REIMBURSEMENT AGREEMENT

between

THE ENERGY NETWORK, INC.

and

FLEET NATIONAL BANK

dated as of

January 1, 2000

 

TABLE OF CONTENTS

SECTION l.	Definitions			1

SECTION 2.	Reimbursement and Other Payments			6

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

SECTION 4.	Reduction of Letter of Credit Amount			12

SECTION 5.	Obligations Absolute			12

SECTION 6.	Representations and Warranties of theBorrower			12

SECTION 7.	Affirmative Covenants Other Than ReportingRequirements			16

SECTION 8.	Negative Covenants			20

SECTION 9.	[Intentionally Left Blank]			23

SECTION 10.	Events of Default			23

SECTION 11.	Right to Cure			25

SECTION 12.	Amendments and Waivers			26

SECTION 13.	Notices			26

SECTION 14.	No Waiver; Remedies			26

SECTION 15.	Indemnification			27

SECTION 16.	Continuing Obligation; Survival			27

SECTION 17.	Transfer of the Letter of Credit			28

SECTION 18.	Limited Liability of the Bank			28

SECTION 19.	Costs, Expenses and Taxes			28

SECTION 20.	Severability			29

SECTION 21.	Governing Law			29

SECTION 22.	Consent to Jurisdiction; JURY TRIAL WAIVER			30

SECTION 23.	Table of Contents; Headings			30

 

Exhibit A - Project Description

Exhibit B - Irrevocable Letter of Credit

Exhibit C - Form of Request for Termination Date Extension

Exhibit D - List of Subsidiaries

Exhibit E - Litigation

Exhibit F - Financial Statement Certificate

Exhibit G - Existing Indebtedness and Liens

REIMBURSEMENT AGREEMENT

	REIMBURSEMENT AGREEMENT dated as of January 1,2000 between **THE ENERGY NETWORK, INC.**, a corporation duly organized andvalidly existing under the laws of the State of Connecticut (the"Borrower") and **FLEET NATIONAL BANK** (together with any successorthereto, the "Bank").

	WHEREAS, the Connecticut Development Authority (the "Issuer"), isissuing its $4,300,000 aggregate principal amount Industrial Revenue VariableRate Demand Bonds (The Energy Network/SINA Project-2000 Series) (the"Bonds") pursuant to an Indenture of Trust dated as of January 1, 2000(the "Indenture") between the Issuer and State Street Bank and TrustCompany, as trustee, and the Issuer wishes to lend the proceeds of the Bonds tothe Borrower to finance the project described in Exhibit A hereto and topay certain costs of issuance of the Bonds (collectively, the "Project");and

	WHEREAS, pursuant to a Loan Agreement dated as of January 1, 2000 (the"Loan Agreement") between the Issuer and the Borrower, the Issuer proposes tolend to the Borrower the amount of $4,300,000 (the "Loan") in order tofinance the Project; and

	WHEREAS, in order to enhance the marketability of the Bonds and thusachieve savings on interest costs, the Borrower has requested the Bank to issue,for the account of the Borrower and for the benefit of the Trustee under theIndenture, an irrevocable letter of credit substantially in the form ofExhibit B hereto (the "Letter of Credit") in the maximum statedamount of $4,364,500 (as the same may be reduced from time to time as providedtherein, the "Letter of Credit Amount"); and

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

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

 

	SECTION 1. Definitions.

	(a) 	Definitions. The following terms, as used herein, shallhave the following respective meanings:

	"Agreement" means this Reimbursement Agreement, as same may befrom time to time amended.

	"Assignment of Contracts and Security Agreement" means thatcertain Assignment of Contracts and Security Agreement of even date herewithbetween the Borrower and the Bank.

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

	"Bank Obligations" means all obligations (now existing orhereafter arising, matured or unmatured, fixed or contingent) of the Borrower tothe Bank arising under this Agreement and/or under any of the RelatedDocuments.

	"Bonds" has the meaning assigned to it in the introductory clausesto this Agreement.

	"Business Day" means any day (i) that is not a Saturday, Sunday orlegal holiday, (ii) that is a day on which banks are not required or authorizedto close in Hartford, Connecticut or New York, New York, (iii) that is a day onwhich banking institutions in all of the cities in which the principal corporatetrust office of the Trustee, the principal office of the Remarketing Agent andthe principal office of the Bank are located are not required or authorizedpursuant to law to remain closed and (iv) that is a day on which the New YorkStock Exchange is not closed.

	"Charter" means the Articles of Organization or otherorganizational documents of a corporation referred to herein, all as amended todate.

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

	"Code" shall mean the Internal Revenue Code of1986, a amended from time to time.

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

	"Commonly Controlled Entity" shall have themeaning specified in Section 6(i) of this Agreement.

	"Credit Facilities" means that certain 3-YearRevolving Credit Agreement dated as of October 1, 1997 between the Borrower andthe Bank, that certain 364 Day Revolving Credit Agreement dated as of October 1,1997, both as amended from time to time, as well as the Reimbursement Agreementdated as of August 1, 1998 between the Borrower and the Bank.

	"Date of Issuance" means the date on which the Letter of Credit isissued upon request of the Borrower pursuant to Subsection 3(a) hereof.

	"Employee Benefit Plan" shall have the meaningspecified in Section 6(i) of this Agreement.

	"Environmental Event" means (i) the unlawful generation, storage,disposal, removal, transportation or treatment of Hazardous Substances on any ofthe properties used or owned by the Borrower or any of its Subsidiaries or inthe vicinity of such properties, if, through soil or groundwater migration, suchHazardous Substances could have come to be located at any of such properties);(ii) the receipt by the Borrower of any notice or claim of any violation of anyEnvironmental Law or of any action based upon nuisance, negligence or other torttheory alleging liability on the basis of improper generation, storage,disposal, removal, transportation or treatment of Hazardous Substances on anyproperties used or owned by the Borrower or any of its Subsidiaries; or (iii)the presence or release of Hazardous Substances at or upon any of propertiesused or owned by the Borrower or any of its Subsidiaries that has resulted incontamination or deterioration of any portion of such properties resulting in alevel of contamination greater than the levels permitted or established by anygovernmental agency having jurisdiction over the Borrower or any of suchproperties.

	"Environmental Laws" means any and all federal, state and localstatutes, laws, regulations, ordinances, rules, judgments, orders, decrees,permits, licenses or other governmental restrictions relating to the environmentor the release of any materials into the environment, including, withoutlimitation, CERCLA and the Resource Conservation and Recovery Act of 1976, 42U.S.C. Sections 6901-6987. 

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

	"Event of Default" means any of the events specified in Section 10hereof.

	"Final Drawing" has the meaning assigned to that term in theLetter of Credit.

	"Financing Statement" means that certain UCC-1 Financing Statementencumbering the Project and Project related contracts from the Borrower to theBank.

	"Guarantor" shall mean, jointly, severally andcollectively, TEN Transmission Company, The Hartford Steam Company, and ENI GasServices, Inc.

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

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

	"Hazardous Substances" means "hazardous substances" as defined inCERCLA or any similar definitions in any of the Environmental Laws, as well asasbestos and materials containing asbestos.

	"Indenture" has the meaning assigned to it in the introductoryclauses to this Agreement.

	"Interest Drawing" has the meaning assigned to that term in theLetter of Credit.

	"Legal Requirements" means all statutes, ordinances, by-laws,codes, rules, rulings, regulations, restrictions, orders, judgments, decrees,writs, judicial or administrative interpretations and injunctions (including,without limitation, all applicable building, health code, zoning, subdivisionand other land use statutes, ordinances, by-laws, codes, rules and regulations),whether now or hereafter enacted, promulgated or issued by any GovernmentalAuthority materially affecting the Borrower, any of its properties or theownership, construction, development, maintenance, management, repair, use,occupancy, possession or operation of any of the foregoing or the operation ofany programs or services by the Borrower, including, without limitation, any ofthe foregoing which may (i) require repairs, modifications or alterations in orto any of its properties, (ii) in any way materially affect (adversely orotherwise) the use and enjoyment of any of its properties or (iii) require theassessment, monitoring, clean-up, containment or removal of any oil or hazardoussubstances on, under or from any of its properties.

	"Letter of Credit" has the meaning given to it in the introductoryclauses to this Agreement.

	"Letter of Credit Amount" has the meaning given to it in theintroductory clauses to this Agreement.

	"Letter of Support" means the Letter of Support dated the datehereof from CTG Resources, Inc. to the Bank.

	"Loan" has the meaning specified in the introductory clauses tothis Agreement.

	"Material Adverse Change" shall mean a materialadverse change in (i) the business, prospects, operations, results ofoperations, assets, liabilities or condition (financial or otherwise) ofBorrower or (ii) the Collateral, in each case as determined by the Bank in itssole discretion.

	"Mortgage and Security Agreement" means thatcertain Open-End Leasehold/Easement Mortgage and Security Agreement of even dateherewith from the Borrower to the Bank.

	"Multiemployer Plan" shall mean a multiemployerplan as defined in Section 4001(a)(3) of ERISA.

	"Partial Redemption Drawing" has the meaning assigned to that termin the Letter of Credit.

	"PBGC" means the Pension Benefit Guaranty Corporation or anysuccessor thereto.

	"Permits" means all licenses, approvals, qualifications,variances, permissive uses, certificates of need, franchises, accreditations,certificates, certifications, consents, permits and other authorizations(including, without limitation, building permits, subdivision approvals andsubdivision plans) benefiting, relating to or affecting the Borrower or any ofits properties and the ownership, construction, development, maintenance,management, repair, use, occupancy, possession or operation thereof or theoperation of any programs or services by the Borrower and all renewals,replacements and substitutions therefor, now or hereafter issued by or enteredinto with any Governmental Authority or maintained or used by the Borrower orentered into by the Borrower with any other Person.

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

	"Pledge Agreement" means that certain Pledge Agreement of evendate herewith between the Borrower and the Bank.

	"Prevailing Local Time" means the prevailing local time in effectin Hartford, Connecticut.

	"Prime Rate" means a fluctuating rate of interest per annum equalto that rate per annum announced by Fleet National Bank or any successorthereto, from time to time, as being its prime rate of interest or base rate ofinterest, with a change in the Prime Rate to take effect simultaneously witheach change in such announced rate. It is understood that such announced primerate or base rate is merely a reference rate, not necessarily the lowest, whichserves as the basis upon which effective rates of interest are calculated forobligations making reference thereto.

	"Project" has the meaning assigned thereto in the introductoryclauses of this Agreement.

