exv4w25



 







[EXECUTION COPY]

EXHIBIT 4.25




 

 








CONNECTICUT DEVELOPMENT AUTHORITY



and



THE CONNECTICUT WATER COMPANY



 





LOAN AGREEMENT



 





Dated as of October 1, 2005



Connecticut Development Authority

$10,000,000 Water Facilities Revenue Bonds

(The Connecticut Water Company Project — 2005A Series)




 

 






 









 








Exhibit 4.25




TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	PREAMBLE
	 	 	1	 
	ARTICLE I
DEFINITIONS AND INTERPRETATION
	 	 	 	 
	Section 1.1. Definitions
	 	 	3	 
	Section 1.2. Interpretation
	 	 	8	 
	ARTICLE II
REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	Section 2.1. Representations by the Authority
	 	 	10	 
	Section 2.2. Representations by the Borrower
	 	 	11	 
	ARTICLE III
THE LOAN
	 	 	 	 
	Section 3.1. Loan Clauses
	 	 	14	 
	Section 3.2. Other Amounts Payable
	 	 	14	 
	Section 3.3. Manner of Payment
	 	 	15	 
	Section 3.4. Obligation Unconditional
	 	 	15	 
	Section 3.5. Securities Clauses
	 	 	15	 
	Section 3.6. Issuance of Bonds
	 	 	16	 
	Section 3.7. Effective Date and Term
	 	 	16	 
	Section 3.8. No Additional Bonds
	 	 	16	 
	ARTICLE IV
THE PROJECT
	 	 	 	 
	Section 4.1. Completion of the Project
	 	 	17	 
	Section 4.2. Payment of Additional Project Costs by Borrower
	 	 	18	 
	Section 4.3. Completion Certificate
	 	 	18	 
	Section 4.4. No Warranty Regarding Condition, Suitability or Cost of Project
	 	 	18	 
	Section 4.5. Taxes
	 	 	18	 
	Section 4.6. Insurance
	 	 	18	 
	Section 4.7. Compliance with Law
	 	 	19	 
	Section 4.8. Maintenance and Repair
	 	 	19	 
	Section 4.9. Disposition of Project Realty by Borrower
	 	 	19	 
	Section 4.10. Leasing of the Project Realty and the Project Equipment
	 	 	20	 
	Section 4.11. Project Equipment
	 	 	20	 
	Section 4.12. Borrower Contribution
	 	 	20	 
	ARTICLE V
CONDEMNATION DAMAGE AND DESTRUCTION
	 	 	 	 
	Section 5.1. No Abatement of Payments Hereunder
	 	 	21	 
	Section 5.2. Project Disposition Upon Condemnation, Damage or Destruction
	 	 	21	 
	Section 5.3. Application of Net Proceeds of Insurance or Condemnation
	 	 	21	 
	 
	 	 	 	 
	Section 6.1. Consolidation, Merger and Transfer of Assets
	 	 	22	 
	Section 6.2. Restrictions on Liens and Sale and Leaseback Transactions
	 	 	23	 
	Section 6.3. [Reserved]
	 	 	24	 
	Section 6.4. Indemnification, Payment of Expenses, and Advances
	 	 	24	 
	Section 6.5. Incorporation of Tax Regulatory Agreement; Payments Upon Taxability
	 	 	27	 
	Section 6.6. Public Purpose Covenants
	 	 	27	 
	Section 6.7. Further Assurances and Corrective Instruments
	 	 	28	 
	Section 6.8. Covenant by Borrower as to Compliance with Indenture
	 	 	28	 






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Exhibit 4.25




	 	 	 	 	 
	 	 	Page
	Section 6.9. Assignment of Agreement or Note
	 	 	28	 
	Section 6.10. Inspection
	 	 	28	 
	Section 6.11. Default Notification
	 	 	28	 
	Section 6.12. Covenant Against Discrimination
	 	 	28	 
	Section 6.13. Covenant to Provide Disclosure
	 	 	29	 
	ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
	 	 	 	 
	Section 7.1. Events of Default
	 	 	30	 
	Section 7.2. Remedies on Default
	 	 	31	 
	Section 7.3. Remedies on Public Purpose Default
	 	 	31	 
	Section 7.4. No Duty to Mitigate Damages
	 	 	32	 
	Section 7.5. Remedies Cumulative
	 	 	33	 
	ARTICLE VIII
PREPAYMENT PROVISIONS
	 	 	 	 
	Section 8.1. Optional Prepayment
	 	 	34	 
	Section 8.2. Notices of Prepayment
	 	 	35	 
	Section 8.3. Mandatory Prepayment on Taxability, Receipt of Request for
Redemption of a Deceased Holder’s Bonds and the Occurrence of Certain Events
	 	 	35	 
	ARTICLE IX
GENERAL
	 	 	 	 
	Section 9.1. Indenture
	 	 	36	 
	Section 9.2. Benefit of and Enforcement by Bondholders
	 	 	36	 
	Section 9.3. Force Majeure
	 	 	36	 
	Section 9.4. Amendments
	 	 	36	 
	Section 9.5. Notices
	 	 	36	 
	Section 9.6. Prior Agreements Superseded
	 	 	37	 
	Section 9.7. Execution of Counterparts
	 	 	37	 
	Section 9.8. Time
	 	 	37	 
	Section 9.9. Separability of Invalid Provisions
	 	 	37	 
	Section 9.10. Third Party Beneficiaries
	 	 	37	 
	Section 9.11. Governing Law
	 	 	37	 
	 
	 	 	 	 
	APPENDICES
	 	 	 	 
	Appendix A – Form of Promissory Note
	 	 	 	 
	Appendix B – Description of Project Realty
	 	 	 	 
	Appendix C – Description of Project Equipment
	 	 	 	 






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Exhibit 4.25




Connecticut Development Authority



The Connecticut Water Company



LOAN AGREEMENT




     THIS LOAN AGREEMENT, made and dated as of October 1, 2005, by and between the CONNECTICUT
DEVELOPMENT AUTHORITY, a body corporate and politic constituting a public instrumentality and
political subdivision of the State of Connecticut, and THE CONNECTICUT WATER COMPANY, a corporation
organized and existing under the laws of the State of Connecticut,



WITNESSETH THAT:




     WHEREAS, the State Commerce Act, constituting Connecticut General Statutes, Sections 32-1a
through 32-23zz, as amended (the “Act”), declares that there is a continuing need in the State (1)
for industrial development and activity to provide and maintain employment and tax revenues and to
control, abate and prevent pollution to protect the public health and safety, (2) for the
development of recreation facilities to promote tourism, provide and maintain employment and tax
revenues, and promote the public welfare, (3) for the development of commercial and retail sales
and service facilities in urban areas to provide and maintain construction and permanent employment
and tax revenues, to improve conditions of deteriorated physical development, slow economic growth
and eroded financial health of the public and private sectors in urban areas and to revitalize the
economy of urban areas, and (4) for assistance to public service businesses providing
transportation and utility services in the State, and that the availability of financial assistance
and suitable facilities are important inducements to industrial and commercial enterprises to
remain or locate in the State and to provide industrial, recreation, urban and public service
projects; and



     WHEREAS, the Act provides that (1) the term “project” as used therein means any facility,
plant, works, system, building, structure, utility, fixture or other real property improvement
located in the State, and the land on which it is located or which is reasonably necessary in
connection therewith, which is of a nature or which is to be used or occupied by any person for
purposes which would constitute it as an economic development project, recreation project, urban
project, public service project or health care project, and any real property improvement
reasonably related thereto, and (2) a project may also include or consist exclusively of machinery,
equipment or fixtures; and



     WHEREAS, the Act provides that the Authority shall have power to determine the location and
character of, and extend credit or make loans to any person for the planning, designing, acquiring,
improving and equipping of, a project which may be secured by loan, lease or sale agreements,
contracts and other instruments, upon such terms and conditions as the Authority shall determine to
be reasonable, to require the inclusion in any contract, loan agreement or other instrument of such
provisions for the construction, use, operation, maintenance and financing of the project as the
Authority may deem necessary or desirable, to issue its bonds for such purposes, subject to the
approval of the Treasurer of the State, and, as security for the payment of the principal or
redemption price, if any, of and interest on any such bonds, to pledge or assign such a loan, lease
or sale agreement and the revenues and receipts derived by the Authority from such a project; and



     WHEREAS, by resolution adopted on May 19, 2004, in furtherance of the purposes of the Act, the
Authority has accepted the application of The Connecticut Water Company (the “Borrower”) for
assistance in the financing of various capital projects located in the State of Connecticut; and



 









 





Exhibit 4.25




     WHEREAS, the Borrower currently owns certain existing facilities within certain municipalities
in the State and at this time requests assistance in the design, acquisition, installation,
improvement and construction of certain facilities consisting of water treatment and storage
facilities, transmission and distribution mains, service lines, meters, hydrants and pumping
equipment for the purpose of supplying safe potable water to the general public within its service
area; and



     WHEREAS, the Authority has by a further resolution adopted on August 17, 2005 authorized the
issuance of not to exceed $10,000,000 principal amount of its Water Facilities Revenue Bonds (The
Connecticut Water Company Project — 2005A Series) for the purpose of providing funds for the
Projects; and



     WHEREAS, pursuant to such resolution the Bonds (as hereinafter defined) are to be secured by
an Indenture of Trust of even date herewith, by and between the Authority and U.S. Bank National
Association, as Trustee; and



     WHEREAS, the Bonds shall be special obligations of the Authority, payable solely from the
revenues or other receipts, funds or monies to be derived by the Authority under this Agreement or
the Indenture and from any amounts otherwise available under the Indenture for the payment of the
Bonds; and



     WHEREAS, the Authority proposes with the proceeds of the Bonds to make a loan to the Borrower
and the Borrower proposes to borrow such proceeds from the Authority for the purpose of financing
the acquisition, construction and installation of the Project; and



     WHEREAS, the Borrower acknowledges that the Authority is providing financing for the Project
in furtherance of the Authority’s corporate purposes under the Act, that the accomplishment of
these purposes is dependent upon the compliance of the Borrower with its covenants contained in
this Agreement, that the Authority has a resulting beneficial interest in the Project, and that the
Borrower’s use of and interest in the Project as provided hereby are in furtherance of the
discharge of a public purpose; and



     WHEREAS, the Connecticut Department of Public Utility Control (the “DPUC”) has approved the
issuance of the Note;



     NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants
and agreements herein set forth, the Authority and the Borrower, each binding itself, its
successors and assigns, do mutually promise, covenant and agree as follows (provided that in the
performance of the agreements of the Authority herein contained, any obligation it may incur for
the payment of money shall not be an obligation, debt or liability of the State or any municipality
thereof and neither the State nor any municipality thereof shall be liable on any obligation so
incurred, but any such obligation shall be payable solely out of the revenues or other receipts,
funds or monies to be derived by the Authority under this Agreement or the Indenture and from any
amounts otherwise available under the Indenture for the payment of the Bonds):



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Exhibit 4.25




ARTICLE I

DEFINITIONS AND INTERPRETATION




     Section 1.1. Definitions. For the purposes of this Agreement, the following words and
terms shall have the respective meanings set forth as follows, and any capitalized word or term
used but not defined herein is used as defined in the Indenture:



     “Act” means the State Commerce Act, constituting Connecticut General Statutes, Sections 32-la
through 32-23zz, as amended.



     “Agreement” means this Loan Agreement and any amendments and supplements hereto.



     “Attributable Debt” in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction, including any period
for which such lease has been extended or may, at the option of the lessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with generally accepted accounting principles.



     “Authority” means the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the State of Connecticut, duly
organized and existing under the laws of the State, and any body, board, authority, agency or other
political subdivision or instrumentality of the State which shall hereafter succeed to the powers,
duties and functions thereof.



     “Authorized Representative” means, in the case of the Authority, the Chairman or Vice
Chairman, the President, any Executive Vice President, Deputy Director or any Senior Vice President
or any Vice President thereof and, in the case of the Borrower, the Chairman, the President and
Chief Executive Officer, the Vice President-Chief Financial Officer and Treasurer, and any Vice
President, Assistant Treasurer or Secretary thereof and, when used with reference to the
performance of any act, the discharge of any duty or the execution of any certificate or other
document, any officer, employee or other person authorized to perform such act, discharge such duty
or execute such certificate or other document.



     “Beneficial Owner” shall have the meaning specified in Section 2.3(F) of the Indenture. If
any person claims to the Trustee to be a Beneficial Owner, for purposes of Section 2.4(C) of the
Indenture, such person shall prove such claim to the satisfaction of the Trustee with such
documentation and signature guaranties as the Trustee may request.



     “Bonds” means the $10,000,000 Water Facilities Revenue Bonds (The Connecticut Water Company
Project — 2005A Series) authorized and issued pursuant to Section 2.3 of the Indenture.



     “Bond Counsel” means Winston & Strawn LLP or such other nationally recognized bond counsel
selected by the Authority and reasonably satisfactory to the Borrower and the Trustee.



     “Bond Insurance Policy” means the municipal bond new issue insurance policy issued by the Bond
Insurer that guaranties the payment when due of the principal of and interest on the Bonds as
provided therein.



     “Bond Insurer” means Financial Guaranty Insurance Company, a New York stock insurance company,
or any successor thereto.



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Exhibit 4.25




     “Borrower” means (i) The Connecticut Water Company, a corporation organized and existing under
the laws of the State of Connecticut, and its successors and assigns and (ii) any surviving,
resulting or transferee corporation as provided in Section 6.1 hereof.



     “Business Day” means any day (i) that is not a Saturday or Sunday, (ii) that is a day on which
banks located in Hartford, Connecticut and New York, New York are not required or authorized to
remain closed, (iii) that is a day on which banking institutions in the cities in which the
principal offices of the Trustee and the Paying Agent are located and are not required or
authorized to remain closed and (iv) that is a day on which the New York Stock Exchange, Inc. is
not closed.



     “Code” means the Internal Revenue Code of 1986, as amended and regulations promulgated
thereunder.



     “Completion Date” means the date of completion of the Project as specified and established in
accordance with Section 4.3 hereof.



