ASSET PURCHASE AGREEMENT
                             ------------------------



        This ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
   the 26th day of June, 1998, by and among CCF-1, INC. ("Seller"), a
   Connecticut corporation, KENETECH FACILITIES MANAGEMENT, INC.("KFM"), a
   Delaware corporation, and THE HARTFORD STEAM COMPANY ("Purchaser"), a
   Connecticut corporation, with reference to the following RECITALS:

   RECITALS
   --------

        A.   Seller owns a cogeneration facility (the "Facility") located at 19
   Jefferson Street, Hartford, Connecticut (the "Site"), for the generation of
   steam and electricity for sale to Hartford Hospital (the "Hospital");

        B.   KFM is an affiliate of Seller that operates the Facility pursuant
   to an Operation and Maintenance Agreement for Gas Turbine Cogeneration
   Facility, dated April 10, 1987, between Plant Facilities Management, Inc.
   (the former name of KFM) and Seller, as amended January 15, 1998, by an
   amendment between KFM and Seller (collectively, the "Operating Agreement");

        C.   Purchaser is an indirect subsidiary of CTG Resources, Inc. and is
   engaged in district heating and cooling services; and

        D.   Seller and KFM desire to sell and transfer to Purchaser and
   Purchaser desires to purchase certain of the assets comprising the Facility
   and assume certain obligations of Seller under certain contracts related
   thereto, all as more fully described in this Agreement;

        NOW, THEREFORE, in consideration of the recitals and of the respective
   covenants, representations, warranties and agreements herein contained, and
   intending to be legally bound hereby, the parties hereto hereby agree as
   follows:


















<PAGE>






                          ARTICLE I - PURCHASE AND SALE
                          -----------------------------

        1.1  AGREEMENTS TO SELL AND ASSIGN.  At the Closing hereunder (as
   defined in Section 2.1 hereof), Seller and KFM shall grant, sell, convey,
   assign, transfer and deliver to Purchaser, upon and subject to the terms and
   conditions of this Agreement, all right, title and interest of Seller and
   KFM in and to the following assets of Seller or KFM, as the case may be, as
   the same shall exist on the Closing Date (collectively, the "Purchased
   Assets"), free and clear of all mortgages, liens, security  interests, and
   encumbrances, except for Permitted Liens (as defined in Section 3.1.6
   below):

        (a)  The following equipment, supplies and other tangible assets of
   Seller or KFM, as the case may be (collectively, the "Tangible Assets"):

        all machinery, equipment, piping, fixtures, parts, tools, furniture,
        furnishings, leasehold improvements, goods, inventory, raw materials,
        office and other supplies, computers (and related software) and other
        tangible personal property used in the operation of the Facility and
        located at the Site, including without limitation all personal property
        listed on SCHEDULE 1.1(a), but excluding the Excluded Assets set forth
        in Section 1.2 hereof; 

        (b)  the following leases, contracts and other agreements
   (collectively, the "Purchased Agreements"):

             (i) the Project Development Agreement, dated as of April 10, 1987,
        between the Hospital and CNF Industries, Inc. ("CNF"), a predecessor-
        in-interest to Seller, as amended by an Agreement Amending Ground Lease
        and Project Development Agreement (the "GL and PDA Amendment"), dated
        as of December 21, 1988, between the Hospital, CNF and Seller, and an
        Amendment No. 1 to Project Development Agreement, dated as of February
        28, 1998, between the Hospital and Seller (as amended, the "Project
        Development Agreement"), and a Ground Lease, dated as of April 10,
        1987, between the Hospital and CNF, as amended by the GL and PDA
        Amendment, and as assigned to Seller by CNF (as amended and assigned,
        the "Ground Lease") (collectively, the "Hospital Agreements");

             (ii) the Purchase Agreement between Solar Turbines, Incorporated
        ("Solar") and Seller, dated January 26, 1998, as amended by
        Clarifications, dated January 28, 1998, a Telefax from B. Carlin to J.
        McKenty, concerning "Revised Contract Price," dated May 21, 1998, and a
        memorandum response from C. Diez to B. Carlin, concerning "Final
        Invoice for Solar Gas Turbine," dated June 9, 1998, and a memorandum
        from B. Carlin to C. Diez, concerning "Final Invoice Arrangements,"
        dated June 11, 1998 and an amendment dated June 25, 1998 (as amended,
        the "Solar Purchase Agreement");

             (iii)  Seller's Purchase Order No. IP200194, dated March 30, 1998,
        with Cleaver Brooks Co., a Division of Aqua-Chem, Inc. ("Cleaver
        Brooks") and Seller's Purchase Order No. IP200193, dated March 30,
        1998, with Blake Equipment Company, Inc. ("Blake"), as amended by

                                        2
   <PAGE>





        letters dated May 1, 1998 and May 4, 1998 (together with the Solar
        Purchase Agreement, collectively referred to as the "Equipment Purchase
        Agreements");

             (iv)  the Termination and Release Agreement, dated December 15,
        1997, by and between Seller and The Connecticut Light and Power Company
        ("CL&P"), as amended by the Amendment to the Termination and Release
        Agreement, made as of February 28, 1998, by and between Seller and CL&P
        (as amended, the "Termination and Release Agreement") and a CL&P
        Document Termination Agreement, dated as of December 17, 1997, amended
        and restated as of February 28, 1998 (as amended and restated, the
        "Document Termination Agreement") (collectively, the "CL&P
        Agreements"), including the right to all post-Closing payments required
        to be made by CL&P under Section 2.03 of the Termination and Release
        Agreement and of the Document Termination Agreement and the obligation
        to indemnify CL&P and certain other parties as set forth in those
        documents; 

