REIMBURSEMENT AGREEMENT

                                     between

                             THE ENERGY NETWORK, INC.

                                       and

                               FLEET NATIONAL BANK

                                   dated as of

                                  August 1, 1998<PAGE>






                                TABLE OF CONTENTS

   SECTION l.     Definitions  . . . . . . . . . . . . . . . . . . . .  1

   SECTION 2.     Reimbursement and Other Payments . . . . . . . . . .  6

   SECTION 3.     Issuance; Conditions Precedent; Extension  . . . . .  9

   SECTION 4.     Reduction of Letter of Credit Amount . . . . . . . . 12

   SECTION 5.     Obligations Absolute . . . . . . . . . . . . . . . . 12

   SECTION 6.     Representations and Warranties of the Borrower . . . 13

   SECTION 7.     Affirmative Covenants Other Than Reporting Requirements16

   SECTION 8.     Negative Covenants . . . . . . . . . . . . . . . . . 20

   SECTION 9.     [Intentionally Left Blank] . . . . . . . . . . . . . 23

   SECTION 10.    Events of Default  . . . . . . . . . . . . . . . . . 23

   SECTION 11.    Right to Cure  . . . . . . . . . . . . . . . . . . . 26

   SECTION 12.    Amendments and Waivers . . . . . . . . . . . . . . . 26

   SECTION 13.    Notices  . . . . . . . . . . . . . . . . . . . . . . 26

   SECTION 14.    No Waiver; Remedies  . . . . . . . . . . . . . . . . 27

   SECTION 15.    Indemnification  . . . . . . . . . . . . . . . . . . 27

   SECTION 16.    Continuing Obligation; Survival  . . . . . . . . . . 27

   SECTION 17.    Transfer of the Letter of Credit . . . . . . . . . . 28

   SECTION 18.    Limited Liability of the Bank  . . . . . . . . . . . 28

   SECTION 19.    Costs, Expenses and Taxes  . . . . . . . . . . . . . 29

   SECTION 20.    Severability . . . . . . . . . . . . . . . . . . . . 29

   SECTION 21.    Governing Law  . . . . . . . . . . . . . . . . . . . 30

   SECTION 22.    Consent to Jurisdiction; JURY TRIAL WAIVER . . . . . 30

   SECTION 23.    Table of Contents; Headings  . . . . . . . . . . . . 31<PAGE>





   Exhibit A  -  Project Description

   Exhibit B  -  Irrevocable Letter of Credit

   Exhibit C  -  Form of Request for Termination Date Extension

   Exhibit D  -  List of Subsidiaries

   Exhibit E  -  Litigation

   Exhibit F  -  Financial Statement Certificate

   Exhibit G  -  Existing Indebtedness and Liens<PAGE>





                             REIMBURSEMENT AGREEMENT

        REIMBURSEMENT AGREEMENT dated as of August 1, 1998 between THE ENERGY
   NETWORK, INC., a corporation duly organized and validly existing under the
   laws of the State of Connecticut (the  Borrower ) and FLEET NATIONAL BANK
   (together with any successor thereto, the  Bank ).

        WHEREAS, the Connecticut Development Authority (the "Issuer"), is
   issuing its $10,600,000 aggregate principal amount Industrial Revenue
   Variable Rate Demand Bonds (Capitol District Energy Center Project - 1998
   Refunding Series) (the  Bonds ) pursuant to an Indenture of Trust dated as
   of August 1, 1998 (the  Indenture ) between the Issuer and State Street Bank
   and Trust Company, as trustee, and the Issuer wishes to lend the proceeds of
   the Bonds to the Borrower to finance the project described in EXHIBIT A
   hereto and to pay certain costs of issuance of the Bonds (collectively, the
    Project ); and

        WHEREAS, pursuant to a Loan Agreement dated as of August 1, 1998 (the
    Loan Agreement ) between the Issuer and the Borrower, the Issuer proposes
   to lend to the Borrower the amount of $10,600,000 (the  Loan ) in order to
   finance the Project; and

        WHEREAS, in order to enhance the marketability of the Bonds and thus
   achieve savings on interest costs, the Borrower has requested the Bank to
   issue, for the account of the Borrower and for the benefit of the Trustee
   under the Indenture, an irrevocable letter of credit substantially in the
   form of EXHIBIT B hereto (the  Letter of Credit ) in the maximum stated
   amount of $10,756,822 (as the same may be reduced from time to time as
   provided therein, the  Letter of Credit Amount ); and

        WHEREAS, the Letter of Credit will secure the payment of the principal
   amount of the Bonds and up to 45 days' interest thereon;

        NOW, THEREFORE, in consideration of the premises and in order to induce
   the Bank to issue the Letter of Credit, the Borrower and the Bank hereby act
   and agree as follows:


        SECTION 1.  DEFINITIONS.

        (a)  DEFINITIONS.  The following terms, as used herein, shall have the
   following respective meanings:

        "AGREEMENT" means this Reimbursement Agreement, as same may be from
   time to time amended.

        "AVAILABLE AMOUNT", as in effect at any time, means the maximum amount
   available to be drawn at such time under the Letter of Credit, the
   determination of such maximum amount to assume compliance with all
   conditions for drawing and no reduction (i) for any amount drawn by an
   Interest Drawing (unless such amount is not to be reinstated under the
   Letter of Credit), or (ii) or any amount drawn by a Tender Drawing, or (iii)
   for any amount not available to be drawn because Bonds are held by or for
   the account of the Borrower.

                                        1<PAGE>





        "BANK OBLIGATIONS" means all obligations (now existing or hereafter
   arising, matured or unmatured, fixed or contingent) of the Borrower to the
   Bank arising under this Agreement and/or under any of the Related Documents.

        "BONDS" has the meaning assigned to it in the introductory clauses to
   this Agreement.

        "BUSINESS DAY" means any day (i) that is not a Saturday, Sunday or
   legal holiday, (ii) that is a day on which banks are not required or
   authorized to close in Hartford, Connecticut or New York, New York, (iii)
   that is a day on which banking institutions in all of the cities in which
   the principal corporate trust office of the Trustee, the principal office of
   the Remarketing Agent and the principal office of the Bank are located are
   not required or authorized pursuant to law to remain closed and (iv) that is
   a day on which the New York Stock Exchange is not closed.

        "CHARTER" means the Articles of Organization or other organizational
   documents of a corporation referred to herein, all as amended to date.

        "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act
   of 1985, as amended.

        "CODE" shall mean the Internal Revenue Code of 1986, a amended from
   time to time.

        "COLLATERAL" shall mean any and all assets, rights and interests in or
   to property of Borrower or any other Person pledged or mortgaged to Bank, or
   in which a security interest is granted to Bank, from time to time, as
   security pursuant to the Security Documents, whether now owned or hereafter
   acquired.

        "COMMONLY CONTROLLED ENTITY" shall have the meaning specified in
   Section 6(i) of this Agreement.

        "CREDIT FACILITIES  means that certain 3-Year Revolving Credit
   Agreement dated as of October 1, 1997 between the Borrower and the Bank, as
   well as that certain 364 Day Revolving Credit Agreement dated as of October
   1, 1997, both as amended from time to time.

        "DATE OF ISSUANCE" means the date on which the Letter of Credit is
   issued upon request of the Borrower pursuant to Subsection 3(a) hereof.

        "EMPLOYEE BENEFIT PLAN" shall have the meaning specified in Section
   6(i) of this Agreement.

        "ENVIRONMENTAL EVENT" means (i) the unlawful generation, storage,
   disposal, removal, transportation or treatment of Hazardous Substances on
   any of the properties used or owned by the Borrower or any of its
   Subsidiaries or in the vicinity of such properties, if, through soil or
   groundwater migration, such Hazardous Substances could have come to be
   located at any of such properties); (ii) the receipt by the Borrower of any
   notice or claim of any violation of any Environmental Law or of any action
   based upon nuisance, negligence or other tort theory alleging liability on
   the basis of improper generation, storage, disposal, removal, transportation

                                        2<PAGE>





   or treatment of Hazardous Substances on any properties used or owned by the
   Borrower or any of its Subsidiaries; or (iii) the presence or release of
   Hazardous Substances at or upon any of properties used or owned by the
   Borrower or any of its Subsidiaries that has resulted in contamination or
   deterioration of any portion of such properties resulting in a level of
   contamination greater than the levels permitted or established by any
   governmental agency having jurisdiction over the Borrower or any of such
   properties.

        "ENVIRONMENTAL LAWS" means any and all federal, state and local
   statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
   permits, licenses or other governmental restrictions relating to the
   environment or the release of any materials into the environment, including,
   without limitation,  CERCLA and the Resource Conservation and Recovery Act
   of 1976, 42 U.S.C. Sections 6901-6987. 

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

        "EVENT OF DEFAULT" means any of the events specified in Section 10
   hereof.

        "FEPA ASSIGNMENT AGREEMENT" means that certain Pledge and Assignment
   Agreement dated as of October 1, 1997 from the Borrower to State Street Bank
   and Trust Company, as Collateral Agent, as amended by that certain Amendment
   to Pledge and Assignment Agreement dated the date hereof, and as further
   amended from time to time, and relating to the Forward Equity Purchase
   Agreement.

        "FINAL DRAWING" has the meaning assigned to that term in the Letter of
   Credit.

        "FORWARD EQUITY PURCHASE AGREEMENT" means that certain Forward Equity
   Purchase Agreement dated as of August 1, 1997 between CTG Resources, Inc.
   and the Borrower.

        "GUARANTOR" shall mean, jointly, severally and collectively, TEN
   Transmission Company, The Hartford Steam Company, and ENI Gas Services, Inc.

        "GUARANTY" shall mean those certain unconditional and continuing
   guaranties of each Guarantor of even date herewith in favor of Bank, as the
   same may be supplemented or amended from time to time.

        "GOVERNMENTAL AUTHORITIES" means all agencies, authorities, bodies,
   boards, commissions, courts, instrumentalities, legislatures and offices of
   any nature whatsoever for any government unit or political subdivision,
   whether foreign, federal, state, county, district, municipal or otherwise,
   and whether now or hereafter in existence.

        "HAZARDOUS SUBSTANCES" means  hazardous substances  as defined in
   CERCLA or any similar definitions in any of the Environmental Laws, as well
   as asbestos and materials containing asbestos.



                                        3<PAGE>





        "INDENTURE" has the meaning assigned to it in the introductory clauses
   to this Agreement.

        "INTEREST DRAWING" has the meaning assigned to that term in the Letter
   of Credit.

        "LEGAL REQUIREMENTS" means all statutes, ordinances, by-laws, codes,
   rules, rulings, regulations, restrictions, orders, judgments, decrees,
   writs, judicial or administrative interpretations and injunctions
   (including, without limitation, all applicable building, health code,
   zoning, subdivision and other land use statutes, ordinances, by-laws, codes,
   rules and regulations), whether now or hereafter enacted, promulgated or
   issued by any Governmental Authority materially affecting the Borrower, any
   of its properties or the ownership, construction, development, maintenance,
   management, repair, use, occupancy, possession or operation of any of the
   foregoing or the operation of any programs or services by the Borrower,
   including, without limitation, any of the foregoing which may (i) require
   repairs, modifications or alterations in or to any of its properties, (ii)
   in any way materially affect (adversely or otherwise) the use and enjoyment
   of any of its properties or (iii) require the assessment, monitoring, clean-
   up, containment or removal of any oil or hazardous substances on, under or
   from any of its properties.

        "LETTER OF CREDIT" has the meaning given to it in the introductory
   clauses to this Agreement.

        "LETTER OF CREDIT AMOUNT" has the meaning given to it in the
   introductory clauses to this Agreement.

        "LOAN" has the meaning specified in the introductory clauses to this
   Agreement.

        "MATERIAL ADVERSE CHANGE  shall mean a material adverse change in (i)
   the business, prospects, operations, results of operations, assets,
   liabilities or condition (financial or otherwise) of Borrower or (ii) the
   Collateral, in each case as determined by Bank in its sole discretion.

        "MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
   Section 4001(a)(3) of ERISA.

        "PARTIAL REDEMPTION DRAWING" has the meaning assigned to that term in
   the Letter of Credit.

        "PBGC" means the Pension Benefit Guaranty Corporation or any successor
   thereto.

        "PERMITS" means all licenses, approvals, qualifications, variances,
   permissive uses, certificates of need, franchises, accreditations,
   certificates, certifications, consents, permits and other authorizations
   (including, without limitation, building permits, subdivision approvals and
   subdivision plans) benefiting, relating to or affecting the Borrower or any
   of its properties and the ownership, construction, development, maintenance,
   management, repair, use, occupancy, possession or operation thereof or the
   operation of any programs or services by the Borrower and all renewals,

                                        4<PAGE>





   replacements and substitutions therefor, now or hereafter issued by or
   entered into with any Governmental Authority or maintained or used by the
   Borrower or entered into by the Borrower with any other Person.

        "PERSON" means an individual, corporation, company, partnership, joint
   venture, trust or unincorporated organization or a government or any agency
   or political subdivision thereof.

        "PLEDGE AGREEMENT" means that certain Pledge Agreement of even date
   herewith between the Borrower and the Bank.

        "PREVAILING LOCAL TIME" means the prevailing local time in effect in
   Hartford, Connecticut.

        "PRIME RATE" means a fluctuating rate of interest per annum equal to
   that rate per annum announced by Fleet National Bank or any successor
   thereto, from time to time, as being its prime rate of interest or base rate
   of interest, with a change in the Prime Rate to take effect simultaneously
   with each change in such announced rate.  It is understood that such
   announced prime rate or base rate is merely a reference rate, not
   necessarily the lowest, which serves as the basis upon which effective rates
   of interest are calculated for obligations making reference thereto.

        "PROJECT" has the meaning assigned thereto in the introductory clauses
   of this Agreement.

        "RELATED DOCUMENTS" means the Letter of Credit, the Indenture, the Loan
   Agreement, the Bonds, the Pledge Agreement, the Mortgage, the Security
   Documents, and any other agreement or instrument guaranteeing, securing or
   otherwise relating to any of the foregoing.

        "REMARKETING AGENT" means A.G. Edwards & Sons, Inc. or any successor
   thereto as remarketing agent under the Indenture.

        "REMARKETING AGREEMENT" means that certain Remarketing Agreement of
   even date herewith between the Remarketing Agent and the Borrower, and any
   modification thereof or substitution therefor.

        "SECURITY DOCUMENTS" means the FEPA Assignment Agreement and the
   Guaranty as the same may be amended from time to time.

        "TENDER ADVANCE" has the meaning assigned to that term in Subsection
   2(d) of this Agreement.

        "TENDER DRAWING" has the meaning assigned to that term in the Letter of
   Credit.

        "TERMINATION DATE" means the earliest of: (i) August __, 2000 (unless
   extended as provided in Subsection 3(e) below), (ii) the date of payment of
   a Final Drawing drawn under the Letter of Credit, or (iii) the earlier
   termination of the Letter of Credit pursuant to the terms thereof.

        "TRUSTEE" means State Street Bank and Trust Company, as trustee under
   the Indenture, or any successor as such trustee.

                                        5<PAGE>





        "UNRESTRICTED INVESTMENTS" means at any time cash and cash-equivalents
   and other readily marketable securities of the Borrower as are unrestricted
   and are identified as such in financial statements provided by the Borrower
   to the Bank from time to time under this Agreement.

        (b)  ACCOUNTING TERMS AND DETERMINATIONS.  Unless otherwise specified
   herein, all accounting terms used herein shall be interpreted, all
   accounting determinations hereunder shall be made, and all financial
   statements required to be delivered hereunder shall be prepared, in
   accordance with generally accepted accounting principles as in effect from
   time to time and consistently applied.

        (c)  USE OF DEFINED TERMS.  Any defined term used in the plural
   preceded by the definite article shall be taken to encompass all members of
   the relevant class.  Any defined term used in the singular preceded by  any 
   shall be taken to indicate any number of the members of the relevant class.

        SECTION 2.     REIMBURSEMENT AND OTHER PAYMENTS.