	"Related Documents" means the Letter of Credit, the Indenture, theLoan Agreement, the Bonds, the Pledge Agreement, the Mortgage, the SecurityDocuments, and any other agreement or instrument guaranteeing, securing orotherwise relating to any of the foregoing.

	"Remarketing Agent" means A.G. Edwards & Sons, Inc. or anysuccessor thereto as remarketing agent under the Indenture.

	"Remarketing Agreement" means that certain Remarketing Agreementof even date herewith between the Remarketing Agent and the Borrower, and anymodification thereof or substitution therefor.

	"Security Documents" means the Mortgage and Security Agreement,the Financing Statement, the Assignment of Contracts and Security Agreement, andthe Guaranty as the same may be amended from time to time.

	"Tender Advance" has the meaning assigned to that term inSubsection 2(d) of this Agreement.

	"Tender Drawing" has the meaning assigned to that term in theLetter of Credit.

	"Termination Date" means the earliest of: (i) January 14, 2000(unless extended as provided in Subsection 3(e) below), (ii) the date of paymentof a Final Drawing drawn under the Letter of Credit, or (iii) the earliertermination of the Letter of Credit pursuant to the terms thereof.

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

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

	(b)	Accounting Terms and Determinations. Unless otherwisespecified herein, all accounting terms used herein shall be interpreted, allaccounting determinations hereunder shall be made, and all financial statementsrequired to be delivered hereunder shall be prepared, in accordance withgenerally accepted accounting principles as in effect from time to time andconsistently applied.

	(c)	Use of Defined Terms. Any defined term used in the pluralpreceded by the definite article shall be taken to encompass all members of therelevant class. Any defined term used in the singular preceded by "any" shall betaken to indicate any number of the members of the relevant class.

	SECTION 2.	Reimbursement and Other Payments.

	(a)	Certain Fees and Charges. The Borrower agrees to pay to theBank (i) upon each transfer of the Letter of Credit by the Trustee, a transferfee equal to the Bank's then customary charge therefor; (ii) on the sameBusiness Day as any drawing under the Letter of Credit, a drawing fee in theamount of $150; (iii) upon notice from the Bank, any and all out-of-pocketcharges and expenses which the Bank may pay or incur relative to drawings underthe Letter of Credit; (iv) interest on any and all amounts unpaid by theBorrower when due under this Agreement (except as otherwise expressly providedin Subsection 2(e) below) from the date such amounts become due until payment infull, payable on demand, at a fluctuating interest rate per annum (computed onthe basis of a year of 360 days for the actual number of days elapsed) whichshall at times be equal to the sum of (x) 4.00% per annum plus (y) the PrimeRate as in effect from time to time (but such fluctuating interest rate shall inno event be higher than the maximum rate permitted by then applicable law); (v)a late fee of 5.00% on any and all amounts unpaid by the Borrower within tendays after the same are due under this Agreement, payable on demand; and (vi)any and all costs and expenses (including, without limitation, reasonableattorneys' fees) reasonably incurred by the Bank in exercising or enforcing anyrights or performing any obligations under this Agreement.

	(b)	Commitment and Closing Fees. The Borrower also agrees thatit will pay to the Bank commitment fees with respect to the Letter of Creditcomputed (on the basis of a year of 360 days for the actual number of dayselapsed) at the rate of 1.00% per annum. Such fees shall be payable in advance,on the Date of Issuance and thereafter annually in advance on the first day ofeach January, and shall be calculated on the Available Amount outstanding on thedate of payment. All commitment fees paid hereunder shall be non-refundable oncepaid. The Borrower acknowledges that it will be solely responsible for anyconfirmation or other credit enhancement which may now or hereafter be needed(or reasonably desired by the Borrower and/or the Remarketing Agent) withrespect to the Bonds. The Bank makes no representation that it has or willmaintain any particular rating with respect to the Letter of Credit or itsobligations generally and will not be liable to the Borrower for any decline inany such rating.

	(c)	Reimbursement for Drawings. The Borrower hereby agrees topay to the Bank immediately after (and on the same Business Day as) any amountis drawn under the Letter of Credit pursuant to any Interest Drawing, PartialRedemption Drawing or Final Drawing or pursuant to any Tender Drawing (but as toa Tender Drawing, except as otherwise provided below, only to the extent thatsuch drawing represents accrued interest on the Bonds), a sum equal to theamount so drawn. The Borrower also agrees to pay to the Bank, with respect toany Tender Drawing as to which the conditions contained in Subsection 3(d) arenot fulfilled, any amount drawn under the Letter of Credit pursuant to suchTender Drawing, such amount to be paid to the Bank immediately after and on thesame Business Day as such drawing. All amounts payable under this Subsection2(c) shall bear interest from the date on which any such amount became payableuntil paid in full, at the rate provided in clause (iv) of Subsection 2(a),payable on demand.

	(d)	Tender Advances. If the Bank shall make any payment of thatportion of the purchase price corresponding to principal of the Bonds drawnunder the Letter of Credit pursuant to a Tender Drawing and the conditions setforth in Subsection 3(d) shall have been fulfilled, each such payment shallconstitute a Tender Advance made by the Bank to the Borrower on the date and inthe amount of such payment. The Borrower shall repay the unpaid principal amountof each Tender Advance on the earliest of: (i) any demand for payment followingthe occurrence of an Event of Default hereunder, (ii) such date as is providedfor in Paragraph 2(f)(ii) hereof, (iii) that date which is designated as therequired payment date in a written notice sent by the Bank to the Borrower(provided that (a) such required payment date with respect to any Tender Advanceshall be not sooner than 120 days after the date on which such Tender Advancewas made, and (b) the required payment date shall be not sooner than 30 daysafter such notice is given) or (iv) the Termination Date of the Letter ofCredit. The Borrower may prepay such amount on an earlier date as provided inParagraph 2(f)(i) hereof.

	(e)	Interest on Tender Advances. The Borrower shall payinterest on the unpaid amount of each Tender Advance from the date of suchTender Advance until such amount is paid in full, such interest to be payablemonthly, in arrears, on the first day of each month during the term of eachTender Advance and on the date such amount is paid in full, at a fluctuatinginterest rate per annum which shall at all times be equal to the sum of (x)2.00% per annum plus (y) the Prime Rate.

	(f)	Prepayments; Reinstatement of Letter of Credit Amount.

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

		(ii)	Prior to or simultaneously with the resale of Bonds acquiredwith the proceeds of one or more draws under the Letter of Credit by one or moreTender Drawings, the Borrower shall prepay the then outstanding Tender Advances(in the order in which they were made) by paying to the Bank an amount equal tothe sum of (x) the portion of the purchase price corresponding to the aggregateprincipal amount of the Bonds being resold or to be resold, plus (y) theportion of the purchase price corresponding to the aggregate amount of accruedand unpaid interest on such Bonds, plus (z) the aggregate amount ofaccrued and unpaid interest on such Tender Advances, less the amount paidpursuant to the immediately preceding clause. Such payment shall be applied bythe Bank in reimbursement of such drawings (and as prepayment of Tender Advancesresulting from such drawings in the manner described above), and, when suchpayment with respect to clause (x) and (y) of the immediately preceding sentenceis accompanied by a certificate completed and signed by the Trustee in the formof Annex F to the Letter of Credit, the Borrower irrevocably authorizes the Bankto rely on such certificate and to reinstate the Letter of Credit in accordancetherewith.

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

		(iv)	Outstanding Tender Advances may be prepaid at any time by oron behalf of the Borrower on notice from the Borrower directing the Bank todeliver Bonds held by the Bank or its designee pursuant to the Pledge Agreementfor sale pursuant to the Indenture and specifying the principal amount of Bondsto be so sold, which notice may be given by telephone (promptly confirmed inwriting) but which shall not be effective unless received by the Bank prior to10:00 A.M. (New York time) on the day of the proposed prepayment referred toabove; provided that the Bank shall not deliver any such Bonds for saleor otherwise until the Letter of Credit has been reinstated pursuant to theterms of this Agreement and the Letter of Credit.

	(g)	Increased Costs. If any law, regulation or change in anylaw or regulation or in the interpretation thereof or any ruling, decree,judgment, guideline, directive or recommendation (whether or not having theforce of law) by any regulatory body, court, central bank or any administrativeor governmental authority having or claiming jurisdiction (including, withoutlimitation, a request or requirement that affects the manner in which the Bankor any participant in the Letter of Credit or any confirming bank with respectto the Letter of Credit allocates capital resources to its commitments includingits obligations hereunder), shall either (i) impose upon, modify, require, makeor deem applicable to the Bank or any participant in the Letter of Credit or toany confirming bank with respect to the Letter of Credit any reserverequirement, special deposit requirement or the like against or affecting theLetter of Credit or such participation or any confirmation thereof, or (ii)subject the Bank or any such participant to any tax, charge, fee, deduction orwithholding of any kind whatsoever in connection with the Letter of Credit orany participation or any confirmation thereof or change the basis of taxation ofthe Bank or of any such participant or any such confirming bank (other than achange in the rate of tax based on the overall net income of the Bank or of anysuch participant or any such confirming bank), or (iii) impose any conditionupon or cause in any manner the addition of any supplement to or increase of anykind to the Bank's or such participant's or confirming bank's capital or costbase for issuing the Letter of Credit or participating therein or confirmingthereof, or (iv) impose upon, modify, require, make or deem applicable to theBank or any such participant or such confirming bank any capital requirement,increased capital requirement or similar requirement, including, withoutlimitation, a request or requirement that affects the manner in which the Bankor any such participant allocates capital resources to its commitments includingits obligations hereunder and/or under the Letter of Credit or any suchparticipation or confirmation, and the result of any of the events referred toin (i), (ii), (iii) or (iv) above shall be to increase the costs in any way tothe Bank or any such participant or any such confirming bank of issuing ormaintaining the Letter of Credit or participating therein or confirming thereofor to reduce the amounts payable by the Borrower hereunder or to reduce the rateof return on the Bank's capital, as a consequence of issuing or maintaining theLetter of Credit or participating therein or confirming thereof, to a levelbelow that which the Bank or any such participant or any such confirming bankcould have achieved but for any such events; then and in any such event theBorrower shall, promptly upon receipt of written notice by the Bank of suchincreased costs and/or decreased benefits stating the reason therefor, pay tothe Bank all such additional amounts that, in the Bank's sole good faithcalculation, as allocated to the Letter of Credit or any such participation orconfirmation, shall be sufficient to compensate the Bank or any such participantor any such confirming bank for all such increased costs and/or decreasedbenefits, all as certified by the Bank in said written notice to the Borrower.Such certification shall be conclusive and binding on the parties hereto, absentmanifest error. In determining such amount, the Bank may use any reasonableaveraging or attribution methods.