             (v)  National Airmotive Corporation's ("NAC") Purchase Order
        43718, dated May 29, 1998 (the "Turbine Sales Agreement"), by which NAC
        will purchase the Allison HH 571-KA Engine S/N 506 and related spare
        parts; provided, however, that to the extent Seller or KFM shall have
        received proceeds of such purchase prior to the Closing Date, Seller
        shall deposit such proceeds with the Trustee (as defined in Section 1.1
        (e) below);

             (vi) the Extended Service Agreement, dated January 26, 1998,
        between KFM and Solar (the "Extended Service Agreement"); and

             (vii)  the Firm Transportation Service Agreement, dated February
        5, 1992 (the "CNG Agreement"), between Seller and Connecticut Natural
        Gas Corporation ("CNG"); 

             (viii) any additional agreements set forth on SCHEDULE 1.1(b)
        (viii) (collectively, the "Other Agreements");

        (c)  all documentation concerning the Purchased Assets currently in the
   possession of Seller or KFM, including all maps, plans, specifications,
   manuals, maintenance and repair records, engineering drawings and reports,
   warranty information, purchase agreements, and copies of all other
   documentation concerning the operations of the Facility, including operating
   records, environmental reports and compliance documentation, and supplier
   and customer information (the "Documentation");

        (d)  all existing licenses, permits and governmental approvals and
   authorizations used in the operation of the Facility (the "Existing
   Permits"); 

        (e)  all cash, bank deposits and cash equivalents of Seller ("Seller's
   Funds"), including all funds held by Connecticut General Life Insurance
   Company ("CIGNA") or the State Street Bank and Trust Company, acting in its
   capacity as trustee (the "Trustee"), in the trust accounts (the "Trustee
   Funds") provided for in the Mortgage (as hereinafter defined), the CIGNA
   Note Agreement (as hereinafter defined) or a Depository Agreement among

                                                                       3
                 <PAGE>





   CIGNA, Seller and the predecessor of Trustee, executed on or about December
   10, 1987; and

        (f)  the building and improvements owned by Seller at 19 Jefferson
   Street, Hartford, Connecticut (collectively, the "Building").

        1.2  EXCLUDED ASSETS.  Notwithstanding the foregoing, the Purchased
   Assets shall not include any of the following:

        (a)  the corporate seals, certificates of incorporation, minute books,
   stock books, tax returns, books of account or other records having to do
   with the corporate organization of Seller or KFM;

        (b)  that certain Chevrolet S-10 truck owned by KFM; and

        (c)  all trash, non-functional or excess pipe, valves, fittings, etc.
   removed as waste by Seller or KFM during Seller s on-going efforts to
   replace the Facility s existing turbines and to repower the Facility (the
   "Repowering").

        1.3  AGREEMENT TO PURCHASE AND ASSUME.  At the Closing hereunder,
   Purchaser shall:

        (a) purchase from Seller and KFM the Purchased Assets, subject to the
   terms and conditions of this Agreement and in reliance on the
   representations, warranties and covenants of Seller and KFM contained
   herein, in exchange for the Purchase Price, as defined in Section 1.4
   hereof;

        (b) assume and agree to pay, discharge, guarantee or perform, as
   appropriate, all of the obligations of Seller and KFM to be performed or
   discharged on or after the Closing Date under the Purchased Agreements;
   provided, however, that Purchaser shall not assume or agree to pay, perform
   or discharge any liability or obligations arising out of any breach by
   Seller or KFM  of any provision of any such Purchased Agreements prior to
   the Closing Date ("Excluded Liabilities").

        1.4  THE PURCHASE PRICE.

             1.4.1     PURCHASE PRICE.  The purchase price shall be the sum of
   (i) $6,200,000.00 and (ii) $10,744,499.10, which amount equals the balance,
   including both principal and interest, without prepayment penalty, of
   Seller s indebtedness as of the Closing Date (the "Mortgage Debt") under a
   certain Note Agreement, dated as of April 10, 1987, between Seller and
   CIGNA, as amended by a letter agreement, dated December 31, 1998, by a
   Second Amendment to Note Agreement, dated as of January 15, 1998, and a
   Third Amendment to Note Agreement, dated as of February 28, 1998, (as
   amended, the "CIGNA Note Agreement"), and a Leasehold Mortgage and Security
   Agreement between Seller and Shawmut Bank, N.A., as Trustee dated as of
   December 30, 1987 and recorded in the Hartford Land Records in Volume 2714
   at Page 8, as amended by modifications or amendments dated December 22, 1988
   and recorded in Volume 2873, Page 72; January 15, 1998 and recorded in
   Volume 3911, Page 224; and February 28, 1998 and recorded in Volume 3955,
   Page 208, now held by Trustee (the "Mortgage"),subject to any adjustments

                                        4
   <PAGE>





   pursuant to Section 1.4.2 hereof (as adjusted, the "Purchase Price").  In
   the event any Trustee Funds are not credited to reduce the amounts payable
   under the CIGNA Note Agreement or the Mortgage, such Trustee Funds shall be
   the property of Purchaser at Closing and Seller shall, by written notice,
   direct any party holding such Trustee Funds to pay them directly to
   Purchaser (the "Payment Notice").
                  
             1.4.2     ADJUSTMENT OF PURCHASE PRICE.  The Purchase Price shall
   be adjusted at Closing as follows:

                  (a)  In the event that prior to the Closing Date, Seller
   receives any insurance proceeds from its pending claim against Hartford
   Steam Boiler Company for business interruption insurance and Seller either
   deposits such proceeds with the Trustee or utilizes such proceeds in
   connection with the Repowering of the Facility, the Purchase Price shall be
   increased by the amount so deposited or used;

                  (b)  In the event that the amount of Mortgage Debt
   outstanding as of April 30, 1998, proves to have been greater or less than
   $9,188,671, the Purchase Price shall be reduced or increased, as
   appropriate, by the amount of the difference.  