        (a)  CERTAIN FEES AND CHARGES.  The Borrower agrees to pay to the Bank
   (i) upon each transfer of the Letter of Credit by the Trustee, a transfer
   fee equal to the Bank's then customary charge therefor; (ii) on the same
   Business Day as any drawing under the Letter of Credit, a drawing fee in the
   amount of $150; (iii) upon notice from the Bank, any and all out-of-pocket
   charges and expenses which the Bank may pay or incur relative to drawings
   under the Letter of Credit; (iv) interest on any and all amounts unpaid by
   the Borrower when due under this Agreement (except as otherwise expressly
   provided in Subsection 2(e) below) from the date such amounts become due
   until payment in full, payable on demand, at a fluctuating interest rate per
   annum (computed on the basis of a year of 360 days for the actual number of
   days elapsed) which shall at times be equal to the sum of (x) 4.00% per
   annum plus (y) the Prime Rate as in effect from time to time (but such
   fluctuating interest rate shall in no event be higher than the maximum rate
   permitted by then applicable law); (v) a late fee of 5.00% on any and all
   amounts unpaid by the Borrower within ten days after the same are due under
   this Agreement, payable on demand; and (vi) any and all costs and expenses
   (including, without limitation, reasonable attorneys' fees) reasonably
   incurred by the Bank in exercising or enforcing any rights or performing any
   obligations under this Agreement.

        (b)COMMITMENT AND CLOSING FEES.  The Borrower also agrees that it will
   pay to the Bank commitment fees with respect to the Letter of Credit
   computed (on the basis of a year of 360 days for the actual number of days
   elapsed) at the rate of 0.65% per annum.  Such fees shall be payable in
   advance, on the Date of Issuance and thereafter quarterly in advance on the
   first day of each February, May, August and November, and shall be
   calculated on the Available Amount outstanding on the date of payment.  All
   commitment fees paid hereunder shall be non-refundable once paid.  The
   Borrower acknowledges that it will be solely responsible for any
   confirmation or other credit enhancement which may now or hereafter be
   needed (or reasonably desired by the Borrower and/or the Remarketing Agent)
   with respect to the Bonds.  The Bank makes no representation that it has or 



                                        6<PAGE>





   will maintain any particular rating with respect to the Letter of Credit or
   its obligations generally and will not be liable to the Borrower for any
   decline in any such rating.

        (c)  REIMBURSEMENT FOR DRAWINGS.  The Borrower hereby agrees to pay to
   the Bank immediately after (and on the same Business Day as) any amount is
   drawn under the Letter of Credit pursuant to any Interest Drawing, Partial
   Redemption Drawing or Final Drawing or pursuant to any Tender Drawing (but
   as to a Tender Drawing, except as otherwise provided below, only to the
   extent that such drawing represents accrued interest on the Bonds), a sum
   equal to the amount so drawn.  The Borrower also agrees to pay to the Bank,
   with respect to any Tender Drawing as to which the conditions contained in
   Subsection 3(d) are not fulfilled, any amount drawn under the Letter of
   Credit pursuant to such Tender Drawing, such amount to be paid to the Bank
   immediately after and on the same Business Day as such drawing.  All amounts
   payable under this Subsection 2(c) shall bear interest from the date on
   which any such amount became payable until paid in full, at the rate
   provided in clause (iv) of Subsection 2(a), payable on demand.

        (d)  TENDER ADVANCES.  If the Bank shall make any payment of that
   portion of the purchase price corresponding to principal of the Bonds drawn
   under the Letter of Credit pursuant to a Tender Drawing and the conditions
   set forth in Subsection 3(d) shall have been fulfilled, each such payment
   shall constitute a Tender Advance made by the Bank to the Borrower on the
   date and in the amount of such payment.  The Borrower shall repay the unpaid
   principal amount of each Tender Advance on the earliest of:  (i) any demand
   for payment following the occurrence of an Event of Default hereunder, (ii)
   such date as is provided for in Paragraph 2(f)(ii) hereof, (iii) that date
   which is designated as the required payment date in a written notice sent by
   the Bank to the Borrower (provided that (a) such required payment date with
   respect to any Tender Advance shall be not sooner than 120 days after the
   date on which such Tender Advance was made, and (b) the required payment
   date shall be not sooner than 30 days after such notice is given) or (iv)
   the Termination Date of the Letter of Credit.  The Borrower may prepay such
   amount on an earlier date as provided in Paragraph 2(f)(i) hereof.

        (e)  INTEREST ON TENDER ADVANCES.  The Borrower shall pay interest on
   the unpaid amount of each Tender Advance from the date of such Tender
   Advance until such amount is paid in full, such interest to be payable
   monthly, in arrears, on the first day of each month during the term of each
   Tender Advance and on the date such amount is paid in full, at a fluctuating
   interest rate per annum which shall at all times be equal to the sum of (x)
   2.00% per annum plus (y) the Prime Rate.

        (f)  PREPAYMENTS; REINSTATEMENT OF LETTER OF CREDIT AMOUNT.

             (i)  The Borrower, upon same-day prior notice to the Bank (stating
   the amount to be prepaid), may prepay the outstanding amount of any Tender
   Advance in whole or in part, together with accrued interest to the date of
   such prepayment on the amount prepaid.

             (ii) Prior to or simultaneously with the resale of Bonds acquired
   with the proceeds of one or more draws under the Letter of Credit by one or
   more Tender Drawings, the Borrower shall prepay the then outstanding Tender

                                        7<PAGE>





   Advances (in the order in which they were made) by paying to the Bank an
   amount equal to the sum of (x) the portion of the purchase price
   corresponding to the aggregate principal amount of the Bonds being resold or
   to be resold, PLUS (y) the portion of the purchase price corresponding to
   the aggregate amount of accrued and unpaid interest on such Bonds, PLUS (z)
   the aggregate amount of accrued and unpaid interest on such Tender Advances,
   less the amount paid pursuant to the immediately preceding clause.  Such
   payment shall be applied by the Bank in reimbursement of such drawings (and
   as prepayment of Tender Advances resulting from such drawings in the manner
   described above), and, when such payment with respect to clause (x) and (y)
   of the immediately preceding sentence is accompanied by a certificate
   completed and signed by the Trustee in the form of Annex F to the Letter of
   Credit, the Borrower irrevocably authorizes the Bank to rely on such
   certificate and to reinstate the Letter of Credit in accordance therewith.

             (iii)     Pursuant to the Pledge Agreement, the Borrower has
   agreed that Bonds purchased with proceeds of any Tender Drawing shall be
   delivered to the Bank or its designee to be held by the Bank or its designee
   in pledge as collateral securing the Borrower's payment obligations to the
   Bank hereunder.  Bonds so delivered to the Bank or its designee shall be
   registered in the name of the Bank, or its designee, as pledgee, as provided
   for in Section 3 of the Pledge Agreement.

             (iv) Outstanding Tender Advances may be prepaid at any time by or
   on behalf of the Borrower on notice from the Borrower directing the Bank to
   deliver Bonds held by the Bank or its designee pursuant to the Pledge
   Agreement for sale pursuant to the Indenture and specifying the principal
   amount of Bonds to be so sold, which notice may be given by telephone
   (promptly confirmed in writing) but which shall not be effective unless
   received by the Bank prior to 10:00 A.M. (New York time) on the day of the
   proposed prepayment referred to above; PROVIDED that the Bank shall not
   deliver any such Bonds for sale or otherwise until the Letter of Credit has
   been reinstated pursuant to the terms of this Agreement and the Letter of
   Credit.

        (g)  INCREASED COSTS.  If any law, regulation or change in any law or
   regulation or in the interpretation thereof or any ruling, decree, judgment,
   guideline, directive or recommendation (whether or not having the force of
   law) by any regulatory body, court, central bank or any administrative or
   governmental authority having or claiming jurisdiction (including, without
   limitation, a request or requirement that affects the manner in which the
   Bank or any participant in the Letter of Credit or any confirming bank with
   respect to the Letter of Credit allocates capital resources to its
   commitments including its obligations hereunder), shall either (i) impose
   upon, modify, require, make or deem applicable to the Bank or any
   participant in the Letter of Credit or to any confirming bank with respect
   to the Letter of Credit any reserve requirement, special deposit requirement
   or the like against or affecting the Letter of Credit or such participation
   or any confirmation thereof, or (ii) subject the Bank or any such
   participant to any tax, charge, fee, deduction or withholding of any kind
   whatsoever in connection with the Letter of Credit or any participation or
   any confirmation thereof or change the basis of taxation of the Bank or of
   any such participant or any such confirming bank (other than a change in the
   rate of tax based on the overall net income of the Bank or of any such

                                        8<PAGE>





   participant or any such confirming bank), or (iii) impose any condition upon
   or cause in any manner the addition of any supplement to or increase of any
   kind to the Bank s or such participant's or confirming bank's capital or
   cost base for issuing the Letter of Credit or participating therein or
   confirming thereof, or (iv) impose upon, modify, require, make or deem
   applicable to the Bank or any such participant or such confirming bank any
   capital requirement, increased capital requirement or similar requirement,
   including, without limitation, a request or requirement that affects the
   manner in which the Bank or any such participant allocates capital resources
   to its commitments including its obligations hereunder and/or under the
   Letter of Credit or any such participation or confirmation, and the result
   of any of the events referred to in (i), (ii), (iii) or (iv) above shall be
   to increase the costs in any way to the Bank or any such participant or any
   such confirming bank of issuing or maintaining the Letter of Credit or
   participating therein or confirming thereof or to reduce the amounts payable
   by the Borrower hereunder or to reduce the rate of return on the Bank s
   capital, as a consequence of issuing or maintaining the Letter of Credit or
   participating therein or confirming thereof, to a level below that which the
   Bank or any such participant or any such confirming bank could have achieved
   but for any such events; then and in any such event the Borrower shall,
   promptly upon receipt of written notice by the Bank of such increased costs
   and/or decreased benefits stating the reason therefor, pay to the Bank all
   such additional amounts that, in the Bank's sole good faith calculation, as
   allocated to the Letter of Credit or any such participation or confirmation,
   shall be sufficient to compensate the Bank or any such participant or any
   such confirming bank for all such increased costs and/or decreased benefits,
   all as certified by the Bank in said written notice to the Borrower.  Such
   certification shall be conclusive and binding on the parties hereto, absent
   manifest error.  In determining such amount, the Bank may use any reasonable
   averaging or attribution methods.

        (h)  PAYMENTS.  All payments by the Borrower to the Bank hereunder
   shall be made in lawful currency of the United States and in immediately
   available funds at the offices of the Bank at One Federal Street, Boston,
   Massachusetts 02110, or such other place as the Bank may designate. 
   Whenever any payment hereunder shall be due on a day which is not a Business
   Day, the date for payment thereof shall be extended to the next succeeding
   Business Day, and any interest payable thereon shall be payable for such
   extended time at the specified rate.  Any payments received after 12:00 noon
   on any day will be deemed received on the next succeeding Business Day.

                 SECTION 3.  ISSUANCE; CONDITIONS PRECEDENT; EXTENSION.
                 
        (a)  Subject to satisfaction of the conditions precedent set forth in
   subsections (b) and (c) of this Section, the Bank shall issue the Letter of
   Credit in the Letter of Credit Amount, effective on the Date of Issuance and
   expiring on the Termination Date.

        (b)  As conditions precedent to the issuance of the Letter of Credit,
   the Bank shall have received on or before the Date of Issuance the
   following, each in form and substance satisfactory to the Bank:

              (i) A copy of the Borrower's Charter and all amendments thereto,
        certified by the Secretary of State of the State of Connecticut.

                                        9<PAGE>





              (ii)     A long-form Certificate of Legal Existence for the
        Borrower, issued by the Secretary of State of the State of Connecticut.
              
              (iii)    The by-laws of the Borrower, certified by its Secretary.
              
               (iv)    True and correct copies of the resolutions of the board
        of directors of the Borrower (and, if needed, the members of the
        Borrower) approving this Agreement and each of the Related Documents. 
        Such resolutions shall be certified as to the accuracy, due adoption
        and continuing force and effect thereof by the Secretary of the
        Borrower.
             
          (v)     A certificate executed by the Secretary of the Borrower
        certifying the names and true signatures of the officers of the
        Borrower authorized to execute on behalf of the Borrower this Agreement
        and the Related Documents and any and all certificates, notices and
        reports referred to in this Agreement; each such certificate shall
        state that the Bank may conclusively rely on the statements made
        therein until the Bank shall receive a further certificate of such
        Secretary canceling or amending the prior certificate and submitting
        signatures of the officers named in such further certificate.

         (vi)     The Security Documents.

        (vii)     Evidence in such form as the Bank may reasonably require that
        the Borrower has obtained all types of casualty, liability and other
        insurance required hereunder or under any of the Related Documents.

       (viii)     Certified copies of all approvals, authorizations, or
        consents of, or notices to, or registrations with, any governmental
        body or agency required for the Borrower to enter into this Agreement
        and the Related Documents and to carry out the transactions
        contemplated hereby and thereby.

         (ix)     Executed copies of the Related Documents (or duplicate
        originals thereof), and all other such documents relating to the
        Related Documents or this Agreement as the Bank shall reasonably
        request, each of which shall be in form and substance satisfactory to
        the Bank, together with evidence of the execution and delivery thereof
        by a person duly authorized to do so and appropriate evidence of such
        authorization.

          (x)     An opinion or opinions of counsel to the Borrower as to legal
        existence and authority of the Borrower, corporate capacity of the
        Borrower, due authorization of transactions, enforceability of
        documents, no conflict with law, no conflict with other agreements, no
        litigation, perfection of security interests, and other matters
        reasonably requested by the Bank, such opinion or opinions to be
        satisfactory in form and substance to the Bank.

         (xi)     Financial statements of the Borrower as at September 30,
        1997, and for the fiscal year then ended, certified by the Borrower s
        independent certified public accountants.


                                       10<PAGE>





        (xii)     Interim financial statements of the Borrower, certified by
        its chief financial officer, for the fiscal quarter ended June 30,
        1998.

       (xiii)      Evidence of the Issuer's approval of the Bonds.

        (xiv)     All such other documents, instruments, approvals and opinions
        as the Bank may reasonably request.

        (c)  The following statements shall be true and correct on the Date of
   Issuance and the Bank shall have received a certificate signed by an
   authorized officer of the Borrower, dated the Date of Issuance, stating
   that:

          (i)     the representations and warranties contained in Section 6
        hereof are correct on and as of the Date of Issuance as though made on
        and as of such date; and

         (ii)     no Event of Default hereunder (or event or circumstance
        which, with the passage of time or the giving of notice, or both, could
        become an Event of Default) has occurred and is continuing or could
        result from the issuance of the Letter of Credit.

        (d)  Each payment made by the Bank under the Letter of Credit pursuant
   to a Tender Drawing shall constitute a Tender Advance hereunder ONLY IF on
   the date of such payment the following statements shall be true:

          (i)     The representations and warranties contained in Section 6 of
        this Agreement, Section 5 of the Pledge Agreement and the other Related
        Documents are correct on and as of the date of such Tender Advance as
        though made on and as of such date; and

         (ii)     No event has occurred and is continuing, or would result from
        such Tender Advance, that constitutes an Event of Default or could,
        with the passage of time or the giving of notice or both, constitute an
        Event of Default.

        On the date of each payment by the Bank of a Tender Drawing, the
   Borrower shall give the Bank a certificate, signed by an authorized officer
   of the Borrower, stating that on the date of such payment the above
   statements are true and correct.

        (e)  Upon the written request of the Borrower received by the Bank no
   later than 225 days prior to the Termination Date then in effect under
   subsection (i) of the definition thereof (or such later date to which the
   Bank may consent in writing), the Bank shall within 45 days of such request
   notify the Borrower, the Issuer, the Trustee and the Remarketing Agent
   whether or not it will extend the scheduled Termination Date for a period of
   one year (or such other period as the Bank may agree in its sole
   discretion); PROVIDED, HOWEVER, that the Borrower shall not make its first
   request that Bank so extend the scheduled Termination Date earlier than the
   one year anniversary of this Agreement.  If the Bank notifies the Borrower,
   the Issuer, the Trustee and the Remarketing Agent that the scheduled
   Termination Date shall be so extended, the Bank shall within 30 days of such

                                       11<PAGE>





   notification, deliver to the Trustee and the Borrower a written
   acknowledgment of such extension.  If the Bank fails to notify the Borrower
   of its decision within such 30-day period, the Bank shall be deemed to have
   rejected such request.  Any such request by the Borrower for an extension of
   the Termination Date shall be substantially in the form of EXHIBIT C hereto
   (or in such other form to which the Bank may consent in writing) and, unless
   the Bank shall otherwise consent, shall include (i) a statement of the
   outstanding principal amount of the Bonds, (ii) a reasonably detailed
   description of any and all Events of Default and all conditions, events and
   acts which with notice or lapse of time or both would become an Event of
   Default and (iii) any other pertinent information requested by the Bank. 
   Nothing contained in this Agreement or elsewhere shall be deemed an
   agreement by the Bank to extend the Termination Date whether on the terms
   contained herein or on any other terms.

