EX10-158

 

 

 

 

CONNECTICUT DEVELOPMENT AUTHORITY

and

 

 

THE ENERGY NETWORK, INC.

 

 

           
             
             


LOAN AGREEMENT

 

 

 

 

Dated as of January 1, 2000

Connecticut Development Authority

$4,300,000 Industrial Revenue Variable Rate Demand Bonds

(The Energy Network/SINA Project - 2000 Series)

 

 

 

TABLE OF CONTENTS

Page
ARTICLE I.

Section 1.1Definitions5

Section 1.2.Interpretation9

ARTICLE II.

Section 2.1.Representations by the Authority10

Section 2.2.Representations by the Borrower12

ARTICLE III.

Section 3.1.Loan Clauses14

Section 3.2.Other Amounts Payable and Other Obligations15

Section 3.3.Manner of Payment16

Section 3.4.Obligation Unconditional16

Section 3.5.Security Clauses16

Section 3.6.Issuance of Bonds17

Section 3.7.No Additional Bonds17

Section 3.8.Effective Date and Term17

Section 3.9.Use of Priority Amounts17

Section 3.10.Effect of Drawings Under Credit Facility17

Section 3.11. Borrower's Purchase of Bonds17

Section 3.12.Letter of Credit18

Section 3.13.Requirements for Delivery of an Alternative Credit
Facility.18

Section 3.14. Securities Laws19

ARTICLE IV.

Section 4.1.Completion of the Project20

Section 4.2.No Warranty Regarding Condition, Suitability or Cost of
Project20

Section 4.3.Taxes20

Section 4.4.Insurance21

Section 4.5.Compliance with Law21

Section 4.6.Maintenance and Repair22

Section 4.7.Disposition of Project by Borrower22

Section 4.8.Leasing of the Project22

Section 4.9.Project Equipment22

 

ARTICLE V.

Section 5.1.No Abatement of Payments Hereunder23

Section 5.2.Project Disposition Upon Condemnation, Damage or
Destruction23

Section 5.3.Application of Net Proceeds of Insurance or
Condemnation23

ARTICLE VI.

Section 6.1.The Borrower to Maintain its Status as a Corporation;
Conditions under which Exceptions Permitted23

Section 6.2.Indemnification, Payment of Expenses, and Advances24

Section 6.3.Incorporation of Tax Regulatory Agreement; Payments Upon
Taxability26

Section 6.4.Public Purpose Covenants27

Section 6.5.Further Assurances and Corrective Instruments28

Section 6.6.Covenant by Borrower as to Compliance with
Indenture28

Section 6.7.Assignment of Agreement or Note28

Section 6.8.Inspection28

Section 6.9.Default Notification28

Section 6.10.Covenant Against Discrimination28

Section 6.11.Authority Costs and Expenses29

Section 6.12.Securities Laws29

ARTICLE VII.

Section 7.1.Events of Default29

Section 7.2.Remedies on Default30

Section 7.3.Remedies on Public Purpose Default31

Section 7.4.No Duty to Mitigate Damages32

Section 7.5.Remedies Cumulative32

ARTICLE VIII.

Section 8.1.Optional Prepayment33

Section 8.2.Notice and Sources of Prepayment34

Section 8.3.Mandatory Prepayment on Public Purpose Default34

Section 8.4.Mandatory Prepayment on Taxability34

ARTICLE IX.

Section 9.1.Indenture34

Section 9.2.Benefit of and Enforcement by Bondholders35

Section 9.3.Force Majeure35

Section 9.4.Amendments35

Section 9.5.Notices35

Section 9.6.Prior Agreements Superseded36

Section 9.7.Execution of Counterparts37







APPENDICES

Appendix APromissory Note

 

Connecticut Development Authority

The Energy Network, Inc.

LOAN AGREEMENT

THIS LOAN AGREEMENT, made and dated as of January 1, 2000, by
and between the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the State of
Connecticut (the "Authority") and The Energy Network, Inc., a corporation duly
organized and validly existing under the laws of the State of Connecticut (the
"Borrower"),

WITNESSETH THAT:

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

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

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

WHEREAS, in furtherance of the purposes of the Act, the
Authority has accepted the application of the Borrower, and has by a resolution
adopted December 15, 1999 authorized the issuance of not to exceed $5,500,000
principal amount of its Industrial Revenue Variable Rate Demand Bonds (The
Energy Network/SINA Project - 2000 Series) (the "Bonds") for the purpose of
financing a certain project consisting of (i) the construction of a heat
exchanger building to service facilities located at 1460 Broad Street, 15 Vernon
Street, 43 Vernon Street, 53 Vernon Street and 359 Washington Street, in the
City of Hartford, Connecticut (the "Facilities"), (ii) the acquisition and
installation of a distribution piping system and new equipment thereon, and
(iii) certain costs incidental to the issuance of the Bonds (the "Project");
and

WHEREAS, pursuant to such resolution the Bonds are to be
secured by an Indenture of Trust of even date herewith, by and between the
Authority and State Street Bank and Trust Company, as Trustee (the "Indenture");
and

WHEREAS, in order to further secure the Bonds, the Borrower
concurrently with the execution hereof has arranged the delivery to the Trustee
of an irrevocable Letter of Credit, dated the date of delivery of the Bonds,
issued by Fleet National Bank (the "Bank") for the account of the Borrower in
favor of the Trustee as beneficiary on behalf of the owners of the Bonds;
and

WHEREAS, the Borrower and the Bank entered into a
Reimbursement Agreement dated as of January 1, 2000 (the "Reimbursement
Agreement"), obligating the Borrower inter alia to repay all amounts
drawn under the Letter of Credit together with interest, if any, thereon;
and

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

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

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

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

ARTICLE I.

DEFINITIONS AND INTERPRETATION

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

"Account" or "Accounts" means a special trust account or
accounts established pursuant to Article V of the Indenture.

"Agreement" means this Loan Agreement and any amendments and
supplements hereto.

"Alternative Credit Facility" means an Alternative Credit
Facility which meets the requirements of Section 3.13 of the Loan Agreement.

"Authorized Representative" means, in the case of the
Authority, the Chairman or Vice Chairman, the President, the Executive Vice
President or any Senior Vice President or any Vice President thereof and, in the
case of the Borrower, the Chairman, Vice Chairman, the President, any Executive
Vice President, Senior Vice President, Vice President, Assistant Vice President,
Treasurer or Secretary thereof and, when used with reference to the performance
of any act, the discharge of any duty or the execution of any certificate or
other document, any officer, employee or other person authorized to perform such
act, discharge such duty or execute such certificate or other document, provided
the Trustee receives written evidence of such person's authorization.

"Bank" means Fleet National Bank, in its capacity as issuer
of the Letter of Credit and any other issuer of a Credit Facility.

"Bond" or "Bonds" means the $4,300,000 Industrial Revenue
Variable Rate Demand Bonds (The Energy Network/SINA Project - 2000 Series)
authorized and issued pursuant to Section 2.3 of the Indenture.

"Bondholder" means any owner or holder of the Bonds.

"Borrower" means (i) The Energy Network, Inc., formerly known
as Affiliated Resources Corporation, a corporation, duly organized and validly
existing under the laws of the State of Connecticut, and its successors and
assigns and (ii) any surviving resulting or transferee corporation as provided
in Section 6.1 hereof.

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

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

"Conversion Date" means the date on which a new Mode becomes
effective with respect to a Bond, and with respect to a Bond in the Multiannual
Mode, the date on which a new Rate Period becomes effective.

"Credit Facility" means the Letter of Credit and any
substitute irrevocable transferable letter of credit delivered to the Paying
Agent pursuant to the Indenture and this Agreement and then in effect. More than
one Credit Facility may be in effect from time to time.

"Date of Delivery" means the date that the Bonds are issued,
dated and delivered.