             1.4.3     PAYMENT OF PURCHASE PRICE AND PAYMENT OF MORTGAGE DEBT. 
   On the Closing Date, Purchaser shall pay the Mortgage Debt to CIGNA; shall
   pay the balance of the Purchase Price to Seller and KFM by wire transfers of
   immediately available funds in the amounts provided for in Section 2.2(b)
   below.

             1.4.4     ALLOCATION OF PURCHASE PRICE.  The Purchase Price shall
   be allocated to the Purchased Assets and the liabilities assumed by
   Purchaser hereunder (together, the "Total Consideration") as set forth on
   SCHEDULE 1.4.4.  The Seller and Purchaser agree to cooperate with each other
   in meeting the requirements of Section 1060 of the Internal Revenue Code of
   1986, as amended, and each agrees to file Internal Revenue Service Form 8594
   in accordance with the allocations set forth on SCHEDULE 1.4.4.




















                                                                       5
                 <PAGE>






                   ARTICLE II   CLOSING; ITEMS TO BE DELIVERED
                   -------------------------------------------

        2.1  CLOSING AND CLOSING DATE.  The closing (the "Closing") of the sale
   and purchase of the Purchased Assets shall take place at 10:00 A.M., local
   time, on or before June 30, 1998 at the offices of Murtha, Cullina, Richter
   and Pinney LLP, CityPlace I, 185 Asylum Street, Hartford, Connecticut 06103-
   3469.  The date of the Closing is sometimes herein referred to as the
   "Closing Date."  The Closing shall be deemed effective upon the delivery of
   the Purchased Assets and payment of the Purchase Price. 

        2.2  ITEMS TO BE DELIVERED AT CLOSING.  At the Closing and subject to
   the terms and conditions herein contained:

             (a)  Seller and KFM shall deliver to Purchaser the following:

                  (i)  such bills of sale with covenants of warranty,
        assignments, endorsements, deeds (including a warranty deed from Seller
        and a quitclaim deed from CNF Industries, Inc. ("CNF") or a warranty
        deed from Seller in which CNF joins with quitclaim covenants only as to
        CNF), conveyance tax forms, assignment of Ground Lease and Project
        Development Agreement, and other good and sufficient instruments and
        documents of conveyance and transfer, in form satisfactory to Purchaser
        and Seller and their respective counsel; and

                  (ii) the payment of Seller's Funds, to the extent not applied
        to the Mortgage Debt, and the Payment Notice as to any Trustee Funds
        not so applied, and

                  (iii)  appropriate incumbency certificates, corporate
        resolutions, certificates of good standing or legal existence, title
        affidavits concerning parties in possession and mechanics liens (or
        lien waivers) to allow title coverage without exception therefor, such
        releases as are required to deliver clear title, certificate of
        occupancy, original copies of the Ground Lease and the Project
        Development Agreement, and all required consents and releases,

   and simultaneously with such delivery, all such steps will be taken as may
   be required to put Purchaser in actual possession and operating control of
   the Purchased Assets.

             (b)  Purchaser shall deliver the following:

                  (i)  to KFM, $250,000;

                  (ii) to CIGNA, the Mortgage Debt; and

                  (iii)  to Seller, the balance of the Purchase Price not
             delivered to KFM and CIGNA; and

                  (iv)  an undertaking whereby Purchaser will assume and agree
             to pay, discharge or perform, as appropriate, Seller's liabilities
             and obligations to the extent and as provided in Section 1.3(b)

                                        6
   <PAGE>





             hereof, in form satisfactory to Seller and its counsel.

             (c)  At or prior to the Closing, the parties hereto shall also
   deliver to each other the agreements, consents, approvals, assignments,
   opinions, certificates and other documents and instruments referred to in
   Article IV hereof.


                   ARTICLE III - REPRESENTATIONS AND WARRANTIES
                   --------------------------------------------

        3.1  REPRESENTATIONS AND WARRANTIES OF SELLER AND KFM.  Seller and KFM
   hereby represent and warrant to Purchaser that:

             3.1.1     CORPORATE EXISTENCE.  Each of KFM and Seller is a
   corporation duly organized, validly existing and (as to KFM only) in good
   standing under the laws of the jurisdiction of its incorporation, and KFM is
   duly qualified to do business as a foreign corporation in the State of
   Connecticut.

             3.1.2     CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. 
   Each of KFM and Seller has the corporate power, authority and legal right to
   execute, deliver and perform this Agreement.  The execution, delivery and
   performance of this Agreement by KFM and Seller have been duly authorized by
   all necessary corporate action.  This Agreement has been, and the other
   agreements, documents and instruments required to be delivered by Seller or
   KFM in accordance with the provisions hereof (the "Seller's Documents") will
   be, duly executed and delivered on behalf of KFM and Seller by duly
   authorized officers of KFM and Seller, and this Agreement constitutes, and
   the Seller's Documents when executed and delivered will constitute, the
   legal, valid and binding obligations of such of KFM and Seller as is a party
   thereto, enforceable against such party in accordance with their respective
   terms, except to the extent such enforceability is subject to the effect of
   any applicable bankruptcy, insolvency, reorganization, moratorium or other
   law affecting or relating to creditors' rights generally and general
   principles of equity (regardless of whether such enforceability is
   considered in a proceeding in equity or at law).

             3.1.3     CONSENTS AND APPROVALS.  The execution, delivery and
   performance of this Agreement, including without limitation the assignment
   of the Purchased Agreements, by Seller and KFM do not require any consents
   or approvals by any contract party other than such consents and approvals
   identified in Section 4.3 which have been secured.