        SECTION 4.     REDUCTION OF LETTER OF CREDIT AMOUNT.  The Letter of
   Credit Amount shall be reduced from time to time as specified in the fourth
   grammatical paragraph of the Letter of Credit; provided that voluntary
   prepayments of the Loan will be made not more frequently than quarterly.

        SECTION 5.     OBLIGATIONS ABSOLUTE.  The obligations of the Borrower
   under this Agreement shall be absolute, unconditional and irrevocable, and
   shall be performed strictly in accordance with the terms of this Agreement,
   under all circumstances whatsoever, including, without limitation, the
   following circumstances:

          (a)     any lack of validity or enforceability of the Letter of
        Credit or any of the other Related Documents;

          (b)     any amendment or waiver of or any consent to departure from
        the terms of all or any of the Related Documents;

          (c)     any exchange, acceptance, release or non-perfection as to any
        collateral or release or addition of any other Persons primarily or
        secondarily liable;

          (d)     the existence of any claim, setoff, defense or other rights
        which the Borrower may have at any time against the Bank, the Issuer,
        the Trustee or any beneficiary or any transferee of the Letter of
        Credit (or any Person for whom any such beneficiary or any such
        transferee may be acting), whether in connection with this Agreement,
        the transactions contemplated hereby or any unrelated transaction;

          (e)     any statement or any other document presented under the
        Letter of Credit shall prove to be forged, fraudulent, invalid or
        insufficient in any material respect or any statement therein is untrue
        or inaccurate in any material respect;

          (f)     payment in good faith by the Bank under the Letter of Credit
        against presentation of a statement or draft which does not comply with
        the terms of the Letter of Credit; or

          (g)     any other circumstance or happening whatsoever, whether or
        not similar to any of the foregoing.

                                       12<PAGE>






        SECTION 6.  REPRESENTATIONS AND WARRANTIES OF THE BORROWER.  As an
   inducement to the Bank to execute this Agreement and to issue the Letter of
   Credit, the Borrower hereby represents and warrants to the Bank that:

        (a)  The Borrower is a corporation duly organized, legally existing and
   in good standing under the laws of the State of Connecticut and has the
   legal power and authority to enter into and perform this Agreement and each
   of the Related Documents in which it is named as a party, to grant the
   security interests and liens described in the Security Agreement and the
   related collateral assignments, to fulfill its obligations set forth herein
   and therein and to carry out the transactions contemplated hereby and
   thereby.  The Borrower has all requisite corporate power to own and operate
   its properties and to carry on its business as now conducted and as proposed
   to be conducted and is duly qualified and in good standing in each
   jurisdiction where the failure so to be qualified could have a material
   adverse effect on the Borrower and/or its operations.  At the date of this
   Agreement, the Borrower has only Subsidiaries listed on Exhibit D.  The
   Borrower is not a member of any partnership or joint venture, other than
   Downtown Cogeneration Associates Limited Partnership.

        (b)  The execution, delivery and performance by the Borrower of this
   Agreement, the Security Documents and the other documents required to be
   executed by the Borrower pursuant hereto have been duly authorized by all
   necessary corporate action, will not require any consent of any third party
   not obtained prior to the date hereof, and will not conflict with, violate
   the provisions of, or cause a default or constitute an event which, with the
   passage of time or the giving of notice or both, could constitute a default
   on the part of the Borrower under any mortgage, indenture, judgment, decree,
   rule, regulation, law or order, or any material contract or agreement
   applicable to the Borrower or under any provision of the Charter or by-laws
   of the Borrower, or result in the imposition of any lien or encumbrance on
   any property or assets of the Borrower, except for the liens created by the
   Security Agreement, the Mortgage and/or the related collateral assignments. 
   This Agreement, the Security Agreement, the Mortgage and any other documents
   delivered to the Bank by the Borrower pursuant hereto are the valid and
   binding obligations of the Borrower, enforceable in accordance with their
   respective terms.

        (c)  There are no actions, suits, proceedings or investigations pending
   or, to the knowledge of the Borrower, threatened, anticipated or
   contemplated (nor, to the knowledge of the Borrower, is there any basis
   therefor) against or affecting the Borrower before any court or governmental
   department, commission, board, bureau, agency or instrumentality, domestic
   or foreign, which could prevent or hinder the consummation of the
   transactions contemplated hereby or call into question the validity of this
   Agreement, any of the Related Documents or any other instrument provided for
   or contemplated by this Agreement or any action taken or to be taken in
   connection with the transactions contemplated hereby or thereby or which in
   any single case or in the aggregate could reasonably be expected to result
   in any material adverse change in the business, prospects, condition,
   affairs or operations of the Borrower or any material impairment of the
   right or ability of the Borrower to carry on its operations as now conducted
   or as proposed to be conducted. Without conceding that any of same are

                                       13<PAGE>





   material, the Borrower represents that the only judicial or administrative
   proceedings to which it is party are those set forth on EXHIBIT E hereto.

        (d)  The Borrower is not in violation of any term of its Charter or by-
   laws as now in effect.  The Borrower is not in violation of any material
   term of any mortgage, indenture, judgment, decree or order, or any other
   material instrument, contract or agreement applicable to it.

        (e)  The Borrower has filed proper and accurate federal, state and
   local tax returns, reports and estimates for all years and periods for which
   any such returns, reports or estimates were required to be filed and has
   paid all taxes, assessments, impositions, fees and other governmental
   charges required to be paid in respect of the periods covered by any such
   returns, reports or estimates, except for taxes being contested in good
   faith for which adequate provision and reserves for payment have been made
   and for which no lien has been filed.  The Borrower is not delinquent in the
   payment of any tax, assessment or governmental charge, and no deficiencies
   for any tax, assessment or governmental charge have been asserted or
   assessed, and the Borrower knows of no material liability or basis therefor.

        (f)  The Borrower is in compliance in all material respects with all
   requirements of law, federal, state and local, and all requirements of all
   governmental bodies or agencies having jurisdiction over it, the conduct of
   its business and the use of its properties and assets, as presently
   conducted and used, and all premises occupied by it, all to the extent that
   failure to comply with any of which could (singly or in the aggregate) have
   a material adverse effect on the business, prospects or financial condition
   of the Borrower.

        (g)  The Borrower is not engaged in the business of extending credit
   for the purpose of purchasing or carrying margin stock (within the meaning
   of Regulation U of the Board of Governors of the Federal Reserve System),
   and no part of the proceeds of the Loan will be used to purchase or carry
   any margin stock or to extend credit to others for the purpose of purchasing
   or carrying any margin stock or in any other manner which would involve a
   violation of any of the regulations of the Board of Governors of the Federal
   Reserve System.  The Borrower is not an  investment company  within the
   meaning of the Investment Company Act of 1940, as amended.

        (h)  The reviewed financial statements of the Borrower as at December
   31, 1997, March 31, 1998 and June 30, 1998 heretofore delivered to the Bank,
   are complete and accurate and fairly present the financial condition of the
   Borrower as at the dates thereof and for the periods covered thereby, having
   been prepared in accordance with generally accepted accounting principles
   consistently applied.  The Borrower has no liability, contingent or
   otherwise, not disclosed in the aforesaid financial statements or in any
   notes thereto that could materially affect the financial condition of the
   Borrower.  The following representations are true on the Date of Issuance;
   since the date of the most recently delivered financial statements: (A)
   there has been no material adverse change in the business, assets or
   condition, financial or otherwise, of the Borrower; (B) neither the
   business, condition, or operations of the Borrower nor any of its properties
   or assets has been materially adversely affected as the result of any
   legislative or regulatory change, any revocation or change in any franchise,

                                       14<PAGE>





   license or right to do business, or any other event or occurrence, whether
   or not insured against; (C) the Borrower has not experienced any material
   controversy or problem with its employees or with any labor organization;
   and (D) the Borrower has not entered into any material transaction other
   than in the ordinary course of business and other than the purchase by The
   Hartford Steam Company of certain cogeneration facilities as disclosed in
   writing to the Bank prior to the date hereof.

        (i)  PENSION PLANS, Etc.

             (i)  PLANS.  Except as  set forth in  a separate  letter to Bank of
   even date herewith and acknowledged  by Bank in writing, neither Borrower nor
   any entity  with which Borrower would  be aggregated  (a  Commonly Controlled
   Entity ) under  Section 414(b), (c), (m),  or (o) of  the Code, maintains  or
   contributes to any pension,  profit sharing, or similar plan providing for  a
   program of deferred compensation to any employee or former employee.

             (ii)   FUNDING OF  EMPLOYEE BENEFIT  PLANS.   All contributions and
   other payments  required to be  made by Borrower  or any  Commonly Controlled
   Entity to  all employee  benefit plans,  as defined  in Section  3(3) of  the
   Employee Retirement Income Security Act of  1974, as amended ( ERISA ), which
   either Borrower or any Commonly Controlled  Entity maintains or maintained or
   to  which any of them  contributes or has  contributed (the  Employee Benefit
   Plans ) have been made  or reserves adequate for  such purposes has  been set
   aside and reflect on Borrower s financial statements.  Except  as provided in
   the  following sentence,  no  Employee Benefit  Plan  is a  plan  subject  to
   Section 412 of the Code or Section 302 of ERISA, nor is  any Employee Benefit
   Plan  a multiemployer plan  as defined  in Section 4001(a)(3) of  ERISA.  The
   three  defined benefit  plans maintained  by  the  Borrower and  its Commonly
   Controlled Entities are subject  to Section 412 of  the Code and  Section 302
   of ERISA.   Each  other Employee  Benefit Plan  which is an  employee pension
   benefit plan, as defined in Section 3(2) of ERISA,  has been determined to be
   qualified under Section 401(a) or Section 403(a) of  the Code and nothing has
   occurred which would cause the  loss of such qualification  or the imposition
   of any tax liability or penalty under the Code or ERISA on Borrower.

             (iii)   ADMINISTRATION, Etc.  Each  Employee Benefit  Plan has been
   and is administered in accordance with its terms and applicable law.  To  its
   knowledge, Borrower has not  breached any fiduciary duty  imposed on it under
   ERISA  with  respect  to  any  Employee  Benefit  Plan,  or  engaged  in  any
   prohibited transaction,  as defined in Title  I of ERISA  or Section 4975  of
   the  Code, involving  any Employee  Benefit Plan  for which  no exemption  is
   available.

             (iv)   WELFARE  PLANS.    No  Employee  Benefit Plan  which  is  an
   employee welfare benefit plan,  as defined in Section  3(1) of ERISA, if any,
   provides  for  continuing  benefits  or  coverage  for  any  participant  (or
   beneficiary) after the termination of the participant s employment except  as
   may  be  required  under  Section  4980B of  the  Code  or  applicable  state
   statutory  law, and  except that  medical  insurance  is provided  in certain
   instances.

             (v)  CLAIMS.   There are no claims  (other than routine claims  for
   benefits), actions  or lawsuits asserted or  instituted with  respect to, and

                                       15<PAGE>





   Borrower  has  no knowledge  of  any  threatened  claims  or litigation  with
   respect to, any Employee Benefit Plan or any fiduciary thereof.
        (j)  ENVIRONMENTAL MATTERS.  Borrower:

             (i) Except as  disclosed in the Annual Report  on Form 10-K of  the
   Connecticut Natural Gas Corporation for Borrower s  1997 fiscal year, has not
   received  any   notice,  citation,   summons,  directive,   order  or   other
   communication, written  or oral, from, and  Borrower has  no knowledge, after
   reasonable inquiry,  of any  notice, citation,  summons, directive, order  or
   other communication  by,  any  Governmental  Authority or  any  other  person
   concerning  the  presence, generation,  treatment,  storage,  transportation,
   transfer, disposal,  release or  other handling of  any Hazardous  Substances
   within, on,  from,  related to,  or  affecting  any  real property  owned  or
   occupied by Borrower; and

             (ii)  Except as disclosed in the  Annual Report on Form 10-K of the
   Connecticut Natural Gas Corporation for Borrower s  1997 fiscal year, has  no
   knowledge,  after  reasonable  inquiry,  that  any  real  property  owned  or
   occupied  by Borrower has  ever been  used either by Borrower,  any tenant or
   any predecessor in interest, to generate,  treat, store, transport, transfer,
   dispose  of, release or  otherwise handle  any Hazardous  Material, except in
   material compliance with all Environmental Laws.

        (k)  The principal place of business and chief executive offices of the
   Borrower are located at 100 Columbus Boulevard, Hartford, Connecticut 06103. 
   The Borrower maintains at said location the books and records relating to
   the collateral described in the Security Agreement and/or the related
   collateral assignments.

        (l)  There is no condemnation or similar proceeding pending with
   respect to or affecting any of the Borrower's properties, and the Borrower
   is not aware that any such proceeding is contemplated.

        (m)  After giving effect to the transactions contemplated hereby, the
   Borrower (A) will be able to pay its debts as they become due, (B) will have
   funds and capital sufficient to carry on its business as now conducted and
   as intended to be conducted, (C) has total assets which exceed total
   liabilities, and (D) is not insolvent and will not be rendered insolvent as
   determined by applicable law.

        (n)  Neither this Agreement, nor the financial statements referred to
   herein, nor any other agreement, document, certificate or written statement
   furnished or to be furnished to the Bank by or on behalf of the Borrower in
   connection with the transactions contemplated by this Agreement contains any
   untrue statement of a material fact or omits to state a material fact
   necessary in order to make the statements contained herein or therein not
   misleading.  There is no fact within the special knowledge of any of the
   officers of the Borrower which has not been disclosed herein or in writing
   by them to the Bank and which materially adversely affects or in the future
   in their opinion may, insofar as they can now reasonably foresee, materially
   adversely affect the business, properties, assets or condition, financial or
   other, of the Borrower.

        (o)  The representations and warranties of the Borrower contained in

                                       16<PAGE>





   the Related Documents are hereby incorporated herein by reference; such
   representations and warranties are true and correct.

        SECTION 7.  AFFIRMATIVE COVENANTS OTHER THAN REPORTING REQUIREMENTS.
   Without limiting any other covenants and provisions hereof or of any of the
   Related Documents, the Borrower covenants and agrees that during the term of
   this Agreement and for so long as (i) the Letter of Credit is outstanding
   and/or (ii) any Indebtedness of the Borrower to the Bank under this
   Agreement or any Related Document remains unpaid:

        (a)  PAYMENT.  The Borrower will pay promptly when due any and all
   amounts owing under the Bonds or other Related Documents or owing to the
   Bank hereunder.

        (b)  PRESERVATION OF ASSETS; COMPLIANCE WITH LAW.

             (i)  Do or cause to be done all things reasonably necessary to
   preserve, renew and keep in full force and effect its corporate existence,
   rights, licenses, permits and franchises; at all times maintain, preserve
   and protect all franchises and trade names and preserve all the remainder of
   its property used or useful in the conduct of its business and keep the same
   in good repair, working order and condition, and from time to time, make, or
   cause to be made, all needful and proper repairs, renewals, replacements,
   betterments and improvements thereto, so that the business carried on in
   connection therewith may be properly and advantageously conducted at all
   times; and

             (ii) Comply with all applicable laws, rules, regulations and
   orders, whether now in effect or hereafter enacted or promulgated by any
   Governmental Authority.

             (iii)      TAXES, Etc.  Pay and discharge or cause to be paid and
   discharged, when due, all taxes, assessments and governmental charges or
   levies imposed upon it or upon its respective income and profits or upon any
   of its property, real, personal or mixed, or upon any part thereof, as well
   as all lawful claims for labor, materials and supplies or otherwise, which,
   if unpaid, might become a lien or charge upon such properties or any part
   thereof, PROVIDED, HOWEVER, Borrower may contest in good faith any such
   taxes, assessments and governmental charges or levies, and withhold payment
   thereof, if Borrower properly commences and thereafter diligently pursues
   the contest.

        (d)  NOTICE OF PROCEEDINGS.  Give prompt written notice to the Bank of
   any proceedings instituted against it by or in any Federal or state court or
   before any commission or other regulatory body, whether Federal, state or
   local.