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

"Determination of Taxability" means (1) a ruling by the
Internal Revenue Service, (2) the receipt by the owner of any Bonds from the
Internal Revenue Service of a notice of assessment and demand for payment
(provided the Borrower has been afforded the opportunity to participate at its
own expense in all appeals and proceedings to which the owner of any Bonds is a
party relating to such assessment and demand for payment) and the expiration of
the appeal period provided therein if no appeal is taken or, if an appeal is
taken by the owner of any Bonds as provided in Section 6.3 hereof within the
applicable appeal period which has the effect of staying the demand for payment,
a final unappealable decision by the court of competent jurisdiction, or (3) the
admission in writing by the Borrower, in any case to the effect that the
interest on the Bonds is includable in the gross income for federal income tax
purposes (other than for purposes of alternative minimum tax, environmental tax
or foreign branch profits tax) of an owner or former owner thereof, other than
for a period during which such owner or former owner is or was a "substantial
user" of the Project or a "related person" as such terms are defined in the
Code. For purposes of this definition only, the term owner means the Beneficial
Owner of the Bonds so long as the Book-Entry System is in effect.

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

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

"Extraordinary Services" and "Extraordinary Expenses" means
all services rendered and all expenses incurred by the Trustee under the
Indenture other than Ordinary Services and Ordinary Expenses.

"Financing Documents", (1) when used with respect to the
Borrower, means all documents and agreements executed and delivered by the
Borrower as security for or in connection with the issuance of the Bonds,
including this Agreement, the Tax Regulatory Agreement, the Note, the
Reimbursement Agreement, the Remarketing Agreement, the Bond Purchase Agreement,
the General Certificate of the Borrower and all other documents and agreements
executed and delivered by the Borrower in connection with any of the foregoing,
and (2) when used with respect to the Authority, means any of the foregoing
documents, the Indenture and all other documents and agreements to which the
Authority is a direct party. The Financing Documents do not include with respect
to the Borrower any documents or agreements to which the Borrower is not a
direct party, including the Bonds or the Indenture.

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

"Interest Payment Date" shall mean each date on which
interest is payable on the Bonds as defined in Article I of the Indenture.

"Letter of Credit" means the $4,364,500 irrevocable letter of
credit dated the date of the initial delivery of the Bonds and issued by the
Bank, for the benefit of the Trustee, as it may be supplemented and amended.

"Maximum Interest Rate" shall mean, with respect to the
Bonds, the maximum rate of interest that such Bonds may at any time bear as set
forth in Section 1.1 of the Indenture.

"Moody's" means Moody's Investors Service, Inc., a
corporation organized and existing under the laws of the State of Delaware, its
successors and their assigns, and, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally recognized
securities agency designated by the Authority, at the direction of the Borrower,
by notice to the Trustee and the Borrower.

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

"Note" means the promissory note of the Borrower to the
Authority, dated the Date of Delivery, in the form attached as Appendix A
hereto, and any amendments or supplements made in conformity with the Indenture
and this Agreement.

"Ordinary Services" and "Ordinary Expenses" means those
services normally rendered and those expenses normally incurred by a trustee
under instruments similar to the Indenture prior to the occurrence of an event
of default, including without limitation, fees and expenses of the Trustee as
paying agent and bond registrar, and as custodian of the Project Fund and the
Debt Service Fund under the Indenture.

"Outstanding", when used with reference to a Bond or Bonds,
as of any particular date, means all Bonds which have been authenticated and
delivered under the Indenture, except:
(1)any Bonds canceled by the Trustee because of payment
or redemption prior to maturity or surrendered to the Trustee for
cancellation;

(2)any Bond (or portion of a Bond) paid or redeemed or
for the payment or redemption of which there has been separately set aside and
held in the Redemption Account either:
(a)moneys in an amount sufficient to effect payment of
the principal or applicable Redemption Price thereof, together with accrued
interest on such Bond to the payment or redemption date, which payment or
redemption date shall be specified in irrevocable instructions given to the
Trustee to apply such moneys to such payment on the date so specified; or

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

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



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

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





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

"Project" means (i) the construction of a heat exchanger
building to service facilities located at 1460 Broad Street, 15 Vernon Street,
43 Vernon Street, 53 Vernon Street and 359 Washington Street, in the City of
Hartford, Connecticut (the "Facilities"), (ii) the acquisition and installation
of a distribution piping system and new equipment thereon, and (iii) certain
costs incidental to the issuance of the Bonds.

"Project Equipment" means all personal property, goods,
leasehold improvements, machinery, equipment, furnishings, furniture, fixtures,
tools and attachments wherever located and whether now owned or hereafter
acquired, acquired in whole or in part with the proceeds of the Bonds in
connection with the Project, as set forth in Appendix B.

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

"Reimbursement Agreement" means the Reimbursement Agreement
dated as of January 1, 2000 between the Borrower and Fleet National Bank, and
any other agreement between the Borrower and a Bank under which the Borrower is
obligated to reimburse the Bank for payments made by the Bank under a Credit
Facility, as it may be supplemented or amended.

"Remarketing Agent" means the Remarketing Agent appointed
pursuant to Section 9.17 of the Indenture.

"State" means the State of Connecticut.

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

"S&P" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., a corporation, organized and
existing under the laws of the State of New York, its successors and their
assigns, and, if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "S&P" shall be
deemed to refer to any other nationally recognized securities rating agency
designated by the Authority at the direction of the Borrower, by notice to the
Trustee and the Borrower.

"Tax Regulatory Agreement" means the Tax Regulatory
Agreement, dated as of the Date of Delivery, among the Authority, the Borrower
and the Trustee, and any amendments and supplements thereto.

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

"Trustee" means State Street Bank and Trust Company, its
successors and assigns.

Section 1.2.Interpretation. In this
Agreement:
(1)The terms "hereby", "hereof", "hereto", "herein",
"hereunder" and any similar terms, as used in this Agreement, refer to this
Agreement, and the term "hereafter" means after, and the term "heretofore" means
before, the date of this Agreement.

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

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

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

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

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

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

(8)This Agreement shall be governed by and construed in
accordance with the applicable laws of the State.

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

(10)From and after the date upon which there is no Credit
Facility in effect, upon receipt by the Trustee of a certificate from the Bank
stating that all amounts payable to the Bank under the Reimbursement Agreement
have been paid in full, all references to the Bank, the Reimbursement Agreement
or the Credit Facility in this Agreement, the Note, the Indenture, and the Bonds
shall be ineffective.





ARTICLE II.

REPRESENTATIONS AND WARRANTIES

Section 2.1.Representations by the Authority. The
Authority represents and warrants that:
(1)The Authority is a body corporate and politic
constituting a public instrumentality and political subdivision of the State,
duly organized and existing under the laws of the State including the Act. The
Authority is authorized to issue the Bonds in accordance with the Act and to use
the proceeds thereof to finance the Project.

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

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

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

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

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

(7)There is no action, suit, proceeding or investigation
at law or in equity before or by any court, public board or body pending or
threatened against or affecting the Authority, or to the best knowledge of the
Authority, any basis therefor, wherein an unfavorable decision, ruling or
finding would adversely affect the transactions contemplated hereby, or in any
of the other Financing Documents, or by the Indenture, or which, in any way,
would adversely affect the validity of the Bonds, or the validity of or
enforceability of the Financing Documents, or any agreement or instrument to
which the Authority is a party and which is used or contemplated for use in
consummation of the transactions contemplated hereby and by the Financing
Documents.

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

(9)The representations of the Authority set forth in the
Tax Regulatory Agreement delivered concurrently with the execution and delivery
hereof are by this reference incorporated in this Agreement as though fully set
forth herein.





Section 2.2.Representations by the Borrower. The
Borrower represents and warrants that:
(1)The Borrower is a corporation which has been duly
organized and validly exists as a corporation in good standing under the laws of
the State of Connecticut, is not in violation of any provision of its
certificate of incorporation or by-laws, has corporate power to enter into and
perform the Financing Documents, and by proper corporate action has duly
authorized the execution and delivery of the Financing Documents.

