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[EXECUTION COPY]
EXHIBIT 4.25
   CONNECTICUT DEVELOPMENT AUTHORITY
 and
 THE CONNECTICUT WATER COMPANY
 
 LOAN AGREEMENT
 
 Dated as of October 1, 2005
 Connecticut Development Authority
$10,000,000 Water Facilities Revenue Bonds
(The Connecticut Water Company Project  2005A Series)




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Exhibit 4.25
 TABLE OF CONTENTS
 PagePREAMBLE
    
    
    1ARTICLE I
DEFINITIONS AND INTERPRETATIONSection 1.1. Definitions
    
    
    3Section 1.2. Interpretation
    
    
    8ARTICLE II
REPRESENTATIONS AND WARRANTIESSection 2.1. Representations by the Authority
    
    
    10Section 2.2. Representations by the Borrower
    
    
    11ARTICLE III
THE LOANSection 3.1. Loan Clauses
    
    
    14Section 3.2. Other Amounts Payable
    
    
    14Section 3.3. Manner of Payment
    
    
    15Section 3.4. Obligation Unconditional
    
    
    15Section 3.5. Securities Clauses
    
    
    15Section 3.6. Issuance of Bonds
    
    
    16Section 3.7. Effective Date and Term
    
    
    16Section 3.8. No Additional Bonds
    
    
    16ARTICLE IV
THE PROJECTSection 4.1. Completion of the Project
    
    
    17Section 4.2. Payment of Additional Project Costs by Borrower
    
    
    18Section 4.3. Completion Certificate
    
    
    18Section 4.4. No Warranty Regarding Condition, Suitability or Cost of Project
    
    
    18Section 4.5. Taxes
    
    
    18Section 4.6. Insurance
    
    
    18Section 4.7. Compliance with Law
    
    
    19Section 4.8. Maintenance and Repair
    
    
    19Section 4.9. Disposition of Project Realty by Borrower
    
    
    19Section 4.10. Leasing of the Project Realty and the Project Equipment
    
    
    20Section 4.11. Project Equipment
    
    
    20Section 4.12. Borrower Contribution
    
    
    20ARTICLE V
CONDEMNATION DAMAGE AND DESTRUCTIONSection 5.1. No Abatement of Payments Hereunder
    
    
    21Section 5.2. Project Disposition Upon Condemnation, Damage or Destruction
    
    
    21Section 5.3. Application of Net Proceeds of Insurance or Condemnation
    
    
    21Section 6.1. Consolidation, Merger and Transfer of Assets
    
    
    22Section 6.2. Restrictions on Liens and Sale and Leaseback Transactions
    
    
    23Section 6.3. [Reserved]
    
    
    24Section 6.4. Indemnification, Payment of Expenses, and Advances
    
    
    24Section 6.5. Incorporation of Tax Regulatory Agreement; Payments Upon Taxability
    
    
    27Section 6.6. Public Purpose Covenants
    
    
    27Section 6.7. Further Assurances and Corrective Instruments
    
    
    28Section 6.8. Covenant by Borrower as to Compliance with Indenture
    
    
    28
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Exhibit 4.25
 PageSection 6.9. Assignment of Agreement or Note
    
    
    28Section 6.10. Inspection
    
    
    28Section 6.11. Default Notification
    
    
    28Section 6.12. Covenant Against Discrimination
    
    
    28Section 6.13. Covenant to Provide Disclosure
    
    
    29ARTICLE VII
EVENTS OF DEFAULT AND REMEDIESSection 7.1. Events of Default
    
    
    30Section 7.2. Remedies on Default
    
    
    31Section 7.3. Remedies on Public Purpose Default
    
    
    31Section 7.4. No Duty to Mitigate Damages
    
    
    32Section 7.5. Remedies Cumulative
    
    
    33ARTICLE VIII
PREPAYMENT PROVISIONSSection 8.1. Optional Prepayment
    
    
    34Section 8.2. Notices of Prepayment
    
    
    35Section 8.3. Mandatory Prepayment on Taxability, Receipt of Request for
Redemption of a Deceased Holders Bonds and the Occurrence of Certain Events
    
    
    35ARTICLE IX
GENERALSection 9.1. Indenture
    
    
    36Section 9.2. Benefit of and Enforcement by Bondholders
    
    
    36Section 9.3. Force Majeure
    
    
    36Section 9.4. Amendments
    
    
    36Section 9.5. Notices
    
    
    36Section 9.6. Prior Agreements Superseded
    
    
    37Section 9.7. Execution of Counterparts
    
    
    37Section 9.8. Time
    
    
    37Section 9.9. Separability of Invalid Provisions
    
    
    37Section 9.10. Third Party Beneficiaries
    
    
    37Section 9.11. Governing Law
    
    
    37APPENDICESAppendix A  Form of Promissory NoteAppendix B  Description of Project RealtyAppendix C  Description of Project Equipment




