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 1.1	Definitions	5

Section 1.2.	Interpretation	9

ARTICLE II.

Section 2.1.	Representations by the Authority	10

Section 2.2.	Representations by the Borrower	12

ARTICLE III.

Section 3.1.	Loan Clauses	14

Section 3.2.	Other Amounts Payable and Other Obligations	15

Section 3.3.	Manner of Payment	16

Section 3.4.	Obligation Unconditional	16

Section 3.5.	Security Clauses	16

Section 3.6.	Issuance of Bonds	17

Section 3.7.	No Additional Bonds	17

Section 3.8.	Effective Date and Term	17

Section 3.9.	Use of Priority Amounts	17

Section 3.10.	Effect of Drawings Under Credit Facility	17

Section 3.11. Borrower's Purchase of Bonds	17

Section 3.12.	Letter of Credit	18

Section 3.13.	Requirements for Delivery of an Alternative CreditFacility.	18

Section 3.14. Securities Laws	19

ARTICLE IV.

Section 4.1.	Completion of the Project	20

Section 4.2.	No Warranty Regarding Condition, Suitability or Cost ofProject	20

Section 4.3.	Taxes	20

Section 4.4.	Insurance	21

Section 4.5.	Compliance with Law	21

Section 4.6.	Maintenance and Repair	22

Section 4.7.	Disposition of Project by Borrower	22

Section 4.8.	Leasing of the Project	22

Section 4.9.	Project Equipment	22

 

ARTICLE V.

Section 5.1.	No Abatement of Payments Hereunder	23

Section 5.2.	Project Disposition Upon Condemnation, Damage orDestruction	23

Section 5.3.	Application of Net Proceeds of Insurance orCondemnation	23

ARTICLE VI.

Section 6.1.	The Borrower to Maintain its Status as a Corporation;Conditions under which Exceptions Permitted	23

Section 6.2.	Indemnification, Payment of Expenses, and Advances	24

Section 6.3.	Incorporation of Tax Regulatory Agreement; Payments UponTaxability	26

Section 6.4.	Public Purpose Covenants	27

Section 6.5.	Further Assurances and Corrective Instruments	28

Section 6.6.	Covenant by Borrower as to Compliance withIndenture	28

Section 6.7.	Assignment of Agreement or Note	28

Section 6.8.	Inspection	28

Section 6.9.	Default Notification	28

Section 6.10.	Covenant Against Discrimination	28

Section 6.11.	Authority Costs and Expenses	29

Section 6.12.	Securities Laws	29

ARTICLE VII.

Section 7.1.	Events of Default	29

Section 7.2.	Remedies on Default	30

Section 7.3.	Remedies on Public Purpose Default	31

Section 7.4.	No Duty to Mitigate Damages	32

Section 7.5.	Remedies Cumulative	32

ARTICLE VIII.

Section 8.1.	Optional Prepayment	33

Section 8.2.	Notice and Sources of Prepayment	34

Section 8.3.	Mandatory Prepayment on Public Purpose Default	34

Section 8.4.	Mandatory Prepayment on Taxability	34

ARTICLE IX.

Section 9.1.	Indenture	34

Section 9.2.	Benefit of and Enforcement by Bondholders	35

Section 9.3.	Force Majeure	35

Section 9.4.	Amendments	35

Section 9.5.	Notices	35

Section 9.6.	Prior Agreements Superseded	36

Section 9.7.	Execution of Counterparts	37

APPENDICES

Appendix A	Promissory Note

 

Connecticut Development Authority

The Energy Network, Inc.

LOAN AGREEMENT

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

WITNESSETH THAT:

WHEREAS, the State Commerce Act, constituting ConnecticutGeneral 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 maintainemployment and tax revenues and to control, abate and prevent pollution toprotect the public health and safety, (2) for the development of recreationfacilities to promote tourism, provide and maintain employment and tax revenues,and promote the public welfare, (3) for the development of commercial and retailsales and service facilities in urban areas to provide and maintain constructionand permanent employment and tax revenues, to improve conditions of deterioratedphysical development, slow economic growth and eroded financial health of thepublic and private sectors in urban areas and to revitalize the economy of urbanareas, and (4) for assistance to public service businesses providingtransportation and utility services in the State, and that the availability offinancial assistance and suitable facilities are important inducements toindustrial and commercial enterprises to remain or locate in the State and toprovide industrial, recreation, urban and public service projects; and

WHEREAS, the Act provides that (1) the term "project" as usedtherein means any facility, plant, works, system, building, structure, utility,fixture or other real property improvement located in the State, and the land onwhich 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 forpurposes which would constitute it as an industrial project, recreation project,urban project, public service project or health care project, and any realproperty improvement reasonably related thereto, and (2) that a project may alsoinclude 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 makeloans to any person for the planning, designing, acquiring, improving andequipping of, a project, which may be secured by loan, lease or sale agreements,contracts and other instruments, upon such terms and conditions as the Authorityshall 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 deemnecessary or desirable, (iii) to issue its bonds for such purposes, subject tothe approval of the Treasurer of the State, and, (iv) as security for thepayment of the principal or redemption price, if any, of and interest on anysuch bonds, to pledge or assign such a loan, lease or sale agreement and therevenues and receipts derived by the Authority from such a project; and

WHEREAS, in furtherance of the purposes of the Act, theAuthority has accepted the application of the Borrower, and has by a resolutionadopted December 15, 1999 authorized the issuance of not to exceed $5,500,000principal amount of its Industrial Revenue Variable Rate Demand Bonds (TheEnergy Network/SINA Project - 2000 Series) (the "Bonds") for the purpose offinancing a certain project consisting of (i) the construction of a heatexchanger building to service facilities located at 1460 Broad Street, 15 VernonStreet, 43 Vernon Street, 53 Vernon Street and 359 Washington Street, in theCity of Hartford, Connecticut (the "Facilities"), (ii) the acquisition andinstallation 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 besecured by an Indenture of Trust of even date herewith, by and between theAuthority and State Street Bank and Trust Company, as Trustee (the "Indenture");and

WHEREAS, in order to further secure the Bonds, the Borrowerconcurrently with the execution hereof has arranged the delivery to the Trusteeof 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 infavor of the Trustee as beneficiary on behalf of the owners of the Bonds;and

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

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

WHEREAS, the Authority proposes with the proceeds of theBonds to make a loan to the Borrower and the Borrower proposes to borrow suchproceeds from the Authority for the purpose of financing the cost of theProject; and

WHEREAS, the Borrower acknowledges that the Authority isproviding financing for the Project in furtherance of the Authority's corporatepurposes under the Act, that the accomplishment of these purposes is dependentupon the compliance of the Borrower with its covenants contained in thisAgreement, that the Authority has a resulting beneficial interest in theProject, and that the Borrower's use of and interest in the Project as providedhereby are in furtherance of the discharge of a public purpose;

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

ARTICLE I.

DEFINITIONS AND INTERPRETATION

Section 1.1.	Definitions. For the purposes of thisAgreement, the following words and terms shall have the respective meanings setforth as follows, and any capitalized word or term used but not defined hereinis used as defined in the Indenture:

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

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

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

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

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

"Bond" or "Bonds" means the $4,300,000 Industrial RevenueVariable 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 knownas Affiliated Resources Corporation, a corporation, duly organized and validlyexisting under the laws of the State of Connecticut, and its successors andassigns and (ii) any surviving resulting or transferee corporation as providedin Section 6.1 hereof.