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

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

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

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

(6)The Borrower represents that it has not made any
commitment or taken any action which will result in a valid claim for any
finders' or similar fees or commitments in respect of the transactions described
in this Agreement.

(7)The Project is included within the definition of a
"project" in the Act, and its cost is not less than $4,300,000. The Borrower
intends the Project to be and continue to be an authorized project under the Act
during the Term of this Agreement.

(8)All amounts shown in Exhibit D of the Tax Regulatory
Agreement are eligible costs of a project financed by bonds issued by the
Authority under the Act. None of the proceeds of the Bonds will be used directly
or indirectly to finance inventory.

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

(10)The Borrower has obtained, or shall obtain as
required, all necessary approvals from any and all governmental agencies
requisite to the Project, and has also obtained all occupancy permits and
authorizations from appropriate authorities authorizing the occupancy and use of
the Project for the purposes contemplated hereby. The Borrower further
represents and warrants with respect to any portion of the Project that is
completed that it was completed in accordance with all material federal, State
and local laws, ordinances and regulations applicable thereto.

(11)The availability of financial assistance from the
Authority as provided herein and in the Indenture has induced the Borrower to
undertake the financing of the Project.

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

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

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

(15)The Borrower will use all of the proceeds of the
Bonds to pay the costs of the Project.





ARTICLE III.

THE LOAN

Section 3.1.Loan Clauses. (A) Subject to the
conditions and in accordance with the terms of this Agreement, the Authority
agrees to make a loan to the Borrower from the proceeds of the Bonds in the
amount of $4,300,000 and the Borrower agrees to borrow such amount from the
Authority.

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

(C)On or before 11:00 a.m. of each due date for the
payment of the principal of or interest on the Bonds, until the principal or
Redemption Price, if any, of and interest on the Bonds shall have been fully
paid or provision for the payment thereof shall have been made in accordance
with the Indenture, the Borrower shall make loan payments to the Trustee for the
account of the Authority in an amount which, when added to any moneys (i) then
on deposit in the Debt Service Fund and available therefor, and (ii) amounts
received by the Trustee to pay the same from a draw under a Credit Facility,
shall be equal to the amount payable on such due date with respect to the Bonds
as provided in Section 5.4(A) of the Indenture, including amounts due for the
payment of the principal of and interest on the Bonds. In addition, the Borrower
shall pay to the Trustee, as and when the same shall become due, all other
amounts due under the Agreement, the Note and the Tax Regulatory Agreement,
together with interest thereon at the then applicable rate as set forth herein
in Section 6.2(G). The Borrower shall have the option to prepay its loan
obligation in whole or in part at the times and in the manner provided in
Article VIII hereof.

(D)The payments to be made under Section 3.1(C) shall be
appropriately adjusted to reflect the date of issue of Bonds, accrued interest
deposited in the Debt Service Fund, if any, and any purchase or redemption of
Bonds so that there will be available on each payment date the amount necessary
to pay the interest and principal due or coming due on the Bonds and so that
accrued interest will be applied to the installments of interest to which it is
applicable.

(E)At any time when any principal of the Bonds is
overdue, the Borrower shall also have a continuing obligation to pay to the
Trustee for deposit in the Debt Service Fund an amount equal to interest on the
overdue principal but the installment payments required under this section shall
not otherwise bear interest. Redemption premiums shall not bear interest.

(F)The payment obligations of the Borrower in this
Section 3.1 are subject in all respects to the provisions of Sections 3.9 and
3.10 hereof regarding the use of Priority Amounts and the effect of drawings
under the Credit Facility.

(G)In the event the Borrower should fail to make any of
the payments required under the foregoing provisions of this Section 3.1, the
item or installment so in default shall continue as an obligation of the
Borrower until the amount in default shall have been fully paid, and the
Borrower agrees to pay or cause to be paid the same with interest thereon at the
rate determined in accordance with Article II of the Indenture until paid in
accordance herewith and with the Indenture.

Section 3.2.Other Amounts Payable and Other
Obligations. (A) The Borrower hereby further expressly agrees to pay as and
when the same shall become due an amount equal to (i) the initial and annual
fees of the Trustee for the Ordinary Services of the Trustee rendered and its
Ordinary Expenses incurred under the Indenture, including its reasonable fees
and expenses as Registrar and in connection with preparation of new Bonds upon
exchanges or transfers, and the reasonable fees and expenses of Trustee's
counsel, (ii) the reasonable fees and expenses of the Trustee and any
Paying Agents on the Bonds for acting as such as provided in the Indenture,
including the reasonable fees and expenses of its and their counsel,
(iii) the reasonable fees and expenses of the Trustee for Extraordinary
Services rendered by it and Extraordinary Expenses incurred by it under the
Indenture, including reasonable counsel fees and expenses, (iv) the reasonable
fees and expenses of the Authority, including the reasonable fees and expenses
of its counsel, incurred by the Authority as a result of an Event of Default or
otherwise enforcing this Agreement, (v) the reasonable fees and expenses of the
Bondholders as a result of an Event of Default or otherwise enforcing this
Agreement and for any consent, waiver or amendment relating to the Indenture or
any of the Financing Documents, including reasonable fees and expenses of one
(1) counsel for such Bondholders, (vi) the reasonable fees and expenses of the
Bank and the Remarketing Agent for the performance of their duties as provided
in the Indenture, including the reasonable fees of their counsel and other
expenses the Remarketing Agent may incur in providing for accurate offering
documents in connection therewith, and (vii) any other sums required to be
paid by the Borrower under the terms of the Indenture and the Note.

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

(C)The Borrower also agrees to fund and maintain all
amounts required to be funded and maintained as required by Article V of the
Indenture.

(D)The Borrower also agrees to perform all obligations
required to be performed by it under the Indenture in accordance with its
terms.

(E)The Borrower also agrees to pay, or cause to be paid,
when due, any amounts necessary to redeem Bonds Outstanding (including any
applicable premiums thereon).

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

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

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

Section 3.5.Security Clauses. The Authority hereby
notifies the Borrower and the Borrower acknowledges that, among other things,
the Borrower's loan payments and all of the Authority's right, title and
interest under the Note and Financing Documents to which it is a party (except
its rights under Section 6.2 hereof) are being concurrently with the execution
and delivery hereof endorsed, pledged and assigned without recourse by the
Authority to the Trustee as security for the Bonds as provided in the
Indenture.

Section 3.6.Issuance of Bonds. The Authority has
concurrently with the execution and delivery hereof sold and delivered the Bonds
under and pursuant to a resolution adopted by the Authority on December 15, 1999
authorizing their issuance under and pursuant to the Indenture. The proceeds of
sale of the Bonds shall be applied as provided in Articles IV and V of the
Indenture.

Section 3.7.No Additional Bonds. No additional
Bonds other than bonds refunding the Bonds in full may be issued under the
Indenture.

Section 3.8.Effective Date and Term. (A) This
Agreement shall become effective upon its execution and delivery by the parties
hereto, shall remain in full force from such date and, subject to the provisions
hereof (including particularly Articles VII and VIII), shall expire on such date
as the Indenture shall be discharged and satisfied in accordance with the
provisions of subsection 12.1(A) thereof. The Borrower's obligations under
Sections 6.2 and 6.3 hereof, however, shall survive the expiration of this
Agreement in accordance with the provisions of said Sections.

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

Section 3.9.Use of Priority Amounts. The Borrower
and the Authority acknowledge their intention to minimize the risk that any
payment made to a Bondowner from amounts provided by or on behalf of the
Borrower may be determined by a bankruptcy court to constitute a preference. To
this end the parties agree that payments to Bondowners on Bonds supported by a
Credit Facility shall be made only from Priority Amounts, except when and to the
extent no Priority Amounts are available for the purpose as provided in Section
5.9(E) of the Indenture.

Section 3.10.Effect of Drawings Under Credit
Facility. The payment of obligations of the Borrower under this Agreement
and the Note with respect to the Bonds shall be completely satisfied to the
extent of all funds received by the Paying Agent pursuant to drawings made under
the Credit Facility for the purpose of satisfying such obligations.