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

SECTION 3. Issuance; Conditions Precedent; Extension.

	(a)	Subject to satisfaction of the conditions precedent set forth insubsections (b) and (c) of this Section, the Bank shall issue the Letter ofCredit in the Letter of Credit Amount, effective on the Date of Issuance andexpiring on the Termination Date.

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

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

(ii)	A long-form Certificate of Legal Existence for the Borrower, issuedby the Secretary of State of the State of Connecticut.

(iii)	The by-laws of the Borrower, certified by its Secretary.

(iv)	True and correct copies of the resolutions of the board of directorsof the Borrower (and, if needed, the members of the Borrower) approving thisAgreement and each of the Related Documents. Such resolutions shall be certifiedas to the accuracy, due adoption and continuing force and effect thereof by theSecretary of the Borrower.

(v)	A certificate executed by the Secretary of the Borrower certifying thenames and true signatures of the officers of the Borrower authorized to executeon behalf of the Borrower this Agreement and the Related Documents and any andall certificates, notices and reports referred to in this Agreement; each suchcertificate shall state that the Bank may conclusively rely on the statementsmade therein until the Bank shall receive a further certificate of suchSecretary canceling or amending the prior certificate and submitting signaturesof the officers named in such further certificate.

(vi)	The Security Documents and the Letter of Support.

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

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

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

(x)	An opinion or opinions of counsel to the Borrower as to legalexistence and authority of the Borrower, corporate capacity of the Borrower, dueauthorization of transactions, enforceability of documents, no conflict withlaw, no conflict with other agreements, no litigation, perfection of securityinterests, and other matters reasonably requested by the Bank, such opinion oropinions to be satisfactory in form and substance to the Bank.

(xi)	Financial statements of the Borrower as at September 30, 1999, andfor the fiscal year then ended, certified by the Borrower's independentcertified public accountants.

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

(xiii)	All such other documents, instruments, approvals and opinions asthe Bank may reasonably request.

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

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

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

	(d)	Each payment made by the Bank under the Letter of Credit pursuantto a Tender Drawing shall constitute a Tender Advance hereunder onlyif on the date of such payment the following statements shall betrue:

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

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

	On the date of each payment by the Bank of a Tender Drawing, the Borrowershall give the Bank a certificate, signed by an authorized officer of theBorrower, stating that on the date of such payment the above statements are trueand correct.

	(e)	Upon the written request of the Borrower received by the Bank nolater than 225 days prior to the Termination Date then in effect undersubsection (i) of the definition thereof (or such later date to which the Bankmay consent in writing), the Bank shall within 45 days of such request notifythe Borrower, the Issuer, the Trustee and the Remarketing Agent whether or notit will extend the scheduled Termination Date for a period of one year (or suchother period as the Bank may agree in its sole discretion). If the Bank notifiesthe Borrower, the Issuer, the Trustee and the Remarketing Agent that thescheduled Termination Date shall be so extended, the Bank shall within 30 daysof such notification, deliver to the Trustee and the Borrower a writtenacknowledgment of such extension. If the Bank fails to notify the Borrower ofits decision within such 30-day period, the Bank shall be deemed to haverejected such request. Any such request by the Borrower for an extension of theTermination Date shall be substantially in the form of Exhibit C hereto(or in such other form to which the Bank may consent in writing) and, unless theBank shall otherwise consent, shall include (i) a statement of the outstandingprincipal amount of the Bonds, (ii) a reasonably detailed description of any andall Events of Default and all conditions, events and acts which with notice orlapse of time or both would become an Event of Default and (iii) any otherpertinent information requested by the Bank. Nothing contained in this Agreementor elsewhere shall be deemed an agreement by the Bank to extend the TerminationDate whether on the terms contained herein or on any other terms.

	SECTION 4.	Reduction of Letter of Credit Amount. The Letter ofCredit Amount shall be reduced from time to time as specified in the fourthgrammatical paragraph of the Letter of Credit; provided that voluntaryprepayments of the Loan will be made not more frequently than quarterly.

	SECTION 5.	Obligations Absolute. The obligations of theBorrower under this Agreement shall be absolute, unconditional and irrevocable,and shall be performed strictly in accordance with the terms of this Agreement,under all circumstances whatsoever, including, without limitation, the followingcircumstances:

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

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

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

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

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

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

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

	SECTION 6. Representations and Warranties of the Borrower. As aninducement to the Bank to execute this Agreement and to issue the Letter ofCredit, the Borrower hereby represents and warrants to the Bank that:

	(a)	The Borrower is a corporation duly organized, legally existing andin good standing under the laws of the State of Connecticut and has the legalpower and authority to enter into and perform this Agreement and each of theRelated Documents in which it is named as a party, to grant the securityinterests and liens described in the Security Documents, to fulfill itsobligations set forth herein and therein and to carry out the transactionscontemplated hereby and thereby. The Borrower has all requisite corporate powerto own and operate its properties and to carry on its business as now conductedand as proposed to be conducted and is duly qualified and in good standing ineach jurisdiction where the failure so to be qualified could have a materialadverse effect on the Borrower and/or its operations. At the date of thisAgreement, the Borrower has only Subsidiaries listed on Exhibit D. The Borroweris not a member of any partnership or joint venture, other than DowntownCogeneration Associates Limited Partnership.

	(b)	The execution, delivery and performance by the Borrower of thisAgreement, the Security Documents and the other documents required to beexecuted by the Borrower pursuant hereto have been duly authorized by allnecessary corporate action, will not require any consent of any third party notobtained prior to the date hereof, and will not conflict with, violate theprovisions of, or cause a default or constitute an event which, with the passageof time or the giving of notice or both, could constitute a default on the partof the Borrower under any mortgage, indenture, judgment, decree, rule,regulation, law or order, or any material contract or agreement applicable tothe Borrower or under any provision of the Charter or by-laws of the Borrower,or result in the imposition of any lien or encumbrance on any property or assetsof the Borrower, except for the liens created by the Security Agreement, theMortgage and/or the related collateral assignments. This Agreement, the SecurityDocuments and any other documents delivered to the Bank by the Borrower pursuanthereto are the valid and binding obligations of the Borrower, enforceable inaccordance with their respective terms.

	(c)	There are no actions, suits, proceedings or investigations pendingor, to the knowledge of the Borrower, threatened, anticipated or contemplated(nor, to the knowledge of the Borrower, is there any basis therefor) against oraffecting the Borrower before any court or governmental department, commission,board, bureau, agency or instrumentality, domestic or foreign, which couldprevent or hinder the consummation of the transactions contemplated hereby orcall into question the validity of this Agreement, any of the Related Documentsor any other instrument provided for or contemplated by this Agreement or anyaction taken or to be taken in connection with the transactions contemplatedhereby or thereby or which in any single case or in the aggregate couldreasonably be expected to result in any material adverse change in the business,prospects, condition, affairs or operations of the Borrower or any materialimpairment of the right or ability of the Borrower to carry on its operations asnow conducted or as proposed to be conducted. Without conceding that any of sameare material, the Borrower represents that the only judicial or administrativeproceedings to which it is party are those set forth on Exhibit Ehereto.

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

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

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

	(g)	The Borrower is not engaged in the business of extending creditfor the purpose of purchasing or carrying margin stock (within the meaning ofRegulation U of the Board of Governors of the Federal Reserve System), and nopart of the proceeds of the Loan will be used to purchase or carry any marginstock or to extend credit to others for the purpose of purchasing or carryingany margin stock or in any other manner which would involve a violation of anyof the regulations of the Board of Governors of the Federal Reserve System. TheBorrower is not an "investment company" within the meaning of the InvestmentCompany Act of 1940, as amended.

	(h)	The audited financial statements of the Borrower as at September30, 1999, heretofore delivered to the Bank, are complete and accurate and fairlypresent the financial condition of the Borrower as at the dates thereof and forthe periods covered thereby, having been prepared in accordance with generallyaccepted accounting principles consistently applied. The Borrower has noliability, contingent or otherwise, not disclosed in the aforesaid financialstatements or in any notes thereto that could materially affect the financialcondition of the Borrower. The following representations are true on the Date ofIssuance; since the date of the most recently delivered financial statements:(A) there has been no material adverse change in the business, assets orcondition, financial or otherwise, of the Borrower; (B) neither the business,condition, or operations of the Borrower nor any of its properties or assets hasbeen materially adversely affected as the result of any legislative orregulatory change, any revocation or change in any franchise, license or rightto do business, or any other event or occurrence, whether or not insuredagainst; (C) the Borrower has not experienced any material controversy orproblem with its employees or with any labor organization; and (D) the Borrowerhas not entered into any material transaction other than in the ordinary courseof business.

	(i)	Pension Plans, Etc.
		(i) Plans. Except as set forth in aseparate letter to the Bank of even date herewith and acknowledged by the Bankin writing, neither the Borrower nor any entity with which the Borrower would beaggregated (a "Commonly Controlled Entity") under Section 414(b), (c), (m), or(o) of the Code, maintains or contributes to any pension, profit sharing, orsimilar plan providing for a program of deferred compensation to any employee orformer employee.

		(ii) Funding of Employee Benefit Plans. Allcontributions and other payments required to be made by the Borrower or anyCommonly Controlled Entity to all employee benefit plans, as defined in Section3(3) of the Employee Retirement Income Security Act of 1974, as amended("ERISA"), which either the Borrower or any Commonly Controlled Entity maintainsor maintained or to which any of them contributes or has contributed (the"Employee Benefit Plans") have been made or reserves adequate for such purposeshas been set aside and reflect on the Borrower's financial statements. Except asprovided in the following sentence, no Employee Benefit Plan is a plan subjectto Section 412 of the Code or Section 302 of ERISA, nor is any Employee BenefitPlan a multiemployer plan as defined in Section 4001(a)(3) of ERISA. The threedefined benefit plans maintained by the Borrower and its Commonly ControlledEntities are subject to Section 412 of the Code and Section 302 of ERISA. Eachother Employee Benefit Plan which is an employee pension benefit plan, asdefined in Section 3(2) of ERISA, has been determined to be qualified underSection 401(a) or Section 403(a) of the Code and nothing has occurred whichwould cause the loss of such qualification or the imposition of any taxliability or penalty under the Code or ERISA on the Borrower.

