Document:

exh10n.htm

    

     

    

       

      

      Bylaws

      of

      Almasani
Al Kobra Mining Company

      A
Closed Joint Stock Saudi Company

       
 

      (Issued
pursuant to Ministerial Resolution No. 583 dated 01/05/1385 H. and amendments
thereto, and in conformity with Article 51 of the Companies Law)

      

      

      Part
“1”

       Incorporation
of the Company

      

      Article “1”: A Saudi
Joint-Stock Company shall be incorporated in accordance with the provisions of
these Bylaws and the provisions of the Companies Law, as follows:

      

      Article “2”: The Company’s
Name shall be Almasani Al Kobra
Mining Company, a closed joint stock company.

      

      Article “3”: Production of
silver alloys, gold alloys, copper concentrates, and zinc concentrates pursuant
to SAGIA Licence No. 993/2 dated 16/7/1428 H.

      

      Article
“4”:

      The
Company may have an interest in or participate in any manner whatsoever with
corporations or companies engaged in activities which are similar to its
activities or which may help the Company achieve its objects. Further, the
Company may own shares in and merge with or purchase such
companies.

      

      Further
still, the Company may have an interest in or participate in any manner
whatsoever with other companies provided that such interest or participation
shall not exceed 20 % of its free reserves nor 10 % of the capital of companies
in which the Company is participating; and provided further that the total of
such participation shall not exceed the value of such reserves and that the same
be brought before the 1st
Ordinary General Meeting.

      

      Article “5”: The Company’s
Head office shall be located in the city of Jeddah. However, the Board of
Directors may establish branches, offices or agencies for the Company within or
without the Kingdom of Saudi Arabia.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article “6”: The term of the
Company shall be Ninety Nine (99) Gregorian years commencing from the date of
the Minister of Commerce’s resolution announcing the formation of the Company,
which term may be extended under a resolution adopted by the Extraordinary
General Meeting of Shareholders, at least one year prior to the expiration of
the Company’s Term.

      

      Part
“2”

      Capital
and Shares

      

      Article “7”: The declared
Capital of the Company shall be Four Hundred Fifty Million Saudi Riyals
(SR450,000,000.00) divided into 45,000,000.00 shares of equal value of SR 10
each.

      

      Article “8”: The founder
shareholders have subscribed for the entire 45,000,000 shares of the Company and
paid up the amount of Two Hundred Twenty Five Million Saudi Riyals
(SR225,000,000.00) representing 50% of the value of the entire shares, deposited
with Albank Alsaudi Alfransi in the name of the Company under incorporation. The
founder shareholders agree to pay the remaining balance of the Capital amounting
to Two Hundred Twenty Five Million Saudi Riyals (SR225,000,000.00) representing
50% of the value of the entire shares pursuant to the resolution of the Board of
Directors.

      

      Article “9”: Subject to the
approval of the competent authorities, the Company may issue non-voting
preferred shares not exceeding 50% of the Company’s capital. In addition to
their right to share the net dividends distributed on ordinary shares, the
holders of preferred shares shall be entitled to the following:

      

      
        	
                a-  

              	
                The
      right to receive a certain percentage of the net profits, not less than 5%
      of the share par value after deduction of the statutory reserve and before
      any distribution of the profits of the
Company.

              

      

      

      
        	
                b-  

              	
                The
      right of priority to recover the value of their shares in capital upon
      liquidation of the Company and to receive a certain percentage of the
      liquidation proceeds.

              

      

      

      The
Company may purchase said shares in accordance with such principles and in such
manner as set forth in the Issue Decision. It is however provided that the Issue
Decision shall not include any provision putting the shareholder under the
obligation to sell his shares and that  the said shares shall not
count in the quorum required for the Company’s General Meeting provided for in
Articles “37 & 38” of these Bylaws.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article “10”: Shares shall be
of a nominal value. A share may not be issued in an amount less than the nominal
value thereof; however, a share may be issued in an amount exceeding the nominal
value thereof. In the latter case the difference is added to the statutory
reserve even if such reserve has reached the ceiling. A share is indivisible
vis-à-vis the Company. If a share is held by a number of persons, they shall
elect one from amongst themselves to represent them in exercising the rights
attached to such share, provided that such persons shall be jointly responsible
for all the obligations arising from the acquisition of such share.

      

      Article “11’: Shares shall be
negotiable once the certificates appertaining thereto are issued. However,
shares given against contributions in kind or cash shares subscribed to by the
incorporators shall not be negotiable before the publication of the balance
sheet and the profit and loss statement for two consecutive years each
consisting of at least twelve months as from the date of incorporation of the
Company. The provisions of this Article shall also apply to such shares as
subscribed to by the incorporators in case the capital of the Company is
increased before the expiry of the period of suspension as to the remaining
period.