Section 3.11. Borrower's Purchase of Bonds. Pursuant
to Section 5.9(E) of the Indenture, if the amount drawn on the Credit Facility
and deposited with the Paying Agent, together with all other amounts (including
remarketing proceeds) received by the Paying Agent for the purchase of Bonds
supported by a Credit Facility and tendered pursuant to Section 2.3(G)(1)(c) or
2.3(G)(2)(c) or 2.3(G)(3)(d) of the Indenture, is not sufficient to pay the
Purchase Price of such Bonds on the Purchase Date, the Paying Agent shall before
2:15 P.M. on such Purchase Date, notify the Borrower, the Remarketing Agent and
the Trustee of such deficiency by telephone promptly confirmed in writing. The
Borrower shall pay to the Paying Agent in immediately available funds by 2:30
P.M. on the Purchase Date an amount equal to the Purchase Price of such Bonds
less the amount, if any, available to pay the Purchase Price in accordance with
Section 9.18 of the Indenture from the proceeds of the remarketing of such Bonds
or from drawings on the Credit Facility, as reported by the Paying Agent. Bonds
so purchased with moneys furnished by the Borrower shall be Borrower Bonds.

Section 3.12.Letter of Credit. The Borrower has
arranged, concurrently with the original issuance and authentication of the
Bonds, for the delivery to the Paying Agent of the Letter of Credit having a
term expiring one (1) year from the date of issuance, and providing for the
Paying Agent to be entitled to draw on or prior to the Termination Date (as
defined therein), an amount that is not less than the sum of the aggregate
principal amount (or that portion of the purchase price corresponding to
principal) of the Outstanding Bonds and the aggregate amount of interest accrued
on such Bonds (or that portion of the purchase price corresponding to interest)
for forty-five (45) days at the Maximum Interest Rate.

Section 3.13.Requirements for Delivery of an
Alternative Credit Facility. (A) The Borrower may, upon satisfaction of the
requirements set forth in this Section, at its option (except during the period
between the giving of notice of mandatory tender for purchase on account of the
expiration of the Credit Facility and the Purchase Date), provide for the
delivery to the Paying Agent of a substitute Credit Facility; provided,
however, that (1) the Credit Facility being replaced shall in no event be
terminated or released until the Borrower has given not less than forty-five
(45) days' written notice to the Authority, the Trustee, the Paying Agent and
the Remarketing Agent, and further the Paying Agent has received the proceeds of
all outstanding drawings on the Credit Facility being replaced, (2) if any Bonds
supported by the Credit Facility being replaced are in the Weekly Mode or Daily
Mode, the Paying Agent has given not less than (30) days' written notice of the
termination or release of the Credit Facility to owners of such Bonds in the
Weekly Mode or Daily Mode and (3) if any of the Bonds supported by the Credit
Facility being replaced are in the Flexible Mode, such Credit Facility shall in
no event be terminated or released earlier than on the second Business Day after
an Effective Date for all such Bonds or such earlier day on or after such
Effective Date on which the full Purchase Price for such Bonds is received by
the Paying Agent. Any notice given pursuant to clause (1) or (2) above shall
specify the expiration date of the Credit Facility and the name of the entity
providing the substitute Credit Facility and shall advise that the Credit
Facility will terminate on the date stated in such notice.

(B)Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a
financial institution having a rating at least equal to "A" as a long term
rating by S&P and "A1" as a short term rating by S&P or "A2" as a long
term rating by Moody's and "P-1" as a short term rating by Moody's;

(ii) entitle the Paying Agent to draw upon or demand payment
and receive in immediately available funds an amount equal to the sum of the
principal amount of the Bonds supported by the Credit Facility, any premium
applicable thereto, and (A) forty-five (45) days' accrued interest at the
Maximum Interest Rate on the principal amount of Bonds then Outstanding in the
Weekly Mode or Daily Mode, or (B) forty five (45) days' accrued interest at the
Maximum Interest Rate on the principal amount of the Bonds then Outstanding in
the Flexible Mode; and

(iii) provide for a term which may not expire in less than
360 days and which may not expire or be terminated prior to the fifth Business
Day after the mandatory tender for purchase as provided in Section 2.3(G)(1)(c)
or 2.3(G)(3)(d) of the Indenture. The Borrower shall not enter into any
Reimbursement Agreement or agree to any amendment of a Reimbursement Agreement
which in any way limits the obligation of the Bank to provide funds under the
Credit Facility without the prior written consent of 100% of the principal
amount of the Bonds Outstanding and entitled to the benefit thereof.









(C)No substitute Credit Facility may be delivered to the
Trustee for any purpose under this Agreement or the Indenture unless accompanied
by the following documents: (i) an opinion of counsel for the issuer of the
substitute Credit Facility to the effect that it constitutes a legal, valid and
binding obligation of the issuer enforceable in accordance with its terms; (ii)
an opinion of Bond Counsel to the effect that the issuance of a substitute
Credit Facility will not adversely affect the exclusion of interest on the Bonds
from gross income for federal income tax purposes and that such Credit Facility
is permitted under the Indenture; (iii) an opinion of counsel to the Borrower,
satisfactory to the Trustee and the Authority stating that the delivery of such
substitute Credit Facility is authorized under this Agreement and complies with
the terms hereof; (iv) a certificate of the Bank that all amounts due under the
Reimbursement Agreement have been paid and that the Borrower has fulfilled all
its obligations arising out of such Agreement; (v) an executed copy of the
Reimbursement Agreement entered into with respect to the substitute Credit
Facility; (vi) copies of any other documents, agreements or arrangements entered
into directly or indirectly between the Borrower and the entity issuing the
substitute Credit Facility with respect to the transactions contemplated by the
substitute Credit Facility and related Reimbursement Agreement; and (vii) such
other documents and opinions as the Trustee or the Authority may reasonably
request. Notice of the substitution, replacement, termination or extension of a
Credit Facility shall be sent by the Paying Agent to Moody's, if it carries a
rating on the Bonds and/or S&P, if it carries a rating on the Bonds, and
shall include the new expiration date of the Credit Facility and the name of the
entity providing the substitute Credit Facility.

The substitute Credit Facility, related Reimbursement
Agreement and other documents, agreements and arrangements entered into and
delivered with respect to the delivery of a substitute Credit Facility shall not
include any provisions less favorable to the owners of the Bonds than the
provisions of the Credit Facility and related Reimbursement Agreement,
documents, agreements and arrangements, as it relates to provisions regarding
the acceleration of the Bonds.

Section 3.14. Securities Laws. In any remarketing of
Bonds under this Agreement, the Borrower shall at all times comply with
applicable federal and state securities laws.

ARTICLE IV.

THE PROJECT

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

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

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

Section 4.2.No Warranty Regarding Condition,
Suitability or Cost of Project. Neither the Authority, nor the Trustee, nor
any Bondholder makes any warranty, either expressed or implied, as to the
Project or its condition or that it will be suitable for the Borrower's purposes
or needs.

Section 4.3.Taxes. (A) The Borrower will pay when
due all material (1) taxes, assessments, water rates and sewer use or rental
charges, (2) payments in lieu thereof which may be required by law, and (3)
governmental charges and impositions of any kind whatsoever which may now or
hereafter be lawfully assessed or levied upon the Project or any part thereof,
or upon the rents, issues, or profits thereof, whether directly or indirectly.
With respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall be
obligated to pay only such installments as are required to be paid during the
Term.

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

Section 4.4.Insurance. (A) The Borrower shall
insure the Project against loss or damage by fire, flood, lightning, windstorm,
vandalism and malicious mischief and other hazards, casualties, contingencies
and extended coverage risks in such amounts and in such manner as is customary
with companies in the same or similar business, and shall pay when due the
premiums thereon. In the event of loss or damage to the Project the Net Proceeds
of any insurance provided under this subsection shall be deposited with the
Trustee and shall be applied to the manner set forth in Article V hereof. Any
excess proceeds of insurance remaining after application as required by this
Section shall be paid to the Borrower, but only if the Borrower is not in
default under this Agreement. At least ten days prior to the expiration of any
policy required under this Section the Borrower shall furnish evidence
satisfactory to the Authority and the Trustee that such policy has been renewed
or replaced.