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

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

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

"Credit Facility" means the Letter of Credit and anysubstitute irrevocable transferable letter of credit delivered to the PayingAgent pursuant to the Indenture and this Agreement and then in effect. More thanone 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 sodesignated, established pursuant to Section 5.1 of the Indenture.

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

"DTC" or "The Depository Trust Company" shall mean thelimited-purpose trust company organized under the laws of the State of New Yorkwhich shall act as securities depository for the Bonds, and any successorthereto.

"Event of Default" means an Event of Default as defined insubsection 7.1 hereof.

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

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

"Indenture" means the Indenture of Trust, of even dateherewith, by and between the Authority and the Trustee, together with allindentures supplemental thereto made and entered into in accordancetherewith.

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

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

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

"Moody's" means Moody's Investors Service, Inc., acorporation organized and existing under the laws of the State of Delaware, itssuccessors and their assigns, and, if such corporation shall be dissolved orliquidated or shall no longer perform the functions of a securities ratingagency, "Moody's" shall be deemed to refer to any other nationally recognizedsecurities 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 orcondemnation award, means the gross proceeds from such award less all expenses(including attorney's fees and expenses and any Extraordinary Expenses of theTrustee) incurred by the Trustee in the collection thereof.

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

"Ordinary Services" and "Ordinary Expenses" means thoseservices normally rendered and those expenses normally incurred by a trusteeunder instruments similar to the Indenture prior to the occurrence of an eventof default, including without limitation, fees and expenses of the Trustee aspaying agent and bond registrar, and as custodian of the Project Fund and theDebt 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 anddelivered under the Indenture, except:

(1)	any Bonds canceled by the Trustee because of paymentor redemption prior to maturity or surrendered to the Trustee forcancellation;

(2)	any Bond (or portion of a Bond) paid or redeemed orfor the payment or redemption of which there has been separately set aside andheld in the Redemption Account either:

(a)	moneys in an amount sufficient to effect payment ofthe principal or applicable Redemption Price thereof, together with accruedinterest on such Bond to the payment or redemption date, which payment orredemption date shall be specified in irrevocable instructions given to theTrustee to apply such moneys to such payment on the date so specified; or

(b)	obligations of the kind described in subsection12.1(A) of the Indenture in such principal amounts, of such maturities, bearingsuch interest and otherwise having such terms and qualifications as shall benecessary to provide moneys in an amount sufficient to effect payment of theprincipal or applicable Redemption Price of such Bond, together with accruedinterest on such Bond to the payment or redemption date, which payment orredemption date shall be specified in irrevocable instructions given to theTrustee 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 Bondsshall have been authenticated and delivered under Article III of the Indenture;and

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

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

"Project" means (i) the construction of a heat exchangerbuilding to service facilities located at 1460 Broad Street, 15 Vernon Street,43 Vernon Street, 53 Vernon Street and 359 Washington Street, in the City ofHartford, Connecticut (the "Facilities"), (ii) the acquisition and installationof a distribution piping system and new equipment thereon, and (iii) certaincosts 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 hereafteracquired, acquired in whole or in part with the proceeds of the Bonds inconnection with the Project, as set forth in Appendix B.

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

"Reimbursement Agreement" means the Reimbursement Agreementdated as of January 1, 2000 between the Borrower and Fleet National Bank, andany other agreement between the Borrower and a Bank under which the Borrower isobligated to reimburse the Bank for payments made by the Bank under a CreditFacility, as it may be supplemented or amended.

"Remarketing Agent" means the Remarketing Agent appointedpursuant to Section 9.17 of the Indenture.

"State" means the State of Connecticut.

"Supplemental Indenture" means any indenture supplemental tothe Indenture or amendatory of the Indenture, adopted by the Authority inaccordance with Article X of the Indenture.

"S&P" means Standard & Poor's Ratings Services, adivision of The McGraw-Hill Companies, Inc., a corporation, organized andexisting under the laws of the State of New York, its successors and theirassigns, and, if such corporation shall be dissolved or liquidated or shall nolonger perform the functions of a securities rating agency, "S&P" shall bedeemed to refer to any other nationally recognized securities rating agencydesignated by the Authority at the direction of the Borrower, by notice to theTrustee and the Borrower.

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

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

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

Section 1.2.	Interpretation. In thisAgreement:

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

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

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

(4)	Any headings preceding the texts of the severalArticles and Sections of this Agreement, and any table of contents appended tocopies hereof, shall be solely for convenience of reference and shall notconstitute a part of this Agreement, nor shall they affect its meaning,construction or effect.

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

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

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

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

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

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

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

Section 2.1.	Representations by the Authority. TheAuthority represents and warrants that:

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

(2)	The Authority has complied with the provisions of theAct and has full power and authority pursuant to the Act to consummate alltransactions contemplated by the Bonds, the Indenture and the FinancingDocuments.

(3)	By resolution duly adopted by the Authority and stillin full force and effect, the Authority has authorized the execution, deliveryand due performance of the Bonds, and the Financing Documents, and the taking ofany 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 Agreementand the Indenture, and all approvals necessary in connection with the foregoinghave been received.

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

(5)	 The execution and delivery of the Bonds, and theFinancing Documents and compliance with the provisions thereof, will notconflict with or constitute on the part of the Authority a violation of, breachof or default under its by-laws or any statute, indenture, mortgage, deed oftrust, note agreement or other agreement or instrument to which the Authority isa party or by which the Authority is bound, or, to the knowledge of theAuthority, any order, rule or regulation of any court or governmental agency orbody having jurisdiction over the Authority or any of its activities orproperties, and all consents, approvals, authorizations and orders ofgovernmental or regulatory authorities which are required for the consummationby the Authority of the transactions contemplated thereby have beenobtained.

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

(7)	There is no action, suit, proceeding or investigationat law or in equity before or by any court, public board or body pending orthreatened against or affecting the Authority, or to the best knowledge of theAuthority, any basis therefor, wherein an unfavorable decision, ruling orfinding would adversely affect the transactions contemplated hereby, or in anyof 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 orenforceability of the Financing Documents, or any agreement or instrument towhich the Authority is a party and which is used or contemplated for use inconsummation of the transactions contemplated hereby and by the FinancingDocuments.

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

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

Section 2.2.	Representations by the Borrower. TheBorrower represents and warrants that:

(1)	The Borrower is a corporation which has been dulyorganized and validly exists as a corporation in good standing under the laws ofthe State of Connecticut, is not in violation of any provision of itscertificate of incorporation or by-laws, has corporate power to enter into andperform the Financing Documents, and by proper corporate action has dulyauthorized the execution and delivery of the Financing Documents.

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

(3)	Neither the execution and delivery of the FinancingDocuments, the consummation of the transactions contemplated thereby, nor thefulfillment by the Borrower of or compliance by the Borrower with the terms andconditions thereof is prevented or limited by or conflicts with or results in abreach of, or default under the terms, conditions or provisions of anycontractual or other restriction on the Borrower, evidence of its indebtednessor agreement or instrument of whatever nature to which the Borrower is now aparty or by which it is bound, or constitutes a default under any of theforegoing. No event has occurred and no condition exists which, upon theexecution and delivery of any Financing Documents, constitutes an Event ofDefault hereunder or an event of default thereunder or, but for the lapse oftime or the giving of notice, would constitute an Event of Default hereunder oran event of default thereunder.