     “Debt” means (A) indebtedness of the Borrower or a Significant Subsidiary for borrowed money
evidenced by a bond, debenture, note or other written instrument or agreement by which the Borrower
or a Significant Subsidiary is obligated to repay such borrowed money and (B) any guaranty by the
Borrower or a Significant Subsidiary of any such indebtedness of another Significant Subsidiary.
“Debt” does not include, among other things, (w) indebtedness of the Borrower or a Significant
Subsidiary under any installment sale or conditional sale agreement or any other agreement relating
to indebtedness for the deferred purchase price of property or services, or (x) any trade
obligation (including obligations under power or other commodity purchase agreements and any hedges
or derivatives associated therewith), or other obligations of the Borrower or a Significant
Subsidiary in the ordinary course of business, (y) obligations of the Borrower or a Significant
Subsidiary under any lease agreement (including any lease intended as security), whether or not
such obligations are required to be capitalized on the balance sheet of the Borrower or a
Significant Subsidiary under generally accepted accounting principles.



     “Debt Service Fund” means the special trust fund so designated, established pursuant to
Section 5.1 of the Indenture.



     “Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United
States of America as at the time shall be legal tender for the payment of public and private debts.



     “DTC” or “The Depository Trust Company” shall mean the limited-purpose trust company organized
under the laws of the State of New York which shall act as securities depository for the Bonds, and
any successor thereto.



     “Determination of Taxability” means with respect to the Bonds (1) a ruling by the Internal
Revenue Service, (2) the receipt by the owner of any of the Bonds from the Internal Revenue Service
of a notice of assessment and demand for payment and (provided the Borrower has been afforded the
opportunity to participate at its own expense in all appeals and proceedings to which such owner of
the Bonds is a party relating to such assessment and demand for payment) the expiration of the
appeal period provided therein if no appeal is taken or, if an appeal is taken by such owner as
provided in Section 6.3 of this Agreement within the applicable appeal period which has the effect
of staying the demand for payment, a final unappealable decision by a court of competent
jurisdiction, or (3) the admission in writing by the Borrower, in any case to the effect that the
interest on any Bonds is includable in the gross income for federal income tax purposes (other than
for purposes of any alternative minimum tax or foreign branch profits tax) of an owner or former
owner thereof, other than for a period during which such owner or former owner is or was a
“Substantial User” of the Project financed by such Bonds or a “Related



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Exhibit 4.25



Person” as such terms are defined in the Code. For purposes of this definition, the term
owner means the Beneficial Owner of the Bonds so long as the Book-Entry System is in effect.




     “DPUC” means the State Department of Public Utilities Control.



     “Disclosure Agreement” means the agreement by and between the Borrower and U.S. Bank National
Association, as dissemination agent, dated the date of the initial delivery of the Bonds, providing
for the provision of certain information subsequent to the issuance of the Bonds.



     “Event of Default” means an Event of Default as defined in subsection 7.1 hereof.



     “Financing Documents” (1) when used with respect to the Borrower, means this Agreement, the
Tax Regulatory Agreement, the Note, the Disclosure Agreement and the general certificate of the
Borrower delivered in connection with the issuance of the Bonds, and (2) when used with respect to
the Authority, means any of the foregoing documents and agreements to which the Authority is a
direct party. The Financing Documents do not include any documents or agreements to which the
Borrower is not a direct party, including the Bonds or the Indenture.



     “Fitch” means Fitch Inc., a corporation organized and existing under the laws of the State of
Delaware, its successors and their assigns, and if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating agency, “Fitch” shall be
deemed to refer to any other nationally recognized securities rating agency designated by the
Authority, at the direction of the Borrower, by notice to the Trustee and the Borrower and with the
prior written consent or approval of the Bond Insurer.



     “Indenture” means the Indenture of Trust relating to the Bonds, of even date herewith, by and
between the Authority and the Trustee, together with all indentures supplemental thereto made and
entered into in accordance therewith.



     “Interest Payment Date” shall mean April 1, 2006 and each April 1 and October 1 thereafter on
which interest is payable on the Bonds as provided in the forms of the Bonds.



     “Insurance Agreement” means the Insurance Agreement, dated as of October 1, 2005, by and
between the Borrower and the Bond Insurer.



     “Lien” means any mortgage, deed of trust, pledge, security interest, encumbrance, easement,
lease, reservation, restriction, servitude, charge or similar right and any other lien of any kind,
including, without limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof, and any defect, irregularity, exception or limitation in record title or,
when the context so requires, any lien, claim or interest arising from any of the foregoing.



     “Moody’s” means Moody’s Investors Services, Inc., a corporation organized and existing under
the laws of the State of Delaware, its successors and their assigns, and if such corporation shall
be dissolved or liquidated or shall no longer perform the functions of a securities rating agency,
“Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency
designated by the Authority, at the direction of the Borrower, by notice to the Trustee and the
Borrower and with the prior written consent or approval of the Bond Insurer.



     “Net Proceeds” when used with respect to any insurance or condemnation award, means the gross
proceeds from such award less all expenses (including attorney’s fees and expenses and any
extraordinary expenses) incurred by the Trustee in the collection thereof.



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Exhibit 4.25




     “Net Tangible Assets” means the total amount of the Borrower’s assets determined on a
consolidated basis in accordance with generally accepted accounting principles as of a date
determined pursuant to Section 6.2 of this Agreement, less (i) the sum of the Borrower’s
consolidated current liabilities determined in accordance with generally accepted accounting
principles, and (ii) the amount of the Borrower’s consolidated assets classified as intangible
assets, determined in accordance with generally accepted accounting principles, including, but not
limited to, such items as goodwill, trademarks, trade names, patents, and unamortized debt discount
and expense and regulatory assets carried as an asset on the Borrower’s consolidated balance sheet.



     “Note” means the promissory note of the Borrower to the Authority, dated the date of initial
delivery of the Bonds in the form attached as Appendix A to this Agreement, and any
amendments or supplements made in conformity with this Agreement and the Indenture.



     “Outstanding”, when used with reference to a Bond or Bonds, as of any particular date, means
all Bonds which have been authenticated and delivered under the Indenture, except:




     (1) any Bonds canceled by the Trustee because of payment or redemption prior to
maturity or surrendered to the Trustee for cancellation;




     (2) any Bond (or portion of a Bond) paid or redeemed or for the payment or redemption
of which there has been separately set aside and held in the Debt Service Fund either:




     (a) monies in an amount sufficient to effect payment of the principal or
applicable Redemption Price thereof, together with accrued interest on such Bond to
the payment or redemption date, which payment or redemption date shall be specified
in irrevocable instructions given to the Trustee to apply such monies to such
payment on the date so specified; or




     (b) obligations of the kind described in subsection 12.1(B) of the Indenture in
such principal amounts, of such maturities, bearing such interest and otherwise
having such terms and qualifications as shall be necessary to provide monies in an
amount sufficient to effect payment of the principal or applicable Redemption Price
of such Bond, together with accrued interest on such Bond to the payment or
redemption date, which payment or redemption date shall be specified in irrevocable
instructions given to the Trustee to apply such obligations to such payment on the
date so specified; or




     (c) any combination of (a) and (b) above;




     (3) Bonds in exchange for or in lieu of which other Bonds shall have been authenticated
and delivered under Article III of the Indenture; and




     (4) any Bond deemed to have been paid as provided in subsection 12.1 of the Indenture.



     “Paying Agent” means any paying agent for the Bonds appointed pursuant to Section 9.10 of the
Indenture (and may include the Trustee), and its successor or successors and any other corporation
which may at any time be substituted in its place in accordance with the Indenture.



     “Permitted Encumbrances” mean, as of any particular date, (i) liens for taxes not yet due and
payable, (ii) any lien created by this Agreement and the Indenture, (iii) utility, access and other
easements and rights-of-way, that will not interfere with or impair the value or use of the Project
as herein provided,



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Exhibit 4.25



(iv) any mechanic’s, laborer’s, materialman’s, supplier’s or vendor’s lien or right in respect
thereof if payment is not yet due and payable and for which statutory lien rights exist, (v) such
minor defects, irregularities, easements, and rights-of- way (including agreements with any
railroad the purpose of which is to service the railroad siding) as normally exist with respect to
property similar in character to the Project and which do not materially impair the value or use of
the property affected thereby for the purpose for which it was acquired hereunder, and (vi) any
mortgage, lien, security interest or other encumbrance to which the Authority and the Bond Insurer
may consent as provided in Section 4.8 hereof.




     “Principal Property” means any property of the Borrower or any Significant Subsidiary.



     “Principal User” means any principal user of the Project within the meaning of Section
144(a)(2)(B) of the Code, including without limitation any person who is a
greater-than-10-percent-owner (or if none, the person(s) who holds the largest ownership interest
in the Project), lessee or user of more than 10% of the Project measured either by occupiable space
or fair rental value under any formal or informal agreement or, under the particular facts and
circumstances, anyone who is a principal customer of the Project. The term “principal customer”
means any person, who purchases output of the Project under a contract if the percentage of output
taken or to be taken by such person, multiplied by a fraction the numerator of which is the term of
such contract and the denominator of which is the economic life of the Project, exceeds 10%. In
the case of a person who purchases output of an electric or thermal energy, gas, water or other
similar facility, such person is a principal customer if the total output purchased by such person
during any one year period beginning with the date the facility is placed in service is more than
10 percent of the facility’s output during each such period. Co-owners or co-lessees who are
shareholders in a corporation or who are collectively treated as a partnership subject to
subchapter K under section 761(a) of the Code are not treated as Principal Users merely by reason
of their ownership of corporate or partnership interests.



     “Project” means the Borrower’s interest in the Project Realty and other interests in the real
property, and in all Project Equipment wherever located and whether now owned or hereafter acquired
or refinanced in whole or in part with the proceeds of the Bonds and any additions and accessions
thereto, substitutions therefor and replacements, improvements, extensions and restorations
thereof, described in the appendices hereto, as amended from time to time in accordance with this
Agreement.



     “Project Equipment” means all personal property, goods, leasehold improvements, machinery,
equipment, furnishings, furniture, fixtures, tools and attachments wherever located and whether now
owned or hereafter acquired, financed in whole or in part with the proceeds of the Bonds, and any
additions and accessions thereto, substitutions therefor and replacements thereof, including,
without limitation the Project Equipment described in Appendix C hereto, as amended from time to
time in accordance herewith.



     “Project Realty” means the realty and other interests in the real property financed in whole
or in part from the proceeds of the Bonds, together with all replacements, improvements,
extensions, substitutions, restorations and additions thereto which are made pursuant hereto,
including without limitation, the Project Realty described in Appendix B, as amended from time to
time in accordance herewith.



     “Rating Agency” shall mean S&P, Moody’s and Fitch, or, in each case, if such corporation shall
be dissolved or liquidated or shall no longer perform the functions of a securities rating agency,
any other nationally recognized securities rating agency designated by the Authority, at the
direction of the Borrower, by notice to the Trustee and the Borrower and with the prior written
consent or approval of the Bond Insurer.



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Exhibit 4.25




     “Redemption Price” means, when used with respect to a Bond or a portion thereof, the principal
amount of such Bond or portion thereof plus the applicable premium, if any, payable upon redemption
thereof pursuant to the Indenture.



     “Related Person” means, with respect to any Principal User, a person which is a related person
(as defined in Section 144(a)(3) of the Code, and by reference to Sections 267, 707(b) and 1563(a)
of the Code, except that 50% is to be substituted for 80% in Section 1563(a)).



     “S&P” means Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc., a corporation
organized and existing under the laws of the State of New York, its successors and their assigns,
and, if such corporation or division shall be dissolved, eliminated, reorganized, or liquidated or
shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer
to any other nationally recognized securities rating agency designated by the Authority at the
direction of the Borrower, by notice to the Trustee and the Borrower and with the prior written
consent or approval of the Bond Insurer.



     “Significant Subsidiary” shall have the meaning specified in Rule 1-02(w) of Regulation S-X
under the Securities Act of 1933, as amended.



     “State” means the State of Connecticut.



     “Substantial User” means any substantial user of the Project within the meaning of Section
147(a) of the Code.



     “Supplemental Indenture” means any indenture supplemental to the Indenture or amendatory of
the Indenture, adopted by the Authority in accordance with Article X of the Indenture.



     “Tax Incidence Date” means the date as of which interest on the Bonds becomes or became
includable in the gross income of the recipient thereof (other than the Borrower or another
Substantial User or Related Person) for federal income tax purposes for any cause, as determined by
a Determination of Taxability.



     “Tax Regulatory Agreement” means the Tax Regulatory Agreement, dated as of the date of initial
issuance and delivery of the Bonds, among the Authority, the Borrower and the Trustee, and any
amendments and supplements thereto.



     “Term”, when used with reference to this Agreement, means the term of this Agreement
determined as provided in Article III hereof.



     “Trustee” means U.S. Bank National Association, and its successor or successors hereafter
appointed in the manner provided in the Indenture.



     Section 1.2. Interpretation. In this Agreement:




     (1) The terms “hereby”, “hereof”, “hereto”, “herein”, “hereunder” and any similar
terms, as used in this Agreement, refer to this Agreement, and the term “hereafter” means
after, and the term “heretofore” means before, the date of this Agreement.




     (2) Words of the masculine gender mean and include correlative words of the feminine
and neuter genders and words importing the singular number mean and include the plural
number and vice versa.



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Exhibit 4.25





     (3) Words importing persons include firms, associations, partnerships (including
limited partnerships), trusts, corporations and other legal entities, including public
bodies, as well as natural persons.




     (4) Any headings preceding the texts of the several Articles and Sections of this
Agreement, and any table of contents appended to copies hereof, shall be solely for
convenience of reference and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.




     (5) Nothing contained in this Agreement shall be construed to cause the Borrower to
become the agent for the Authority or the Trustee for any purpose whatsoever, nor shall the
Authority or the Trustee be responsible for any shortage, discrepancy, damage, loss or
destruction of any part of the Project wherever located or for whatever cause.




     (6) All approvals, consents and acceptances required to be given or made by any person
or party hereunder shall be at the sole discretion of the party whose approval, consent or
acceptance is required.




     (7) All notices to be given hereunder shall be given in writing within a reasonable
time unless otherwise specifically provided.




     (8) If any provision of this Agreement shall be ruled invalid by any court of competent
jurisdiction, the invalidity of such provision shall not affect any of the remaining
provisions hereof.



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Exhibit 4.25




ARTICLE II

REPRESENTATIONS AND WARRANTIES




Section 2.1. Representations by the Authority.




     The Authority represents and warrants that:



     (1) It is a body corporate and politic constituting a public instrumentality and
political subdivision of the State, duly organized and existing under the laws of the State
including the Act. The Authority is authorized to issue the Bonds in accordance with the
Act and to use the proceeds thereof to finance the Project.