(B)The Borrower further agrees that it will at all times
carry public liability insurance with respect to the Project in a minimum amount
of $4,300,000. Any such policy of public liability insurance may contain
provisions for a deductible amount not in excess of five percent of the amount
of the coverage thereunder. In the event of a public liability occurrence, the
Net Proceeds of the insurance provided under this subsection shall be applied to
satisfy or extinguish the liability.

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

(D)The insurance coverage required by this Section may be
effected under overall blanket or excess coverage policies of the Borrower or
any affiliate and may be carried with any insurer other than an unauthorized
insurer under the Connecticut Unauthorized Insurers Act. The Borrower shall
furnish evidence satisfactory to the Authority, promptly upon the request of
either, that the required insurance coverage is valid and in force.

Section 4.5.Compliance with Law. The Borrower will
observe and comply with all material laws, regulations, ordinances, rules, and
orders (including without limitation those relating to zoning, land use,
environmental protection, air, water and land pollution, wetlands, health, equal
opportunity, minimum wages, worker's compensation and employment practices) of
any federal, state, municipal or other governmental authority relating to the
Project and except during any period during which the Borrower at its expense
and in its name shall be in good faith contesting its obligation to comply
therewith.

Section 4.6.Maintenance and Repair. At its own
expense, the Borrower will keep and maintain the Project in good condition,
working order and repair, will not commit or suffer any waste thereon, and will
make all material repairs and replacements thereto which may be required in
connection therewith.

Section 4.7.Disposition of Project by Borrower.
(A) The Borrower shall not sell, assign, encumber, convey or otherwise dispose
of its interest in the Project or any part thereof during the Term without the
prior written consent of the Authority, except in connection with Borrower's
sale of the entire Project, in which case, the Borrower shall cause the Bonds to
be paid in full, in accordance with Article XII of the Indenture, or as
otherwise permitted hereby.

(B)The Borrower may, however, grant such rights of way or
easements over, across, or under, the Project as shall be necessary or
convenient for the operation or use of the Project, including but not limited to
easements or rights-of-way for utility, roadway, railroad or similar purposes in
connection with the Project, or for the use of the real property adjacent to or
near the Project and owned by or leased to the Borrower, but only if such
rights-of-way or easements shall not materially or adversely affect the value
and operation of the Project.

(C)In the event the Authority consents to any disposition
of the Borrower's interest in the Project, the proceeds of the disposition shall
be deposited with the Trustee for deposit in the Debt Service Fund for the
redemption of the Bonds used to finance the Project then being disposed of under
the Indenture. No conveyance or release effected under the provisions of this
Section shall entitle the Borrower to any abatement or diminution of the amounts
payable hereunder or under the Note, or relieve the Borrower of the obligation
to perform all of its covenants and agreements under the Financing
Documents.

Section 4.8.Leasing of the Project. The Borrower
may not lease the Project to any person during the Term of this Agreement
without the prior written consent of the Authority and the Bank. No lease shall
relieve the Borrower from primary liability for any of its obligations
hereunder, and in the event of any such lease the Borrower shall continue to
remain primarily liable for payment of the applicable amounts specified in
Article III hereof and for performance and observance of the other agreements on
its part herein provided to be performed and observed by it to the same extent
as though no lease had been made.

Section 4.9.Project Equipment. The Borrower shall
have the right to install, operate, use, remove and dispose of the Project
Equipment in the normal and ordinary course of its business operations, and
shall not be required to replace any item of Project Equipment which is
discarded or sold for scrap. The Borrower shall not, however, either in one
transaction or a series of transactions, sell, convey, transfer, remove or
otherwise dispose of more than 20% by value of the Project Equipment without
prior notice to and the consent of the Authority, unless such Project Equipment
is replaced by property of similar value and utility.

ARTICLE V.

CONDEMNATION

DAMAGE AND DESTRUCTION

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

Section 5.2.Project Disposition Upon Condemnation,
Damage or Destruction. In the event of any such condemnation, damage or
destruction the Borrower shall:
(1)At its own cost, repair, restore or reconstruct the
Project to substantially its condition immediately prior to such event or to a
condition of at least equivalent value, regardless of whether or not the
proceeds of any and all policies of insurance covering such damage or
destruction, or the amount of the award or compensation or damages recovered on
account of such taking or condemnation, shall be available or sufficient to pay
the cost thereof;

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

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





Section 5.3.Application of Net Proceeds of Insurance
or Condemnation. (A) The Net Proceeds from any insurance or condemnation
award with respect to the Project shall be deposited either (1) in the Project
Fund and applied to pay for the cost of making such repairs, restorations,
reconstructions, replacements or relocations, or to reimburse the Borrower, the
Authority or the Trustee for payment therefor from time to time as provided in
the Indenture, or (2) if prepayment of the loan is then permitted and the
Borrower exercises its option to prepay the loan, in the Debt Service Fund and
applied to the payment of the Note and redemption of the Bonds, in each case
with respect to the Bonds the proceeds of which were used to finance that
portion of the Project which was damaged, destroyed or condemned.

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

ARTICLE VI.

COVENANTS

Section 6.1.The Borrower to Maintain its Status as a
Corporation; Conditions under which Exceptions Permitted. (A) The Borrower
covenants and agrees that during the Term of this Agreement it will maintain its
status as a corporation, will continue to be a corporation either organized
under the laws of or duly qualified to do business as a foreign entity in the
State and in all jurisdictions necessary in the operation of its business, will
not dissolve or otherwise dispose of all or substantially all of its assets and
will not consolidate with or merge into another entity or permit one or more
other entities to consolidate with or merge into it.

(B)The Borrower may, however, without violating the
agreements contained in this Section, consolidate with or merge into another
entity or permit one or more other entities to consolidate with or merge into
it, or sell or otherwise transfer to another entity all or substantially all of
its assets as an entity and thereafter liquidate or dissolve, if (a) the
Borrower is the surviving, resulting or transferee entity, as the case may be,
or (b) in the event the Borrower is not the surviving, resulting or transferee
entity, as the case may be, such entity (i) is a solvent entity, either
organized under the laws of or duly qualified to do business as a foreign entity
subject to service of process in the State; (ii) assumes in writing all of the
obligations of the Borrower herein and in the Note; and (iii) unless a Credit
Facility will be in effect after such consolidation, merger or transfer, the
transferee entity shall have a net worth after such consolidation, merger or
transfer which is at least equal to the net worth of the Borrower immediately
prior to such consolidation, merger or transfer.

Section 6.2.Indemnification, Payment of Expenses, and
Advances. (A) The Borrower agrees to protect, defend and hold harmless the
Authority, the State, agencies of the State, members, servants, agents,
directors, officers and employees, now or forever, of the Authority or the State
(each an "Authority Indemnified Party"), and the Trustee, the Paying Agent, the
Remarketing Agent, and agents, directors, officers and employees, now or
forever, thereof (each an "Indemnified Party"), from any claim, demand, suit,
action or other proceeding and any liabilities, costs, and expenses whatsoever
by any person or entity whatsoever, arising or purportedly arising from or in
connection with the Financing Documents, the Indenture, the Bonds, or the
transactions contemplated thereby or actions taken thereunder by any person
(including without limitation the filing of any information, form or statement
with the Internal Revenue Service), except for any willful and material
misrepresentation, willful misconduct or gross negligence on the part of the
Indemnified Party or the Authority Indemnified Party or any bad faith on the
part of any indemnitee other than an Authority Indemnified Party.

