PARTNERSHIP TERMINATION AGREEMENT

 

	This Partnership Termination Agreement ("Termination Agreement") is madeand entered into as of the 29th day of December, 1999, by and among THE ENERGYNETWORK, INC. ("TEN"), a Connecticut corporation a/k/a Energy Networks, Inc.,HARTFORD COGENERATION ASSOCIATES LIMITED PARTNERSHIP ("HCA"), a Connecticutlimited partnership, DOWNTOWN COGENERATION ASSOCIATES LIMITED PARTNERSHIP (the"Partnership"), a Connecticut limited partnership, and INDEPENDENT ENERGYOPERATIONS, INC. ("IEO"), a Connecticut corporation.

	WHEREAS, on August 22, 1989, TEN, HCA and Paul Romanelli ("Romanelli")entered into an Agreement of Limited Partnership of Downtown CogenerationAssociates Limited Partnership (the "Partnership Agreement") providing for theformation and operation of the Partnership; and

	WHEREAS, pursuant to Section 2.03 of the Partnership Agreement, Romanelliwithdrew as a partner in 1989, leaving TEN and HCA as the sole remainingpartners (the "Partners"); and

	WHEREAS, the Partnership was formed for the principal purpose ofacquiring and operating a cogeneration facility at the former G. Fox store onMain Street in Hartford, Connecticut (the "Cogeneration Project"); and

	WHEREAS, IEO and The Connecticut Light and Power Company ("CL&P")entered into an Electricity Purchase Agreement (the "EPA"), dated as ofDecember 23, 1987, which provided for the sale by IEO of electricity toCL&P; and

	WHEREAS, IEO assigned its rights and obligations under the EPA to thePartnership by an Assignment and Acceptance Agreement, dated August 23, 1989;and

	WHEREAS, IEO and The Hartford Steam Company ("HSC") entered into a SteamSupply Agreement (the "Steam Supply Agreement"), dated as of December 3,1987, providing for the sale by IEO of steam to HSC; and

	WHEREAS, IEO assigned its rights and obligations under the Steam SupplyAgreement to the Partnership by an Assignment and Acceptance Agreement, datedAugust 23, 1989; and

	WHEREAS, IEO and The May Department Stores Company ("May") entered intoan Agreement of Lease (the "Lease") and related Agreement (the "May Agreement"),each dated as of April 3, 1986; and

	WHEREAS, IEO assigned its rights and obligations under the Lease and theMay Agreement, each as amended, to the Partnership on August 23, 1989; and

	WHEREAS, May assigned its interests and obligations under the Lease andthe May Agreement, each as amended, to the City of Hartford pursuant to aQuitclaim Deed, Assignment and Assumption Agreement dated and recorded April 14,1993, in the Hartford Land Records; and

	WHEREAS, IEO and Solar Turbines Incorporated ("Solar") entered into anOperation and Maintenance Agreement (the "O & M Agreement") with respect tothe Cogeneration Project, dated as of February 3, 1989; and

	WHEREAS, IEO assigned its interests and obligations under the O & MAgreement to the Partnership by an Assignment and Acceptance Agreement, datedAugust 23, 1989; and

	WHEREAS, IEO, TEN, HCA and the Partnership entered into an Agreement toPay Development Commission (the "Commission Agreement"), dated August 22, 1989,pursuant to which the Partnership agreed to pay IEO a Development Commission, asdefined therein; and

	WHEREAS, the Partnership and CL&P have either entered into atermination and release agreement by the date first set forth above or, if theyhave not entered into the same, plan to enter into a termination and releaseagreement in substantially the form attached hereto as Attachment A (as eitherentered into or attached hereto the "Termination and ReleaseAgreement") providing for the termination of the EPA; and 

	WHEREAS, the Partnership and CL&P have either entered into aninterconnection agreement by the date first set forth above or, if they have notentered into the same, plan to enter into an interconnection agreement insubstantially the form as the "Interconnection Agreement" attached asExhibit A to the Termination and Release Agreement attached hereto as AttachmentA; and

	WHEREAS, the Termination and Release Agreement provides, among otherthings, for a payment by CL&P to the Partnership of $5,500,000 (the"Termination Payment"); and