     (2) The Authority has complied with the provisions of the Act and has full power and
authority pursuant to the Act to consummate all transactions contemplated by the Bonds, the
Indenture and the Financing Documents.



     (3) By resolution duly adopted by the Authority and still in full force and effect, the
Authority has authorized the execution, delivery and due performance of the Bonds, the
Indenture and the Financing Documents, and the taking of any and all action as may be
required on the part of the Authority to carry out, give effect to and consummate the
transactions contemplated by this Agreement and the Indenture, and all approvals necessary
in connection with the foregoing have been received.



     (4) The Bonds have been duly authorized, executed, authenticated, issued and delivered,
constitute valid and binding special obligations of the Authority payable solely from
revenues or other receipts, funds or monies pledged therefor under the Indenture and from
any amounts otherwise available under the Indenture, and are entitled to the benefit of the
Indenture. Neither the State nor any municipality thereof is obligated to pay the Bonds or
the interest thereon. Neither the faith and credit nor the taxing power of the State nor
any municipality thereof is pledged for the payment of the principal, and premium, if any,
of and interest on the Bonds.



     (5) The execution and delivery of the Bonds, the Indenture and the Financing Documents
and compliance with the provisions thereof, will not conflict with or constitute on the part
of the Authority a violation of, breach of or default under its by-laws or any statute,
indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which
the Authority is a party or by which the Authority is bound, or, to the knowledge of the
Authority, any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Authority or any of its activities or properties, and all consents,
approvals, authorizations and orders of governmental or regulatory authorities which are
required for the consummation by the Authority of the transactions contemplated thereby have
been obtained.



     (6) Subject to the provisions of this Agreement and the Indenture, the Authority will
apply the proceeds of the Bonds to the purposes specified in the Indenture and the Financing
Documents.



     (7) There is no action, suit, proceeding or investigation at law or in equity before or
by any court, public board or body pending or threatened against or affecting the Authority,
or to the best knowledge of the Authority, any basis therefor, wherein an unfavorable
decision, ruling or finding would adversely affect the transactions contemplated hereby or
by the Indenture, or
which, in any way, would adversely affect the validity of the Bonds, or the validity of
or



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Exhibit 4.25



enforceability of the Indenture or the Financing Documents, or any agreement or
instrument to which the Authority is a party and which is used or contemplated for use in
consummation of the transactions contemplated hereby and by the Indenture.




     (8) It has not made any commitment or taken any action which will result in a valid
claim for any finders or similar fees or commitments in respect of the transactions
contemplated by this Agreement.



     (9) The representations of the Authority set forth in the Tax Regulatory Agreement are
by this reference incorporated in this Agreement as though fully set forth herein.



Section 2.2. Representations by the Borrower.




     The Borrower represents and warrants that:



     (1) The Borrower has been duly incorporated and validly exists as a corporation under
the laws of the State of Connecticut, is not in violation of any provision of its
certificate of incorporation or its by-laws, has corporate power to enter into and perform
the Financing Documents, and by proper corporate action has duly authorized the execution
and delivery of the Financing Documents.



     (2) The Financing Documents constitute valid and legally binding obligations of the
Borrower, enforceable in accordance with their respective terms, except to the extent that
such enforceability may be limited by bankruptcy or insolvency or other laws affecting
creditors’ rights generally or by general principles of equity.



     (3) Neither the execution and delivery of the Financing Documents, the consummation of
the transactions contemplated thereby, nor the fulfillment by the Borrower of or compliance
by the Borrower with the terms and conditions thereof is prevented or limited by or
conflicts with or results in a breach of, or default under the terms, conditions or
provisions of any contractual or other restriction of the Borrower, evidence of its
indebtedness or agreement or instrument of whatever nature to which the Borrower is now a
party or by which it is bound, or constitutes a material default under any of the foregoing.
No event has occurred and no condition exists which, upon the execution and delivery of any
Financing Documents, constitutes an Event of Default hereunder or an Event of Default
thereunder or, but for the lapse of time or the giving of notice, would constitute an Event
of Default hereunder or an Event of Default thereunder.



     (4) There is no action or proceeding pending or, to the knowledge of the Borrower,
threatened against the Borrower before any court, administrative agency or arbitration board
that may materially and adversely affect the ability of the Borrower to perform its
obligations under the Financing Documents and all authorizations, consents and approvals of
governmental bodies or agencies required in connection with the execution and delivery of
the Financing Documents and in connection with the performance of the Borrower’s obligations
hereunder or thereunder have been obtained.



     (5) The execution, delivery and performance of the Financing Documents and any other
instrument delivered by the Borrower pursuant to the terms hereof or thereof are within the
corporate powers of the Borrower and have been duly authorized and approved by the board of
directors of the Borrower and are not in contravention of law or of the Borrower’s
certificate of
incorporation or by-laws, as amended to date, or of any undertaking or agreement to
which the Borrower is a party or by which it is bound.



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Exhibit 4.25




     (6) The Borrower represents that it has not made any commitment or taken any action
which will result in a valid claim for any finders’ or similar fees or commitments in
respect of the transactions described in this Agreement other than the fees to various
parties to the transactions contemplated hereby which have been heretofore paid or provided.



     (7) The Project is included within the definition of a “project” in the Act. The
Borrower intends the Project to continue to be an authorized project under the Act during
the Term of this Agreement.



     (8) All amounts shown in Schedule D of the Tax Regulatory Agreement are eligible costs
of a project financed by bonds issued by the Authority under the Act, and may be financed by
amounts in the various Accounts of the Project Fund under the Indenture. None of the
proceeds of the Bonds will be used directly or indirectly as working capital or to finance
inventory.



     (9) The Project is in material compliance with all applicable federal, State and local
laws and ordinances (including rules and regulations) relating to zoning, building, safety
and environmental quality.



     (10) The Borrower intends to proceed with due diligence to complete the Project
pursuant to Section 4.1 hereof. The Borrower has obtained, or will obtain, or will cause to
be obtained, all necessary material approvals from any and all governmental agencies
requisite to the Project, and has also obtained or will cause to be obtained, all material
occupancy permits and authorizations from appropriate authorities authorizing the occupancy
and use of the Project for the purposes contemplated hereby. The Borrower further
represents and warrants that it will complete the Project, or cause the Project to be
completed, in accordance with all material federal, State and local laws, ordinances and
regulations applicable thereto.



     (11) The availability of financial assistance from the Authority, among other factors,
has induced the Borrower to locate the Project in the State. The Borrower does not
presently intend to lease the Project.



     (12) The Borrower will not take or omit to take any action which action or omission
will in any way cause the proceeds of the Bonds to be applied in a manner contrary to that
provided in the Indenture and the Financing Documents as in force from time to time.



     (13) The Borrower has not taken and will not take any action and knows of no action
that any other person, firm or corporation, has taken or intends to take, which would cause
interest on the Bonds to be includable in the gross income of the recipients thereof for
federal income tax purposes. The representations, certifications and statements of
reasonable expectation made by the Borrower in the Tax Regulatory Agreement and relating to
Project description, composite issues, bond maturity and average asset economic life, use of
Bond proceeds, arbitrage and related matters are hereby incorporated by this reference as
though fully set forth herein.



     (14) The Borrower has good and marketable title in fee simple to the Project Realty
subject only to Permitted Encumbrances and to irregularities or defects in title which may
exist which do not materially impair the use of such properties in the Borrower’s business.



     (15) The Borrower has good and merchantable title to the Project Equipment owned by the
Borrower as of the date hereof, free and clear of liens and encumbrances, other than
Permitted Encumbrances.



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Exhibit 4.25




     (16) As of the date of hereof, neither the Borrower, nor to its knowledge anyone acting
on behalf of the Borrower, has entered into negotiations with any person for the purpose of
undertaking any borrowing concurrently with or subsequent to the issuance of the Bonds and
to be secured wholly or partially by a lien or encumbrance on the Project or any part
thereof, and the Borrower has no present intention of undertaking any such borrowing.



     (17) The Borrower will use all of the proceeds of the Bonds to finance the Project
Costs.



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Exhibit 4.25




ARTICLE III

THE LOAN




     Section 3.1. Loan Clauses. (A) Subject to the conditions and in accordance with the
terms of this Agreement, the Authority agrees to make a loan to the Borrower from the proceeds of
the Bonds in the amount of $10,000,000 and the Borrower agrees to borrow such amount from the
Authority.



     (B) The loan shall be made at the time of delivery of the Bonds and receipt of payment
therefor by the Authority against receipt by the Authority of the Note duly executed and delivered
to evidence the pecuniary indebtedness of the Borrower hereunder. As and for the loan the
Authority shall apply the proceeds of the Bonds as provided in the Indenture on the terms and
conditions therein prescribed.



     (C) On or before the fifth Business Day immediately preceding each due date for the payment of
the principal of or interest on the Bonds, until the principal or Redemption Price, if any, of and
interest on the Bonds shall have been fully paid or provision for the payment thereof shall have
been made in accordance with the Indenture, the Borrower shall make loan payments to the Trustee
for the account of the Authority in an amount which, when added to any moneys then on deposit in
the Debt Service Fund and available therefor, shall be equal to the amount payable on such due date
with respect to the Bonds as provided in Section 5.3 of the Indenture, including amounts due for
the payment of the principal of and interest on the Bonds. In addition, the Borrower shall pay to
the Trustee, as and when the same shall become due, all other amounts due under the Financing
Documents, together with interest thereon at the then applicable rate as set forth herein in
Section 6.4(G). The Borrower shall have the option to prepay its loan obligation in whole or in
part at the times and in the manner provided in Article VIII hereof.



     (D) Anything herein to the contrary notwithstanding, any amount at any time held in the
Principal and Interest Account of the Debt Service Fund by the Trustee pursuant to this Section
shall be credited against the next succeeding loan payment obligation of the Borrower as provided
in subsection 3.1(C) hereof. If, on any due date for payments with respect to the Bonds, the
balance in the Debt Service Fund is insufficient to make such payments, the Borrower agrees
forthwith to pay to the Trustee by no later than 11:00 a.m. on such due date the amount of the
deficiency. If at any time the amount held by the Trustee in the Debt Service Fund shall be
sufficient to pay or provide for the payment of the Bonds in accordance with Section 12.1 of the
Indenture, the Borrower shall not be obligated to make any further payments under the foregoing
provisions.



     Section 3.2. Other Amounts Payable. (A) The Borrower hereby further expressly agrees
to pay to the Trustee as and when the same shall become due, (i) an amount equal to the initial and
annual fees of the Trustee for the ordinary services of the Trustee rendered and its ordinary
expenses incurred under the Indenture, including fees and expenses as Paying Agent and the
reasonable fees and expenses of Trustee’s counsel, including fees and expenses as registrar and in
connection with preparation and delivery of new Bonds upon exchanges or transfers, (ii) the
reasonable fees and expenses of the Trustee and any Paying Agents on the Bonds for acting as paying
agents as provided in the Indenture, including reasonable fees and expenses of its counsel, (iii)
the reasonable fees and charges of the Trustee for extraordinary services rendered by it and
extraordinary expenses incurred by it under the Indenture, including reasonable counsel fees and
expenses, and (iv) reasonable fees and expenses of Bond Counsel and the Authority for any future
action requested of either.



     (B) The Borrower also agrees to pay all amounts payable by it under the Financing Documents at
the time and in the manner therein provided.



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Exhibit 4.25




     (C) The Borrower agrees to pay all Rebatable Arbitrage (and penalties, if any) due to the
United States of America pursuant to Section 148 (f) of the Code.



     (D) The Borrower also agrees to pay directly to the Authority on the date of issuance and
delivery of the Bonds and on the second anniversary date of the date of issuance and delivery of
the Bonds and each anniversary date thereafter, a fee equal to 1/8th of 1% of the principal amount
of the Bonds Outstanding, such fee to be payable without notice, demand or invoice of any kind at
the Authority’s address as set forth herein or at such other address and to the attention of such
other person, or to such account as the Authority may stipulate by written notice to the Borrower.



     (E) The Borrower shall pay or reimburse the Bond Insurer for any and all charges, fees, costs,
and expenses that the Bond Insurer may reasonably pay or incur in connection with the following:
(i) the administration, enforcement, defense, or preservation of any rights or security hereunder
or under any other transaction documents; (ii) the pursuit of any remedies hereunder, under any
other transaction document, or otherwise afforded by law or equity, (iii) any amendment, waiver, or
other action with respect to or related to this Agreement or any other transaction document whether
or not executed or completed; (iv) the violation by the Borrower of any law, rule, or regulation or
any judgment, order or decree applicable to it; (v) any advances or payments made by the Bond
Insurer to cure defaults of the Borrower under the transaction documents; or (vi) any litigation or
other dispute in connection with this Agreement, any other transaction document, or the
transactions contemplated hereby or thereby, other than amounts resulting from the failure of the
Bond Insurer to honor its payment obligations under the Bond Insurance Policy. The Bond Insurer
reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver, or
consent proposed in respect of this Agreement or any other transaction document. The obligations
of the Borrower to the Bond Insurer shall survive discharge and termination of this Agreement.



     Section 3.3. Manner of Payment. The payments provided for in Section 3.1 hereof shall
be made by any reasonable method providing immediately available funds at the time and place of
payment directly to the Trustee for the account of the Authority and shall be deposited in the Debt
Service Fund. The additional payments provided for in Section 3.2 shall be made in the same manner
directly to the entitled party or to the Trustee for its own use or disbursement to the Paying
Agents, as the case may be.



     Section 3.4. Obligation Unconditional. The obligations of the Borrower under the
Financing Documents shall be absolute and unconditional, irrespective of any defense or any rights
of setoff, recoupment or counterclaim it might otherwise have against the Authority or the Trustee.
The Borrower will not suspend or discontinue any such payment or terminate this Agreement (other
than in the manner provided for hereunder) for any cause, including, without limiting the
generality of the foregoing, any acts or circumstances that may constitute failure of
consideration, failure of title, or commercial frustration of purpose, or any damage to or
destruction of the Project, or the taking by eminent domain of title to or the right of temporary
use of all or any part of the Project, or any change in the tax or other laws of the United States,
the State or any political subdivision of either thereof, or any failure of the Authority or the
Trustee to perform and observe any agreement or covenant, whether expressed or implied, or any
duty, liability or obligation arising out of or connected with the Financing Documents.