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

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

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

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

(E)In case any action shall be brought against one or
more of the Indemnified Parties based upon any of the above and in respect of
which indemnity may be sought against the Borrower, such Indemnified Party shall
promptly notify the Borrower in writing, enclosing a copy of all papers served,
but the omission so to notify the Borrower of any such action shall not relieve
it of any liability which it may have to any Indemnified Party otherwise than
under this Section 6.2. In case any such action shall be brought against any
Indemnified Party and it shall notify the Borrower of the commencement thereof,
the Borrower shall be entitled to participate in and, to the extent that it
shall wish, to assume the defense thereof with counsel satisfactory to such
Indemnified Party, and after notice from the Borrower to such Indemnified Party
of the Borrower's election so to assume the defense thereof, the Borrower shall
not be liable to such Indemnified Party for any subsequent legal or other
expenses attributable to such defense, except as set forth below, other than
reasonable costs of investigation subsequently incurred by such Indemnified
Party in connection with the defense thereof. The Indemnified Party shall have
the right to employ its own counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the employment of counsel by such Indemnified Party has been
authorized by the Borrower, (ii) the Indemnified Party shall have reasonably
concluded that there may be a conflict of interest between the Borrower and the
Indemnified Party in the conduct of the defense of such action (in which case
the Borrower shall not have the right to direct the defense of such action on
behalf of the Indemnified Party); or (iii) the Borrower shall not in fact have
employed counsel satisfactory to the Indemnified Party to assume defense of such
action.

(F)The Borrower also agrees to pay all reasonable or
necessary out-of-pocket expenses of the Authority in connection with the
issuance of the Bonds, the administration of the Financing Documents and the
enforcement of its rights thereunder.

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

(H)The Borrower shall defend, indemnify, and hold the
Authority and its members and officers and the Trustee and its officers,
directors and stockholders harmless from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs, or expenses of
whatever kind or nature, known or unknown, contingent or otherwise, arising out
of, or in any way related to, (i) the presence, disposal, release, or threatened
release of any hazardous materials, asbestos, petroleum or petroleum by-products
which are on, from, or affecting the soil, water, vegetation, buildings,
personal property, persons, animals, or otherwise, except in compliance with all
applicable Federal, State and local laws or regulations; (ii) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to hazardous materials, asbestos, petroleum or petroleum by-
products; (iii) any lawsuit brought or threatened, settlement reached, or
government order relating to such hazardous materials, asbestos, petroleum or
petroleum by-products and/or (iv) any violation of laws, orders, regulations,
requirements or demand of government authorities or any policies or requirements
of the Authority which are based upon or in any way related to such hazardous
materials, asbestos, petroleum or petroleum by-products including, without
limitation, reasonable attorney and consultant fees, investigation and
laboratory fees, court costs, and litigation expenses. The provisions of this
paragraph shall be in addition to any and all other obligations and liabilities
the Borrower may have to the Authority or the Trustee at common law, and shall
survive the termination of this Agreement.

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

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

Section 6.3.Incorporation of Tax Regulatory Agreement;
Payments Upon Taxability. (A) For purpose of this Section, the term "owner"
means the Beneficial Owner of the Bonds so long as the Book-Entry System is in
effect.

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

(C)If the owner of the Bonds receives from the Internal
Revenue Service a notice of assessment and demand for payment with respect to
interest on such Bond (except a notice and demand based upon the assertion that
such owner of the Bonds is a Substantial User or Related Person), an appeal may
be taken by such owner of the Bonds at the option of the Borrower. Without
limiting the generality of the foregoing, the Borrower shall have the right to
direct the Trustee to direct such owner of the Bonds to take such appeal or not
to take such appeal. In either case all expenses of the appeal including
reasonable counsel fees and expenses shall be paid by the Borrower, and such
owner of the Bonds and the Borrower shall cooperate and consult with each other
in all matters pertaining to any such appeal, except that no owner of the Bonds
shall be required to disclose or furnish any non-publicly disclosed information,
including, without limitation, financial information and tax returns.

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

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

(F)The Borrower's payment obligations under this Section
are further subject in all respects to the provisions of Section 3.9 and 3.10
hereof regarding the use of Priority Amounts and the effect of drawings under
the Credit Facility.

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

Section 6.4.Public Purpose Covenants. (A) The
Borrower covenants that it will operate the Project for the purposes and in a
manner consistent with the Borrower's application for assistance to the
Authority. The Borrower further covenants and agrees that it will, throughout
the term of this Agreement, (1) comply with all applicable laws, regulations,
ordinances, rules, and orders relating to the Project as provided in the
Financing Documents, (2) maintain the Project in accordance with the Financing
Documents, (3) not cause or permit the Project to become or remain a public
nuisance, (4) not allow any change in the nature of the occupancy, use or
operation of the Project which is substantially inconsistent with the Borrower's
application for assistance to the Authority, except that the Borrower may after
notice to the Authority permit any such change which does not disqualify the
Project as an authorized project under the Act as in effect on the date hereof,
and (5) not sell, assign, convey, further lease, sublease or otherwise dispose
of title to the Project without the prior written consent of the Authority.
Nothing in this Section is intended to require the Borrower to operate the
Project in such manner as, in the good faith judgment of the Borrower, shall
materially and adversely impair the use and operation of the Project.

(B)No breach of any covenant contained in this Section
shall constitute an Event of Default but, in order to relieve the Authority of
the consequences of unanticipated failure of consideration, shall permit only
the exercise by the Authority of the remedies provided in Section 7.3
hereof.

Section 6.5.Further Assurances and Corrective
Instruments. The Authority and the Borrower agree that they will, from time
to time, execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description of
the Project or for carrying out the intention of or facilitating the performance
of this Agreement.

Section 6.6.Covenant by Borrower as to Compliance with
Indenture. The Borrower covenants and agrees that it will comply with the
provisions of the Indenture with respect to the Borrower and that the Trustee
and the Bondholders shall have the power and authority provided in the
Indenture. The Borrower further agrees to aid in the furnishing to the Authority
or the Trustee of opinions that may be required under the Indenture. The
Borrower covenants and agrees that the Trustee shall be entitled to and shall
have all the rights, including the right to enforce against the Borrower the
provisions of the Financing Documents, pertaining to the Trustee notwithstanding
the fact that the Trustee is not a party to the Financing Documents.

Section 6.7.Assignment of Agreement or Note. (A)
The Borrower may not assign its rights, interests or obligations hereunder or
under the Note except as may be permitted pursuant to Section 6.1(B) hereof.

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

Section 6.8.Inspection. The Authority, the Trustee
and their duly authorized agents shall have (1) the right at all reasonable
times to enter upon and to examine and inspect the Project and (2) such rights
of access thereto as may be reasonably necessary for the proper maintenance and
repair thereof in the event of failure by the Borrower to perform its
obligations under this Agreement. The Authority and the Trustee shall also be
permitted, at all reasonable times, to examine the books and records of the
Borrower with respect to the Project.

Section 6.9.Default Notification. Within seven (7)
days after becoming aware of any condition or event which constitutes, or with
the giving of notice or the passage of time would constitute, an Event of
Default or an "Event of Default" under Section 8.1 of the Indenture, the
Borrower shall deliver to the Authority, the Bank, if any, the Remarketing
Agent, the Paying Agent and the Trustee a notice stating the existence and
nature thereof and specifying the corrective steps, if any, the Borrower is
taking with respect thereto.

Section 6.10.Covenant Against Discrimination. (A)
The Borrower in the performance of this Agreement will not discriminate or
permit discrimination against any person or group of persons on the grounds of
race, color, religion, national origin, age, sex, sexual orientation, marital
status, physical or learning disability, political beliefs, mental retardation
or history of mental disorder in any manner prohibited by the laws of the United
States or of the State.

(B)The Borrower will comply with the provisions of the
resolution adopted by the Authority on June 14, 1977, as amended, and the policy
of the Authority implemented pursuant thereto concerning the promotion of equal
employment opportunity through affirmative action plans. The resolution requires
that all borrowers receiving financial assistance from the Authority adopt and
implement an affirmative action plan prior to the closing of the loan. The plan
shall be updated annually as long as the Bonds remain Outstanding.

