution of this Agreement the Bank acknowledges that it has been notified of the pledge made.

9. Set-Off/Enforcement

9.1 Each of the Customers which will at any time have debit balances in the Accounts, may set off any amounts due to the Bank arising from or in connection with the Accounts, with any amounts due by the Bank to each of the Customers which will at any time have credit balances in the Accounts arising from or in connection with the Accounts.

9.2 When it wishes to receive payment of the Secured Liabilities, the Bank shall first revoke any debit balances in the Accounts and any such debit balances shall be paid by the Customers concerned. Subsequently the Bank shall seek recourse against the credit balances in the Accounts that are pledged to the Bank pursuant to Clause 8. If the enforcement of the Bank’s claim against the collateral referred to in Clause 8 is insufficient to cover such Secured Liabilities, the Bank may immediately exercise its rights under the guarantee provided by the Principal Customer pursuant to Clause 7.

10. Payments

10.1 Any and all payments to be made by the Customers to the Bank shall – save for Clause 9.1 - be made without set-off, counterclaim or withholding on any account whatsoever.

10.2 If a date on which any payment shall have to be made under this Agreement shall not be a Business Day, such payment shall be made the next succeeding Business Day.

11. Currency Translation

The translation of the currencies in which the Accounts are denominated into EUR for the purpose of the calculation of the Overall Balance on any Business Day, shall be made on the basis of the foreign exchange reference rates of the European Central Bank at 2.15 p.m. on the previous Business Day, as from time to time published on Reuters Screen ECB37 or any such screen as shall from time to time replace Reuters Screen ECB37.

12. Representations and Warranties

12.1 Each of the Customers hereby represents and warrants to the Bank that:

(a) it is a company duly incorporated and existing under the laws of the jurisdiction of its incorporation;

(b) it has the corporate power and authority to enter into this Agreement and to perform its obligations thereunder;

(c) it has taken all required corporate action for the entering into this Agreement;

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(d) this Agreement is enforceable against it in accordance with its terms; and

(e) no approvals or other authorisations are required under the laws of the jurisdiction of its incorporation in relation to the entering into this Agreement.

12.2 The representations and warranties are deemed to be repeated on each Set-Off Date.

13. Fees

13.1 The Principal Customer shall pay the Bank the following implementation fees which fees shall be booked to the Account of the Principal Customer:

Implementation fees	Fee in Euro
One-off Set-Off System and Megabank services set-up fee*
- to cover the complete set-up of the cash pool and Megabank services inclusive of two security tokens per Customer:	EUR 10,000
Setting up Sweeping Arrangements with Local Banks
- One-off fee per Local Bank:	Included

* The fee will be booked to the Account of the Principal Customer in five annual charges of EUR 2,000, provided that this Agreement is still valid during this time.

13.2 The monthly fees for the services provided by the Bank under this Agreement shall be the following, and shall be booked to the Account of the Principal Customer monthly in arrears:

Monthly services fees	Fee in Euro
Set-Off System (cash pooling) services
Number of Customers:
01 – 08	EUR 200.00
(fee per Customer, for the first 8 Customers)
09- 16	EUR 175.00
(fee per Customer, for the second 8 Customers)
17- 24	EUR 150.00
(fee per Customer, for the third 8 Customers)
> 25 Customers	To be negotiated
Multibank reporting services
- monthly system fee:	EUR 100.00
Sweeping services
- Monthly fixed fee per Local Account connected to system:	Included

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13.3 In addition to the implementation and monthly services fees referred to in Clauses 13.1 and 13.2 the Principal Customer shall pay the Bank the following item fees which fees shall be booked to the Account of the Principal Customer monthly in arrears:

Item fees	Fee in Euro
Set-Off System (cash pooling) services
- for incoming urgent transfers:	EUR6
- for outgoing urgent transfers:	EUR8
- booktransfers:	EUR2
Multibank reporting services
- for sending electronic Account statements to Third Party Banks per destination per Account per month:	EUR 25
- for reporting Third Party Bank account statements per Third Party Bank account per month:	EUR 2,50

13.4 The first two security tokens for Megabank services per Customer shall be included in the Megabank services set up fee, as set out in Clause 13.1 above. Each additional token or each replacement token shall be charged against a fee of EUR 100.00 per token. Other fees for Megabank services, if any, shall be agreed upon separately in writing from time to time between the Principal Customer and the Bank.

13.5 In addition, the Customer shall pay a handling fee of EUR 50.00 for each interest claim issued by the Bank. The handling fee will be on top of the interest claimed by the Bank. The Bank will not apply any handling fee in case the origin of the error was caused by the Bank.

13.6 Furthermore the Customer shall pay an item fee of EUR 100.00 per requested Standard Bank Confirmation.

13.7 The Bank shall have the right to adjust its prices, charges or other fees in connection with this Agreement, as reasonably appropriate from time to time, after consultation and upon agreement with the Principal Customer.

14. New Customers

14.1 In anticipation of such event each of the Customers hereby agrees to New Customers becoming a party to this Agreement, which shall be effected by way of the execution of Accession Agreements.

14.2 Each of the Customers hereby irrevocably authorises the Principal Customer to execute Accession Agreements in their name and on their behalf and upon the execution of Accession Agreements any of the New Customers shall be Customers.

15.

15.1 This Agreement is entered into for an indefinite term and may be terminated at any time by the Bank and each of the Customers, provided that Clauses 3, 7, 8, 9, 10, 11, 16, 17, 18 and 19 shall survive the termination of this Agreement and shall continue in full force and effect until all of the Secured Liabilities shall have been fully discharged.

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16. Waiver-Subordination

16.1 Each of the Customers hereby expressly waives and renounces any and all rights, privileges and defenses conferred upon joint and several (co-)debtors, pledgors, guarantors, sureties and other parties providing security under Netherlands law or any other applicable law.

16.2 If and to the extent that it would be entitled to any recourse on any of the other Customers or to any subrogation in the rights of the Bank towards the other Customers resulting from any payment by it to the Bank under or in connection with this Agreement, each of the Customers shall not enforce any such right of recourse or any rights under or resulting from such subrogation and, accordingly, all such rights and claims shall be subordinated to the Secured Liabilities.

17. Notices

Any and all notices required to be made under this Agreement shall be made in writing to the following addresses:

To the Customers:

Iberdrola Renovables S.A.

Attn. Mr. Jon Barrondo Arcchaga

C/Gardoki 8.

48008 Bilbao

Vizcaya

Spain

Phone: +34 94 466 4716/+34 620 267 640

e-mail: jbarrondo@iberdrola.es

To the Bank:

Bank Mendes Gans N.V.

Attn.: Mr. Ferry Veerman

Herengracht 619,1017 CE

P.O. Box 198,1000 AD

Amsterdam

The Netherlands

Phone: +31 20 5235 355

Email: Ferry.Veerman@mendesgans.nl

18. Miscellaneous

18.1 Unless expressly provided otherwise in this Agreement, this Agreement and any of the services to be rendered by the Bank under this Agreement shall be subject to the General Banking Conditions and the Electronic Banking Conditions as published on the Bank’s internet site (www.mendesgans.nl). The General Banking Conditions are filed by the

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Netherlands Bankers’ Association (Nederlandse Vereniging van Banken) at the Registrar’s office of the District Court of Amsterdam on July 27, 2009. (For more information and explanatory notes to the General Banking Conditions 2009 that contain basic rules for all transactions between the Customer and the Bank; www.nvb.nl). By execution of this Agreement, each of the Customers hereby expressly acknowledges and confirms to have read and agrees to the contents of the aforementioned General Banking Conditions and the Electronic Banking Conditions. If there is a discrepancy between the terms of this Agreement, the General Banking Conditions and the Electronic Banking Conditions, the terms of this Agreement shall prevail, as provided in Article 1 of the General Banking Conditions and Article 2.1 of the Electronic Banking Conditions.

18.2 The Principal Customer hereby indemnifies the Bank for and against any and all claims of the other Customers against the Bank arising under or in connection with the services rendered by the Bank under this Agreement.

18.3 The continuation of this Agreement shall be subject to an assessment of the financial standing of the Principal Customer by the Bank according to its risk management policies, at any such lime the Bank considers necessary, and upon such assessment the Bank may forthwith set conditions on the continuation of this Agreement in consultation with the Principal Customer and the Bank shall be entitled to adjust its payment procedure and only execute outgoing payments if the Overall Balance of all of the Accounts with the Banks show sufficient funds.

18.4 The Principal Customer will provide the Bank with its quarterly, semi-annual or annual financial report as the case may be, within four weeks from official publication of such reports. The Principal Customer is obliged to inform the Bank immediately of any material changes to its financial standing or business affairs that may seriously jeopardize its or the Customers’ ability to fulfil its obligations pursuant to this Agreement.

19. Applicable Law and Jurisdiction

19.1 This Agreement shall be governed by Netherlands law.

19.2 Any and all disputes arising from or in connection with this Agreement shall be submitted to the exclusive jurisdiction of the District Court in Amsterdam, The Netherlands.

-11-

IN WITNESS WHEREOF this Agreement has been executed the first date above written.

Bank Mendes Gans N.V.
/s/ R.M. Kors	/s/ M.W.L.P van der Steen
R.M. Kors	M.W.L.P. van der Steen
Executive Vice President	Director
Iberdrola Renovables S.A.
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
signed by: Luis Ybarra Echevarria	signed by: Javier Julio Pastor Zuazaga
title:	title:
Rokas Construcions, S.A.
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
signed by: Luis Ybarra Echevarria	signed by: Javier Julio Pastor Zuazaga
title:	title:
Rokas Acoliki Viotia, S.A.
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
signed by: Luis Ybarra Echevarria	signed by: Javier Julio Pastor Zuazaga
title:	title:
Rokas Aeoliki Evia, S.A.,
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
Signed by: Luis Ybarra Echevarria	Signed by: Javier Julio Pastor Zuazaga
title:	title:
Rokas Aeoliki, S.A.,
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
signed by: Luis Ybarra Echevarria	signed by: Javier Julio Pastor Zuazaga
title:	title:

-12-

Rokas Aeoliki Kriti, S.A.
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
signed by: Luis Ybarra Echevarria	signed by: Javier Julio Pastor Zuazaga
title:	title:
Rokas Aeoliki Zarakes, S.A.
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
signed by: Luis Ybarra Echevarria	signed by: Javier Julio Pastor Zuazaga
title:	title:
Energiaki Alogorachis Anonimi Eteria
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
Signed by: Luis Ybarra Echevarria	Signed by: Javier Julio Pastor Zuazaga
title:	title:
Rokas Iliaki II, Ltd
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
signed by: Luis Ybarra Echevarria	signed by: Javier Julio Pastor Zuazaga
title:	title:
C. Rokas, S.A.
/s/ Luis Ybarra Echevarria	/s/ Javier Julio Pastor Zuazaga
signed by: Luis Ybarra Echevarria	signed by: Javier Julio Pastor Zuazaga
title:	title:

-13-

SCHEDULE 1

Operating Manual

-14-

SCHEDULE 2

Letter (authorization) from Customer to Local Bank

on Customer letterhead and with a copy to Bank Mendes Gans N.V.

TO: [Name, address of Local Bank]

[date]

Dear [                    ],

To assist us in our international cash management, we are now using a service provided by Bank Mendes Gans N.V., in order to co-ordinate the worldwide reporting of our accounts held with your good bank.

We therefore kindly request that you report our balances and full transaction information through the S.W.I.F.T. network to Bank Mendes Gans N.V., Herengracht 619, 1017 CE Amsterdam, The Netherlands (member of ING Group) for the accounts mentioned in this letter. Please report daily, irrespective of whether or not there has been movement on the accounts.

Reporting to Bank Mendes Gans N.V. has to be done through a S.W.I.F.T. MT940 message to S.W.I.F.T. address BKMGNL2A.

Customer accounts to be reported are the following designated accounts:

Account holder (name) Account number Currency

Please commence reporting as soon as possible and advise us when the reporting will begin. If you need any additional information please contact Bank Mendes Gans N.V.

Yours sincerely,

(Customer)

Name:

Title:

Cc: Bank Mendes Gans N.V.

-15-

EXHIBIT

ACCESSION AGREEMENT

This Agreement is made this     day of         2009 between:

(1)                     , a company incorporated under the laws of                     , with its registered office and place of business at                     (the “New Customer”);

(2)                     , a company incorporated under the laws of                     , with its registered office and place of business at (the “Principal Customer”);

and

(3) Bank Mendes Gans N.V., a company limited by shares incorporated under the laws of The Netherlands, with its registered office and place of business at Herengracht 619,1017 CE Amsterdam, The Netherlands (the “Bank”);

WHEREAS:

(A) the New Customer forms part of the same group of companies as the Principal Customer and the Customers referred to in the Cash Pooling Agreement dated                      a copy of which is attached to this Agreement (the “Cash Pooling Agreement”):

(B) pursuant to Clause 14 of the Cash Pooling Agreement the New Customer wishes to become a party to the Cash Pooling Agreement,

IT IS AGREED AS FOLLOWS:

1. Terms defined in the Cash Pooling Agreement shall have the same meanings when used in this Agreement.

2. The New Customer hereby becomes a party to the Cash Pooling Agreement and as from the date of the execution of this Agreement the term Customers shall include the New Customer.

3. The Principal Customer hereby unconditionally and irrevocably guarantees to and in favor of the Bank the Secured liabilities of the New Customer.

4. As security for the payment of the Secured Liabilities, the New Customer hereby pledges to the Bank, by way of a first ranking right of pledge any and all present and future claims of the New Customer on the Bank arising under or in connection with the Accounts.

5. By way of the execution of this Agreement the Bank acknowledges that it has been notified of the pledge made.

6. The New Customer hereby expressly authorizes accordingly and in the same manner and to the same effect as set out in Clauses 5.3 and 5.4 of the Cash Pooling Agreement, each of the Principal Customer, the Cash Pooling Coordinator and the Bank respectively.

-16-

7. Clause 19 of the Cash Pooling Agreement shall mutatis mutandis apply to this Agreement.

IN WITNESS WHEREOF this Agreement has been executed on the first date above written.

Bank Mendes Gans N.V.

signed by:	signed by:
title:	title:
(Principal Customer)
signed by:	signed by:
title:	title:
(Customer)
signed by:	signed by:
title:	title:

-17-

EX-10.15

EXHIBIT 10.15

GUARANTEE AND SUPPORT AGREEMENT

BETWEEN

IBERDROLA, S.A.

AND

SCOTTISHPOWER HOLDINGS, INC.

This Guarantee and Support Agreement, made the 3 day of April, 2008, by and between IBERDROLA, S.A., a corporation (sociedad anonima) organized and existing under the laws of the Kingdom of Spain (“Parent”) and SCOTTISHPOWER HOLDINGS, INC., (“SPHI”) a corporation organized under the laws of the State of Delaware in the United States of America.

WITNESSETH:

WHEREAS, Parent is currently the beneficial owner, directly or indirectly, of one hundred percent (100%) of the outstanding common stock of SPHI;

WHEREAS, Parent and SPHI desire to take certain actions to enhance and maintain the financial condition of SPHI as hereinafter set forth in order to enable SPHI to guarantee certain obligations of certain Parent Subsidiaries (as hereinafter defined); and

WHEREAS, third party creditors and Obligees (as hereinafter defined) will rely upon this Agreement in making loans, extending credit or otherwise conducting business with Parent Subsidiaries and SPHI;

NOW, THEREFORE, in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. For purposes of this Agreement:

(a) “Guarantee” means any obligation, contingent or otherwise, of SPHI directly or indirectly guaranteeing (i) any indebtedness of any Parent Subsidiary or (ii) any payment or performance obligation, direct or indirect, contingent or otherwise, of any Parent Subsidiary, in the case of this clause (ii): (A) to purchase or pay (or advance or supply funds for the purchase or payment of) any indebtedness or payment obligation of any other Parent Subsidiary (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or (B) entered into for the purpose of assuring in any other manner the obligee of any indebtedness or payment or performance obligation of any other Parent Subsidiary of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part). The term “Guarantee” used as a verb has a correlative meaning.

(b) “OTC Guarantee” means any Guarantee issued by SPHI in connection with any commodities trading arrangement consummated between any Parent

Subsidiary and a trading counterparty pursuant to a master trading agreement as used in the U.S. with respect to energy, fuels, environmental commodities, and derivatives markets, including, but not limited to, the Edison Electric Institute Master Power Purchase and Sale Agreement, the North American Energy Standards Board Base Contract for Sale and Purchase of Natural Gas, the International Swaps and Derivatives Association Master Agreement, the Western Systems Power Pool Agreement, and the Emissions Marketing Association Master Agreement for the Purchase and Sale of Emission Products.

(c) “Obligations” means, subject to the provisions of paragraph 6 of this Agreement, any obligations set forth in a Guarantee issued by SPHI, or obligations of SPHI to pay interest, principal or premium, if any, on any of its indebtedness for money borrowed. “Obligations” excludes any obligation set forth in a Scottish Power Finance (US), Inc. (“SPFUS”) guarantee. Unless assumed by SPHI in writing, “Obligations” shall not include any obligation or guarantee issued by Scottish Power Finance (US), Inc. or any other affiliate or subsidiary of SPHI.

(d) “Obligee” means any person, firm, corporation or other entity that is the beneficiary of an Obligation, including any person, firm, corporation or other entity that is a beneficiary of an Obligation, or any person, firm, corporation or other entity which is acting as a trustee or authorized representative on behalf of such person, firm, corporation or other entity.

(e) “Parent Subsidiary” means any corporation, association, partnership or other business entity which is either: (i) a direct or indirect subsidiary of Parent or (ii) an affiliate of Parent that is under the management of Parent or any other Parent Subsidiary.

(f) “Business Day” means any day upon which the clearing banks in both the city of Madrid (Spain) and the city of New York, New York, USA are open for business.

2. Execution and Delivery of this Agreement. Parent and SPHI represent that the execution and delivery of this Agreement has been duly authorized by Parent and SPHI and this Agreement will constitute the legal, valid and binding obligations of the parties hereto in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

3. Stock Ownership. Parent, through subsidiaries, currently indirectly owns 100% of the voting stock of SPHI and, at all times during the term of this Agreement shall continue to beneficially own, directly or indirectly, more than 50% of the voting stock of SPHI.

4. Liquidity Provision.

(a) If, at any time during the term of this Agreement, SPHI is unable to make payment on any Obligation (including any payment obligation set forth in a guarantee issued by SPHI, or of interest, principal or premium, if any, on any of its indebtedness for money borrowed) on the due date for payment of such Obligation, Parent guarantees to make due and punctual payment of such unpaid Obligation pursuant to this paragraph 4.

2

(b) If SPHI is informed by any Parent Subsidiary that such Parent Subsidiary will be unable to meet any underlying obligation guaranteed by SPHI that is an Obligation under this Agreement and SPHI shall not be able at that time to discharge the same from its own resources, SPHI shall deliver to Parent a written request for funds from Parent (a “Payment Request”) (i) specifying (A) which of the Obligations has not been performed or is unable to be performed, and (B) the amount, if any, due and payable to the applicable Obligee together with the name of such Obligee and the due date for payment for such amount, and (ii) accompanied by a certificate from a duly authorized signatory of SPHI confirming the accuracy of the foregoing. In the case of OTC Guarantees, the Payment Request shall be provided to Parent no later than two (2) Business Days prior to the relevant due date for payment. In the case of any other Obligation, the Payment Request shall be provided no later than five (5) Business Days prior to the relevant due date for payment. Upon receipt of the Payment Request, Parent shall remit funds to SPHI in an amount necessary to meet the Payment Request to enable discharge of the relevant Obligations on the relevant due date for payment.

(c) If SPHI is unable to make payment in connection with any Obligation consisting solely of an obligation to pay interest, principal or premium, if any, on any of its indebtedness for money borrowed, SPHI shall deliver to Parent a Payment Request (i) specifying (A) which such Obligation has not been performed or is unable to be performed, and (B) the amount, if any, due and payable to the applicable Obligee together with the name of such Obligee and the due date for payment for such amount, and (ii) accompanied by a certificate from a duly authorized signatory of SPHI confirming the accuracy of the foregoing. Such Payment Request shall be provided no later than five (5) Business Days prior to the relevant due date for payment. Upon receipt of the Payment Request, Parent shall remit funds to SPHI in an amount necessary to meet the Payment Request to enable discharge of the relevant Obligation on the relevant due date for payment.

(d) SPHI and Parent each hereby acknowledge that any funds provided by Parent pursuant hereto shall be used solely to make payments that are due and payable to the Obligee identified by SPHI pursuant to clause (b) or (c) above, as applicable, and not for any other purposes.

(e) If funds are advanced to SPHI as a loan, such loan shall be on such terms and conditions, including maturity and rate of interest, as Parent and SPHI shall agree. Notwithstanding the foregoing, any such loan shall be subordinated in all respects to any and all Obligations of SPHI, whether or not such Obligations are outstanding at the time of such loan.

(f) Except as expressly set forth in paragraphs 13, 14, 15, and 16 of this Agreement, Parent agrees that its Obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, on any Obligation by Parent required hereunder is rescinded or must otherwise be restored by any Obligee upon the bankruptcy or reorganization of SPHI or otherwise.

3

5. Waivers. Parent hereby waives any failure or delay on the part of SPHI in asserting or enforcing any of its rights or in making any claims or demands hereunder. Parent waives presentation to, demand of, payment from and protest to SPHI of any of the Obligations and also waives notice of protest for nonpayment. Parent waives notice of any default under the Obligations. The Obligations of Parent hereunder shall not be affected by (a) the failure of any Obligee to assert any claim or demand or to enforce any right or remedy against SPHI with respect to the Obligations; (b) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement, provided that Parent shall have no Obligations for any Obligation assumed by SPHI after the date that this Agreement has been terminated; (c) the failure of any Obligee to exercise any right or remedy against any other guarantor of the Obligations; or (d) any other circumstance which might otherwise constitute a defense to fulfillment of Parent’s Obligations hereunder, except willful misconduct or fraud of the Obligee or a third party other than an affiliate of SPHI. SPHI may at any time, without Parent’s consent and without affecting or impairing SPHI’s or Parent’s Obligations hereunder, do any of the following with respect to any applicable Obligations pursuant to the terms thereof: (i) make changes, modifications, amendments or alterations, by operation of law or otherwise; (ii) grant renewals and extensions of time, for payment or otherwise; (iii) accept new or additional documents, instruments or agreements relating to or in substitution of said Obligations; or (iv) otherwise handle the enforcement of their respective rights and remedies in accordance with its business judgment; provided that SPHI shall provide ten (10) days prior written notice to Parent of any of the foregoing; provided further, that any noncompliance by SPHI with the covenant in the foregoing proviso shall not have any force or effect with respect to the obligations of Parent hereunder. The foregoing terms and provisions of this paragraph 5 are in each case subject to paragraphs 13, 14, 15, and 16 of this Agreement.

6. Amendment and Termination.

(a) This Agreement may be amended at any time by written agreement signed by both parties; provided, that where any such amendment adversely affects the rights or entitlements of an Obligee, no such amendment to the provisions of paragraphs 4, 5, 6 or 7 of this Agreement shall take effect with respect to that Obligee unless the Obligee consents in writing to such amendment.

(b) Parent may terminate this Agreement at any time by giving SPHI sixty (60) days’ prior written notice. On the expiry of such notice period this Agreement shall terminate without further action by SPHI or Parent. Termination of this Agreement shall be without prejudice to Parent’s liability for any Obligations in existence as at the date of such termination; provided, however, that no liability shall arise hereunder in respect of any guarantee issued by SPHI, any transaction or any other agreement entered into between SPHI and any Obligee or any third party after the date of such termination notice (including the creation, variation, extension or increase in the liability of any such Obligations (or any documentation constituting the same) then in existence.

7. Rights of Obligee. Any Obligee shall have the right to demand that SPHI enforce its rights under paragraph 4, 5 and 6 of this Agreement. If SPHI fails or refuses to take timely action to enforce its rights under paragraphs 4, 5 or 6 of this

4

Agreement or if SPHI defaults in the payment of any Obligation owed to an Obligee on the relevant due date for payment, such Obligee may proceed directly against Parent to enforce SPHI’s rights under paragraphs 4, 5 and 6 of this Agreement or to obtain payment by Parent directly to Obligee of such Obligation owed to such Obligee, in which case Parent, subject to its rights under paragraph 16, shall pay directly to the applicable Obligee the amount necessary to enable discharge of the relevant Obligations. Obligee can only proceed directly against Parent if and when Obligee provides Parent with a Notice of Claim specifying (i) which of the Obligations has not been performed; and (ii) the amount, if any, due and payable to the Obligee together with the name of such Obligee and the due date for payment for such amount. The Notice of Claim shall include a certificate from a duly authorized officer of Obligee confirming the accuracy of the foregoing.

8. Consideration. In consideration for Parent undertaking its obligations to SPHI under this Agreement, SPHI agrees to pay to Parent, on or prior to the sixtieth (60th) day after the end of each fiscal year of SPHI during the term of this Agreement, an amount in cash equal to the product obtained by multiplying (a) the sum of the aggregate face value of Obligations of SPHI relating to OTC Guarantees and the aggregate exposure of SPHI to any Obligations associated with Guarantees issued to support structured transactions for which Parent provided any support pursuant to paragraph 4 of this Agreement during the preceding fiscal year of SPHI, times (b) fifty basis points (0.50%).

9. Covenants of SPHI. SPHI shall take steps to verify with those Parent Subsidiaries on whose behalf SPHI shall have Obligations from time to time that the underlying obligations will be duly and punctually discharged on the due date for payment or if such obligations are contingent liabilities that such liabilities are not due.

10. Notices. Any notice, instruction, request, consent, demand or other communication required or contemplated by this Agreement shall be in writing, shall be given or made or communicated by courier, facsimile transmission or hand delivery, addressed as follows:

If to Parent:	Iberdrola, S.A. Director of Treasury Tomas Redondo, 1
	28033 Madrid Spain
	Fax No.: 34 (91) 466.45.77
	With a copy to: Iberdrola, S.A.
	The Company Secretary Tomas Redondo, 1
	28033 Madrid Spain
	Fax No.: 34 (91) 784.28.70

5

If to SPHI:	ScottishPower Holdings, Inc.
	1125 NW Couch Street Suite 700
	Portland, OR 97209 USA
	Attention: General Counsel Fax No. (001) 503-796-6904

11. Successors; No Third Party Beneficiaries.

(a) Neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by any party without the prior written consent of the other party hereto. Any assignment or transfer without such consent shall be null and void and of no effect. Subject to the foregoing, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Parent may assign this Agreement to Iberdrola Renovables S.A (“IER”); provided, however, that such assignment may not be completed until IER has received an investment grade long-term senior unsecured debt rating or corporate or issuer rating from either Standard & Poors Rating Group (a division of McGraw-Hill, Inc.) or Moody’s Investor Services, Inc.