	WHEREAS, the Partnership and HSC have either entered into a steam supplytermination agreement by the date first set forth above or, if they have notentered into the same, plan to enter into a steam supply termination agreementin the form attached hereto as Attachment B, (as either entered into or attachedhereto, the "Steam Supply Termination Agreement") providing for the terminationof the Steam Supply Agreement; and

	WHEREAS, the Partners desire to terminate and dissolve the Partnershipand certain related agreements;

	NOW, THEREFORE, in consideration of the premises and the promisescontained in this Agreement, the parties agree as follows:

	1.	Payments by Partnership.  On the 15th businessday after receipt by the Partnership of the Termination Payment, the Partnershipwill take the following actions (the "First Closing"):

			(a)  The Partnership will make a cash payment to TEN in theamount of $955,000, and TEN will accept such payment, as full and completepayment for any and all Technical Fees and Administrative Fees which wouldotherwise be earned by TEN on or after the date of the First Closing underSection 4.02 of the Partnership Agreement.

			(b)  The Partnership will make a cash payment to IEO in theamount of $840,000, and IEO will accept such payment, as full and completepayment for any and all Development Commissions which would otherwise be earnedby IEO on and after the date of the First Closing under Section 4.02 of thePartnership Agreement and under the Commission Agreement.  IEO, the Partnership,TEN and HCA hereby agree that upon payment by the Partnership of said $840,000,the Commission Agreement will be terminated and be of no further force andeffect, except as to obligations arising prior to the date of the FirstClosing.

			(c)  The Partnership will make a cash distribution to HCA of$3,382,500, subject to adjustment based upon the amount of indebtedness andinterest paid in accordance with Section 1(d) below.

			(d)  The Partnership will pay all of its then outstandingindebtedness, together with interest due, to BankBoston under Loan No. 047-2808020-000 00072, which has a balance due as of the date of this Agreement in theamount of approximately $1,134,000 provided that there is then an outstandingindebtedness to BankBoston.  In the event that another entity has entered into asuccessor loan agreement with the Partnership for such indebtedness, thePartnership will pay that outstanding indebtedness, together with interestdue.

			(e)  If an agreement has been reached between the City ofHartford and the Partnership providing for termination of the Partnership'sLease and May Agreement with the City of Hartford (the "City Settlement") andfor a full and final payment by the date of the First Closing, the Partnershipwill make the agreed-upon payment to the City of Hartford pursuant to the CitySettlement.

	2.	Contribution to Partnership by TEN.  (a) In consideration ofthe Partnership's assignment to TEN of the right to receive payments by HSCunder the Steam Supply Termination Agreement and in order to facilitate thepayments provided for in Subsections (a) through (d) of Section 1 above, TENwill make a cash contribution to the Partnership at the First Closing of$811,500, subject to adjustment based upon the amount of indebtedness andinterest paid in accordance with Section 1(d) above.  If the City Settlement hasbeen reached and a full and final payment is made by the First Closing, TEN willcontribute $156,000 to the Partnership to fund such full and final payment.  Ifthe required full and final payment is more than $156,000, TEN and HCA will eachcontribute to the Partnership 50% of the amount paid to the City of Hartfordpursuant to the City Settlement in excess of $156,000.  

	(b)  If the City Settlement has been reached prior to the First Closing,or is reached thereafter, which provides for payments that will extend beyondthe First Closing, the aggregate cost of those payments will be determined bythe Partnership on a present value basis using a discount rate of 8%.  TEN willcontribute  $156,000 toward such aggregate cost of payments.  If the presentvalue of the aggregate cost of those payments is more than $156,000, TEN and HCAwill each contribute 50% of the additional amount.	