        (e)  FINANCIAL REPORTING.  Furnish to Bank:

             (i)  Within ninety (90) days of the end of each fiscal year,
   consolidated and consolidating Financial Statements certified (without
   qualification) by independent certified public accountants selected by
   Borrower and approved by Bank, showing the financial condition at the close
   of such fiscal year, the results of operations during such year and

                                       17<PAGE>





   containing a statement to the effect that its independent public accountants
   have examined the provisions of this Agreement and that no Event of Default,
   nor any event which with notice or lapse of time, or both, would constitute
   such an Event of Default, has occurred;

             (ii) Within sixty (60) days after the end of each quarter in each
   such fiscal year, consolidated and consolidating Financial Statements for
   such period and the fiscal year to that date, subject to changes resulting
   from routine year-end audit adjustments, in form satisfactory to Bank,
   prepared and certified by the chief financial officer of Borrower to the
   best of his or her information and belief;

             (iii)     Simultaneously with the furnishing of each of the
   Financial Statements to be delivered pursuant to subsections (a) and (b)
   above, a certificate in the form of EXHIBIT F hereto and certified by the
   President or chief financial officer of Borrower; and

             (iv) Promptly, from time to time such other information regarding
   its operations, assets, business, affairs and financial condition or the
   operations, assets, business, affairs and financial condition of any of its
   subsidiaries, as Bank may reasonably request.

        (f)  VISITATION AND INSPECTION RIGHTS. Permit agents or representatives
   of Bank to inspect and to discuss the affairs, finances and accounts of
   Borrower with its officers, at any time and from time to time during normal
   business hours upon twenty-four hours notice to Borrower, at Borrower s
   reasonable expense after an Event of Default (including, without limitation,
   the reasonable fees and expenses of such agents or representatives), (i) the
   Collateral, and (ii) Borrower s books and records and to make abstracts or
   reproductions thereof and to duplicate, reduce to hard copy or otherwise use
   any and all computer or electronically stored information or data.

        (g)  NOTICE OF EVENT OF DEFAULT.  Immediately advise Bank of any
   Material Adverse Change, or of the occurrence of any Event of Default, or of
   the occurrence of any event which upon notice or lapse of time or both would
   constitute such an Event of Default.

        (h)  ACCOUNTING SYSTEM.  Maintain a standard system of accounting in
   accordance with GAAP.

        (i)  FINANCIAL COVENANTS.

             (i)  For purposes of this Section, the following terms shall have
   the following definitions and any undefined terms shall be defined in
   accordance with GAAP:

                  (a)  "DEBT SERVICE" shall mean for any relevant accounting
        period the aggregate amount of principal and interest payments due from
        Borrower with respect to its Total Debt.

                  (b)  "DEBT SERVICE COVERAGE RATIO  shall mean for any
        relevant accounting period the ratio of (x) earnings before interest,
        taxes , depreciation,  amortization and dividends (EBITDA) plus amounts
        received under the Forward Equity Purchase Agreement to (y) Debt

                                       18<PAGE>





        Service.

                  (c)  "INTEREST COVERAGE RATIO" shall mean for any relevant
        accounting period the ratio of (x) earnings before interest, taxes and
        dividends (EBIT) plus amounts received under the Forward Equity
        Purchase Agreement to (y) the aggregate amount of interest payments due
        from Borrower with respect to its Total Debt.

                  (d)  "SENIOR DEBT" shall mean the Loan, all debt secured PARI
        PASSU with the Loan pursuant to the FEPA Assignment Agreement and any
        other indebtedness of Borrower owed to Bank, including all debt related
        to the Credit Facilities.

                  (e)  "TANGIBLE NET WORTH" shall mean the excess of Borrower s
        total assets over its total liabilities computed in accordance with
        generally accepted accounting principles consistently applied, less all
        intangible assets and deferred charges, including, without limitation,
        goodwill, unamortized debt discount, organization expenses, trademarks
        and trade names, patents, deferred product development costs, the
        Borrower s interests under the Forward Equity Purchase Agreement, and
        similar items.

                  (f)  "TOTAL DEBT" shall mean Senior Debt, as well as any of
        Borrower s other loan or lease obligations then outstanding.

             (ii) At all times during the period the Letter of Credit is
   outstanding, Borrower agrees to fulfill each of the following financial
   covenants:

                  (a)  Not permit the ratio of Total Debt to Tangible Net Worth
        to exceed 2.25 to 1 on a consolidated basis, to be tested quarterly;

                  (b)  Not permit its Tangible Net Worth to be less than
        $30,000,000 on a consolidated basis, to be tested annually;
                  (c)  Not permit its Debt Service Coverage Ratio to be less
        than 1.25 to 1, as tested quarterly; and

                  (d)  Not permit its Interest Coverage Ratio to be less than
        2.5 to 1, as tested quarterly.

        (j)   BANK AS PRINCIPAL DEPOSITORY.  Use Bank as the principal
   depository of its funds.

        (k)  INSURANCE.  Keep all of its insurable properties, now or hereafter
   owned, adequately insured at all times against loss or damage by fire or
   other casualty to the extent customary with respect to like properties of
   companies conducting similar businesses; maintain public liability, business
   interruption and worker s compensation insurance insuring Borrower to the
   extent customary with respect to companies conducting similar businesses,
   all by financially sound and reputable insurers.

        (l)  ENVIRONMENTAL INDEMNIFICATION.  With respect to environmental
   matters:


                                       19<PAGE>





             (i)  comply strictly and in all material respects with all
   Environmental Laws, and cause all tenants or other occupants of any real
   property which Borrower owns or occupies to comply, in all material respects
   with all Environmental Laws, and not generate, treat, store, handle,
   process, transfer, transport, dispose of, release or otherwise use, and not
   permit any tenant or other occupant of such property to generate, treat,
   store, handle, process, transfer, transport, dispose of, release or
   otherwise use, Hazardous Substances within, on, under or about such property
   in a manner that could lead to the imposition on Borrower, Bank or any such
   real property of any liability or lien of any nature whatsoever under any
   Environmental Laws;

             (ii) notify Bank promptly in the event of any Environmental Event,
   promptly forward to Bank copies of any notices received by Borrower relating
   to any Environmental Event and promptly pay when due any fine or assessment
   against Borrower, Bank or any such real property relating to any
   Environmental Event, PROVIDED, HOWEVER, Borrower may contest in good faith
   any such fine or assessment, and withhold payment thereof, if Borrower
   properly commences and thereafter diligently pursues the contest.; and

             (iii)     indemnify, defend, and hold Bank harmless from and
   against any claim, cost, damage (including, without limitation,
   consequential damages), expenses (including, without limitation, attorneys 
   fees and expenses), loss, liability, or judgment now or hereafter arising as
   a result of any Environmental Event.  Notwithstanding anything contained
   herein to the contrary, the provisions of this subparagraph (C) shall
   continue in effect and shall survive (among other events) any termination of
   this Agreement, payment and satisfaction of the Note, and release of any
   Collateral.

        (m)  The Borrower will use the proceeds of the Loan for the Project,
   all as specified in the description of the Project contained in EXHIBIT A.

        (n)  So long as the Bonds are outstanding, the Borrower will comply
   with all of its obligations and agreements under the Loan Agreement.

        SECTION 8.     NEGATIVE COVENANTS.  Without limiting any other
   covenants and provisions hereof or of any of the Related Documents, the
   Borrower covenants and agrees that during the term of this Agreement and for
   so long as (i) the Letter of Credit is outstanding and/or (ii) any
   Indebtedness of the Borrower to the Bank under this Agreement or any Related
   Document remains unpaid, then, unless the Bank shall have otherwise
   consented in writing (which consent may be given or withheld in the Bank's
   discretion):

        (a)  INDEBTEDNESS.  Incur, create, assume, become or be liable in any
   manner with respect to, or permit to exist, any indebtedness, obligation or
   liability or permit any of its subsidiaries to incur, create, assume, become
   or be liable in any manner with respect to, or permit to exist, any
   indebtedness, obligation or liability, except for:

             (i)  indebtedness to Bank, including the debt outstanding under
   the Credit Facilities;


                                       20<PAGE>





             (ii)  indebtedness with respect to trade obligations and other
   normal accruals in the ordinary course of business not yet due and payable,
   or with respect to which it is contesting in good faith the amount or
   validity thereof by appropriate proceedings, and then only to the extent it
   has set aside on its books adequate reserves therefor;

             (iii)  indebtedness for which Borrower has received the prior
   written consent of Bank, which consent shall not be unreasonably withheld;

             (iv)  liens created pursuant to the Security Agreement and the
   indebtedness set forth on EXHIBIT G, Existing Indebtedness and Liens
   attached hereto and made a part hereof; and

             (v)  other indebtedness for borrowed money not in excess of
   $1,000,000 outstanding at any time; and

             (vi)  $45,000,000 in 6.99% Senior Secured Notes due 2009.

        (b)  LIENS.  Create, incur, assume or otherwise permit to exist any
   mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever
   on any of its assets, now or hereafter owned by Borrower, except for:

             (i)  liens securing the payment of taxes, either not yet due or
   the validity of which is being contested in good faith by appropriate
   proceedings, and as to which it shall have set aside on its books adequate
   reserves;

             (ii)  deposits under worker s compensation, unemployment insurance
   and social security laws, or to secure the performance of bids, tenders,
   contracts (other than for the repayment of borrowed money) or leases, or to
   secure statutory obligations or surety or appeal bonds, or to secure
   indemnity, performance or other similar bonds in the ordinary course of
   business;

             (iii)  liens imposed by law, such as carriers , warehousemen s or
   mechanics  liens, incurred by it in good faith in the ordinary course of
   business, and liens arising out of a judgment or award against it with
   respect to which it shall currently be prosecuting an appeal, a stay of
   execution pending such appeal having been secured;

             (iv)  liens in favor of Bank;

             (v) the liens set forth on the EXHIBIT G Existing Indebtedness
   Liens attached hereto and made a part hereof; and
             (vi)  liens (including liens securing obligations in respect of
   capital leases) to secure indebtedness incurred in connection with the
   financing of all or part of the purchase price or cost of improvement of
   property acquired or improved by the Company or any of its subsidiaries
   after the date hereof, provided that the indebtedness secured by said liens
   is permitted by Section 8(a) above.

        (c)  GUARANTEES.  Without the consent of the Bank, which shall not be
   unreasonably withheld, guarantee, endorse or otherwise in any way become or
   be responsible for obligations of any other person, except endorsements of

                                       21<PAGE>





   negotiable instruments for collection in the ordinary course of business.

        (d)  DISPOSITION OF ASSETS.  Sell, lease, transfer or otherwise dispose
   of its material properties, assets, rights, licenses and franchises to any
   person, except for sales of inventory in the ordinary course of its
   business, or turn over the management of, or enter a management contract
   with respect to, such material properties, assets, rights, licenses and
   franchises.

        (e)  SALE AND LEASEBACKS.  Enter into any arrangement, directly or
   indirectly, with any person whereby it shall sell or transfer any property,
   real, personal or mixed, used or useful in its business, whether now owned
   or hereafter acquired, and thereafter rent or lease such property.

        (f)  INVESTMENTS.  Purchase, invest in or otherwise acquire or hold
   securities, including, without limitation, capital stock and evidences of
   indebtedness of, or make loans or advances to, but excluding from such
   prohibition commercial paper rated A/2 or P-2 or better and Euro-Time
   deposits, or enter into any arrangement for the purpose of providing funds
   or credit to, any other person, except:

             (i)  advances to employees for business expenses or for personal
   needs not to exceed Five Thousand Dollars ($5,000) in the case of any one
   (1) employee and not to exceed Fifty Thousand Dollars ($50,000) in the
   aggregate to all such employees outstanding at one time; and

             (ii)  investments in certificates of deposit issued by Bank or in
   short-term obligations of the United States.

        (g)  FUNDAMENTAL CHANGES.  Dissolve, liquidate, merge, consolidate or
   otherwise alter or modify Borrower s corporate name, mailing address,
   principal place of business, structure, status or existence.

        (h)  DIVIDENDS.  Pay any dividends, or make any distribution of cash or
   property, or both, to holders of shares of its capital stock, or directly or
   indirectly, redeem, purchase or otherwise acquire for a consideration, any
   shares of its capital stock, of any class, unless such would not
   significantly alter Borrower s financial capabilities or cause a default
   under a covenant contained in this Agreement.

        (i)  ACCOUNTS RECEIVABLE.  Sell, assign, pledge, discount or dispose in
   any way of any accounts receivable, promissory notes or trade acceptances
   held by Borrower, with or without recourse, except for collection (including
   endorsements) in the ordinary course of business.

        (j)  TRANSACTIONS WITH AFFILIATES.  Enter into any transaction,
   including, without limitation, the purchase, sale or exchange of property or
   assets or the rendering or accepting of any service with or to any
   subsidiary or affiliate of Borrower except in the ordinary course of
   business and pursuant to the reasonable requirements of Borrower s business
   and upon terms not less favorable to Borrower than it could obtain in a
   comparable arm s-length transaction with a third party other than such
   subsidiary or affiliate.


                                       22<PAGE>





        (k)  ERISA.  (a)  Fail, or permit any Commonly Controlled Entity to
   fail, to comply with the requirements of ERISA with respect to any Employee
   Benefit Plan; (b) permit any funded Employee Pension Plan to lose its
   qualified status under Section 401(a) or 403(a) of the Code; (c) fail, or
   permit any Commonly Controlled Entity to fail, to meet the minimum funding
   standards of Section 302 of ERISA and Section 412 of the Code; (d) fail, or
   permit any Commonly Controlled Entity to fail, to discharge any obligations
   to the PBGC with respect to the termination of an Employee Pension Plan or
   to any Multiemployer Plan on account of its withdrawal or partial withdrawal
   therefrom or allow to exist any event or condition which presents a
   substantial risk of Borrower incurring liability to the PBGC by reason of
   the termination of any Employee Pension Plan; (e) create or adopt, or permit
   any Commonly Controlled Entity to create or adopt, any new Employee Pension
   Plan which would significantly alter Borrower s financial capabilities or
   cause a default under a covenant contained in this Agreement without the
   prior written consent of Bank; (f) modify, or permit any Commonly Controlled
   Entity to modify, any existing Employee Pension Plan so as to increase its
   obligations thereunder which would significantly alter Borrower s financial
   capabilities or cause a default under a covenant contained in this
   Agreement, except in the ordinary course of business consistent with past
   practice or with the prior written consent of Bank; (g) create or adopt any
   new Employee Welfare Plan or modify any existing Employee Welfare Plan, or
   permit any Commonly Controlled Entity to create or adopt any new Employee
   Welfare Plan or modify any existing Employee Welfare Plan, to provide
   continuing benefits or coverage for any participant (or beneficiary) after
   the termination of the participant s employment except as may be required by
   COBRA, regulations thereunder or applicable state statutory law which would
   significantly alter Borrower s financial capabilities or cause a default
   under a covenant contained in this Agreement or with the prior written
   consent of Bank; or (h) engage, or permit any Commonly Controlled Entity to
   engage, in any transaction which would reasonably result in the assessment
   of a direct or indirect liability to Borrower or any Commonly Controlled
   Entity under Section 409 or 502 of ERISA or Section 4975 of the Code.

        (l)  NEGATIVE PLEDGE.  Without Bank s consent, which shall not be
   unreasonably withheld, (a) sell, transfer, pledge or assign any shares of
   stock or other ownership interests in Borrower or any of its subsidiaries or
   (b) execute or agree to any further negative pledges of such shares of stock
   or other ownership interests in Borrower or any of its subsidiaries.

        SECTION 9.     Intentionally left blank.