(b) Except for the rights of Obligee specifically contemplated hereunder, and in any event subject to the conditions and limitations set forth herein (including, without limitation, the provisions of paragraphs 13, 14, 15, and 16), this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give any person, other than the parties hereto and such permitted assigns, any legal or equitable rights hereunder, whether as third party beneficiaries or otherwise.

12. Governing Law and Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws, other than Section 5-1401 of the New York General Obligations Law, which shall apply to this Agreement. Parent hereby, to the extent permitted by law, (a) submits to the exclusive jurisdiction of the federal District Court for the Southern District of New York and the state courts of the State of New York with respect to any proceeding by SPHI or an Obligee against Parent pursuant to the Agreement and stipulates that venue is proper in the Court as well and (b) agrees that any final and unappealable judgment against Parent in any proceeding contemplated above shall be enforceable in the United States or Canada by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and amount of such judgment. Each Obligee, by accepting the benefits of this Agreement, hereby (y) submits to the exclusive jurisdiction of the federal District Court for the Southern District of New York and the state courts of the State of New York and (z) agrees to bring any action, suit, claim or other legal proceeding arising under, or in connection with, this Agreement only in the federal District Court for the Southern District of New York or the state courts of the State of New York, in each case to the extent permitted by law.

13. Limited Liability. Notwithstanding any provision in any documentation constituting an Obligation, Parent shall not be liable to SPHI or any Obligee whether

6

in contract, tort (including negligence) or otherwise, for any loss of use (whether partial or total), loss of profits, loss of contracts or indirect or consequential loss or damage whatsoever and howsoever arising which is suffered by SPHI or any Obligee which is directly or indirectly connected with the Obligations or the non performance thereof, in each case to the extent so permitted by applicable law. Nor, without prejudice or limitation to the foregoing, shall Parent be liable to SPHI or any Obligee in contract, tort (including negligence) or otherwise for any loss or damage or fine of a punitive or exemplary nature, in each case to the extent so permitted by applicable law.

14. Aggregate Liability. The liabilities and obligations of Parent to SPHI or any Obligee under the provisions of this Agreement shall not either individually or when aggregated together be greater or different in character or extent to the respective liabilities or obligations of SPHI or the applicable Parent Subsidiaries to the respective Obligees from time to time in terms of the relevant Obligations, in each case to the extent so permitted by applicable law.

15. Lapse. Where SPHI has failed to provide a Payment Request within twelve (12) months of the applicable due date or an Obligee has failed to provide a Notice of Claim to Parent pursuant to paragraph 7 of this Agreement within the later of twelve (12) months of SPHI’s failure to enforce its rights under paragraph 4, 5 and 6 of this Agreement with respect to an Obligation and SPHI’s default in the payment of any Obligation, then any claim that should have been made against Parent in respect of such Obligation will lapse and Parent shall be released from any liability in respect of that Obligation, in each case to the extent so permitted by applicable law.

16. Access to Defenses. In any action brought by SPHI against Parent under this Agreement, Parent may exercise and assert all defenses, rights of set-off, counterclaims and other rights to which SPHI or any Parent Subsidiary is or may be entitled under the Obligations (or any documentation constituting the same) as if the action had been brought by an Obligee against SPHI or the applicable Parent Subsidiary, in each case to the extent so permitted by applicable law. Parent does not waive and may exercise any defenses, rights of set-off, counterclaims and other rights to which SPHI or any Parent Subsidiary is or may be entitled under the Obligations and any rights of set-off as between Parent and Obligee to the extent so permitted by applicable law.

17. Gross-Up. All sums payable by Parent pursuant to this Agreement shall be paid free and clear of all deductions or withholdings whatsoever, save only as may be required by law. If any deductions or withholdings are required by law to be made from any such sums, Parent shall be obliged to pay to SPHI or the relevant Obligee such sum as will, after the deduction or withholding has been made, leave SPHI or the relevant Obligee (as the case may be) with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.

7

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date set forth above.

	IBERDROLA, S.A.
By:	/s/ Julián Martínez-Simancas Sánchez
Name:	Julián Martínez-Simancas Sánchez
Title	General Secretary and Secretary of the Board of Directors
	SCOTTISH POWER HOLDINGS, INC.
By:	/s/ Terry F. Hudgens
Name:	Terry F. Hudgens
Title	President & CEO
By:	/s/ Susan M. Reilly
Name:	Susan M. Reilly
Title	Executive Vice President

EX-10.16

EXHIBIT 10.16

AMENDMENT NO. 1

TO

GUARANTEE AND SUPPORT AGREEMENT

BETWEEN

IBERDROLA,

S.A. AND

IBERDROLA RENEWABLES HOLDINGS, INC.

(formerly known as SCOTTISHPOWER HOLDINGS, INC.)

THIS AMENDMENT NO. 1 TO GUARANTEE AND SUPPORT AGREEMENT (this “Amendment No. l”) is dated and executed as of the 27th of May, 2010, but effective for all purposes as of April 1, 2010, by and among IBERDROLA, S.A., a corporation (sociedad anonima) organized and existing under the laws of the Kingdom of Spain (“Parent”) and IBERDROLA RENEWABLES HOLDINGS, INC. (formerly known as SCOTTISHPOWER HOLDINGS, INC.), a corporation organized under the laws of the State of Delaware in the United States of America (“SPHI”). Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Guarantee and Support Agreement (as defined below).

WHEREAS, the parties entered into that certain Guarantee and Support Agreement dated as of April 3, 2008, (the “Guarantee and Support Agreement”); and

WHEREAS, the parties hereto desire to amend the Guarantee and Support Agreement as set forth herein.

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

1. Amendment to Section 8. Section 8 of the Guarantee and Support Agreement which currently reads:

“9. Consideration. In consideration for Parent undertaking its obligations to SPHI under this Agreement, SPHI agrees to pay to the Parent, on or prior to the sixtieth (60th) day after the end of each fiscal year of SPHI during the term of this Agreement, an amount in cash equal to the product obtained by multiplying (a) the sum of the aggregate face value of the Obligations of SPHI relating to OTC Guarantees and the aggregate exposure of SPHI to any Obligations associated with Guarantees issued to support structured transactions for which Parent provided any support pursuant to paragraph 4 of this Agreement during the preceding fiscal year of SPHI, times (b) fifty basis points (0.50%).”

is hereby deleted in its entirety and replaced with the following:

“9. Consideration. In consideration for Parent undertaking its obligations to SPHI under this Agreement, SPHI agrees to pay to Parent, on or prior to the sixtieth (60th) day after the end of each fiscal year of SPHI during the term of this Agreement, an amount in cash equal to the product obtained by multiplying (a) the sum of the aggregate face value of Obligations of SPHI relating to OTC Guarantees and the aggregate exposure of SPHI to any Obligations associated with Guarantees issued to support structured transactions for which Parent provided any support pursuant to paragraph 4 of this Agreement during the preceding fiscal year of SPHI, times (b) thirty basis points (0.30%).”

2. Full Force and Effect. Except as expressly amended hereby, the Guarantee and Support Agreement shall continue to full force and effect as originally constituted (including any subsequent amendments thereto) and is ratified by the parties hereto.

3. Counterparts. This Amendment No. 1 may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

4. Severability. If one or more provisions of this Amendment No.1 are held to be unenforceable under applicable law, such provision shall be excluded from this Amendment No. 1 and the balance of this Amendment No. 1 shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

5. Governing Law. This Amendment No. 1 shall be governed by and construed under the laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused their authorized representatives to execute and deliver this Amendment No. 1 on the date first above written.

IBERDROLA, S.A.		IBERDROLA RENEWABLES HOLDINGS, INC.
By:	/s/ Jesús Martínez Pérez	By:	/s/ Pablo Canales
Name:	Jesús Martínez Pérez	Name:	Pablo Canales
Title:		Title:	Authorized Representative
By:	/s/ Javier Julio Pastor Zuazaga	By:	/s/ Richard Ito
Name:	Javier Julio Pastor Zuazaga	Name:	Richard Ito
Title:		Title:	Authorized Representative

EX-10.28

ACUERDO MARCO PARA

LA REGULACIÓN DE LAS

PRESTACIONES DE

SERVICIOS

CORPORATIVOS PARA

IBERDROLA Y LAS

SOCIEDADES DE SU

GRUPO

En Bilbao, a 16 de julio de 2015

LAS PARTES

IBERDROLA, S.A. (en adelante, “IBERDROLA”), sociedad española, con domicilio social en Bilbao (Bizkaia), plaza Euskadi, número 5, inscrita en el Registro Mercantil de Bizkaia, Tomo BI-233, folio 156, hoja número BI-167, de la sección de sociedades, y CIF A-48010615. Actúa representada en este acto por don Fernando Becker Zuazua y don Juan Carlos Rebollo Liceaga en virtud del apoderamiento conferido a su favor el día 12 de mayo de 2010 ante el Notario de Bilbao don José Antonio Isusi Ezcurdia, bajo el número 2.315 de orden de su protocolo, que declaran expresamente vigente, por no haber sido modificado, revocado, ni suspendido.

De otra parte,

Las sociedades integradas en el grupo cuya entidad dominante, en el sentido establecido por la ley, es IBERDROLA (el “Grupo Iberdrola”) que firmen la Declaración de Aceptación que figura como Anexo II (el “Declaración de Aceptación”) a este contrato (el “Contrato” o el “Acuerdo Marco”) y que lo remitan, según lo dispuesto en este documento, a IBERDROLA (dichas sociedades, en adelante, las “Sociedades del Grupo” o las “Sociedades Cliente”). Las Sociedades Cliente podrán hacer variaciones en la redacción de la Declaración de Aceptación justificadas por sus especialidades siempre que no ello no afecte a las disposiciones sustantivas de este Contrato.

EXHIBIT 10.28

FRAMEWORK

AGREEMENT

FOR THE PROVISION

OF CORPORATE

SERVICES

FOR IBERDROLA AND

THE COMPANIES OF ITS

GROUP

July 16, 2015, Bilbao

BY AND BETWEEN

IBERDROLA, S.A. (hereinafter referred to as “IBERDROLA”), a Spanish company, domiciled in Bilbao, (Bizkaia), at Plaza Euskadi, número 5, and registered at the Vizcaya Commercial Registry in Volume BI-233 sheet 156, page number BI-167 of the companies section, and holding taxpayer identification number A-48010615. Represented in this agreement by Mr. Fernando Becker Zuazua and Mr. Juan Carlos Rebollo Liceaga, pursuant to the power of attorney granted in their names on May 12, 2010, before the Bilbao Notary, Mr. José Antonio Isusi Ezcurdia, registered under number 2.315, which they expressly state remains in force since it has not been modified, revoked or suspended.

And,

The group of companies, the parent company of which is IBERDROLA (the “Iberdrola Group”), that execute the declaration of acceptance attached as Annex II hereto (the Declaration of Acceptance”) to this agreement (the “Agreement” or the “Framework Agreement”) and send it, pursuant to the provisions of this document, to IBERDROLA (hereinafter, such companies shall be referred to as the “Group Companies” or the “Client Companies”). The Client Companies will be allowed to do some alternative drafting to the Declaration of Acceptance when justified for their own particularities and as far as that does not affect the substantive provisions of this Agreement.

Las Partes, en la representación que ostentan, se reconocen, mutua y recíprocamente, la capacidad legal necesaria para la formalización de este documento mediante la citada Declaración de Aceptación y, en su virtud,

EXPONEN

I. De acuerdo con el artículo 2 de los Estatutos Sociales de IBERDROLA, su objeto social es plural, pudiendo desarrollarse tanto en España como en el extranjero y de forma directa, total o parcialmente, por la Sociedad, o indirectamente, a través de otras sociedades pertenecientes al Grupo Iberdrola.

II. La presencia del Grupo Iberdrola en distintos países, negocios y sectores ha hecho necesaria la implantación de un modelo de negocio basado en una estructura descentralizada de los procesos de decisión que, sin embargo, permita, a su vez, una integración global de los negocios de acuerdo con el Modelo de negocio del Grupo.

III. Este modelo, acordado por el Consejo de Administración de Iberdrola, S.A., está orientado a la maximización de la eficiencia operativa de las distintas unidades de negocio y garantiza la difusión, implementación y seguimiento de la estrategia general y las directrices básicas de gestión establecidas para cada uno de los negocios, fundamentalmente mediante el intercambio de mejores prácticas entre las distintas sociedades del Grupo Iberdrola. Así, en la actualidad, los negocios del Grupo Iberdrola son desarrollados por sociedades distintas de Iberdrola tanto en España como en el extranjero.

IV. Uno de los instrumentos clave del Modelo de negocio del Grupo es la llamada Corporación Única, que Iberdrola, como sociedad dominante del Grupo, ha constituido para la prestación de determinados servicios corporativos de una forma eficiente y flexible a todas las sociedades del Grupo Iberdrola que lo requieran vía la conclusión del correspondiente contrato (este

The Parties represent and warrant that they have the necessary legal capacity to enter into this Agreement by virtue of executing the Declaration of Acceptance, for which purpose they agree to the following,

WHEREAS

I. Pursuant to Article 2 of the Bylaws of IBERDROLA, its corporate purpose is general and perpetual in nature and may be pursued both in Spain and abroad, directly, in whole or in part, by IBERDROLA, or indirectly via other companies belonging to the Iberdrola Group.

II. The presence of the Iberdrola Group in various countries, businesses and industries has made it necessary to set in place a business model that allows for a decentralized decision-making process and, which nevertheless, also allows for the global integration of its businesses in line with the business model of the Iberdrola Group.

III. This model, which was approved by the Board of Directors of IBERDROLA, is aimed at maximizing the operating efficiency of the various business units and guaranteeing the dissemination, implementation and monitoring of the general strategy and the general management guidelines established for each of the businesses, essentially by exchanging best practices among the various companies of the Iberdrola Group. Thus, presently, the businesses of the companies of the Iberdrola Group are developed by different companies of the Iberdrola Group both in Spain and abroad.

IV. As the Iberdrola Group’s parent company, IBERDROLA has launched its “Single Corporation” (Corporación Única) structure which provides efficient, flexible corporate services to all such companies of the Iberdrola Group as may so request via the execution of

Acuerdo Marco) y la consiguiente determinación de los servicios que serán prestados a cada sociedad por IBERDROLA. IBERDROLA, como sociedad prestadora de servicios, garantizará la adecuada prestación de los servicios contratados siguiendo, en su caso, las instrucciones suministradas en la correspondiente Declaración de Aceptación por las Sociedades Cliente que concluyan el Acuerdo Marco, que deberán respetar los estándares fijados en el marco de la Corporación Única para garantizar las adecuadas sinergias y la maximización operativa en el Grupo.

V. En particular, a la fecha de este Acuerdo Marco, IBERDROLA viene proporcionando, a Sociedades Cliente, bienes y servicios similares a los que son objeto de este Acuerdo Marco, con base en los Acuerdos Marco para la regulación de las prestaciones de servicios corporativos para IBERDROLA y las sociedades de su Grupo de fechas 31 de diciembre de 2009 y 1 de enero de 2011.

VI. Los servicios deberán prestarse con pleno respeto a la legislación aplicable y, en particular, a la normativa española en materia de separación de actividades reguladas, que admite que las sociedades de un mismo grupo puedan desarrollar actividades reguladas y liberalizadas en España, siempre que éstas y aquéllas se realicen por sociedades diferentes y se cumplan los criterios de independencia contemplados en los apartados a), b) y c) de los artículos 12.2 de la Ley del Sector Eléctrico y 63.4 de la Ley del Sector de Hidrocarburos.

VII. De acuerdo con lo dispuesto en la citada normativa, el Consejo de Administración de IBERDROLA, en reunión celebrada el 18 de febrero de 2014, aprobó el texto refundido en vigor del Código de separación de actividades de las sociedades del grupo Iberdrola con Actividades Reguladas en España, que garantiza la capacidad de decisión efectiva de las sociedades reguladas sobre los activos necesarios para el desarrollo de sus actividades y que resulta de aplicación a este Contrato.

the relevant agreement (this Framework Agreement) and the related selection of the services they wish to be provided by IBERDROLA. In line with the instructions issued by the Client Companies that are party to the Framework Agreement, IBERDROLA, as the service provider, shall guarantee the proper execution of those specified services.

V. In particular, as of the date of this Framework Agreement, IBERDROLA has been providing Client Companies with goods and services similar to those under this Framework Agreement, based on the framework agreements between IBERDROLA and the companies of the Iberdrola Group dated December 31, 2009 and January 1, 2009.

VI. The contracted services must be provided in full compliance with applicable legislation and, in particular, the Spanish laws governing the separation of regulated activities, which entitle companies from the same group to pursue regulated and unregulated activities in Spain, provided such regulated and unregulated activities are carried out by different companies and comply with the standards of independence set forth in sub-sections a), b) and c) of Articles 12.2 of the Electricity Industry Law and 63.4 of the Hydrocarbon Industry Law.

VII. In accordance with the provisions of the above legislation, the Board of Directors of IBERDROLA, at a meeting held on February 18, 2007, approved the revised Code of Separation of Activities of the Companies of the Iberdrola Group with Regulated Activities in Spain, which ensures the effective decision-making capacity of the regulated companies with respect to the necessary assets for the development of their activities and, which is also applicable to this Agreement.

VIII. Moreover, the contracted services must be provided in full observance of the system of corporate governance and the distribution of duties and competences thereunder.

VIII. Asimismo, los servicios contratados deberán prestarse con pleno respeto al Sistema de gobierno corporativo y a la distribución de funciones y competencias derivadas del mismo.

IX. A la vista de cuanto antecede, las Partes desean establecer con claridad el régimen de prestación de determinados servicios de tipo corporativo por parte de IBERDROLA a las Sociedades Cliente y

Así, otorgan este Contrato, que se regirá por lo establecido en las siguientes

CLÁUSULAS

1.- ÁMBITOS OBJETIVO Y SUBJETIVO DEL CONTRATO

1.1.- Ámbito objetivo

Este Contrato tiene por objeto regular las relaciones entre IBERDROLA y las Sociedades Cliente en lo relativo a la contratación, por parte de las éstas últimas de los servicios que se identifican en el Anexo I (en lo sucesivo “los Servicios”), que IBERDROLA podrá prestar en los términos establecidos en este Contrato.

Se incluye, asimismo, en el Anexo I, el inductor de coste para el cálculo del precio de cada uno de los Servicios, para el ejercicio 2014. El precio será revisable para cada uno de los ejercicios consecutivos.

Se incorpora, además, como Anexo II a este Contrato, el modelo de Declaración de Aceptación que cada una de las sociedades del Grupo Iberdrola podrá suscribir y en el que se establecerán los concretos Servicios que dichas sociedades requieren le sean prestados por IBERDROLA.

La prestación de los servicios adicionales a los que se hubieran descrito en el Anexo II exigirá que las Partes suscriban la correspondiente novación del Anexo para identificar el correcto alcance de los nuevos servicios a prestar.

1.2.- Ámbito subjetivo

Serán Parte de este Contrato IBERDROLA y todas las Sociedades integradas en el Grupo Iberdrola que suscriban la Declaración de Aceptación.

IX. In light of the foregoing, the Parties wish to update the regime governing the provision of services of a corporate nature by IBERDROLA to the Client Companies and,

Thus, they enter into this Agreement, which shall be governed by the following provisions

CLAUSES

1.- SCOPE OF THE AGREEMENT

1.1.- Subject Matter of the Agreement

The purpose of this Agreement is to govern the relationship between IBERDROLA and the Client Companies with respect to the services detailed in Annex I (hereinafter, the “Services”) that IBERDROLA may provide based on the terms and conditions established in this Agreement.

Also included in Annex I is the price for each Service for the 2014 financial year. This price may be reviewed for each consecutive year.

Moreover, attached to this Agreement as Annex II is the form of Declaration of Acceptance that each of the companies of the Iberdrola Group may enter into and which shall identify the specific Services requested by such companies to be provided by IBERDROLA.

To the extent the Client Companies have determined that they require additional services to those described in Annex II, the Parties shall execute a novation to the Annex in order to identify the proper scope of the new services to be provided.

1.2.- Parties to the Agreement

IBERDROLA and all such companies of the Iberdrola Group that enter into the Declaration of Acceptance shall be party to this Agreement.

1.3.- Resolución de la relación de contratos anteriores

Las Partes expresamente acuerdan que mediante la firma de este Contrato, quedan resueltos de pleno derecho y sin efecto alguno los Acuerdos Marco de prestación de servicios que hubieran podido concluirse con anterioridad.

2.- DURACIÓN DEL CONTRATO

Este Contrato es aplicable, con independencia de la fecha de su firma, a los servicios prestados a partir del 1 de enero de 2014, y entrará en todo caso en vigor una vez se suscriba la Declaración de Aceptación correspondiente por cada una de las Sociedades del Grupo. El contrato mantendrá su vigencia mientras las Sociedades Cliente continúen formando parte del Grupo Iberdrola, de conformidad con lo previsto en el artículo 42 del Código de Comercio español.

En el momento en que una Sociedad Cliente deje de formar parte del Grupo Iberdrola, de acuerdo con lo previsto en el párrafo anterior, la relación contractual en virtud de este Contrato entre IBERDROLA y la Sociedad que deje de formar parte del Grupo Iberdrola quedará automáticamente resuelta desde la fecha efectiva en que dicha Sociedad deje de formar parte del Grupo Iberdrola.

No obstante lo anterior, este Contrato podrá resolverse en cualquier momento de común acuerdo por las Partes o por las demás causas previstas en el Código Civil español.

3.- PRESTACIÓN DE SERVICIOS DE IBERDROLA A LAS SOCIEDADES CLIENTES

3.1.- Servicios de IBERDROLA

IBERDROLA prestará, de manera singular o recurrente, los Servicios corporativos que se identifican en el Anexo I y que sean solicitados por la Sociedad Cliente mediante la aceptación del presente Acuerdo Marco, de conformidad con el modelo de Corporación Única descrito en los expositivos del presente contrato.

1.3.- Termination of previous agreements

The Parties expressly represent that, by entering into this Agreement, all such framework agreements for contracted services as may have been executed beforehand, are terminated by operation of law and rendered without any effect whatsoever.

2.- TERM OF THE AGREEMENT

Regardless of its execution date, this Agreement is applicable to the services provided as of January 1, 2014, and shall, in any event, enter into force upon the execution of the relevant Declaration of Acceptance for each of the Group Companies. This Agreement shall remain in force as long as the Client Companies continue forming part of the Iberdrola Group in accordance with the provisions of Article 42 of the Spanish Commercial Code.

As soon as a Client Company ceases to form part of the Iberdrola Group, in line with the provisions of the preceding paragraph, the contractual relationship under this Agreement between IBERDROLA and the company ceasing to form part of the Iberdrola Group shall be automatically terminated as from the date on which such company effectively ceases to form part of the Iberdrola Group.

Notwithstanding the foregoing, this Agreement may be terminated at any time by mutual agreement between the Parties or on any other grounds provided for in the Spanish Civil Code.

3.- PROVISION OF THE IBERDROLA SERVICES TO THE CLIENT COMPANIES

3.1.- Services of IBERDROLA

IBERDROLA shall provide to the Client Company, on a one-time or recurring basis, the Services identified in Annex I.

All of the Services shall be provided on market conditions, and IBERDROLA shall not, within the context of a provision of Services, enjoy financial or other types of conditions more favorable than those that would be recognized by third parties in substantially similar circumstances or that may entail preferential treatment for IBERDROLA due to its status as parent company and controlling shareholder of the Client Companies.

Todos los Servicios se prestarán en condiciones de mercado siempre de acuerdo con la normativa aplicable, y sin que ninguna de las Partes pueda gozar, en el marco de la prestación de sus Servicios, de unas condiciones económicas o de otro tipo más favorables de las que se reconocerían a un tercero en condiciones sustancialmente equivalentes o, en particular, que puedan suponer un trato de favor a IBERDROLA por razón de su condición de sociedad dominante y accionista controlador de las Sociedades Cliente.

La prestación de los Servicios por parte de IBERDROLA se llevará a cabo, en todo caso, sin menoscabo de la capacidad de decisión efectiva de las Sociedades Cliente sobre los servicios una vez hayan sido contratados.

Para la mejor prestación de los Servicios contratados, las Sociedades Cliente deberán proporcionar información precisa, cierta y completa a IBERDROLA. En este sentido, las Sociedades Cliente asumen cualquier responsabilidad derivada de daños o perjuicios imputables a la información suministrada a IBERDROLA para la prestación de los Servicios contratados, quedando la responsabilidad de ésta limitada al incumplimiento o cumplimiento defectuoso o negligente de lo pactado con las Sociedades Cliente.

3.2.- Calidad de prestación de los Servicios

En la ejecución de los Servicios contratados, IBERDROLA usará toda la pericia, cuidado y diligencia que se espera de una sociedad dedicada a la venta y prestación en condiciones de mercado de bienes y servicios equivalentes a esos Servicios, pudiendo las Partes establecer, de común acuerdo, niveles de calidad específicos para algunos de los Servicios, formalizándose en su caso mediante documento escrito que se adjuntará a este Contrato como anexo al mismo. IBERDROLA prestará los Servicios contratados de acuerdo con sus normas y procedimientos internos específicos.

The Services shall be provided by IBERDROLA at all times without detriment to the effective decision-making capacity of the Client Companies.

In order to ensure the best results of the contracted Services, the Client Companies must provide precise, accurate and complete information to IBERDROLA. In this regard, the Client Companies assume any such liability as may derive from damage or losses attributable to the dissemination of instructions or information provided to IBERDROLA for the contracted Services; provided, however, that Iberdrola will be liable only for non-performance, defective performance or negligence.

3.2.- Quality of the Services

IBERDROLA shall, when executing the contracted Services, use all of the expertise, care and diligence as may be expected of a company engaged in the sale and provision on market conditions of goods and services equal to such Services, and the Parties may by mutual agreement establish specific quality standards for some of the Services, formalized, as the case may be, under a written document to be attached to this Agreement as a schedule hereto. IBERDROLA will provide the contracted Services consistent with its specific internal rules and procedures.