	(c) If a City Settlement provides for payments that will extend beyondthe date of the First Closing but for a period of ninety (90) days or less, thePartnership will make such payments.  If any City Settlement provides forpayments which will extend more than ninety (90) days beyond the date of theTermination Payment, the Partners and the partners of HCA will enter into anagreement with a third party financial institution or other responsible entity("City Settlement Payor") whereby the City Settlement Payor will makesuch payments required in fulfillment of the City Settlement which are to bemade following dissolution of the Partnership and such earlier payments as maybe agreed.  The Partnership will pay to the City Settlement Payor the amount ofall contributions made pursuant to Subsection (b) of Section 2, together withany required fee (taking into account interest to the extent available orapplicable).  In the event that the amount required to be paid to the CitySettlement Payor by the Partnership to fund said payments under the CitySettlement is deemed  insufficient by the City Settlement Payor, the abovediscount rate will be adjusted by the Partners so as to produce a payment to theCity Settlement Payor which will sufficiently fund its obligation to make suchpayments.  Said agreement with the City Settlement Payor will provide that allexcess monies remaining after the final payment under the City SettlementAgreement will be paid over to TEN and the partners of HCA (or their successorsor assigns) in accordance with their respective shares in the Partnership andHCA when they were extant, together with interest on such excess amount to theextent the Partners are able to negotiate such a payment of interest by the CitySettlement Payor.

	3.	Additional Contributions by Partners.  In addition to theamounts provided for in Section 2 above, at the First Closing, TEN and HCA willeach contribute to the Partnership 50% of the funds necessary to bring thePartnership's liquid assets (defined for purposes hereof as cash and receivablesless aggregate liabilities) to an aggregate of $500,000 after payment of allamounts specified in Subsections (a) through (d) of Section 1 above, in order toprovide the Partnership with sufficient funds to complete the dissolution andliquidation of the Partnership. 

	4.	Assignment of Payments to TEN.  In consideration of TEN'scash contribution to the Partnership, as provided for in Section 2 above, and ofthe distribution to HCA of $3,382,500 (or the adjusted amount) as provided inSection 1(c) above, the Partnership will assign to TEN, and TEN will accept, allof the Partnership's rights to payments by HSC under the Steam SupplyTermination Agreement, by execution and delivery of an Assignment of Rights toPayments and Consent to Assignment in the form of Exhibit Ahereto.

	5.	Termination of Lease and May Agreement.  In the event thatthe City Settlement has not been entered into  prior to the First Closing,  thePartnership will, after the First Closing, attempt to reach agreementexpeditiously with the City of Hartford or its assignee to terminate the Leaseand the May Agreement under terms satisfactory to the Partnership.  	

	6.	Winding Up and Liquidation of Partnership.  (a)  If thePartnership has been able to terminate or otherwise dispose of the Lease, theMay Agreement and all other agreements to which the Partnership is a party bythe date of the First Closing, the Partnership will promptly take any and allappropriate actions to dispose of its remaining assets of the Partnership and tosettle its remaining liabilities and obligations with the objective ofdissolving and liquidating the Partnership in accordance with Section 7 of thePartnership Agreement within 90 days of the receipt of the Termination Payment,unless such liquidation is prevented by circumstances beyond the control of thePartners or by obligations to third parties (other than affiliates of thePartners) which the Partners can not arrange to have performed other than by thecontinuation of the Partnership.  In the event that the Partnership can not beliquidated and dissolved within 90 days of the receipt of the TerminationPayment for the reasons set forth in the prior sentence, the Partnership willcontinue operations only for so long and to such an extent as is necessary tomeet such contractual obligations to third parties (other than affiliates of thePartners) and/or following the end of said circumstances beyond the control ofthe Partners.  As soon as such contractual obligations are fulfilled and/orfollowing the end of said circumstances, the Partnership will liquidate anddistribute all remaining assets to the Partners in accordance with their shares.In the event that the continued operations of the Partnership during theliquidation process requires funds in excess of those available to it, thePartners will contribute such required additional funds in accordance with theirrespective Partnership shares.  