		(iii) Administration, Etc. Each EmployeeBenefit Plan has been and is administered in accordance with its terms andapplicable law. To its knowledge, the Borrower has not breached any fiduciaryduty imposed on it under ERISA with respect to any Employee Benefit Plan, orengaged in any prohibited transaction, as defined in Title I of ERISA or Section4975 of the Code, involving any Employee Benefit Plan for which no exemption isavailable.

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

		(v) Claims. There are no claims (other thanroutine claims for benefits), actions or lawsuits asserted or instituted withrespect to, and the Borrower has no knowledge of any threatened claims orlitigation with respect to, any Employee Benefit Plan or any fiduciarythereof.

	(j)	Environmental Matters. The Borrower:

		(i) Except as disclosed in the Annual Report on Form10-K of the Connecticut Natural Gas Corporation for the Borrower's 1999 fiscalyear, has not received any notice, citation, summons, directive, order or othercommunication, written or oral, from, and the Borrower has no knowledge, afterreasonable inquiry, of any notice, citation, summons, directive, order or othercommunication by, any Governmental Authority or any other person concerning thepresence, generation, treatment, storage, transportation, transfer, disposal,release or other handling of any Hazardous Substances within, on, from, relatedto, or affecting any real property owned or occupied by the Borrower; and

		(ii) Except as disclosed in the Annual Report on Form10-K of the CTG Resources, Inc. for the Borrower's 1999 fiscal year, has noknowledge, after reasonable inquiry, that any real property owned or occupied bythe Borrower has ever been used either by the Borrower, any tenant or anypredecessor in interest, to generate, treat, store, transport, transfer, disposeof, release or otherwise handle any Hazardous Material, except in materialcompliance with all Environmental Laws.

	(k)	The principal place of business and chief executive offices of theBorrower are located at 100 Columbus Boulevard, Hartford, Connecticut 06103. TheBorrower maintains at said location the books and records relating to thecollateral described in the Security Documents.

	(l)	There is no condemnation or similar proceeding pending withrespect to or affecting any of the Borrower's properties, and the Borrower isnot aware that any such proceeding is contemplated.

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

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

	(o)	The representations and warranties of the Borrower contained inthe Related Documents are hereby incorporated herein by reference; suchrepresentations and warranties are true and correct.

	SECTION 7. Affirmative Covenants Other Than ReportingRequirements. Without limiting any other covenants and provisions hereof orof any of the Related Documents, the Borrower covenants and agrees that duringthe term of this Agreement and for so long as (i) the Letter of Credit isoutstanding and/or (ii) any Indebtedness of the Borrower to the Bank under thisAgreement or any Related Document remains unpaid:

	(a)	Payment. The Borrower will pay promptly when due any andall amounts owing under the Bonds or other Related Documents or owing to theBank hereunder.

	(b)	Preservation of Assets; Compliance withLaw.

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

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

		(iii) Taxes, Etc. Pay and discharge or causeto be paid and discharged, when due, all taxes, assessments and governmentalcharges or levies imposed upon it or upon its respective income and profits orupon any of its property, real, personal or mixed, or upon any part thereof, aswell as all lawful claims for labor, materials and supplies or otherwise, which,if unpaid, might become a lien or charge upon such properties or any partthereof, provided, however, the Borrower may contest in good faithany such taxes, assessments and governmental charges or levies, and withholdpayment thereof, if the Borrower properly commences and thereafter diligentlypursues the contest.

	(d)	Notice of Proceedings. Give prompt writtennotice to the Bank of any proceedings instituted against it by or in any Federalor state court or before any commission or other regulatory body, whetherFederal, state or local.

	(e)	Financial Reporting. Furnish to theBank:

		(i)	Within ninety (90) days of the end of eachfiscal year, consolidated and consolidating Financial Statements certified(without qualification) by independent certified public accountants selected bythe Borrower and approved by the Bank, showing the financial condition at theclose of such fiscal year, the results of operations during such year andcontaining a statement to the effect that its independent public accountantshave examined the provisions of this Agreement and that no Event of Default, norany event which with notice or lapse of time, or both, would constitute such anEvent of Default, has occurred;

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

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

		(iv)	Promptly, from time to time such otherinformation regarding its operations, assets, business, affairs and financialcondition or the operations, assets, business, affairs and financial conditionof any of its subsidiaries, as the Bank may reasonably request.
**	(f)	Visitation and Inspection Rights.Permit agents or representatives of the Bank to inspect and to discuss theaffairs, finances and accounts of the Borrower with its officers, at any timeand from time to time during normal business hours upon twenty-four hours noticeto the Borrower, at the Borrower's reasonable expense after an Event of Default(including, without limitation, the reasonable fees and expenses of such agentsor representatives), (i) the Collateral, and (ii) the Borrower's books andrecords and to make abstracts or reproductions thereof and to duplicate, reduceto hard copy or otherwise use any and all computer or electronically storedinformation or data.

	(g)	Notice of Event of Default. Immediatelyadvise the Bank of any Material Adverse Change, or of the occurrence of anyEvent of Default, or of the occurrence of any event which upon notice or lapseof time or both would constitute such an Event of Default.

	(h)	Accounting System. Maintain a standardsystem of accounting in accordance with GAAP.

	(i)	Financial Covenants.

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

	(a)	"Debt Service" shall mean for any relevantaccounting period the aggregate amount of principal and interest payments duefrom the Borrower with respect to its Total Debt.

	(b)	"Debt Service Coverage Ratio" shall meanfor any relevant accounting period the ratio of (x) earnings before interest,taxes , depreciation, amortization and dividends (EBITDA) plus amounts receivedunder the Forward Equity Purchase Agreement to (y) Debt Service.

	(c)	"Interest Coverage Ratio" shall mean forany relevant accounting period the ratio of (x) earnings before interest, taxesand dividends (EBIT) plus amounts received under the Forward Equity PurchaseAgreement to (y) the aggregate amount of interest payments due from the Borrowerwith respect to its Total Debt.

	(d)	"Senior Debt" shall mean the Loan, all debtsecured *pari passu* with the Loan pursuant to the Stock Pledge Agreementand any other indebtedness of the Borrower owed to the Bank, including all debtrelated to the Credit Facilities.

	(e)	"Tangible Net Worth" shall mean the excessof the Borrower's total assets over its total liabilities computed in accordancewith generally accepted accounting principles consistently applied, less allintangible assets and deferred charges, including, without limitation, goodwill,unamortized debt discount, organization expenses, trademarks and trade names,patents, deferred product development costs, the Borrower's interests under theForward Equity Purchase Agreement, and similar items.

	(f)	"Total Debt" shall mean Senior Debt, aswell as any of the Borrower's other loan or lease obligations thenoutstanding.

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

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

	(b)	Not permit its Tangible Net Worth to be less than$30,000,000 on a consolidated basis, to be tested annually;

	(c)	Not permit its Debt Service Coverage Ratio to beless than 1.25 to 1, as tested quarterly; and

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

	(j)	 Bank as Principal Depository. Use the Bankas the principal depository of its funds.

	(k)	Insurance. Keep all of its insurableproperties, now or hereafter owned, adequately insured at all times against lossor damage by fire or other casualty to the extent customary with respect to likeproperties of companies conducting similar businesses; maintain publicliability, business interruption and worker's compensation insurance insuringthe Borrower to the extent customary with respect to companies conductingsimilar businesses, all by financially sound and reputable insurers.

	(l)	Environmental Indemnification. With respectto environmental matters:

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

		(ii)	notify the Bank promptly in the event of anyEnvironmental Event, promptly forward to the Bank copies of any notices receivedby the Borrower relating to any Environmental Event and promptly pay when dueany fine or assessment against the Borrower, the Bank or any such real propertyrelating to any Environmental Event, provided, however, theBorrower may contest in good faith any such fine or assessment, and withholdpayment thereof, if the Borrower properly commences and thereafter diligentlypursues the contest.; and

		(iii)	indemnify, defend, and hold the Bankharmless from and against any claim, cost, damage (including, withoutlimitation, consequential damages), expenses (including, without limitation,attorneys' fees and expenses), loss, liability, or judgment now or hereafterarising as a result of any Environmental Event. Notwithstanding anythingcontained herein to the contrary, the provisions of this subparagraph (iii)shall continue in effect and shall survive (among other events) any terminationof this Agreement, payment and satisfaction of the Note, and release of anyCollateral.

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

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

	SECTION 8.	Negative Covenants. Without limiting any othercovenants and provisions hereof or of any of the Related Documents, the Borrowercovenants and agrees that during the term of this Agreement and for so long as(i) the Letter of Credit is outstanding and/or (ii) any Indebtedness of theBorrower to the Bank under this Agreement or any Related Document remainsunpaid, then, unless the Bank shall have otherwise consented in writing (whichconsent may be given or withheld in the Bank's discretion):

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

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

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

		(iii) indebtedness for which the Borrower hasreceived the prior written consent of the Bank, which consent shall not beunreasonably withheld;

		(iv) indebtedness set forth on Exhibit G,Existing Indebtedness and Liens, attached hereto and made a part hereof; 

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

		(vi) $45,000,000 in 6.99% Senior Secured Notes due2009; and

		(vii) $15,000,000 in 6.90% Senior Secured Notes due2010.

	(b)	Liens. Create, incur, assume or otherwisepermit to exist any mortgage, pledge, lien, charge or other encumbrance of anynature whatsoever on any of its assets, now or hereafter owned by the Borrower,except for:

		(i) liens securing the payment of taxes, either notyet due or the validity of which is being contested in good faith by appropriateproceedings, and as to which it shall have set aside on its books adequatereserves;

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

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

		(iv) liens in favor of the Bank;

		(v) the liens set forth on the Exhibit G,Existing Indebtedness and Liens, attached hereto and made a part hereof; and

		(vi) liens (including liens securing obligations inrespect of capital leases) to secure indebtedness incurred in connection withthe financing of all or part of the purchase price or cost of improvement ofproperty acquired or improved by the Company or any of its subsidiaries afterthe date hereof, provided that the indebtedness secured by said liens ispermitted by Section 8(a) above.

	(c)	Guarantees. Without the consent of theBank, which shall not be unreasonably withheld, guarantee, endorse or otherwisein any way become or be responsible for obligations of any other person, exceptendorsements of negotiable instruments for collection in the ordinary course ofbusiness.

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

	(e)	Sale and Leasebacks. Enter into anyarrangement, directly or indirectly, with any person whereby it shall sell ortransfer any property, real, personal or mixed, used or useful in its business,whether now owned or hereafter acquired, and thereafter rent or lease suchproperty.