             3.1.4     ABSENCE OF UNDISCLOSED LIABILITIES.  To the actual
   knowledge of Seller and KFM, neither Seller nor KFM has any material
   liabilities, commitments or obligations, and neither has pending or
   threatened claims or litigation against it in connection with the Purchased
   Assets or the Facility, in each case or in the aggregate the effect of which
   would have a material adverse effect on the Purchased Assets or the
   Facility, except as disclosed in SCHEDULE 3.1.4.

             3.1.5     ABSENCE OF VIOLATIONS OF LAW OR EXISTING PERMITS.  To
   the actual knowledge of the officers of Seller and KFM, except as disclosed

                                                                       7
                 <PAGE>





   on SCHEDULE 3.1.5, neither Seller nor KFM is in material default or
   violation under any law, regulation (including, but not limited to,
   environmental regulations), or Existing Permit applicable to the Purchased
   Assets or the Facility, in each case or in the aggregate the effect of which
   would have a material adverse effect on the Purchased Assets or the
   Facility.

             3.1.6     TITLE TO PROPERTIES; DISCLAIMER CONCERNING TANGIBLE
   ASSETS.  Seller and KFM have good, valid and marketable title to all of the
   Tangible Assets, free and clear of all mortgages, liens, pledges, security
   interests, charges, claims, restrictions and other encumbrances and defects
   of title of any nature whatsoever, except for (i) liens, restrictions and
   encumbrances listed on SCHEDULE 3.1.6(a) hereof, (ii) remaining payment
   obligations with respect to certain Purchased Assets as disclosed on
   SCHEDULE 3.1.6(b), and (iii) liens that are immaterial in character, amount,
   and extent and that do not detract from the value or interfere with the
   present or proposed use of the Facility including, without limitation, any
   liens of carriers, warehousemen, mechanics, materialmen and other similar
   liens imposed by law ("Permitted Liens").  

             3.1.7     PURCHASED AGREEMENTS.  To the actual knowledge of the
   officers of Seller and KFM, each of the Purchased Agreements is in full
   force and effect and has not been assigned, modified, supplemented or
   amended except as specified herein, and neither Seller, nor KFM nor any
   other party to any of the Purchased Agreements is in material default under
   any such Purchased Agreement, and no circumstances or state of facts
   presently exists which, with the giving of notice or passage of time, or
   both, would permit any such party to terminate a Purchased Agreement.

             3.1.8     ENVIRONMENTAL MATTERS.

             (a)  Except as set forth in SCHEDULE 3.1.8(a), to the actual
   knowledge of its officers, Seller knows of no material violation of any laws
   relating to pollution or protection of the environment arising out of
   Seller's past or present ownership, use or operations of the Facility and
   the Site on which it is located, in each case the effect of which would have
   a material adverse effect on the Purchased Assets or the Facility.

             (b)  Except as set forth in SCHEDULE 3.1.8(b), to the actual
   knowledge of its officers, Seller knows of no pending or threatened lawsuits
   or administrative proceedings against Seller that may affect Seller
   regarding environmental compliance, control or liability relating to the
   Facility, in which case the effect of which would have a material adverse
   effect on the Purchased Assets or the Facility.
        
             3.1.9     TAXES.  Except as provided in Section 7.2, Seller and
   KFM have paid or properly accrued all required federal, state and local
   taxes, including without limitation income tax, unemployment compensation,
   social security, payroll, sales and use, gross receipt and property, and
   have filed all required tax returns related thereto.

             3.1.10    ABSENCE OF EMPLOYEES.  Since January 1, 1998, Seller has
   not provided compensation to any employees.


                                        8
   <PAGE>





             3.1.11    REPRESENTATIONS AS TO CL&P AGREEMENTS.  Seller
   represents with the respect to the CL&P Agreements:

                       (a)  The payments due Purchaser from CL&P under the CL&P
   Agreements (the "Payments") are as set forth in SCHEDULE 3.1.11 hereto;

                       (b)  Seller is the sole owner of the rights to such
   Payments and has full right, power and authority to assign them to
   Purchaser;

                       (c)  Except for those of the Trustee and CIGNA, no other
   person or entity has any claim upon or lien against or interest in the
   Payments, and the Payments are free and clear of all encumbrances
   whatsoever;

                       (d)  CL&P has no right of offset or other right or
   reason not to make the Payments as and when due, except as set forth in the
   second to last sentence of Section 2.03(i) of the Termination and Release
   Agreement and the last sentence of Section 2.03 of the Document Termination
   Agreement; and

                       (e)  Seller is not in default under the CL&P Agreements
   or any other document or instrument of any nature which would give any other
   person or entity a claim, lien or other encumbrance upon the Payments or
   which would give CL&P any right not to make the Payments or to claim an
   offset against the Payments.

             3.1.12    LIMITATIONS ON SELLER'S AND KFM's REPRESENTATIONS AND
   WARRANTIES.  Except as otherwise set forth in this Agreement (including its
   schedules) or in any documents executed by Seller and KFM at or in
   contemplation of the Closing, Seller and KFM are selling to Purchaser, and
   Purchaser is buying from Seller and KFM, the Purchased Assets on an "AS IS,
   WHERE IS" and "WITH ALL FAULTS" basis.  Purchaser hereby acknowledges that,
   except as otherwise set forth in this Agreement (including its schedules) or
   any documents executed by Seller and KFM at or in contemplation of the
   Closing, SELLER AND KFM HAVE NOT MADE, DO NOT MAKE, AND HEREBY DISCLAIM ANY
   REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
   SUCH PURCHASED ASSETS INCLUDING, BUT NOT LIMITED TO, THE DESIGN, CAPACITY,
   CONDITION, MERCHANTABILITY, OR FITNESS FOR USE OR FOR ANY PARTICULAR
   PURPOSE, OF ANY PORTION OF SUCH PURCHASED ASSETS.   