3.3.- Price and invoicing

3.3.1.- Price

The price for each of the Services shall be a market price determined by any legal method, calculated annually, based on the costs incurred by IBERDROLA to provide such Services to the Client Companies as outlined in Annex I of this Agreement.

Expressly excluded from the calculation of the above price are any expenses relating to activities pursued by IBERDROLA that benefit its shareholders, as well as any expenses relating to the supervisory activities pursued by IBERDROLA in

3.3.- Precio y facturación

3.3.1.- Precio

El precio por la prestación de cada uno de los Servicios, se corresponderá en cualquier caso con un precio de mercado, determinado por cualquiera de los métodos aceptados en la legislación y normativa aplicables -incluyendo el propio coste sin margen, cuando se den las oportunas circunstancias-, y se calculará de forma anual con base en el coste incurrido por IBERDROLA para la prestación de los mismos a las Sociedades Cliente, de acuerdo con lo establecido en el Anexo I de este Contrato.

Quedan excluidos expresamente del cálculo de dicho precio, los costes incurridos que se deriven de los denominados servicios en beneficio del accionista, así como los costes relativos a actividades de supervisión realizados por IBERDROLA en cumplimiento de la Política para la definición y coordinación del Grupo Iberdrola y bases de la organización corporativa, aprobada inicialmente por el Consejo de Administración de IBERDROLA el día 18 de diciembre de 2007, y modificada por última vez el 19 de noviembre de 2013.

3.3.2.- Procedimiento de notificación del precio de los Servicios y facturación

Antes del 31 de diciembre de cada año de vigencia del Contrato, IBERDROLA comunicará a las Sociedades Cliente el importe estimado del precio de cada uno de los Servicios contratados para el año siguiente (el “Precio Estimado”), calculado sobre la base del presupuesto y de los inductores establecidos en el Anexo I.

Durante el último mes de cada año de vigencia del Contrato, IBERDROLA emitirá la factura correspondiente a los Servicios contratados en la Declaración de Aceptación, con base en los costes reales incurridos en los doce últimos meses y los inductores establecidos en el Anexo I.

Las Sociedades Clientes aceptan que la emisión de la factura se haga por medio de un sistema automatizado de facturación electrónica en formato pdf y que la entrega de la misma se haga a través de la plataforma corporativa SAP, anexando el documento original al correspondiente apunte contable en cada Sociedad Cliente. En caso de que la Sociedad Cliente no esté integrada en la plataforma corporativa SAP, la factura se enviará por correo electrónico.

line with the “Policy for the Definition and Coordination of the IBERDROLA Group and Foundations of Corporate Organization”, approved by the Board of Directors of IBERDROLA on December 18, 2007 and last amended on November 19, 2013.

3.3.2.- Procedure for the notification of the price of the Services and invoicing

During the term of this Agreement, before December 31 of each year, IBERDROLA shall notify the Client Companies of the estimated price of each contracted Service for the following year (hereinafter, the “Estimated Price”), calculated on the basis of the prices and indicators established in Annex I of this Agreement.

During the last month of each year of each term of this Agreement, IBERDROLA shall issue an invoice to be paid on the payment date to their corporate account in Euros, or by any other means of payment as may be agreed on by the Parties, for the Services rendered (as detailed in the relevant Annex I) during the preceding year, based on the actual costs incurred in such year.

Client Companies accept that the invoices are sent in an electronic pdf form through the SAP corporate platform. The original document will be annexed to the appropriate Client book entry. If the Client Company does not use the SAP corporate platform, the invoice will be sent by e-mail.

Along with the invoice, IBERDROLA shall send the Client Companies written notice of the final price (hereinafter, the “Final Price”) for the Services provided, as reflected in the relevant Annex II.

Within fifteen days, the Client Companies may make comments or inquiries to the invoice. The Parties shall try to resolve any disagreements, but in the event of a disagreement that is ongoing for more than fifteen days, any Party may exercise the rights provided to them in Clause 11 hereof.

Junto con la factura, IBERDROLA remitirá a las Sociedades Cliente una notificación informando de la determinación del precio final (el “Precio Final”) que se haya producido en la prestación de cada uno de los Servicios.

Las Sociedades Cliente podrán formular los comentarios o aclaraciones que consideren necesarias dentro de un plazo de quince días. En caso de discrepancias, las Partes tratarán de llegar a un acuerdo, y en caso de no alcanzarlo en un nuevo plazo de quince días, cualquiera de ellas podrá someter la discrepancia al procedimiento establecido en la cláusula 11.

Dichas cantidades serán abonadas, previa presentación de la factura, en el plazo máximo de treinta días, mediante anotación en la cuenta corriente mercantil en Euros vigente entre las Partes a la fecha del pago, o por cualquier otro procedimiento que las Partes acuerden.

El Precio Final incluirá los impuestos que correspondan según la legislación aplicable en cada caso, así como todos los gastos incurridos por IBERDROLA para su prestación.

3.3.3.- Auditoría Independiente

Las Partes acuerdan que las Sociedades Cliente tendrán derecho a realizar una auditoría independiente de los costes de prestación de los Servicios y los inductores aplicados para calcular el precio anual de los Servicios prestados a las Sociedades Cliente (la “Auditoría Independiente”).

Las Sociedades Clientes podrán solicitar dicha Auditoría Independiente por escrito dentro de los sesenta días siguientes a la recepción de la notificación de IBERDROLA del precio real de los Servicios, según la cláusula 3.3.2, debiendo IBERDROLA facilitar a las Sociedades Cliente toda la información y documentación que soliciten con dicho objeto. El coste de dicha auditoría correrá a cargo de las Sociedades Cliente que la hayan solicitado.

Within the fifteen days following the determination of the Final Price in line with the preceding paragraph, the relevant adjustment invoice shall be issued for the Services, and the Party having to pay the difference shall do so on the payment date to the corporate account, in Euros, or by any other mean of payment as may be agreed on by the Parties, subject to the issuance of the relevant adjustment invoice in respect of the Final Price.

The Final Price shall include the relevant Value Added Tax, as well as any expense incurred by IBERDROLA in connection with providing the Services.

3.3.3.- Independent audit

The Parties agree that the Client Companies shall be entitled to conduct an independent audit of the cost of the Services and the criteria applied to calculate the annual price of the Services provided to the Client Companies (hereinafter, the “Independent Audit”).

The Client Companies may request the above Independent Audit in writing within the sixty days following the receipt of the notification from IBERDROLA of the actual price of the Services according to clause 3.3.2, and IBERDROLA must provide the Client Companies with all the information and documentation requested in connection therewith.

In the event that the Independent Audit reveals a figure of twenty-five percent lower than that notified by IBERDROLA in respect of the actual price of the Services, the Parties shall undertake to agree in good faith on the price of the Services for such financial year in line with the criteria established in clause 3.3.1.

4.- CONFIDENTIALITY

All of the information received by each Party from the other under this Agreement and provided in connection with the Services engaged, shall be confidential in nature and may not be used for purposes other than those contemplated in this Agreement, unless otherwise agreed on by IBERDROLA and the relevant Client Company.

En el caso de que la Auditoría Independiente refleje valores inferiores en un veinticinco por cien a los determinados en la notificación de IBERDROLA sobre el precio real de los Servicios, las Partes se comprometen a acordar de buena fe el precio de los Servicios para dicho ejercicio conforme a los criterios previstos en la cláusula 3.3.1.

4.- CONFIDENCIALIDAD

Toda la información que cada una de las Partes reciba de la otra en el marco de este Contrato y en ejecución de los Servicios contratados tendrá carácter confidencial y no podrá ser utilizada para fines distintos a los contemplados en este Contrato salvo acuerdo en contrario de IBERDROLA y la Sociedad Cliente que corresponda.

Ambas Partes se comprometen, en relación con la información referida, a custodiarla diligentemente y a no divulgarla a ningún tercero sin consentimiento de la otra Parte, salvo que, para obtener un asesoramiento imprescindible en relación con la ejecución de los Servicios, cualquiera de las Partes necesite revelar todo o parte de la información obtenida de la otra Parte a uno o varios asesores externos, ya sean estos personas físicas o jurídicas. En este caso, la Parte que divulgue la información a asesores externos no sujetos por su estatuto profesional al deber de secreto, hará que estos asuman el compromiso de confidencialidad previsto en este apartado.

Lo anterior se entiende sin perjuicio de las excepciones que con respecto a la obligación de confidencialidad pueden derivarse de la normativa aplicable y, especialmente, en materia de transparencia, en relación con este Contrato.

En este sentido, en la medida en que como consecuencia de la prestación de los Servicios, IBERDROLA tenga acceso a información comercialmente sensible de sociedades del Grupo Iberdrola que desarrollan actividades reguladas, IBERDROLA, de conformidad con la normativa aplicable y su Código de separación de actividades de las sociedades del grupo Iberdrola con actividades reguladas en España, adoptará las medidas necesarias para garantizar la confidencialidad de dicha información e impedir su acceso a las Sociedades Cliente que desarrollen actividades liberalizadas de producción, comercialización o de servicios de recarga energética.

The Parties undertake, in relation to the above information, to safeguard it diligently and not to disclose it to any third party without the consent of the other party, save where, in order to obtain essential advice in relation to the performance of the Services, either of the Parties needs to disclose all or part of the information obtained from the other Party to external advisers, whether natural or legal persons. In such case, the Party disclosing the information to external advisers not subject by their professional code to the duty of secrecy, shall ensure that such external advisers assume the confidentiality undertaking provided for herein.

The foregoing is understood notwithstanding any such exceptions as may derive in respect of the confidentiality obligation from the applicable laws and, in particular, with respect to transparency, in relation to this Agreement.

In connection therewith, when, as a result of the performace of the Services, IBERDROLA gains access to commercially sensitive information owned by companies of the Iberdrola Group pursuing regulated activities, IBERDROLA, in accordance with the applicable legislation and its Code of Separation of Activities of the Companies of the Iberdrola Group with Regulated Activities in Spain, shall adopt the necessary measures to guarantee the confidentiality of such information and avoid its disclosure to the Client Companies pursuing the unregulated activities of generation, commercialization or energy recharge services.

The provisions of this clause shall apply while the Agreement remains in force and for a period of two years after its termination, save when the confidential information becomes publically known for reasons other than a breach by the Parties of their confidentiality obligations established in this clause.

5.- TRANSPARENCY

IBERDROLA and the Client Companies shall inform the market of the transactions performed among them under this Agreement, both in their annual public reports and their periodic public reporting, in accordance with applicable legislation.

Lo previsto en esta cláusula será de aplicación mientras este Contrato permanezca en vigor y por un plazo de dos años a partir de la fecha de su extinción, salvo que la información confidencial devenga de dominio público por razones distintas del incumplimiento por las Partes de sus obligaciones de confidencialidad previstas en esta cláusula.

5.- TRANSPARENCIA

IBERDROLA y las Sociedades Cliente informarán al mercado sobre las transacciones realizadas entre ellas al amparo de este Contrato, tanto en su información pública anual, como en su información pública periódica, en los términos previstos en la normativa aplicable.

6.- NOTIFICACIONES

Todas las notificaciones entre las Partes con respecto a este Contrato se formularán por escrito y mediante entrega en mano con confirmación escrita de la recepción por la otra Parte, conducto notarial, burofax, por correo postal o electrónico, así como por cualquier otro medio, siempre que en todos los casos se deje constancia de su debida recepción por el destinatario.

IBERDROLA designa como dirección para la recepción de notificaciones la establecida en el encabezado de este Contrato. Por su parte, las Sociedades Clientes designan como dirección para la recepción de notificaciones la que se establezca en la Declaración de Aceptación que suscriban.

Cualquier modificación de los domicilios o personas a efectos de notificaciones deberá ser inmediatamente comunicada a la otra Parte de acuerdo con las reglas establecidas en esta cláusula. En tanto una Parte no haya recibido notificación de tales cambios, las notificaciones que esta realice conforme a esas reglas de acuerdo con los datos originarios se entenderán correctamente efectuadas.

6.- NOTICES

All notifications among the Parties in connection with this Agreement shall be made in writing and delivered by hand with written acknowledgement of receipt by the other Party, or notarial conduct, burofax, post or e-mail, as well as any other means, provided that a record is at all times made of receipt by the addressee.

IBERDROLA designates as its address for the receipt of communications the address provided in the preamble of this Agreement. For their part, the Client Companies designate, as their address for the receipt of communications, the addresses provided in the applicable Declaration of Acceptance.

Any modification to the addresses or persons to whom the communications must be addressed must be communicated to the other Parties in line with the provisions of this clause. Until such time as a Party has received such communication, the communications made in accordance with these provisions in line with the original particulars shall be considered valid.

7.- SEVERABILITY

Should any court or competent authority declare null and void any of the provisions of this Agreement, the whole document shall remain in force, save for said void and null provision, unless such provision is essential in nature or substantially affects the balance of the obligations assumed by the Parties, in which case the entire Agreement shall be rendered null and void. The Parties shall consult one another, on a best efforts basis, to agree on a valid, enforceable provision that constitutes a reasonable replacement of the null and void clause or section consistent with the spirit of this Agreement.

8.- MODIFICATION OF THE TERMS OF THE AGREEMENT AND ASSIGNMENT

8.1.- Modification

The terms of this Agreement may only be amended by agreement between the Parties.

7.- NULIDAD Y CARÁCTER INDEPENDIENTE DE LAS CLÁUSULAS DEL CONTRATO

Si un Tribunal o autoridad competente declara nula o inexigible cualquiera de las estipulaciones de este Contrato, este seguirá en vigor a excepción de la parte declarada nula o inexigible, salvo que la misma tenga carácter esencial o afecte de forma muy relevante al equilibrio de las obligaciones de las Partes, en cuyo caso este Contrato quedará sin vigor ni efecto alguno. Las Partes mantendrán consultas mutuas y efectuarán sus mejores esfuerzos para acordar una estipulación válida y exigible que constituya una sustitución razonable de la estipulación nula e inexigible de conformidad con el espíritu de este Contrato.

8.- MODIFICACIÓN DE LOS TÉRMINOS DEL CONTRATO Y CESIÓN

8.1.- Modificación

Los términos de este Contrato sólo podrán ser modificados por acuerdo de las Partes.

8.2.- Cesión

Todos los derechos de este Contrato son personales de las Partes y no podrán cederse sin el previo consentimiento escrito de todas las Partes.

9.-IMPUESTOS

Cada parte asumirá, a su cargo, los impuestos que sean de aplicación, en base a la legislación correspondiente. Asimismo, facilitarán a la otra parte, en debido tiempo y forma, cuanta documentación fuera precisa para reducir la carga fiscal al máximo, de acuerdo siempre con la legislación antes referida.

10. DERECHOS DE PROPIEDAD INTELECTUAL

A los solos efectos de este contrato, la cesión de derechos de propiedad intelectual podrá considerarse como prestación de servicios. En el supuesto de que IBERDROLA ceda a las Sociedades Cliente el derecho de uso o de explotación de patentes, dibujos o modelos, planos, fórmulas o procedimientos secretos, derechos sobre informaciones relativas a experiencias industriales, comerciales o científicas, bien para la prestación de los Servicios, bien de manera independiente a este Contrato, dichas cesiones se regirán, en defecto de otro contrato específico, en lo que proceda por el clausulado de este Contrato y, en su caso, de los acuerdos ad hoc que se suscriban entre las Partes.

8.2.- Assignment

All of the rights under this Agreement are exclusive to the Parties and may not be assigned without the prior written consent of all of the Parties.

9.- TAXES

Each Party shall, at its own expense, pay all applicable taxes, based on relevant legislation. Each Party also promises to provide to one another, in a timely manner, such documents that may be required to reduce the tax burden to the fullest, always in accordance with the applicable legislation referred to above.

10 – INTELLECTUAL PROPERTY

For the sole purpose of this Agreement, the assignment of intellectual property rights may be considered as a Service. In the event that IBERDROLA yields to the Client Company the right to use of a patent, design or model, plan, secret formula or process, rights to information concerning industrial, commercial or scientific experience, or for the provision of Services, either independently of this Agreement, such assignments shall be governed, in the absence of other specific contract, as appropriate per the clauses of this Agreement and, if necessary, ad hoc agreements between the Parties.

11.- ARBITRATION

11.1.- Previous negotiations

In the event that any conflict or dispute arises among any of the Parties in connection with this Agreement, the Parties shall enter into negotiations in order to try to solve it by mutual agreement within thirty days, or any other period as may be agreed on between the Parties.

11.2.- Submission to arbitration

Where the Parties are unable to resolve the dispute within the above initial period, they must submit it, especially where the dispute concerns the interpretation, validity, performance or termination of this Agreement, to arbitration at law pursuant to Spanish Arbitration Law 60/2003, of December 23, 2003.

11.- ARBITRAJE

111.- Negociación Previa

En el supuesto de que surgiera algún conflicto o disputa entre cualquiera de las Partes con respecto a este Contrato, las Partes entablarán negociaciones para intentar solucionarlo de mutuo acuerdo en un período de treinta días o aquel período distinto que las mismas acuerden.

11.2.- Sumisión a arbitraje

En caso de que las Partes no pudieran resolver el conflicto en ese período inicial, deberán someterlo, especialmente si se trata de interpretación, validez, exigibilidad, cumplimiento o resolución de este Contrato, a arbitraje de Derecho de conformidad con la Ley Española de Arbitraje (Ley 60/2003, de 23 de diciembre).

11.3.- Tribunal Arbitral

El Tribunal Arbitral estará compuesto por tres árbitros.

Cada Parte nombrará un árbitro, el demandante en la Solicitud de Arbitraje y el demandado mediante comunicación dirigida al primero dentro de los quince días siguientes a la recepción de esa Solicitud. Si una de las Partes se abstiene de nombrar árbitro, el nombramiento lo efectuará el Decano del Ilustre Colegio de Abogados del Señorío de Bizkaia por cuenta de esa Parte. Los dos árbitros así nombrados elegirán al tercer árbitro, quien actuará como Presidente del Tribunal Arbitral.

Si dentro de los treinta días siguientes al nombramiento del segundo árbitro, los dos árbitros no hubieran llegado a acuerdo sobre la elección del árbitro presidente, caducará su nombramiento, comenzándose nuevamente el proceso de designación en los términos del párrafo precedente.

Los árbitros deberán ser y permanecer durante el arbitraje independientes e imparciales. Cada uno de los árbitros deberá suscribir al aceptar su nombramiento una declaración de independencia e imparcialidad. Los

11.3.- Arbitral Tribunal

The Arbitral Tribunal shall be made up of three arbitrators.

Each Party shall appoint one arbitrator, the claimant in the request for Arbitration and the respondent in a communication addressed to the former within fifteen days following the receipt of such Request.

If one of the Parties fails to appoint an arbitrator, the appointment shall be made by the Dean of the Bar Association of Vizcaya on behalf of such Party. The two arbitrators thus appointed shall appoint the third arbitrator, who shall act as Chairman of the Arbitral Tribunal.

If, after thirty days from the designation of the second arbitrator, the two arbitrators have not reached an agreement on the appointment of the Chairman Arbitrator, their appointment shall expire, and the designation process shall recommence in accordance with the terms of the preceding paragraph.

During the arbitration procedure, the arbitrators must remain independent and neutral. Upon acceptance of their appointment, each arbitrator must sign a declaration of independence and impartiality. The arbitrators must serve written notice on the Parties of any circumstance prior or subsequent to their appointment that may give rise to doubts as to their independence or impartiality.

If a Party recuses an arbitrator, it must explain its reasons within fifteen days of the date of receipt of communication of the appointment of such arbitrator or on which it may become aware of circumstances giving rise to justified doubts as to their independence or impartiality. Unless the recused arbitrator resigns or the appointing Party accepts the rejection, the Arbitral Tribunal shall resolve the matter.

árbitros deberán revelar a las Partes por escrito cualquier circunstancia anterior o posterior a su nombramiento que pueda generar dudas sobre su independencia o imparcialidad.

La Parte que recuse a un árbitro expondrá los motivos dentro de los quince días siguientes a aquel en que haya recibido la comunicación del nombramiento de ese árbitro o tenga conocimiento de las circunstancias que puedan dar lugar a dudas justificadas sobre su independencia o imparcialidad. A menos que el árbitro recusado renuncie a su cargo o que la otra Parte acepte la recusación, corresponderá al Tribunal Arbitral decidir sobre esta.

Si en algún momento se produce una vacante, esta será cubierta mediante el mismo procedimiento que el nombramiento original. Una vez nombrado el sustituto, el Tribunal Arbitral decidirá, previa consulta de las Partes, si es necesario repetir actuaciones ya practicadas.

11.4.- Procedimiento

El arbitraje se iniciará mediante la notificación por la parte demandante a la Parte demandada de la Solicitud de Arbitraje. Esta solicitud se formulará por escrito, y deberá incluir:

a) Nombre completo, la calidad en que intervienen y la dirección de cada una de las Partes.

b) Representación del solicitante.

c) Descripción de la naturaleza y circunstancias de la controversia.

d) Indicación de las pretensiones y, si procede, la indicación de la cuantía reclamada.

e) Nombre y datos de contacto del árbitro nombrado por la demandante.

f) La declaración de independencia e imparcialidad del árbitro nombrado.

El Tribunal Arbitral dirigirá el arbitraje del modo que considere más apropiado a las circunstancias de la controversia. A este fin, los árbitros gozarán, dentro de los límites legales, de las más amplias facultades de iniciativa, ordenación y dirección del procedimiento arbitral.

Where a vacancy arises at any time, it shall be filled using the same procedure established for the original appointment. On designation of the replacement, the Arbitral Tribunal shall decide, subject to consultation with the Parties, on whether or not it is necessary to repeat the steps already taken.

11.4.- Procedure

The arbitration procedure shall commence once notice of the request for Arbitration has been served by the claimant on the defendant. Such Request shall be made in writing and must include:

a) Complete name, acting capacity and address of each of the Parties.

b) Representation of the claimant.

c) Description of the nature and circumstances of the dispute.

d) The nature of the claim and, where appropriate, the amount claimed.

e) Name and contact details of the arbitrator appointed by the claimant

f) Declaration of independence and impartiality of the arbitrator.

The Arbitral Tribunal shall conduct the procedure in the most appropriate manner according to the circumstances of the dispute. To this end, the arbitrators shall enjoy, within the legal limits, the broadest powers of initiative, organization and management of the arbitration proceeding.

The Arbitral Tribunal shall establish the rules of the procedure and set the schedule of proceedings under procedural orders, subject to consultation with the Parties.

The Arbitral Tribunal shall adopt all of its decisions by majority vote. In the absence of majority vote, the decision shall be adopted by the Chairman of the Arbitral Tribunal.

The Arbitral Tribunal must render its final award within three months of commencement of the proceeding. This term may be extended, one or more times, by the Arbitral Tribunal under a reasoned decision.

The Arbitral Tribunal shall reside in Madrid, and the language of the arbitration shall be Spanish.

El Tribunal Arbitral establecerá las reglas del procedimiento y fijará el calendario de actuaciones mediante órdenes procesales, previa consulta con las Partes.

El Tribunal arbitral adoptará todas sus decisiones por mayoría. A falta de mayoría, la decisión será tomada por el Presidente del Tribunal Arbitral.

El Tribunal Arbitral deberá dictar su laudo final en el plazo de tres meses, contados desde la fecha de inicio del procedimiento. Este plazo podrá ser prorrogado, una o varias veces, por el Tribunal Arbitral mediante decisión motivada.

El arbitraje tendrá su sede y se realizará en Madrid y el idioma del arbitraje será el español.

11.5.- Laudo

El Laudo se hará constar por escrito y deberá ser firmado. Bastará la firma de la mayoría del Tribunal Arbitral o, en su caso, de su presidente. El Laudo deberá ser motivado. A petición de cualquiera de las Partes, el Laudo se protocolizará notarialmente.

12.- LEY APLICABLE

Este Contrato se regirá por la legislación española.

13.- CONTRATO COMPLETO

Este Contrato recoge todos los acuerdos, términos y condiciones acordados por las Partes en relación con su objeto, y reemplaza a todos los acuerdos y conversaciones previas habidas entre las Partes en relación con dicho objeto.

Asimismo, las Partes se comprometen a modificar el Contrato en el caso de que contraviniera la normativa aplicable durante su vigencia.

Y EN PRUEBA DE CONFORMIDAD, IBERDROLA firma este Contrato, en el lugar y fecha indicados en el encabezamiento.

/s/ José Sainz Armada

Fdo. D. José Sainz Armada

/s/ Juan Carlos Rebollo Liceaga

Fdo. D. Juan Carlos Rebollo Liceaga

11.5.- Arbitral award

The award shall be recorded in writing and must be signed. The signature of the majority of the Arbitral tribunal or, where appropriate, the Chairman, shall suffice. At the request of any of the Parties, the Award shall be notarised.

12.- APPLICABLE LAW

This Agreement shall be governed by the laws of Spain.

13.- ENTIRE AGREEMENT

This Agreement includes all of the agreements, terms and conditions agreed on by the Parties regarding its subject matter, and supersedes any other prior agreement or conversation between the Parties in relation to such subject matter.

Moreover, the Parties agree to amend or modify the Agreement in the event that it breaches applicable legislation during its term.

IN WITNESS WHEREOF, IBERDROLA signs this Agreement in the place and on the date first above written.

/s/ José Sainz Armada

Mr. José Sainz Armada

/s/ Juan Carlos Rebollo Liceaga

Mr. Juan Carlos Rebollo Liceaga

ANEXO I. CATÁLOGO DE SERVICIOS

PRESTADOS POR IBERDROLA S.A.

Servicios en Edificios y arrendamientos: comprende las actividades relacionadas con el apoyo en la gestión de los centros de trabajo para garantizar su óptimo funcionamiento y conservación.

Principales actividades:

• Gestión del Patrimonio:

• Funciones de gestión de terrenos con actividades como: registrar propiedades, actos notariales, cálculo de precios de venta, plusvalías, expropiaciones, asesoramiento, apoyo en la desinversión de activos inmobiliarios, etc.

• Gestión de Edificios:

• Gestión de Espacios y conservación de Edificios: diseño, implantación y gestión de procesos y actividades para asegurar la gestión eficiente de los espacios y entornos de trabajo, la conservación de los inmuebles y la gestión medioambiental y de residuos que se generen en edificios e instalaciones que son centros de trabajo.

• Servicios de Limpieza.

• Mantenimiento preventivo y correctivo.

• Suministro de electricidad, gas, agua y mobiliario en los centros de trabajo.

• Gestión de arrendamientos, comunidades de vecinos y derramas de oficinas.