     Section 3.5. Securities Clauses. The Authority hereby notifies the Borrower and the
Borrower acknowledges that, among other things, the Borrower’s loan payments and all of the
Authority’s right, title and interest under the Financing Documents to which it is a party (except
its rights under Sections 6.4, 6.6, 7.2(A)(2) and 7.3 hereof) are being concurrently
with the execution and delivery hereof endorsed, pledged and assigned without recourse by the
Authority to the Trustee as security for the Bonds as provided in the Indenture.



-15-









 





Exhibit 4.25




     Section 3.6. Issuance of Bonds. The Authority has concurrently with the execution and
delivery hereof sold and delivered the Bonds under and pursuant to a resolution adopted by the
Authority on August 17, 2005, authorizing their issuance under and pursuant to the Indenture. The
proceeds of sale of the Bonds shall be applied as provided in Articles IV and V of the Indenture.



     Section 3.7. Effective Date and Term. (A) This Agreement shall become effective upon
its execution and delivery by the parties hereto, shall remain in full force from such date and,
subject to the provisions hereof (including particularly Articles VII and VIII), shall expire on
such date as the Indenture shall be discharged and satisfied in accordance with the provisions of
subsection 12.1(A) thereof. The Borrower’s obligations under Sections 6.4 and 6.5 hereof, however,
shall survive the expiration of this Agreement in accordance with the provisions of such Sections.



     (B) Within 60 days of such expiration the Authority shall deliver to the Borrower any
documents and take or cause the Trustee, at the Borrower’s expense, to take any such reasonable
actions as may be necessary to effect the cancellation, release and satisfaction of the Indenture
and the Financing Documents.



     Section 3.8. No Additional Bonds. No Additional Bonds on a parity with the Bonds may
be issued under the Indenture.



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Exhibit 4.25




ARTICLE IV

THE PROJECT




     Section 4.1. Completion of the Project. (A) The Borrower agrees that it will
undertake and complete the Project for the purposes and in the manner intended hereby and by the
Borrower’s application for assistance to the Authority and that it will cause such improvements to
be made to the Project as are necessary for the operation thereof in the manner herein provided.



     (B) The Borrower may modify, alter and amend the plans for the Project from time to time and
at any time, provided that such modifications, alterations and amendments do not materially impair
the operation of the Project as water facilities under the Act and provided that no material
modifications, alterations or amendments shall be made unless the Borrower shall have theretofore
delivered to the Trustee an opinion of Bond Counsel to the effect that such amendment, modification
or alteration and the expenditure of amounts from the Project Fund in connection therewith will not
cause interest on the Bonds to be subject to federal income taxation, together with any written
representations or certifications of fact made by or on behalf of the Borrower upon which such
counsel has relied in rendering such opinion.



     (C) The Borrower affirms that it shall bear all of the costs and expenses in connection with
the preparation of the Financing Documents and the Indenture, the preparation and delivery of any
legal instruments and documents necessary in connection therewith and their filing and recording,
if required, and all taxes and charges payable in connection with any of the foregoing. Such costs
and all other costs of the Project shall be paid by the Borrower in the manner and to the extent
provided in the Indenture.



     (D) The Borrower hereby agrees that in order to effectuate the purposes of the Financing
Documents, it will make, execute, acknowledge and deliver any contracts, orders, receipts, writings
and instructions with any other persons, firms, or corporations and in general do all things which
may be requisite or proper, all for the purpose of carrying out and completing the Project. The
Borrower will use its best efforts to complete the Project, or cause the Project to be completed,
with all reasonable dispatch. If for any reason the completion of such work is delayed, there
shall be no liability on the part of the Authority and no diminution in or postponement of the
payments required in Section 3.1 hereof to be paid by the Borrower.



     (E) The Borrower has obtained or shall obtain all necessary material approvals from any and
all governmental agencies requisite to the undertaking and completion of the Project and in
compliance with all federal, State and local laws, ordinances and regulations applicable thereto.
Upon completion of the Project, the Borrower shall obtain all material required permits and
authorizations from appropriate authorities, if any be required, authorizing the operation and uses
of the Project for the purposes contemplated hereby, where failure to obtain such approvals,
permits and authorizations would have a material adverse effect on the transactions contemplated
hereby.



     (F) The Borrower covenants that it will take, or cause to be taken, such action and institute
such proceedings within its power and authority as shall be necessary to cause and require all
contractors and material suppliers to complete their contracts diligently in accordance with the
terms of the contracts, including, without limitation, the correcting of any defective work.



     (G) Upon the occurrence of a default by any contractor or subcontractor or supplier under any
contract made by it in connection with the Project, the Borrower will promptly proceed, to the
extent it deems appropriate in the circumstances, either separately or in conjunction with others,
to exhaust the
remedies of the Borrower against any such contractor or subcontractor or supplier for the
performance of such contract.



-17-









 





Exhibit 4.25




     (H) The Borrower will have good and marketable title in fee simple to the Project Realty to be
owned by it subject only to Permitted Encumbrances, sufficient for the purposes of this Agreement.



     Section 4.2. Payment of Additional Project Costs by Borrower. In the event that
moneys in the Project Fund are not sufficient to pay Project Costs in full, the Borrower shall
nonetheless complete the Project, or cause the Project to be completed, and shall pay that portion
of the Project Costs as may be in excess of the moneys available therefor in the Project Fund and
shall not be entitled to any reimbursement therefor from the Authority or from the Trustee or from
the holders of any of the Bonds, nor shall it be entitled to any diminution of the amounts payable
under the Financing Documents.



     Section 4.3. Completion Certificate. The date of completion of the Project shall be
evidenced to the Trustee by the certificate of an Authorized Representative of the Borrower stating
that the Project has been completed in accordance with the Agreement and in accordance with the
plans and specifications therefor. Notwithstanding the foregoing, such certificate shall state (1)
that it is given without prejudice to any rights of the Borrower against third parties which exist
at the date of such certificate or which may subsequently come into being, (2) that it is given
only for the purpose of this Section and (3) that no person other than the Trustee or the Authority
may benefit therefrom.



     Section 4.4. No Warranty Regarding Condition, Suitability or Cost of Project. Neither
the Authority, nor the Trustee, nor any Bondholder makes any warranty, either expressed or implied,
as to the Project or its condition or that it will be suitable for the Borrower’s purposes or
needs, or that the insurance required hereunder will be adequate to protect the Borrower’s business
or interest, or that the proceeds of the Bonds will be sufficient to complete the Project.



     Section 4.5. Taxes. (A) The Borrower will pay when due all material (1) taxes,
assessments, water rates and sewer use or rental charges, (2) payments in lieu thereof which may be
required by law, and (3) governmental charges and impositions of any kind whatsoever which may now
or hereafter be lawfully assessed or levied upon the Project Realty and the Project Equipment or
any part thereof, or upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may lawfully be paid in
installments over a period of years, the Borrower shall be obligated to pay, or cause to be paid,
only such installments as are required to be paid during the Term.



     (B) The Borrower may, at its expense and in its own name, in good faith contest any such
taxes, assessments and other charges and payments in lieu of taxes including assessments and, in
the event of such contest, may permit the taxes, assessments or other charges or payments in lieu
of taxes, including assessments so contested to remain unpaid, provided either (1) prior written
notice thereof has been given to the Authority and the Trustee and reserves satisfactory to the
Authority are maintained during the period of such contest and any appeal therefrom, or (2) such
contest is conducted in full compliance with Connecticut General Statutes Chapter 203 unless, in
either case, by nonpayment of such taxes, assessments or other charges or payments, the Project or
any part thereof will be subject to loss or forfeiture, and as a result thereof a lien or charge
will be placed upon any payment pursuant to this Agreement or the value or operation of the Project
Realty and the Project Equipment will be materially impaired, in which event such taxes,
assessments or other charges or payments shall be paid forthwith. Nothing herein shall preclude
the Borrower, at its expense and in its own name and behalf, from applying
for any tax exemption allowed by the federal government, the State or any political or taxing
subdivision thereof under any existing or future provision of law which grants or may grant such
tax exemption.



     Section 4.6. Insurance. (A) The Borrower shall insure the Project Realty and the
Project Equipment against loss or damage by fire, flood, lightning, windstorm, vandalism and
malicious mischief and other hazards, casualties, contingencies and extended coverage risks in such
amounts and in such



-18-









 





Exhibit 4.25



manner as is customary with companies in the same or similar business, and
shall pay when due the premiums thereon. In the event of loss or damage to the Project Realty or
Project Equipment, the Net Proceeds of any insurance provided under this subsection shall be
applied to the manner set forth in Article V hereof. Any excess proceeds of insurance remaining
after application as required by this Section shall be paid to the Borrower, but only if the
Borrower is not in default under this Agreement. If the Borrower is in default under this
Agreement, such amounts shall be applied as provided in Article VIII of the Indenture. At least
ten days prior to the expiration of any policy required under this Section the Borrower shall
furnish evidence satisfactory to the Authority and the Trustee that such policy has been renewed or
replaced.




     (B) The Borrower further agrees that it will at all times carry public liability insurance
with respect to the Project Realty and the Project Equipment in a minimum amount of $5,000,000 with
provisions for a deductible amount not in excess of five percent of the amount of coverage
thereunder. In the event of a public liability occurrence, the Net Proceeds of the insurance
provided under this subsection shall be applied to satisfy or extinguish the liability.



     (C) As an alternative to the hazard insurance and public liability insurance requirements of
subsections (A) or (B) above the Borrower may self-insure against hazard or public liability risks
if (1) self-insurance is the Borrower’s customary method of insurance against such risks in similar
circumstances, and (2) the Borrower maintains self-insurance reserves adequate and available to
meet such risks. Amounts available under any such self-insurance arrangement upon the occurrence of
an insured event shall be applied in the same manner as the Net Proceeds of any insurance
maintained pursuant to such subsections would have been applied.



     (D) The insurance coverage required by this Section may be effected under overall blanket or
excess coverage policies of the Borrower or any affiliate and may be carried with any insurer other
than an unauthorized insurer under the Connecticut Unauthorized Insurers Act. The Borrower shall
furnish evidence satisfactory to the Authority or the Trustee, promptly upon the request of either,
that the required insurance coverage is valid and in force. The Borrower shall also give the
Trustee not less than ten (10) days prior written notice of the expiration of any insurance
coverage required by this Section then in effect.



     Section 4.7. Compliance with Law. The Borrower will observe and comply with all
material laws, regulations, ordinances, rules, and orders (including without limitation those
relating to zoning, land use, environmental protection, air, water and land pollution, wetlands,
health, equal opportunity, minimum wages, worker’s compensation and employment practices) of any
federal, state, municipal or other governmental authority relating to the Project Realty and the
Project Equipment except during any period during which the Borrower at its expense and in its name
shall be in good faith contesting its obligation to comply therewith.



     Section 4.8. Maintenance and Repair. At its own expense, the Borrower will keep and
maintain the Project Realty and the Project Equipment in accordance with sound utility operating
practice and in good condition, working order and repair, will not commit or suffer any waste
thereon, and will make all material repairs and replacements thereto which may be required in
connection therewith. Nothing in this Section 4.8 shall (1) apply to any portion of the
Project beyond its useful or economic life or (2) apply to the use and disposition by the
Borrower of any part of the Project in the ordinary course of its business.



     Section 4.9. Disposition of Project Realty by Borrower. (A) The Borrower shall not
sell, assign, encumber (other than Permitted Encumbrances), convey or otherwise dispose of its
interests in the Project Realty or any part thereof during the Term except as provided in Section
6.1 hereof.



-19-









 





Exhibit 4.25




     (B) The Borrower may, however, grant such rights of way or easements over, across, or under,
the Project Realty as shall be necessary or convenient for the operation or use of the Project
Realty, including but not limited to easements or rights-of-way for utility, roadway, railroad or
similar purposes in connection with the Project Realty, or for the use of the real property
adjacent to or near the Project, and owned by or leased to the Borrower, but only if such
rights-of-way or easements shall not materially or adversely affect the value and operation of the
Project. In addition, the Borrower may sell or assign, or cause to be sold or assigned, a portion
of the Project Realty or development rights in the Project Realty to the State, a municipality
within the State or a conservation organization, but only if such sale or assignment shall not
materially or adversely affect the value or operation of the Project.



     (C) In the event the Authority and the Bond Insurer consent to any disposition of the
Borrower’s interest in the Project Realty, the proceeds of the disposition shall be deposited in
the Redemption Account of the Debt Service Fund for the redemption of the Bonds under the
Indenture. No conveyance or release effected under the provisions of this Section shall entitle
the Borrower to any abatement or diminution of the amounts payable hereunder or under the Note, or
relieve the Borrower of the obligation to perform all of its covenants and agreements under the
Financing Documents.



     Section 4.10. Leasing of the Project Realty and the Project Equipment. The Borrower
may not lease the Project Realty or the Project Equipment to any person during the Term of this
Agreement without the prior written consent of the Authority and the Bond Insurer. No lease shall
relieve the Borrower from primary liability for any of its obligations hereunder, and in the event
of any such lease the Borrower shall continue to remain primarily liable for payment of the
applicable amounts specified in Article III hereof and for performance and observance of the other
agreements on its part herein provided to be performed and observed by it to the same extent as
though no lease had been made.



     Section 4.11. Project Equipment. (A) The Borrower shall have the right to install,
operate, use, remove and dispose of the Project Equipment in the normal and ordinary course of its
business operations, and shall not be required to replace any item of Project Equipment which is
discarded or sold for scrap. Except as provided in the immediately preceding sentence, the
Borrower’s ability to dispose of the Project Equipment shall be governed by the provisions of
Section 6.1 hereof.



     (B) The Borrower shall maintain with the Trustee separate and reasonably detailed descriptions
of each item of property constituting the Project Equipment. Without limiting the foregoing, the
Project Equipment list appended hereto at the date of execution and delivery of this Agreement
shall be modified to the extent required by this Section in connection with any disbursement for
Project Equipment from the Project Fund and any replacement of material items of Project Equipment
under this Section or under Section 5.2 hereof.



     Section 4.12. Borrower Contribution. The Borrower agrees to deposit with the Trustee
on the date of issuance of the Bonds a contribution in the amount of $587,535.75 (which will be
applied to the payment of certain costs
and expenses incurred in connection with the issuance, execution and sale of the Bonds for
which the Borrower is responsible, including compensation and expenses of the Trustee, bond
insurance premium, legal, accounting and consulting expenses and fees, costs of printing and
engraving, underwriting expenses and recording and filing fees), which amount shall be deposited by
the Trustee in the Project Fund established pursuant to Section 5.1 of the Indenture.