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Exhibit 4.25
 Connecticut Development Authority
 The Connecticut Water Company
 LOAN AGREEMENT
 THIS LOAN AGREEMENT CONNECTICUT
DEVELOPMENT AUTHORITY THE CONNECTICUT WATER COMPANY
 WITNESSETH THAT:
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS




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Exhibit 4.25
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 NOW, THEREFORE
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Exhibit 4.25
 ARTICLE I
DEFINITIONS AND INTERPRETATION
 Section 1.1. Definitions
           -3-




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Exhibit 4.25
          -4-




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Exhibit 4.25
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Exhibit 4.25
 less
 Appendix A
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Exhibit 4.25
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Exhibit 4.25
            Section 1.2. Interpretation. In this Agreement:
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Exhibit 4.25
       -9-




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Exhibit 4.25
 ARTICLE II
REPRESENTATIONS AND WARRANTIES
 Section 2.1. Representations by the Authority .
         -10-




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Exhibit 4.25
    Section 2.2. Representations by the Borrower
       -11-




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Exhibit 4.25
           -12-




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Exhibit 4.25
   -13-




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Exhibit 4.25
 ARTICLE III
THE LOAN
 Section 3.1. Loan Clauses
    Section 3.2. Other Amounts Payable
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Exhibit 4.25
    Section 3.3. Manner of Payment
 Section 3.4. Obligation Unconditional.
 Section 3.5. Securities Clauses
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Exhibit 4.25
 Section 3.6. Issuance of Bonds.
 Section 3.7. Effective Date and Term
  Section 3.8. No Additional Bonds
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Exhibit 4.25
 ARTICLE IV
THE PROJECT
 Section 4.1. Completion of the Project
       -17-




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Exhibit 4.25
  Section 4.2. Payment of Additional Project Costs by Borrower
 Section 4.3. Completion Certificate
 Section 4.4. No Warranty Regarding Condition, Suitability or Cost of Project
 Section 4.5. Taxes
  Section 4.6. Insurance
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Exhibit 4.25
     Section 4.7. Compliance with Law
 Section 4.8. Maintenance and Repair
 Section 4.9. Disposition of Project Realty by Borrower
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Exhibit 4.25
   Section 4.10. Leasing of the Project Realty and the Project Equipment
 Section 4.11. Project Equipment
  Section 4.12. Borrower Contribution
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Exhibit 4.25
 ARTICLE V
CONDEMNATION DAMAGE AND DESTRUCTION
 Section 5.1. No Abatement of Payments Hereunder
 Section 5.2. Project Disposition Upon Condemnation, Damage or Destruction
    Section 5.3. Application of Net Proceeds of Insurance or Condemnation
   -21-




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Exhibit 4.25
 ARTICLE VI
COVENANTS
 Section 6.1. Consolidation, Merger and Transfer of Assets
 Restructuring, Merger, Consolidation and Reorganization.
 Sale of Assets
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Exhibit 4.25
 Section 6.2. Restrictions on Liens and Sale and Leaseback Transactions
       -23-




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Exhibit 4.25
      Section 6.3. [ Reserved ].
 Section 6.4. Indemnification, Payment of Expenses, and Advances
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Exhibit 4.25
       -25-




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Exhibit 4.25
       -26-




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Exhibit 4.25
 Section 6.5. Incorporation of Tax Regulatory Agreement; Payments Upon Taxability
      Section 6.6. Public Purpose Covenants
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Exhibit 4.25
  Section 6.7. Further Assurances and Corrective Instruments
 Section 6.8. Covenant by Borrower as to Compliance with Indenture
 Section 6.9. Assignment of Agreement or Note
  Section 6.10. Inspection
 Section 6.11. Default Notification
 Section 6.12. Covenant Against Discrimination
  -28-




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Exhibit 4.25
  Section 6.13. Covenant to Provide Disclosure
 -29-




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Exhibit 4.25
 ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
 Section 7.1. Events of Default
        -30-




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Exhibit 4.25
    Section 7.2. Remedies on Default
       Section 7.3. Remedies on Public Purpose Default
 -31-




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Exhibit 4.25
      Section 7.4. No Duty to Mitigate Damages
 -32-




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Exhibit 4.25
 Section 7.5. Remedies Cumulative
 -33-




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Exhibit 4.25
 ARTICLE VIII
PREPAYMENT PROVISIONS
 Section 8.1. Optional Prepayment
       -34-