Section 6.11.Authority Costs and Expenses. The
Authority agrees that it shall in all instances act in good faith in incurring
costs, expenses and legal fees in connection with the transactions contemplated
by this Agreement and the Indenture.

Section 6.12.Securities Laws. In any "Offering" of
the Bonds by a "Participating Underwriter" as those terms are defined in Rule
15c2-12 of the Securities and Exchange Act of 1934 (the "Rule"), including any
remarketing of Bonds under this Agreement, the Borrower shall at all times
comply with applicable federal and state securities laws, and shall cooperate
with the Remarketing Agent to the extent necessary to permit the Remarketing
Agent to comply with, applicable federal and state securities laws.

ARTICLE VII. 

EVENTS OF DEFAULT AND REMEDIES

Section 7.1.Events of Default. Any one or more of
the following shall constitute an "Event of Default" hereunder:
(1)Any material representation or warranty made by the
Borrower in the Financing Documents or any certificate, statement, data or
information furnished in writing to the Authority or the Trustee by the Borrower
in connection with the closing of the Bonds or included by the Borrower in its
application to the Authority for assistance proves at any time to have been
incorrect when made in any material respect.

(2)Failure by the Borrower to pay (i) any interest,
principal or premium, if any, when due and payable with respect to the Bonds
and, if the Bonds are not secured by a Credit Facility, the continuance of such
failure for more than five Business Days, (ii) amounts due and payable
(excluding amounts due and payable under (i) above pursuant to the Agreement,
the Note and the Tax Regulatory Agreement (other than as described in (iii)
below) and the continuance of such failure for more than thirty Business Days,
or (iii) rebate amounts due under section 148(f) of the Code when due and
payable under the Tax Regulatory Agreement.

(3)Failure by the Borrower to comply with the default
notification provisions of Section 6.9 hereof.

(4)The occurrence of an "event of default" under Section
8.1 of the Indenture.

(5)Failure by the Borrower to observe or perform any
covenant, condition or agreement hereunder or under the Financing Documents
(except those referred to above) and (a) continuance of such failure for a
period of sixty (60) days after receipt by the Borrower of written notice
specifying the nature of such failure or (b) if by reason of the nature of such
failure the same cannot be remedied within the sixty day period, the Borrower
fails to proceed with reasonable diligence after receipt of the notice to cure
the failure.

(6)The Borrower shall (a) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or the like of
itself or of its property, (b) admit in writing its inability to pay its debts
generally as they become due, (c) make a general assignment for the benefit of
creditors, (d) be adjudicated a bankrupt or insolvent, or (e) commence a
voluntary case under the Federal bankruptcy laws of the United States of America
or file a voluntary petition or answer seeking reorganization, an arrangement
with creditors or an order for relief or seeking to take advantage of any
insolvency law or file an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization or insolvency
proceeding; or action shall be taken by it for the purpose of effecting any of
the foregoing; or if without the application, approval or consent of the
Borrower, a proceeding shall be instituted in any court of competent
jurisdiction, seeking in respect of the Borrower an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or
arrangement with creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of the Borrower or of all
or any substantial part of its assets, or other like relief in respect thereof
under any bankruptcy or insolvency law, and, if such proceeding is being
contested by the Borrower in good faith, the same shall continue undismissed, or
pending and unstayed, for any period of seventy-five (75) consecutive days.

(7)Failure of the Borrower to cause to have paid the
Purchase Price of Bonds tendered pursuant to Section 2.3 of the
Indenture.





Section 7.2.Remedies on Default. (A) Whenever any
Event of Default shall have occurred, the Trustee, or the Authority where so
provided herein, may take any one or more of the following actions with the
prior consent of the Bank so long as the Bank is not in default under the Letter
of Credit and the Reimbursement Agreement, as certified by the Bank:
(1)The Trustee, as and to the extent provided in Article
VIII of the Indenture, may cause all amounts payable under the Financing
Documents to be immediately due and payable without notice or demand of any
kind, whereupon the same shall become immediately due and payable.

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

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

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





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

Section 7.3.Remedies on Public Purpose Default.
(A) If the Borrower shall default in the performance of any of its covenants
contained in Section 6.4 hereof and such default shall constitute an Event of
Default under Section 7.1 hereof, and such Event of Default shall continue for
thirty (30) days without the Trustee or Bondholders instituting the remedial
steps provided for in subsection 7.2(A)(1) hereof or subsection 8.1(B) of the
Indenture, the Authority may, so long as such Event of Default is continuing,
send a notice to the Trustee calling for the acceleration of all of the
Borrower's obligations under the Financing Documents and for the redemption of
all of the Bonds then Outstanding. Any such notice shall set forth in reasonable
detail the default by the Borrower giving rise thereto and shall specify the
date upon which (1) notice of Bond redemption is to be given by the Trustee
(which shall be not less than one hundred twenty (120) days from the date of the
Authority's determination notice) and (2) the redemption of the Bonds is to
occur (which shall be at least thirty (30) days after notice of redemption is
given by the Trustee). Within thirty days following receipt of the notice, the
Trustee shall forward a copy thereof to the Borrower and each registered
Bondholder, together with a copy of Sections 6.4 and 7.3 of this Agreement.

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

(C)If upon receipt of such notice from the Borrower or
any Bondholder, the Authority determines to affirm its earlier determination,
either the Borrower or any Bondholder shall have the right to bring an action in
any court of competent jurisdiction to enjoin the proceedings for the redemption
of such Bonds, and during the pendency of any such action the redemption
proceedings shall be suspended. Neither the Authority, the Borrower nor any
Bondholder shall be responsible for any costs, fees, expenses, or counsel fees
incurred by any other party in connection with any such action, other than the
Trustee (whose costs, fees and expenses shall be paid by the Borrower). In the
event the Authority is successful in such a proceeding, and a final judgment is
rendered which is not appealable or appealed within sixty days thereafter
finding the Borrower in default under Section 6.4 hereof, the Trustee shall,
promptly upon receipt of notice from the Authority of the entry of the decision,
give notice of the redemption of all Outstanding Bonds under Section 6.3 of the
Indenture, and redeem all such Bonds upon the date fixed for redemption in the
notice (which shall be no more than thirty-five days after the notice is given).
In the event the Borrower or such Bondholders are successful in such a
proceeding, and a final judgment is rendered which is not appealable or appealed
within sixty days thereafter finding the Borrower not to be in default under
Section 6.4 hereof, all proceedings for the redemption of Bonds commenced under
this Section shall be terminated. No such judgment, however, shall prejudice the
exercise of the Authority's rights under this Section upon the occurrence of
such subsequent failure of performance under Section 6.4 hereof.

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

(E)The payment obligations of the Borrower under this
Section are subject in all respects to the provisions of Sections 3.9 and 3.10
hereof regarding the use of the Credit Facility and Priority Amounts for the
payment of Bonds and the effect of drawings upon the Credit Facility.

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

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

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

ARTICLE VIII.

PREPAYMENT PROVISIONS

Section 8.1.Optional Prepayment.
(A)  The Borrower shall have, and is hereby granted, the option to
prepay its loan obligation and to cause the corresponding optional redemption of
the Bonds pursuant to Section 2.4(A) of the Indenture at such times, in such
amounts, and with such premium, if any, for such optional redemption as set
forth in the form of the Bonds, by delivering a written notice to the Trustee in
accordance with Section 8.2 hereof, with a copy to the Authority, setting forth
the amount to be prepaid, the amount of Bonds requested to be redeemed with the
proceeds of such prepayment, and the date on which such Bonds are to be
redeemed. Such prepayment must be sufficient to provide monies for the payment
of interest and Redemption Price in accordance with the terms of the Bonds
requested to be redeemed with such prepayment and all other amounts then due
under the Agreement, Note and Tax Regulatory Agreement. In the event of any
complete prepayment of its loan obligation, the Borrower shall, at the time of
such prepayment, also pay or provide for the payment of all reasonable or
necessary fees and expenses of the Authority, the Trustee and the Paying Agent
accrued and to accrue through the final payment of all the Bonds. Any such
prepayments shall be applied to the redemption of Bonds in the manner provided
in Section 6.4 of the Indenture, and credited against payments due hereunder in
the same manner.