        3.2  REPRESENTATIONS AND WARRANTIES OF PURCHASER.  Purchaser represents
   and warrants to Seller and KFM as follows:

             3.2.1.    CORPORATE EXISTENCE.  Purchaser is a corporation duly
   organized and validly existing under the laws of the State of Connecticut.

             3.2.2     CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. 
   Purchaser has the corporate power, authority and legal right to execute,
   deliver and perform this Agreement.  The execution, delivery and performance
   of this Agreement by Purchaser have been duly authorized by all necessary
   corporate action.  This Agreement has been, and the other agreements,
   documents and instruments required to be delivered by Purchaser in
   accordance with the provisions hereof (the "Purchaser s Documents") will be,

                                                                       9
                 <PAGE>





   duly executed and delivered on behalf of Purchaser by duly authorized
   officers of Purchaser, and this Agreement constitutes, and the Purchaser s
   Documents when executed and delivered will constitute, the legal, valid and
   binding obligations of Purchaser, enforceable in accordance with their
   respective terms, except to the extent such enforceability is subject to the
   effect of any applicable bankruptcy, insolvency, reorganization, moratorium
   or other law affecting or relating to creditors' rights generally and
   general principles of equity (regardless of whether such enforceability is
   considered in a proceeding in equity or at law).

             3.2.3     CONSENTS AND APPROVALS.  The execution, delivery and
   performance of this Agreement by Purchaser do not require any consents or
   approvals by any contract party or federal, state or local regulatory agency
   other than such consents and approvals identified in Section 4.3, which have
   been secured.

             3.2.4     INVESTMENT COMPANY. Purchaser is not an "investment
   company" nor a person "controlled" by an "investment company" within the
   meaning of the Investment Company Act of 1940, as amended.


                 ARTICLE IV - CONDITIONS PRECEDENT TO THE CLOSING
                 ------------------------------------------------

        4.1  CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS.  All obligations
   of Purchaser under this Agreement are subject to the fulfillment or
   satisfaction, prior to or at the Closing, of each of the following
   conditions precedent:

             4.1.1     REPRESENTATIONS AND WARRANTIES TRUE AS OF THE CLOSING
   DATE.  The representations and warranties of Seller and KFM contained in
   this Agreement (including its schedules) or in any document executed by
   Seller or KFM at or in contemplation of the Closing and delivered by Seller
   or KFM to Purchaser pursuant to the provisions hereof shall be true on the
   Closing Date with the same effect as though such representations and
   warranties were made as of such date.

             4.1.2     COMPLIANCE WITH THIS AGREEMENT.  Seller and KFM shall
   have performed and complied with all agreements and conditions required by
   this Agreement to be performed or complied with by them prior to or at the
   Closing.

             4.1.3     CLOSING CERTIFICATE.  Purchaser shall have received a
   certificate from Seller and KFM dated the Closing Date certifying in such
   detail as Purchaser may reasonably request (i) that the conditions specified
   in Sections 4.1.1 and 4.1.2 hereof have been fulfilled, (ii) that Seller and
   KFM have obtained all consents and approvals required by Section 4.3 hereof,
   and (iii) that the following statements are, to the actual knowledge of the
   officers of Seller and KFM, true and accurate with respect to the period
   beginning on May 15, 1998 and ending on the Closing Date (the "Interim
   Period"):

                       (a)  CL&P PAYMENTS. All payments due Seller from CL&P
   under the CL&P Agreement were made when due and were deposited in their

                                        10
   <PAGE>





   entirety in the Trustee Funds, and the payment due July 1, 1998, was not
   received by Seller prior to the Closing.

                       (b)  APPROVAL OF PURCHASE ORDERS; FAILURE TO APPROVE. 
   Seller did not enter into any new contract or purchase order with respect to
   the Facility that has a value of more than $10,000 (a "Large Contract")
   without the approval of Purchaser.  In addition, Seller did not enter into
   new contracts or purchase orders with individual values of $10,000 or less
   (a "Small Contract") that aggregate more than $100,000, without the approval
   of Purchaser.

                       (c)  COMPLIANCE WITH BUDGET; RETENTION OF CASH AND CASH
   EQUIVALENTS.  Seller made no expenditures or commitment to make future
   expenditures except as provided for in and permitted under the Budget.  In
   addition, during the Interim Period, except as contemplated by Section
   4.1.3(f), Seller did not distribute any of Seller's Funds or any of the
   Trustee Funds to any of its parents or affiliates.

                       (d)  COMPLIANCE WITH LAWS, ETC.  Seller did comply with
   all laws, ordinances, rules, regulations and orders applicable to the
   Purchased Assets and the operation of the Facility, the noncompliance with
   which might materially affect the Facility or the Purchased Assets.

                       (e)  PRE-CLOSING SALE OF TURBINE. Seller deposited with
   the Trustee any payments received by Seller during the Interim Period
   pursuant to the Turbine Sales Agreement as defined in Subsection 1.1(b)(v)
   above.  

                       (f)  PAYMENTS TO KFM UNDER THE OPERATING AGREEMENT.  The
   fee paid to KFM under the Operation and Maintenance Agreement, as referenced
   in Section B of the Recitals hereof, was $35,000 for the month of June,
   1998.

             4.1.4     OPINIONS OF COUNSEL FOR SELLER.  Bingham Dana LLP,
   counsel for Seller and KFM, shall have delivered to Purchaser a written
   opinion, dated the Closing Date, in the form of EXHIBIT A hereto with only
   such changes as shall be in form and substance reasonably satisfactory to
   the Purchaser and its counsel.

             4.1.5     NO THREATENED OR PENDING LITIGATION.  On the Closing
   Date, no suit, action or other proceeding, or injunction or final judgment
   relating thereto, shall be threatened or be pending before any court or
   governmental or regulatory official, body or authority in which it is sought
   to restrain or prohibit or to obtain damages or other relief in connection
   with this Agreement or the consummation of the transactions contemplated
   hereby, and no investigation that might result in any such suit, action or
   proceeding shall be pending or threatened.