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

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

(6)	The Borrower represents that it has not made anycommitment or taken any action which will result in a valid claim for anyfinders' or similar fees or commitments in respect of the transactions describedin 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 Borrowerintends the Project to be and continue to be an authorized project under the Actduring the Term of this Agreement.

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

(9)	The Project is in material compliance with allapplicable material federal, State and local laws and ordinances (includingrules and regulations) relating to zoning, building, safety and environmentalquality.

(10)	The Borrower has obtained, or shall obtain asrequired, all necessary approvals from any and all governmental agenciesrequisite to the Project, and has also obtained all occupancy permits andauthorizations from appropriate authorities authorizing the occupancy and use ofthe Project for the purposes contemplated hereby. The Borrower furtherrepresents and warrants with respect to any portion of the Project that iscompleted that it was completed in accordance with all material federal, Stateand local laws, ordinances and regulations applicable thereto.

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

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

(13)	The Borrower has not taken and will not take anyaction and knows of no action that any other person, firm or corporation hastaken or intends to take, which would cause interest on the Bonds to beincludable in the gross income of the recipients thereof for federal income taxpurposes. The representations, certifications and statements of reasonableexpectation made by the Borrower in the Tax Regulatory Agreement and relating toProject description, composite issues, bond maturity and average asset economiclife, use of Bond proceeds, arbitrage and related matters are herebyincorporated by this reference as though fully set forth herein.

(14)	As of the date of execution hereof, neither theBorrower, nor to its knowledge anyone acting on behalf of the Borrower, hasentered into negotiations with any person for the purpose of undertaking anyborrowing concurrently with or subsequent to the issuance of the Bonds and to besecured wholly or partially by a lien or encumbrance on the Project or any partthereof, and the Borrower has no present intention of undertaking any suchborrowing.

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

ARTICLE III.

THE LOAN

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

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

(C)	On or before 11:00 a.m. of each due date for thepayment of the principal of or interest on the Bonds, until the principal orRedemption Price, if any, of and interest on the Bonds shall have been fullypaid or provision for the payment thereof shall have been made in accordancewith the Indenture, the Borrower shall make loan payments to the Trustee for theaccount of the Authority in an amount which, when added to any moneys (i) thenon deposit in the Debt Service Fund and available therefor, and (ii) amountsreceived 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 Bondsas provided in Section 5.4(A) of the Indenture, including amounts due for thepayment of the principal of and interest on the Bonds. In addition, the Borrowershall pay to the Trustee, as and when the same shall become due, all otheramounts due under the Agreement, the Note and the Tax Regulatory Agreement,together with interest thereon at the then applicable rate as set forth hereinin Section 6.2(G). The Borrower shall have the option to prepay its loanobligation in whole or in part at the times and in the manner provided inArticle VIII hereof.

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

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

(F)	The payment obligations of the Borrower in thisSection 3.1 are subject in all respects to the provisions of Sections 3.9 and3.10 hereof regarding the use of Priority Amounts and the effect of drawingsunder the Credit Facility.

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

Section 3.2.	Other Amounts Payable and OtherObligations. (A) The Borrower hereby further expressly agrees to pay as andwhen the same shall become due an amount equal to (i) the initial and annualfees of the Trustee for the Ordinary Services of the Trustee rendered and itsOrdinary Expenses incurred under the Indenture, including its reasonable feesand expenses as Registrar and in connection with preparation of new Bonds uponexchanges or transfers, and the reasonable fees and expenses of Trustee'scounsel, (ii) the reasonable fees and expenses of the Trustee and anyPaying 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 ExtraordinaryServices rendered by it and Extraordinary Expenses incurred by it under theIndenture, including reasonable counsel fees and expenses, (iv) the reasonablefees and expenses of the Authority, including the reasonable fees and expensesof its counsel, incurred by the Authority as a result of an Event of Default orotherwise enforcing this Agreement, (v) the reasonable fees and expenses of theBondholders as a result of an Event of Default or otherwise enforcing thisAgreement and for any consent, waiver or amendment relating to the Indenture orany of the Financing Documents, including reasonable fees and expenses of one(1) counsel for such Bondholders, (vi) the reasonable fees and expenses of theBank and the Remarketing Agent for the performance of their duties as providedin the Indenture, including the reasonable fees of their counsel and otherexpenses the Remarketing Agent may incur in providing for accurate offeringdocuments in connection therewith, and (vii) any other sums required to bepaid by the Borrower under the terms of the Indenture and the Note.

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

(C)	The Borrower also agrees to fund and maintain allamounts required to be funded and maintained as required by Article V of theIndenture.

(D)	The Borrower also agrees to perform all obligationsrequired to be performed by it under the Indenture in accordance with itsterms.

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

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

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

Section 3.4.	Obligation Unconditional. Theobligations of the Borrower under the Agreement, the Note and the Tax RegulatoryAgreement shall be absolute and unconditional, irrespective of any defense orany rights of setoff, recoupment or counterclaim it might otherwise have againstthe Authority or the Trustee. The Borrower will not suspend or discontinue anysuch payment or terminate this Agreement (other than in the manner provided forhereunder) for any cause, including, without limiting the generality of theforegoing, any acts or circumstances that may constitute failure ofconsideration, failure of title, or commercial frustration of purpose, or anydamage to or destruction of the Project, or the taking by eminent domain oftitle to or the right of temporary use of all or any part of the Project, or anychange in the tax or other laws of the United States, the State or any politicalsubdivision of either thereof, or any failure of the Authority or the Trustee toperform and observe any agreement or covenant, whether expressed or implied, orany duty, liability or obligation arising out of or connected with the FinancingDocuments.

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

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

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

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

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

Section 3.9.	Use of Priority Amounts. The Borrowerand the Authority acknowledge their intention to minimize the risk that anypayment made to a Bondowner from amounts provided by or on behalf of theBorrower may be determined by a bankruptcy court to constitute a preference. Tothis end the parties agree that payments to Bondowners on Bonds supported by aCredit Facility shall be made only from Priority Amounts, except when and to theextent no Priority Amounts are available for the purpose as provided in Section5.9(E) of the Indenture.

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

Section 3.11. Borrower's Purchase of Bonds. Pursuantto Section 5.9(E) of the Indenture, if the amount drawn on the Credit Facilityand deposited with the Paying Agent, together with all other amounts (includingremarketing proceeds) received by the Paying Agent for the purchase of Bondssupported by a Credit Facility and tendered pursuant to Section 2.3(G)(1)(c) or2.3(G)(2)(c) or 2.3(G)(3)(d) of the Indenture, is not sufficient to pay thePurchase Price of such Bonds on the Purchase Date, the Paying Agent shall before2:15 P.M. on such Purchase Date, notify the Borrower, the Remarketing Agent andthe Trustee of such deficiency by telephone promptly confirmed in writing. TheBorrower shall pay to the Paying Agent in immediately available funds by 2:30P.M. on the Purchase Date an amount equal to the Purchase Price of such Bondsless the amount, if any, available to pay the Purchase Price in accordance withSection 9.18 of the Indenture from the proceeds of the remarketing of such Bondsor from drawings on the Credit Facility, as reported by the Paying Agent. Bondsso purchased with moneys furnished by the Borrower shall be Borrower Bonds.