	(f)	Investments. Purchase, invest in orotherwise acquire or hold securities, including, without limitation, capitalstock and evidences of indebtedness of, or make loans or advances to, butexcluding from such prohibition commercial paper rated A/2 or P-2 or better andEuro-Time deposits, or enter into any arrangement for the purpose of providingfunds or credit to, any other person, except:

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

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

	(g)	Fundamental Changes. Dissolve, liquidate,merge, consolidate or otherwise alter or modify the Borrower's corporate name,mailing address, principal place of business, structure, status orexistence.

	(h)	Dividends. Pay any dividends, or make anydistribution of cash or property, or both, to holders of shares of its capitalstock, or directly or indirectly, redeem, purchase or otherwise acquire for aconsideration, any shares of its capital stock, of any class, unless such wouldnot significantly alter the Borrower's financial capabilities or cause a defaultunder a covenant contained in this Agreement.

	(i)	Accounts Receivable. Sell, assign, pledge,discount or dispose in any way of any accounts receivable, promissory notes ortrade acceptances held by the Borrower, with or without recourse, except to theBank or for collection (including endorsements) in the ordinary course ofbusiness.

	(j)	Transactions with Affiliates. Enter intoany transaction, including, without limitation, the purchase, sale or exchangeof property or assets or the rendering or accepting of any service with or toany subsidiary or affiliate of the Borrower except in the ordinary course ofbusiness and pursuant to the reasonable requirements of the Borrower's businessand upon terms not less favorable to the Borrower than it could obtain in acomparable arm's-length transaction with a third party other than suchsubsidiary or affiliate.

	(k)	ERISA. (a) Fail, or permit any CommonlyControlled Entity to fail, to comply with the requirements of ERISA with respectto any Employee Benefit Plan; (b) permit any funded Employee Pension Plan tolose its qualified status under Section 401(a) or 403(a) of the Code; (c) fail,or permit any Commonly Controlled Entity to fail, to meet the minimum fundingstandards of Section 302 of ERISA and Section 412 of the Code; (d) fail, orpermit any Commonly Controlled Entity to fail, to discharge any obligations tothe PBGC with respect to the termination of an Employee Pension Plan or to anyMultiemployer Plan on account of its withdrawal or partial withdrawal therefromor allow to exist any event or condition which presents a substantial risk ofthe Borrower incurring liability to the PBGC by reason of the termination of anyEmployee Pension Plan; (e) create or adopt, or permit any Commonly ControlledEntity to create or adopt, any new Employee Pension Plan which wouldsignificantly alter the Borrower's financial capabilities or cause a defaultunder a covenant contained in this Agreement without the prior written consentof the Bank; (f) modify, or permit any Commonly Controlled Entity to modify, anyexisting Employee Pension Plan so as to increase its obligations thereunderwhich would significantly alter the Borrower's financial capabilities or cause adefault under a covenant contained in this Agreement, except in the ordinarycourse of business consistent with past practice or with the prior writtenconsent of the Bank; (g) create or adopt any new Employee Welfare Plan or modifyany existing Employee Welfare Plan, or permit any Commonly Controlled Entity tocreate or adopt any new Employee Welfare Plan or modify any existing EmployeeWelfare Plan, to provide continuing benefits or coverage for any participant (orbeneficiary) after the termination of the participant's employment except as maybe required by COBRA, regulations thereunder or applicable state statutory lawwhich would significantly alter the Borrower's financial capabilities or cause adefault under a covenant contained in this Agreement or with the prior writtenconsent of the Bank; or (h) engage, or permit any Commonly Controlled Entity toengage, in any transaction which would reasonably result in the assessment of adirect or indirect liability to the Borrower or any Commonly Controlled Entityunder Section 409 or 502 of ERISA or Section 4975 of the Code.

	(l)	Negative Pledge. Without the Bank's consent, which shallnot be unreasonably withheld, (a) sell, transfer, pledge or assign any shares ofstock or other ownership interests in the Borrower or any of its subsidiaries or(b) execute or agree to any further negative pledges of such shares of stock orother ownership interests in the Borrower or any of its subsidiaries.

	SECTION 9.	Intentionally left blank.

	SECTION 10. Events of Default. The occurrence of any one or moreof following shall be an Event of Default under this Agreement, unless waived bythe Bank pursuant to Section 12 hereof:

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

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

	(c)	The Borrower shall fail to observe or perform any term, covenantor agreement contained in this Agreement (other than those referred to inclauses (a) or (b) above) and such failure shall continue for 30 days afterwritten notice thereof has been given to the Borrower; or

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

	(e) the occurrence of a default or event of default withrespect to any evidence of indebtedness of the Borrower (other than to theBank), in excess of one million dollars ($1,000,000), if the effect of suchdefault is to accelerate the maturity of such indebtedness or to permit theholder thereof to cause such indebtedness to become due prior to the statedmaturity thereof, or if any such indebtedness of the Borrower is not paid whendue and payable, whether at the due date thereof or by acceleration orotherwise;

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

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

	(h) there shall be filed against the Borrower aninvoluntary petition seeking reorganization of the Borrower or the appointmentof a receiver, trustee, custodian or liquidator of the Borrower or any materialpart of its assets, or an involuntary petition under any bankruptcy,reorganization or insolvency law of any jurisdiction, whether now or hereafterin effect;

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

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

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

	(l) the Borrower suffers or sustains a Material AdverseChange or the Bank in good faith determines that the prospect of repayment ofthe Borrower's obligations hereunder is materially impaired; or
**	(m) for any reason, the ratio of (x) the totaldebt (the sum of all short term debt, current maturities of long termindebtedness (CMLTD) and long-term debt) of CTG Resources, Inc. (the parent ofthe Borrower) to (y) the capitalization of CTG Resources, Inc., exceeds 70% inany two consecutive fiscal quarters;

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

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

	(p)	Any "Event of Default" (as defined in the Indenture) shall haveoccurred or any failure or default shall have occurred under any of the RelatedDocuments and shall have continued beyond the expiration of any applicablenotice and/or grace period.

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

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

		(ii)	Enforce its rights and remedies under the SecurityDocuments.

		(iii)	Enforce the provisions of this Agreement by legalproceedings for the specific performance of any covenant or agreement containedherein or for the enforcement of any other appropriate legal or equitableremedy. The Bank may recover damages caused by any breach by the Borrower of theprovisions of this Agreement, including court costs, reasonable attorneys' feesand other costs and expenses incurred in the enforcement of the obligations ofthe Borrower hereunder.

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

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

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

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

	SECTION 12. Amendments and Waivers. No amendment or waiver of anyprovision of this Agreement or consent to any departure by the Borrowertherefrom shall in any event be effective unless the same shall be in writingand signed by the party to be charged. Any such waiver or consent shall beeffective only in the specific instance and for the specific purpose for whichgiven. The Borrower will not agree or consent to any amendment to any of theRelated Documents without prior written consent of the Bank which shall not beunreasonably withheld. The Borrower will not initiate or consent to any changein the Mode applicable to the Bonds under the Indenture to provide for any Modeother than a Weekly Mode (as defined in the Indenture).

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

	Party		Address
	Borrower:	The Energy Network, Inc.

			100 Columbus Boulevard

			Hartford, Connecticut 06103

	Bank:		Fleet National Bank

			One Hundred Federal Street

			Mail Stop: BOS 01-08-04

			Boston, MA 02110

			Attention: Thomas L. Rose,

				 Vice President

	SECTION 14. No Waiver: Remedies. No failure on the part of theBank to exercise, and no delay in exercising, any right hereunder shall operateas a waiver thereof nor shall any single or partial exercise of any righthereunder preclude any other or further exercise thereof or the exercise of anyother right. The provisions of this Agreement are not in limitation of norlimited by inconsistent or differing provisions contained in the SecurityDocuments or the indenture or elsewhere, and any rights or remedies hereunderare cumulative with (and not in exclusion of) all other rights and remedieshereunder, or arising under any other agreement or provided by law. The Borrowerspecifically acknowledges that the Indenture may permit incurrence of additionalIndebtedness and additional liens, permits certain property dispositions andcontemplates other matters which are prohibited by this Agreement and agreesthat, as between the Borrower and the Bank, the provisions of this Agreement arecontrolling over the provisions of the Indenture.

	SECTION 15. Indemnification. The Borrower hereby agrees toindemnify and hold harmless the Bank from and against any and all claims,damages, losses, liabilities, costs or expenses whatsoever which the Bank mayincur (i) by reason of any untrue statement or alleged untrue statement of anymaterial fact contained or incorporated by reference in any materials furnishedby the Borrower or any other Person (other than the Bank) in connection with themaking of the Loan or the sale of the Bonds, or the omission or alleged omissionto state therein a material fact necessary to make such statements, in light ofthe circumstances under which they are or were made, not misleading, or (ii) byreason of or in connection with the execution and delivery or transfer of, orpayment or failure to pay under, the Letter of Credit, except for any claims,damages, losses, liabilities, costs or expenses to the extent, but only to theextent, caused by the gross negligence or willful misconduct of the Bank indetermining whether a statement or draft presented under the Letter of Creditcomplies with the terms of the Letter of Credit or in failing to pay under theLetter of Credit after presentation to it by the Trustee of a draft andcertificate strictly complying with the terms and conditions of the Letter ofCredit. Further, the Borrower hereby agrees to pay, and to protect, indemnifyand save harmless the Bank and its officers, directors, shareholders, employees,agents and servants from and against, any and all losses, liabilities (includingliabilities for penalties), actions, suits, judgments, demands, damages, costsor expenses (including, without limitation, attorneys' fees and expenses) of anynature arising from or relating to the offering, issuance, sale or delivery ofthe Bonds (or any interest in any fund into which the Bonds are placed), exceptfor any such loss, liability, action, suit, judgment, demand, damage, cost orexpense to the extent, and only to the extent, resulting from the Bank's grossnegligence or willful misconduct. Nothing in this Section 15 is intended tolimit the Borrower's reimbursement obligation set forth in Section 2 of thisAgreement.