	     (b)  Disposition of the assets of the Partnership shall beaccomplished in a commercially reasonable fashion with the objective of securingthe maximum consideration for the Partnership.  Each of the Partners (and thepartners of HCA) shall have the option to bid on any or all of the Partnershipassets for a thirty (30) day period following the Termination Payment. Thewritten consent of the non-purchasing Partner (and  the non-purchasingpartner(s) of HCA) must be obtained by the  Purchasing Partner (and thepurchasing partner(s) of HCA) as to such purchase(s).  In the event neither ofthe Partners (nor either partner of HCA) elects to exercise said option to bid,or if either or both Partners (or either of the partners of HCA) bid but thenon-purchasing Partner(s)(and the non-purchasing partner(s) of HCA) do notconsent, the Partnership will attempt to dispose of such assets by sale to thirdparty purchasers (including affiliates of the Partners and affiliates of thepartners of HCA) in accordance with the first sentence of this Subsection (b) ofSection 6.  In the event that no third party purchaser can be found which iswilling to pay a price higher than the price that a Partner (or either of thepartners of HCA) was willing to pay for any such assets, the bidding Partner (orthe bidding partner of HCA) shall be permitted to purchase those assets for theprice it bid hereunder.  During the liquidation process, TEN will continue itsrole as Managing Partner and Tax Matters Partner.

	     (c)     If TEN desires to operate the Cogeneration Project on atemporary basis in order to provide it with supplemental chilled water capacitythrough the summer of 2000, the Partners (and the partners of HCA) will enterinto good-faith negotiations toward an agreement that will permit such temporaryoperation in a manner that is equitable to all of the Partners (and the partnersof HCA).

	7.	Conditions.  The dissolution and liquidation of thePartnership is conditioned upon the following:

	(a)	The termination of the EPA;

	(b)	The receipt by the Partnership of the Termination Payment asprovided for in the Termination and Release Agreement;

	(c)	The execution by the Partnership and HSC of the Steam SupplyTermination Agreement; 

	(d)   Disposition of the Lease, the May Agreement and the O & MAgreement in a manner satisfactory to the Partners; and

	(e) Termination of the Interconnection Agreement in a manner satisfactoryto the Partners.

	8.	Closing.  The First Closing will be held at the offices ofMurtha, Cullina, Richter and Pinney LLP, CityPlace I, 185 Asylum Street,Hartford, Connecticut 06103 at 10:00 a.m. on the 15th business dayafter receipt of the Termination Payment.

	9.	Termination of All Rights and Obligations.  It is theintention of the parties to this Termination Agreement to provide for thetermination of all rights and obligations among them with respect to theCogeneration Project, other than those rights and obligations whose continuationis specifically provided for in this Agreement, and the parties agree that anyand all agreements with respect to the Cogeneration Project, other than asprovided herein, shall be extinguished and shall be of no further force andeffect after the consummation of the transaction provided for herein.

	10.	Mutual Representations.  Each party represents and warrantsto the other party that:

			(a)	the execution, delivery and performance of thisTermination Agreement has been duly authorized by all necessary proceedings;

			(b)	this Termination Agreement constitutes its legal, validand binding obligation, enforceable against it in accordance with the termshereof, except as: (i) such enforcement may be subject to bankruptcy,insolvency, reorganization, moratorium or other similar laws now or hereafter ineffect relating to creditors' rights generally, and (ii) the remedy of specificperformance and injunctive relief may be subject to equitable defenses and tothe discretion of the court before which any proceeding therefor may bebrought;

	    		(c)	there is no action, suit, grievance, arbitration orproceeding pending or, to the knowledge of such party, threatened against oraffecting such party at law or in equity, before any governmental authority thatprohibits or impairs its ability to execute and deliver this TerminationAgreement or to consummate the transactions provided for herein.

	11.	Governing Law; Jurisdiction; Waivers.  This TerminationAgreement shall be construed in accordance with and governed by the laws of theState of Connecticut, without applicable of principles of conflicts of law. EACHPARTY HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THESTATE OF CONNECTICUT FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF ORRELATING TO THIS TERMINATION AGREEMENT AND THE TRANSACTION.  EACH PARTYIRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,(a) ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT INSUCH A COURT; (b) ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH COURTHAS BEEN BROUGHT IN AN INCONVENIENT FORUM; AND (c) ITS RIGHT TO A JURY TRIAL OFANY CLAIM RESULTING HEREFROM.

	12.	Counterparts.  This Termination Agreement may be executedin any number of counterparts, all of which taken together shall constitute oneand the same instrument.

	13.	Amendments.  This Termination Agreement may not be amended,supplemented or otherwise modified, and no provision of this TerminationAgreement may be waived, except by a written instrument signed by each of theparties.