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Exhibit 4.25




ARTICLE V

CONDEMNATION DAMAGE AND DESTRUCTION




     Section 5.1. No Abatement of Payments Hereunder. If the Project Realty or Project
Equipment shall be damaged or either partially or totally destroyed, or if title to or the
temporary use of the whole or any part thereof shall be taken or condemned by a competent authority
for any public use or purpose, there shall be no abatement or reduction in the amounts payable by
the Borrower hereunder and the Borrower shall continue to be obligated to make such payments. In
any such case the Borrower shall promptly give written notice thereof to the Authority and the
Trustee.



     Section 5.2. Project Disposition Upon Condemnation, Damage or Destruction. In the
event of any such condemnation, damage or destruction the Borrower shall:




     (1) At its own cost, repair, restore or reconstruct, or cause to be repaired, restored
or reconstructured, the Project Realty and Project Equipment to substantially its condition
immediately prior to such event or to a condition of at least equivalent value, regardless
of whether or not the proceeds of any and all policies of insurance covering such damage or
destruction, or the amount of the award or compensation or damages recovered on account of
such taking or condemnation, shall be available or sufficient to pay the cost thereof;




     (2) At its own cost, replace or relocate, or cause to be replaced or relocated, the
Project Realty and Project Equipment at its site in such fashion as to render the
replacement or relocated structures, improvements and items, machinery, equipment or other
property of equivalent value to the Project Realty and Project Equipment immediately prior
to such event; or




     (3) If and as permitted by Section 8.1 hereof, exercise its option to prepay its loan
obligation in full.



     Section 5.3. Application of Net Proceeds of Insurance or Condemnation. (A) The Net
Proceeds from any insurance or condemnation award with respect to the Project Realty or Project
Equipment shall be deposited either (1) in the Renewal Fund and applied to pay for the cost of
making such repairs, restorations, reconstructions, replacements or relocations, or to reimburse
the Borrower, the Authority or the Trustee for payment therefor from time to time as provided in
the Indenture or (2) if prepayment of the loan is then permitted and the Borrower exercises its
option to prepay the loan, in the Redemption Account of the Debt Service Fund and applied to the
payment of the Note and redemption of the Bonds.



     (B) Notwithstanding the provisions of subsection (A) of this Section, any insurance or
condemnation proceeds attributable to improvements, machinery, equipment and other property
installed in or about the Project Realty and the Project Equipment, but which do not constitute a
portion of the Project Realty and the Project Equipment, shall be paid as the Borrower may direct.
The Trustee and the Authority agree to execute such documents as may be reasonably necessary to
accomplish the purposes of this subsection.



     (C) The Borrower, the Authority and the Trustee shall cooperate and consult with each other in
all matters pertaining to the settlement or adjustment of any and all claims and demands for
damages on account of any taking or condemnation of the Project Realty or the Project Equipment or
pertaining to the settlement, compromising or arbitration of any claim on account of any damage or
destruction thereof.



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Exhibit 4.25




ARTICLE VI

COVENANTS




     Section 6.1. Consolidation, Merger and Transfer of Assets.



     (A) Restructuring, Merger, Consolidation and Reorganization. The Borrower covenants and
agrees that, during the Term of this Agreement, it will maintain its corporate existence, will
continue to be a corporation either organized under the laws of or duly qualified to do business as
a foreign corporation in the State and in all jurisdictions necessary in the operation of its
business and will not merge, consolidate, restructure or reorganize with an entity without the
prior written consent of the Bond Insurer, provided, however, the Borrower (or any subsequent
obligor on the Note) may merge, consolidate, restructure or reorganize with an entity without the
prior written consent of the Bond Insurer either if (a) the Borrower (or any subsequent obligor on
the Note) continues to exist after such merger, consolidation, restructuring or reorganization and
(i) the Borrower (or any subsequent obligor on the Note) remains a public utility regulated by the
appropriate regulatory body, and (ii) the Borrower (or any subsequent obligor on the Note) remains
obligated to the Bond Insurer with respect to, and to make payments with respect to, the Bonds, the
Note and this Agreement or (b) the Borrower (or any subsequent obligor on the Note) is not the
surviving entity after such merger, consolidation, restructuring or reorganization and (i) the
surviving entity is a public utility regulated by the appropriate regulatory body, and (ii) the
surviving entity fully assumes all obligations to the Bond Insurer with respect to, and to make
payments with respect to the Bonds, the Note and this Agreement. Notwithstanding the foregoing, if
as a result of the merger, consolidation, restructuring or reorganization of the Borrower (or any
subsequent obligor on the Note) with an entity without the prior written consent of the Bond
Insurer, the unenhanced rating on the Bonds is lower than investment grade by any Rating Agency
then rating the Bonds or if any Rating Agency then rating the unenhanced Bonds ceases to rate the
unenhanced Bonds, all obligations to the Bond Insurer with respect to, and all payments under, the
Note and this Agreement must be paid in full and the Bonds must be fully redeemed in accordance
with the Indenture.



     (B) Sale of Assets. The Borrower (or any subsequent obligor on the Note) may sell or otherwise
dispose of its assets without the consent of the Bond Insurer, provided, however, if the Borrower
(or any subsequent obligor on the Note) sells or otherwise disposes of an aggregate of 20% or more
of its assets based upon the historical book value of the assets sold as determined as of the
issuance date of the Bonds, without the prior written consent of the Bond Insurer, and as a result
of such sale and disposition, the unenhanced rating on the Bonds is lower than investment grade by
any Rating Agency then rating the Bonds or if any Rating Agency then rating the unenhanced Bonds
ceases to rate the unenhanced Bonds, then all obligations of the Borrower to the Bond Insurer with
respect to, and all payments under, the Note and this Agreement must be paid in full and the Bonds
must be fully redeemed in accordance with the Indenture.



     (C) Upon the occurrence of an event specified in Section 6.1 (A) or (B) the Borrower shall
deliver to the Bond Insurer and the Trustee a certificate of the president or any vice president
and an opinion of counsel acceptable to the Bond Insurer and the Trustee, each stating that such
occurrence complies with this Section 6.1.



     (D) Upon the occurrence of an event specified in Section 6.1(A) or (B), the successor entity
shall succeed to, and be substituted for, and may exercise every right and power under this
Agreement with the same effect as if such successor had been named herein, and thereafter, the
predecessor entity shall be relieved of all obligations and covenants hereunder.



     (E) Notwithstanding anything to the contrary contained herein or in the Indenture, none of the
transactions described in this Section 6.1 shall require the consent of the Authority or the
Trustee.



-22-









 





Exhibit 4.25




     Section 6.2. Restrictions on Liens and Sale and Leaseback Transactions. (A) For so
long as the Bonds are outstanding and the Bond Insurer has fully performed all of its obligations
under the Bond Insurance Policy, the Borrower will not, nor will it permit any Significant
Subsidiary to, (1) issue, incur, assume or permit to exist any Debt, if such Debt is secured by a
Lien on any Principal Property (whether such Principal Property is now owned or hereafter
acquired), unless the Borrower provides that the Bonds will be equally and ratably secured with
such secured Debt or (2) incur or permit to exist any Attributable Debt in respect of Principal
Property; provided, however, that the foregoing restriction shall not apply to:




     (i) to the extent the Borrower or any Significant Subsidiary consolidates with, or
merges with or into, another entity, Liens on the property of such entity securing Debt in
existence on the date of such consolidation or merger, provided that such Debt and Liens
were not created or incurred in anticipation of such consolidation or merger and that such
Liens do not extend to cover any Principal Property;




     (ii) Liens existing on property hereafter acquired at the time of such acquisition, as
long as the Lien was not created or incurred in anticipation thereof and does not extend to
or cover any other Principal Property;




     (iii) Liens of any kind, including purchase money Liens, conditional sales agreements
or title retention agreements and similar agreements, upon any property acquired,
constructed, developed or improved by the Borrower or any Significant Subsidiary (whether
alone or in association with others) which do not exceed the cost or value of the property
acquired, constructed, developed or improved and which are created prior to, at the time of,
or within 12 months after such acquisition (or in the case of property constructed,
developed or improved, within 12 months after the completion of such construction,
development or improvement and commencement of full commercial operation of such property,
whichever is later) to secure or provide for the payment of any part of the purchase price
or cost thereof; provided that the Liens shall not extend to any Principal Property other
than the property so acquired, constructed, developed or improved;




     (iv) Liens in favor of the United States, any state or any foreign country or any
department, agency or instrumentality or political subdivision of any such jurisdiction to
secure payments pursuant to any contract or statute or to secure any indebtedness incurred
for the purpose of financing all or any part of the purchase price or cost of constructing
or improving the property subject to such Lien, including Liens related to governmental
obligations the interest on which is tax-exempt under Section 103 of the Internal Revenue
Code or any successor section of the Internal Revenue Code;




     (v) Liens in favor of the Borrower, one or more Significant Subsidiaries of the
Borrower, one or more wholly-owned Subsidiaries of the Borrower or any of the foregoing
combination; and




     (vi) replacements, extensions or renewals (or successive replacements, extensions or
renewals), in whole or in part, of any Lien, or of any agreement, referred to above in
clauses (i) through (v) inclusive, or replacements, extensions or renewals of the Debt
secured thereby (to the extent that the amount of Debt secured by any such Lien is not
increased from the amount originally so secured, plus any premium, interest, fee or expenses
payable in connection with any replacements, refundings, refinancings, remarketings,
extensions or renewals); provided that such replacement, extension or renewal is limited to
all or a part of the same property (plus improvements thereon or additions or accessions
thereto) that secured the Lien replaced, extended or renewed.



-23-









 





Exhibit 4.25




     (B) Notwithstanding the restriction in subsection (A) of this Section 6.2, the Borrower or any
Significant Subsidiary may (1) issue, incur or assume Debt secured by a Lien not described in
clauses (i) through (vi) of subsection (A) above on any Principal Property now or hereafter owned
without providing that the Bonds be equally and ratably secured with such Debt and (2) issue or
permit to exist Attributable Debt in respect of Principal Property, in either case so long as the
aggregate amount of such secured Debt and Attributable Debt, together with the aggregate amount of
all other Debt secured by Liens not described in clauses (i) through (vi) of subsection (A) above
then outstanding and all other Attributable Debt, does not exceed 10% of the Net Tangible Assets of
the Borrower, as determined by the Borrower as of a month end not more than 90 days prior to the
closing or consummation of the proposed transaction.



     (C) For purposes of determining compliance with this Section 6.2, in the event that any Lien
at any time meets the criteria of more than one of the categories described in clauses (i) through
(vi) above of Section 6.2(A), or is entitled to be created pursuant to Section 6.2(B), the Borrower
will be permitted to classify (and later reclassify) in whole or in part in its sole discretion
such Lien in any manner that complies with this Section 6.2.



     (D) For purposes of determining compliance with any Dollar-denominated restriction on the
incurrence of Debt secured by Liens on Principal Property, the Dollar-equivalent principal amount
of Debt denominated in a foreign currency will be calculated based on the relevant currency
exchange rate in effect on the date such Debt was incurred, in the case of term Debt, or first
committed, in the case of revolving credit Debt; provided that if such Debt is incurred to
refinance other Debt denominated in the same foreign currency, and such refinancing would cause the
applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such refinancing, the Dollar-denominated restriction will be
deemed not to have been exceeded so long as the principal amount of the refinancing Debt does not
exceed the principal amount of the Debt being refinanced. Notwithstanding any other provision of
this Section 6.2, the maximum amount of Debt secured by Liens on Principal Property that the
Borrower or any Significant Subsidiary may incur pursuant to this covenant will not be deemed to be
exceeded solely as a result of fluctuations in the exchange rate of currencies.



     (E) Except as provided in Section 6.2 hereof, while there are any Bonds Outstanding or any
reimbursement obligations owed to the Bond Insurer, without the prior written consent of the Bond
Insurer, the Borrower will not permit, create, assume or suffer to be created or to exist any
mortgage, lien, security interest, or encumbrance of any kind, upon, or pledge of, any of the
Borrower ’s properties of any character, including real, personal, tangible and intangible
properties and revenues, now owned or hereafter acquired, to secure any indebtedness without
providing that the Bonds and the reimbursement obligations hereunder have the same security.



     (F) Notwithstanding anything to the contrary contained herein or in the Indenture, none of the
transactions described in this Section 6.2 shall require the consent of the Authority or the
Trustee.



     Section 6.3. [Reserved].



     Section 6.4. Indemnification, Payment of Expenses, and Advances. (A) The Borrower
agrees to protect, defend and hold harmless the Authority, the State, agencies of the State,
members, servants, agents, directors, officers and employees, now or forever, of the Authority or
the State (each an “Authority Indemnified Party”), the Trustee and the Paying Agent, agents,
directors, officers and employees, now or forever, of the Trustee and the Paying Agent (each an
“Indemnified Party”), from any claim, demand, suit, action or other proceeding and any liabilities,
costs, and expenses whatsoever by any person or entity whatsoever, arising or purportedly arising
from or in connection with the Financing Documents, the Indenture, the Bonds, or the transactions
contemplated thereby or actions taken thereunder by any person (including without limitation the
filing of any information, form or statement



-24-









 





Exhibit 4.25



with the Internal Revenue Service, if applicable), except for any willful and material
misrepresentation, willful misconduct or gross negligence on the part of the Indemnified Party or
the Authority Indemnified Party or any bad faith on the part of any indemnitee other than an
Authority Indemnified Party.




     The Borrower agrees to indemnify and hold harmless any Indemnified Party against any and all
claims, demands, suits, actions or other proceedings and all liabilities, costs and expenses
whatsoever caused by any untrue statement or misleading statement or alleged untrue statement or
alleged misleading statement of a material fact contained in the written information provided by
the Borrower in connection with the issuance of the Bonds or incorporated by reference therein or
caused by any omission or alleged omission from such information of any material fact relating to
the Borrower or the Project required to be stated therein or necessary in order to make the
statements made therein in the light of the circumstances under which they were made, not
misleading.



     (B) The Authority and the Trustee shall not be liable for any damage or injury to the persons
or property of the Borrower or its members, directors, officers, agents, servants or employees, or
any other person who may be about the Project due to any act or omission of any person other than
the Authority or the Trustee, respectively, or their respective members, directors, officers,
agents, servants and employees.