	SECTION 16. Continuing Obligation: Survival. This Agreement is acontinuing obligation and shall be binding upon and inure to the benefit of andbe enforceable by the parties hereto and their respective successors,transferees and assigns; provided, however, that the Borrower maynot assign or delegate all or any part of this Agreement without the priorwritten consent of the Bank. All representations and warranties of the Borrowercontained herein or made in connection herewith shall survive the making of thisAgreement or any payment made by the Bank under the Letter of Credit. The Bankmay, in accordance with applicable law, from time to time assign or grantparticipations in this Agreement and/or the Letter of Credit issued hereunder.Without limitation of the foregoing generality:

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

		(ii)	The Bank shall have the unrestricted right at any time andfrom time to time, and without the consent of or notice to the Borrower, togrant to one or more banks or other financial institutions (each, a"Participant") participating interests in the Bank's obligations hereunderand/or under the Letter of Credit. In the event of any such grant by the Bank ofa participating interest to a Participant, whether or not upon notice to theBorrower, the Bank shall remain responsible for the performance of itsobligations hereunder and under the Letter of Credit and the Borrower shallcontinue to deal solely and directly with the Bank in connection with the Bank'srights and obligations hereunder. The Bank may furnish any informationconcerning the Borrower in its possession from time to time to prospectiveassignees and Participants; provided that the Bank shall require any suchprospective assignee or Participant to agree in writing to maintain theconfidentiality of such information to the same extent as the Bank would berequired to maintain such confidentiality.

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

	SECTION 17. Transfer of the Letter of Credit. The Letter of Creditmay be transferred only in accordance with the provisions set forth therein.

	SECTION 18. Limited Liability of the Bank. The Borrower assumesall risks of the acts or omissions of the Trustee and any transferee of theLetter of Credit with respect to the use of the Letter of Credit. Neither theBank nor any of its officers, directors, employees or attorneys shall be liableor responsible for: (a) the use which may be made of the Letter of Credit or forany acts or omissions of the Trustee or any beneficiary or transferee inconnection therewith; (b) the validity, sufficiency or genuineness of documents,or of any endorsement(s) thereon, even if such documents should in fact prove tobe in any or all respects invalid, insufficient, fraudulent or forged; (c)payment by the Bank against presentation of documents which do not comply withthe terms of the Letter of Credit, including failure of any documents to bearany reference or adequate reference to the Letter of Credit; or (d) any othercircumstances whatsoever in making or failing to make payment under the Letterof Credit; provided that the Borrower shall have a claim against theBank, and the Bank shall be liable to the Borrower to the extent, but only tothe extent, of any direct, as opposed to consequential, losses, liabilities ordamages suffered by the Borrower which the Borrower proves were caused by theBank's willful misconduct or gross negligence. In furtherance and not inlimitation of the foregoing, the Bank may accept documents that appear on theirface to be in order, without responsibility for further investigation. Further,and without limitation of the foregoing, the Bank is specifically authorized torely upon facsimile copies received by telecopier of any sight drafts andcertificates otherwise complying as to form with the terms and conditions of theLetter of Credit.

	SECTION 19. Costs, Expenses and Taxes. The Borrower agrees to payon demand all reasonable costs and expenses (including, without limitation,reasonable legal fees) of the Bank in connection with the preparation,negotiation, execution, delivery, filing and recording of this Agreement and anyother documents which may be delivered in connection with this Agreement, andany amendments or modifications of any of the foregoing, or in connection withthe examination, review or administration of any of the foregoing, or inconnection with the confirmation, perfection and/or protection of the securityinterests granted or intended to be granted to the Bank, as well as the costsand expenses (including, without limitation, the reasonable fees and expenses oflegal counsel) incurred by the Bank in connection with interpreting,administering, preserving, enforcing or exercising any rights or remedies underthis Agreement, the Security Agreement and all other instruments and documentsto be delivered hereunder, all whether or not legal action is instituted. Inaddition, the Borrower shall pay any and all stamp and other taxes and feespayable or determined to be payable in connection with the execution, delivery,filing and recording of this Agreement, the Security Agreement and such otherdocuments, and agrees to save the Bank harmless from and against any and allliabilities with respect to or resulting from any delay in paying or omission topay such taxes and fees. The Borrower further agrees to pay, and to save theBank harmless from, any and all brokers' fees, investment bankers' fees and thelike which may be asserted in connection with any of the transactionscontemplated by this Agreement. The Bank did not have any broker or investmentbanker in connection herewith. Any fees, expenses, other charges or otherpayments which the Bank is entitled to receive from the Borrower hereunder shallbear interest until paid at a fluctuating rate per annum which shall at alltimes be equal to the lesser of (i) 4.00% per annum plus the Prime Rate or (ii)the maximum rate permitted by then applicable law.

	SECTION 20. Severability; Miscellaneous. Any provision of thisAgreement which is prohibited, unenforceable or not authorized in anyjurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch prohibition, unenforceability or non-authorization without invalidating theremaining provisions hereof or affecting the validity, enforceability orlegality of such provision in any other jurisdiction. Upon receipt of anaffidavit of an officer of the Bank as to the loss, theft, destruction ormutilation of this Agreement or any Related Document which is not of publicrecord and, in the case of any such mutilation, upon surrender and cancellationof such document, the Borrower will issue, in lieu thereof, a replacementdocument of like tenor. All agreements between the Borrower and the Bank arehereby expressly limited so that in no contingency or event whatsoever, whetherby reason of acceleration of maturity of the Bonds or otherwise, shall theamount paid or agreed to be paid to the Bank for the use or the forbearance ofany Indebtedness exceed the maximum permissible under applicable law. In thisregard, it is expressly agreed that it is the intent of the Borrower and theBank, in the execution, delivery and acceptance of this Agreement, to contractin strict compliance with the laws of the State of Connecticut. If, under anycircumstances whatsoever, performance or fulfillment of any provision of thisAgreement or any of the Related Documents at the time such provision is to beperformed or fulfilled shall involve exceeding the limit of validity prescribedby applicable law, then the obligation so to be fulfilled shall be reducedautomatically to the limits of such validity, and if under any circumstanceswhatsoever the Bank should ever receive as interest an amount which would exceedthe highest lawful rate, such amount which would be excessive interest shall beapplied to the reduction of the principal balance of the Bank Obligations andnot to the payment of interest. The provisions of this Section shall controlevery other provision of this Agreement and of each Related Document.

	SECTION 21. Governing Law. This Agreement shall be governed by,and construed and interpreted in accordance with, the laws of the State ofConnecticut.

	SECTION 22. Consent to Jurisdiction; JURY TRIAL WAIVER. (a) TheBorrower irrevocably submits to the non-exclusive jurisdiction of anyConnecticut court or any federal court sitting within the State of Connecticutover any suit, action or proceeding arising out of or relating to thisAgreement. The Borrower irrevocably waives, to the fullest extent permitted bylaw, any objection which it may now or hereafter have to the laying of venue ofany such suit, action or proceeding brought in such a court and any claim thatany such suit, action or proceeding has been brought in an inconvenient forum.The Borrower agrees that final judgment in any such suit, action or proceedingbrought in such a court shall be enforced in any court of proper jurisdiction bya suit upon such judgment, provided that service of process in such action, suitor proceeding shall have been effected upon the Borrower in one of the mannersspecified in paragraph (b) of this Section 22 or as otherwise permitted bylaw.

	(b)	The Borrower hereby consents to process being served in any suit,action or proceeding of the nature referred to in paragraph (a) of this Section22 either (i) by mailing a copy thereof by registered or certified mail, postageprepaid, return receipt requested, to it at its address set forth in Section 13or (ii) by serving a copy thereof upon it at its address set forth in Section13. The Borrower irrevocably waives, to the fullest extent permitted by law, allclaims of error by reason of any service as contemplated herein and agrees thatsuch service shall be deemed in every respect effective service upon theBorrower in any such suit, action or proceeding and, to the fullest extentpermitted by law, shall be taken and held to be valid personal service upon andpersonal delivery to the Borrower.

	(c)	**Each of the parties hereto hereby waives trial by jury in anyaction, proceeding or counterclaim brought by either of them against the otheron any matters whatsoever (including, without limitation, any action, proceedingor counterclaim arising out of or in any way connected with this agreement, thesecurity agreement or any other agreements executed in connection herewith orthe administration thereof or any of the transactions contemplated herein ortherein). The provisions of this section have been fully discussed by theparties hereto, and these provisions shall be subject to no exceptions. no partyhas in any way agreed with or represented to any other party that the provisionsof this section will not be fully enforced in all instances.**
	SECTION 23. Table of Contents; Headings. The Table of Contentsand Section headings in this Agreement are included herein for convenience ofreference only and shall not constitute a part of this Agreement for any otherpurpose.

 

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

						**THE ENERGY NETWORK, INC.**
 

						By:							
						 Name:

						 Title:

 

						**FLEET NATIONAL BANK**
 

						By:							
						 Name:

						 Title:

EXHIBIT A

Project Description

	The heating and cooling system providing for thegeneration and transfer of steam and hot and chilled water located in the southwestern section of Hartford, Connecticut, in the vicinity of Trinity College anddesignated the SINA Project.

 

EXHIBIT B

Letter of Credit

(See Attached)

 

 

 

IRREVOCABLE DIRECT PAY LETTER OF CREDIT NO. *********
DATE OF ISSUE: January 14, 2000

 

ISSUING BANK:

Fleet National Bank

a Member of Fleet Financial

Group

c/o Fleet Pennsylvania Services

One Fleet Way

Scranton, PA 18507
APPLICANT:

The Energy Network, Inc.

100 Columbus Boulevard

Hartford, Connecticut 06144
 
BENEFICIARY:

State Street Bank and Trust Company,

as Trustee under Indenture of

Trust Agreement dated as of

January 1, 2000

Goodwin Square

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103
 
Amount/Currency:

Up to USD $4,364,500.00

Up to Four Million Three Hundred Sixty-Four Thousand Five Hundred and00/100ths US Dollars
 
Date and Place of Expiry:

January 14, 2001 at the

Issuing Bank
	

Dear Sirs:

	At the request and for the account of our customer, The Energy Network,Inc., 100 Columbus Boulevard, Hartford, Connecticut 06144 (the "Borrower"), wehereby establish in your favor, as Trustee under the below-defined Indenturepursuant to which $4,300,000 in aggregate principal amount of ConnecticutDevelopment Authority Industrial Revenue Variable Rate Demand Bonds (The EnergyNetwork/SINA Project-2000 Series) (the "Bonds") are being issued by theConnecticut Development Authority (the "Issuer"), this Irrevocable Direct PayLetter of Credit No. ********* in the amount of $4,364,500 (the"Stated Amount"), of which (1) $4,300,000 (as from time to time reduced orreinstated as provided in this Letter of Credit, the "Principal Component")shall support the payment of the principal or portion of the purchase pricecorresponding to principal of the Bonds, and (2) $64,500 (as from time to timereduced or reinstated as provided in this Letter of Credit, the "InterestComponent") shall support the payment of up to 45 days' interest on the Bonds orportion of the purchase price corresponding to interest at an assumed rate of12% per annum, effective immediately and expiring at 5:00 P.M. (Scranton time)on the below-defined Stated Termination Date or earlier as hereinafter provided.Any payment pursuant to a drawing under this Letter of Credit will be made by uswith our own funds, and not from any separate funds of the Issuer or theBorrower. As used herein, the term "Indenture" will be deemed to mean thatcertain Indenture of Trust dated as of January 1, 2000 among the Issuer andState Street Bank and Trust Company, as trustee (the "Trustee"). As used herein,the term "Stated Termination Date" means January 14, 2001.
We hereby irrevocably authorize you to draw on us, in an aggregate amount notto exceed the amount of this Letter of Credit set forth above and in accordancewith the terms and conditions and subject to the reductions in amount ashereinafter set forth, (1) in one drawing per month (subject to the provisionscontained in the next following paragraph) by your draft (in the form of Annex Aattached hereto), payable at sight on a Business Day, and accompanied by yourwritten and completed certificate signed by you in the form of Annex B attachedhereto (such draft accompanied by such certificate being your "InterestDrawing"), an amount not exceeding the Interest Component, computed at anassumed rate of 12% per annum; (2) in one or more drawings by one or more ofyour drafts (in the form of Annex A attached hereto), payable at sight on aBusiness Day, and accompanied by your written and completed certificate signedby you in the form of Annex C attached hereto (any such draft accompanied bysuch certificate being your "Tender Drawing"), an aggregate amount not exceedingthe sum of the Principal Component and the Interest Component; (3) in one ormore drawings by one or more of your drafts (in the form of Annex A attachedhereto), payable at sight on a Business Day, and accompanied by your written andcompleted certificate signed by you in the form of Annex D attached hereto (anysuch draft accompanied by such certificate being your "Partial RedemptionDrawing"), an aggregate amount not exceeding the sum of the Principal Componentand the Interest Component; and (4) in a single drawing by your draft (in theform of Annex A attached hereto), payable at sight on a Business Day, andaccompanied by your written and completed certificate signed by you in the formof Annex E attached hereto (such draft accompanied by such certificate beingyour "Final Drawing", and any Interest Drawing, Tender Drawing, PartialRedemption Drawing or Final Drawing referred to herein being a "Drawing"), anamount not exceeding the sum of the Principal Component and the InterestComponent. Each such Drawing shall cover principal of and/or accrued and unpaidinterest on the Bonds. "Business Day" means any day (i) that is not a Saturday,Sunday or legal holiday, (ii) that is a day on which banks are not required orauthorized to close in Hartford, Connecticut or New York, New York, (iii) thatis a day on which banking institutions in each of the cities in which theprincipal corporate trust office of the Trustee, the principal office of theRemarketing Agent (as defined in the Indenture) and our principal office arelocated are not required or authorized to remain closed and (iv) that is a dayon which the New York Stock Exchange is not closed.

If you shall draw on us by your Interest Drawing under clause (1) of thefirst sentence of the immediately preceding paragraph and you shall not havereceived from us within ten (10) calendar days from the date of such drawing awritten notice to the effect that a default exists under our reimbursementagreement with the Borrower and that the Interest Component of the Letter ofCredit will not be reinstated, your right to draw on us in a single drawing byyour Interest Drawing under said clause (1) shall be automatically reinstatedand, effective the eleventh (11th) calendar day from the date of such drawing,you shall again be authorized to draw on us by your Interest Drawing inaccordance with said clause (1); provided, however, that the Interest Componentof this Letter of Credit shall be decreased as hereinafter provided inconnection with amounts drawn pursuant to Partial Redemption Drawings and anyTender Drawing. The automatic reinstatement of your right to draw on us by yourInterest Drawing shall be applicable to successive drawings by your InterestDrawings under clause (1) of the first sentence of the immediately precedingparagraph so long as this Letter of Credit shall not have terminated as setforth below.

Upon our honoring any Tender Drawing or Partial Redemption Drawing presentedby you hereunder, (i) the Principal Component of this Letter of Credit and theamounts available to be drawn hereunder by you with respect to principal of theBonds by any subsequent Drawing shall be automatically decreased by an amountequal to the Principal Component of such Tender Drawing or Partial RedemptionDrawing, and (ii) the Interest Component of this Letter of Credit and theamounts available to be drawn hereunder by you with respect to accrued andunpaid interest on the Bonds by any subsequent Drawing shall be automaticallydecreased by an amount equal to the portion of the Interest Component relatingto Bonds purchased or redeemed with the proceeds of such Tender Drawing orPartial Redemption Drawing, but shall automatically reinstate asfollows:

	(A) with respect to any decrease upon payment of any Tender Drawing, theamount of the Principal Component of this Letter of Credit and the portion ofthe Interest Component relating thereto shall be increased when and to theextent, but only when and to the extent, that we are reimbursed by or on behalfof the Borrower for any amount drawn hereunder by any Tender Drawing. Any amountreceived by us from or on behalf of the Borrower in reimbursement of amountsdrawn hereunder by any Tender Drawing shall, if accompanied by your completedcertificate signed by you in the form of Annex F attached hereto, be applied tothe extent of the amount indicated therein to reimburse us for amounts drawnhereunder by your Tender Drawings; and

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

Funds from us under this Letter of Credit are available to you againstpresentation of your Interest Drawing, your Tender Drawing, your PartialRedemption Drawing and your Final Drawing. Each sight draft drawn under thisLetter of Credit must bear on its face the clause "Drawn under Fleet NationalBank Irrevocable Direct Pay Letter of Credit No. *********." EachDrawing shall be presented to us at the following address: [Fleet National Bank,c/o Fleet Pennsylvania Services, Trade Services Operations, One Fleet Way,Scranton, PA 18507, attention: Standby Letter of Credit Unit, Mail CodePASCNO4E.] A Drawing shall be deemed to have been presented on the date actuallyreceived by us. Presentation will also be deemed made upon our receipt of yourtelecopier transmission to us (at Fax No. [(717) 330-4187)] of a facsimile ofthe appropriate sight draft and drawing certificate properly completed andsigned, together with your undertaking to send to us by regular U.S. Mail, forreceipt on the next following Business Day, the signed originals of suchdocuments. Presentation may not be made in any manner other than as provided inthis paragraph. If we receive any of your Drawings (other than a Tender Drawing)at our aforesaid office, all in strict conformity with the terms and conditionsof this Letter of Credit, not later than 12:00 noon (New York City time) on aBusiness Day (provided that this Letter of Credit has not then terminated), wewill cause payment of same by 1:00 P.M. (New York City time) on the nextfollowing Business Day in accordance with your payment instructions. If wereceive any of your Drawings (other than a Tender Drawing) at such office, allin strict conformity with the terms and conditions of this Letter of Credit,after 12:00 A.M. (New York City time) on a Business Day (provided that thisLetter of Credit has not then terminated), we will cause payment of same by12:00 noon (New York City time) on the second succeeding Business Day inaccordance with your payment instructions. If we receive any Tender Drawing atour aforesaid office, all in strict conformity with the terms and conditions ofthis Letter of Credit, not later than 10:00 A.M. (New York City time) on anyBusiness Day (provided that this Letter of Credit has not then terminated), wewill cause payment of same by 2:00 P.M. (New York City time) on the sameBusiness Day in accordance with your payment instructions. If we receive anyTender Drawing at such office, all in strict conformity with the terms andconditions of this Letter of Credit, after 10:00 A.M. (New York City time) onany Business Day (provided that this Letter of Credit has not then terminated),we will cause payment of same by 12:00 noon (New York City time) on the nextfollowing Business Day in accordance with your payment instructions. Ifrequested by you, payment under this Letter of Credit may be made by wiretransfer of Federal Reserve Bank of Boston funds to your account in a bank onthe Federal Reserve wire system or by deposit of same day funds into adesignated account that you maintain with us. As used in this Letter of Credit"cause payment" shall mean (i) the deposit of same day funds into a designatedaccount with us, if such deposit is requested; or (ii) if wire transfer isrequested, the entry of an appropriate wire transfer in the Federal Reserve wiresystem and the obtaining of a Federal Reserve reference number.
Upon the earliest of (i) our honoring your Final Drawing presented hereunderaccompanied by this Letter of Credit, (ii) 5:00 p.m. (New York City time) on thedate on which we receive a certificate signed by you accompanied by this Letterof Credit stating that the Borrower has provided and you have accepted asubstitute or replacement "Credit Facility" (as defined in the Indenture) inaccordance with the terms of the Indenture that is effective the date of suchcertificate, or (iii) the Stated Termination Date, this Letter of Credit shallterminate.

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

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

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

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

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

	Very truly yours,

FLEET NATIONAL BANK

 

By:____________________________________

Authorized Signature

 

 

Annex A

[Form of Sight Draft]

DRAWN UNDER FLEET NATIONAL BANK

IRREVOCABLE DIRECT PAY

LETTER OF CREDIT NO. *********
										Date:____________

AMOUNT: _______________________

Pay at sight

Pay to the order of ________________________, as trustee

(U.S. $_________________)

Charge to account of Fleet National Bank

	Irrevocable Direct Pay Letter of Credit No. ********* datedJanuary 14, 2000
TO:	Fleet National Bank

	c/o Fleet Pennsylvania Services

	Trade Services Operations

	One Fleet Way

	Scranton, PA 18507

	Attention: Standby Letter of Credit Unit

						___________________, as Trustee

						By:_________________________

						 Authorized Officer

	The signature below constitutes an endorsement of this sight draft.

						___________________, as Trustee

						By:_________________________

						 Authorized Officer

Annex B

[Form of Certificate for Interest Drawing]

"CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT

OF UP TO 45 DAYS' INTEREST

Irrevocable Direct Pay Letter of Credit No. ***********
The undersigned, a duly authorized officer of the undersigned Trustee(the 'Trustee'), hereby certifies to Fleet National Bank (the 'Bank'), withreference to Irrevocable Direct Pay Letter of Credit No. *********(the 'Letter of Credit', the terms defined therein and not otherwise definedherein being used herein as therein defined) issued by the Bank in favor of theTrustee, as follows:
(1)		The Trustee is the Trustee under the Indenture.

(2) 	The Trustee is making a drawing under the Letter of Credit withrespect to a payment of interest on Bonds on an interest payment date, whichpayment is due and payable. As of the record date for such interest payment,none of such Bonds to which this drawing relates were the Borrower Bonds orPledged Bonds, as those terms are defined in the Indenture.