• Obras de Arquitectura:

• Desarrollo de nuevos inmuebles de oficinas mediante asesoramiento en los ámbitos urbanísticos, arquitectónicos, constructivos y de imagen. Realización de obras de construcción, acondicionamiento y mejora en edificios corporativos.

• Transporte a Edificios Corporativos:

• Establecimiento, gestión y optimización del servicio de ruta de autocares para transporte de empleados a los principales centros de trabajo.

ANNEX I. CATALOGUE OF SERVICES

PROVIDED BY IBERDROLA S.A.

Services in Buildings and leases: comprises activities related to support in the management of work centres to guarantee optimum functioning and maintenance.

Main activities:

• Asset Management:

• Land management functions, with activities such as: registration of properties, legal procedures, calculation of sale prices, capital gains, compulsory purchases, consultancy, support in the divestment of real estate assets, etc.

• Management of Buildings:

• Management of Locations and maintenance of Buildings: design, implementation and management of processes and activities to ensure efficient management of work locations and environments, maintenance of buildings, along with environmental and waste management at work centres.

• Cleaning Services.

• Corrective and preventive maintenance.

• Supply of electricity, gas, water and furniture in work centres.

• Management of leases, communities and special levies.

• Architecture:

• Development of new office buildings through consultancy in the areas of urban planning, architecture, construction and image. Construction, adaptation and improvement works in corporate buildings.

• Traslados:

• Gestión de traslados de puestos de trabajo dentro del mismo centro y/o entre diferentes centros de trabajo.

Inductor de coste: número de empleados de cada Sociedad Cliente que ocupan espacio en los edificios corporativos y arrendados.

Telefonía móvil: este servicio permite cubrir las necesidades de comunicación en movilidad, tanto de voz como de datos, de los usuarios de las Sociedades Cliente que soliciten este servicio.

La gestión del Servicio de Telefonía Móvil engloba las siguientes funciones:

• Gestión de la demanda de los usuarios.

• Control, supervisión de inventario e informe de consumo de los servicios.

• Prospección y homologación de nuevas tecnologías.

Inductor de coste: importe del consumo telefónico anual por Sociedad Cliente

Gestión de Servicios Generales: comprende las actividades relacionadas con la gestión y definición de políticas y procedimientos referentes a los servicios prestados desde el área de Patrimonio y Servicios Generales. Esto incluye a todas las actividades englobadas en los Servicios en Edificios y arrendamientos, Servicios de Oficina y Servicios de Telefonía Móvil

Inductor de coste: número de empleados en cada Sociedad Cliente, considerando la plantilla global del Grupo.

Vigilancia y mantenimiento de edificios: diseño, implantación y apoyo en la gestión de los procesos necesarios para garantizar la seguridad del patrimonio de las Sociedades Cliente, analizando permanentemente los posibles escenarios de riesgo y recomendando la implantación de las medidas de prevención y protección necesarias.

• Transport to Corporate Buildings:

• Establishment, management and optimisation of coach services for transportation of employees to the main work centres.

• Transfers:

• Management of transfers of positions within the same centre and/or between different work centres.

Cost driver: number of employees at each Client Company that occupy space in corporate and leased buildings.

Mobile telephony: this service caters to the mobile communications requirements, for both voice and data, of Client Company users who request this service.

Management of the Mobile Telephony Service comprises the following functions:

• User demand management

• Control, supervision of inventory and report on consumption of services

• Research and standardisation of new technologies

Cost driver: amount of annual telephony consumption per Client Company.

General Services Management: comprises activities related to management and definition of policies and procedures with reference to the services provided by Real Estate and General Services area. This gathers all the activities of Service in Buildings and leases, Office Services and Mobile Telephony.

Cost driver: number of employees per Client Company, considering all the employees of the Group

Principales actividades:

• Identificación Corporativa: identificación de empleados y visitantes para su acceso y estancia en las instalaciones de las Sociedades del Grupo.

• Mantenimiento Equipos de Seguridad e Incendios: mantenimiento y conservación de equipos de seguridad contra incendios y otros equipos de seguridad, incluye:

• Definición e implantación de medidas de seguridad en cuanto a medios físicos y electrónicos.

• Adaptación de los sistemas de detección y extinción de incendios de acuerdo con la legislación vigente.

• Gestión del servicio de control de la central receptora de alarmas y de los centros de control remoto.

• Iluminación y Planes de Emergencia: garantizar el cumplimiento de la legislación vigente realizando el mantenimiento y la actualización de los sistemas de iluminación y planes de emergencia.

• Tratamiento de documentación: mantenimiento de equipos y procedimientos necesarios para garantizar la confidencialidad de la información.

• Vigilancia: vigilancia y control de accesos en las instalaciones de las Sociedades del Grupo.

• Certificación AENOR: procesos para obtención y mantenimiento de la certificación de calidad de sistemas de seguridad de las Sociedades del Grupo.

Inductor de coste: número de empleados en cada Sociedad Cliente que ocupan espacio en los edificios corporativos y arrendados.

Seguridad Internacional y Corporativa: principales actividades:

• Análisis del impacto y condicionantes de la aplicación de la Política de seguridad corporativa para su adaptación al entorno real (legislación, clima social, situaciones político – económicas).

• Análisis de riesgos del país de referencia en aspectos personales y patrimoniales.

• Definición e implantación de las medidas de seguridad en cuanto a medios humanos, físicos y electrónicos.

Surveillance and maintenance of buildings: design, implementation and support in the management of processes required to guarantee the security of the Client Companies’ assets, carrying out ongoing analyses of possible risk scenarios, and recommending implementation of the necessary prevention and protection measures.

Main activities:

• Corporate Identification: identification of employees and visitors for access to, and time spent at the facilities of the Group Companies.

• Maintenance of Safety and Fire Equipment: maintenance and upkeep of fire equipment and other security equipment, including:

• Definition and implementation of safety measures regarding physical and electronic media

• Adaptation of fire detection and extinction systems in accordance with current legislation

• Management of control service for the alarm switchboard and remote centres

• Lighting and Emergency Plans: guarantee compliance with current legislation through maintenance and updating of lighting systems and emergency plans

• Documentation: maintenance of equipment and procedures necessary to guarantee confidentiality of information.

• Surveillance: surveillance and control of accesses at the facilities of the Group Companies.

• AENOR Certification: processes to obtain and maintain quality certification of the security systems of the Group Companies.

Cost driver: number of employees at each Client Company that occupy space in corporate and leased buildings.

International and Corporate Security: main activities:

• Definición de la planificación de seguridad:

• Previo a la implantación.

• Durante el proceso de implantación.

• En operación.

• Desarrollo e implantación de planes de contingencia para personas y patrimonio durante las fases anteriormente definidas.

• Asesoramiento técnico a las Sociedades Cliente en materia de seguridad.

• Implantación de la seguridad personal en desplazamiento y estancias en países de destino.

• Definición y establecimiento de la estructura de seguridad necesaria que permita la gestión y control de la seguridad en el país de referencia.

• Coordinación y supervisión de los recursos humanos propios y externos empleados en las funciones que cada uno de ellos tiene asignadas en cada país.

• Vehículos de Directivos:

• Gestión del pool de vehículos de directivos, incluye renting, carburante, mantenimiento, reparaciones y servicio de conductores y escolta.

• Contratación de guardaespaldas

• Coches de Seguridad

Inductor de coste: número de empleados en cada Sociedad Cliente, considerando la plantilla global del Grupo.

Servicios de RRHH: comprende las actividades relacionadas con la gestión y definición de políticas y procedimientos referentes a los servicios prestados desde el área de Recursos Humanos.

Inductor de coste: número de empleados en cada Sociedad Cliente, considerando la plantilla global del Grupo

I+D+i: dotación de las herramientas, recursos y estructuras necesarios para que la Innovación encuentre un marco adecuado para su desarrollo. En línea con esto, los servicios son los siguientes:

• Planes estratégicos de I+D+i: coordinación y apoyo a las Sociedades Cliente en la definición y seguimiento de sus planes de innovación. Se construye el Plan Estratégico de I+D+i de IBERDROLA.

• Analysis of impact and requirements derived from the application of the Corporate Security Policy for its adaptation to real scenario (legislation, social environment, political and economic situations).

• Country risk analysis in terms of people and assets.

• Definition and implementation of security measures related to human, physical and electronic resources

• Definition of security planning:

• Prior to implementation

• During the implementation process

• In operation

• Development and implementation of contingency plans for people and assets in the abovementioned phases.

• Technical advice to Client Companies on security matters.

• Implementation of personal security during travel and stay in destination countries.

• Definition and establishment of the security structure necessary to ensure the management and control of security in destination countries

• Coordination and supervision of human resources, internal and external, employed in the functions assigned to them in each country.

• Directors’ vehicles:

• Management of Directors’ vehicles pool, including renting, fuel, maintenance, repairs and drivers and bodyguard service

• Bodyguard hire

• Security cars

Cost driver: number of employees per Client Company, considering all the employees of the Group

HR services: comprises activities related to management and definition of policies and procedures with reference to the services provided by Human Resources.

• Comités de I+D+i: coordinación de los comités de I+D+i de las Sociedades Cliente.

• Deducciones fiscales: apoyo en la gestión del proceso para la aplicación de desgravaciones fiscales mediante reuniones con todas las Sociedades Cliente. Trámites administrativos.

• Ayudas y subvenciones a la I+D+i para proyectos y RRHH. Apoyo en la solicitud de ayudas a los diversos programas y realización de los trámites administrativos. Representación de las Sociedades Cliente ante las instituciones relacionadas con la Innovación y los organismos financiadores.

• Red de Innovación de IBERDROLA: coordinación de esta iniciativa.

• Sistema de Gestión de la I+D+i: establecimiento de la estrategia en materia de gestión de la Innovación de IBERDROLA. Definición del Sistema de Gestión de la I+D+i de acuerdo al estándar UNE 166002.

• Gestión del conocimiento: desarrollo y coordinación de los Equipos de Expertos de forma conjunta con las Sociedades Cliente.

• Plataformas Tecnológicas: coordinación de la presencia de las Sociedades Cliente en las plataformas tecnológicas europeas y nacionales.

• Sistema de Gestión de la Propiedad Industrial e Intelectual: su función es promover, gestionar y coordinar gestión de la propiedad industrial e intelectual, así como realizar los trámites administrativos para la protección de los resultados de los proyectos.

• Vigilancia Tecnológica. Responsabilidad de la Oficina de Vigilancia e Inteligencia Tecnológica, que permite los usuarios de las Sociedades Cliente recibir alertas sobre las áreas tecnológicas de su interés e informes específicos bajo pedido de una determinada tecnología o proceso. Definición del Sistema de Vigilancia Tecnológica de acuerdo al estándar UNE 166006.

• Comunicación de la innovación: hacer visibles los esfuerzos innovadores de las Sociedades Cliente tanto fuera como dentro del Grupo: noticias, premios a la innovación, encuestas, etc.

• Formación en Innovación: colaboración con Formación Corporativa en el establecimiento de acciones formativas encaminadas a desarrollar la competencia de innovación (creatividad, gestión de la I+D+i, etc.).

Cost driver: number of employees per Client Company, considering all the employees of the Group

R&D&I: provision of the tools, resources and structures necessary to ensure a suitable setting for innovation development. In line with this, the services offered are as follows:

• Strategic R&D&I plans: coordination and support for Client Companies in the definition and monitoring of their innovation plans. Construction of the IBERDROLA Strategic R&D&I Plan.

• R&D&I Committees: coordination of R&D&I committees at the Client Companies.

• Tax deductions: support in managing the procedure for the application of tax deductions through meetings with all Client Companies. Administrative procedures.

• R&D&I grants and subsidies for projects and human resources. Support with grant applications for different programmes and performance of administrative formalities. Representation of Client Companies before institutions related to Innovation, and funding bodies.

• IBERDROLA Innovation Network: coordination of this initiative.

• R&D&I Management System: establishment of the strategy for IBERDROLA Innovation management.

• Definition of the R&D&I Management System in accordance with the UNE 166002 standard.

• Knowledge management: development and coordination of Teams of Experts together with the Client Companies.

• Technological Platforms: coordination of the presence of the Client Companies on European and Spanish technological platforms.

Inductor de coste: presupuesto base para deducciones fiscales por actividades de I+D+i (2/3) e inversión en I+D+i en cada Sociedad Cliente (1/3).

Calidad: los servicios consisten en lo siguiente:

• Comité de Calidad: organización del Comité de coordinadores de Calidad.

• Asesoría e implantación ISO 9001.

• Realización de auditorías ISO 9001.

• Asesoría 6s, Pas.

• Gestionar evaluaciones EFQM.

• Elaboración informe EFQM licenciatario (nivel de excelencia).

• Elaboración del Plan de excelencia.

• Elaboración de memorias para la presentación a premios de excelencia de las Sociedades Cliente.

• Gestión del Premio a la Excelencia de los proveedores (ámbito internacional).

Inductor de coste: número de sistemas de calidad implantados o en proceso de implantación en cada Sociedad Cliente negocio/sociedad.

Medioambiente: los servicios que IBERDROLA puede ofrecer en este ámbito consisten en lo siguiente:

• Planes de medioambiente: apoyo a las Sociedades Cliente en la definición y seguimiento de sus planes ambientales. Definición de las directrices ambientales internacionales.

• Comité de Medioambiente: organización del Comité de coordinadores de Medioambiente.

• Deducciones fiscales: apoyo en la gestión del proceso para la aplicación de desgravaciones fiscales por medioambiente. Trámites administrativos.

• Ayudas y subvenciones ambientales para proyectos. Apoyo en la gestión y elaboración de las memorias para la solicitud de ayudas a los diversos programas y realización de los trámites administrativos.

• Industrial and Intellectual Property Management System: its function is to promote, manage and coordinate the management of industrial and intellectual property, and to perform administrative formalities to protect the results of projects.

• Technological Monitoring. Provided by the Technological Monitoring and Intelligence Office, it allows users of the Client Companies to receive alerts on technological areas that could interest them, as well as specific reports requested on certain technologies or processes. Definition of the Technological Monitoring System in accordance with the UNE 166006 standard.

• Innovation communication: to make the Client Companies’ efforts in innovation visible both inside and outside the company: news, innovation awards, surveys, etc.

• Innovation Training: collaboration with Corporate Training in the establishment of training actions to develop innovation skills (creativity, R&D&I management, etc.)

Cost driver: basic budget for tax deductions for R&D&I activities (2/3) and investments in R&D&I at each Client Company (1/3).

Quality: the services offered are as follows:

• Quality Committee: organization of the Committee of Quality Coordinators.

• Advice on and implementation of ISO 9001.

• Performance of audits under ISO 9001

• 6s, Pas advice.

• Management of EFQM assessments.

• Preparation of EFQM licensee report (level of excellence).

• Preparation of the excellence plan

• Preparation of reports for presentation to excellence awards of the Client Companies.

• Management of the Excellence Award for suppliers (international level).

• Sistema de Gestión de Medioambiente de acuerdo a la ISO 14000: estrategia en materia de gestión ambiental de acuerdo al estándar ISO 14000. Apoyo en la gestión de las auditorías internas y externas. Seguimiento de las no conformidades. Generación del informe Global.

• Cuadro de mando medioambiental: apoyo en la gestión de los indicadores y de las inversiones y gastos a nivel global.

• Inventario de emisiones: cálculo de las emisiones globales y realización de auditoría del inventario conforme la norma ISO 14064.

• Iniciativas medioambientales: lanzamiento e implantación de proyectos de medioambiente.

• Iniciativas de biodiversidad: lanzamiento e implantación de proyectos de biodiversidad.

Inductor de coste: inversiones y gastos medioambientales (60%) y Certificación 14000 bajo SGAI (40%).

Gestión de la marca: se refiere a todas las actividades relacionadas con la licencia de uso de la marca y la utilización de la misma por las Sociedades Cliente:

• Gestión registral de las marcas y nombres de dominios web: creación, gestión de Registros y protección de las marcas registradas; seguimiento y renovación de las mismas, para garantizar la cobertura legal adecuada en cada caso, así como solventar las dudas que puedan surgir este ámbito.

• Cesión del pleno uso de dominios de páginas web de los que sea titular Iberdrola. En estos casos, la filial asumirá la plena gestión del contenido de la página web respectiva y, consecuentemente y, de modo expreso, la plena responsabilidad por sus contenidos debiéndolo hacer así constar en el aviso legal correspondiente a esa página web.

• El servicio de hosting que debe de permitir que desde la página web de IBERDROLA se pueda clicar en la dirección de la página web de la Sociedad Cliente accediendo de este modo a la misma de modo que, ante el mayor número de visitantes de la web de IBERDROLA la Sociedad Cliente se beneficie de una mayor visibilidad.

Cost Driver: number of quality systems implemented or in the process of being implemented at each Client Company business unit/company.

Environment: the services that IBERDROLA can offer in this area are as follows:

• Environmental planning: support to the Client Companies in defining and monitoring their environmental plans. Definition of the international environmental guidelines.

• Environmental Committee: organization of the Committee of environmental coordinators

• Tax deductions: support in managing the process for the application of tax deductions for environmental reasons. Administrative formalities.

• Environmental grants and subsidies for projects. Support in managing and preparing reports for grant applications for the different programs and performance of administrative formalities.

• Environmental Management System, according to ISO 14000: environmental management strategy according to the ISO 14000 standard. Support in managing internal and external audits. Monitoring of nonconformities. Creation of the Global report.

• Environmental scorecard: support in managing indicators and investments and expenses at a global level.

• Emissions inventory: calculation of the global emissions and performance of the inventory audit according to ISO 14064.

• Environmental initiatives: launch and implementation of environmental projects.

• Biodiversity initiatives: launch and implementation of biodiversity projects.

Cost Driver: environmental investment and expenses (60%) and Certification 14000 under SGAI (40%).

• Material de la Marca:

• Creación y distribución de los criterios de aplicación de la marca y logotipos correspondientes, asesorando, resolviendo dudas y atendiendo solicitudes personalizadas ante la necesidad de formatos determinados.

• Diseño de los elementos necesarios para la correcta aplicación de la marca: facilitar plantillas o bocetos donde la marca tenga un papel fundamental en el caso de no poder resolverlo en origen para asegurar la correcta aplicación de la marca, así como su posible convivencia con otras marcas. Ejemplos: señalización de Oficinas e Instalaciones Industriales, Inauguraciones, Relaciones Institucionales, actos públicos y ferias.

• Asesorar y diseñar materiales promocionales y de patrocinio, proporcionando la versión de la marca idónea de acuerdo con el espacio disponible y los colores utilizados en las piezas para asegurar la buena convivencia entre la gama cromática utilizada y lograr mayor notoriedad de la marca en cada pieza, así como coherencia con los valores de la marca.

• Asesoramiento en la rotulación y señalética: tanto interior como exterior de edificios, centrales, subestaciones, vehículos y en general de cualquier elemento, mediante rótulos luminosos, vinilos, placas, adhesivos, etc.

• Imagen y señalización de oficinas: coordinación de las necesidades de señalización para ajustarse a lo establecido en el manual de la marca, solucionando los problemas que puedan surgir, asesorando en lo más conveniente y encargándose de mantener actualizados y traducidos los manuales normativos de señalización de oficinas, y supervisando que los elementos cumplan lo establecido en los mismos.

• Elementos de identidad corporativa: supervisión de los elementos donde la marca tenga un papel fundamental (cartelería, libros, folletos, videos y DVD´s), o en eventos (actos públicos, ferias y congresos). El uso de estos elementos requerirá

Brand management: this refers to all activities related to licenses for use of the brand by the Client Companies:

• Registration management for brands and web domain names: creation and registration management and protection of registered marks; monitoring and renewal of brand registrations, in order to guarantee adequate legal protection in each case; resolution of queries in this area.

• Assignment of full use of the web domains belonging to Iberdrola. In these cases, the subsidiary will assume full management of the content of the respective website and, as a result, expressly assume full responsibility for its content, stating this in the legal notice on the website.

• The hosting service, which should allow one-click access to the Client Company’s website from the IBERDROLA website, meaning that, in light of the high number of visitors to the IBERDROLA website, the Client Company benefits from a greater visibility.

• Brand materials:

• Creation and distribution of criteria applicable to the brand and corresponding logos, providing advice, resolving queries and attending to individual requests in light of the need for specific formats.

• Design of necessary elements for the correct application of the brand: provision of templates or sketches where the brand has a fundamental role in cases where it is not possible to resolve doubts at source in order to guarantee the correct application of the brand, as well as possible co-existence with other brands. For example: signage of offices and industrial facilities, inaugurations, institutional relations, public events, trade fairs, etc.).

que la Sociedad Cliente respete los manuales normativos de identidad corporativa en Publicaciones Corporativas, Papelería, Publicidad, videos internos, eventos, señalética y elementos promocionales, etc. para la correcta aplicación de la marca.

• Material promocional: apoyo, resolución de dudas y supervisión de la correcta aplicación de la marca en dichos elementos, así como de su coherencia con el posicionamiento y valores de la marca. Recomendación del logotipo más adecuado en función del elemento que se quiera y resolverá las dudas que puedan surgir.

• GESTIÓN Y SERVICIO DEL BRAND CENTER: El “Brand Center” es una herramienta online que contempla todas las necesidades en el ámbito de la gestión de las diferentes Marcas que en la actualidad tiene el Grupo IBERDROLA en todos los países donde la sociedad está presente, y que a través de la Administración y Gestión del Departamento de Gestión de la Marca da servicio a los diferentes representantes de las Marcas locales en cada país: archivos, manuales, artes finales, proyectos y control de aplicación de forma global.

Inductor de coste: Indicador de dimensión de cada negocio (fórmula Massachusetts de reparto para utilities)

Comunicación Corporativa: comprende todas las actividades relacionadas con la comunicación interna a empleados de IBERDROLA y sus sociedades cliente. Esto incluye:

• Definición, gestión y administración de los canales y herramientas internas empleadas para la comunicación a empleados

• Definición de acciones para el lanzamiento de comunicados

• Labores de producción de contenidos multimedia (vídeos, comunicados,...) en los diferentes canales de comunicación con empleados

Inductor de coste: número de empleados en cada Sociedad Cliente, considerando la plantilla global del Grupo

• Advice and design of promotional and sponsorship materials, providing the version of the brand which best fits the space available and colours used in order to ensure the best match among the colour range used and ensure the best visibility of the brand in each piece, as well as coherence with the brand values.

• Advice on labelling and signage: both inside and outside of buildings, centres, sub-stations, vehicles and in general of any element, using illuminated signs, vinyl signs, boards, stickers, etc.

• Office image and signage: coordination of signage needs in order to comply with what is established in the brand manual, solving potential problems, providing pertinent advice and taking charge of updating and translating the manuals regulating office signage, monitoring that the signage complies with what is established in the manuals.

• Corporate identity elements: monitoring of all elements where the brand plays a fundamental role (posters, books, brochures, videos and DVDs) or at events (public events, trade fairs and congresses, etc.). The use of these elements will require the Client Company to respect the manuals regulating the corporate identity in corporate publications, stationery, advertising, internal videos, events, signage and promotional elements, etc., for the correct application of the brand.

• Promotional materials: support, resolution of queries and supervision of the correct application of the brand in these elements, as well as its coherence with the brand positioning and values, Recommendation of the most suitable logo according to the element in question and resolution of any queries that may arise.

Servicio de Dirección General de los Negocios y Regulación: comprende las actividades de gestión y definición de políticas en cada uno de los negocios de IBERDROLA, así como la propuesta y desarrollo de los planes e iniciativas de defensa y asesoramiento en materia regulatoria frente a los Organismos Reguladores de los mercados. Detalle de funciones:

• Supervisar los negocios de IBERDROLA en cada uno de los países donde operan

• Supervisar la conformidad a derecho de los actos administrativos de los Organismos Reguladores.

• Realizar una adecuada defensa de los intereses de las Sociedades Cliente en el mercado.

• Apoyar en el desarrollo de propuestas regulatorias.

• Asesoramiento a las Sociedades Cliente en temas regulatorios.

• Apoyar en el cumplimiento de la regulación en la búsqueda de oportunidades de negocio en el extranjero y en los concursos internacionales.

Inductor de coste: Indicador de dimensión de cada negocio (fórmula Massachusetts de reparto para utilities)

Servicios de Control:

• Apoyar en la elaboración de la información económico-financiera adecuada al seguimiento de las Sociedades Cliente.

• Coordinar la elaboración e integración de los planes operativos y del presupuesto anual de las Sociedades Cliente.

• Análisis y seguimiento del grado de cumplimiento de los planes operativos y del presupuesto anual aprobado.

• Analizar la aportación de valor y rentabilidad de las propuestas de proyectos de inversión de las Sociedades Cliente sobre la base de los objetivos de los planes.

• Preparar la información económico-financiera exigida por instituciones externas (CNMV, accionistas institucionales, etc.).

• Emitir los criterios contables del Grupo y el marco de actuación de los procesos de contabilidad.

Inductor de coste: Indicador de dimensión de cada negocio (fórmula Massachusetts de reparto para utilities)

• BRAND CENTRE MANAGEMENT AND SERVICE: The “Brand Centre” is an online tool which covers all needs in connection with the management of the various Brands currently held by the IBERDROLA Group in all countries in which the company is present and which, through the management and direction of the Brand Management Department, serves the various representatives of the local Brands in each country: archives, manuals, final arts, projects and global application control.

Cost Driver: Dimension indicator (Massachusetts formula for distribution of costs for utilities)

Corporate Communication: comprises all the activities related to internal communications for IBERDROLA employees and its client companies. This gathers:

• Definition, management and administration of channels and internal tools used for communications for employees

• Definition of actions in order to launch announcements

• Actions so as to produce multimedia contents (videos, announcements,..) in the different channels for communications to employees

Cost Driver: number of employees per Client Company, considering all the employees of the Group

Business General Administration and Regulation services: comprises the activities of management and definition of policies in each of the businesses of IBERDROLA, as well as proposal and development of plans and initiatives for defence of, and advice on, compliance matters before market Regulatory Bodies. Functions:

• Supervise the businesses of IBERDROLA in each of the countries where it operates

• Ensure that all administrative acts of the Regulatory Bodies are carried out in line with the law

Plataforma SAP: realizar la administración de la plataforma corporativa SAP en los ámbitos de Administración General, Administración de Personal, Administración de Compras y Logística:

• Recoger nuevos requerimientos funcionales, diseñar las especificaciones y trasladarlas a Sistemas para su construcción.

• Parametrización del sistema.

• Ejecución de procesos masivos y control de interfaces.