     (C) The Borrower releases each Indemnified Party from, agrees that no Indemnified Party shall
be liable for, and agrees to hold each Indemnified Party harmless against, any reasonable attorney
fees and expenses, expenses or damages incurred because of any investigation, review or lawsuit
commenced by the Trustee or the Authority in good faith with respect to the Financing Documents,
the Indenture, the Bonds and the Projects and the Authority or the Trustee, as the case may be,
shall promptly give written notice to the Borrower with respect thereto.



     (D) All covenants, stipulations, promises, agreements and obligations of the Authority and the
Trustee contained herein shall be deemed to be the covenants, stipulations, promises, agreements
and obligations of the Authority and the Trustee and not of any member, director, officer or
employee of the Authority or the Trustee in its individual capacity, and no recourse shall be had
for the payment of the Bonds or for any claim based thereon or hereunder against any member,
director, officer or employee of the Authority or the Trustee or any natural person executing the
Bonds.



     (E) In case any action shall be brought against one or more of the Indemnified Parties based
upon any of the above and in respect of which indemnity may be sought against the Borrower, such
Indemnified Party shall promptly notify the Borrower in writing, enclosing a copy of all papers
served, but the omission so to notify the Borrower of any such action shall not relieve it of any
liability which it may have to any Indemnified Party otherwise than under this Section 6.4. In
case any such action shall be brought against any Indemnified Party and it shall notify the
Borrower of the commencement thereof, the Borrower shall be entitled to participate in and, to the
extent that it shall wish, to assume the defense thereof with counsel satisfactory to such
Indemnified Party, and after notice from the Borrower to such Indemnified Party of the Borrower’s
election so to assume the defense thereof, the Borrower shall not be liable to such Indemnified
Party for any subsequent legal or other expenses attributable to such defense, except as set forth
below, other than reasonable costs of investigation subsequently incurred by such Indemnified Party
in connection with the defense thereof. The Indemnified Party shall have the right to employ its
own counsel in any such action, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the employment of counsel by such Indemnified Party has been
authorized by the Borrower, (ii) the Indemnified Party shall have reasonably concluded that there
may be a conflict of interest between the Borrower and the Indemnified Party in the conduct of the
defense of such action (in which case the Borrower shall not have the right to direct the defense
of such



-25-









 





Exhibit 4.25



action on behalf of the Indemnified Party); or (iii) the Borrower shall not in fact have
employed counsel satisfactory to the Indemnified Party to assume defense of such action.




     (F) The Borrower also agrees to pay all reasonable or necessary out-of-pocket expenses of the
Authority and the Trustee in connection with the issuance of the Bonds, the administration of the
Financing Documents and the enforcement of its rights thereunder, including without limitation the
costs of preparation and distribution of closing transcripts relating thereto.



     (G) In the event the Borrower fails to pay any amount or perform any act under the Financing
Documents, the Trustee or the Authority may pay the amount or perform the act, in which event the
costs, disbursements, expenses and reasonable counsel fees and expenses thereof, together with
interest thereon from the date the expense is paid or incurred at the prime interest rate publicly
announced from time to time by the Trustee as a commercial bank plus 1% shall be an additional
obligation hereunder payable upon demand by the Authority or the Trustee.



     (H) The Borrower shall defend, indemnify, and hold the Authority, its agents, members,
officers and employees, and the Trustee and its agents, directors, officers and employees, harmless
from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs,
or expenses of whatever kind or nature, known or unknown, contingent or otherwise, related to or in
connection with the Project, arising out of, or in any way related to, (i) the presence, disposal,
release, or threatened release of any hazardous materials, asbestos, petroleum or petroleum
by-products which are on, from, or affecting the soil, water, vegetation, buildings, personal
property, persons, animals, or otherwise, except in compliance with all applicable federal, State
and local laws or regulations; (ii) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to hazardous materials, asbestos, petroleum or
petroleum by-products; (iii) any lawsuit brought or threatened, settlement reached, or government
order relating to such hazardous materials, asbestos, petroleum or petroleum by-products and/or
(iv) any violation of laws, orders, regulations, requirements or demand of government authorities
or any policies or requirements of the Authority which are based upon or in any way related to such
hazardous materials, asbestos, petroleum or petroleum by-products including, without limitation,
reasonable attorney and consultant fees, investigation and laboratory fees, court costs, and
litigation expenses. Notwithstanding the foregoing, the Borrower shall have no obligation to
defend, indemnify and hold harmless the Authority or the Trustee or their respective agents,
members, officers or employees under this Section 6.4(H) in the event and to the extent that any
such claims, demands, penalties, fines, liabilities, settlements, damages, costs or other expenses
arise out of or result from the willful misconduct or gross negligence of the Authority or the
Trustee or their respective agents, members, officers or employees. The provisions of this
paragraph shall be in addition to any and all other obligations and liabilities the Borrower may
have to the Authority or the Trustee at common law, and shall survive the termination of this
Agreement.



     (I) Any obligation of the Borrower to the Authority under this Section shall be separate from
and independent of the other obligations of the Borrower hereunder, and may be enforced directly by
the Authority against the Borrower, irrespective of any action taken by or on behalf of the owners
of the Bonds.



     (J) The obligations of the Borrower under this section, notwithstanding any other provisions
contained in the Financing Documents, shall survive the termination of this Agreement and shall be
recourse to the Borrower, and for the enforcement thereof any Indemnified Party shall have recourse
to the general credit of the Borrower.



-26-









 





Exhibit 4.25




     Section 6.5. Incorporation of Tax Regulatory Agreement; Payments Upon Taxability. (A)
For purpose of this Section, the term owner means the Beneficial Owner of the Bonds so long as the
Book-Entry System is in effect.



     (B) The representations, warranties, covenants and statements of expectation of the Borrower
set forth in the Tax Regulatory Agreement are by this reference incorporated in this Agreement as
though fully set forth herein.



     (C) If any owner of the Bonds receives from the Internal Revenue Service a notice of
assessment and demand for payment with respect to interest on any Bond (except a notice and demand
based upon the assertion that the owner of the Bonds is a Substantial User or Related Person), an
appeal may be taken by the owner of the Bonds at the option of either the owner of the Bonds or the
Borrower. In either case all expenses of the appeal including reasonable counsel fees and expenses
shall be paid by the party taking such appeal, and the owner of the Bonds and the Borrower shall
cooperate and consult with each other in all matters pertaining to any such appeal, except that no
owner of the Bonds shall be required to disclose or furnish any non-publicly disclosed information,
including, without limitation, financial information and tax returns.



     (D) Not later than 180 days following a Determination of Taxability, the Borrower shall pay to
the Trustee an amount sufficient, when added to the amount then in the Debt Service Fund and
available for such purpose, to retire and redeem all Bonds then Outstanding, in accordance with
Section 2.4 of the Indenture.



     (E) The obligation of the Borrower to make the payments provided for in this Section shall be
absolute and unconditional, and the failure of the Authority or the Trustee to execute or deliver
or cause to be executed or delivered any documents or to take any action required under this
Agreement or otherwise shall not relieve the Borrower of its obligation under this Section.
Notwithstanding any other provision of this Agreement or the Indenture, the Borrower’s obligations
under this Section shall survive the termination of this Agreement and the Indenture.



     (F) The occurrence of a Determination of Taxability shall not be an Event of Default hereunder
but shall require only the performance of the obligations of the Borrower stated in this Section,
the breach of which shall constitute an Event of Default as provided in Section 7.1 hereof.



     Section 6.6. Public Purpose Covenants. (A) The Borrower covenants that it will
operate the Project for the purposes and in a manner consistent with its application for assistance
to the Authority. The Borrower further covenants and agrees that it will, throughout the term of
this Agreement, (1) comply with all applicable laws, regulations, ordinances, rules, and orders
relating to the Project as provided in the Financing Documents, (2) maintain the Project in
accordance with the Financing Documents, (3) not cause or permit the Project to become or remain a
public nuisance, (4) not allow any change in the nature of the occupancy, use or operation of the
Project which is substantially inconsistent with the Borrower’s application for assistance to the
Authority, except that the Borrower may, after notice to the Authority, permit any such change
which does not disqualify the Project as authorized projects under the Act as in effect on the date
hereof, and (5) except as permitted hereunder, not sell, assign, convey, further lease, sublease or
otherwise dispose of title to the Project without the prior written consent of the Authority.
Nothing in this Section is intended to require the Borrower to operate the Project in such manner
as, in the good faith judgment of the Borrower, shall materially and adversely impair the use and
operation of the Project.



-27-









 





Exhibit 4.25




     (B) A breach of any covenant contained in this Section shall constitute an Event of Default
but, in order to relieve the Authority of the consequences of unanticipated failure of
consideration, shall permit only the exercise by the Authority of the remedies provided in Section
7.3 hereof.



     Section 6.7. Further Assurances and Corrective Instruments. The Authority and the
Borrower agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description of the Project Realty
or Project Equipment or for carrying out the intention of or facilitating the performance of this
Agreement.



     Section 6.8. Covenant by Borrower as to Compliance with Indenture. The Borrower
covenants and agrees that it will comply with the provisions of the Indenture with respect to the
Borrower and that the Trustee and the Bondholders shall have the power and authority provided in
the Indenture. The Borrower further agrees to aid in the furnishing to the Authority or the
Trustee of opinions that may be required under the Indenture. The Borrower covenants and agrees
that the Trustee shall be entitled to and shall have all the rights, including the right to enforce
against the Borrower the provisions of the Financing Documents, pertaining to the Trustee
notwithstanding the fact that the Trustee is not a party to the Financing Documents.



     Section 6.9. Assignment of Agreement or Note. (A) The Borrower may not assign its
rights, interests or obligations hereunder or under the Note except as may be permitted pursuant to
Section 6.1 hereof.



     (B) The Authority agrees that it will not assign or transfer any of the Financing Documents or
the revenues and other receipts, funds and monies to be received thereunder during the Term except
to the Trustee as provided in this Agreement and the Indenture.



     Section 6.10. Inspection. The Authority and its duly authorized agents shall have (1)
the right at all reasonable times, and upon notice sufficient to permit the Borrower to take
actions necessary to comply with any security regulations then in effect at the Project, to enter
upon and to examine and inspect the Project Realty and the Project Equipment and (2) such rights of
access thereto as may be reasonably necessary for the proper maintenance and repair thereof in the
event of failure by the Borrower to perform its obligations under this Agreement. The Authority
and the Trustee shall also be permitted, at all reasonable times, to examine the books and records
of the Borrower with respect to the Project Realty and the Project Equipment.



     Section 6.11. Default Notification. Upon becoming aware of any condition or event
which constitutes, or with the giving of notice or the passage of time would constitute, an Event
of Default, the Borrower shall deliver to the Authority and the Trustee a notice stating the
existence and nature thereof and specifying the corrective steps, if any, the Borrower is taking
with respect thereto.



     Section 6.12. Covenant Against Discrimination. (A) The Borrower in the performance
of this Agreement will not discriminate or permit discrimination against any person or group of
persons on the grounds of race, color, religion, national origin, age, sex, sexual orientation,
marital status, physical or learning disability, political beliefs, mental retardation or history
of mental disorder in any manner prohibited by the laws of the United States or of the State.



     (B) The Borrower will comply with the provisions of the resolution adopted by the Authority on
June 14, 1977, as amended, and the policy of the Authority implemented pursuant thereto concerning
the promotion of equal employment opportunity through affirmative action plans. The resolution
requires that all borrowers receiving financial assistance from the Authority adopt and implement
an affirmative



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Exhibit 4.25



action plan prior to the closing of the loan. The plan shall be updated annually as long as
the Bonds remain Outstanding.




     Section 6.13. Covenant to Provide Disclosure. The Borrower hereby covenants and
agrees that it will execute, comply with and carry out all of the provisions of the Disclosure
Agreement. Notwithstanding any other provision of this Agreement, failure of the Borrower to
comply with the provisions of the Disclosure Agreement shall not be considered an Event of Default
hereunder; however, the Trustee may, subject to the provisions of Article IX of the Indenture (and,
at the request of the underwriter for the Bonds or the Holders of at least 25% aggregate principal
amount in Outstanding Bonds, shall), or any Bondholder or Beneficial Owner may take such actions as
may be necessary and appropriate, including seeking mandamus or specific performance by court
order, to cause the Borrower to comply with its obligations under this Section 6.13. For purposes
of this Section, “Beneficial Owner” means any person which (a) has the power, directly or
indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including
persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as
the owner of any Bonds for federal income tax purposes.



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Exhibit 4.25




ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES




     Section 7.1. Events of Default. Any one or more of the following shall constitute an
“Event of Default” hereunder:




     (1) Any material representation or warranty made by the Borrower in the Financing
Documents or any certificate, statement, data or information furnished in writing to the
Authority or the Trustee by the Borrower in connection with the closing of the Bonds or
included by the Borrower in its application to the Authority for assistance proves at any
time to have been incorrect in any material respect when made.




     (2) Failure by the Borrower to pay any interest, principal or premium, if any, that has
become due and payable with respect to the Bonds.




     (3) Failure by the Borrower to pay any amount, other than principal, interest or
premium with respect to the Bonds, that has become due and payable with respect to the Bonds
or any other amount due and payable pursuant to the Financing Documents and the continuance
of such failure for more than thirty (30) Business Days.




     (4) Failure by the Borrower to comply with the default notification provisions of
Section 6.11 hereof.




     (5) The occurrence of an “Event of Default” under Section 8.1(A) of the Indenture.




     (6) Failure by the Borrower to observe or perform any covenant, condition or agreement
hereunder or under the Financing Documents (other than the Disclosure Agreement) (except
those referred to above and except as provided in Section 6.5(F) hereof with respect to the
occurrence of a Determination of Taxability which, in and of itself, shall not constitute an
Event of Default hereunder but shall require only the performance of the obligations of the
Borrower stated in Section 6.5(F) hereof, the breach of which shall constitute an Event of
Default hereunder) and (a) continuance of such failure for a period of sixty (60) days after
receipt by the Borrower of written notice specifying the nature of such failure or (b) if by
reason of the nature of such failure the same cannot be remedied within the sixty-day
period, the Borrower fails to proceed with reasonable diligence after receipt of the notice
to cure the failure.