             4.1.6     MATERIAL ADVERSE CHANGES.  The Purchased Assets  shall
   not have been and shall not be threatened to be materially adversely
   affected in any way as a result of any event or occurrence.

             4.1.7     CORPORATE APPROVALS.  Seller shall have received any and
   all approvals of its board of directors and/or shareholders required to

                                                                       11
                 <PAGE>





   effect the transactions provided for under the Agreement.

        4.2  CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. All obligations
   of Seller under this Agreement are subject to the fulfillment or
   satisfaction, prior to or at the Closing, of each of the following
   conditions precedent:

             4.2.1     REPRESENTATIONS AND WARRANTIES TRUE AS OF THE CLOSING
   DATE.  The representations and warranties of Purchaser contained in this
   Agreement (including its schedules) and any document executed by Purchaser
   at or in contemplation of the Closing and delivered by Purchaser to Seller
   pursuant to the provisions hereof shall be true on the Closing Date with the
   same effect as though such representations and warranties were made as of
   such date.

             4.2.2     COMPLIANCE WITH THIS AGREEMENT.  Purchaser shall have
   performed and complied with all agreements and any conditions required by
   this Agreement to be performed or complied with by it prior to or at the
   Closing.

             4.2.3     CLOSING CERTIFICATES.  Seller shall have received a
   certificate from Purchaser dated the Closing Date certifying in such detail
   as Seller may reasonably request that the conditions specified in sections
   4.2.1 and 4.2.2 hereof have been fulfilled.

             4.2.4     OPINION OF COUNSEL FOR PURCHASER.  Murtha, Cullina,
   Richter and Pinney LLP, counsel to Purchaser, shall have delivered to Seller
   a written opinion, dated the Closing Date, in the form of EXHIBIT B hereto
   with only such changes as shall be in form and substance reasonably
   satisfactory to Seller and its counsel.

             4.2.5     NO THREATENED OR PENDING LITIGATION.  On the Closing
   Date, no suit, action or other proceeding, or injunction or final judgment
   relating thereto, shall be threatened or be pending before any court or
   governmental or regulatory official, body or authority in which it is sought
   to restrain or prohibit or to obtain damages or other relief in connection
   with this Agreement or the consummation of the transactions contemplated
   hereby, and no investigation that might result in any such suit, action or
   proceeding shall be pending or threatened.

             4.2.6  CORPORATE APPROVALS.  Purchaser shall have received any and
   all approvals of its board of directors required to effect the transactions
   provided for under the Agreement.

        4.3  CONSENTS AND APPROVALS; RELEASES; OTHER AGREEMENTS.   Except as
   otherwise agreed in writing by each of the parties hereto or as otherwise
   qualified herein, the Closing of this Agreement is subject to the receipt of
   each of the following consents and approvals, releases and agreements,
   containing such representations, releases of liability, and other conditions
   as are agreed upon by the parties hereto:

             (a)  The consent of the Hospital to the assignment to Purchaser of
   the Hospital Agreements;


                                        12
   <PAGE>





             (b)  The consent of CNG to the assignment to Purchaser of the CNG
   Agreement;

             (c)  The consent of Solar to the assignment to Purchaser of the
   Solar Purchase Agreement and the Extended Service Agreement;

             (d)  The consent of Blake to the assignment to Purchaser of
   Seller s Purchase Order No. IP200193;

             (e)  The consent of CL&P to the assignment to Purchaser of the
   CL&P Agreement; and

             (f)  The execution by all required parties of those assignments,
   bills of sale and other agreements that are required to be executed at the
   Closing under the terms of this Agreement.

                           ARTICLE V - INDEMNIFICATION
                           ----------------------------

        5.1  GENERAL INDEMNIFICATION OBLIGATION OF SELLER. Seller hereby agrees
   to reimburse, indemnify and hold harmless Purchaser, its officers directors,
   and affiliates and its successors and assigns (an "Indemnified Purchaser
   Party") against and in respect of any and all material damages, losses,
   deficiencies, liabilities, costs and expenses (including reasonable
   attorneys  fees) incurred or suffered by any Indemnified Purchaser Party, up
   to a maximum amount equal to $6,200,000, that result from, relate to or
   arise out of (i) any material misrepresentation, breach of warranty or
   nonfulfillment of any agreement or covenant on the part of Seller or KFM
   under or pursuant to this Agreement; or (ii) from any material
   misrepresentation in or material omission from any certificate, schedule,
   statement, document or instrument furnished to Purchaser pursuant hereto or
   in connection with the negotiation, execution or performance of this
   Agreement or the transactions contemplated by this Agreement (collectively,
   a "Breach"); provided, however, that such indemnification shall be effective
   only as to a Breach as to which Purchaser notifies Seller in writing within
   90 days of the Closing Date and provided further that except in connection
   with a material misrepresentation in or material omission in Sections
   3.1.8(a) and (b) and Schedules 3.1.8(a) and (b), Seller shall have no
   indemnification obligation to Purchaser in connection with any environmental
   contamination at the Facility or the Site.  This Section 5.1 contains
   Purchaser's exclusive remedy with respect to this Agreement, the
   certificates, schedules, bills of sale, deeds, assignments, statements,
   documents or instruments executed, delivered or made in connection herewith
   and the transactions contemplated thereby.