      

      An
annotation shall be made on these instruments indicating their type, date of
Company’s incorporation and the period during which they shall remain
non-negotiable. However, during the period of suspension, title to shares in
cash may, in accordance with the legal provisions for the sale of rights, may be
transferred from one incorporator to another, or to a director for the purpose
of submitting same as security to the management, or from the heirs of a
deceased incorporator to a third party.

      

      Article 12: Nominal shares
shall be transferred by entering them into a Shareholders Register including the
Shareholders’ names, nationalities, professions, domiciles, and addresses, the
shares numbers, and the value paid up on such shares. An annotation to that
effect shall be made on the share instrument. The transfer of title to the share
shall be effective vis-à-vis the Company or third parties from the date of its
entry into said Register or from the date of the consummation of transfer
procedures by means of the Electronic Shares System. Subscription or title to
shares shall be interpreted as an acceptance by the Shareholder of the Bylaws of
the Company and as a commitment by the Shareholder toward the resolutions issued
by the Shareholders Meetings pursuant to the provisions of these Bylaws, whether
such resolutions were adopted in the presence of the Shareholder or in his
absence, and regardless whether such resolutions are acceptable or unacceptable
to the Shareholder.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article 13: The Company shall
issue share certificates serially numbered, signed by the chairman of the
Company’s board of directors, and sealed with the  Company’s stamp. In
particular, each certificates shall include the number and date of the
Ministerial Decision approving the incorporation of the Company, its share
capital, the number of shares into which the capital is divided, the share
nominal value, the value paid thereof, a summary of the Company’s objects, the
Company’s Head Office, and the Company’s Term. The share certificates may have
coupons with serial numbers reflecting the number of the shares attached
thereto.

      

      Article “14”: If a shareholder
fails to pay the share value on the due date thereof, the Board of Directors
may, after giving him notice by registered letter, sell such share at a public
auction. Nevertheless, a defaulting shareholder may, up to the date fixed for
the auction, pay the amount due from him plus the expenses incurred by the
Company. The Company shall recover from the proceeds of the sale such amounts as
are due to it and shall refund the balance to the shareholder. If the proceeds
of the sale fall short of the amounts due, the Company shall have a claim on the
entire fortune of the shareholder for the unpaid balance. The Company shall
cancel the share so sold, issue the purchaser a new share bearing the serial
number of the cancelled share and make an annotation to this effect in the share
register.

      

      Article 15: The Extraordinary
Meeting may upon satisfying itself of the feasibility study and subject to the
approval of the competent authorities resolve to increase the Company’s Capital
on one or more occasions by issuing new shares at the same nominal value,
provided however that the entire initial capital shall have been paid up and
that the provisions of the Saudi Companies Law be observed. There shall be
indicated in the increase resolution the manner in which the capital shall be
increased. The shareholders shall have the priority right of subscription to the
new cash shares and they shall announce such priority right in a daily
newspaper, including the increase resolution and the subscription terms, as well
as their desire to exercise their priority right within fifteen days from the
date of publication of said announcement. Such shares shall be distributed
amongst the initial shareholders who subscribed to such shares in proportion to
the initial shares they hold, provided however that the number of shares they
will acquire be not more than the new shares they subscribed to. The remaining
balance of the new shares shall be offered for public subscription.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article “16”: Pursuant to a
resolution by the Extraordinary General Meeting, adopted on the basis of
acceptable justifications and subject to the approval of the Minister of
Commerce, the Company’s capital may be reduced if such capital is in excess of
the Company’s needs, or if the Company incurs losses. The resolution for
reduction shall be adopted only after a reading of the auditor’s report
indicating the reasons necessitating such reduction, the liabilities of the
Company, and the effect of the reduction on such liabilities, and it shall be in
accordance with the Companies Law. The resolution shall also indicate the way
the reduction is effectuated. If the reduction of capital is due to the capital
being in excess over the Company’s needs, the creditors must be invited to raise
their objections thereto within sixty days from the date of publication of the
resolution for reduction in a daily newspaper circulated in the locality of the
head office of the Company. If any creditor objects (to the reduction) and
submits to the Company, within the said period, the documents substantiating his
claim, the Company must pay his debt if it is due and payable or submit adequate
security for payment if it is payable at a future date.