     (7) The Borrower shall (a) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian or the like of itself or of its property, (b) admit in
writing its inability to pay its debts generally as they become due, (c) make a general
assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent, or (e)
commence a voluntary case under the federal bankruptcy laws of the United States of America
or file a voluntary petition or answer seeking reorganization, an arrangement with creditors
or an order for relief or seeking to take advantage of any insolvency law or file an answer
admitting the material allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding; or corporate action shall be taken by it for the
purpose of effecting any of the foregoing; or if without the application, approval or
consent of the Borrower, a proceeding shall be instituted in any court of competent
jurisdiction, seeking in respect of the Borrower an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or arrangement with
creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or
custodian or the like of the Borrower or of all or any substantial part of its assets, or
other like relief in respect thereof under any bankruptcy or insolvency law, and, if such
proceeding is being contested by the



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Exhibit 4.25





Borrower in good faith, the same shall continue undismissed, or pending and unstayed,
for any period of 75 consecutive days.




     (8) Failure by the Borrower to make when due any payment of principal or interest
required under the provisions of any loan agreement (after the expiration of any applicable
grace periods) to which the Authority and the Borrower are parties.




     (9) The occurrence of an “Event of Default” under the Insurance Agreement.



     Section 7.2. Remedies on Default. (A) Except as provided in Section 6.6(B) hereof
and in Section 7.2(C) below, whenever any Event of Default shall have occurred, the Trustee, or the
Authority where so provided herein, may take any one or more of the following actions:




     (1) The Trustee, as and to the extent provided in Article VIII of the Indenture, and
only with the prior written consent of the Bond Insurer, unless the Bond Insurer is in
default under the Bond Insurance Policy, may cause all amounts payable under the Financing
Documents to be immediately due and payable without notice or demand of any kind, whereupon
the same shall become immediately due and payable.




     (2) The Authority, without the consent of the Trustee or any Bondholder, may proceed to
enforce the obligations of the Borrower to the Authority under this Agreement.




     (3) The Trustee may take whatever action at law or in equity it may have to collect the
amounts then due and thereafter to become due, or to enforce the performance or observance
of the obligations, agreements, and covenants of the Borrower under the Financing Documents.




     (4) The Trustee may exercise any and all rights it may have under the Financing
Documents.



     (B) In the event that any Event of Default or any proceeding taken by the Authority (or by the
Trustee on behalf of the Authority) thereon shall be waived or determined adversely to the
Authority, then the Event of Default shall be annulled and the Authority and the Borrower shall be
restored to their former rights hereunder, but no such waiver or determination shall extend to any
subsequent or other default or impair any right consequent thereon.



     (C) Notwithstanding any other provision hereof or of the Indenture to the contrary, only the
Bond Insurer will be permitted to exercise any rights or remedies with respect to an Event of
Default described in Section 7.1(9) hereof (in accordance with Section 8.2(E) of the Indenture);
provided, however, the Bond Insurer shall only be permitted to exercise such rights and remedies if
the Bond Insurance Policy is in effect and the Bond Insurer is not in default on its payment
obligations under the Bond Insurance Policy.



     Section 7.3. Remedies on Public Purpose Default. (A) If the Borrower shall default in
the performance of any of the covenants contained in Section 6.6 hereof, and in the event that such
default shall also constitute an Event of Default under Section 7.1 hereof, such Event of Default
shall continue for thirty (30) days without the Trustee or Bondholders instituting the remedial
steps provided for in subsection 7.2(A)(1) hereof or subsection 8.1(B) of the Indenture, then, in
either case, the Authority may, with the prior written consent of the Bond Insurer, unless the Bond
Insurer is in default under the Bond Insurance Policy, so long as such Event of Default is
continuing, send a notice to the Trustee calling for the acceleration of all of the Borrower’s
obligations under the Financing Documents and for the
redemption of all of the Bonds then Outstanding. Any such notice shall set forth in
reasonable detail the



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Exhibit 4.25



default by the Borrower giving rise thereto and shall specify the date upon
which (1) notice of Bond redemption is to be given by the Trustee (which shall be not less than one
hundred twenty days from the date of the Authority’s determination notice) and (2) the redemption
of the Bonds is to occur (which shall be at least thirty (30) days after notice of redemption is
given by the Trustee). Within thirty (30) days following receipt of the notice, the Trustee shall
forward a copy thereof to the Borrower and each registered Bondholder, together with a copy of
Sections 6.6 and 7.3 of this Agreement.




     (B) If, within sixty (60) days after the mailing of notice by the Trustee to the Borrower and
the Bondholders, the Trustee receives no objection (as hereinbelow provided) to such redemption,
the Trustee shall give such notice and effect the acceleration of the Borrower’s obligations and
the redemption of all Outstanding Bonds in accordance with the Authority’s notice and pursuant to
Section 2.4(F) of the Indenture. If, however, the Borrower or any Bondholder disputes the
existence of such Event of Default, the Borrower or such Bondholder shall mail a notice to the
Authority and the Trustee containing a statement of such person’s belief with respect to the
claimed default. The receipt of such notice by the Trustee shall serve to suspend the proceedings
for redemption of Bonds initiated by the Authority’s notice of default.



     (C) If upon receipt of such notice from the Borrower or any Bondholder, the Authority
determines to affirm its earlier determination, either the Borrower or any Bondholder shall have
the right to bring an action in any court of competent jurisdiction to enjoin the proceedings for
the redemption of such Bonds, and during the pendency of any such action the redemption proceedings
shall be suspended. Neither the Authority, the Borrower nor any Bondholder shall be responsible
for any costs, fees, expenses, or reasonable counsel fees incurred by any other party in connection
with any such action, other than the Trustee (whose costs, fees and expenses shall be paid by the
Borrower). In the event the Authority is successful in such a proceeding, and a final judgment is
rendered which is not appealable or appealed within sixty (60) days thereafter finding the Borrower
in default under Section 6.6 hereof, the Trustee shall, promptly upon receipt of notice from the
Authority of the entry of the decision, give notice of the redemption of all Outstanding Bonds
under Section 6.3 of the Indenture, and redeem all such Bonds upon the date fixed for redemption in
the notice (which shall be no more than thirty-five (35) days after the notice is given). In the
event the Borrower or such Bondholders are successful in such a proceeding, and a final judgment is
rendered which is not appealable or appealed within sixty (60) days thereafter finding the Borrower
not to be in default under Section 6.6 hereof, all proceedings for the redemption of Bonds
commenced under this Section shall be terminated. No such judgment, however, shall prejudice the
exercise of the Authority’s rights under this Section upon the occurrence of such subsequent
failure of performance under Section 6.6 hereof.



     (D) Within fifteen (15) days of the date the Trustee gives notice of any redemption of Bonds
pursuant to Section 7.3(B) above and subject to the last sentence of Section 7.3(B) above, the
Borrower shall pay as a final loan payment a sum sufficient, together with other funds on deposit
with the Trustee and available for such purpose, to redeem all Bonds then Outstanding under the
Indenture at 100% of the principal amount thereof plus accrued interest to the redemption date.
The Borrower shall also pay or provide for all reasonable and necessary fees and expenses of the
Trustee and any Paying Agent accrued and to accrue through the date of redemption of all such
Bonds.



     (E) Nothing contained in this Section shall be deemed to prevent the Authority or the Borrower
from seeking equitable relief if it asserts or disputes, as the case may be, the existence of an
event of a public purpose default.



     Section 7.4. No Duty to Mitigate Damages. Unless otherwise required by law, neither
the Authority, the Trustee nor any Bondholder
shall be obligated to do any act whatsoever or exercise any diligence whatsoever to mitigate
the damages to the Borrower if an Event of Default shall occur.



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Exhibit 4.25




     Section 7.5. Remedies Cumulative. No remedy herein conferred upon or reserved to the
Authority or the Trustee is intended to be exclusive of any other available remedy or remedies but
each and every such remedy shall be cumulative and shall be in addition to every remedy given under
this Agreement or now or hereafter existing at law or in equity or by statute. Delay or omission
to exercise any right or power accruing upon any default or failure by the Authority or the Trustee
to insist upon the strict performance of any of the covenants and agreements herein set forth or to
exercise any rights or remedies upon default by the Borrower hereunder shall not impair any such
right or power or be considered or taken as a waiver or relinquishment for the future of the right
to insist upon and to enforce, by injunction or other appropriate legal or equitable remedy, strict
compliance by the Borrower with all of the covenants and conditions hereof, or of the right to
exercise any such rights or remedies, if such default by the Borrower be continued or repeated.



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Exhibit 4.25




ARTICLE VIII

PREPAYMENT PROVISIONS




     Section 8.1. Optional Prepayment. (A) The Borrower shall have, and is hereby
granted, the option to prepay its loan obligation at any time, and from time to time, on or after
October 1, 2009 and to cause the corresponding optional redemption of the Bonds pursuant to Section
2.4(A) of the Indenture at such times, in such amounts, and with such premium, if any, for such
optional redemption as set forth in the form of the Bond, by delivering a written notice to the
Trustee in accordance with Section 8.2 hereof, with a copy to the Authority, setting forth the
amount to be prepaid, the amount of Bonds requested to be redeemed with the proceeds of such
prepayment, and the date on which such Bonds are to be redeemed. Such prepayment must be
sufficient to provide monies for the payment of interest and Redemption Price in accordance with
the terms of the Bonds requested to be redeemed with such prepayment and all other amounts then due
under the Financing Documents. In the event of any complete prepayment of its loan obligation, the
Borrower shall, at the time of such prepayment, also pay or provide for the payment of all
reasonable or necessary fees and expenses of the Authority, the Trustee and the Paying Agent
accrued and to accrue through the final payment of all the Bonds. Any such prepayments shall be
applied to the redemption of Bonds in the manner provided in Section 6.2 of the Indenture, and
credited against payments due hereunder in the same manner.



     (B) The Borrower shall have, and is hereby granted, the option to prepay its loan obligation
in full at any time without premium if any of the following events shall have occurred, as
evidenced in each case by the filing with the Trustee of a certificate of an Authorized
Representative of the Borrower to the effect that one of such events has occurred and is
continuing, and describing the same:




     (1) The Project shall have been damaged or destroyed to such extent that (a) the
Project cannot be reasonably restored within a period of six (6) months from the date of
such damage or destruction to the condition thereof immediately preceding such damage or
destruction, or (b) the Borrower is thereby prevented or likely to be prevented from
carrying on its normal operation of the Project for a period of six (6) months from the date
of such damage or destruction.




     (2) Title to or the temporary use of all or substantially all of the Project shall have
been taken or condemned by a competent authority, which taking or condemnation results or is
likely to result in the Borrower being thereby prevented or likely to be prevented from
carrying on its normal operation of the Project for a period of six (6) months.




     (3) A change in the Constitution of the State or of the United States of America or
legislative or executive action (whether local, state, or federal) or a final decree,
judgment or order of any court or administrative body (whether local, state, or federal)
that causes this Agreement to become void or unenforceable or impossible of performance in
accordance with the intent and purpose of the parties as expressed herein or, imposes
unreasonable burdens or excessive liabilities upon the Borrower with respect to the Project
or the operation thereof.




     (4) The operation of any of the Project shall have been enjoined or shall otherwise
have been prohibited by any order, decree, rule or regulation of any court or of any local,
state, or federal regulatory body, administrative agency or other governmental body for a
period of not less than six months.




     (5) Changes in the economic availability of raw materials, operating supplies or
facilities necessary for the operation of the Project or technological or other changes
shall have occurred which the Borrower cannot reasonably overcome or control and which in
the



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Exhibit 4.25



Borrower’s reasonable judgment renders the Project unsuitable or uneconomic for the
purposes herein specified or any tax shall be levied upon payments due under the Note in an
amount which the Borrower in its reasonable judgment believes imposes an unreasonable burden
upon the Borrower.


In any such case the final loan payment shall be a sum sufficient, together with other funds
deposited with Trustee and available for such purpose, to redeem all Bonds then Outstanding under
the Indenture at the redemption price of 100% of the principal amount thereof plus accrued interest
to the redemption date and all other amounts then due under the Financing Documents, and the
Borrower shall also pay or provide for all reasonable or necessary fees and expenses of the
Authority, the Trustee and Paying Agent accrued and to accrue through final payment for the Bonds.
The Borrower shall deliver a written notice to the Trustee, with a copy to the Authority,
requesting the redemption of the Bonds under the Indenture, which notice shall have attached
thereto the applicable certificate of the Authorized Representative of the Borrower.




     In addition, the Borrower may prepay all or a portion of its loan obligation in order to
preserve the tax-exempt status of interest on the Bonds in accordance with the provisions of
Section 2.4(G) of the Indenture.



     Section 8.2. Notices of Prepayment. To exercise any options granted in this Article,
or to consummate the acceleration of the loan payments as set forth in this Article, the written
notice to the Trustee shall be signed by an Authorized Representative of the Borrower and shall
specify therein the date of prepayment, which date shall be not less than thirty-five days nor more
than ninety days from the date the notice is mailed. A duplicate copy of any written notice
hereunder shall also be filed with the Authority by the Borrower.



     Section 8.3. Mandatory Prepayment on Taxability, Receipt of Request for Redemption of a
Deceased Holder’s Bonds and the Occurrence of Certain Events. The Borrower shall pay or cause
the prepayment of all or a portion of its loan obligation, as circumstances and the provisions of
Section 2.4 of the Indenture shall warrant, following (i) a Determination of Taxability in the
manner provided in Section 6.5 of this Agreement, (ii) receipt by the Trustee of a request for
redemption of a deceased owners’ Bonds in accordance with Section 2.4(D) of the Indenture and (iii)
the occurrence of certain events specified in Sections 6.1(A) and (B) of this Agreement.



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Exhibit 4.25




ARTICLE IX

GENERAL




     Section 9.1. Indenture. (A) Monies received from the sale of the Bonds and all loan
payments made by the Borrower and all other monies received by the Authority or the Trustee under
the Financing Documents shall be applied solely and exclusively in the manner and for the purposes
expressed and specified in the Indenture and in the Bonds and as provided in this Agreement.



     (B) The Borrower shall have and may exercise all the rights, powers and authority given the
Borrower in the Indenture and in the Bonds, and the Indenture and the Bonds shall not be modified,
altered or amended in any manner which adversely affects such rights, powers and authority or
otherwise adversely affects the Borrower without the prior written consent of the Borrower.