	14.	Assignments.  This Termination Agreement shall be bindingupon, and inure to the benefit of, each party and its successors and assigns;provided that no party may assign or transfer any of its rights orobligations under this Termination Agreement without the advance written consentof the other.

	15.	Further Assurances.  Subject to the terms and conditions ofthis Termination Agreement, each party shall execute and deliver such otherdocuments and instruments, provide such materials and information, and take suchother actions as may reasonably be necessary, proper or advisable, to the extentpermitted by applicable law, to fulfill the purposes and intent of thisTermination Agreement.

	16.	Confidentiality.  Each party shall keep confidential, andshall not disseminate to any third party (other than on a confidential basis toits counsel, advisors, lenders and affiliates) or use for any other purpose(except with the written authorization of the other parties), the specific termsand conditions of this Termination Agreement and any non-public informationreceived from the other that is marked as confidential or proprietary unlesslegally compelled by deposition, inquiry, request for documents, subpoena, civilinvestigative demand or similar process, or by order of a court, commission ortribunal of competent jurisdiction; or in order to comply with applicable rulesor requirements of any stock exchange, government department or agency or otherregulatory authority, or by requirements of any securities law or regulation orother legal requirement.  The parties shall reasonably coordinate all publicityspecifically relating to the transaction.

	17.	Entire Agreement.  This Termination Agreement sets forththe entire agreement of the parties with respect to the subject matter hereinand takes precedence over all prior understandings.

	18.	Expenses.  Each party shall bear all of its own costs andexpenses incurred by it to consummate the transactions provided for herein,including fees and expenses of their respective counsel, accountants andinvestment advisors.  Notwithstanding the foregoing, if a court determines thata party has failed to perform its obligations herein, then the prevailing partyshall be entitled to recover reasonable attorneys' fees, court costs and otherreasonable expenses incurred in the enforcement or attempted enforcement of theapplicable rights and obligations set forth in this Termination Agreement or ina successful claim for damages based on any breach of this TerminationAgreement.

	19.	Remedies.  Each party acknowledges and agrees that theother party would be damaged irreparably in the event any of the provisions ofthis Termination Agreement are not performed in accordance with their specificterms or otherwise are breached.  Accordingly, each party agrees that the otherparty shall be entitled to an injunction or injunctions to prevent breaches ofthe provisions of this Termination Agreement and to enforce specifically thisAgreement and the terms and provisions hereof in addition to any other remedy towhich it may be entitled, at law or in equity.  In any event, no party shallhave any liability to the other party for special, incidental, indirect orconsequential damages for any matter whatsoever associated with the activitiescovered by this Termination Agreement.

	20.  Severability.  If any provision of this Termination Agreementshall be held to be invalid, illegal or unenforceable, the validity, legality orenforceability of any of the remaining provisions shall not be in any wayaffected or impaired, and, to the fullest extent possible, the provisions hereofshall be constructed so as to give effect of the intent manifested by all of theterms of this Termination Agreement. 

	WHEREFORE, the parties have executed this Termination Agreement on thedate first above written.

					THE ENERGY NETWORK, INC.

 

 

					By:S/ R. L.Babcock                       
					      Name:R. L. Babcock

					      Title:Vice President

 

				Hartford Cogeneration Associates 

				Limited Partnership

					A General Partner

				       By:  Independent Energy

				               Operations, Inc.

				               Its General Partner

				         By: S/ Paul F.Romanelli          
					         Name:  Paul F. Romanelli

					         Title: President

					DOWNTOWN COGENERATION ASSOCIATES LIMITED 

					 PARTNERSHIP

 

					By:  The Energy Network, Inc.

					     A General Partner

					By:S/ R. L.Babcock                       
					      Name:R. L. Babcock

					      Title:Vice President

					     and

 

     				Hartford Cogeneration Associates 

     				Limited Partnership

				        	A General Partner

 

 

					    By:  Independent Energy

					            Operations, Inc.

					             Its General Partner

				         By: S/ Paul F.Romanelli          

					         Name:  Paul F. Romanelli

					         Title: President

		

		                                            INDEPENDENT ENERGY

	                                            OPERATIONS, INC.

 

 

				         By: S/ Paul F.Romanelli          
					         Name:  Paul F. Romanelli

					         Title: President