        SECTION 10.  EVENTS OF DEFAULT.  The occurrence of any one or more of
   following shall be an Event of Default under this Agreement, unless waived
   by the Bank pursuant to Section 12 hereof:

        (a)  The Borrower shall fail to pay when due any amount payable
   hereunder; or

        (b)  The Borrower shall fail to observe, comply or perform any term,
   covenant, condition or agreement contained in any of Sections 3, 7, or 8;

        (c)  The Borrower shall fail to observe or perform any term, covenant
   or agreement contained in this Agreement (other than those referred to in

                                       23<PAGE>





   clauses (a) or (b) above) and such failure shall continue for 30 days after
   written notice thereof has been given to the Borrower; or

        (d)  Any representation, warranty or certification made by the Borrower
   in this Agreement or in any certificate, financial statement or other
   document delivered in connection with or pursuant to this Agreement or any
   of the Related Documents shall prove to have been incorrect in any material
   respect when made; or

        (e)  the occurrence of a default or event of default with respect to
   any evidence of indebtedness of Borrower (other than to Bank), in excess of
   one million dollars ($1,000,000), if the effect of such default is to
   accelerate the maturity of such indebtedness or to permit the holder thereof
   to cause such indebtedness to become due prior to the stated maturity
   thereof, or if any such indebtedness of Borrower is not paid when due and
   payable, whether at the due date thereof or by acceleration or otherwise;

        (f)  the occurrence of an  Event of Default  as defined in any Security
   Document or either of the Credit Facilities;

        (g)  Borrower shall (i) discontinue or abandon operation of its
   business, (ii) apply for or consent to or suffer the appointment of a
   receiver, trustee, custodian or liquidator of it or any of its property,
   (iii) admit in writing its inability to pay its debts as they mature, (iv)
   make a general assignment for the benefit of creditors, (v) file a petition
   for relief under Title 11 of the United States Code or (vi) file a petition
   in bankruptcy, or a petition or an answer seeking reorganization or an
   arrangement with creditors or to take advantage of any bankruptcy,
   reorganization, insolvency, readjustment of debt, dissolution or liquidation
   law or statute, or an answer admitting the material allegations of a
   petition filed against it in any proceeding under any such law, or if
   corporate action shall be taken for the purpose of effecting any of the
   foregoing, (vi) become insolvent, (vii) fail to generally pay its debts as
   they mature or (viii) have liabilities which exceed the fair value of its
   assets;

        (h)  there shall be filed against Borrower an involuntary petition
   seeking reorganization of Borrower or the appointment of a receiver,
   trustee, custodian or liquidator of Borrower or any material part of its
   assets, or an involuntary petition under any bankruptcy, reorganization or
   insolvency law of any jurisdiction, whether now or hereafter in effect;

        (i)  any judgment or court order for the payment of money in excess of
   an aggregate of one million dollars ($1,000,000) shall be rendered against
   Borrower in any twelve (12) month period, and either the same shall remain
   undischarged for a period of thirty (30) consecutive days, or execution
   shall have issued in respect thereof;

        (j)  the occurrence of any attachment of any deposits or other property
   of Borrower in the hands or possession of Bank, or the occurrence of any
   attachment of any other property of Borrower in the aggregate amount
   exceeding one million dollars ($1,000,000) in any twelve (12) month period
   and either the same shall remain undischarged for a period of thirty (30)
   consecutive days, or execution shall have issued in respect thereof;

                                       24<PAGE>





        (k)  for any reason, any Security Document at any time shall not be in
   full force and effect in all material respects or shall not be enforceable
   in all material respects in accordance with its terms, or any material
   security interest or lien granted pursuant thereto shall fail to be
   perfected, or any person (other than Bank) shall contest the validity,
   enforceability or perfection of any material lien granted pursuant thereto,
   or any party thereto (other than Bank) shall seek to disaffirm, terminate,
   limit or reduce its obligations under any Security Document; or

        (l)  Borrower suffers or sustains a Material Adverse Change or Bank in
   good faith determines that the prospect of repayment of Borrower s
   obligations hereunder is materially impaired; or

        (m)  for any reason, the ratio of (x) the total debt (the sum of all
   short term debt, current maturities of long term indebtedness (CMLTD) and
   long-term debt) of CTG Resources, Inc. (the parent of Borrower) to (y) the
   capitalization of CTG Resources, Inc., exceeds 70% in any two consecutive
   fiscal quarters;

        (n)  any operating subsidiary of CTG Resources, Inc. fails to maintain
   a Standard and Poor s Corporation debt rating at least equal to  BBB ;

        (o)  Any default on the part of the Borrower or any of its Subsidiaries
   shall exist, and shall remain unwaived or uncured beyond the expiration of
   any applicable notice and/or grace period, under any contract, agreement
   (including, without limitation, the documentation for the Line of Credit) or
   undertaking now existing or hereafter entered into with or for the benefit
   of the Bank or any affiliate of the Bank in any capacity or capacities; or

        (p)  Any  Event of Default  (as defined in the Indenture) shall have
   occurred or any failure or default shall have occurred under any of the
   Related Documents and shall have continued beyond the expiration of any
   applicable notice and/or grace period.

        If an Event of Default occurs, the Bank may exercise any one or more of
   the following rights and remedies (all of which shall be cumulative):

             (i)  Notify the Trustee of such Event of Default and direct the
        Trustee in writing to accelerate the Bonds pursuant to the Indenture,
        resulting in the Trustee declaring the principal of such Bonds then
        outstanding and the interest accrued thereon immediately due and
        payable under the Indenture and in the Trustee drawing under the Letter
        of Credit by a Final Drawing, whereupon all amounts drawn under the
        Letter of Credit, all Tender Advances, all interest thereon and all
        other amounts payable hereunder or in respect hereof shall
        automatically be forthwith due and payable, without presentment,
        demand, protest or further notice of any kind, all of which are hereby
        expressly waived by the Borrower.

             (ii) Enforce its rights and remedies under the Security Documents.

             (iii)     Enforce the provisions of this Agreement by legal
        proceedings for the specific performance of any covenant or agreement
        contained herein or for the enforcement of any other appropriate legal

                                       25<PAGE>





        or equitable remedy.  The Bank may recover damages caused by any breach
        by the Borrower of the provisions of this Agreement, including court
        costs, reasonable attorneys' fees and other costs and expenses incurred
        in the enforcement of the obligations of the Borrower hereunder.

             (iv) Exercise all other rights and remedies which the Bank may
        have under any agreement or under applicable law.

             (v)  Whether or not any acceleration occurs under the Indenture or
        any other notice is given to the Trustee, the Bank may give the notice
        described in the third grammatical paragraph of the Letter of Credit,
        whereupon any Interest Component (as defined in the Letter of Credit)
        theretofore drawn and not yet reinstated in accordance with the terms
        of the Letter of Credit will not be so reinstated.

        In addition to any rights now or hereafter granted under applicable law
   and not by way of limitation of any such rights, upon the occurrence of any
   Event of Default, the Bank is hereby authorized at any time or from time to
   time, without presentment, demand, protest or other notice of any kind to
   the Borrower or to any other Person, all of which are hereby expressly
   waived, to set off and to appropriate and apply any and all deposits and any
   other Indebtedness at any time held or owing by the Bank or any affiliate
   thereof to or for the credit or the account of any Borrower against and on
   account of the obligations and liabilities of the Borrower to the Bank,
   under this Agreement or otherwise, if then due and payable.  ANY AND ALL
   RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
   TO ANY OTHER COLLATERAL WHICH SECURES ANY OF THE BANK OBLIGATIONS PRIOR TO
   THE EXERCISE BY THE BANK OF ITS RIGHT OF SET-OFF UNDER THIS SECTION ARE
   HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

        SECTION 11.  RIGHT TO CURE.  In the event that the Borrower shall fail
   to purchase or maintain insurance required hereunder on any of the
   collateral or to pay any tax, assessment, governmental charge or levy on any
   of the collateral, except as the same may be otherwise permitted hereunder,
   or in the event that any lien, encumbrance or security interest on any of
   the collateral prohibited hereby shall not be paid in full or discharged, or
   in the event that the Borrower shall fail to pay or comply with any other
   liability or agreement hereunder, which liability or agreement relates to
   any of the collateral or to the Loan or to any obligation of the Borrower to
   the Trustee and/or the Issuer, the Bank may, but shall not be required to,
   pay, satisfy, perform, discharge or bond the same for the account of the
   Borrower, and all moneys so paid and expenses incurred by the Bank shall be
   payable to the Bank by the Borrower on demand and shall bear interest from
   the date of demand until paid at the lesser of (i) a fluctuating rate per
   annum which shall at all times be equal to 4.00% plus the Prime Rate, or
   (ii) the maximum rate permitted by then applicable law.

        SECTION 12.  AMENDMENTS AND WAIVERS.  No amendment or waiver of any
   provision of this Agreement or consent to any departure by the Borrower
   therefrom shall in any event be effective unless the same shall be in
   writing and signed by the party to be charged.  Any such waiver or consent
   shall be effective only in the specific instance and for the specific
   purpose for which given.  The Borrower will not agree or consent to any
   amendment to any of the Related Documents without prior written consent of

                                       26<PAGE>





   the Bank which shall not be unreasonably withheld.  The Borrower will not
   initiate or consent to any change in the Mode applicable to the Bonds under
   the Indenture to provide for any Mode other than a Weekly Mode (as defined
   in the Indenture).

        SECTION 13.  NOTICES.  All notices, requests and other communications
   to any party hereunder shall be in writing and shall be given to such party,
   addressed to it at its address set forth below or such other address as such
   party may hereafter specify for the purpose by notice to the other party. 
   Each such notice, request or communication shall be deemed delivered on the
   earliest of (a) the date received or (b) the date of delivery, refusal or
   nondelivery indicated on the return receipt if deposited in a United States
   Postal Service Depository, postage prepaid, sent certified or registered
   mail, return receipt requested.  The parties' initial notice addresses are
   as follows:

        Party          Address
        -----          -------

        Borrower: The Energy Network
                  100 Columbus Avenue
                  Hartford, Connecticut  06103

        Bank:     Fleet National Bank
                  One Federal Street
                  Mail Stop: MAOFD07B
                  Boston, MA 02110
                  Attention:  Thomas L. Rose,
                             Vice President, National Utilities

        SECTION 14.  NO WAIVER: REMEDIES.  No failure on the part of the Bank
   to exercise, and no delay in exercising, any right hereunder shall operate
   as a waiver thereof nor shall any single or partial exercise of any right
   hereunder preclude any other or further exercise thereof or the exercise of
   any other right.  The provisions of this Agreement are not in limitation of
   nor limited by inconsistent or differing provisions contained in the
   Security Documents or the indenture or elsewhere, and any rights or remedies
   hereunder are cumulative with (and not in exclusion of) all other rights and
   remedies hereunder, or arising under any other agreement or provided by law. 
   The Borrower specifically acknowledges that the Indenture may permit
   incurrence of additional Indebtedness and additional liens, permits certain
   property dispositions and contemplates other matters which are prohibited by
   this Agreement and agrees that, as between the Borrower and the Bank, the
   provisions of this Agreement are controlling over the provisions of the
   Indenture.

        SECTION 15.  INDEMNIFICATION.  The Borrower hereby agrees to indemnify
   and hold harmless the Bank from and against any and all claims, damages,
   losses, liabilities, costs or expenses whatsoever which the Bank may incur
   (i) by reason of any untrue statement or alleged untrue statement of any
   material fact contained or incorporated by reference in any materials
   furnished by the Borrower or any other Person (other than the Bank) in
   connection with the making of the Loan or the sale of the Bonds, or the
   omission or alleged omission to state therein a material fact necessary to

                                       27<PAGE>





   make such statements, in light of the circumstances under which they are or
   were made, not misleading, or (ii) by reason of or in connection with the
   execution and delivery or transfer of, or payment or failure to pay under,
   the Letter of Credit, except for any claims, damages, losses, liabilities,
   costs or expenses to the extent, but only to the extent, caused by the gross
   negligence or willful misconduct of the Bank in determining whether a
   statement or draft presented under the Letter of Credit complies with the
   terms of the Letter of Credit or in failing to pay under the Letter of
   Credit after presentation to it by the Trustee of a draft and certificate
   strictly complying with the terms and conditions of the Letter of Credit. 
   Further, the Borrower hereby agrees to pay, and to protect, indemnify and
   save harmless the Bank and its officers, directors, shareholders, employees,
   agents and servants from and against, any and all losses, liabilities
   (including liabilities for penalties), actions, suits, judgments, demands,
   damages, costs or expenses (including, without limitation, attorneys' fees
   and expenses) of any nature arising from or relating to the offering,
   issuance, sale or delivery of the Bonds (or any interest in any fund into
   which the Bonds are placed), except for any such loss, liability, action,
   suit, judgment, demand, damage, cost or expense to the extent, and only to
   the extent, resulting from the Bank's gross negligence or willful
   misconduct.  Nothing in this Section 15 is intended to limit the Borrower's
   reimbursement obligation set forth in Section 2 of this Agreement.

        SECTION 16.  CONTINUING OBLIGATION: SURVIVAL.  This Agreement is a
   continuing obligation and shall be binding upon and inure to the benefit of
   and be enforceable by the parties hereto and their respective successors,
   transferees and assigns; PROVIDED, HOWEVER, that the Borrower may not assign
   or delegate all or any part of this Agreement without the prior written
   consent of the Bank.  All representations and warranties of the Borrower
   contained herein or made in connection herewith shall survive the making of
   this Agreement or any payment made by the Bank under the Letter of Credit.
   The Bank may, in accordance with applicable law, from time to time assign or
   grant participations in this Agreement and/or the Letter of Credit issued
   hereunder.  Without limitation of the foregoing generality:

             (i)  The Bank may at any time pledge all or any portion of its
       rights under this Agreement and the Related Documents to any of the 12
       Federal Reserve Banks organized under Section 4 of the Federal Reserve
       Act, 12 U.S.C. Section 341.  No such pledge or the enforcement thereof
       shall release the Bank from its obligations under this Agreement or
       Related Documents.

             (ii)The Bank shall have the unrestricted right at any time and
       from time to time, and without the consent of or notice to the
       Borrower, to grant to one or more banks or other financial institutions
       (each, a  Participant ) participating interests in the Bank s
       obligations hereunder and/or under the Letter of Credit.  In the event
       of any such grant by the Bank of a participating interest to a
       Participant, whether or not upon notice to the Borrower, the Bank shall
       remain responsible for the performance of its obligations hereunder and
       under the Letter of Credit and the Borrower shall continue to deal
       solely and directly with the Bank in connection with the Bank s rights
       and obligations hereunder.  The Bank may furnish any information
       concerning the Borrower in its possession from time to time to

                                       28<PAGE>





       prospective assignees and Participants; provided that the Bank shall
       require any such prospective assignee or Participant to agree in
       writing to maintain the confidentiality of such information to the same
       extent as the Bank would be required to maintain such confidentiality.

        All covenants and agreements of the Borrower contained herein shall
   continue in full force and effect from and after the date hereof until
   payment in full of all sums due hereunder.  The obligations of the Borrower
   pursuant to Section 15 and Section 19 shall survive termination of this
   Agreement.

        SECTION 17.  TRANSFER OF THE LETTER OF CREDIT.  The Letter of Credit
   may be transferred only in accordance with the provisions set forth therein.

        SECTION 18.  LIMITED LIABILITY OF THE BANK.  The Borrower assumes all
   risks of the acts or omissions of the Trustee and any transferee of the
   Letter of Credit with respect to the use of the Letter of Credit.  Neither
   the Bank nor any of its officers, directors, employees or attorneys shall be
   liable or responsible for: (a) the use which may be made of the Letter of
   Credit or for any acts or omissions of the Trustee or any beneficiary or
   transferee in connection therewith; (b) the validity, sufficiency or
   genuineness of documents, or of any endorsement(s) thereon, even if such
   documents should in fact prove to be in any or all respects invalid,
   insufficient, fraudulent or forged; (c) payment by the Bank against
   presentation of documents which do not comply with the terms of the Letter
   of Credit, including failure of any documents to bear any reference or
   adequate reference to the Letter of Credit; or (d) any other circumstances
   whatsoever in making or failing to make payment under the Letter of Credit;
   PROVIDED that the Borrower shall have a claim against the Bank, and the Bank
   shall be liable to the Borrower to the extent, but only to the extent, of
   any direct, as opposed to consequential, losses, liabilities or damages
   suffered by the Borrower which the Borrower proves were caused by the Bank's
   willful misconduct or gross negligence.  In furtherance and not in
   limitation of the foregoing, the Bank may accept documents that appear on
   their face to be in order, without responsibility for further investigation. 
   Further, and without limitation of the foregoing, the Bank is specifically
   authorized to rely upon facsimile copies received by telecopier of any sight
   drafts and certificates otherwise complying as to form with the terms and
   conditions of the Letter of Credit.