     Section 9.2. Benefit of and Enforcement by Bondholders. The Authority and the
Borrower agree that this Agreement is executed in part to induce the purchase by others of the
Bonds and for the further securing of the Bonds, and accordingly that all covenants and agreements
on the part of the Authority and the Borrower as to the amounts payable with respect to the Bonds
hereunder are hereby declared to be for the benefit of the holders from time to time of the Bonds
and may be enforced as provided in the Indenture on behalf of the Bondholders by the Trustee.



     Section 9.3. Force Majeure. In case by reason of force majeure either party hereto
shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then
except as otherwise expressly provided in this Agreement, if such party shall give notice and full
particulars of such force majeure in writing to the other party within a reasonable time after
occurrence of the event or cause relied on, the obligations of the party giving such notice, other
than the obligation of the Borrower to make the payments required under the terms hereof or of the
Note, so far as they are affected by such force majeure, shall be suspended during the continuance
of the inability then claimed which shall include a reasonable time for the removal of the effect
thereof, but for no longer period, and such parties shall endeavor to remove or overcome such
inability with all reasonable dispatch. The term “force majeure”, as employed herein, means acts
of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, orders of any
kind of the Government of the United States, of the State or any civil or military authority,
insurrections, riots, epidemics, landslides, lightning, earthquakes, volcanoes, fires, hurricanes,
tornadoes, storms, floods, washouts, droughts, arrests, restraining of government and people, civil
disturbances, explosions, partial or entire failure of utilities, shortages of labor, material,
supplies or transportation, or any other similar or different cause not reasonably within the
control of the party claiming such inability. It is understood and agreed that the settlement of
existing or impending strikes, lockouts or other industrial disturbances shall be entirely within
the discretion of the party having the difficulty and that the above requirements that any force
majeure shall be reasonably beyond the control of the party and shall be remedied with all
reasonable dispatch shall be deemed to be fulfilled even though such existing or impending strikes,
lockouts and other industrial disturbances may not be settled and could have been settled by
acceding to the demands of the opposing person or persons.



     Section 9.4. Amendments. This Agreement may be amended only with the concurring
written consent of the Trustee and, if required by the Indenture, of the owners of the Bonds given
in accordance with the provisions of the Indenture.



     Section 9.5. Notices. All notices, certificates or other communications hereunder
shall be sufficiently given and shall be deemed given when delivered or when mailed by registered
or certified mail, postage prepaid, addressed as follows: if to the Authority, at 999
West Street, Rocky Hill, Connecticut 06067, Attention: Program Manager — Loan Administration;
if to the Borrower, 93 West Main Street, Clinton, Connecticut 06413 Attention: Vice
President-Finance; if to the Paying Agent,



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Exhibit 4.25



Goodwin Square, 225 Asylum Street, Hartford, Connecticut
06103, Attention: Corporate Trust Department; if to the Trustee, Goodwin Square, 225 Asylum Street,
Hartford, Connecticut 06103, Attention: Corporate Trust Administration; and if to the Bond Insurer,
125 Park Avenue, New York, New York 10017, Attention: Risk Management. A duplicate copy of each
notice, certificate or other communication given hereunder by either the Authority or the Borrower
to the other shall also be given to the Trustee and the Bond Insurer. In addition, copies of all
amendments to this Agreement which are consented to by the Bond Insurer shall be sent to S&P. The
Authority, the Borrower, the Paying Agent, the Trustee and the Bond Insurer may, by notice given
hereunder, designate any further or different addresses to which subsequent notices, certificates
or other communications shall be sent.




     Section 9.6. Prior Agreements Superseded. This Agreement, together with all
agreements executed by the parties concurrently herewith or in conjunction with the sale of the
Bonds, shall completely and fully supersede all other prior understandings or agreements, both
written and oral, between the Authority and the Borrower relating to the lending of money and the
Project, including those contained in any commitment letter executed in anticipation of the
issuance of the Bonds but excluding agreements entered into in connection with the financing of the
Project with other bonds previously issued by the Authority.



     Section 9.7. Execution of Counterparts. This Agreement may be executed simultaneously
in several counterparts each of which shall be an original and all of which shall constitute but
one and the same instrument.



     Section 9.8. Time. All references to times of day in this Agreement are references to
New York City time.



     Section 9.9. Separability of Invalid Provisions. In case any one or more of the
provisions contained in this Agreement or in the Note shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein.



     Section 9.10. Third Party Beneficiaries. The Authority and the Borrower agree that
the Trustee, the Paying Agent and the Bond Insurer shall be third party beneficiaries of this
Agreement to the extent that any of the provisions hereof relate to or provide rights to the
Trustee, the Paying Agent or the Bond Insurer.



     Section 9.11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, without reference to its choice of law
principles.



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Exhibit 4.25




     IN WITNESS WHEREOF, the Authority has caused this Agreement to be executed in its corporate
name by a duly Authorized Representative, and the Borrower has caused this Agreement to be executed
in its corporate name by its duly authorized officer all as of the date first above written.



	 	 	 	 	 
	 	 	CONNECTICUT DEVELOPMENT AUTHORITY
	 
	 	 	 	 
	 

	 	By
	 	/s/ Karin A. Lawrence
	 

	 	 	 	 
	 	 	Name: Karin A. Lawrence
	 	 	Authorized Representative
	 
	 	 	 	 
	 	 	THE CONNECTICUT WATER COMPANY
	 
	 	 	 	 
	 

	 	By
	 	/s/ David C. Benoit
	 

	 	 	 	 
	 	 	Name: David C. Benoit
	 	 	Title: Vice President — Finance and
	 	 	          Chief Financial Officer






-38-









 






Exhibit 4.25




APPENDIX A



THE CONNECTICUT WATER COMPANY



FORM OF
PROMISSORY NOTE

2005A SERIES




	 	 	 
	No. 1
	 	$10,000,000






     The Connecticut Water Company, a corporation organized and existing under the laws of the
State of Connecticut (the “Borrower”), for value received, hereby promises to pay to the order of
the Connecticut Development Authority (the “Authority”), the principal sum of $10,000,000.00
together with interest on the unpaid principal balance thereof from the date hereof until fully and
finally paid, on the applicable Interest Payment Dates together with all taxes levied or assessed
on this Note or the debt evidenced hereby against the holder hereof. This Note shall bear interest
at the rate of interest borne by the Bonds referred to below.



     This Note has been executed under and pursuant to a Loan Agreement, dated as of October 1,
2005, between the Authority and the Borrower (the “Agreement”). This Note is issued to evidence
the obligation of the Borrower under the Agreement to repay the loan made by the Authority from the
proceeds of its $10,000,000 Water Facilities Revenue Bonds (The Connecticut Water Company Project -
2005A Series) (the “Bonds”), together with interest thereon and all other amounts, fees, penalties,
premiums, adjustments, expenses, reasonable counsel fees and other payments of any kind required to
be paid by the Borrower under the Agreement. The Agreement includes provision for mandatory and
optional prepayment of this Note as a whole or in part. Advances made pursuant to Section 6.4 of
the Agreement shall bear interest at the rate specified in accordance therewith.



     The Agreement and this Note (hereinafter, together with the Tax Regulatory Agreement,
collectively referred to as the “Financing Documents”) have been assigned to U.S. Bank National
Association (the “Trustee”) acting pursuant to an Indenture of Trust, dated as of October 1, 2005
(the “Indenture”), between the Authority and the Trustee. Such assignment is made as security for
the payment of the Bonds issued by the Authority pursuant to the Indenture.



     As provided in the Agreement and subject to the provisions thereof, payments hereon are to be
made at the corporate trust office of U.S. Bank National Association in Hartford, Connecticut, or
at the office designated for such payment by any successor trustee in an amount which, together
with other moneys available therefor pursuant to the Indenture, will equal the amount payable as
principal or Redemption Price, if any, of and interest on the Bonds outstanding under the Indenture
on each such due date.



     The Borrower shall make payments on this Note on the dates and in the amounts specified herein
and in the Agreement and in addition shall make such other payments as are required pursuant to the
Financing Documents, the Indenture and the Bonds. Upon the occurrence of an Event of Default, as
defined in any of the Financing Documents, the principal of and interest on this Note may be
declared immediately due and payable as provided in the Agreement. Upon any such declaration the
Borrower shall pay all cost, disbursements, expenses and reasonable counsel fees of the Authority
and the Trustee in seeking to enforce their rights under any of the Financing Documents.



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Exhibit 4.25




     THE BORROWER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A COMMERCIAL TRANSACTION AND
WAIVES ITS RIGHTS TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR
AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE
HOLDER HEREOF MAY DESIRE TO USE. The Borrower further (1) waives diligence, demand, presentment
for payment, notice of nonpayment, protest and notice of protest, notice of any renewals or
extension of this Note, and all rights under any statute of limitations, (2) agrees that the time
for payment of this Note may be changed and extended in accordance with the provisions of the
Indenture, and (3) consents to the release of all or any part of the security for the payment
thereof at the discretion of the Trustee or the release of any party liable for this obligation
without affecting the liability of the other parties hereto. Any delay on the part of the
Authority or the Trustee in exercising any right hereunder shall not operate as a waiver of any
such right, and any waiver granted with respect to one default shall not operate as a waiver in the
event of any subsequent default.



     IN WITNESS WHEREOF, The Connecticut Water Company has caused this Note to be executed in its
corporate name by its duly authorized officer, dated November 30, 2005.



	 	 	 	 	 
	 	 	THE CONNECTICUT WATER COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	    /s/ David C. Benoit
	 

	 	 	 	 
	 

	 	 	 	    Name: David C. Benoit
	 

	 	 	 	    Authorized Representative






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Exhibit 4.25




AUTHORITY ENDORSEMENT



Pay to the order of U.S. Bank National Association, as Trustee, without recourse.




	 	 	 	 	 
	 	 	CONNECTICUT DEVELOPMENT AUTHORITY
	 
	 	 	 	 
	 

	 	By:
	 	    /s/ Karin A. Lawrence
	 

	 	 	 	 
	 

	 	 	 	    Name: Karin A. Lawrence
	 

	 	 	 	    Authorized Representative






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Exhibit 4.25




APPENDIX B



DESCRIPTION OF PROJECT REALTY




     NONE.



 









 





Exhibit 4.25




APPENDIX C



DESCRIPTION OF PROJECT EQUIPMENT




     The Project Equipment shall consist of various improvements to certain of the Borrower’s water
systems each of which collects, treats, stores, transmits and distributes water for residential,
commercial, industrial and fire protection services in certain cities, towns and communities within
Connecticut. The Borrower’s systems are operationally separate and are organized into regions.
Those systems affected by the improvements and the regions to which they are allocated are as
follows: (1) Shoreline Region, consisting of the Guilford System, the Chester System, the Point O’
Woods System and the Mason Islands System; (2) the Naugatuck Region, consisting of Central System
and the Terryville System and (3) the Northern Region, consisting of the Western System and the
Stafford System.



	 	 	 
	Description	 	Location
	Shoreline Region
	 	 
	 
	 	 
	Killingworth Dam — raise Killingworth Dam five feet,
reconstruct spillway and replace existing intake piping

	 	105 Deep River Rd., (Rte 80)
Killingworth, CT.
	 
	 	 
	Deep River Sewer — Repaired water main Spring St. from
River west to Union St.; Union St. from Spring St. south
to Liberty St; Union St. from Rte 80 south to Church
St.; and Rogers Lane

	 	As Described,
Deep River, CT.
	 
	 	 
	Money Point Water Main Replacement

	 	Money Point Road on Masons
Island from house #30 to
end. Stonington CT.
	 
	 	 
	Wildwood Water Main Interconnection

	 	Route 156. Installed water
main from Point of Woods
System to Wildwood System.
Old Lyme, CT.
	 
	 	 
	Beach Park Road Water Main Replacement

	 	From Shore Grove Road South
to Shore Road Clinton, CT.
	 
	 	 
	Main Street Water Main Replacement

	 	From head of Main St. to
Back Street, Essex, CT.
	 
	 	 
	Route 1 Water Main Replacement

	 	From Green Acres Drive to
East River Bridge, Madison,
CT.
	 
	 	 
	Route 1 Water Main Replacement

	 	East River Bridge to Tanner
Marsh Rd., Guilford, CT
	 
	 	 
	Naugatuck Region
	 	 
	 
	 	 
	Route 6 Water Main  — New installation of 12” water main.

	 	Route 6 between North St.
and Scott Road, Thomaston &
Plymouth, CT.






 









 






Exhibit 4.25




	 	 	 
	Description	 	Location
	Middlebury Pump Station — construction of precast
concrete building with 30 square feet of space,
containing pump and related instrumentation. Two pumps,
350 gallons per minute each, 1 million gallons per day
total.

	 	Directly opposite 158

Shadduck Road, Middlebury,

CT
	 
	 	 
	New Haven Road Valve Insertion — New Water Valve Install
20” butterfly valve using dual line stop, maintaining
service.

	 	Warren Avenue and Rt. 63,
Naugatuck, CT
	 
	 	 
	Bemis Street Water Main

	 	Bemis St. between Armdruster
Rd. and Country Farms,
Plymouth, CT.
	 
	 	 
	Northern Region
	 	 
	 
	 	 
	Talcottville PRV — Installed new Pressure Reading Valve

	 	Talcottville Rd. south of
Kelly Rd., Vernon, CT
	 
	 	 
	Rockville Security — Installed perimeter fencing, auto
gate and video surveillance.

	 	10 Snipsic Street, Vernon, CT
	 
	 	 
	Oak Street Water Main Replacement

	 	Oak St. from Center St. to
Chestnut, Windsor Locks, CT.
	 
	 	 
	Ratley Road Water Main Replacement

	 	On Ratley Rd. from Mountain
Rd., 800 ft. North,
Suffield, CT.
	 
	 	 
	James Street Water Main Replacement

	 	On James St. from Center St.
800 ft. West, Windsor Locks,
CT.
	 
	 	 
	East Street Water Main Replacement

	 	East St. from Hickory St.
North to CT/MA border,
Suffield, CT.
	 
	 	 
	Thompsonville Well #8 — Install new production well with a
capacity of 600 gallons per minute.

	 	40 Booth Rd., Enfield, CT
	 
	 	 
	Stafford Water Treatment Plant Improvements

	 	#20 Buckley Highway (Rte.
190), Stafford, CT
	 
	 	 
	Second Water Tank, Wapping Wood Road – Install new 2.3
million gallon above ground water storage tank.

	 	Located next to an existing
water tank at 2990 Ellington
Rd., South Windsor CT






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