• Mantenimiento de los usuarios y perfiles de acceso.

• Definición, construcción y puesta a disposición de los usuarios de herramientas de extracción de información.

• Planificación y realización de la formación a usuarios finales.

Inductor de coste: número de usuarios de la plataforma corporativa SAP por Sociedad Cliente.

Administración General: realización de los procesos de administración general de acuerdo con los procedimientos internos y la legislación mercantil y fiscal. Detalle de actividades:

• Tramitación de pedidos de compra y mantenimiento de datos maestros de proveedores.

• Registro, conformación y pago efectivo de facturas de terceros, una vez autorizado el pago por la Sociedad Cliente.

• Atención a suministradores.

• Conciliación bancaria.

• Facturación de las transacciones intercompañía del Grupo.

• Facturación de otros ingresos a terceros.

• Contabilización de las transacciones administrativas.

Inductor de coste: número de documentos tramitados en cada Sociedad Cliente.

Servicios de Fiscal: Los servicios Fiscales consisten en la realización de las siguientes funciones, teniendo en cuenta que cuando la entidad destinataria del servicio dispone de un equipo fiscal local que le presta servicios, los que fueran aplicables de los enumerados a continuación, lo serán en complemento y apoyo a la labor desarrollada por dicho equipo local:

• Suitable defence of the interests of the Client Companies in the market

• Support in the development of regulatory proposals

• Advice to the Client Companies on compliance matters

• Support in complying with regulations in the pursuit of overseas business opportunities and in international tenders.

Cost driver: Dimension indicator (Massachusetts formula for distribution of costs for utilities)

Control Services:

• Support in the preparation of the appropriate economic and financial information for the monitoring of the Client Companies.

• Coordination of the drafting and integration of operational plans and of the annual budget of the Client Companies.

• Analysis and monitoring of the degree of compliance with the operational plans and the approved annual budget.

• Analysis of the added value and profitability of investment proposals by the Client Companies on the basis of the plans’ objectives.

• Preparation of the economic and financial information required by external institutions (Spanish Securities Market Commission (CNMV), institutional shareholders, etc.).

• Issue of the Group’s accounting criteria and the framework of action for accounting processes.

Cost driver: Dimension indicator (Massachusetts formula for distribution of costs for utilities)

SAP platform: management of the SAP corporate platform in the General Administration, Personnel Administration, Procurement Administration and Logistics areas:

• Collection of new functional requirements, design of specifications and transfer to systems for construction,

• Desarrollar la Política de buenas prácticas tributarias.

• Definir la estrategia de riesgo fiscal del Grupo.

• Gestionar la fiscalidad de las Sociedades Cliente con sede social en España, calculando sus impuestos y gestionando sus declaraciones y sus tributos.

• Defender los intereses de las Sociedades Cliente con sede social en España ante las Inspecciones de Hacienda.

• Coordinar la fiscalidad de las Sociedades Cliente extranjeras.

• Asesorar fiscalmente a las Sociedades Cliente planificando los procesos de inversión o desinversión, las reestructuraciones empresariales e ideando y desarrollando economías de opción.

• Representar a las Sociedades Cliente con sede social en España ante las autoridades fiscales y en los foros profesionales.

• Colaborar con los responsables de elaborar la información económica del Grupo, asesorando en la elaboración de la información fiscal de los cierres anuales y periódicos.

• Coordinar el apoyo de asesores externos en asuntos fiscales de especial relevancia.

• Coordinar la Política de Precios de Transferencia del Grupo.

Inductor de coste: Indicador de dimensión de cada negocio (fórmula Massachusetts de reparto para utilities)

Servicio de Compras: función de compras de equipos, materiales, bienes y de servicios a las Sociedades Cliente en las mejores condiciones de servicio con el objeto de obtener las condiciones de compra más favorables a través del uso de las herramientas, recursos y estructuras necesarios y del cumplimiento de la Política de compras, de los procedimientos establecidos y la legalidad aplicable en cada caso.

El alcance de este servicio dependerá de si la Sociedad Cliente ha suscrito un contrato de gestión centralizada o de gestión coordinada de compras. En cada uno de estos contratos se detallan las actividades de compras realizadas por IBERDROLA para las citadas Sociedades Cliente.

• Parameterisation of the system

• Performance of mass processes and control of interfaces

• Maintenance of users and access profiles

• Definition, construction and provision of information extraction tools to users

• Planning and implementation of training for end users

Cost driver: number of SAP platform users by Client Company

General Administration: performance of general administration procedures in accordance with commercial, tax and labour legislation. Activities:

• Accounts administration procedures

• Registration, conformation and payment of third-party invoices once authorized by the Client Company

• Service to suppliers

• Bank reconciliation

• Invoicing of inter-company transactions within the Group

• Invoicing of other revenues to third-parties

• Accounting of administrative transactions

Cost driver: number of documents processed at each Client Company.

Taxation Services: The tax services consist of the following activities, taking into account that, if the recipient of the services has its own local tax team, the applicable tax services of those listed below will be provided on a supplementary and support basis to the activities carried out by said local team.

• Development of the Good Tax Practices Policy

• Definition of the tax risk strategy of the Group

Inductor de coste: importe de los pedidos abiertos entre las Sociedades Cliente.

Servicios de Seguros: Gestionar, a solicitud y en coordinación con las Sociedades Cliente, los riesgos operacionales:

• Identificación de los riesgos operacionales: operación y explotación, adquisición de sociedades, nuevas actividades, proyectos, legislación, contratos, etc.

• Análisis de los riesgos operacionales: exposición al riesgo cálculos de máximas pérdidas (PML’s), análisis de frecuencia y severidad.

• Gestión del nivel de retención y transferencia de los riesgos operacionales.

• Prevención (visitas de inspección / recomendaciones).

• Contratos (cláusulas de responsabilidades, garantías, fuerza mayor, seguros, etc.).

• Contratación de programas de seguro.

• Gestión de pólizas de los programas de seguro contratados.

• Tramitación de siniestros.

• Contratación de asesores en materia de gerencia de riesgos y colocación de seguros (Brokers).

• Elaboración y gestión del presupuesto de seguros.

Inductor de coste: importe de las pólizas entre las Sociedades Cliente

Servicios financieros: Gestionar, a solicitud y en coordinación con las Sociedades Cliente los siguientes aspectos:

• Planificación financiera:

• Elaboración del plan financiero a largo plazo

• Elaboración de presupuesto financiero a corto plazo y revisiones a lo largo del año

• Management of the tax treatment of the Client Companies with headquarters in Spain, calculating their taxes and managing their tax returns and their taxes

• Defence of the interests of the Client Companies with headquarters in Spain in tax inspections

• Coordination of the tax treatment of the foreign Client Companies

• Tax assessment of the Client Companies, planning investment/disinvestment processes, businesses restructuring processes, and devising and developing money-saving options

• Representation of Client Companies with headquarters in Spain before the tax authorities and in professional forums

• Collaboration with the persons responsible for preparing the economic information on the Group, advising on the preparation of tax information at annual and periodic closes.

• Coordination of the support from external advisors on particularly significant tax issues

• Coordination of the Group’s Transfer Pricing Policy

Cost driver: Dimension indicator (Massachusetts formula for distribution of costs for utilities)

Purchasing Service: procurement of equipment, materials, goods and services provided to the Client Companies on the best service conditions with the aim of obtaining the most favourable purchasing conditions, through the use of the necessary tools, resources and structures and in compliance with the Procurement Policy, the appropriate proceedings and the applicable law.

The scope of this service will depend on whether the Client Company has signed a centralized management agreement or a coordinated management agreement. Each of those contracts specify the particular procurement activities that IBERDROLA provides for the Client Companies.

Cost driver: amount of purchasing requests per each Client Company

• Reporting financiero

• Financiación:

• Realización de la financiación bancaria a corto y largo plazo

• Realización la financiación corto y largo plazo en los mercados de capitales.

• Realización de la financiación estructurada

• Gestión de la financiación intercompañía.

• Tesorería

• Pagos y cobros por los medios de pago oportunos

• Previsión de tesorería a medio plazo

• Conciliación bancaria tesorera y cálculo de la posición diaria

• Regulación de liquidez, gestión de déficits y de excedentes de tesorería

• Negociación, contratación y emisión de avales, fianzas y garantías

• Apertura y cancelación de cuentas bancarias

• Gestión del Riesgo

• Gestión del riesgo de Tipo de Interés

• Gestión del riesgo de Cambio

• Back Office para financiación, tesorería y gestión del riesgo

• Confirmación, administración, contabilización de operaciones y cierre contable.

• Ejecución de pagos

• Conciliación bancaria contable de operaciones de financiación

• Cumplimiento y control de obligaciones contractuales (covenants).

• Proceso de auditoría financiera

• Control de la fiscalidad de las operaciones financieras

• Elaboración de estados financieros individuales y consolidados y otra información de carácter mercantil

• Desarrollo y mantenimiento de sistemas informáticos y atención de usuarios

• Declaraciones a los Bancos Centrales y cooperación en el cumplimiento de regulación internacional.

Insurance services: Management, at the request of and in conjunction with the Client Companies, of operational risks:

• Identification of operational risks: operation and exploitation, acquisition of companies, new activities, projects, legislation, agreements, etc.

• Analysis of operational risks: exposure to risk, calculation of probable maximum losses (PML), analysis of frequency and severity.

• Management of degree of retention and transfer of operational risks.

• Prevention (inspections/ recommendations)

• Agreements (liability, warranties, force majeure, insurance clauses, etc.)

• Arrangement of insurance programs.

• Management of policies under purchased insurance programs

• Loss management

• Hiring of advisors in the areas of risk management and placement of insurance (brokers).

• Preparation and management of insurance budget.

Cost driver: amount of policies per each Client Company

Financial services: management, at the request and in coordination with Client Companies, of the following aspects.

• Financial planning

• Preparation of the long-term financial plan

• Preparation of the short-term financial budget and adjustments throughout the year

• Financial reporting

• Financing

• Arrangement of short- and long-term bank financing.

• Facturación de los rendimientos

• Gestión documental

Inductor de coste: Porcentaje ponderado en cada Sociedad Cliente por los siguientes conceptos:

• Saldo medio de financiación (pasiva y activa) intercompañía así como la deuda con terceros

• número de garantías tramitadas

• número de movimientos de extracto tratados

• Iguala a aplicar en todos los negocios

Servicios de desarrollo: se prestan los siguientes servicios a las Sociedades del Grupo:

• Desarrollo de negocios, apoyo regulatorio, adquisición y desinversión de activos o empresas, etcétera.

Inductor de coste: dedicación temporal del equipo humano de Desarrollo.

Servicios jurídicos:

• Asesoramiento en el establecimiento, implantación y cumplimiento de sistemas de seguridad jurídica preventiva, de los apropiados procesos de toma de decisiones y de los mecanismos de coordinación e información entre las diferentes sociedades del Grupo.

• Coordinación con despachos externos

• Asesoramiento en operaciones societarias

• Cooperación en el mantenimiento de la relación con notarías, registros y demás funciones públicas

• Cooperación en la adecuada gestión del riesgo legal mediante la ayuda en la identificación, evaluación y asesoramiento en Derecho sobre los referidos riesgos.

• Cooperación en el asesoramiento en Derecho y defensa jurídica en general incluyendo las esferas fiscales y regulatoria.

• Asistencia en la llevanza o la llevanza misma de litigios en defensa de las sociedades del Grupo, directamente o dirigiendo a despachos externos.

Inductor de coste: Indicador de dimensión de cada negocio (fórmula Massachusetts de reparto para utilities)

• Arrangement of short –and long-term financing on capital markets.

• Arrangement of structural financing.

• Management of inter-company financing.

• Cash and banks

• Payments and collections using appropriate payment methods.

• Medium-term cash projections.

• Cash and banks conciliation and calculation of daily position.

• Regulation of liquidity, management of cash deficits and surpluses.

• Negotiation, contracting and issue of surety ships, security deposits and guarantees.

• Opening and closing of bank accounts.

• Risk management

• Interest rate risk management

• Exchange rate risk management

• Back Office for financing, cash and risk management

• Confirmation, administration, accounting of transactions and accounting close.

• Making of payments.

• Banking accounting conciliation of financing transactions

• Performance and control of contractual obligations (covenants)

• Financial audit process.

• Control of the tax treatment of financial transactions.

• Preparation of individual and consolidated financial statements and other corporate information.

• Development and maintenance of computer and help desk systems.

• Declarations to Central Banks and cooperation in compliance with international regulations.

Puesto de trabajo informático: el servicio PTI engloba todas las actividades y prestaciones que dan como resultado la disponibilidad y el correcto funcionamiento del Puesto de trabajo informático.

El Servicio General de Puesto de Trabajo incluye los siguientes componentes:

• Suministro e instalación del puesto.

• Mantenimiento del puesto (dependiendo de criticidad).

• Renovación del puesto.

• Servicios de Red.

• Aplicativos en plataforma, software de productividad personal y aplicaciones de negocio.

• Acceso al Portal del Empleado y a aplicativos publicados en él. (SacinWeb, Viajes, Amarna, etc.).

• Acceso a los diferentes portales de negocio y a aplicativos publicados en ellos.

• Puntos Ofimáticos de uso general.

• Accesibilidad.

• Licencias software de tratamiento centralizado.

• Servicio de atención al cliente informático (en la parte que le corresponde).

• Inventario como sistema soporte.

• Administración de usuarios y recursos incluidos en los procesos de Sistemas.

Servicios Complementarios de Puesto de Trabajo:

• Migración y/o conversión de los datos del usuario.

• Destrucción de la información del Cliente registrada en los soportes magnéticos.

• Ampliación de capacidad de almacenamiento individual o para grupos de trabajo, en servidores de almacenamiento.

• Horario especial de servicio previa petición y análisis.

• Conexión remota a la infraestructura de red a través de equipo plataformado con cliente VPN y acceso WebVPN a aplicativos publicados si existieran.

• Acceso a aplicaciones en entorno Metaframe (consultar ficha de servicio para más información).

• Conexión y acceso a sistemas de información ajenos al Grupo Iberdrola.

• Billing performance.

• Management of documents.

Cost driver: Weighted percentage of the following concepts per each Client: Company

• Intercompany Financing Average balance (assets and liabilities) as well as debt with third-parties

• Number of guarantees processed

• Number of activities processes

• Equalization for all businesses

Development services: the following services are provided to the Group Companies:

• Business development, regulatory support, acquisition and divestment of assets or companies, etc.

Cost driver: time dedication of Development team.

Legal services:

• Advice on the establishment and implementation of, and compliance with, preventive legal security systems, appropriate decision-making processes and coordination and information mechanisms among the various Group companies.

• Coordination with external firms.

• Advice on corporate transactions.

• Cooperation in maintaining relationships with notaries, registries and other public offices.

• Cooperation in the suitable management of legal risks by aiding in the identification, evaluation and provision of legal advice on such risks.

• Cooperation in providing advice on law and legal defence in general, including tax and regulatory fields.

• Assistance in the processing of lawsuits in the defence of Group companies, directly or by contacting external firms.

• Formación de los usuarios de la Sociedad Cliente en el manejo de los elementos de la configuración del Puesto o Estación de Trabajo.

• Acceso a Sistemas de Gestión del conocimiento.

• Backup en servidor corporativo de datos de usuario que residan en equipo portátil o sobremesa, con las limitaciones de espacio definidas y siempre que las comunicaciones lo permitan.

• Instalación de Aplicaciones Departamentales bajo petición del instalador (IAD).

• Transferencia de ficheros (hacia/desde el exterior) a través del FTP corporativo.

En definitiva, este servicio comprende el conjunto de actividades necesarias para la dotación, integración y soporte de los elementos hardware, software y de conectividad necesarios para que los usuarios finales puedan manejar su información y acceder a la que requieran de los sistemas de información para los que estén autorizados por los órganos competentes de su respectiva sociedad.

Inductor de coste: número de equipos (sobremesa, portátiles, tablet pc o PDAs) ponderados según precios unitarios y componentes de coste local o global, en cada Sociedad Cliente.

Nuevos desarrollos: este servicio comprende los nuevos sistemas de información o software de aplicación, así como el mantenimiento y corrección de los ya existentes, independientemente de la plataforma hardware/software de ejecución que requieran.

Inductor de coste: Número de usuarios de cada aplicación / Nº de personas / Otros, por Sociedad Cliente

Operación y soporte: este servicio tiene por objeto el conjunto de actividades necesarias para la gestión y administración de los elementos de la infraestructura, para permitir la operatividad y operabilidad en el ámbito de Sistemas. Además incluye el servicio de protección de la información y las comunicaciones elaborando e implantando medidas de prevención y protección adecuadas que garanticen la inaccesibilidad a la información de los sistemas por parte de personas no autorizadas, monitorizando posibles brechas de seguridad de los sistemas informáticos.

Cost driver: Dimension indicator (Massachusetts formula for distribution of costs for utilities)

IT workstation: the PTI (IT workstation) service covers all activities and services concerning the availability and correct functioning of IT workstations.

The Workstation General Service includes the following components:

• Supply and installation of the workstation.

• Maintenance of the workstation (according to criticality).

• Renewal of the workstation.

• Network Services.

• Platform-based applications, personal productivity software and business applications.

• Access to the Employees’ Web Portal and applications published on it (SacinWeb, Viajes, Amarna, etc.).

• Access to different business web portals and to applications published on them.

• IT Stations for general use.

• Accessibility.

• Centralised software licences.

• IT support for customers (as appropriate).

• Inventory as support system.

• Administration of users and resources included in Systems processes.

Additional Workstation Services:

• Migration and/or conversion of user data.

• Destruction of Client information registered on magnetic media.

• Extension of storage capacity for individuals or work groups, on storage servers.

• Special service timetable subject to request and analysis.

Adicionalmente incluye el Centro de Acabado e Impresión (CAI) con todas las actividades relacionadas con las tareas de Impresión (Servicio de impresión, Servicio de creación y manipulación de formularios, y Servicio de Acabado)

Inductor de coste: Porcentaje de consumo de operación según servicios recibidos por cada Sociedad Cliente.

Gestión de Sistemas: comprende las actividades relacionadas con la gestión y definición de políticas y procedimientos referentes a los servicios prestados desde el área de Sistemas. Esto incluye a todas las actividades englobadas en los servicios de Puesto de trabajo informático, Operación y Soporte, y Nuevos desarrollos

Inductor de coste: número de empleados en cada Sociedad Cliente, considerando la plantilla global del Grupo.

• Remote connection to network infrastructure via platform equipment with VPN client and WebVPN access to published applications, if any.

• Access to Metaframe environment applications (check service file for further information).

• Connection and access to information systems outside the Iberdrola Group.

• Training of Client Company users on handling elements pertaining to the configuration of the Workstation.

• Access to Knowledge Management Systems.

• Corporate server backup of user data stored on laptop or desktop systems, subject to defined space limitations, and always communications permitting.

• Installation of Departmental Applications as requested by the installer (DAI).

• Transfer of files (to/from the exterior) via the corporate FTP.

In short, this service includes all activities necessary to provide, integrate and support the hardware, software and connectivity required by end users to enable them to manage their information and access what they need from the information systems for which they are authorised by the competent bodies of their respective companies.

Cost driver: number of systems (desktop, laptop, tablet PCs or PDAs) weighted by unit price and local or global cost components, at each Client Company.

New developments: this service comprises new information systems or applications software, as well as maintenance and correction of pre-existing ones, regardless of the hardware/software platform they require.

Cost driver: Number of users of each application / Number of persons / Others, per each Cliente Company

Operation and support: this service covers all activities necessary for the management and administration of infrastructure elements, to ensure functioning and operability in the Systems environment. It also includes the information and communications protection service, developing and implementing, pursuant to the instructions received from the Client Companies, suitable prevention and protection measures that guarantee inaccessibility of systems information by unauthorised persons, and monitoring possible security breaches of information systems.

Additionally the services includes Finishing and Printing Center with all activities related to printing tasks (printing service, creation and modification of forms, and finishing service)

Cost driver: percentage of operation consumption according to the services received per each Client Company

Systems Management: comprises activities related to management and definition of policies and procedures with reference to the services provided by IT area. This gathers all the activities of IT Workstation, Operation and Support, and New Developments.

Cost driver: number of employees per Client Company, considering all the employees of the Group.

ANNEX II.

DECLARATION OF ACCEPTANCE

July 16, 2015

IBERDROLA USA, Inc., a holding company, having its registered office in 52 Farm View Drive, New Gloucester ME 04260 (hereinafter referred to as “IBERDROLA USA”)

STATE AS FOLLOWS

I. Whereas IBERDROLA USA belongs to a group of companies the parent company of which, in the meaning established by the law, is IBERDROLA, S.A. (hereinafter, the “Iberdrola Group”)

II. Whereas IBERDROLA, S.A., as parent company of the Iberdrola Group, has implemented the “Single Corporation” as one of the key instruments of its Business Model, created for the provision of certain corporate services in an efficient and flexible manner to all companies in the Iberdrola Group that require them by executing the relevant agreement (the Framework Agreement accepted by means of this Declaration) and the consequent determination of the services to be provided to each company by IBERDROLA.

III. Whereas with a view to being the recipient of the corporate services referred to in the preceding recital, IBERDROLA USA is interested in signing the Framework Agreement for the year 2015 by way of this Declaration of Acceptance.

IV. Now therefore, being convinced of the benefits deriving from the Framework Agreement and in light of the foregoing, IBERDROLA USA has decided, by way of this Declaration of Acceptance, to sign the Framework Agreement in accordance with the following

CLAUSES

ONE.- The purpose of this Declaration of Acceptance is: (i) to document IBERDROLA USA’s intention to sign the Framework Agreement for the year 2015, so that IBERDROLA USA shall hereafter be considered a Party to such agreement for all purposes; and (ii) to list the services requested by IBERDROLA USA to be provided by IBERDROLA to IBERDROLA USA or to any affiliate of IBERDROLA USA in 2015, in accordance with the terms and conditions established in the Framework Agreement, which IBERDROLA USA undertakes to accept and comply with.

TWO.- A description of the services to be provided by IBERDROLA to IBERDROLA USA or to any affiliate of IBERDROLA USA in 2015 and the estimated prices thereof are attached as an annex to this Declaration of Acceptance.

In accordance with clause 3.3.2 of the Framework Agreement, at the end of the year IBERDROLA will issue the relevant invoice for the services engaged in this Declaration of Acceptance, based on the actual costs incurred and the indicators applicable.

The invoices corresponding to the services provided to Iberdrola USA or its affiliates shall be addressed to Iberdrola USA Management Corporation (52 Farm View Dr. New Gloucester, ME 04260, USA).

THREE.- In this connection, independently of the date of signature of this Declaration of Acceptance, it covers the provision of the services described in the annex to this Declaration of Acceptance by IBERDROLA as from January 1, 2015.

Where no new Declaration of Acceptance is formalized in 2016, it shall be understood that the Declaration of Acceptance formalized at this time and its annex shall remain in force on the same terms, unless any ground for termination of the Framework Agreement arises. This same provision shall be applicable in subsequent years.

FOUR.- In accordance with the clause on the existence of Representatives and Contact Persons in the Framework Agreement, Mr. Pablo Canales Abaitua is designated as contact persons and expressly submit to the rules on substitution set out in the Framework Agreement.

FIVE.- The personal data disclosed by means of this Declaration of Acceptance shall be processed in accordance with Organic Law 15/1999 and the USA relevant applicable laws and with the sole purpose of enabling the maintenance and/or fulfilment of the terms of the Framework Agreement.

In this connection, the Parties undertake to inform their personnel and to obtain their consent for the inclusion of their personal data on such filing systems as may be necessary and to inform them of the address at which they may exercise their rights of access, rectification, cancellation and objection.

In witness whereof and for the appropriate purposes, this Declaration of Acceptance is signed in two counterparts, which shall together constitute one document, on the date and in the place first above written.

IBERDROLA USA, INC.

/s/ Robert D. Kump

Mr. Robert D. Kump

/s/ Pablo Canales Abaitua

Mr. Pablo Canales Abaitua

ANNEX. Service Description

SERVICES	IBERDROLA USA MANAGEMENT CORPORATION
General Services		402.543,32
International Security		246.941,34
Global HR services		2.189.722,63
R&D&I		180.157,86
Quality		23.745,46
Enviroment		130.700,76
Brand management		119.967,62
Communication services		270.144,07
Regulation services		1.508.778,29
Control services		2.110.422,28
SAP Plataform		882.652,27
General Administration services		919.760,21
Taxation services		614.005,24
Procurement services		1.480.778,14
Insurance services		311.666,22
Financial services		1.284.448,49
Legal services		2.157.748,11
Client platform & conectivity		516.977,19
New develepments		6.389.440,47
Operation and support		2.895.864,85
IT		1.183.822,65
Total amount		25.820.287,46

EX-10.29

EXHIBIT 10.29

EQUIPMENT SUPPLY AGREEMENT

between

IBERDROLA RENEWABLES, LLC,

as Buyer,

and

Gamesa Wind US, LLC,

as Supplier

December 28, 2014

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

TABLE OF CONTENTS

	Page
ARTICLE 1. DEFINITIONS AND RULES OF INTERPRETATION		2
ARTICLE 2. EFFECTIVENESS		8
ARTICLE 3. PURCHASE AND SALE OF PTC EQUIPMENT		8
ARTICLE 4. PURCHASE AND SALE OF ADDITIONAL TURBINE EQUIPMENT		14
ARTICLE 5. DISPUTE RESOLUTION		15
ARTICLE 6. INDEMNIFICATION		17
ARTICLE 7. DEFAULT; TERMINATION		19
ARTICLE 8. REPRESENTATIONS AND WARRANTIES		20
ARTICLE 9. CONFIDENTIALITY		21
ARTICLE 10. MISCELLANEOUS		22

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

i

LIST OF EXHIBITS

Exhibit 1	List of PTC Equipment
Exhibit 1-A	Specifications
Exhibit 2	Description of Additional Turbine Equipment/Scope of Supply
Exhibit 3	Form of Delivery Certificate
Exhibit 4	Reserved
Exhibit 5	Project Descriptions
Exhibit 6	Warranty, Service & Maintenance on PTC Equipment Prior to Project TSA Execution
Exhibit 7	Contract Price
Exhibit 8	Payment Schedule
Exhibit 9	Component Breakdown

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

1

EQUIPMENT SUPPLY AGREEMENT

THIS EQUIPMENT SUPPLY AGREEMENT (including the Exhibits, this “ESA” or this “Agreement”) is entered into on December 28, 2014 (the “Effective Date”) by and between:

IBERDROLA RENEWABLES, LLC, an Oregon limited liability company (“Buyer”), with corporate address at 1125 NW Couch St., Suite 700, Portland, Oregon 97209; and

GAMESA WIND US, LLC, a Delaware limited liability company (“Supplier”), with corporate address at 1150 Northbrook Drive, Feasterville-Trevose, Pennsylvania 19053.