Section 3.12.	Letter of Credit. The Borrower hasarranged, concurrently with the original issuance and authentication of theBonds, for the delivery to the Paying Agent of the Letter of Credit having aterm expiring one (1) year from the date of issuance, and providing for thePaying Agent to be entitled to draw on or prior to the Termination Date (asdefined therein), an amount that is not less than the sum of the aggregateprincipal amount (or that portion of the purchase price corresponding toprincipal) of the Outstanding Bonds and the aggregate amount of interest accruedon 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 anAlternative Credit Facility. (A) The Borrower may, upon satisfaction of therequirements set forth in this Section, at its option (except during the periodbetween the giving of notice of mandatory tender for purchase on account of theexpiration of the Credit Facility and the Purchase Date), provide for thedelivery to the Paying Agent of a substitute Credit Facility; provided,however, that (1) the Credit Facility being replaced shall in no event beterminated or released until the Borrower has given not less than forty-five(45) days' written notice to the Authority, the Trustee, the Paying Agent andthe Remarketing Agent, and further the Paying Agent has received the proceeds ofall outstanding drawings on the Credit Facility being replaced, (2) if any Bondssupported by the Credit Facility being replaced are in the Weekly Mode or DailyMode, the Paying Agent has given not less than (30) days' written notice of thetermination or release of the Credit Facility to owners of such Bonds in theWeekly Mode or Daily Mode and (3) if any of the Bonds supported by the CreditFacility being replaced are in the Flexible Mode, such Credit Facility shall inno event be terminated or released earlier than on the second Business Day afteran Effective Date for all such Bonds or such earlier day on or after suchEffective Date on which the full Purchase Price for such Bonds is received bythe Paying Agent. Any notice given pursuant to clause (1) or (2) above shallspecify the expiration date of the Credit Facility and the name of the entityproviding the substitute Credit Facility and shall advise that the CreditFacility will terminate on the date stated in such notice.

(B)	Each Credit Facility must:

(i) be an irrevocable, unconditional obligation of afinancial institution having a rating at least equal to "A" as a long termrating by S&P and "A1" as a short term rating by S&P or "A2" as a longterm 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 paymentand receive in immediately available funds an amount equal to the sum of theprincipal amount of the Bonds supported by the Credit Facility, any premiumapplicable thereto, and (A) forty-five (45) days' accrued interest at theMaximum Interest Rate on the principal amount of Bonds then Outstanding in theWeekly Mode or Daily Mode, or (B) forty five (45) days' accrued interest at theMaximum Interest Rate on the principal amount of the Bonds then Outstanding inthe Flexible Mode; and

(iii) provide for a term which may not expire in less than360 days and which may not expire or be terminated prior to the fifth BusinessDay 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 anyReimbursement Agreement or agree to any amendment of a Reimbursement Agreementwhich in any way limits the obligation of the Bank to provide funds under theCredit Facility without the prior written consent of 100% of the principalamount of the Bonds Outstanding and entitled to the benefit thereof.

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

The substitute Credit Facility, related ReimbursementAgreement and other documents, agreements and arrangements entered into anddelivered with respect to the delivery of a substitute Credit Facility shall notinclude any provisions less favorable to the owners of the Bonds than theprovisions of the Credit Facility and related Reimbursement Agreement,documents, agreements and arrangements, as it relates to provisions regardingthe acceleration of the Bonds.

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

ARTICLE IV.

THE PROJECT

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

(B)	The Borrower affirms that it shall bear all of thecosts and expenses in connection with the preparation of the Financing Documentsand the Indenture, the preparation and delivery of any legal instruments anddocuments necessary in connection therewith and their filing and recording, ifrequired, and all taxes and charges payable in connection with any of theforegoing. Such costs and all other costs of the Project shall be paid by theBorrower.

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

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

Section 4.3.	Taxes. (A) The Borrower will pay whendue all material (1) taxes, assessments, water rates and sewer use or rentalcharges, (2) payments in lieu thereof which may be required by law, and (3)governmental charges and impositions of any kind whatsoever which may now orhereafter 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 maylawfully be paid in installments over a period of years, the Borrower shall beobligated to pay only such installments as are required to be paid during theTerm.

(B)	The Borrower may, at its expense and in its own name,in good faith contest any such taxes, assessments and other charges and paymentsin lieu of taxes including assessments and, in the event of such contest, maypermit the taxes, assessments or other charges or payments in lieu of taxes,including assessments so contested to remain unpaid, provided either (1) priorwritten notice thereof has been given to the Authority and the Trustee andreserves are maintained during the period of such contest and any appealtherefrom or (2) such contest is conducted in full compliance withConnecticut General Statutes, chapter 203, unless, in either case, by nonpaymentof such taxes, assessments or other charges or payments, the Project or any partthereof will be subject to loss or forfeiture, and as a result thereof a lien orcharge will be placed upon any payment pursuant to this Agreement or the valueor operation of the Project will be materially impaired, in which event suchtaxes, assessments or other charges or payments shall be paid forthwith. Nothingherein shall preclude the Borrower, at its expense and in its own name andbehalf, from applying for any tax exemption allowed by the federal government,the State or any political or taxing subdivision thereof under any existing orfuture provision of law which grants or may grant such tax exemption.

Section 4.4.	Insurance. (A) The Borrower shallinsure the Project against loss or damage by fire, flood, lightning, windstorm,vandalism and malicious mischief and other hazards, casualties, contingenciesand extended coverage risks in such amounts and in such manner as is customarywith companies in the same or similar business, and shall pay when due thepremiums thereon. In the event of loss or damage to the Project the Net Proceedsof any insurance provided under this subsection shall be deposited with theTrustee and shall be applied to the manner set forth in Article V hereof. Anyexcess proceeds of insurance remaining after application as required by thisSection shall be paid to the Borrower, but only if the Borrower is not indefault under this Agreement. At least ten days prior to the expiration of anypolicy required under this Section the Borrower shall furnish evidencesatisfactory to the Authority and the Trustee that such policy has been renewedor replaced.

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

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

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

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

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

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

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

(C)	In the event the Authority consents to any dispositionof the Borrower's interest in the Project, the proceeds of the disposition shallbe deposited with the Trustee for deposit in the Debt Service Fund for theredemption of the Bonds used to finance the Project then being disposed of underthe Indenture. No conveyance or release effected under the provisions of thisSection shall entitle the Borrower to any abatement or diminution of the amountspayable hereunder or under the Note, or relieve the Borrower of the obligationto perform all of its covenants and agreements under the FinancingDocuments.

Section 4.8.	Leasing of the Project. The Borrowermay not lease the Project to any person during the Term of this Agreementwithout the prior written consent of the Authority and the Bank. No lease shallrelieve the Borrower from primary liability for any of its obligationshereunder, and in the event of any such lease the Borrower shall continue toremain primarily liable for payment of the applicable amounts specified inArticle III hereof and for performance and observance of the other agreements onits part herein provided to be performed and observed by it to the same extentas though no lease had been made.

Section 4.9.	Project Equipment. The Borrower shallhave the right to install, operate, use, remove and dispose of the ProjectEquipment in the normal and ordinary course of its business operations, andshall not be required to replace any item of Project Equipment which isdiscarded or sold for scrap. The Borrower shall not, however, either in onetransaction or a series of transactions, sell, convey, transfer, remove orotherwise dispose of more than 20% by value of the Project Equipment withoutprior notice to and the consent of the Authority, unless such Project Equipmentis replaced by property of similar value and utility.

ARTICLE V.