      

      Part
“3”

      Board
of Directors

      

      Article “17”: The Company’s
management shall be undertaken by a Board of Directors to be comprised of eight
(8) members appointed by the Ordinary General Meeting for a term not exceeding
three (3) years.

      

      As an
exception, the term of the 1st
Board of Directors shall be five (5) years commencing from the date of the
Ministerial Decision announcing the incorporation of the Company and the
appointment of the Company’s Constituent Assembly.

      

      Article “18”: A director must
be a holder of a number of the Company’s shares of a nominal value not less than
Ten Thousand Riyals. Such shares shall, within thirty days from the date of
appointment of the director, be deposited in a bank designated by the Minister
of Commerce. These shares shall be set aside to cover the directors’ liability,
and shall remain non-negotiable until the lapse of the period specified for
hearing the action in liability provided for in Article “76” of the Companies
Law, or pending the award of a decision on such action. If a director fails to
submit such security shares within the period specified, his membership shall be
forfeited.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article “19”: Board Membership
shall terminate upon the expiry of the term thereof or upon the director’s
resignation, death, or failure to attend four (4) consecutive meetings without a
justifiable excuse, or on account of disqualification in accordance with the
provisions of any law applicable in Saudi Arabia. If the office of a director
becomes vacant, the board may appoint a temporary director to fill such vacancy,
provided that such appointment be brought before the first Ordinary General
Meeting. The new director shall complete the unexpired term of his predecessor.
If the number of directors falls below the minimum quorum required for its valid
meetings, the Ordinary General Meeting must be convened as soon as possible to
appoint the required number of directors.

      

      Article “20”: Subject to the
authority of the shareholders at a General Meeting, the Board of Directors shall
have the broadest powers to manage the Company and supervise its affairs within
and without the Kingdom. The Board shall, without limitation, have the authority
to:

      

      
        	
                1-  

              	
                Dispose
      of the Company’s assets, properties, estates, effect and approve purchase,
      pay the price, to mortgage, to de-mortgage, sell, vacate and receive the
      price. The Board minutes of meeting shall include the following within the
      recitals, provide that:

              

      

      
        	
                a-  

              	
                To
      specify the reasons and justifications for such
  acts.

              

      

      
        	
                b-  

              	
                To
      state that the sale price, in the event of sale, shall be close to a price
      specified according to the established accounting
    practices.

              

      

      
        	
                c-  

              	
                The
      sale price shall be immediately paid, except where necessary and with
      sufficient guarantee.

              

      

      
        	
                d-  

              	
                Such
      acts will not bring about the obstruction of any of
      the  Company’s activities, impair its competence or create any
      additional obligations.

              

      

      

      
        	
                2-  

              	
                The
      Board of Directors shall have the right to obtain loans
      for  terms not exceeding the Company’s term, subject to the
      following conditions:

              

      

      
        	
                a-  

              	
                The
      value of loans the Board may execute during any one fiscal year shall not
      exceed 50 % of the Company’s
capital;

              

      

      
        	
                b-  

              	
                The
      Board shall specify in its resolution the manner in  which the
      proceeds of the loan will be used and the manner of payment thereof;
      and

              

      

      
        	
                c-  

              	
                The
      conditions of the loan and the securities provided in relation thereto
      shall be without prejudice to the Company, the shareholders and the
      general guarantees of creditors.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                3-  

              	
                The
      Board of Directors may represent the Company in it relations with third
      parties and before the courts, Board of Grievances, Labor Office, Labor
      Committees, Securities Committees, Judicial Committees, Arbitration
      Authorities, Civil Rights Departments, Police Offices, governmental
      authorities, Chamber of Commerce and Industry, various companies and
      corporations; participate in bids, receive and make
      payments,  acknowledge, claim, defend, plead, dispute,
      reconcile, accept and reject judgments, arbitrate on behalf of Company,
      request execution of judgments, oppose same and receive the proceeds
      thereof;

              

      

      

      
        	
                4-  

              	
                The
      Board of Directors may sign all contracts, documents and instruments,
      including without limitation: articles of association of companies in
      which the Company is shareholder, with all amendments and annexes,
      amendment resolutions; sign agreements and instruments before the notary
      public and governmental authorities, make guarantees to companies for
      their loans and those of their subsidiaries, issue powers of attorney on
      behalf of the Company, appoint employees and representatives and fix their
      remuneration and terminate the services of same, receive and deliver, rent
      and lease, open accounts, credits, withdraw, deposit in banks, issue bank
      guarantees, sign all checks, documents and bank
    transactions.