        SECTION 19.  COSTS, EXPENSES AND TAXES.  The Borrower agrees to pay on
   demand all reasonable costs and expenses (including, without limitation,
   reasonable legal fees) of the Bank in connection with the preparation,
   negotiation, execution, delivery, filing and recording of this Agreement and
   any other documents which may be delivered in connection with this
   Agreement, and any amendments or modifications of any of the foregoing, or
   in connection with the examination, review or administration of any of the
   foregoing, or in connection with the confirmation, perfection and/or
   protection of the security interests granted or intended to be granted to
   the Bank, as well as the costs and expenses (including, without limitation,
   the reasonable fees and expenses of legal counsel) incurred by the Bank in
   connection with interpreting, administering, preserving, enforcing or
   exercising any rights or remedies under this Agreement, the Security
   Agreement and all other instruments and documents to be delivered hereunder,

                                       29<PAGE>





   all whether or not legal action is instituted.  In addition, the Borrower
   shall pay any and all stamp and other taxes and fees payable or determined
   to be payable in connection with the execution, delivery, filing and
   recording of this Agreement, the Security Agreement and such other
   documents, and agrees to save the Bank harmless from and against any and all
   liabilities with respect to or resulting from any delay in paying or
   omission to pay such taxes and fees.  The Borrower further agrees to pay,
   and to save the Bank harmless from, any and all brokers' fees, investment
   bankers' fees and the like which may be asserted in connection with any of
   the transactions contemplated by this Agreement.  The Bank did not have any
   broker or investment banker in connection herewith.  Any fees, expenses,
   other charges or other payments which the Bank is entitled to receive from
   the Borrower hereunder shall bear interest until paid at a fluctuating rate
   per annum which shall at all times be equal to the lesser of (i) 4.00% per
   annum plus the Prime Rate or (ii) the maximum rate permitted by then
   applicable law.

        SECTION 20.  SEVERABILITY; MISCELLANEOUS.  Any provision of this
   Agreement which is prohibited, unenforceable or not authorized in any
   jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
   such prohibition, unenforceability or non-authorization without invalidating
   the remaining provisions hereof or affecting the validity, enforceability or
   legality of such provision in any other jurisdiction.  Upon receipt of an
   affidavit of an officer of the Bank as to the loss, theft, destruction or
   mutilation of this Agreement or any Related Document which is not of public
   record and, in the case of any such mutilation, upon surrender and
   cancellation of such document, the Borrower will issue, in lieu thereof, a
   replacement document of like tenor.  All agreements between the Borrower and
   the Bank are hereby expressly limited so that in no contingency or event
   whatsoever, whether by reason of acceleration of maturity of the Bonds or
   otherwise, shall the amount paid or agreed to be paid to the Bank for the
   use or the forbearance of any Indebtedness exceed the maximum permissible
   under applicable law.  In this regard, it is expressly agreed that it is the
   intent of the Borrower and the Bank, in the execution, delivery and
   acceptance of this Agreement, to contract in strict compliance with the laws
   of the State of Connecticut.  If, under any circumstances whatsoever,
   performance or fulfillment of any provision of this Agreement or any of the
   Related Documents at the time such provision is to be performed or fulfilled
   shall involve exceeding the limit of validity prescribed by applicable law,
   then the obligation so to be fulfilled shall be reduced automatically to the
   limits of such validity, and if under any circumstances whatsoever the Bank
   should ever receive as interest an amount which would exceed the highest
   lawful rate, such amount which would be excessive interest shall be applied
   to the reduction of the principal balance of the Bank Obligations and not to
   the payment of interest.  The provisions of this Section shall control every
   other provision of this Agreement and of each Related Document.

        SECTION 21.  GOVERNING LAW.  This Agreement shall be governed by, and
   construed and interpreted in accordance with, the laws of the State of
   Connecticut.

        SECTION 22.  CONSENT TO JURISDICTION; JURY TRIAL WAIVER.  (a)  The
   Borrower irrevocably submits to the non-exclusive jurisdiction of any
   Connecticut court or any federal court sitting within the State of

                                       30<PAGE>





   Connecticut over any suit, action or proceeding arising out of or relating
   to this Agreement.  The Borrower irrevocably waives, to the fullest extent
   permitted by law, any objection which it may now or hereafter have to the
   laying of venue of any such suit, action or proceeding brought in such a
   court and any claim that any such suit, action or proceeding has been
   brought in an inconvenient forum.  The Borrower agrees that final judgment
   in any such suit, action or proceeding brought in such a court shall be
   enforced in any court of proper jurisdiction by a suit upon such judgment,
   provided that service of process in such action, suit or proceeding shall
   have been effected upon the Borrower in one of the manners specified in
   paragraph (b) of this Section 22 or as otherwise permitted by law.

        (b)  The Borrower hereby consents to process being served in any suit,
   action or proceeding of the nature referred to in paragraph (a) of this
   Section 22 either (i) by mailing a copy thereof by registered or certified
   mail, postage prepaid, return receipt requested, to it at its address set
   forth in Section 13 or (ii) by serving a copy thereof upon it at its address
   set forth in Section 13.  The Borrower irrevocably waives, to the fullest
   extent permitted by law, all claims of error by reason of any service as
   contemplated herein and agrees that such service shall be deemed in every
   respect effective service upon the Borrower in any such suit, action or
   proceeding and, to the fullest extent permitted by law, shall be taken and
   held to be valid personal service upon and personal delivery to the
   Borrower.

        (c)  EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL BY JURY IN ANY
   ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE
   OTHER ON ANY MATTERS WHATSOEVER (INCLUDING, WITHOUT LIMITATION, ANY ACTION,
   PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
   AGREEMENT, THE SECURITY AGREEMENT OR ANY OTHER AGREEMENTS EXECUTED IN
   CONNECTION HEREWITH OR THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS
   CONTEMPLATED HEREIN OR THEREIN).  THE PROVISIONS OF THIS SECTION HAVE BEEN
   FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT
   TO NO EXCEPTIONS.  NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY
   OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED
   IN ALL INSTANCES.

        SECTION 23.  TABLE OF CONTENTS; HEADINGS.  The Table of Contents and
   Section headings in this Agreement are included herein for convenience of
   reference only and shall not constitute a part of this Agreement for any
   other purpose.














                                       31<PAGE>





        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
   duly executed and delivered, as an instrument under seal, by their
   respective officers thereunto duly authorized, as of the date first above
   written.

                                 THE ENERGY NETWORK, INC.


                                 By:  S/ Andrew H. Johnson
                                      ---------------------------
                                       Name:  Andrew H. Johnson
                                       Title: Assistant Vice
                                                 President


                                 FLEET NATIONAL BANK


                                 By:  S/ Thomas L. Rose
                                      --------------------------
                                      Name:  Thomas L. Rose
                                      Title: Vice President

































                                       32<PAGE>


       


                                    EXHIBIT A

                               Project Description
                               -------------------

        The Connecticut Development Authority (the  Authority ) has previously
   issued $11,000,000 principal amount of its Industrial Revenue Variable Rate
   Demand Bonds (Capitol District Energy Center Project - 1986 Series) (the
    1986 Series Bonds ) and $5,300,000 of its Industrial Revenue Variable Rate
   demand Bonds (Capitol District Energy Center Project - 1988 Series) (the
    1988 Series Bonds ) and together with the 1986 Series Bonds, the  Prior
   Obligations ) for the purpose of financing the acquisition, constriction and
   installation of approximately 20,000 linear feet of pipeline for a local
   district hearing and cooling system (the  Project ).  The Authority proposes
   to make a loan from Bond proceeds to the Borrower to assist in the
   refinancing of the Project through the refunding of the Prior Obligations.<PAGE>


       


                                    EXHIBIT B

                                 Letter of Credit
                                 ----------------
                                  (See Attached)<PAGE>




       


                                           IRREVOCABLE DIRECT PAY LETTER OF
                                           CREDIT NO. CS1101345

                                           DATE OF ISSUE:  August 27, 1998


          ISSUING BANK:                    APPLICANT:
          Fleet National Bank              The Energy Network, Inc.
          a Member of Fleet Financial      100 Columbus Boulevard
            Group                          Hartford, Connecticut  06144
          c/o Fleet Pennsylvania Services
          One Fleet Way
          Scranton, PA  18507

                                           BENEFICIARY:
                                           State Street Bank and Trust
                                           Company,
                                           as Trustee under Indenture of
                                           Trust Agreement dated as of
                                           August 1, 1998

                                           Goodwin Square
                                           225 Asylum Street, 23rd Floor
                                           Hartford, Connecticut  06103

                                           Amount/Currency:
                                           Up to USD $10,756,822.00
                                           Up to Ten Million Seven Hundred
                                           Fifty-Six Thousand Eight
                                           Hundred and Twenty-Two
                                           00/100ths US Dollars

                                           Date and Place of Expiry:
                                           August 27, 2000 at the
                                           Issuing Bank

          Dear Sirs:

               At the request and for the account of our customer, The
          Energy Network, Inc., 100 Columbus Boulevard, Hartford,
          Connecticut  06144 (the  Borrower ), we hereby establish in your
          favor, as Trustee under the below-defined Indenture pursuant to
          which $10,600,000 in aggregate principal amount of Connecticut
          Development Authority Industrial Revenue Variable Rate Demand
          Bonds (Capital District Energy Center Project- 1998 Refunding
          Series) (the  Bonds ) are being issued by the Connecticut
          Development Authority (the  Issuer ), this Irrevocable Direct Pay
          Letter of Credit No. CS1101345 in the amount of $10,756,822 (the
           Stated Amount ), of which (1) $10,600,000 (as from time to time
          reduced or reinstated as provided in this Letter of Credit, the
           Principal Component ) shall support the payment of the principal
          or portion of the purchase price corresponding to principal of
          the Bonds, and (2) $156,822 (as from time to time reduced or

           (continued)                                                       
 <PAGE>




       


          reinstated as provided in this Letter of Credit, the  Interest
          Component ) shall support the payment of up to 45 days' interest
          on the Bonds or portion of the purchase price corresponding to
          interest at an assumed rate of 12% per annum, effective
          immediately and expiring at 5:00 P.M. (Scranton time) on the
          below-defined Stated Termination Date or earlier as hereinafter
          provided.  Any payment pursuant to a drawing under this Letter of
          Credit will be made by us with our own funds, and not from any
          separate funds of the Issuer or the Borrower.  As used herein,
          the term  Indenture  will be deemed to mean that certain
          Indenture of Trust dated as of August 1, 1998 among the Issuer
          and State Street Bank and Trust Company, as trustee (the
           Trustee ).  As used herein, the term  Stated Termination Date 
          means August 27, 2000.

               We hereby irrevocably authorize you to draw on us, in an
          aggregate amount not to exceed the amount of this Letter of
          Credit set forth above and in accordance with the terms and
          conditions and subject to the reductions in amount as hereinafter
          set forth, (1) in one drawing per month (subject to the
          provisions contained in the next following paragraph) by your
          draft (in the form of Annex A attached hereto), payable at sight
          on a Business Day, and accompanied by your written and completed
          certificate signed by you in the form of Annex B attached hereto
          (such draft accompanied by such certificate being your  Interest
          Drawing ), an amount not exceeding the Interest Component,
          computed at an assumed rate of 12% per annum; (2) in one or more
          drawings by one or more of your drafts (in the form of Annex A
          attached hereto), payable at sight on a Business Day, and
          accompanied by your written and completed certificate signed by
          you in the form of Annex C attached hereto (any such draft
          accompanied by such certificate being your  Tender Drawing ), an
          aggregate amount not exceeding the sum of the Principal Component
          and the Interest Component; (3) in one or more drawings by one or
          more of your drafts (in the form of Annex A attached hereto),
          payable at sight on a Business Day, and accompanied by your
          written and completed certificate signed by you in the form of
          Annex D attached hereto (any such draft accompanied by such
          certificate being your  Partial Redemption Drawing ), an
          aggregate amount not exceeding the sum of the Principal Component
          and the Interest Component; and (4) in a single drawing by your
          draft (in the form of Annex A attached hereto), payable at sight
          on a Business Day, and accompanied by your written and completed
          certificate signed by you in the form of Annex E attached hereto
          (such draft accompanied by such certificate being your  Final
          Drawing , and any Interest Drawing, Tender Drawing, Partial
          Redemption Drawing or Final Drawing referred to herein being a
           Drawing ), an amount not exceeding the sum of the Principal
          Component and the Interest Component.  Each such Drawing shall
          cover principal of and/or accrued and unpaid interest on the
          Bonds.   Business Day  means any day (i) that is not a Saturday,
          Sunday or legal holiday, (ii) that is a day on which banks are
          not required or authorized to close in Hartford, Connecticut or

                              (continued)
                                                                         <PAGE>




       


          New York, New York, (iii) that is a day on which banking
          institutions in each of the cities in which the principal
          corporate trust office of the Trustee, the principal office of
          the Remarketing Agent (as defined in the Indenture) and our
          principal office are located are not required or authorized to
          remain closed and (iv) that is a day on which the New York Stock
          Exchange is not closed.

               If you shall draw on us by your Interest Drawing under
          clause (1) of the first sentence of the immediately preceding
          paragraph and you shall not have received from us within ten (10)
          calendar days from the date of such drawing a written notice to
          the effect that a default exists under our reimbursement
          agreement with the Borrower and that the Interest Component of
          the Letter of Credit will not be reinstated, your right to draw
          on us in a single drawing by your Interest Drawing under said
          clause (1) shall be automatically reinstated and, effective the
          eleventh (11th) calendar day from the date of such drawing, you
          shall again be authorized to draw on us by your Interest Drawing
          in accordance with said clause (1); provided, however, that the
          Interest Component of this Letter of Credit shall be decreased as
          hereinafter provided in connection with amounts drawn pursuant to
          Partial Redemption Drawings and any Tender Drawing.  The
          automatic reinstatement of your right to draw on us by your
          Interest Drawing shall be applicable to successive drawings by
          your Interest Drawings under clause (1) of the first sentence of
          the immediately preceding paragraph so long as this Letter of
          Credit shall not have terminated as set forth below.

               Upon our honoring any Tender Drawing or Partial Redemption
          Drawing presented by you hereunder, (i) the Principal Component
          of this Letter of Credit and the amounts available to be drawn
          hereunder by you with respect to principal of the Bonds by any
          subsequent Drawing shall be automatically decreased by an amount
          equal to the Principal Component of such Tender Drawing or
          Partial Redemption Drawing, and (ii) the Interest Component of
          this Letter of Credit and the amounts available to be drawn
          hereunder by you with respect to accrued and unpaid interest on
          the Bonds by any subsequent Drawing shall be automatically
          decreased by an amount equal to the portion of the Interest
          Component relating to Bonds purchased or redeemed with the
          proceeds of such Tender Drawing or Partial Redemption Drawing,
          but shall automatically reinstate as follows:

                    (A)  with respect to any decrease upon payment of any
               Tender Drawing, the amount of the Principal Component of
               this Letter of Credit and the portion of the Interest
               Component relating thereto shall be increased when and to
               the extent, but only when and to the extent, that we are
               reimbursed by or on behalf of the Borrower for any amount
               drawn hereunder by any Tender Drawing.  Any amount received
               by us from or on behalf of the Borrower in reimbursement of
               amounts drawn hereunder by any Tender Drawing shall, if

                              (continued) 
                                                                        <PAGE>




       


               accompanied by your completed certificate signed by you in
               the form of Annex F attached hereto, be applied to the
               extent of the amount indicated therein to reimburse us for
               amounts drawn hereunder by your Tender Drawings; and

                    (B)  with respect to any decrease upon payment of any
               Partial Redemption Drawing or Final Drawing, the amount of
               the Principal Component relating thereto shall not be
               reinstated.