CONDEMNATION

DAMAGE AND DESTRUCTION

Section 5.1.	No Abatement of Payments Hereunder. Ifthe Project shall be damaged or either partially or totally destroyed, or iftitle to or the temporary use of the whole or any part thereof shall be taken orcondemned by a competent authority for any public use or purpose, there shall beno abatement or reduction in the amounts payable by the Borrower hereunder andthe Borrower shall continue to be obligated to make such payments. In any suchcase the Borrower shall promptly give written notice thereof to the Authorityand the Trustee.

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

(1)	At its own cost, repair, restore or reconstruct theProject to substantially its condition immediately prior to such event or to acondition of at least equivalent value, regardless of whether or not theproceeds of any and all policies of insurance covering such damage ordestruction, or the amount of the award or compensation or damages recovered onaccount of such taking or condemnation, shall be available or sufficient to paythe cost thereof;

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

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

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

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

ARTICLE VI.

COVENANTS

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

(B)	The Borrower may, however, without violating theagreements contained in this Section, consolidate with or merge into anotherentity or permit one or more other entities to consolidate with or merge intoit, or sell or otherwise transfer to another entity all or substantially all ofits assets as an entity and thereafter liquidate or dissolve, if (a) theBorrower 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 transfereeentity, as the case may be, such entity (i) is a solvent entity, eitherorganized under the laws of or duly qualified to do business as a foreign entitysubject to service of process in the State; (ii) assumes in writing all of theobligations of the Borrower herein and in the Note; and (iii) unless a CreditFacility will be in effect after such consolidation, merger or transfer, thetransferee entity shall have a net worth after such consolidation, merger ortransfer which is at least equal to the net worth of the Borrower immediatelyprior to such consolidation, merger or transfer.

Section 6.2.	Indemnification, Payment of Expenses, andAdvances. (A) The Borrower agrees to protect, defend and hold harmless theAuthority, 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, theRemarketing Agent, and agents, directors, officers and employees, now orforever, thereof (each an "Indemnified Party"), from any claim, demand, suit,action or other proceeding and any liabilities, costs, and expenses whatsoeverby any person or entity whatsoever, arising or purportedly arising from or inconnection with the Financing Documents, the Indenture, the Bonds, or thetransactions contemplated thereby or actions taken thereunder by any person(including without limitation the filing of any information, form or statementwith the Internal Revenue Service), except for any willful and materialmisrepresentation, willful misconduct or gross negligence on the part of theIndemnified Party or the Authority Indemnified Party or any bad faith on thepart of any indemnitee other than an Authority Indemnified Party.

The Borrower agrees to indemnify and hold harmless anyIndemnified Party against any and all claims, demands, suits, actions or otherproceedings and all liabilities, costs and expenses whatsoever caused by anyuntrue statement or misleading statement or alleged untrue statement or allegedmisleading statement of a material fact contained in the written informationprovided by the Borrower in connection with the issuance of the Bonds orincorporated by reference therein or caused by any omission or alleged omissionfrom such information of any material fact required to be stated therein ornecessary in order to make the statements made therein in the light of thecircumstances under which they were made, not misleading.

(B)	The Authority and the Trustee shall not be liable forany 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 maybe about the Project due to any act or omission of any person other than theAuthority 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 eachIndemnified Party harmless against, any attorney fees and expenses, expenses ordamages incurred because of any investigation, review or lawsuit commenced bythe Trustee or the Authority in good faith with respect to the FinancingDocuments, the Indenture, the Bonds and the Project and the Authority or theTrustee shall promptly give written notice to the Borrower with respectthereto.

(D)	All covenants, stipulations, promises, agreements andobligations of the Authority and the Trustee contained herein, if any, shall bedeemed to be the covenants, stipulations, promises, agreements and obligationsof the Authority and the Trustee and not of any member, director, officer oremployee of the Authority or the Trustee in its individual capacity, and norecourse shall be had for the payment of the Bonds or for any claim basedthereon or hereunder against any member, director, officer or employee of theAuthority or the Trustee or any natural person executing the Bonds.

(E)	In case any action shall be brought against one ormore of the Indemnified Parties based upon any of the above and in respect ofwhich indemnity may be sought against the Borrower, such Indemnified Party shallpromptly 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 relieveit of any liability which it may have to any Indemnified Party otherwise thanunder this Section 6.2. In case any such action shall be brought against anyIndemnified Party and it shall notify the Borrower of the commencement thereof,the Borrower shall be entitled to participate in and, to the extent that itshall wish, to assume the defense thereof with counsel satisfactory to suchIndemnified Party, and after notice from the Borrower to such Indemnified Partyof the Borrower's election so to assume the defense thereof, the Borrower shallnot be liable to such Indemnified Party for any subsequent legal or otherexpenses attributable to such defense, except as set forth below, other thanreasonable costs of investigation subsequently incurred by such IndemnifiedParty in connection with the defense thereof. The Indemnified Party shall havethe right to employ its own counsel in any such action, but the fees andexpenses of such counsel shall be at the expense of such Indemnified Partyunless (i) the employment of counsel by such Indemnified Party has beenauthorized by the Borrower, (ii) the Indemnified Party shall have reasonablyconcluded that there may be a conflict of interest between the Borrower and theIndemnified Party in the conduct of the defense of such action (in which casethe Borrower shall not have the right to direct the defense of such action onbehalf of the Indemnified Party); or (iii) the Borrower shall not in fact haveemployed counsel satisfactory to the Indemnified Party to assume defense of suchaction.

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

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

(H)	The Borrower shall defend, indemnify, and hold theAuthority 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 ofwhatever kind or nature, known or unknown, contingent or otherwise, arising outof, or in any way related to, (i) the presence, disposal, release, or threatenedrelease of any hazardous materials, asbestos, petroleum or petroleum by-productswhich are on, from, or affecting the soil, water, vegetation, buildings,personal property, persons, animals, or otherwise, except in compliance with allapplicable Federal, State and local laws or regulations; (ii) any personalinjury (including wrongful death) or property damage (real or personal) arisingout of or related to hazardous materials, asbestos, petroleum or petroleum by-products; (iii) any lawsuit brought or threatened, settlement reached, orgovernment order relating to such hazardous materials, asbestos, petroleum orpetroleum by-products and/or (iv) any violation of laws, orders, regulations,requirements or demand of government authorities or any policies or requirementsof the Authority which are based upon or in any way related to such hazardousmaterials, asbestos, petroleum or petroleum by-products including, withoutlimitation, reasonable attorney and consultant fees, investigation andlaboratory fees, court costs, and litigation expenses. The provisions of thisparagraph shall be in addition to any and all other obligations and liabilitiesthe Borrower may have to the Authority or the Trustee at common law, and shallsurvive the termination of this Agreement.

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

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

(B)	The representations, warranties, covenants andstatements of expectation of the Borrower set forth in the Tax RegulatoryAgreement are by this reference incorporated in this Agreement as though fullyset forth herein.

(C)	If the owner of the Bonds receives from the InternalRevenue Service a notice of assessment and demand for payment with respect tointerest on such Bond (except a notice and demand based upon the assertion thatsuch owner of the Bonds is a Substantial User or Related Person), an appeal maybe taken by such owner of the Bonds at the option of the Borrower. Withoutlimiting the generality of the foregoing, the Borrower shall have the right todirect the Trustee to direct such owner of the Bonds to take such appeal or notto take such appeal. In either case all expenses of the appeal includingreasonable counsel fees and expenses shall be paid by the Borrower, and suchowner of the Bonds and the Borrower shall cooperate and consult with each otherin all matters pertaining to any such appeal, except that no owner of the Bondsshall 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 ofTaxability, the Borrower shall pay to the Trustee an amount sufficient, whenadded to the amount then in the Debt Service Fund and available for suchpurpose, to retire and redeem all Bonds thereby then Outstanding, in accordancewith Section 2.4 of the Indenture.