(B)Extraordinary Optional Prepayment. While the
Bonds are in the Multiannual or Fixed Rate Mode, the Borrower shall have, and is
hereby granted, the option to prepay its loan obligation in full at any time
without premium if any of the following events shall have occurred, as evidenced
in each case by the filing with the Trustee of a certificate of an Authorized
Representative of the Borrower to the effect that one of such events has
occurred and is continuing, and describing the same:
(1)The Project shall have been damaged or destroyed to
such extent that (a) the Project cannot be reasonably restored within a period
of six months from the date of such damage or destruction to the condition
thereof immediately preceding such damage or destruction, or (b) the Borrower is
thereby prevented or likely to be prevented from carrying on its normal
operation of the Project for a period of six months from the date of such damage
or destruction.

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

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





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

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

Section 8.3.Mandatory Prepayment on Public Purpose
Default. The Borrower shall pay or cause the prepayment of its loan
evidenced by the Note in the manner provided in Section 7.3 hereof following a
default in the public purpose covenants set forth in Section 6.4 hereof.

Section 8.4.Mandatory Prepayment on Taxability.
The Borrower shall pay or cause the prepayment of its loan evidenced by the
Note, in whole or in part, following a Determination of Taxability in the manner
provided in Section 6.3 of this Agreement.

ARTICLE IX.

GENERAL

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

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

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

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

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

Section 9.5.Notices. All notices, certificates or
other communications hereunder shall be sufficiently given and shall be deemed
given when delivered or when mailed by first class mail, postage prepaid,
addressed as follows: if to the Authority, at 999 West Street, Rocky Hill,
Connecticut 06067, Attention: Program Manager - Loan Administration; if to the
Borrower, at The Energy Network, Inc., P.O. Box 1500, 100 Columbus Boulevard,
Hartford, Connecticut 06144, Attention: Treasurer; if to the Trustee, at Goodwin
Square, 225 Asylum Street, 23rd Floor, Hartford, Connecticut 06103, Attention:
Corporate Trust; and if to the Bank, at Fleet National Bank, One Federal Street,
Boston, Massachusetts 02110, Attention: Vice President - National Utilities. A
duplicate copy of each notice, certificate or other communication given
hereunder by either the Authority or the Borrower to the other shall also be
given to the Trustee. The Authority, the Borrower and the Trustee may, by
written notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be
sent.

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

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

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

Connecticut Development Authority

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Authorized Representative

The Energy Network, Inc.

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Name: 

Title: 

THE ENERGY NETWORK, INC.

PROMISSORY NOTE

 

 

$4,300,000January 14, 2000

The Energy Network, Inc., a corporation duly organized and
validly existing under the laws of the State of Connecticut (the "Borrower"),
for value received, hereby promises to pay to the order of the Connecticut
Development Authority (the "Authority"), the principal sum of $4,300,000
together with interest on the unpaid principal balance thereof from the date
hereof until fully and finally paid, together with all taxes levied or assessed
on this Note or the debt evidenced hereby against the holder hereof. This Note
shall bear interest at the rates of interest borne by, and principal, premium
and interest shall be payable at the times and in the amounts specified in the
Bonds referred to below, but only to the extent that said Bonds are issued and
outstanding. In no event shall the interest rate hereon exceed the maximum rate
permitted by law.

This Note has been executed under and pursuant to a Loan
Agreement dated as of January 1, 2000 between the Authority and the Borrower
(the "Agreement"). This Note is issued to evidence the obligation of the
Borrower under the Agreement to repay the loan made by the Authority from the
proceeds of its $4,300,000 Industrial Revenue Variable Rate Demand Bonds (The
Energy Network / SINA Project - 2000 Series) (the "Bonds"), together with
interest thereon, the Purchase Price thereof, and all other amounts, fees,
penalties, premiums, adjustments, expenses, counsel fees and other payments of
any kind required to be paid by the Borrower under the Agreement. The Agreement
includes provision for mandatory and optional prepayment of this Note as a whole
or in part. Advances made pursuant to Section 6.2 of the Agreement shall bear
interest at the rate specified in accordance therewith.

The Agreement and this Note have been assigned to State
Street Bank and Trust Company (the "Trustee") acting pursuant to an Indenture of
Trust dated as of January 1, 2000 (the "Indenture") between the Authority and
the Trustee. Such assignment is made as security for the payment of the
Bonds.

The Borrower has arranged the delivery to the Trustee of an
irrevocable Direct Pay Letter of Credit, dated the date of delivery of the
Bonds, issued by Fleet National Bank (the "Bank"), for the account of the
Borrower in favor of the Trustee. The Agreement provides that all payment
obligations of the Borrower thereunder and under the Note shall be completely
satisfied to the extent of all drawings made under the Letter of Credit for the
purpose of satisfying such obligations to the extent the Bank is reimbursed for
such draws by or on behalf of the Borrower.

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

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

THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION CONTEMPLATED
HEREIN IS A COMMERCIAL TRANSACTION WITHIN THE MEANING OF SECTION 52-278a OF THE
CONNECTICUT GENERAL STATUTES. IN THE EVENT OF BORROWER'S DEFAULT ON THE NOTE,
THE TRUSTEE INTENDS TO PURSUE ITS RIGHTS TO OBTAIN A PREJUDGMENT REMEDY IN
ACCORDANCE WITH SECTION 52-278f, OF THE CONNECTICUT GENERAL STATUTES. BORROWER
HAS BEEN ADVISED BY COUNSEL OF ITS RIGHTS WITH RESPECT TO PREJUDGMENT REMEDIES
UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, AS AMENDED, INCLUDING
SECTIONS 52-278a TO 52-278g, INCLUSIVE, THEREOF. BORROWER HEREBY KNOWING AND
WILLINGLY WAIVES ALL RIGHTS OF NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER IN
CONNECTION WITH THE OBTAINING BY THE TRUSTEE OF ANY PREJUDGMENT REMEDY IN
CONNECTION WITH THE TRANSACTION, EVIDENCED HEREBY OR PURSUANT TO ANY OTHER
DOCUMENT OR INSTRUMENT EXECUTED BY THE BORROWER IN CONNECTION HEREWITH,
INCLUDING ANY AMENDMENTS OR EXTENSIONS HEREOF OR THEREOF. FURTHER, THE BORROWER
WAIVES ANY REQUIREMENT OF THE TRUSTEE TO POST A BOND OR ANY OTHER SECURITY, OR
TO SHOW EXIGENCY, IN CONNECTION WITH THE OBTAINING BY THE TRUSTEE OF SUCH
PREJUDGMENT REMEDY. FURTHER, THE BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED
BY LAW, THE BENEFITS OF ALL PRESENT AND FUTURE VALUATION, APPRAISEMENT,
HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS. The Borrower further
(1) waives diligence, demand, presentment for payment, notice of nonpayment,
protest and notice of protest, notice of any renewals or extension of this Note,
and all rights under any statute of limitations, (2) agrees that the time for
payment of this Note may be changed and extended at the sole discretion of the
Trustee without impairing its liability hereon, and (3) consents to the release
of all or any part of the security for the payment thereof at the discretion of
the Trustee or the release of any party liable for this obligation without
affecting the liability of the other parties hereto. Any delay on the part of
the Authority or the Trustee in exercising any right hereunder shall not operate
as a waiver of any such right, and any waiver granted with respect to one
default shall not operate as a waiver in the event of any subsequent
default.

IN WITNESS WHEREOF, The Energy Network, Inc., has caused this
Note to be executed in its corporate name by its duly authorized officer, on
January 14, 2000.

The Energy Network, Inc.

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AUTHORITY ENDORSEMENT

 

 

Pay to the order of State Street Bank and Trust Company as
Trustee, without recourse.

 

 

Connecticut Development Authority

 

 

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Authorized Representative