               Funds from us under this Letter of Credit are available to
          you against presentation of your Interest Drawing, your Tender
          Drawing, your Partial Redemption Drawing and your Final Drawing. 
          Each sight draft drawn under this Letter of Credit must bear on
          its face the clause  Drawn under Fleet National Bank Irrevocable
          Direct Pay Letter of Credit No. CS1101345.   Each Drawing shall
          be presented to us at the following address:  Fleet National
          Bank, c/o Fleet Pennsylvania Services, Trade Services Operations,
          One Fleet Way, Scranton, PA 18507, attention: Standby Letter of
          Credit Unit, Mail Code PASCNO4E.  A Drawing shall be deemed to
          have been presented on the date actually received by us. 
          Presentation will also be deemed made upon our receipt of your
          telecopier transmission to us (at Fax No. (717) 330-4187) of a
          facsimile of the appropriate sight draft and drawing certificate
          properly completed and signed, together with your undertaking to
          send to us by regular U.S. Mail, for receipt on the next
          following Business Day, the signed originals of such documents. 
          Presentation may not be made in any manner other than as provided
          in this paragraph.  If we receive any of your Drawings (other
          than a Tender Drawing) at our aforesaid office, all in strict
          conformity with the terms and conditions of this Letter of
          Credit, not later than 12:00 noon (New York City time) on a
          Business Day (provided that this Letter of Credit has not then
          terminated), we will cause payment of same by 1:00 P.M. (New York
          City time) on the next following Business Day in accordance with
          your payment instructions.  If we receive any of your Drawings
          (other than a Tender Drawing) at such office, all in strict
          conformity with the terms and conditions of this Letter of
          Credit, after 12:00 A.M. (New York City time) on a Business Day
          (provided that this Letter of Credit has not then terminated), we
          will cause payment of same by 12:00 noon (New York City time) on
          the second succeeding Business Day in accordance with your
          payment instructions.  If we receive any Tender Drawing at our
          aforesaid office, all in strict conformity with the terms and
          conditions of this Letter of Credit, not later than 10:00 A.M.
          (New York City time) on any Business Day (provided that this
          Letter of Credit has not then terminated), we will cause payment
          of same by 2:30 P.M. (New York City time) on the same Business
          Day in accordance with your payment instructions.  If we receive
          any Tender Drawing at such office, all in strict conformity with
          the terms and conditions of this Letter of Credit, after 10:00
          A.M. (New York City time) on any Business Day (provided that this
          Letter of Credit has not then terminated), we will cause payment

                              (continued)
                                                                         <PAGE>




       


          of same by 12:00 noon (New York City time) on the next following
          Business Day in accordance with your payment instructions.  If
          requested by you, payment under this Letter of Credit may be made
          by wire transfer of Federal Reserve Bank of Boston funds to your
          account in a bank on the Federal Reserve wire system or by
          deposit of same day funds into a designated account that you
          maintain with us.  As used in this Letter of Credit  cause
          payment  shall mean (i) the deposit of same day funds into a
          designated account with us, if such deposit is requested; or (ii)
          if wire transfer is requested, the entry of an appropriate wire
          transfer in the Federal Reserve wire system and the obtaining of
          a Federal Reserve reference number.

               Upon the earliest of (i) our honoring your Final Drawing
          presented hereunder accompanied by this Letter of Credit, (ii)
          5:00 p.m. (New York City time) on the date on which we receive a
          certificate signed by you accompanied by this Letter of Credit
          stating that the Borrower has provided and you have accepted a
          substitute or replacement  Credit Facility  (as defined in the
          Indenture) in accordance with the terms of the Indenture that is
          effective the date of such certificate, or (iii) the Stated
          Termination Date, this Letter of Credit shall terminate.

               This Letter of Credit is transferable in its entirety (but
          not in part) to any transferee whom you certify to us has
          succeeded you as Trustee under the Indenture, and may be
          successively transferred.  Transfer of the available balance
          under this Letter of Credit to such transferee shall be effected
          by the presentation to us of this Letter of Credit accompanied by
          a certificate in the form of Annex G attached hereto.  Upon such
          presentation, we shall forthwith transfer the same to your
          transferee.  A transfer fee is payable to us as set forth in our
          reimbursement agreement with the Borrower.

               This Letter of Credit sets forth in full our undertaking,
          and such undertaking shall not in any way be modified, amended,
          amplified or limited by reference to any document, instrument or
          agreement referred to herein (including, without limitation, the
          Bonds), except only the Drawings referred to herein, which are
          hereby incorporated by reference; and any such reference shall
          not be deemed to incorporate herein by reference any document,
          instrument or agreement except for such Drawings.

               Only you (or a transferee permitted by the terms of this
          Letter of Credit) may make drawings under this Letter of Credit. 
          Upon the payment to you or to your account of the amount
          specified in a sight draft drawn hereunder, we shall be fully
          discharged on our obligation under this Letter of Credit with
          respect to such draft, and we shall not thereafter be obligated
          to make any further payments under this Letter of Credit in
          respect of such draft to you or to any other person who may have
          made to you or who makes to you a demand for payment of principal
          of, or interest on, any Bond.

                              (continued)
                                                                         <PAGE>




       



               To the extent consistent with the express provisions hereof,
          this Letter of Credit shall be governed by the laws of The
          Commonwealth of Massachusetts, except to the extent such laws are
          inconsistent with the Uniform Customs and Practice for
          Documentary Credits (1993 Revision), International Chamber of
          Commerce Publication No. 500, in which event such Uniform Customs
          shall govern except as modified hereby (including, without
          limitation, the provisions on transferability).

               Communications with respect to this Letter of Credit shall
          be in writing and shall be addressed to us at Fleet National
          Bank, c/o Fleet Pennsylvania Services, Trade Services Operations,
          One Fleet Way, Scranton, PA 18507,  attention: Standby Letter of
          Credit Unit, Mail Code PASCNO4E, and shall specifically refer to
          the number of this Letter of Credit.

                                          Very truly yours,

                                          FLEET NATIONAL BANK
                                          
                                          
                                    By:____________________________________
                                            Authorized Signature<PAGE>




       


                                       Annex A
                                       -------

                                [Form of Sight Draft]

                           DRAWN UNDER FLEET NATIONAL BANK
                                IRREVOCABLE DIRECT PAY
                            LETTER OF CREDIT NO. CS1101345


          Date:____________
          AMOUNT: _______________________

          Pay at sight

          Pay to the order of ________________________, as trustee 1

          (U.S. $_________________)

          Charge to account of Fleet National Bank

               Irrevocable Direct Pay Letter of Credit No. CS1101345 dated
          August 27, 1998

          TO:  Fleet National Bank
               c/o Fleet Pennsylvania Services
               Trade Services Operations
               One Fleet Way
               Scranton, PA  18507
               Attention: Standby Letter of Credit Unit

                                        ___________________, as Trustee

                                        By:_________________________
                                              Authorized Officer

               The signature below constitutes an endorsement of this sight
          draft.

                                        ___________________, as Trustee

                                        By:_________________________
                                              Authorized Officer


          --------------------
          1 By wire transfer in immediately available funds for the account
          of ______, as trustee (Account No._________).<PAGE>




       


                                       Annex B
                                       -------

                      [Form of Certificate for Interest Drawing]

                CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                              OF UP TO 45 DAYS  INTEREST

                Irrevocable Direct Pay Letter of Credit No. CS1101345
                -----------------------------------------------------

               The undersigned, a duly authorized officer of the
          undersigned Trustee (the 'Trustee'), hereby certifies to Fleet
          National Bank (the 'Bank'), with reference to Irrevocable Direct
          Pay Letter of Credit No. CS1101345 (the 'Letter of Credit', the
          terms defined therein and not otherwise defined herein being used
          herein as therein defined) issued by the Bank in favor of the
          Trustee, as follows:
               
               (1)       The Trustee is the Trustee under the Indenture.
               
               (2)  The Trustee is making a drawing under the Letter of
               Credit with respect to a payment of interest on Bonds on an
               interest payment date, which payment is due and payable.  As
               of the record date for such interest payment, none of such
               Bonds to which this drawing relates were Borrower Bonds or
               Pledged Bonds, as those terms are defined in the Indenture.

               (3)  [The Interest Drawing of which this Certificate is a
               part is the first Interest Drawing presented by the Trustee
               under the Letter of Credit, and covers interest on the Bonds
               accruing on and after [  ], 1998.]*  [The Interest Drawing
               last presented by the Trustee under the Letter of Credit was
               honored and paid by the Bank on ______, 19 _, and the
               Trustee has not received a notice within ten days of
               presentation of such Interest Drawing from the Bank that a
               default exists under the reimbursement agreement between the
               Borrower and the Bank.]** 

               (4)  The amount of the Interest Drawing of which this
               Certificate is a part is $_____________.  It was computed in
               compliance with the terms and conditions of the Bonds and
               the Indenture and does not exceed the amount available to be
               drawn by the Trustee as the Interest Component under the
               Letter of Credit.

          ________________________

          * To be used in the Certificate relating to the first Interest
          Drawing only.
          ** To be used in each Certificate relating to each Interest
          Drawing other than the first Interest Drawing.


                              (continued) 
                                                                        <PAGE>




       


               (5)  Upon receipt by the undersigned of the amount demanded
               hereby, (a) the undersigned will apply the same directly to
               the payment when due of the interest amount owing on account
               of the Bonds on an interest payment date, (b) no portion of
               said amount shall be applied by the undersigned for any
               other purpose, and (c) no portion of said amount shall be
               commingled with other funds held by the undersigned.

               IN WITNESS WHEREOF, the Trustee has executed and delivered
          this Certificate as of the ___ day of _______________, ____.

                                             [      ], as Trustee


                                        By:_______________________________
                                               Name:
                                               Title:
                                               <PAGE>




       


                                       Annex C
                                       -------

                       [Form of Certificate for Tender Drawing]

               CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
                THE PURCHASE PRICE OF BONDS TENDERED AT THE OPTION OF
                 THE HOLDERS THEREOF OR PURSUANT TO MANDATORY TENDER

                Irrevocable Direct Pay Letter of Credit No. CS1101345
                -----------------------------------------------------


             The undersigned, a duly authorized officer of the undersigned
        Trustee (the 'Trustee'), hereby certifies to Fleet National Bank (the
        'Bank'), with reference to Irrevocable Direct Pay Letter of Credit No.
        CS1101345 (the 'Letter of Credit', the terms defined therein and not
        otherwise defined herein being used herein as therein defined) issued
        by the Bank in favor of the Trustee, as follows:

             (1)  The Trustee is the Trustee under the Indenture.

             (2)  The Trustee is making a drawing under the Letter of Credit
        with respect to a payment, upon a tender of all or less than all of
        the Bonds that are Outstanding (as defined in the Indenture), of the
        unpaid principal amount of, and up to 45 days' accrued and unpaid
        interest on, the Bonds to be purchased as a result of [optional tender
        pursuant to the terms of Section 2.3(G)(1)c) of the Indenture]
        [mandatory tender pursuant to the terms of Section 2.3(G)(1)(d) of the
        Indenture]* (other than Borrower Bonds or Pledged Bonds, as those
        terms are defined in the Indenture), which payment is due on the date
        on which this Certificate and the Tender Drawing of which it is a part
        are being presented to the Bank.

             (3)  The amount of the Tender Drawing of which this Certificate
        is a part is equal to the sum of (i) $____________ being drawn in
        respect of the payment of unpaid principal of Bonds (other than
        Borrower Bonds or Pledged Bonds, as those terms are defined in the
        Indenture) to be purchased as a result of a tender, plus (ii)
        $___________ being drawn in respect of the payment of accrued and
        unpaid interest on such Bonds.

             (4)  The Trustee shall register or cause to be registered in the
        name of the Bank, or its designee, as pledgee of the Borrower, and
        shall deliver or cause to be delivered (unless in book-entry form
        only) to the Bank or its designee a principal amount of Bonds equal to
        the principal amount of the Tender Drawing of which this Certificate
        is a part as promptly as practicable, and in any event within three
        (3) Business Days after presentation of said Tender Drawing.

        _______________________
        * Select one


                              (continued)
                                                                         <PAGE>




       


             (5)  Upon receipt by the undersigned of the amount demanded
        hereby, (a) the undersigned will apply the same directly to the
        payment when due of the purchase price of, and accrued and unpaid
        interest on, Bonds tendered pursuant to the Indenture, (b) no portion
        of said amount shall be applied by the undersigned for any other
        purpose, and (c) no portion of said amount shall be commingled with
        other funds held by the undersigned.

             (6)  The amount of the Tender Drawing of which this Certificate
        is a part was computed in compliance with the terms and conditions of
        the Bonds and the Indenture and does not exceed the amount available
        to be drawn by the Trustee under the Letter of Credit; the amount
        being drawn hereby in respect of interest does not exceed the Interest
        Component and the amount being drawn hereby in respect of principal
        does not exceed the Principal Component.

             The Trustee acknowledges that, pursuant to the terms of the
        Letter of Credit, upon the Bank's honoring of the Tender Drawing of
        which this Certificate is a part, the amount of the Letter of Credit
        and the amounts available to be drawn by the Trustee thereunder by any
        subsequent Drawing are automatically decreased, subject to
        reinstatement as set forth in the Letter of Credit.


             IN WITNESS WHEREOF, the Trustee has executed and delivered this
        Certificate as of the _____ day of _________________, ____.

                                           [  ], as Trustee
                                       
                                       
                                           By:_____________________________
                                              Name:
                                              Title:
                                             <PAGE>




       


                                       Annex D
                                       -------

                 [Form of Certificate for Partial Redemption Drawing]

                CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                OF PRINCIPAL AND UP TO 45 DAYS' INTEREST UPON PARTIAL
                                      REDEMPTION

                Irrevocable Direct Pay Letter of Credit No. CS1101345
                -----------------------------------------------------


             The undersigned, a duly authorized officer of the undersigned
        Trustee (the 'Trustee'), hereby certifies to Fleet National Bank (the
        'Bank'), with reference to Irrevocable Direct Pay Letter of Credit No.
        CS1101345 (the 'Letter of Credit', the terms defined therein and not
        otherwise defined herein being used herein as therein defined) issued
        by the Bank in favor of the Trustee, as follows:

             (1)  The Trustee is the Trustee under the Indenture.

             (2)  The Trustee is making a drawing under the Letter of Credit
        with respect to a payment, upon redemption of less than all of the
        Bonds that are Outstanding (as defined in the Indenture), of the
        unpaid principal amount of, and up to 45 days' accrued and unpaid
        interest on, the Bonds to be redeemed pursuant to Section 2.4 of the
        Indenture (other than Borrower Bonds or Pledged Bonds, as those terms
        are defined in the Indenture).

             (3)  The amount of the Partial Redemption Drawing of which this
        Certificate is a part is equal to the sum of (i) $____________ being
        drawn in respect of the payment of unpaid principal of Bonds (other
        than Borrower Bonds or Pledged Bonds, as those terms are defined in
        the Indenture) to be redeemed, plus (ii) $_________ being drawn in
        respect of the payment of accrued and unpaid interest on such Bonds.

             (4)  The amount of the Partial Redemption Drawing of which this
        Certificate is a part was computed in accordance with the terms and
        conditions of the Bonds and the Indenture and does not exceed the
        amount available to be drawn by the Trustee under the Letter of
        Credit; the amount being drawn hereby in respect of interest does not
        exceed the Interest Component and the amount being drawn hereby in
        respect of principal does not exceed the Principal Component.

             (5)  This Certificate and the Partial Redemption Drawing of which
        it is a part are dated, and are being presented to the Bank for
        payment on, the date on which the unpaid principal amount of and
        interest on Bonds to be redeemed are due and payable under the
        Indenture upon redemption of less than all of the Bonds that are
        Outstanding (as defined in the Indenture).



                              (continued)
                                                                         <PAGE>




       


             (6)  Upon receipt by the undersigned of the amount demanded
        hereby, (a) the undersigned will apply the same directly to the
        payment when due of the principal amount of, and accrued and unpaid
        interest on, Bonds to be redeemed pursuant to the Indenture, (b) no
        portion of said amount shall be applied by the undersigned for any
        other purpose, and (c) no portion of said amount shall be commingled
        with other funds held by the undersigned.

             The Trustee acknowledges that, pursuant to the terms of the
        Letter of Credit, upon the Bank's honoring the Partial Redemption
        Drawing of which this Certificate is a part, the amount of the Letter
        of Credit and the amounts available to be drawn by the Trustee
        thereunder by any subsequent Drawing are automatically and permanently
        decreased by the amounts set forth in the Letter of Credit. The
        Trustee acknowledges that pursuant to the immediately preceding
        sentence, the Principal Component of the Letter of Credit is being
        permanently reduced by $_____________ (the amount set forth in clause
        (i) of Paragraph 3 above) and the maximum amount to which the Interest
        Component can be reinstated under the Letter of Credit is being
        permanently reduced by $___________ (the product of (x) the amount set
        forth in clause (i) of Paragraph 3 above, times (y) 0.12, times (z)
        45/365).

             IN WITNESS WHEREOF, the Trustee has executed and delivered this
        Certificate as of the _______ day of _________, ____.