        5.2  GENERAL INDEMNIFICATION OBLIGATION OF PURCHASER.  Purchaser hereby
   agrees to reimburse, indemnify and hold harmless Seller and KFM, their
   officers, directors and affiliates and their successors and assigns (an
   "Indemnified Seller Party") against and in respect of any and all material
   damages, losses, deficiencies, liabilities, costs and expenses (including
   reasonable attorneys  fees) incurred or suffered by any Indemnified Seller
   Party, up to a maximum amount equal to the Purchase Price, that result from,
   relate to or arise out of (i) any obligation assumed by Purchaser under or
   pursuant to this Agreement, (ii) any material misrepresentation, breach of

                                                                       13
                 <PAGE>





   warranty or nonfulfillment of any agreement or covenant on the part of
   Purchaser under or pursuant to this Agreement, or (iii) any material
   misrepresentation in or material omission from any certificate, schedule,
   statement, document or instrument furnished to Seller pursuant hereto or in
   connection with the negotiation, execution or performance of this Agreement
   or the transactions contemplated by this Agreement.  This Section 5.2
   contains Purchaser's exclusive remedy with respect to this Agreement, the
   certificates, schedules, bills of sale, deeds, assignments, statements,
   documents or instruments executed, delivered or made in connection herewith
   and the transactions contemplated thereby.


                        ARTICLE VI - POST-CLOSING MATTERS
                        ---------------------------------

        6.1  FURTHER ASSURANCES.  Seller and KFM will, from time to time after
   the Closing, at Purchaser's request, execute, acknowledge and deliver to
   Purchaser such other instruments of conveyance and transfer and will take
   such other actions and execute and deliver such other documents,
   certifications and further assurances as Purchaser may reasonably require in
   order to vest more effectively in Purchaser, or to put Purchaser more fully
   in possession of, any of the Purchased Assets, to better enable Purchaser to
   complete, perform or discharge any of the liabilities or obligations assumed
   by Purchaser at the Closing pursuant to Section 1.3 hereof, and to pass
   through to Purchaser any and all warranties and guarantees with respect to
   any of the Purchased Assets.  In addition, each of the parties hereto will
   cooperate with the other and execute and deliver to the other parties hereto
   such other instruments and documents and take such other actions as may be
   reasonably requested from time to time by any other party hereto as
   necessary to carry out, evidence and confirm the intended purposes of this
   Agreement.

        6.2  PAYMENTS RECEIVED.  Seller and Purchaser each agree that after the
   Closing Date they will hold and will promptly transfer and deliver to the
   other, from time to time as and when received by them, any cash, checks with
   appropriate endorsements (using their best efforts not to convert such
   checks into cash), or other property that they may receive on or after the
   Closing Date which properly belongs to the other party, including without
   limitation the payment in the amount of $166,666.67 that would otherwise be
   made to Seller on July 1, 1998, by CL&P under the CL&P Agreement and any
   payments received pursuant to the Hospital Agreements, and will account to
   the other for all such receipts.  From and after the Closing Date, Purchaser
   shall have the right and authority to endorse without recourse the name of
   Seller on any check or any other evidences of indebtedness received by
   Purchaser on account of the Purchased Assets transferred to Purchaser
   hereunder, except for any payments received in connection with Seller s
   pending claims against Hartford Steam Boiler Company as described in Section
   1.4.2(a) hereof and Allison for breach of contract. .







                                        14
   <PAGE>





                           ARTICLE VII - MISCELLANEOUS
                           ---------------------------

        7.1  BROKERS' AND FINDERS' FEES.

             (a)  Seller and KFM represent and warrant to Purchaser that all
   negotiations relative to this Agreement have been carried on by them
   directly without the intervention of any person, who may be entitled to any
   brokerage or finder's fee or other commission in respect of this Agreement
   or the consummation of the transactions contemplated hereby, and Seller and
   KFM agree to indemnify and hold harmless Purchaser against any and all
   claims, losses, liabilities and expenses which may be asserted against or
   incurred by it as a result of Seller's or KFM s dealings, arrangements or
   agreements with any such person.

             (b)  Purchaser represents and warrants that all negotiations
   relative to this Agreement have been carried on by it directly without the
   intervention of any person who may be entitled to any brokerage or finder's
   fee or other commission in respect of this Agreement or the consummation of
   the transactions contemplated hereby, and Purchaser agrees to indemnify and
   hold harmless Seller and KFM against any and all claims, losses, liabilities
   and expenses which may be asserted against or incurred by them as a result
   of Purchaser's dealings, arrangements or agreements with or any such person.

        7.2  TAXES AND TRANSFER TAXES.  

             (a)  Except as set forth in Section 7.2(b) below, Seller and KFM
   shall be liable for and shall pay all taxes (whether assessed or unassessed)
   applicable to the operations of the Facility or the Purchased Assets
   attributable to periods (or portions thereof) through the Closing Date. 
   Purchaser shall be liable for and shall pay all taxes (whether assessed or
   unassessed) applicable to the operation of the Facility or the Purchased
   Assets attributable to periods (or portions thereof) after the Closing Date.

             (b)  Notwithstanding Subsection (a) hereof, Purchaser shall: (i)
   pay all state and local sales, documentary and other transfer taxes, if any,
   due as a result of the purchase, sale or transfer of the Purchased Assets in
   accordance herewith, whether imposed by law on Purchaser, Seller or KFM;
   (ii) pay any and all costs and fees incurred in connection with the transfer
   of the Existing Permits (as defined in Subsection 1.1(d) above); and (iii)
   any and all installments of state or local real or personal property taxes
   with respect to the Purchased Assets that are due and payable after the
   Closing Date whether attributable to periods before the Closing Date or
   after.

        7.3  MUTUAL ASSISTANCE.  On and after the Closing Date, Seller will
   assist Purchaser in effecting the transfer of Existing Permits, subject to
   reimbursement for Seller s out-of-pocket costs, if any, and for its
   employees  time at the rate of $100 per hour; and Purchaser will assist
   Seller in pursuing any business interruption insurance claims relating to
   the performance of the Facility prior to the Closing Date, subject to
   reimbursement for Purchaser s out-of-pocket costs, if any, and for its
   employees  time at the rate of $100 per hour.  