Buyer and Supplier each may be referred to in the ESA individually as a “Party” and collectively as the “Parties”.

RECITALS:

A. WHEREAS, Supplier is in the business of manufacturing and delivering wind power plant equipment and components and providing related services.

B. WHEREAS, Buyer, either directly or through its affiliates, is engaged in the business of developing and operating wind power generation facilities, including the Projects (as defined below).

C. WHEREAS, Buyer has requested that Supplier supply and deliver the PTC Equipment (as defined in Exhibit 1) in connection with Buyer’s interest in having the Projects qualify for Tax Credits (as defined below), and Supplier has committed to provide and deliver the PTC Equipment requested by Buyer, in accordance with the terms and conditions of this Agreement.

D. WHEREAS, Buyer and Supplier agree to subsequently negotiate in good faith commercial terms for (a) one or more Turbine Supply Agreements (each, a “Project TSA”) that, upon execution, will provide for the purchase, sale, delivery and warranty of Additional Turbine Equipment for one or more Projects, and (b) one or more Operations and Maintenance Agreements (each, an “Project OMA”) that, upon execution, will provide for the scheduled and unscheduled maintenance of the WTGs contained in one or more Projects.

NOW, THEREFORE, in consideration of the mutual representations, warranties and covenants contained in this ESA and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE 1.

DEFINITIONS AND RULES OF INTERPRETATION

1.1 Definitions. For purposes of this Agreement, capitalized terms used herein and not otherwise defined herein shall have the meaning assigned to such terms in in this Section 1.1:

“Additional Turbine Equipment” means the Turbine Equipment described in Exhibit 2.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

2

“Alternate Tax Incentives” is defined in Section 3.6.8.

“Applicable Laws” means (a) the statutes, laws, ordinances, rules, regulations, judgments, decrees, injunctions, writs and orders of any Governmental Authority; (b) decisions of and determinations by, and interpretations of, any of the foregoing set forth in clause (a) by any Governmental Authority, judge, or arbitrator; and (c) requirements of Permits, in the case of each of the items described in clauses (a)-(c), that apply to either or both of the Parties or their affiliates, a Project, the terms of this ESA or otherwise to the Person or matter in question. For the avoidance of doubt, “Applicable Laws” includes rules and regulations of any independent system operator, regional transmission operator or other transmission operator or authority and of any reliability authority and any electrical specifications, grid codes and other similar requirements that apply to the Project.

“Blade” means a complete, fully-functional (if installed) wind turbine blade to be mounted on a WTG, of which a set of three (3) are included in such WTG, all as more specifically described in the Specifications.

“Buyer Indemnified Parties” is defined in Section 6.2.

“Buyer PTC Party” means the lessor in a sale-leaseback transaction or the partnership in a partnership flip transaction or the investor in a tax equity transaction.

“Buyer Responsible Party” means Buyer, its affiliates, subcontractors, agents and vendors, or any Person or entity employed by any of them, or any Person or entity for whose acts any of them is liable during the performance of Buyer’s obligations under this ESA, but excluding Supplier and other Supplier Responsible Parties.

“Code” means the Internal Revenue Code of 1986, as may be amended or replaced from time to time.

“Contract Price” is the purchase price for the Additional Turbine Equipment as set forth on Exhibit 7 hereto.

“Delivery Certificate” means a certificate in the form of Exhibit 3, signed by Supplier and countersigned by Buyer, that identifies the PTC Equipment delivered to the PTC Equipment Delivery Location, including the serial numbers of such PTC Equipment.

“Effective Date” is defined in the preamble.

“ESA” is defined in the recitals.

“ESA Price” is defined in Section 3.1.

“ExWorks” means the time when the Turbine Equipment has been completely manufactured and assembled and is located at the Supplier’s manufacturing facilities.

[***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

3

“Excusable Event” means: (i) any gross negligence or willful misconduct of any Buyer Responsible Party, (ii) the occurrence of a Force Majeure Event, (iii) a material change in Applicable Law; (iv) any issuance of, or change in, a Permit required of Buyer after the Effective Date to the extent it requires a change in the design (including required materials) of, or modifications to, the PTC Equipment, (v) any material breach of this ESA by Buyer, (vi) any suspension of Supplier’s performance hereunder instructed by Buyer, or (vii) Buyer’s failure to comply with Applicable Laws, but, in each case, only if the event prevents the Supplier from satisfying the PTC Delivery Obligations.

“Final PTC Decision” is defined in Section 3.6.3.

“Financing Party” means any lender providing direct or indirect, senior or subordinated construction, interim or long-term debt financing or refinancing to Buyer for the purchase, installation or operation of the Turbine Equipment or a Project or any party providing tax equity.

“Force Majeure Event” means, with respect to a Party, any event or occurrence which is reasonably unforeseeable as of the date of this ESA, and that is beyond the reasonable control, directly or indirectly, of the Party affected, and that wholly or partly delays or prevents such Party’s performance of its obligations under this ESA, and which (i) could not be avoided, prevented or removed by such Party’s commercially reasonable efforts and (ii) is not caused by or does not result from the negligence, breach, or failure of such Party to perform its obligations hereunder; provided the affected Party has taken all reasonable precautions, care and alternate measures to avoid or mitigate the effects thereof. Force Majeure events may include: war (whether declared or not) or other armed conflict; terrorism; civil insurrection; declaration of martial law; Changes in Law; piracy; nuclear or chemical spills or accidents; widespread or prolonged electrical outages; lightning strikes; earthquakes; fires; tornadoes; blizzards or ice storms; hurricanes; volcanic activity; strikes; lockouts or other labor actions; and unilateral governmental action such as export or import prohibitions. The Parties expressly agree and acknowledge that the list of Force Majeure Events in the foregoing sentence is intended as an inclusive list rather than an exhaustive list. Notwithstanding anything to the contrary, the term Force Majeure Event shall be deemed not to include (a) lack of funds or the availability of financing, or (b) any labor disturbance affecting either Supplier or its subcontractors, to the extent that such labor disturbance involves direct employees of Supplier or its subcontractors who are performing PTC Delivery Obligations, except for strikes or lockouts national or regional in scope, or (c) any delay, default or failure (direct or indirect) in obtaining materials, or any other delay, default or failure (financial or otherwise) of Supplier or its subcontractor, except as otherwise resulting from a Force Majeure Event.

“Governmental Authority” means any national, state, local or other governmental, quasi-governmental, regulatory, judicial, administrative, public or statutory instrumentality, tribunal, agency, commission, authority, body or entity (including any independent system operator, regional transmission operator or other transmission operator or authority and any reliability authority), or any political subdivision thereof, lawfully exercising or entitled to exercise legal jurisdiction over the matter or Person in question.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

4

“Hub” means a complete, fully-functional (if installed) hub of a WTG attached to a Turbine Nacelle to which the Blades are attached, as more specifically described in the Specifications.

[***]

“Indemnified Party” is defined in Section 6.5.

“Indemnifying Party” is defined in Section 6.5.

“IPRs” means any intellectual property rights protected under any Applicable Law, including, but not limited to, copyrights, patents and trade marks, whether registerable or not and wherever existing in the world.

“IRS” means the Internal Revenue Service.

“Manuals” means, collectively, each of Supplier’s (i) turbine installation manual, (ii) electrical installation manual describing erection and installation of the WTGs, (iii) operations and maintenance manual, in electronic and hard copy form, and which manual may be updated from time to time by written notice to Buyer (which notice(s) shall be accompanied by the electronic copies of updated manual).

“Minimum PTC Delivery Obligations” means, [***]

“Notice to Proceed” or “NTP” means a written notice by Buyer to Supplier that commits Buyer to purchase the Additional Turbine Equipment, subject to the terms of a Project TSA.

[***]

“Permits” means any valid waiver, consent, exemption, variance, certificate, franchise, permit, entitlement, authorization, plan, approval, license or similar order, judgment, declaration or decree of or from, or filing, submission or registration with, or notice to, any Governmental Authority having jurisdiction over the matter in question.

“Person” means any natural person, corporation, partnership, limited liability company, association, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or any other entity.

“Projects” means the [***] wind generation projects (as further described in Exhibit 5) or any project being developed by Buyer and identified at a later date for which Buyer uses the PTC Equipment to qualify such project for Tax Credits, and “Project” means one of the Projects.

“Project OMA” is defined in the Recitals.

“Project TSA” is defined in the Recitals.

“PTC Contest Action” is defined in Section 3.6.3.

“PTC Deadline” means the date that is 105 days from payment of the PTC Payment.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

5

“PTC Delivery Obligations” means Supplier’s obligation to deliver 100% of the PTC Equipment to the PTC Equipment Delivery Location by the PTC Deadline in accordance with the terms and conditions of this Agreement.

“PTC Equipment” is the equipment identified in Exhibit 1.

“PTC Equipment Delivery Location” means Supplier’s Manufacturing facility in Agreda, Spain, for the Nacelles, Supplier’s Blade manufacturer facility in [***], for the Blades, and Supplier’s Tower manufacturer in [***], for the Towers, as those facilities are identified in greater detail in Exhibit 9.

“PTC Payment” is defined in Section 3.2.

“Punch List” means a list of repairs, replacements, remedial work or other items to be completed with respect to the PTC Equipment in order to conform with the Specifications or the ESA.

“SCADA System” means a complete, fully functional (if installed) remote control and monitoring system for the WTGs, as more specifically described in the Specifications.

“Scheduled Delivery Date” means the date or dates Supplier has scheduled for the delivery of PTC Equipment to the PTC Equipment Delivery Location.

“Specifications” means the specifications for the WTGs attached hereto as Exhibit 1-A.

“Supplier Indemnified Parties” is defined in Section 6.1.

“Supplier Responsible Party” means Supplier, its affiliates, subcontractors, agents and vendors, or any Person or entity employed by any of them, or any Person or entity for whose acts any of them is liable during the performance of Supplier’s obligations under this ESA.

“Tax Credits” means production tax credits under section 45 of the Internal Revenue Code or investment tax credits under section 48(a)(5) of the Internal Revenue Code.

“Taxes” means any and all forms of applicable taxation, charges, duties, imposts, levies and rates imposed by any Governmental Authority incurred in connection with the performance of either Parties’ obligations under this Agreement, including withholding taxes, corporation tax, capital gains tax, capital transfer tax, inheritance tax, water rates, sales tax, value added tax, customs duties, capital duty, excise duties, betterment levy, stamp duty, stamp duty reserve tax, national insurance, social security or other similar contributions, and generally any tax, duty, impost, levy, rate or other amount, and any interest, penalty or fine in connection therewith.

“Tower” means a complete, fully-functional (if installed) steel tubular tower on which the Turbine Nacelle, Hub, Blades, and other parts of the WTG will be mounted, including all ladders, platforms, internal lighting, safety equipment and other parts and assemblies needed to be fully functioning, as more specifically described in the Specifications.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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“Turbine Equipment” means all parts, components, material, equipment, consumables and other items required for complete, fully-functional WTGs (including switchgear, if the WTG model contemplates switchgear in the Tower, and any other equipment selected by Buyer), the SCADA System and all other materials and equipment required to be supplied or incorporated into the Project by Supplier pursuant to this ESA, as more specifically described in the Specifications.

“Turbine Nacelle” means a complete, fully-functional (if installed) nacelle, including gearbox, generator, transformer (if the WTG model contemplates a transformer in the nacelle), blade pitch controls and nacelle yaw controls, and associated control and ancillary equipment within the Turbine Nacelle, but excluding the Blades, Hubs and Tower, as more specifically described in the Specifications.

[***].

“Warranty Period” means with respect to: (a) PTC Equipment, the period of time identified in Section 4.6.2 during which Supplier will provide warranties under this ESA, and a Project TSA and Project OMA, if applicable; and (b) Additional Turbine Equipment, the period of time during which Supplier will provide warranties under a Project TSA and Project OMA, if applicable.

“WTG” means a complete, fully functional wind turbine generator, including a Turbine Nacelle, Tower, Hub, Blades, controller, control panels, anemometers, a service lift or a lift assist device (as applicable), all as more particularly described in the Specifications.

1.2 Interpretation.

1.2.1 Recitals, Articles, Sections, Schedules and Exhibits. References to Recitals, Articles, Sections, Schedules and Exhibits are, unless otherwise indicated, Recitals of, Articles of, Sections of, Schedules to and Exhibits to this ESA. All Schedules and Exhibits attached to this ESA are incorporated and made part of this ESA by this reference. References to a Schedule or an Exhibit will mean the referenced Schedule or Exhibit and any of its sub-schedules, sub-exhibits, sub-parts, components or attachments.

1.2.2 Gender. As used in this ESA, the masculine gender will include the feminine and neuter and the singular number will include the plural, and vice versa.

1.2.3 Successors and Assigns. Unless expressly stated otherwise, references to a Person includes its successors and permitted assigns and, in the case of a Governmental Authority, any Person succeeding to its functions and capacities.

1.2.4 Day. As used in this ESA, references to “days” will mean calendar days, unless the term “business days” is used. If the time for performing an obligation under this ESA expires on a day that is not a business day, the time will be extended until that time on the next business day.

1.2.5 Grammatical Forms. As used in this ESA, where a word or phrase is specifically defined, other grammatical forms of such word or phrase have corresponding

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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meanings; the words “herein,” “hereunder,” “hereof” and this “ESA” refer to this ESA, taken as a whole, and not to any particular provision of this ESA; “including” means “including, for example and without limitation,” and other forms of the verb “to include” are to be interpreted similarly.

ARTICLE 2.

EFFECTIVENESS

2.1 Effective Date. This ESA is effective as of the Effective Date.

ARTICLE 3.

PURCHASE AND SALE OF PTC EQUIPMENT

3.1 Supply and Purchase of PTC Equipment.

3.1.1 Upon the terms and subject to the conditions of this Agreement, Supplier agrees to supply to Buyer, and Buyer agrees to purchase from Supplier, the quantity and type of PTC Equipment identified in Exhibit 1. Buyer will pay Supplier $[***] (the “ESA Price”) for the PTC Equipment as described in Section 3.2. Buyer may designate one of its affiliates as the purchaser of the PTC Equipment by providing written notice to Supplier.

3.1.2 Supplier agrees to provide Buyer with three (3) copies of Manuals with respect to the WTGs supplied under this ESA within thirty (30) business days of the Effective Date.

3.1.3 Upon request of Buyer, Supplier agrees to provide all reasonably necessary documentation required for transportation of the PTC Equipment from the PTC Equipment Delivery Locations to any Project or other location designated by Buyer, including Supplier’s recommended transportation guidelines for the PTC Equipment set forth in the applicable Supplier’s “Transportation Manual” and “Unloading & Access Road Requirements”.

3.2 Payment Terms for PTC Equipment. Supplier will invoice Buyer for the ESA Price on the Effective Date. Buyer will pay the ESA Price in a single payment (the “PTC Payment”), via wire or otherwise as agreed by the Parties, no later than December 30, 2014. The PTC Payment will be payment in full for the PTC Equipment and other items provided by Supplier in accordance with this Agreement, and no additional amounts will be due with respect to the PTC Equipment.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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3.3 Taxes. Supplier shall be responsible for all Taxes imposed on the sale of the PTC Equipment contemplated under this ESA. All such Taxes are already included in the ESA Price. Buyer will neither be responsible for, nor reimburse Supplier for, any Taxes (or any associated penalties or interest) imposed on Supplier, and Supplier will cause all such Taxes, penalties and interest to be paid promptly and in no event later than necessary to avoid the imposition of any lien on the PTC Equipment or the Project. Neither Party is responsible for Taxes on the other Party’s income or the income of the other Party’s personnel.

3.4 Delivery of PTC Equipment.

3.4.1 Supplier will deliver the PTC Equipment ExWorks to the PTC Equipment Delivery Locations on or before the PTC Deadline. For the avoidance of doubt, Supplier will deliver the PTC Equipment ExWorks to the PTC Equipment Delivery Locations no later than 105 days from payment of the PTC Payment, and such delivery will include presentation of the Delivery Certificate in accordance with Section 3.4.3 to Buyer for acceptance or rejection of the Delivery Certificate before the PTC Deadline. Notwithstanding anything to the contrary herein, in the event that Supplier would incur any Tax as a result of storing the PTC Equipment at the PTC Equipment Delivery Location, Supplier shall, in its sole discretion, be permitted to transfer the PTC Equipment to a storage facility in Spain or any other location pre-approved by Buyer, so long as (i) such storage results in no additional cost to Buyer other than as provided in Section 3.4.4, (ii) all of Supplier’s obligations hereunder remain in effect including Supplier’s maintenance and warranty obligations, and (iii) Supplier provides prior written notice of such transfer to Buyer. Buyer shall continue to hold title and risk of loss at all times after delivery of the PTC Equipment has occurred pursuant to Sections 3.4 and 3.5.1

3.4.2 After the PTC Equipment has been delivered to the PTC Equipment Delivery Locations (and following any transfer of the PTC Equipment to another location pursuant to Section 3.4.1), Supplier will do the following on Buyer’s behalf, at Buyer’s expense as provided in Section 3.4.4: (a) maintain the PTC Equipment in accordance with the Supplier’s technical requirements for storing Turbine Equipment as specified in Exhibit 6 and otherwise in a manner that is designed to preserve the warranty, performance and useful lives of the PTC Equipment (b) provide any utilities, delivery devices and equipment, and perform any services, required in connection with the foregoing; (c) identify (and maintain the identification of) the PTC Equipment with such identification information including, at a minimum, serial numbers and other descriptions included in the corresponding Delivery Certificate; (d) segregate the PTC Equipment belonging to Buyer from components belonging to Supplier or third parties; and (e) upon reasonable advance written notice to Supplier, allow Buyer access to the PTC Equipment Delivery Location (or other storage location) for inspection, and removal at any time, of the PTC Equipment.

3.4.3 Supplier will notify Buyer of the anticipated delivery of PTC Equipment no later than 45 business days before the Scheduled Delivery Date and then provide regular updates on the status of deliveries. Upon delivery of PTC Equipment to the PTC Equipment Delivery Location, Supplier will present a signed Delivery Certificate for countersignature by Buyer. Buyer may inspect the PTC Equipment to verify content and condition of the PTC Equipment, including for compliance with the Specifications and this ESA, before countersigning or rejecting the Delivery Certificate.

(1) Upon receipt from Supplier of the Delivery Certificate, Buyer may:

(a) accept the Delivery Certificate and countersign it;

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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(b) accept the Delivery Certificate and countersign it, subject to Supplier correcting or performing the Punch List items to Buyer’s reasonable satisfaction; or,

(c) reject the Delivery Certificate due to the PTC Equipment’s noncompliance with the ESA or applicable Specifications. Upon such rejection, Buyer will provide in writing the reasons for the rejection and Supplier will (a) repair on site or replace the PTC Equipment, (b) keep Buyer informed regularly of the progress of such repairs or replacements, (c) upon completion of those actions, inform Buyer and allow re-inspection by Buyer, and (d) if Buyer had earlier rejected delivery, redeliver the PTC Equipment and provide a revised Delivery Certificate to Buyer for Buyer’s countersignature.

(2) For the purposes of this ESA, the date of delivery to the PTC Equipment Delivery Location for any PTC Equipment will be the date identified as such on a Delivery Certificate that is accepted or should have been accepted in the event of a wrongful rejection by Buyer.

3.4.4 The cost of the storage, maintenance and warranty services to be provided by Supplier pursuant to Section 3.4.2 for the first 12 months following delivery of the PTC Equipment is included in the ESA Price. After the first 12 months, Buyer will pay to Supplier as per Exhibit 9 per month for the cost of storage and maintenance, such amount payable monthly at the end of the first12-month storage period. Warranty services after the first 12 months shall be paid for in accordance with Section 4.6.3.

3.5 Title and Risk of Loss.

3.5.1 Title and risk of loss to the PTC Equipment will transfer to Buyer when Buyer countersigns the Delivery Certificate after delivery to the PTC Equipment Delivery Locations, but not before Supplier has received the PTC Payment. Supplier will promptly execute and deliver to Buyer any documentation reasonably requested by Buyer to evidence passage of title.

3.5.2 Notwithstanding Section 3.5.1, Supplier will remain fully responsible for any damage to PTC Equipment caused by Supplier or any other Supplier Responsible Party. Buyer will be responsible for maintaining insurance to cover any damage to the PTC Equipment after risk of loss has transferred to Buyer, except for the damage caused by Supplier or any other Supplier Responsible Party. Supplier will be responsible for maintaining insurance to cover any damages to the PTC Equipment until such transfer.

3.5.3 Supplier warrants and guarantees that legal title to and ownership of the PTC Equipment shall be free and clear of any and all liens, claims, security interests or other encumbrances when title thereto passes to Buyer pursuant to Section 3.5.1 above, except for any liens Supplier holds as a result of non-payment by Buyer under this Agreement. As such, when the title of the PTC Equipment is transferred to Buyer from Supplier in accordance with Section 3.5.1,

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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Supplier warrants and guaranties that (i) Buyer shall have good title to such PTC Equipment free and clear of all claims, liens or other encumbrances, and (ii) no instrument or other document shall be required to be delivered to Owner in order to effect the sale of the PTC Equipment from Supplier to Buyer, or if any such instrument or other document is so required, then Supplier shall deliver such instrument or other document to Buyer.

3.6 Damages for Delayed Delivery of PTC Equipment.

3.6.1 Damages if Buyer Discontinues the Projects. If Supplier fails to meet its Minimum PTC Delivery Obligations for reasons other than an Excusable Event, Buyer may suspend work on one or more of the Projects. If Buyer so elects to suspend work on a Project, then Buyer may cancel the PTC Equipment for the Project and Supplier will pay Buyer liquidated damages equal to [***]. If Supplier pays [***], and Buyer subsequently builds the discontinued Project, Buyer will reimburse Supplier the difference between the damages paid by Supplier (but not any refund for returned equipment) and [***] within 30 days after the Project is placed in service for federal income tax purposes, but only to the extent Tax Credits can be claimed on the Project at the same or higher levels as under the Code on the Effective Date. If the Tax Credits that can be claimed on the Project are less than the Tax Credits allowed under the Code on the Effective Date, then the reimbursement to Supplier will be reduced proportionately. Buyer will make commercially reasonable efforts to mitigate [***].

3.6.2 Damages if Buyer Continues the Projects. If Supplier fails to meet its PTC Delivery Obligations, Buyer nevertheless may elect to continue the development of the Projects. If Supplier’s failure to satisfy the PTC Delivery Obligations was not due to an Excusable Event and if Buyer fails to qualify all or a portion of a Project for the Tax Credits that the Project would otherwise have been entitled but for Supplier’s failure, then Supplier will pay Buyer liquidated damages equal to [***]%. [***] will be paid to Buyer in a lump sum.

3.6.3 Determination of Lost Tax Credits. Subject to satisfaction of the terms of Section 3.6.2, Supplier will only pay [***] with respect to a Project upon the earlier of the date that (a) Buyer provides Supplier an opinion of a nationally-recognized tax counsel that the Project or any portion of the Project was not under construction in time to qualify for Tax Credits, which opinion is delivered at a “more likely than not” or higher level, or (b) Buyer is unable to enter into a tax equity transaction with respect to the Project on economic terms reasonably satisfactory to Buyer, despite commercially-reasonable efforts (not including indemnifying the tax equity investors for construction-start risk), due to risk that the Project was not under construction in time to qualify for Tax Credits (each a “Final PTC Decision”). Buyer will, and will cause each Buyer PTC Party to (to the maximum extent permitted under any tax equity financing documents), (i) take all reasonable and appropriate steps to contest any partial or full rejection of the Tax Credits by the IRS, including diligently commencing and prosecuting any and all actions or proceedings to contest a Tax Credit determination by the IRS, including in court (any such action or proceeding, a “PTC Contest Action”), (ii) promptly inform Supplier of all filings, pleadings, correspondence, discovery requests and other actions or documents taken, made, filed, served or received by any Buyer PTC Party in connection with any PTC Contest Action or IRS audit and provide copies of the same to Supplier, (iii) provide Supplier with a reasonable opportunity to review and comment on all filings, pleadings, requests, responses and other matters to be filed with a court or served on other parties in a PTC Contest Action or IRS audit and give

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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due and full consideration to all Supplier comments, including making appropriate revisions, before filing or serving on another party any such document, (iv) make all reasonable and appropriate arguments in each PTC Contest Action or IRS audit with respect to qualification for the Tax Credits and (v) allow Supplier to attend proceedings in any PTC Contest Action or IRS audit. Buyer’s reasonable and appropriate arguments may include arguments relating to (A) the incurrence of costs before January 1, 2015 for the Project, including with respect to construction of non-WTG equipment, (B) any physical work of a significant nature relating to the Project, whether performed by Buyer or by a third party under contract, whether on-site or off, commenced before January 1, 2015 and (C) Buyer’s reasonable expectations of taking delivery of PTC Equipment prior to the applicable deadline. Notwithstanding the previous sentence, neither Buyer nor any Buyer PTC Party will be obligated to contest beyond the stage of an IRS audit (including IRS appeals), unless Supplier has agreed in writing that it will be liable for [***] in the event the contest is lost, agreed to pay the costs of the PTC Contest Action past such stage and has provided an opinion of a nationally-recognized tax counsel that there is at least substantial authority for the taxpayer’s position for an action at the trial court level and that the taxpayer is more likely than not to prevail for an appeal to a U.S. court of appeals. No further PTC Contest Action will be required beyond the U.S. court of appeals. In the event of a PTC Contest Action, payment of [***] may be delayed until conclusion of the PTC Contest Action, but the [***], when ultimately paid, will include interest at the rate of LIBOR plus 3.0% per annum. Buyer will use reasonable efforts to secure the full contest rights in this Section 3.6.3 in any tax equity transaction it negotiates and will notify Supplier if it is unable to secure such full contest rights. The Parties will jointly determine whether any contest at the trial court level will be in the U.S. Tax Court or in a federal district court or the Court of Federal Claims, and if the taxes at issue in the contest must be paid in order to continue the PTC Contest Action in court, then Supplier will advance the money to Buyer to pay the taxes as an interest-free loan, provided, however, that if Buyer receives refund of the Tax Credits as a result of PTC Contest Action, then Buyer will reimburse to Supplier the advanced money with an interest at the rate of LIBOR plus 3.0% per annum.