(E)	The obligation of the Borrower to make the paymentsprovided for in this Section shall be absolute and unconditional, and thefailure of the Authority or the Trustee to execute or deliver or cause to beexecuted or delivered any documents or to take any action required under thisAgreement or otherwise shall not relieve the Borrower of its obligation underthis Section. Notwithstanding any other provision of this Agreement or theIndenture, the Borrower's obligations under this Section shall survive thetermination of this Agreement and the Indenture.

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

(G)	The occurrence of a Determination of Taxability shallnot be an Event of Default hereunder but shall require only the performance ofthe obligations of the Borrower stated in this Section, the breach of whichshall constitute an Event of Default as provided in Section 7.1 hereof.

Section 6.4.	Public Purpose Covenants. (A) TheBorrower covenants that it will operate the Project for the purposes and in amanner consistent with the Borrower's application for assistance to theAuthority. The Borrower further covenants and agrees that it will, throughoutthe term of this Agreement, (1) comply with all applicable laws, regulations,ordinances, rules, and orders relating to the Project as provided in theFinancing Documents, (2) maintain the Project in accordance with the FinancingDocuments, (3) not cause or permit the Project to become or remain a publicnuisance, (4) not allow any change in the nature of the occupancy, use oroperation of the Project which is substantially inconsistent with the Borrower'sapplication for assistance to the Authority, except that the Borrower may afternotice to the Authority permit any such change which does not disqualify theProject 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 disposeof title to the Project without the prior written consent of the Authority.Nothing in this Section is intended to require the Borrower to operate theProject in such manner as, in the good faith judgment of the Borrower, shallmaterially and adversely impair the use and operation of the Project.

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

Section 6.5.	Further Assurances and CorrectiveInstruments. The Authority and the Borrower agree that they will, from timeto time, execute, acknowledge and deliver, or cause to be executed, acknowledgedand delivered, such supplements hereto and such further instruments as mayreasonably be required for correcting any inadequate or incorrect description ofthe Project or for carrying out the intention of or facilitating the performanceof this Agreement.

Section 6.6.	Covenant by Borrower as to Compliance withIndenture. The Borrower covenants and agrees that it will comply with theprovisions of the Indenture with respect to the Borrower and that the Trusteeand the Bondholders shall have the power and authority provided in theIndenture. The Borrower further agrees to aid in the furnishing to the Authorityor the Trustee of opinions that may be required under the Indenture. TheBorrower covenants and agrees that the Trustee shall be entitled to and shallhave all the rights, including the right to enforce against the Borrower theprovisions of the Financing Documents, pertaining to the Trustee notwithstandingthe 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 orunder the Note except as may be permitted pursuant to Section 6.1(B) hereof.

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

Section 6.8.	Inspection. The Authority, the Trusteeand their duly authorized agents shall have (1) the right at all reasonabletimes to enter upon and to examine and inspect the Project and (2) such rightsof access thereto as may be reasonably necessary for the proper maintenance andrepair thereof in the event of failure by the Borrower to perform itsobligations under this Agreement. The Authority and the Trustee shall also bepermitted, at all reasonable times, to examine the books and records of theBorrower 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 withthe giving of notice or the passage of time would constitute, an Event ofDefault or an "Event of Default" under Section 8.1 of the Indenture, theBorrower shall deliver to the Authority, the Bank, if any, the RemarketingAgent, the Paying Agent and the Trustee a notice stating the existence andnature thereof and specifying the corrective steps, if any, the Borrower istaking with respect thereto.

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

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

Section 6.11.	Authority Costs and Expenses. TheAuthority agrees that it shall in all instances act in good faith in incurringcosts, expenses and legal fees in connection with the transactions contemplatedby this Agreement and the Indenture.

Section 6.12.	Securities Laws. In any "Offering" ofthe Bonds by a "Participating Underwriter" as those terms are defined in Rule15c2-12 of the Securities and Exchange Act of 1934 (the "Rule"), including anyremarketing of Bonds under this Agreement, the Borrower shall at all timescomply with applicable federal and state securities laws, and shall cooperatewith the Remarketing Agent to the extent necessary to permit the RemarketingAgent 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 ofthe following shall constitute an "Event of Default" hereunder:

(1)	Any material representation or warranty made by theBorrower in the Financing Documents or any certificate, statement, data orinformation furnished in writing to the Authority or the Trustee by the Borrowerin connection with the closing of the Bonds or included by the Borrower in itsapplication to the Authority for assistance proves at any time to have beenincorrect 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 Bondsand, if the Bonds are not secured by a Credit Facility, the continuance of suchfailure 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 andpayable under the Tax Regulatory Agreement.

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

(4)	The occurrence of an "event of default" under Section8.1 of the Indenture.

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

(6)	The Borrower shall (a) apply for or consent to theappointment of a receiver, trustee, liquidator or custodian or the like ofitself or of its property, (b) admit in writing its inability to pay its debtsgenerally as they become due, (c) make a general assignment for the benefit ofcreditors, (d) be adjudicated a bankrupt or insolvent, or (e) commence avoluntary case under the Federal bankruptcy laws of the United States of Americaor file a voluntary petition or answer seeking reorganization, an arrangementwith creditors or an order for relief or seeking to take advantage of anyinsolvency law or file an answer admitting the material allegations of apetition filed against it in any bankruptcy, reorganization or insolvencyproceeding; or action shall be taken by it for the purpose of effecting any ofthe foregoing; or if without the application, approval or consent of theBorrower, a proceeding shall be instituted in any court of competentjurisdiction, seeking in respect of the Borrower an adjudication in bankruptcy,reorganization, dissolution, winding up, liquidation, a composition orarrangement with creditors, a readjustment of debts, the appointment of atrustee, receiver, liquidator or custodian or the like of the Borrower or of allor any substantial part of its assets, or other like relief in respect thereofunder any bankruptcy or insolvency law, and, if such proceeding is beingcontested by the Borrower in good faith, the same shall continue undismissed, orpending and unstayed, for any period of seventy-five (75) consecutive days.

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

Section 7.2.	Remedies on Default. (A) Whenever anyEvent of Default shall have occurred, the Trustee, or the Authority where soprovided herein, may take any one or more of the following actions with theprior consent of the Bank so long as the Bank is not in default under the Letterof Credit and the Reimbursement Agreement, as certified by the Bank:

(1)	The Trustee, as and to the extent provided in ArticleVIII of the Indenture, may cause all amounts payable under the FinancingDocuments to be immediately due and payable without notice or demand of anykind, whereupon the same shall become immediately due and payable.

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

(3)	The Trustee may take whatever action at law or inequity 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, andcovenants of the Borrower under the Financing Documents.

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

(B)	In the event that any Event of Default or anyproceeding 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 Eventof Default shall be annulled and the Authority and the Borrower shall berestored to their former rights hereunder, but no such waiver or determinationshall extend to any subsequent or other default or impair any right consequentthereon.