(3) 	[The Interest Drawing of which this Certificate is a part is thefirst Interest Drawing presented by the Trustee under the Letter of Credit, andcovers interest on the Bonds accruing on and after [ ], 2000.]* [TheInterest Drawing last presented by the Trustee under the Letter of Credit washonored and paid by the Bank on ______, 200_, and the Trustee has not received anotice within ten days of presentation of such Interest Drawing from the Bankthat a default exists under the reimbursement agreement between the Borrower andthe Bank.]**

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

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

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

							[ ], as Trustee

 

By:________________________________"

Name:

Title:					

Annex C

[Form of Certificate for Tender Drawing]

"CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF

THE PURCHASE PRICE OF BONDS TENDERED AT THE OPTION OF

THE HOLDERS THEREOF OR PURSUANT TO MANDATORY TENDER

Irrevocable Direct Pay Letter of Credit No. ***********
 

The undersigned, a duly authorized officer of the undersigned Trustee(the 'Trustee'), hereby certifies to Fleet National Bank (the 'Bank'), withreference to Irrevocable Direct Pay Letter of Credit No. *********(the 'Letter of Credit', the terms defined therein and not otherwise definedherein being used herein as therein defined) issued by the Bank in favor of theTrustee, as follows:
(1)	The Trustee is the Trustee under the Indenture.

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

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

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

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

(6)	The amount of the Tender Drawing of which this Certificate is a partwas computed in compliance with the terms and conditions of the Bonds and theIndenture and does not exceed the amount available to be drawn by the Trusteeunder the Letter of Credit; the amount being drawn hereby in respect of interestdoes not exceed the Interest Component and the amount being drawn hereby inrespect of principal does not exceed the Principal Component.

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

 

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

	[ ], as Trustee

 

	By:_____________________________"

Name:

Title:

				

Annex D

[Form of Certificate for Partial Redemption Drawing]

"CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT

OF PRINCIPAL AND UP TO 45 DAYS' INTEREST UPON PARTIAL

REDEMPTION

Irrevocable Direct Pay Letter of Credit No. ***********
 

The undersigned, a duly authorized officer of the undersigned Trustee (the'Trustee'), hereby certifies to Fleet National Bank (the 'Bank'), with referenceto Irrevocable Direct Pay Letter of Credit No. ********* (the'Letter of Credit', the terms defined therein and not otherwise defined hereinbeing used herein as therein defined) issued by the Bank in favor of theTrustee, as follows:
(1)	The Trustee is the Trustee under the Indenture.

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

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

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

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

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

The Trustee acknowledges that, pursuant to the terms of the Letter of Credit,upon the Bank's honoring the Partial Redemption Drawing of which thisCertificate is a part, the amount of the Letter of Credit and the amountsavailable to be drawn by the Trustee thereunder by any subsequent Drawing areautomatically and permanently decreased by the amounts set forth in the Letterof Credit. The Trustee acknowledges that pursuant to the immediately precedingsentence, the Principal Component of the Letter of Credit is being permanentlyreduced by $_____________ (the amount set forth in clause (i) of Paragraph 3above) and the maximum amount to which the Interest Component can be reinstatedunder the Letter of Credit is being permanently reduced by $___________ (theproduct of (x) the amount set forth in clause (i) of Paragraph 3 above, times(y) 0.12, times (z) 45/360).

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

	[ ], as Trustee

 

	By:__________________________"

	 Name:

	 Title:				

Annex E

[Form of Certificate for Final Drawing]

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

Irrevocable Direct Pay Letter of Credit No. ***********
 

	The undersigned, a duly authorized officer of the undersigned Trustee(the 'Trustee'), hereby certifies to Fleet National Bank (the 'Bank'), withreference to Irrevocable Direct Pay Letter of Credit No. *********(the 'Letter of Credit', the terms defined therein and not otherwise definedherein being used herein as therein defined) issued by the Bank in favor of theTrustee, as follows:
(l)	The Trustee is the Trustee under the Indenture.

(2)	The Trustee is making a drawing under the Letter of Credit withrespect to a payment*
[ ] upon stated maturity,

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

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

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

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

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

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

(4)	The amount of the Final Drawing of which this Certificate is a partwas computed in compliance with the terms and conditions of the Bonds and theIndenture and does not exceed the amount available to be drawn by the Trusteeunder the Letter of Credit; the amount being drawn hereby in respect of interestdoes not exceed the Interest Component and the amount being drawn hereby inrespect of principal does not exceed the Principal Component.

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

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

 

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

	[ ], as Trustee

 

	By:_________________________"

	 Name:

								 Title:				

Annex F

[Form of Reinstatement Certificate for TenderDrawing]

"CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE UNDERIRREVOCABLE DIRECT PAY LETTER OF CREDIT NO. *********
The undersigned, a duly authorized officer of the undersigned Trustee(the 'Trustee'), hereby certifies to Fleet National Bank (the 'Bank'), withreference to Irrevocable Direct Pay Letter of Credit No. *********(the 'Letter of Credit', the terms defined therein and not otherwise definedherein being used herein as therein defined) issued by the Bank in favor of theTrustee, as follows:
(1)	The Trustee is the Trustee under the Indenture.

(2)	The amount of $__________ paid to you today by or on behalf of theBorrower is a payment made to reimburse you, pursuant to Section 2(f) of theReimbursement Agreement dated as of January 1, 2000 (the "ReimbursementAgreement") among the Borrower and the Bank, for amounts drawn under the Letterof Credit by Tender Drawings. Of such amount, $___________ represents theaggregate principal amount of Bonds resold or to be resold on behalf of theBorrower. The Trustee hereby requests that you reinstate the Principal Componentof the Letter of Credit upon receipt of such payment in an amount equal to suchprincipal amount and that you reinstate the portion of the Interest Component ofthe Letter of Credit relating to such Bonds.

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificateas of the __________ day of ___________, ____.

	[ ], as Trustee

 

	By:_______________________"

	 Name:

								 Title:

Annex G

[Form of Transfer Certificate]

"INSTRUCTION TO TRANSFER

 

												[Date]

 

Fleet National Bank

c/o Fleet Pennsylvania Services

Trade Services Operations

One Fleet Way

Scranton, PA 18507

Attention: Standby Letter of

Credit Unit

Mail Code: PASCNO4E

 

Re: Fleet National Bank Irrevocable Direct Pay Letter of Credit No.*********
Ladies and Gentlemen:

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

________________________________

[Name of Transferee]

__________________________________

[Address]

 

 

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

	By this transfer, all rights of the undersigned beneficiary in the Letterof Credit are transferred to the Transferee and the Transferee shall have thesole rights as beneficiary thereof, including sole rights relating to anyamendments of the Letter of Credit, whether increases in the amount to be drawnthereunder, extensions of the expiration date thereof, or other amendments, andwhether such amendments now exist or are made after the date hereof. Allamendments of the Letter of Credit are to be delivered directly to theTransferee without necessity of any consent of or notice to the undersignedbeneficiary. The undersigned hereby certifies that the Transferee has becomesuccessor Trustee under the Indenture, and has accepted such appointment inwriting.

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

 

Very truly yours,

		[ ], as predecessor Trustee

 

	By:________________________________

	 Authorized Officer

 

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

 

	[Name of Transferee]

 

	By:	
		Authorized Officer

EXHIBIT C

FORM REQUEST FOR EXTENSION OF TERMINATION DATE

OF LETTER OF CREDIT

[date]

Fleet National Bank

One Hundred Federal Street

Boston, Massachusetts 02110

	Re:	Request for Extension of Termination Date of Letter ofCredit
Ladies/Gentlemen:

	Reference is hereby made to that certain Reimbursement Agreement, datedas of January 1, 2000 (the "Agreement"), between The Energy Network, Inc.(the "Borrower") and Fleet National Bank (the "Bank") and theLetter of Credit referred to therein. All capitalized terms contained hereinwhich are not specifically defined shall be deemed to have the definition setforth in the Agreement. The Institution hereby requests, pursuant to Section3(e) of the Agreement, that the Termination Date for the Letter of Credit beextended by one year. This request is being given not earlier than the yearanniversary of the Letter of Credit and not later than 225 days prior to thescheduled Termination Date. Pursuant to Section 3(e) of the Agreement, we haveenclosed along with this request the following information:

	1. The outstanding principal amount of**the Bonds;

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

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

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

								Very truly yours,

								The Energy Network, Inc.

								By:___________________________

								 Name:__________________

								 Title: ___________________

EXHIBIT D

List of Subsidiaries

EXHIBIT E

Litigation

 

EXHIBIT F

Financial Statement Certificate 

 

Fleet National Bank

One Hundred Federal Street

Boston, Massachusetts 02110

Attention: Thomas L. Rose, Vice President

Ladies and Gentlemen:

	As required by that certain 3-Year Reimbursement CreditAgreement dated January 1, 2000, by and between The Energy Network, Inc. (the"Borrower") and Fleet National Bank, a review of the activities of the Borrowerfor the fiscal quarter/fiscal year ended **[__________]** has been made undermy supervision with a view to determining whether the Borrower has kept,observed, performed and fulfilled all of its obligations under the ReimbursementCredit Agreement and all other agreements or undertakings contemplatedthereby.

	The undersigned hereby certifies that the amounts setforth below, with abbreviated descriptions, to the best of my information andbelief, accurately present amounts required to be calculated by variouscovenants of the Reimbursement Credit Agreement as of the last day of the fiscalquarter/fiscal year noted above and all terms used herein have the identicalmeaning as in the Reimbursement Credit Agreement.

1.	**7(i)(B)(i) - Total Debt to Tangible NetWorth
		Total Debt		_______________

		Tangible Net Worth		_______________

		Ratio of Total Debt to Tangible NetWorth		_______________

		Maximum Permitted		 2.25 to 1

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

		Minimum Required		 $30,000,000

3.	**7(i)(i)(b) Debt Service Coverage Ratio
		EBITDA plus equity purchasefunds		_______________

		Debt Service		_______________

		Debt Service CoverageRatio		_______________

		Minimum Required		 1.25 to 1

4.		**7(i)(i)(c) Interest Coverage Ratio
		EBIT			_______________

		Interest expense		_______________

		Interest Coverage Ratio		_______________

		Minimum Required		 2.5 to 1

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

	CTG capitalization	________________

	CTG ratio of debt tocapitalization	________________

	Maximum Permitted	 70%

6.	**10(n) S&P Rating of CTG OperatingSubsidiaries
	Lowest Standard & Poor's debt rating of each

	operating subsidiary of CTG	________________

	Minimum Required	 BBB

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

			Sincerely,

			THE ENERGY NETWORK, INC.

 

	By:	

			Title:	

EXHIBIT G

Existing Other Indebtedness and Liens

 

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