3.6.4 Payment of [***]. Following a Final PTC Decision with respect to a Project, the Parties will negotiate in good faith to determine the [***] payable by Supplier pursuant to Section 3.6.2, taking into consideration the calculation assumptions in Section 3.6.5.1. Supplier shall pay [***] to Buyer within 45 days of the Final PTC Decision.

3.6.5 Engagement of Independent Engineering Firm. If the Parties are unable to reach agreement on the [***], the Parties will engage an independent engineering firm selected jointly by Buyer and Supplier to calculate the [***] for which Supplier is liable under Section 3.6.2. The independent engineer will present a draft report to each of Supplier and Buyer for comment. Its calculation, after considering all comments, will be subject to dispute resolution under Article 5. The costs of the independent engineer will be shared equally by the Parties.

(1) In doing any such calculation, the independent engineer will assume [***].

(2) The independent engineer will also gross up any [***] for income taxes unless Supplier delivers an opinion from a nationally-recognized tax counsel, in form and substance satisfactory to Buyer, that [***] are more properly reported as a purchase price

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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adjustment for the PTC Equipment and/or Additional Turbine Equipment to which the payment relates in which case the independent engineer will take into account as part of the actual value of the lost Tax Credits the loss of depreciation deductions due to the purchase price adjustment (treating the Buyer as a corporation able to use such depreciation using the same composite tax rate that would have been used for the gross up calculation). If Supplier fails to provide such an opinion, any [***] will be grossed up for income taxes by dividing the amount of the [***] by one minus the highest marginal composite federal and state income tax rates in effect when Buyer must report the damages payment as income. The composite tax rate on the Effective Date is 39.6%.

3.6.6 Maximum Liability for [***]. Notwithstanding anything to the contrary in this ESA, Supplier’s aggregate liability for any [***] with respect to the Projects will be limited to a maximum of $[***] USD.

3.6.7 Extension of Tax Credits or Later Qualification. If (i) the Tax Credits are renewed or extended by legislation enacted after the Effective Date and, as a result of such renewal or extension, any portion of a Project becomes qualified to receive Tax Credits or (ii) any portion of a Project that does not qualify for Tax Credits later qualifies for Tax Credits for any reason, then Supplier will not be obligated to pay the [***] to Buyer with respect to such portion of the Project; provided that if the renewed or extended Tax Credits are at a lower rate than in effect on the Effective Date, then Supplier will pay [***] in an amount necessary to compensate Buyer for the difference between such renewed or extended rate and the rate in effect on the Effective Date. If Supplier has already paid [***] to Buyer with respect to such portion of the Project, then Buyer will refund to Supplier such [***] within 30 days after the date on which such portion of the Project so qualified receives the Tax Credits.

3.6.8 Other Renewable Tax Incentives. If Supplier is responsible for [***] under this ESA and any portion of a Project is or becomes eligible to receive federal renewable energy tax credits, federal grants or other federal incentives for the production of energy from, or the construction of, such portion of the Project other than the Tax Credits (“Alternate Tax Incentives”), then Buyer will use commercially reasonable efforts to qualify such portion of the Project for such Alternate Tax Incentives. If Buyer receives any such Alternate Tax Incentives, then Buyer will refund to Supplier an amount equal to 100% of the value of such Alternate Tax Incentives within 30 days after the date on which Buyer receives such Alternate Tax Incentives; provided that in no event will the aggregate amount of any such refunds to Supplier exceed the amount of the [***] paid by Supplier.

3.6.9 Sole and Exclusive Remedy. Payment of liquidated damages or [***] described in Section 3.6.1 and 3.6.2 will constitute the sole and exclusive remedy of Buyer and the sole and exclusive liability and measure of damages of Supplier with respect to Supplier’s failure, if any, to deliver the PTC Equipment to the PTC Equipment Delivery Location on or before the PTC Deadline. Both Parties agree that the damages underlying the liquidated damages and the [***] described in Section 3.6.1 and 3.6.2 including the loss of any value to Buyer from it failing to qualify for Tax Credits, are direct damages not barred by the Parties’ waiver of consequential, incidental or indirect damages. After payment of liquidated damages or [***], Supplier will be relieved of any and all further liability in respect of its failure to satisfy its PTC Delivery Obligation. The Parties acknowledge and agree that because of the unique nature of the

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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PTC Delivery Obligation and the unavailability of comparable products and services, it is difficult or impossible to determine with precision the amount of damages that would or might be incurred by Buyer as a result of Supplier’s failure to achieve delivery of the PTC Equipment by the PTC Deadline; it being understood and agreed by the Parties that (a) Buyer shall be damaged by the failure of Supplier to meet such obligations, (b) it would be impracticable or extremely difficult to fix the actual damages resulting therefrom, (c) any sums which would be payable under this Article 3 are in the nature of liquidated damages, and not a penalty, and are fair and reasonable under the circumstances and (d) each payment represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated from such failure, and shall, without duplication, be the sole and exclusive remedy with respect to any such failure by Supplier. Once payment of such liquidated damages has been paid or the limits with respect to liquidated damages set forth in this Agreement have been reached, Supplier shall be relieved of any further liability in respect thereof. Supplier hereby waives any rights or defenses that any liquidated damage provided for herein is a penalty or otherwise void.

3.7 Qualification of the Projects. Supplier will provide any documentation reasonably requested by Buyer to establish that any of the Projects qualify for Tax Credits under the construction-start tests in IRS Notice 2013-29, including by documenting 2014 costs that may have been incurred by Supplier directly and by documenting continuous construction that may have occurred at Supplier’s factories.

ARTICLE 4.

PURCHASE AND SALE OF ADDITIONAL TURBINE EQUIPMENT

4.1 [***].

4.2 [***].

4.3 Execution of a Project TSA and Project OMA. Buyer shall notify Supplier when it wishes to begin finalizing the Project TSA and Project OMA for each Project. Promptly after receiving such notice, Supplier shall provide Buyer with a proposed Project TSA and Project OMA, each on terms and pricing that are consistent with this Agreement and [***]. Thereafter, the Parties shall negotiate diligently and in good faith to reach agreement on the terms of such Project TSA and Project OMA, and all of the related exhibits and schedules thereto.

4.4 Obligations and Liability with Respect to Additional Turbine Equipment; Notice to Proceed. This ESA imposes no liability or obligations on Buyer with respect to Additional Turbine Equipment other than as provided in Section 4.1 [***]. Buyer shall have no obligations or liability with respect to the Additional Turbine Equipment unless and until Buyer issues an NTP and delivers executed signature pages for a Project TSA and Project OMA, and then only to the extent of the NTP and the executed Project TSA and Project OMA. Upon Buyer’s issuance of an NTP, Turbine Supplier will provide Buyer with final lien waivers in a form generally accepted for the state in which the Project will be located with respect to any PTC Equipment to be used in that Project.

4.4.1 NTP for Other Projects. Buyer may elect to allocate all or part of the PTC Equipment to Projects other than the [***].

4.4.2 Termination of Obligation to Reserve Additional Turbine Equipment. Supplier’s obligation to provide Additional Turbine Equipment to the Projects shall terminate unless Buyer issues an NTP for the Projects by [***], Supplier is not able to provide the Additional Turbine Equipment in accordance with a request from Buyer to supply such Additional Turbine Equipment, then Buyer’s obligations with respect to Exclusivity pursuant to Section 4.1 shall terminate.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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4.5 Contract Price; Payment Schedule. Exhibit 7 provides the Contract Price for the Projects and the associated payment schedule that will be included in the Project TSA for that Project.

4.6 Incorporation of PTC Equipment.

4.6.1 Relationship with Project TSA and Project OMA. The Parties acknowledge that Buyer may incorporate the PTC Equipment in one or more Projects. Upon allocation of the PTC Equipment to a Project, issuance of an NTP for that Project, and Buyer’s execution of the Project TSA and Project OMA for that Project, the terms of the Project TSA and Project OMA will govern the Parties’ rights and obligations with respect to the applicable portion of the PTC Equipment. In no event: (i) will Buyer be obligated to make any additional payments for the PTC Equipment and (ii) nothing in the project TSA will act to amend or conflict with the provisions of this ESA that provide for the supply, purchase and delivery of the PTC Equipment.

4.6.2 Warranty for PTC Equipment. The warranties applicable to the PTC Equipment shall be the warranties: (a) set forth on Exhibit 6 hereto, until a Project TSA and Project OMA is executed by the Parties, and (b) provided in the Project TSA or Project OMA, as applicable, once a Project TSA and Project OMA is executed. For the purposes of applying the warranties, the Warranty Period for PTC Equipment shall begin on the date that title transfers for the PTC Equipment pursuant to this Agreement and terminate on [***], unless a Project TSA is executed for a Project into which the PTC Equipment is incorporated. If the PTC Equipment is incorporated into a Project, then the Warranty Period for the PTC Equipment (and all Turbine Equipment under the Project TSA) shall be the Warranty Period provided in the Project TSA.

4.6.3 In the event the PTC Equipment is not incorporated into a Project, Buyer shall have the option of extending the Warranty Period for the PTC Equipment an additional 24 Months beyond the date that that Warranty Period would otherwise terminate under Section 4.6.2, for: $[***], $[***] per month, and $[***] per month.

ARTICLE 5.

DISPUTE RESOLUTION

5.1 Referral to Senior Management. No later than five (5) days after a Party notifies the other Party of a dispute: (a) each Party will appoint a representative from their respective senior management and (b) the Parties’ representatives will meet, negotiate and attempt in good faith to resolve the dispute.

5.2 Arbitration Procedure. If the referral to senior management fails to resolve the dispute after thirty (30) days, either party may submit the dispute for resolution by binding arbitration. To initiate the arbitration process, the Party seeking a resolution will submit a

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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demand for arbitration to the other Party. The demand will summarize the dispute and identify the basic facts and ESA provisions underlying the dispute. The arbitration will be resolved through the offices of the American Arbitration Association pursuant to the rules for complex civil litigation. The arbitral tribunal will be composed of three (3) arbitrators, and the arbitration will be conducted in New York, New York. Each Party will be entitled to appoint one arbitrator from the complex litigation panel. The two (2) arbitrators appointed by the Parties will then appoint a third arbitrator from the same panel. The Parties will use all commercially reasonable efforts to conclude the arbitration as soon as practicable. All aspects of the arbitration will be treated as confidential. The arbitrators will have no power to award damages or remedies inconsistent with this ESA.

5.3 Fees. Each Party will share equally the fees of the arbitrators and the costs and expenses of the arbitration, and each Party will pay its own attorneys’ and expert and witness fees and other costs associated with the arbitration.

5.4 Award Final and Binding. The arbitration award will be final and binding on the Parties and may be enforced in any court of competent jurisdiction. Each Party waives any right of appeal to any court or tribunal of competent jurisdiction to the fullest extent permitted by the governing law of this ESA. For the purpose of an enforcement of an award, the Parties irrevocably and unconditionally submit to the jurisdiction of federal courts located in Philadelphia, PA, and waive any defenses to such enforcement based on lack of personal jurisdiction or inconvenient forum.

5.5 Interim Measures and Other Relief. Notwithstanding anything to the contrary, either Party may apply to a court of competent jurisdiction for interim measures, specific performance or other similar relief. The Parties agree that seeking and obtaining such interim measures, specific performance or similar relief will not waive the right to arbitration, including the right to apply to the arbitrators for such interim measures, specific performance or similar relief. To the maximum extent permitted by applicable laws, the Parties authorize and empower the arbitrator to grant interim measures, including injunctions, attachments and conservation orders, and all other remedies permitted by this ESA, including specific performance and other similar relief (which, for the avoidance of doubt, may be part of the final arbitral decision or award), in appropriate circumstances; these interim measures and other remedies may be immediately enforced by court order.

5.6 Limitation of Liability. THE PARTIES WAIVE ALL CLAIMS AGAINST EACH OTHER (AND AGAINST THE AFFILIATES OF EACH, AND THEIR RESPECTIVE MEMBERS, SHAREHOLDERS, OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES) FOR ANY CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES (INCLUDING LOSS OF ACTUAL OR ANTICIPATED PROFITS) ARISING OUT OF THIS ESA, REGARDLESS OF WHETHER ANY SUCH CLAIM ARISES OUT OF BREACH OF CONTRACT, GUARANTY OR WARRANTY, TORT, PRODUCT LIABILITY, INDEMNITY, CONTRIBUTION, STRICT LIABILITY OR ANY OTHER LEGAL THEORY. NOTWITHSTANDING THE FOREGOING, THE PRECEDING SENTENCE WILL NOT AFFECT EACH PARTY’S INDEMNITY OBLIGATIONS TO THE OTHER PARTY. LIQUIDATED DAMAGES WILL NOT BE DEEMED CONSEQUENTIAL DAMAGES. IN NO EVENT WILL EITHER PARTY’S LIABILITY TO THE OTHER PARTY EXCEED: (A)

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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PRIOR TO ISSUANCE OF THE NOTICE TO PROCEED, THE PRICE FOR PTC EQUIPMENT; AND (B) FOLLOWING ISSUANCE OF THE NOTICE TO PROCEED, THE CONTRACT PRICE.

ARTICLE 6.

INDEMNIFICATION

6.1 Supplier’s Indemnity Obligation. Supplier agrees to indemnify, hold harmless and defend Buyer, its affiliates, and each of its officers, directors, shareholders, managers, members, partners, agents, employees, successors and permitted assigns (the “Supplier Indemnified Parties”) from and against any claims, demands and losses arising on account of: (a) bodily injuries, death or damage to property, to the extent that the same results from the fault, negligent act or omission, or willful misconduct of Supplier and Supplier Responsible Party, and not from the fault, negligent act or omission, or willful misconduct of Buyer, its affiliates or its personnel, (b) the breach of the ESA by Supplier or Supplier Responsible Party, (c) the violation of any Applicable Laws or Permits by Supplier or Supplier Responsible Party, or (d) any taxes for which Supplier or its affiliates is responsible.

6.2 Buyer’s Indemnification Obligation. Buyer agrees to indemnify, hold harmless and defend Supplier, its affiliates, and each of its officers, directors, shareholders, managers, members, partners, agents, employees, successors and permitted assigns (the “Buyer Indemnified Parties”) from and against any claims, demands and losses arising on account of: (a) bodily injuries, death or damage to property, to the extent that the same results from the fault, negligent act or omission, or willful misconduct of Buyer and Buyer Responsible Party, and not from the fault, negligent act or omission, or willful misconduct of Supplier or Supplier Responsible Party, (b) Buyer’s breach of the ESA, (c) the violation of any Applicable Laws or Permits by Buyer or Buyer Responsible Party, or (d) any taxes for which Buyer or its affiliates is responsible.

6.3 Indemnity Against Infringement. Supplier shall indemnify and keep indemnified and hold harmless each Buyer Indemnified Party from and against all claims, liabilities, losses and damages asserted by any third party person, together with all costs and expenses relating thereto (including reasonable attorneys’ fees and court costs), based upon any claim of infringement of any IPR (whether by way of trademark or otherwise) resulting from the manufacture, offer for sale, sale, supply or importation of the PTC Equipment or use thereof by Buyer to generate electrical energy from wind. Each Party agrees to notify the other as soon as possible of any material matters with respect to which the foregoing indemnity may apply and of which the notifying Party has knowledge. If notified in writing of any action or claim for which Supplier is to provide an indemnity, Supplier shall defend such action or claim at its expense and pay the cost and damages and reasonable attorneys’ fees awarded against Buyer in such action or claim; provided, that Supplier shall have the right to control the defense (including selection of defense counsel) and settlement of all such actions or claims.

6.4 Treatment of Infringing Equipment. If an order by any court of competent jurisdiction shall be obtained against Buyer’s purchase, use or operation of any PTC Equipment or any part thereof by reason of Supplier’s alleged infringement of any IPR of any Person, Supplier shall first be afforded a reasonable opportunity, at its expense but without limiting its indemnification obligations under Section 6.3, to diligently seek the discharge of any such order as aforesaid, and at Supplier’s election to forthwith:

(a) at a commercially reasonable time (taking into consideration Buyer’s current or future operation of any applicable PTC Equipment), modify the PTC Equipment so that it becomes non-infringing;

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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(b) procure for Buyer the right to continue (or as applicable, commence and then continue) the operation and/or use of the PTC Equipment; or

(c) substitute for any infringing equipment, other non-infringing equipment having the capabilities which otherwise satisfy Supplier’s obligations under this Agreement.

6.5 Indemnification Procedure. When a Party hereunder (the “Indemnifying Party”) is required to indemnify the Buyer Indemnified Parties or the Supplier Indemnified Parties, as applicable (either such indemnified parties being the “Indemnified Parties”) in accordance with this Article 6, the Indemnifying Party shall assume on behalf of such Indemnified Parties, and conduct with due diligence and in good faith, the defense of any claim against such Indemnified Parties, whether or not the Indemnifying Party shall be joined therein, and the Indemnified Parties shall cooperate with the Indemnifying Party in such defense. The Indemnifying Party shall be in charge of the defense and settlement of such claim; provided, however, that without relieving the Indemnifying Party of its obligations hereunder or impairing the Indemnifying Party’s right to control the defense or settlement thereof, the Indemnified Parties may elect to participate through separate counsel in the defense of any such claim, but the fees and expenses of such counsel shall be at the expense of such Indemnified Parties. In the event that the Indemnified Parties shall have reasonably concluded that there exists a material conflict of interest between the Indemnifying Party and the Indemnified Parties in the conduct of the defense of such claim, then each Party shall retain their separate counsel (at the sole cost of the Indemnifying Party) and (except as otherwise provided in Section 6.3) shall have the right to control the defense and/or settlement of such claim. In the event that the Indemnifying Party does not employ counsel to assume the defense of such claim asserted against the Indemnified Party within a reasonable time after the Indemnifying Party’s receipt of notice of the commencement of an action thereon, the Indemnified Parties may retain counsel for the defense thereof, upon twenty (20) business days written notice, in which case the fees and expenses of counsel shall be paid by the Indemnifying Party. No Indemnifying Party shall settle any such claims or actions in a manner which would require any action or forbearance from action by any Indemnified Parties without the written consent of the Indemnified Parties, which consent shall not be unreasonably withheld or delayed.

6.6 Indemnification Rights Not Abridged. The indemnification obligations contained in this Article 6 shall not be construed so as to negate, abridge, or reduce other rights or obligations of indemnity that would otherwise exist as to an Indemnified Party hereunder. In claims against an Indemnified Party pursuant to the indemnification obligations contained in this Article 6 and which are brought by an employee of the Indemnifying Party, a subcontractor of the Indemnifying Party, or anyone for whom they may be responsible, the indemnification obligations contained in this Article 6 shall not be limited (x) by a limitation on the amount or type of damages, compensation, or benefits payable by or for the Indemnifying Party, any

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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subcontractor of the Indemnifying Party, or anyone for whom they may be responsible, under workers’ or workmen’s compensation acts, disability benefit acts, or other employee benefit acts, or (y) pursuant to any common law or case law.

6.7 Survival of Indemnities. The indemnities solely set forth in this Article 6 shall survive the termination or expiration of this Agreement.

ARTICLE 7.

DEFAULT; TERMINATION

7.1 Default.

7.1.1 Event of Default. If during the term of this Agreement either Party breaches any of the material covenants or conditions of this Agreement, such breach shall constitute an event of default hereunder by the breaching Party and the other Party shall give notice to such breaching Party thereof, specifying in detail the nature thereof, and the amount thereof if it is a default which may be cured by the payment of money.

7.1.2 Bankruptcy Event of Default. It shall be an event of default hereunder with respect to a Party if such Party becomes insolvent, or generally does not pay its debts as they become due, or admits in writing its inability to pay its debts, or makes a general assignment for the benefit of creditors, or (a) if insolvency, receivership, reorganization or bankruptcy proceedings are commenced against any such party, and such proceedings are not dismissed within sixty (60) days, or (b) if insolvency, receivership, reorganization or bankruptcy proceedings are commenced by any such party.

7.1.3 Cure Rights. In the case of an event of:

(a) a undisputed payment default under Section 7.1.1, if, after the service of the notice described in such section, the event of default upon which such notice was based shall continue to exist, or

(b) any other event of default under Section 7.1.1 or 7.1.3, if, after the expiration of a grace period of thirty (30) days after the service of the notice described in such sections, the event of default upon which such notice was based shall continue to exist (or in the case of an event of default which cannot with all diligence be remedied within a period of thirty (30) days, the breaching Party fails to commence within a period of thirty (30) days after the service of such notice to remedy such event of default and to proceed with all diligence thereafter to remedy such event of default within a reasonable period of time, but in no event later than sixty (60) days after the service of such notice),

then any such occurrence shall be considered a “Default” under this Agreement, and the non-breaching Party shall be entitled to the remedies set forth in Section 7.1.4. There shall be no cure period, and no notice of default shall be required, with respect to an event of default under Section 7.1.2, which event shall be considered a Default immediately upon its occurrence.

7.1.4 Remedies. In the event of a Default, the non-breaching Party shall be entitled, without prejudice to any other rights or remedies to which it may be entitled at law

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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and/or in equity on account of such Default (but subject nevertheless to any provision of this Agreement expressly providing that a stated remedy is exclusive), including the right, in the non-breaching Party’s sole discretion, to either continue its rights and obligations under this Agreement in full force and effect or, by providing five (5) business days prior written notice to the breaching Party, to terminate this Agreement. Notwithstanding anything to the contrary, any failure or delay in giving a notice of an event of default by a non-breaching Party under Section 7.1.1 or 7.1.3 shall not be construed as a waiver or admission by the non-breaching Party with respect to such event of default.

7.2 Termination Due to Force Majeure. Either Party shall have the right to terminate this Agreement upon not less than thirty (30) days prior written notice to the other Party if the occurrence of a Force Majeure Event affecting such Party’s performance hereunder continues for three (3) consecutive months or more; provided, however, that such Party may only terminate this Agreement according to the terms of this Section 7.2 with respect to that PTC Equipment affected by such Force Majeure Event.

ARTICLE 8.

REPRESENTATIONS AND WARRANTIES

8.1 Representations and Warranties by Supplier. Supplier hereby represents and warrants to Buyer as follows:

8.1.1 Due Organization; Good Standing. Supplier is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware and is (or will be) qualified to do business in the jurisdictions in which it will be “doing business” pursuant to this Agreement.

8.1.2 Due Authorization. The execution, delivery and performance of this Agreement by Supplier have been duly authorized by all necessary corporate action on the part of Supplier and do not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Supplier or any other Party to any other agreement with Supplier.

8.1.3 IPR. It owns or is licensed or is otherwise lawfully permitted to use any and all IPR relating to the manufacture, production, sale and use of the PTC Equipment and the manufacture, production, sale and use of the PTC Equipment will not infringe the IPR of any third party.

8.2 Representations and Warranties by Buyer. Buyer represents and warrants to Supplier as follows:

8.2.1 Due Organization; Good Standing. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of Oregon, is currently registered and able to conduct its business legally and is (or will be) qualified to do business in the jurisdictions in which it will be “doing business” pursuant to this Agreement.

8.2.2 Due Authorization. The execution, delivery and performance of this Agreement by Buyer have been duly authorized by all necessary action on the part of Buyer in

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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accordance with Buyer’s charter documents and do not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.

ARTICLE 9.

CONFIDENTIALITY

9.1 Supplier Confidentiality. Supplier shall keep confidential, except as may be approved in writing by Buyer, or as may be necessary for the proper discharge by Supplier of its duties under this Agreement (each a “Supplier Contract Performance Disclosure”), (i) the terms and provisions of this Agreement, (ii) all proprietary and technical data of Buyer, (iii) all data identified in writing as being confidential or proprietary, and (iv) all details of Buyer’s business or other information regarding any Project (collectively, the “Buyer Confidential Information”); provided, however, each Supplier Contract Performance Disclosure shall be subject to the written agreement of such third party to keep the Buyer Confidential Information confidential, to not disclose the same to any third party without the prior written consent of Buyer, and to not use any Buyer Confidential Information for any purpose other than as authorized in this Section 9.1 and such confidentiality agreements shall: (i) be in writing; (ii) be governed by terms and conditions substantially similar to those in this Agreement; and (iii) inform each third party in receipt of such information of the confidential nature of such information).

9.2 Buyer Confidentiality. Buyer shall keep confidential, except as may be approved in writing by Supplier, or as may be necessary for the proper discharge by Buyer of its duties under this Agreement (each an “Buyer Contract Performance Disclosure”), (i) all proprietary and technical data of Supplier, (ii) all data identified in writing as being confidential or proprietary, and (iii) the terms and provisions of this Agreement (collectively, the “Supplier Confidential Information”); provided, however, each Buyer Contract Performance Disclosure shall be subject to the written agreement of such third party to keep the Supplier Confidential Information confidential, to not disclose the same to any third party without the prior written consent of Buyer, and to not use any Supplier Confidential Information for any purpose other than as authorized this Section 9.2 and such confidentiality agreements shall: (i) be in writing; (ii) be governed by terms and conditions substantially similar to those in this Agreement; and (iii) inform each third party in receipt of such information of the confidential nature of such information.

Buyer may also use and disclose Supplier Confidential Information to third parties for the financing, repair, operation, maintenance and insurance of the PTC Equipment, and, in addition, Buyer may disclose Supplier Confidential Information to prospective purchasers (such purchase being either direct or indirect) of the Project or Buyer, parties providing financing (such financing being either direct or indirect) with respect to the Project or Buyer, and prospective assignees or transferees of this Agreement; provided, however, in each case such disclosures shall be subject to the written agreement of such third party to keep the Supplier Confidential Information confidential, to not disclose the same to any third party without the prior written consent of Buyer, and to not use any Supplier Confidential Information for any purpose other than as authorized this Section 9.2 and such confidentiality agreements shall: (i) be in writing; (ii) be governed by terms and conditions substantially similar to those in this Agreement; and (iii) inform each third party in receipt of such information of the confidential nature of such information.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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9.3 Notwithstanding Sections 9.1 and 9.2, the Parties shall have no obligation with respect to any Buyer Confidential Information or Supplier Confidential Information, as applicable, which (i) is or becomes publicly known through no act of the receiving Party, (ii) is approved for release by written authorization of the disclosing Party, (iii) is necessary to be disclosed to taxing authorities and accountants preparing Supplier’s tax reports and filings, or (iv) is required to be disclosed by the receiving Party pursuant to a legal process (so long as the receiving Party uses commercially reasonable efforts to avoid disclosure of such information, and prior to furnishing such information, the receiving Party notifies the disclosing Party and gives the disclosing Party the opportunity to object to the disclosure and/or to seek a protective order). Nothing in this Agreement shall bar the right of either Party to seek and obtain from any court injunctive relief against conduct or threatened conduct which violates this Article 9.