Section 7.3.	Remedies on Public Purpose Default.(A) If the Borrower shall default in the performance of any of its covenantscontained in Section 6.4 hereof and such default shall constitute an Event ofDefault under Section 7.1 hereof, and such Event of Default shall continue forthirty (30) days without the Trustee or Bondholders instituting the remedialsteps provided for in subsection 7.2(A)(1) hereof or subsection 8.1(B) of theIndenture, 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 theBorrower's obligations under the Financing Documents and for the redemption ofall of the Bonds then Outstanding. Any such notice shall set forth in reasonabledetail the default by the Borrower giving rise thereto and shall specify thedate 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 theAuthority's determination notice) and (2) the redemption of the Bonds is tooccur (which shall be at least thirty (30) days after notice of redemption isgiven by the Trustee). Within thirty days following receipt of the notice, theTrustee shall forward a copy thereof to the Borrower and each registeredBondholder, together with a copy of Sections 6.4 and 7.3 of this Agreement.

(B)	If, within sixty (60) days after the mailing of noticeby the Trustee to the Borrower and the Bondholders, the Trustee receives noobjection (as hereinbelow provided) to such redemption, the Trustee shall givesuch notice and effect the acceleration of the Borrower's obligations and theredemption of all Outstanding Bonds in accordance with the Authority's noticeand pursuant to Section 2.4(B) of the Indenture. If, however, the Borrower orany Bondholder disputes the existence of such Event of Default, the Borrower orsuch Bondholder shall mail a notice to the Authority and the Trustee containinga statement of such person's belief with respect to the claimed default. Thereceipt of such notice by the Trustee shall serve to suspend the proceedings forredemption of Bonds initiated by the Authority's notice of default.

(C)	If upon receipt of such notice from the Borrower orany Bondholder, the Authority determines to affirm its earlier determination,either the Borrower or any Bondholder shall have the right to bring an action inany court of competent jurisdiction to enjoin the proceedings for the redemptionof such Bonds, and during the pendency of any such action the redemptionproceedings shall be suspended. Neither the Authority, the Borrower nor anyBondholder shall be responsible for any costs, fees, expenses, or counsel feesincurred by any other party in connection with any such action, other than theTrustee (whose costs, fees and expenses shall be paid by the Borrower). In theevent the Authority is successful in such a proceeding, and a final judgment isrendered which is not appealable or appealed within sixty days thereafterfinding 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 theIndenture, and redeem all such Bonds upon the date fixed for redemption in thenotice (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 aproceeding, and a final judgment is rendered which is not appealable or appealedwithin sixty days thereafter finding the Borrower not to be in default underSection 6.4 hereof, all proceedings for the redemption of Bonds commenced underthis Section shall be terminated. No such judgment, however, shall prejudice theexercise of the Authority's rights under this Section upon the occurrence ofsuch subsequent failure of performance under Section 6.4 hereof.

(D)	Within fifteen (15) days of the date the Trustee givesnotice of any redemption of Bonds pursuant to this Section, the Borrower shallpay as a final loan payment a sum sufficient, together with other funds ondeposit with the Trustee and available for such purpose, to redeem all Bondsthen Outstanding under the Indenture at 100% of the principal amount thereofplus accrued interest to the redemption date. The Borrower shall also pay orprovide for all reasonable and necessary fees and expenses of the Trustee andany Paying Agent accrued and to accrue through the date of redemption of allsuch Bonds.

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

(F)	Nothing contained in this Section shall be deemed toprevent the Authority or the Borrower from seeking equitable relief if itasserts or disputes, as the case may be, the existence of an event of a publicpurpose default.

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

Section 7.5.	Remedies Cumulative. No remedy hereinconferred upon or reserved to the Authority or the Trustee is intended to beexclusive of any other available remedy or remedies but each and every suchremedy shall be cumulative and shall be in addition to every remedy given underthis 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 orfailure by the Authority or the Trustee to insist upon the strict performance ofany of the covenants and agreements herein set forth or to exercise any rightsor remedies upon default by the Borrower hereunder shall not impair any suchright or power or be considered or taken as a waiver or relinquishment for thefuture of the right to insist upon and to enforce, by injunction or otherappropriate legal or equitable remedy, strict compliance by the Borrower withall of the covenants and conditions hereof, or of the right to exercise any suchrights or remedies, if such default by the Borrower be continued orrepeated.

ARTICLE VIII.

PREPAYMENT PROVISIONS

Section 8.1.	Optional Prepayment.(A)  The Borrower shall have, and is hereby granted, the option toprepay its loan obligation and to cause the corresponding optional redemption ofthe Bonds pursuant to Section 2.4(A) of the Indenture at such times, in suchamounts, and with such premium, if any, for such optional redemption as setforth in the form of the Bonds, by delivering a written notice to the Trustee inaccordance with Section 8.2 hereof, with a copy to the Authority, setting forththe amount to be prepaid, the amount of Bonds requested to be redeemed with theproceeds of such prepayment, and the date on which such Bonds are to beredeemed. Such prepayment must be sufficient to provide monies for the paymentof interest and Redemption Price in accordance with the terms of the Bondsrequested to be redeemed with such prepayment and all other amounts then dueunder the Agreement, Note and Tax Regulatory Agreement. In the event of anycomplete prepayment of its loan obligation, the Borrower shall, at the time ofsuch prepayment, also pay or provide for the payment of all reasonable ornecessary fees and expenses of the Authority, the Trustee and the Paying Agentaccrued and to accrue through the final payment of all the Bonds. Any suchprepayments shall be applied to the redemption of Bonds in the manner providedin Section 6.4 of the Indenture, and credited against payments due hereunder inthe same manner.

(B)	Extraordinary Optional Prepayment. While theBonds are in the Multiannual or Fixed Rate Mode, the Borrower shall have, and ishereby granted, the option to prepay its loan obligation in full at any timewithout premium if any of the following events shall have occurred, as evidencedin each case by the filing with the Trustee of a certificate of an AuthorizedRepresentative of the Borrower to the effect that one of such events hasoccurred and is continuing, and describing the same:

(1)	The Project shall have been damaged or destroyed tosuch extent that (a) the Project cannot be reasonably restored within a periodof six months from the date of such damage or destruction to the conditionthereof immediately preceding such damage or destruction, or (b) the Borrower isthereby prevented or likely to be prevented from carrying on its normaloperation of the Project for a period of six months from the date of such damageor destruction.

(2)	Title to or the temporary use of all or substantiallyall 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 Borrowerbeing thereby prevented or likely to be prevented from carrying on its normaloperation of the Project for a period of six months.

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

In any such case, the final loan payment shall be a sumsufficient, together with other funds deposited with the Trustee and availablefor such purpose, to redeem all Bonds then outstanding under the Indenture atthe redemption price of 100% of the principal amount thereof plus accruedinterest to the redemption date or dates and all other amounts then due underthe Agreement, Note and Tax Regulatory Agreement, and the Borrower shall alsopay or provide for all reasonable or necessary fees and expenses of theAuthority, the Trustee and Paying Agent accrued and to accrue through finalpayment for the Bonds. The Borrower shall deliver a written notice to theTrustee, with a copy to the Authority, requesting the redemption of the Bondsunder the Indenture, which notice shall have attached thereto the applicablecertificate of the Authorized Representative of the Borrower.

Section 8.2.	Notice and Sources of Prepayment. Toexercise any options granted in this Article, or to consummate the accelerationof the loan payments as set forth in this Article, the written notice to theTrustee and the Authority shall be signed by an Authorized Representative of theBorrower and shall specify therein the date of prepayment, which date shall benot less than thirty-five days nor more than ninety days from the date thenotice is received by the Trustee. A duplicate copy of any written noticehereunder shall also be filed with the Authority by the Borrower.