                                                                       15
                 <PAGE>





        7.4  EXPENSES.  Except as otherwise provided in this Agreement, each
   party hereto shall pay its own expenses incidental to the preparation of
   this Agreement, the carrying out of the provisions of this Agreement and the
   consummation of the transactions contemplated hereby.

        7.5  CONTENTS OF AGREEMENT; AMENDMENTS.  This Agreement sets forth the
   entire understanding of the parties hereto with respect to the transactions
   contemplated hereby.  It shall not be amended or modified except by written
   instrument duly executed by each of the parties hereto.  Any and all
   previous agreements and understandings between or among the parties
   regarding the subject matter hereof, whether written or oral, are superseded
   by this Agreement.

        7.6  WAIVER.  Any term or provision of this Agreement may be waived at
   any time by the party entitled to the benefit thereof by a written
   instrument duly executed by such party.

        7.7  NOTICES.  Any notice, request, demand, waiver, consent, approval
   or other communication which is required or permitted hereunder shall be in
   writing and shall be deemed given, delivered and received (a) when
   delivered, if delivered personally by a commercial messenger delivery
   service with verification of delivery, (b) four days after mailing, when
   sent by registered or certified mail, return receipt requested and postage
   prepaid, (c) one business day after delivery to a private courier service,
   when delivered to a private courier service providing documented overnight
   service, (d) on the date of delivery if delivered by facsimile and
   electronically confirmed before 5:00 p.m. (local time) on any business day,
   or (e) on the next business day if delivered by facsimile and electronically
   confirmed either after 5:00 p.m. (local time) or on a non-business day, in
   each case addressed as follows::

        If to Purchaser, to:

                  The Hartford Steam Company
                  60 Columbus Boulevard
                  P.O. Box 150401
                  Hartford, CT 06115
                  Attention: Mr.  James Laurito

        With a required copy to:

                  Murtha, Cullina, Richter and Pinney LLP
                  CityPlace I, 185 Asylum Street
                  Hartford, CT 06103-3469
                  Attention: Dwight A. Johnson, Esq.

        If to Seller or KFM, to:

                  CCF-1, Inc.
                  355 Research Parkway
                  Meriden, CT 06450
                  Attention: Mr. Scott Taylor



                                        16
   <PAGE>





                  KENETECH Corporation
                  500 Sansome Street
                  San Francisco, CA 94111
                  Attention: Mr. Michael Alvarez

        With a required copy to:

                  Bingham Dana LLP
                  150 Federal Street
                  Boston, MA 02110
                  Attention:  Martin J. Pasqualini, Esq.

   or to such other address as the addressee may have specified in a notice
   duly given to the sender as provided herein. 

        7.8  CONNECTICUT LAW TO GOVERN.  This Agreement shall be governed by
   and interpreted and enforced in accordance with the laws of the State of
   Connecticut.

        7.9  NO BENEFIT TO OTHERS.  The representations, warranties, covenants
   and agreements contained in this Agreement are for the sole benefit of the
   parties hereto and their heirs, executors, administrators, legal
   representatives, successors and assigns, and they shall not be construed as
   conferring any rights on any other persons.

        7.10 HEADINGS, GENDER AND "PERSON."  All section headings contained in
   this Agreement are for convenience of reference only, do not form a part of
   this Agreement and shall not affect in any way the meaning or interpretation
   of this Agreement.  Words used herein, regardless of the number and gender
   specifically used, shall be deemed and construed to include any other
   number, singular or plural, and any other gender, masculine, feminine, or
   neuter, as the context requires.  Any reference to a "person" herein shall
   include an individual, firm, corporation, partnership, trust, governmental
   authority or body, association, unincorporated organization or any other
   entity.

        7.11 SCHEDULES AND EXHIBITS.  All Exhibits and Schedules referred to
   herein are intended to be and hereby are specifically made a part of this
   Agreement.

        7.12 SEVERABILITY.  Any provision of this Agreement which is invalid or
   unenforceable in any jurisdiction shall be ineffective to the extent of such
   invalidity or unenforceability without invalidating or rendering
   unenforceable the remaining provisions hereof, and any such invalidity or
   unenforceability in any jurisdiction shall not invalidate or render
   unenforceable such provision in any other jurisdiction.









                                                                       17
                 <PAGE>






        7.13 COUNTERPARTS.  This Agreement may be executed in any number of
   counterparts and any party hereto may execute any such counterpart, each of
   which when executed and delivered shall be deemed to be an original and all
   of which counterparts taken together shall constitute but one and the same
   instrument.  This Agreement shall become binding when one or more
   counterparts taken together shall have been executed and delivered by the
   parties.  It shall not be necessary in making proof of this Agreement or any
   or counterpart hereof to produce or account for any of the other
   counterparts.

        IN WITNESS WHEREOF, the parties hereto have duly executed this
   Agreement on the date first written.

   WITNESSED BY:                       THE HARTFORD STEAM COMPANY


   S/ Barbara Sarrantonio                 S/ Anthony C. Mirabella
                                       By                          
   Barbara Sarrantonio                     As its Senior Vice President
                                               Anthony C. Mirabella

                                       CCF-1, INC.


   Christopher H. Diez                    S/ Scott J. Taylor
                                       By                           
   Christopher H. Diez                     As its Vice President
                                                Scott J. Taylor

                                       KENETECH FACILITIES  MANAGEMENT, INC.


   Scott J. Taylor                         Christopher H. Diez
                                       By                           
   Scott J. Taylor                         As its Vice President
                                                 Christopher H. Diez


















                                        18
   <PAGE>