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Exhibit 4.25
    Section 8.2. Notices of Prepayment
 Section 8.3. Mandatory Prepayment on Taxability, Receipt of Request for Redemption of a
Deceased Holders Bonds and the Occurrence of Certain Events
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Exhibit 4.25
 ARTICLE IX
GENERAL
 Section 9.1. Indenture
  Section 9.2. Benefit of and Enforcement by Bondholders
 Section 9.3. Force Majeure
 Section 9.4. Amendments
 Section 9.5. Notices
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Exhibit 4.25
  Section 9.6. Prior Agreements Superseded
 Section 9.7. Execution of Counterparts
 Section 9.8. Time
 Section 9.9. Separability of Invalid Provisions
 Section 9.10. Third Party Beneficiaries
 Section 9.11. Governing Law
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Exhibit 4.25
 IN WITNESS WHEREOF
 CONNECTICUT DEVELOPMENT AUTHORITYBy
    
    /s/ Karin A. LawrenceName: Karin A. LawrenceAuthorized RepresentativeTHE CONNECTICUT WATER COMPANYBy
    
    /s/ David C. BenoitName: David C. BenoitTitle: Vice President  Finance andChief Financial Officer
 -38-




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Exhibit 4.25
 APPENDIX A
 THE CONNECTICUT WATER COMPANY
 FORM OF
PROMISSORY NOTE
2005A SERIES
 No. 1
    
    $10,000,000




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Exhibit 4.25
   THE CONNECTICUT WATER COMPANYBy:
    
    /s/ David C. BenoitName: David C. BenoitAuthorized Representative




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Exhibit 4.25
 AUTHORITY ENDORSEMENT
  CONNECTICUT DEVELOPMENT AUTHORITYBy:
    
    /s/ Karin A. LawrenceName: Karin A. LawrenceAuthorized Representative




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Exhibit 4.25
 APPENDIX B
 DESCRIPTION OF PROJECT REALTY




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Exhibit 4.25
 APPENDIX C
 DESCRIPTION OF PROJECT EQUIPMENT
  Description
    
    LocationShoreline RegionKillingworth Dam  raise Killingworth Dam five feet,
reconstruct spillway and replace existing intake piping
    
    105 Deep River Rd., (Rte 80)
Killingworth, CT.Deep River Sewer  Repaired water main Spring St. from
River west to Union St.; Union St. from Spring St. south
to Liberty St; Union St. from Rte 80 south to Church
St.; and Rogers Lane
    
    As Described,
Deep River, CT.Money Point Water Main Replacement
    
    Money Point Road on Masons
Island from house #30 to
end. Stonington CT.Wildwood Water Main Interconnection
    
    Route 156. Installed water
main from Point of Woods
System to Wildwood System.
Old Lyme, CT.Beach Park Road Water Main Replacement
    
    From Shore Grove Road South
to Shore Road Clinton, CT.Main Street Water Main Replacement
    
    From head of Main St. to
Back Street, Essex, CT.Route 1 Water Main Replacement
    
    From Green Acres Drive to
East River Bridge, Madison,
CT.Route 1 Water Main Replacement
    
    East River Bridge to Tanner
Marsh Rd., Guilford, CTNaugatuck RegionRoute 6 Water Main   New installation of 12 water main.
    
    Route 6 between North St.
and Scott Road, Thomaston &
Plymouth, CT.




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Exhibit 4.25
 Description
    
    LocationMiddlebury Pump Station  construction of precast
concrete building with 30 square feet of space,
containing pump and related instrumentation. Two pumps,
350 gallons per minute each, 1 million gallons per day
total.
    
    Directly opposite 158
Shadduck Road, Middlebury,
CTNew Haven Road Valve Insertion  New Water Valve Install
20 butterfly valve using dual line stop, maintaining
service.
    
    Warren Avenue and Rt. 63,
Naugatuck, CTBemis Street Water Main
    
    Bemis St. between Armdruster
Rd. and Country Farms,
Plymouth, CT.Northern RegionTalcottville PRV  Installed new Pressure Reading Valve
    
    Talcottville Rd. south of
Kelly Rd., Vernon, CTRockville Security  Installed perimeter fencing, auto
gate and video surveillance.
    
    10 Snipsic Street, Vernon, CTOak Street Water Main Replacement
    
    Oak St. from Center St. to
Chestnut, Windsor Locks, CT.Ratley Road Water Main Replacement
    
    On Ratley Rd. from Mountain
Rd., 800 ft. North,
Suffield, CT.James Street Water Main Replacement
    
    On James St. from Center St.
800 ft. West, Windsor Locks,
CT.East Street Water Main Replacement
    
    East St. from Hickory St.
North to CT/MA border,
Suffield, CT.Thompsonville Well #8  Install new production well with a
capacity of 600 gallons per minute.
    
    40 Booth Rd., Enfield, CTStafford Water Treatment Plant Improvements
    
    #20 Buckley Highway (Rte.
190), Stafford, CTSecond Water Tank, Wapping Wood Road  Install new 2.3
million gallon above ground water storage tank.
    
    Located next to an existing
water tank at 2990 Ellington
Rd., South Windsor CT