Section 8.3.	Mandatory Prepayment on Public PurposeDefault. The Borrower shall pay or cause the prepayment of its loanevidenced by the Note in the manner provided in Section 7.3 hereof following adefault 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 theNote, in whole or in part, following a Determination of Taxability in the mannerprovided in Section 6.3 of this Agreement.

ARTICLE IX.

GENERAL

Section 9.1.	Indenture. (A) Moneys received fromthe sale of the Bonds and all loan payments made by the Borrower and all othermoneys received by the Authority or the Trustee under the Financing Documentsshall be applied solely and exclusively in the manner and for the purposesexpressed and specified in the Indenture and in the Bonds and as provided inthis Agreement.

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

Section 9.2.	Benefit of and Enforcement byBondholders. The Authority and the Borrower agree that this Agreement isexecuted in part to induce the purchase by others of the Bonds and for thefurther securing of the Bonds, and accordingly that all covenants and agreementson the part of the Authority and the Borrower as to the amounts payable withrespect to the Bonds hereunder are hereby declared to be for the benefit of theholders from time to time of the Bonds and may be enforced as provided in theIndenture on behalf of the Bondholders by the Trustee.

Section 9.3.	Force Majeure. In case by reason offorce majeure either party hereto shall be rendered unable wholly or in part tocarry out its obligations under this Agreement, then except as otherwiseexpressly provided in this Agreement, if such party shall give notice and fullparticulars of such force majeure in writing to the other party within areasonable time after occurrence of the event or cause relied on, theobligations of the party giving such notice, other than the obligation of theBorrower to make the payments required under the terms hereof or of the Note, sofar as they are affected by such force majeure, shall be suspended during thecontinuance of the inability then claimed which shall include a reasonable timefor the removal of the effect thereof, but for no longer period, and suchparties shall endeavor to remove or overcome such inability with all reasonabledispatch. 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 anycivil or military authority, insurrections, riots, epidemics, landslides,lightning, earthquakes, volcanoes, fires, hurricanes, tornadoes, storms, floods,washouts, droughts, arrests, restraining of government and people, civildisturbances, explosions, partial or entire failure of utilities, shortages oflabor, material, supplies or transportation, or any other similar or differentcause not reasonably within the control of the party claiming such inability. Itis understood and agreed that the settlement of existing or impending strikes,lockouts or other industrial disturbances shall be entirely within thediscretion of the party having the difficulty and that the above requirementsthat any force majeure shall be reasonably beyond the control of the party andshall be remedied with all reasonable dispatch shall be deemed to be fulfilledeven though such existing or impending strikes, lockouts and other industrialdisturbances may not be settled and could have been settled by acceding to thedemands of the opposing person or persons.

Section 9.4.	Amendments. This Agreement may beamended only with the concurring written consent of the Trustee and, if requiredby the Indenture, of the owners of the Bonds given in accordance with theprovisions of the Indenture.

Section 9.5.	Notices. All notices, certificates orother communications hereunder shall be sufficiently given and shall be deemedgiven 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 theBorrower, at The Energy Network, Inc., P.O. Box 1500, 100 Columbus Boulevard,Hartford, Connecticut 06144, Attention: Treasurer; if to the Trustee, at GoodwinSquare, 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. Aduplicate copy of each notice, certificate or other communication givenhereunder by either the Authority or the Borrower to the other shall also begiven to the Trustee. The Authority, the Borrower and the Trustee may, bywritten notice given hereunder, designate any further or different addresses towhich subsequent notices, certificates or other communications shall besent.

Section 9.6.	Prior Agreements Superseded. ThisAgreement, together with all agreements executed by the parties concurrentlyherewith or in conjunction with the sale of the Bonds, shall completely andfully supersede all other prior understandings or agreements, both written andoral, between the Authority and the Borrower relating to the lending of moneyand the Project, including those contained in any commitment letter executed inanticipation of the issuance of the Bonds.

Section 9.7.	Execution of Counterparts. ThisAgreement may be executed simultaneously in several counterparts each of whichshall be an original and all of which shall constitute but one and the sameinstrument.

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

Connecticut Development Authority

By                                                          
Authorized Representative

The Energy Network, Inc.

By                                                          
Name: 

Title: 
**THE ENERGY NETWORK, INC.

PROMISSORY NOTE**
 

 

$4,300,000	January 14, 2000

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

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

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

The Borrower has arranged the delivery to the Trustee of anirrevocable Direct Pay Letter of Credit, dated the date of delivery of theBonds, issued by Fleet National Bank (the "Bank"), for the account of theBorrower in favor of the Trustee. The Agreement provides that all paymentobligations of the Borrower thereunder and under the Note shall be completelysatisfied to the extent of all drawings made under the Letter of Credit for thepurpose of satisfying such obligations to the extent the Bank is reimbursed forsuch draws by or on behalf of the Borrower.

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

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

THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION CONTEMPLATEDHEREIN IS A COMMERCIAL TRANSACTION WITHIN THE MEANING OF SECTION 52-278a OF THECONNECTICUT GENERAL STATUTES. IN THE EVENT OF BORROWER'S DEFAULT ON THE NOTE,THE TRUSTEE INTENDS TO PURSUE ITS RIGHTS TO OBTAIN A PREJUDGMENT REMEDY INACCORDANCE WITH SECTION 52-278f, OF THE CONNECTICUT GENERAL STATUTES. BORROWERHAS BEEN ADVISED BY COUNSEL OF ITS RIGHTS WITH RESPECT TO PREJUDGMENT REMEDIESUNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, AS AMENDED, INCLUDINGSECTIONS 52-278a TO 52-278g, INCLUSIVE, THEREOF. BORROWER HEREBY KNOWING ANDWILLINGLY WAIVES ALL RIGHTS OF NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER INCONNECTION WITH THE OBTAINING BY THE TRUSTEE OF ANY PREJUDGMENT REMEDY INCONNECTION WITH THE TRANSACTION, EVIDENCED HEREBY OR PURSUANT TO ANY OTHERDOCUMENT OR INSTRUMENT EXECUTED BY THE BORROWER IN CONNECTION HEREWITH,INCLUDING ANY AMENDMENTS OR EXTENSIONS HEREOF OR THEREOF. FURTHER, THE BORROWERWAIVES ANY REQUIREMENT OF THE TRUSTEE TO POST A BOND OR ANY OTHER SECURITY, ORTO SHOW EXIGENCY, IN CONNECTION WITH THE OBTAINING BY THE TRUSTEE OF SUCHPREJUDGMENT REMEDY. FURTHER, THE BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTEDBY 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 forpayment of this Note may be changed and extended at the sole discretion of theTrustee without impairing its liability hereon, and (3) consents to the releaseof all or any part of the security for the payment thereof at the discretion ofthe Trustee or the release of any party liable for this obligation withoutaffecting the liability of the other parties hereto. Any delay on the part ofthe Authority or the Trustee in exercising any right hereunder shall not operateas a waiver of any such right, and any waiver granted with respect to onedefault shall not operate as a waiver in the event of any subsequentdefault.

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

The Energy Network, Inc.

By:                                                         
Name:                                                         
Title:                                                         
 

 

 

 
**AUTHORITY ENDORSEMENT**
 

 

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

 

 

Connecticut Development Authority

 

 

By:                                                         		

Authorized Representative