9.4 All public announcements by Supplier or Buyer in relation to the ESA shall be fully discussed in advance between, and approved in writing by, the Parties.

ARTICLE 10.

MISCELLANEOUS

10.1 Compliance with Applicable Law. In connection with the performance of its obligations under this Agreement, Supplier shall comply with all applicable Applicable Laws, including: (i) binding accords relating to human rights; (ii) laws and regulations relating to the ability of workers to form unions or engage in collective bargaining; (iii) laws and regulations prohibiting forced and compulsory labor; (iv) laws and regulations relating to child labor or minimum contracting ages; (v) laws and regulations prohibiting discriminatory practices with respect to employment and occupation, including but not limited to those relating to distinction, exclusion or preference based on race, color, gender, religion, political opinion, national or social origin; (vi) laws and regulations designed to limit activities which may negatively impact the environment; and (vii) laws and regulations prohibiting corruption, extortion and bribery. In the event that during the term of this Agreement Supplier identifies noncompliance with the foregoing obligation, it shall promptly notify Buyer, specifying in such notice its plan to remedy such default. Supplier shall cause its subcontractors to comply with the provisions of this Section 10.1. Supplier shall, during the term of this Agreement, provide Buyer with certifications, confirmations or other information as reasonably requested by Buyer to demonstrate or confirm compliance with the obligations of this Section 10.1.

10.2 Inspections by Buyer. During the Term of this Agreement, Supplier shall permit Buyer and its representatives to monitor and inspect the PTC Equipment in order to verify material compliance with the terms of this Agreement, including the Specifications upon reasonable prior notice by Buyer. Such inspection of any part of the PTC Equipment shall in no way relieve Supplier of its obligations to perform its obligations in accordance with this Agreement nor constitute acceptance or waiver of any of the right and remedies of Buyer hereunder, unless such acceptance or waiver is granted in writing.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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10.3 Obligations with respect to Excusable Events and Force Majeure.

10.3.1 If as a result of the occurrence of a Force Majeure Event or Excusable Event, a Party is rendered wholly or partially unable to perform its obligations under this ESA, the Party will provide the other Party written notice describing the particulars of the occurrence and estimating the expected duration of the event. The notice will be given promptly, but in no event greater than ten (10) business days after the event.

10.3.2 The suspension of performance will be of no greater scope and of no longer duration than is reasonably required by the event. The affected Party will exercise all reasonable efforts to mitigate or limit damages to the other Party and promptly take appropriate and sufficient corrective action. When the affected Party is able to resume performance of the affected obligations under this ESA, the affected Party will promptly resume performance and give the other Party written notice to that effect.

10.3.3 The burden of proof as to whether a Force Majeure Event or Excusable Event has occurred, its duration and whether such event excuses a Party from performance under this ESA will be upon the Party claiming such Force Majeure Event or Excusable Event.

10.4 Governing Law. This Agreement and all matters arising hereunder or in connection herewith shall be governed by and construed in accordance with the internal laws of the State of New York without regard to conflicts of law or choice of law principles (other than Sections 5-1401 and 5-1402 of the General Obligations Law).

10.5 Amendment and Waiver. This ESA may be modified or amended only by an instrument in writing signed by both Parties to this ESA. A Party’s rights and obligations under this ESA cannot be waived, except by an instrument in writing, delivered by the waiving Party, in which such Party’s intent to waive is expressly stated.

10.6 Entire Agreement. This ESA, including all exhibits attached to this ESA, contains the entire understanding of the Parties with respect to the purchase, sale and delivery of the PTC Equipment and supersedes all prior or contemporaneous discussions, agreements and commitments between the Parties on this matter. There are no agreements or understandings between the Parties with respect to the subject matter of this ESA, whether oral or written, other than those in this ESA. Neither Party has relied upon any representation, express or implied, not contained in this ESA.

10.7 Survival. All provisions of this ESA that either expressly by their terms survive, by their nature survive, or come into or continue in force and effect after the expiration or termination of this ESA will remain in effect and be enforceable following such expiration or termination of the ESA. The provisions of this Section 10 will survive expiration or termination of this ESA.

10.8 Assignment.

10.8.1 Except as expressly provided in this Section 10.8, no Party may assign or transfer this ESA, in whole or in part, without the prior written consent of the other Party (which consent will not be unreasonably withheld, conditioned or delayed). Any attempted assignment or transfer that does not comply with this Section 10.8 will be null and void and of no force or effect whatsoever.

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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10.8.2 This ESA may be assigned by Buyer, upon prior written notice to Supplier (but without Supplier’s consent), to: (a) an affiliate of Buyer; or (b) to a Financing Party as collateral security. This ESA, or any or all of Supplier’s obligations hereunder, may be assigned to any affiliate of Supplier.

10.8.3 If Buyer assigns this ESA in accordance with this Section 10.8: (a) the ESA will be binding upon and inure to the benefit of the successors and assigns; and (b) Buyer will, to the extent the assignee assumes the liabilities and obligations of the assignor, be relieved of such liabilities and obligations.

10.9 Further Assurances; Cooperation. Supplier and Buyer agree to provide such information, and to take such other actions as may be necessary or reasonably requested by the other Party in order to give full effect to this ESA and to carry out the intent of this ESA. Supplier will execute and deliver such consent forms, acknowledgments and other documents (including an opinion of counsel) reasonably requested by Buyer. Buyer will reimburse Supplier for reasonable documented third-party costs and expenses incurred by Supplier in connection with Buyer’s request.

10.10 No Rights in Third Parties. This ESA and all rights under this ESA are intended for the sole benefit of the Parties and will not imply or create any rights on the part of, or obligations to, any other Person, except with respect to the Buyer Indemnified Parties and the Supplier Indemnified Parties.

10.11 Severability. The invalidity of one or more phrases, sentences or clauses contained in this ESA will not affect the validity of the remaining portions of this ESA so long as the material purposes of this ESA can be determined and effectuated.

10.12 Notice. Any notice or invoice required or authorized to be given under this ESA or any other communications between the Parties provided for under the terms of this ESA will be in writing (unless otherwise provided) and will be served personally or by reputable next Business Day express courier service addressed to the relevant Party at the address stated below or at any other address notified by that Party to the other as its address for service. Any notice so given personally or by express courier will be served on delivery. As proof of such service, it will be sufficient to produce a receipt showing personal service or the receipt of a reputable courier company showing the correct address of the addressee. The Parties’ addresses for notice and service are:

To Buyer:	Iberdrola Renewables, LLC
	1125 NW Couch Street, Suite 700
	Portland, OR 97209
	Attn: Contract Administration
	Telephone: (503) 241-3230

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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	with a copy to:
	Iberdrola Renewables, LLC
	1125 NW Couch Street, Suite 600
	Portland, OR 97209
	Attn: General Counsel
	Telephone: (503) 796-7127
To Supplier:	Gamesa Wind US, LLC
	1150 Northbrook Dr.
	Trevose, Pennsylvania 19053
	Attention: Vice President of Sales
	Telephone: (215) 710-3100
	Email: customerservice_us@gamesacorp.com
	with a copy to:
	Gamesa Wind US LLC
	1150 Northbrook Dr.
	Trevose, Pennsylvania 19053
	Attention: General Counsel’s Office
	Telephone: (215) 710-3100
	Email: ffuselier@gamesacorp.com

10.13 Joint Effort. Preparation of this ESA has been a joint effort of the Parties, and the resulting document will not be construed more severely against one of the Parties than against the other. Any rule of construction that ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this ESA, or exhibits to this ESA.

10.14 Counterparts. This ESA may be executed in any number of counterparts, each of which will be an original but all of which together will constitute one instrument, binding upon all parties to this ESA, notwithstanding that all of such parties may not have executed the same counterpart. The delivery of an executed counterpart of this ESA by facsimile or portable document format (.pdf) will be deemed to be valid delivery.

[SIGNATURES FOLLOW]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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IN WITNESS WHEREOF, the undersigned have caused this ESA to be executed as of the date first stated above.

SUPPLIER:			BUYER:
Gamesa Wind US, LLC			IBERDROLA RENEWABLES, LLC
	By:	/s/ Borja Negro		By:	/s/ Martin Mugica, CEO
	Name:	Borja Negro		Name:	Martin Mugica, CEO
	Title:	CEO		Title:	Iberdrola Renewables LLC
	By:	/s/ Gonzalo Onzain		By:	/s/ Frank Burkhartsmeyer, CFO
	Name:	Gonzalo Onzain		Name:	Frank Burkhartsmeyer, CFO
	Title:	VP Sales		Title:	Iberdrola Renewables LLC

Initials
MK	Legal
GW	Procurement
EL	Engineering and Construction

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 1 – List of PTC Equipment

SCOPE OF SUPPLY FOR PTC EQUIPMENT

Wind Turbine Generator Component	GAMESA
Nacelle & Hub [***]	[***]
Rotor – Set of 3 Blades	[***]
Tower - [***] hub height	[***]

• Gamesa will provide serial numbers for major components for the PTC equipment

• [***]

• [***]

• Leading edge tape or high solids coating in the leading edge will be employed if [***] blades are supplied (at an optional cost- see Price Proposal)

• [***] sensors will be installed in the main bearings to monitor temperature (at an optional cost- see Price Proposal)

• All equipment shall comply with OSHA regulations

• Standard Temperature Package (-20C to +40C)

• [***]

• Converters sourced from [***]

• Low voltage ride through, [***]

• High voltage ride through, [***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 1-A - Specifications

[***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 2 – Description of Additional Turbine Equipment / Scope of Supply

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 3 – Form of Delivery Certificate

Date:

1. Reference is made to the Equipment Supply Agreement dated as of December     , 2014 (the “Agreement”) by and between Iberdrola Renewables, LLC, a company incorporated and existing under the laws of Oregon (“Buyer”), and Gamesa Wind US, LLC, a company incorporated and existing under the laws of Delaware (“Supplier”). Capitalized terms used but not defined in this Delivery Certificate shall have the meanings in the Agreement. Buyer purchased the PTC Equipment listed in the attached Exhibit A from Supplier pursuant to the Agreement.

2. The undersigned, Supplier, does hereby certify and represent as follows to Buyer with respect to the PTC Equipment listed in the attached Exhibit A:

a. Pursuant to Section 3.4.3 of the Agreement, Supplier certifies that the PTC Equipment has been delivered to the PTC Equipment Delivery Location identified on Exhibit A to this document.

b. The PTC Equipment has been assembled and delivered in accordance with Agreement and the Specifications.

c. The PTC Equipment has been marked as the property of Buyer and physically segregated from other property being stored at the PTC Equipment Delivery Location belonging to Supplier or third parties.

d. Buyer paid Supplier $XXX for the PTC Equipment. The purchase price has been paid in full.

e. The person signing below is authorized to submit this Delivery Certificate to Buyer for and on behalf of Supplier.

3. Supplier and Buyer have agreed on a Punch List in connection with the PTC Equipment as set forth in the attached Exhibit B, if any, and Supplier agrees to promptly correct or perform the Punch List items to Buyer’s reasonable satisfaction.

[signatures follow]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

This Delivery Certificate is executed and delivered to Buyer this      day of             , 20    .

SUPPLIER:

Gamesa Wind US, LLC

a company incorporated and existing under the laws of Delaware

By:

Name:

Title:

This Delivery Certificate is acknowledged and accepted by Buyer this      day of             , 20    .

BUYER:

Iberdrola Renewables LLC,

a company incorporated and existing under the laws Oregon

By:

Name:

Title:

Date:

By:

Name:

Title:

Date:

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 4 – NOT USED

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 5 – Project Descriptions

[***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 6 – Warranty on PTC Equipment Prior to Project TSA Execution

Supplier warrants during the Warranty Period that (a) each item of PTC Equipment is new at the time of ExWorks delivery pursuant to this ESA, and (b) each item of PTC Equipment shall be free from defects and deficiencies in design, engineering, materials, manufacture, or workmanship, and (c) any work or services performed by Supplier in connection with the PTC Equipment, including storage maintenance services, shall be performed in a good and workmanlike manner; and in each case of (a), (b), and (c), shall comply with and conform to Specifications, Manuals, prudent wind industry practices, Applicable Laws, Permits, and the other express requirements of this Agreement.

Supplier further agrees that it will comply with and conform with the requirements in the attached Storage Maintenance Manuals set forth below as part of the Warranty and scope of work under the Agreement for each PTC Equipment component while in storage:

[***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 7 – Contract Price

[***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 8 - Payment Schedule

Milestone Payment #1 – 100% of ESA Price payable no later than December 30, 2014 for the following amount:

$[***]

In Words: [***] US Dollars

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

Exhibit 9 - PTC Component Breakdown

G114 component
[***] Tower	$	[***	]
Rotor	$	[***	]
Nacelle	$	[***	]

PTC Equipment EXW Locations

Component	Location	Address
Nacelles, Hubs	[***]	[***]
Rotors	[***]	[***]
Rotors	[***]	[***]
Towers	[***]	[***]

Storage & Maintenance Services

Component	Location	Monthly Fee for Storage & Maintenance Services
Nacelles	[***]	$	[***	]
Rotors	[***]	$	[***	]
Rotors	[***]	$	[***	]
Towers	[***]	$	[***	]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

EX-10.30

EXHIBIT 10.30

Umbrella Agreement to Sell and Purchase Wind Turbines

This umbrella agreement (“Umbrella Agreement”), effective June 30, 2015 (“Effective Date”), memorializes that Gamesa Wind US, LLC (“Seller”) and Iberdrola Renewables, LLC (the “Owner”) agree for Seller to sell, and for Owner or its affiliates to purchase Wind Turbines in multiple transactions (each, a “Transaction”) for projects (the “Projects”) substantially in accordance with the terms and conditions of this Umbrella Agreement, including the terms in Seller’s Proposal GWUS 15-047, dated June 19, 2015 (“Proposal”) attached hereto as Exhibit 1. Seller and Owner each may be referred to in this Umbrella Agreement individually as a “Party”, and collectively as the “Parties”.

This Umbrella Agreement sets forth the basic terms of the proposed Transactions which shall be more fully reflected in definitive agreements (the “Supply Agreements” as they are defined in paragraph 3 of this Umbrella Agreement) to be negotiated by the Parties.

WHEREAS, Seller is engaged in the business of manufacturing and selling wind turbine generators, parts and components (the “Wind Turbines”), and providing erection supervision, commissioning, and operation and maintenance services (the “Work”) for such Wind Turbines (together, the Wind Turbines and Work constitute the “Supply Items”), and wishes to sell such Supply Items to Owner;

WHEREAS, Owner is engaged in the development and operation of renewable energy projects, which include wind-powered electrical generation facilities, and wishes to purchase the Supply Items from Seller for the Projects; and

WHEREAS, the Parties have entered into the Equipment Supply Agreement dated December 28, 2014 (as amended, the “ESA”), and wish to modify the ESA to the extent related to the Projects as described in this Umbrella Agreement.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Award of Supply for [***] Projects. Pursuant to the terms and conditions set forth herein, Owner hereby grants to Seller the exclusive right to supply all Supply Items for [***] Projects, provided, however, that if Supply Agreements are executed for such Projects, the terms of such Supply Agreements shall control for each applicable Project. [***]

2. Notices to Proceed. Owner shall issue corresponding Notices to Proceed (“NTPs”) under Supply Agreements for [***] no later than [***]. If the Supply Agreements for [***] are not yet in executable form by [***] then Owner [***] and, until the Supply Agreements for such Projects are executed, [***] (as amended, the “TSA”) and [***] (as amended, “WMSA”), as modified by (i) the applicable NTP, (ii) this Umbrella Agreement, (iii) the Proposal attached hereto as Exhibit 1, and (iv) certain agreed changes made to provisions of TSA, attached hereto as Exhibit 2 (collectively, the “Specified Proposal Terms”). Further, Parties agree that TSA and WMSA, including their exhibits, shall be Project specific. The Parties shall continue to use commercially reasonable efforts to finalize and execute the Supply Agreements by [***].

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

3. Form of Supply Agreements. The Supply Agreements for each individual Project shall consist of (i) a Wind Turbine Delivery and Purchase Contract, and (ii) a Warranty, Maintenance, and Service Agreement (together, the “Supply Agreements”). The Parties shall execute the Supply Agreements, for each Project, substantially in the form of the TSA and WMSA, except as such agreements may be modified by mutual agreement of the Parties. Furthermore, the Parties agree that the executable Supply Agreements also shall be modified, as necessary, to incorporate the Specified Proposal Terms.

4. Quantity. [***]

5. [***]

6. [***]

7. Announcements. Neither Party shall make any public announcement regarding the Transaction or this Umbrella Agreement without the express written consent of the other Party, which consent shall not unreasonably be withheld. Press releases regarding the Transactions shall be mutually agreed upon by the Parties.

8. Confidentiality. Article 9 of the ESA is hereby incorporated by reference in and as part of this Umbrella Agreement. The Parties acknowledge that the “legal process” exception in Section 9.3(iv) includes disclosures of confidential Information to the extent necessary to comply with each Party’s reporting obligations under applicable law and securities exchange rules. Further, each Party agrees to provide the other Party with a five (5) business day written notice that the Party intends to disclose confidential information as required per applicable law and/or securities exchange rules.

9. Costs. Each Party shall assume its own counsel costs, fees and expenses incurred in the preparation and negotiation of this Umbrella Agreement and the Supply Agreements, and the Parties shall not have the right to claim for any compensation or damages for this cause.

10. Modification of ESA; Incorporation of Certain ESA Provisions. The Parties acknowledge that all terms and provisions of the ESA, except as expressly

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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modified by this Umbrella Agreement, remain in full force and effect. The Parties further agree that Article 5 (Dispute Resolution), Article 6 (Indemnification), Article 7 (Default; Termination), Article 8 (Representations and Warranties), Article 9 (Confidentiality), and Article 10 (Miscellaneous) of the ESA are incorporated by reference in and as part of this Umbrella Agreement, mutatis mutandis, but only to the extent they do not conflict with the express terms of this Umbrella Agreement.

11. Term. This Umbrella Agreement shall expire upon the earlier of (i) the execution of Supply Agreements for each of the [***] Projects, or (ii) [***].

12. Binding Effect. Seller and Owner agree that the obligations of the Parties set forth herein shall constitute legally binding commitments.

13. Choice of Law: Dispute Resolution. This Umbrella Agreement shall be governed by the laws of the State of New York without regard to choice of law principles. Any claim, requirement, or dispute arising from this Umbrella Agreement shall be irrevocably submitted to the exclusive jurisdiction of the state or federal courts located in New York City, New York.

14. Assignment. Neither Party shall have the right or power to assign this Umbrella Agreement in any way without the other Party’s express written consent, which shall not be unreasonably withheld. Any purported assignment made in violation of this paragraph shall be void.

15. Expiration of Umbrella Agreement; Survival of Certain Provisions. In the event that the Umbrella Agreement expires or otherwise terminates, paragraphs 1, 7, 8, 13 and this paragraph 15 shall survive notwithstanding such termination.

16. Default; Termination; Damages. Notwithstanding anything to the contrary set forth herein, the Parties expressly exclude and waive any and all special, punitive, Indirect or consequential damages arising out of, resulting from or in connection with the performance or non-performance of this Umbrella Agreement, including, but not limited to, loss of profit or business interruptions, howsoever caused, and whether or not foreseeable as of the Effective Date, except if such damage is caused by fraud, willful misconduct or gross negligence.

17. Notices. Any Notice required or permitted to be given by Owner to Seller hereunder shall be in writing and shall be addressed to:

Seller:

Gamesa Wind US, LLC

1150 Northbrook Drive, Suite 150

Trevose, Pennsylvania 19053

Attention: Head of Sales

Telephone: (215) 710-3100

Facsimile: (215) 741-4048

Email: gonzain@gamesacorp.com

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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With a copy to:

Gamesa Technology Corporation, Inc.

1150 Northbrook Drive, Suite 150

Trevose, Pennsylvania 19053

Attention: General Counsel

Telephone; (215) 710-3100

Facsimile: (215) 689-3784

Email: ffuselier@gamesacorp.com

and any Notice required or permitted to be given by Seller to Owner hereunder shall be in writing and shall be addressed to:

Owner:

Iberdrola Renewables, LLC

1125 NW Couch Street, Suite 700

Portland, Oregon 97209

Attention: Contract Administration

Telephone: (503)241-3230

with a copy to:

Iberdrola Renewables, LLC

1125 NW Couch Street, Suite 700

Portland, Oregon 97209

Attention: General Counsel

Telephone: (503) 796-7127

[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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IN WITNESS WHEREOF, the Parties intending to be legally bound, have caused this Umbrella Agreement to be executed by their duly authorized officers as of the date first written above.

Gamesa Wind US, LLC:
By:	/s/ Borja Negro
Name:	Borja Negro
Title:	CEO
By:	/s/ Francis A. Fuselier
Name:	Francis A. Fuselier
Title:	Secretary & General Counsel
IBERDROLA RENEWABLES, LLC
By:	/s/ Frank Burkhartsmeyer
Name:	Frank Burkhartsmeyer
Title:	Authorized Representative
By:	/s/ Scott Jacobson
Name:	Scott Jacobson
Title:	Authorized Representative

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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Exhibit 1

Proposal

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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June 24, 2015 Proposal: GWUS 15-047R1                                 

Iberdrola Renewables:

Ignacio Zamarrón Cassinello

REVISED PROPOSAL FOR THE SUPPLY OF 2016 / 2017 WIND TURBINES

For

[***]

Dear Nacho,

[***]

We trust these adjustments capture our intent to bring your projects to fruition with the lowest cost of energy.

Please let me know if you have any questions in regards to our proposal.

Sincerely,

Gonzalo Onzain

Vice President

Sales & Marketing

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

[***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

June 24, 2015 Confidential, Subject to Contract Page 2

Annex 1

Project Schedule

[***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

June 24, 2015 Confidential, Subject to Contract Page 3

DISCLAIMER:

The following conditions apply to this proposal and to any negotiations between your company and Gamesa Wind US LLC (“Gamesa”) regarding a potential transaction(s) involving Gamesa wind turbine generators and associated supply items and services (including operation and maintenance services of such items) (the “Supply Items and Services”):

No obligation for a potential transaction involving the Supply Items and the Services shall be deemed to exist unless until a Definitive Agreement involving the Supply Items and Services has been executed by both parties and the basis for the Definitive Agreement shall solely be the terms and conditions set forth in the Definitive Agreement. For purposes of this proposal, a “Definitive Agreement” means a final written agreement(s) relating to a transaction that is expressly binding and signed by the relevant parties.

This proposal does not equate to a binding offer for a transaction involving the Supply Items and Services and Gamesa shall not assume any legal obligation until a Definitive Agreement regarding a transaction Involving the Supply Items and Services is executed and delivered. This proposal, subsequent letters of intent, or any other preliminary agreements between the parties shall not be deemed a Definitive Agreement.

Either party shall be entitled to terminate, at its sole discretion, discussions or negotiations at any time, prior to the execution and delivery of the Definitive Agreement regarding a potential transaction involving the Supply items and Services and the parties shall not have the right to claim any compensation and/or damages.

Any Definitive Agreement with Gamesa regarding a transaction involving the Supply Items and Services, shall be subject to the approval by the Board of Directors and/or management of the Gamesa Group.

The Information contained in this proposal shall be deemed to be confidential and both parties agree to hold such information in strict confidence. Neither party shall disclose this information to any other person, except to those employees, agents, attorneys or representatives of that party with a need to view this information for the purpose of evaluating a potential transaction and negotiating a Definitive Agreement.

The parties agree that the information provided herein is solely for the purpose of exploring the potential for a Definitive Agreement regarding a transaction Involving the Supply Items and Services. This proposal, along with previous or future conversations between the parties related to a proposed transaction involving the Supply Items and Services, shall not be used against the other party in any circumstance, including other business ventures, industry activities, competitive projects or with customers, now or in the future.

Each party will assume its own costs, Including attorney fees, and expenses incurred in the discussions and negotiations, if any.                                         

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

June 24, 2015 Confidential, Subject to Contract Page 4

Exhibit 2

Agreed Changes to TSA

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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Exhibit 2

[***]

*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.

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EX-23.1

EXHIBIT 23.1

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated July 17, 2015, in the Registration Statement (Form S-4) and related Prospectus of Iberdrola USA, Inc. (the “Company”) and Proxy Statement of UIL Holdings Corporation for the registration of 57,628,297 shares of the Company’s common stock.

/s/ Ernst & Young LLP

New York, New York

July 17, 2015

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Iberdrola USA, Inc. of our report dated February 26, 2015 relating to the financial statements, financial statement schedules and the effectiveness of internal control over financial reporting, which appears in UIL Holdings Corporation’s Annual Report on Form 10-K for the year ended December 31, 2014. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, MA

July 17, 2015

EX-99.3

EXHIBIT 99.3

Consent of Morgan Stanley & Co. LLC

We hereby consent to the use in the Registration Statement of Iberdrola USA, Inc. (“Iberdrola USA”) on Form S-4 (the “Registration Statement”) and in the Proxy Statement/Prospectus of Iberdrola USA and UIL Holdings Corporation (“UIL”), which is part of the Registration Statement, of our opinion dated February 25, 2015, to the Board of Directors of UIL, appearing as Annex C to such Proxy Statement/Prospectus, and to the description of such opinion and to the references to our name contained therein under the headings “Summary—Opinion of UIL’s Financial Advisor,” “Risk Factors—Risks Relating to the Proposed Merger,” “The Merger—Background of the Merger,” “The Merger—UIL’s Reasons for the Merger,” “The Merger—Certain Unaudited Financial Forecasts Prepared by the Management of UIL,” “The Merger—Opinion of UIL’s Financial Advisor,” “The Merger—Litigation Relating to the Merger,” and “The Merger Agreement—Representations and Warranties.” In giving the foregoing consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended (the “Securities Act”), or the rules and regulations promulgated thereunder, nor do we admit that we are experts with respect to any part of such Registration Statement within the meaning of the term “experts” as used in the Securities Act or the rules and regulations promulgated thereunder.

MORGAN STANLEY & CO. LLC
By:	/s/ Rakesh Shankar
	Rakesh Shankar Vice President

New York, New York

July 15, 2015