                                                [  ], as Trustee


                                                By:__________________________
                                                     Name:
                                                     Title:<PAGE>




       


                                       Annex E
                                       -------

                       [Form of Certificate for Final Drawing]

          CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL
         AND UP TO 45 DAYS' INTEREST, UPON STATED OR ACCELERATED MATURITY OR
                     OPTIONAL OR MANDATORY REDEMPTION AS A WHOLE

                Irrevocable Direct Pay Letter of Credit No. CS1101345
                -----------------------------------------------------


             The undersigned, a duly authorized officer of the undersigned
        Trustee (the 'Trustee'), hereby certifies to Fleet National Bank (the
        'Bank'), with reference to Irrevocable Direct Pay Letter of Credit No.
        CS1101345 (the 'Letter of Credit', the terms defined therein and not
        otherwise defined herein being used herein as therein defined) issued
        by the Bank in favor of the Trustee, as follows:

             (l)  The Trustee is the Trustee under the Indenture.

             (2)  The Trustee is making a drawing under the Letter of Credit
        with respect to a payment*

                  [ ] upon stated maturity,

                  [ ] upon acceleration, pursuant to Section 8.1 of the
        Indenture,

                  [ ] upon optional redemption in whole, pursuant to Section
        2.4 of the Indenture,

                  [ ] upon mandatory redemption in whole, pursuant to Section
        2.4 of the                         Indenture,

        of the unpaid principal amount of and up to 45 days' accrued and
        unpaid interest on, all of the Bonds that are Outstanding within the
        meaning of the Indenture (other than Borrower Bonds or Pledged Bonds,
        as those terms are defined in the Indenture).

             (3)  The amount of the Final Drawing of which this Certificate is
        a part is equal to the sum of (i) $_____________ being drawn in
        respect of the payment of unpaid principal of Bonds 

        ___________________________
        *Check Applicable Section.







                              (continued)
                                                                         <PAGE>




       


        (other than Borrower Bonds or Pledged Bonds, as those terms are
        defined in the Indenture), plus (ii) $_________ being drawn in respect
        of the payment of accrued and unpaid interest on such Bonds.

             (4)  The amount of the Final Drawing of which this Certificate is
        a part was computed in compliance with the terms and conditions of the
        Bonds and the Indenture and does not exceed the amount available to be
        drawn by the Trustee under the Letter of Credit; the amount being
        drawn hereby in respect of interest does not exceed the Interest
        Component and the amount being drawn hereby in respect of principal
        does not exceed the Principal Component.

             (5)  Upon receipt by the undersigned of the amount demanded
        hereby, (a) the undersigned will apply the same directly to the
        payment when due of the principal amount of, and accrued and unpaid
        interest on, the Bonds pursuant to the Indenture, (b) no portion of
        said amount shall be applied by the undersigned for any other purpose,
        and (c) no portion of said amount shall be commingled with other funds
        held by the undersigned.

             The Trustee acknowledges that, pursuant to the terms of the
        Letter of Credit, upon the Bank's honoring the Final Drawing of which
        this Certificate is a part, the Letter of Credit is automatically
        terminated and no further amounts are available to be drawn by the
        Trustee thereunder.


             IN WITNESS WHEREOF, the Trustee has executed and delivered this
        Certificate as of the _____________ day of ____________, ____.

                                                [  ], as Trustee


                                                By:_________________________
                                                     Name:
                                                     Title:<PAGE>




       


                                       Annex F
                                       -------

                [Form of Reinstatement Certificate for Tender Drawing]
                -----------------------------------------------------

             CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE UNDER
                IRREVOCABLE DIRECT PAY LETTER OF CREDIT NO. CS1101345

             The undersigned, a duly authorized officer of the undersigned
        Trustee (the 'Trustee'), hereby certifies to Fleet National Bank (the
        'Bank'), with reference to Irrevocable Direct Pay Letter of Credit No.
        CS1101345 (the 'Letter of Credit', the terms defined therein and not
        otherwise defined herein being used herein as therein defined) issued
        by the Bank in favor of the Trustee, as follows:

             (1)  The Trustee is the Trustee under the Indenture.

             (2)  The amount of $__________ paid to you today by or on behalf
        of the Borrower is a payment made to reimburse you, pursuant to
        Section 2(f) of the Reimbursement Agreement dated as of August 1, 1998
        (the  Reimbursement Agreement ) among the Borrower and the Bank, for
        amounts drawn under the Letter of Credit by Tender Drawings.  Of such
        amount, $___________ represents the aggregate principal amount of
        Bonds resold or to be resold on behalf of the Borrower.  The Trustee
        hereby requests that you reinstate the Principal Component of the
        Letter of Credit upon receipt of such payment in an amount equal to
        such principal amount and that you reinstate the portion of the
        Interest Component of the Letter of Credit relating to such Bonds.


             IN WITNESS WHEREOF, the Trustee has executed and delivered this
        Certificate as of the __________ day of ___________, ____.
                                                [   ], as Trustee


                                                By:_______________________ 
                                                      Name:
                                                      Title:














                                (continued)           
                                                      <PAGE>


                     


                                       Annex G
                                       -------

                            [Form of Transfer Certificate]
                            -----------------------------

                                INSTRUCTION TO TRANSFER


                                                                    [Date]


        Fleet National Bank
        c/o Fleet Pennsylvania Services
        Trade Services Operations
        One Fleet Way
        Scranton, PA  18507
        Attention:  Standby Letter of
                          Credit Unit
                          Mail Code:  PASCNO4E


             Re:  Fleet National Bank Irrevocable Direct Pay Letter of Credit
               No. CS1101345

        Ladies and Gentlemen:

             For value received, the undersigned beneficiary hereby
        irrevocably transfers to the following (the Transferee):

                           ________________________________
                                 [Name of Transferee]

                          __________________________________
                                      [Address]



        all rights of the undersigned beneficiary to draw under the above-
        captioned Letter of Credit (the 'Letter of Credit') in its entirety. 
        The Transferee has succeeded the undersigned as Trustee under the
        Indenture (as defined in the Letter of Credit).

             By this transfer, all rights of the undersigned beneficiary in
        the Letter of Credit are transferred to the Transferee and the
        Transferee shall have the sole rights as beneficiary thereof,
        including sole rights relating to any amendments of the Letter of
        Credit, whether increases in the amount to be drawn thereunder,
        extensions of the expiration date thereof, or other amendments, and
        whether such amendments now exist or are made after the date hereof. 
        All amendments of the Letter of Credit are to be delivered directly to
        the Transferee without necessity of any consent of or notice to the
        undersigned beneficiary.  The undersigned hereby certifies that the


                                     (continued)
                     <PAGE>




       


        Transferee has become successor Trustee under the Indenture, and has
        accepted such appointment in writing.

             The original of the Letter of Credit is returned herewith, and in
        accordance therewith we ask you to endorse the within transfer on the
        reverse thereof, and forward it directly to the Transferee with your
        customary notice of transfer.


                                           Very truly yours,

                                           [   ], as predecessor Trustee


                                           By:________________________________
                                                Authorized Officer


             We certify that we have succeeded [predecessor Trustee] as
        trustee under the Indenture.


                                           [Name of Transferee]


                                           By:_______________________________
                                             Authorized Officer


























                                      
                     <PAGE>


                     


                                    EXHIBIT C

                  FORM REQUEST FOR EXTENSION OF TERMINATION DATE
                               OF LETTER OF CREDIT
                               -------------------

                                      [date]
   Fleet National Bank
   One Federal Street
   Boston, Massachusetts  02110

        Re:  Request for Extension of Termination Date of Letter of
             ------------------------------------------------------
   Credit
   ------

   Ladies/Gentlemen:

        Reference is hereby made to that certain Reimbursement Agreement, dated
   as of August 1, 1998 (the "Agreement"), between The Energy Network, Inc.
   (the "Borrower") and Fleet National Bank (the "Bank") and the Letter of
   Credit referred to therein.  All capitalized terms contained herein which
   are not specifically defined shall be deemed to have the definition set
   forth in the Agreement.  The Institution hereby requests, pursuant to
   Section 3(e) of the Agreement, that the Termination Date for the Letter of
   Credit be extended by one year.  This request is being given not earlier
   than the year anniversary of the Letter of Credit and not later than 225
   days prior to the scheduled Termination Date.  Pursuant to Section 3(e) of
   the Agreement, we have enclosed along with this request the following
   information:

        1. The outstanding principal amount of the Bonds;

        2. The nature of any and all Events of Default and all conditions,
   events and acts which with notice or lapse of time or both would become an
   Event of Default; and

        3. Any other pertinent information previously requested by the Bank.

        The Bank is required to notify the Borrower, the Issuer, the Trustee
   and the Remarketing Agent of its decision with respect to this request for
   extension within 30 days of the date of this request.  If the Bank fails to
   notify the Borrower of its decision within such 30-day period, the Bank
   shall be deemed to have rejected such request.

                                           Very truly yours,

                                           The Energy Network, Inc.

                                           By:___________________________
                                              Name:__________________
                                              Title: ___________________



                                     (continued)
                     <PAGE>


       


                                    EXHIBIT D

                               List of Subsidiaries
                               --------------------


















































                                 

       <PAGE>




       


                                    EXHIBIT E

                                    Litigation
                                    ----------

















































                                      
                     <PAGE>




       


                                     EXHIBIT F

                         Financial Statement Certificate
                         -------------------------------


   Fleet National Bank
   One Federal Street
   Boston, Massachusetts 02110
   Attention:  Thomas L. Rose, Senior Vice President

   Ladies and Gentlemen:

   As required by Section 5.04 of that certain 3-Year Revolving Credit
   Agreement dated October 1, 1997, by and between The Energy Network, Inc.
   ( Borrower ) and Fleet National Bank, a review of the activities of Borrower
   for the fiscal quarter/fiscal year ended [__________] has been made under my
   supervision with a view to determining whether Borrower has kept, observed,
   performed and fulfilled all of its obligations under the Revolving Credit
   Agreement and all other agreements or undertakings contemplated thereby.

   The undersigned hereby certifies that the amounts set forth below, with
   abbreviated descriptions, to the best of my information and belief,
   accurately present amounts required to be calculated by various covenants of
   the Revolving Credit Agreement as of the last day of the fiscal
   quarter/fiscal year noted above and all terms used herein have the identical
   meaning as in the Revolving Credit Agreement.
   1.   7(i)(B)(i) - Total Debt to Tangible Net Worth
        ---------------------------------------------
   Total Debt                                   _______________

   Tangible Net Worth                           _______________

   Ratio of Total Debt to Tangible Net Worth    _______________

   Maximum Permitted          2.25 to 1


   2.   7(i)(B)(ii) - Minimum Tangible Net Worth
        ----------------------------------------
   Tangible Net Worth                           _______________

   Minimum Required                                  30,000,000










                                      
                     <PAGE>




       


   3.   7(i)(B)(iii) Debt Service Coverage Ratio
        ----------------------------------------
        EBITDA plus equity purchase funds       _______________

        Debt Service                            _______________

        Debt Service Coverage Ratio             _______________

        Minimum Required                           1.25 to 1


   4.   7(I)(B)(iv) Interest Coverage Ratio
        -----------------------------------
        EBIT                                    _______________

        Interest expense                        _______________

        Interest Coverage Ratio                 _______________

        Minimum Required                             2.5 to 1


   5.   10(m)  CTG s Debt to Capitalization
        -----------------------------------
        CTG total debt                          ________________

        CTG capitalization                      ________________

        CTG ratio of debt to capitalization     ________________

        Maximum Permitted                                70%


   6.   10(n)  S&P Rating of CTG Operating Subsidiaries
        -----------------------------------------------
        Lowest Standard & Poor s debt rating of each 
        operating subsidiary of CTG             ________________

        Minimum Required                            BBB

        The undersigned hereby further certifies that he/she has reviewed the
   terms of the Revolving Credit Agreement and that, to the best of his/her
   knowledge, no event has occurred which constitutes, or which with the
   passage of time or service of notice, or both, would constitute, an Event of
   Default as defined in the Revolving Credit Agreement.

                                      Sincerely,

                                      THE ENERGY NETWORK, INC.

                                      By:
                                      Title:

                                      
                     <PAGE>


       


                                    EXHIBIT G

                      Existing Other Indebtedness and Liens
                      -------------------------------------


















































                                 

       <PAGE>


                                                                     APPENDIX C
                                                                     ----------
                      SUMMARY OF THE REIMBURSEMENT AGREEMENT

                           THE REIMBURSEMENT AGREEMENT
                           ---------------------------

        The Home has entered into a Reimbursement Agreement with the Bank
   pursuant to which the Borrower has agreed to reimburse the Bank for sums
   drawn on the Letter of Credit and to exercise its right to optionally redeem
   the Bonds as described below so long as the Reimbursement Agreement is in
   effect.  The Reimbursement Agreement also provides for drawing fees,
   transfer fees and other fees and charges.  The Borrower s obligations under
   the Reimbursement Agreement are secured by a pledge and assignment of a
   Forward Equity Purchase Agreement with CTG Resources, Inc. (the Security
   Documents)

        The Reimbursement Agreement sets forth conditions to the issuance of
   the Letter of Credit and certain representations and warranties which are to
   be true at the closing date.  Such representations and warranties include
   representations as to:  corporate organization; due execution and delivery;
   no litigation; compliance with applicable agreements; payment of taxes;
   compliance with laws; lack of encumbrances; accuracy of financial
   information; no violation of Regulation U; no ERISA violation; no burdensome
   contracts; environmental matters; and accuracy of information furnished.

        The Reimbursement Agreement also contains affirmative and negative
   covenants and reporting requirements.  Affirmative covenants of the Home
   include:  payment of amounts due to the Bank; payment of taxes, charges and
   other obligations; maintenance of insurance; maintenance of existence and
   qualification; compliance with laws; rights of access; maintenance of proper
   books and records; maintenance of property; continued conduct of business
   and a prohibition against unrelated new lines of business; maintaining
   principal operating accounts at the Bank; providing further assurances;
   maintenance of a debt service coverage ratio of not less than 1.25 to 1.00;
   maintenance of the ratio of debt to tangible net worth of not less than
   2.25:1.00; and use of loan proceeds.  Negative covenants include: 
   limitation on further indebtedness, subject to exceptions and baskets
   described therein; limitation on further liens, subject to exceptions
   described therein; limitation on guaranties, subject to exceptions described
   therein; prohibition against dissolution or merger and limitations on asset
   dispositions as described therein; prohibitions against further pledges;
   limitations on loans to other persons and investments in other persons,
   subject to exceptions described therein; prohibition against sale-leaseback
   transactions; limitations on transactions with affiliates; and requirements
   relating to environmental hazards.  Reporting requirements include
   requirements to furnish: annual audited financial statements of the
   Borrower; quarterly unaudited financial statements of the Borrower;
   compliance certificates; notice of defaults; notice of material litigation;
   management letters; notice of ERISA violations; notice of environmental
   violations; notice of change in accountants; notice of loss of material
   permits; notice of material loss or casualty damage; notice of material
   labor problems; notice of other adverse developments; and such other
   information as the Bank may request.

        The Reimbursement Agreement also sets out certain Events of Default. 
   These include:  (i) failure to pay; (ii) failure to observe affirmative
   covenants (including covenants relating to taxes, insurance, corporate
   existence and qualification, compliance with laws and observance of
   financial ratios), as well as failure to comply with any of the negative<PAGE>




       


   covenants or reporting requirements; (iii) default under any other covenant
   for 30 days after notice; (iv) failure of any representation or warranty to
   have been true in any material respect; (v) cross-default to other
   agreements with the Bank; (vi) cross-default to any subordinated debt or
   other indebtedness of the Borrower in excess of $100,000; (vii) dissolution,
   bankruptcy, reorganization or similar proceedings involving the Borrower,
   any of its subsidiaries or any guarantor, other than involuntary proceedings
   dismissed within 60 days; (viii) any attachment, execution or similar
   process in excess of $100,000; (ix) material ERISA violations; (x) material
   loss, theft, damage or destruction; (xi) material uninsured judgments; (xii)
   cross-default to Indenture and Loan Agreement; (xiv) any material
   environmental problem; and (xv) any event of default under other agreements
   relating to other indebtedness owed to the Bank.

        Upon the occurrence of an Event of Default, the Bank may, among other
   things:  (i) direct the Trustee to accelerate the Bonds; (ii) enforce its
   rights under the Security Documents; (iii) enforce its rights against the
   Borrower through legal action; and/or (iv) give notice of non-reinstatement
   of the interest component of the Letter of Credit.

        The Reimbursement Agreement also contains provisions as to the Bank s
   right (but not obligation) to cure certain Borrower defaults;
   indemnification of the Bank by the Borrower; amendment and waivers; notices
   and other miscellaneous provisions.





























                                 
       <PAGE>