              

      

      

      5. The
Board of Directors may discharge the debtors of the Company of their liabilities
with a view toward achieving the interests of the Company in conformity with the
accounting principles in case of debts written off, provided however that the
Board resolution shall include in the introduction of its resolution and that
that the following conditions are satisfied:

      

      
        	
                a.  

              	
                That
      such discharge shall take place at least one year after the date on which
      the debt has originated,

              

      

      
        	
                b.  

              	
                That
      such discharge shall be limited to a certain maximum amount for each year
      and for each individual debtor; and

              

      

      
        	
                c.  

              	
                That
      such discharge shall be the right of the Board and may not be delegated to
      others.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6. The
Board of Directors may draw up the Board’s internal rules, and approve the
schedule of financial and administrative powers in the Company;

      

      7. The
Board of Directors may approve the Company’s internal, financial,
administrative, and technical rules and the workmen regulations;

      

      8. The
Board of Directors may authorize the officers in charge of the Company’s
management to sign on behalf of the Company, subject to the limitations set by
the Board.

      

      9. The
Board of Directors may form committees and delegate such powers thereto as the
Board may deem necessary with a view toward speeding up the matters brought up
before them;

      

      10. The
Board of Directors may coordinate among the various Board
committees;

      

      11. The
Board of Directors may prepare the Company’s financial statements and make the
annual report on the Company’s businesses;

      

      12. The
Board of Directors may approve the Company’s work plan and the estimative annual
balance sheets thereof.

      

      The Board
chairman and the managing director shall, jointly or individually, have the
right to represent the Board in exercising the powers vested in them by the
Board, and each of them may, to the extent of his powers,  appoint a
substitute/ substitutes from amongst the Board members or from amongst other
persons to perform certain act or acts which are within their
powers.

      

      Article
“21”:

      21.1 The
Ordinary General Meeting shall fix the share of the  Board Members in
the annual profits which share shall not exceed Two Hundred Thousand (SR200,000)
provided that it will not exceed 10 %  of the net profits in
accordance with the Article 48 of these Bylaws.

      
        

        22.2 The
Ordinary General Meeting shall fix the allowance to be paid to the Board Members
for attending Board Meetings. Such allowance will be paid to the Board member
together with all expenses he has incurred due to attending the Board
Meeting.

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        22.3 The
Board of Directors’ report to the Ordinary General meeting shall include a
comprehensive statement of all the amounts received by directors during the
fiscal year including salaries, share in profits, attendance allowance,
expenses, and other benefits, as well as of all the amounts received by the
directors in their capacity as officers or executives of the Company, or in
consideration of technical, administrative or advisory services approved by the
Company’s general meeting.

      

      

      Article “22”: The 7th
Party shall appoint the Chairman of the Board of Directors. The Board of
Directors shall appoint from amongst its members a chairman and a managing
director. A director may hold the offices of a chairman and a managing director.
The Board of Directors shall appoint a secretary from amongst its members or
others, and shall determine his duties and powers and fix his remuneration. The
terms of the chairman, managing director and secretary shall not extend beyond
their respective term as board members, but re-election and re-appointment is
permissible.

      

      Article 23: The chairman of
the Board of Directors shall have all powers to represent the Company before
third parties, judicial bodies, notaries public, all government authorities,
disputes settlement committees of various types and grades, and all other
bodies. The chairman shall have the right to sign the articles of association of
companies in which the Company enters as partner and other contracts based on
the resolutions of the Board of Directors. The chairman shall also have the
right to authorize the managing director, the executive officer, or others to
defend and plead on behalf of the Company and to perform the tasks falling
within the competence of the chairman pursuant to this Article.

      

      Article “24”: The Board of
Directors shall convene at the written invitation of the Chairman, which
invitation shall be sent by registered mail not less than 15 days prior to the
meeting date. The Board Chairman shall convene the Board at the request of at
least two directors. The Board shall meet no less than four times per year.
Board meetings shall take place in the principal office of the Company or
elsewhere as may be decided by the Board.

      

      Article “25”: No Board meeting
may be valid unless attended by at least four members. A Board member may give a
proxy to another member to attend the Board meetings on his behalf, provided
that such proxy be given in accordance with the following:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                 
      

              	
                a-
      A member of the Board of Directors may not act on behalf of more than one
      Board Member at the same meeting;

              

      

      
        	
                 
      

              	
                b-   The
      proxy shall be in writing; and

              

      

      c-  The
Board member acting  by proxy may not vote on resolutions on which his
principal is prohibited from voting under the law.

      

      Resolutions
of the Board shall be passed under the majority vote of the directors present or
represented at the meeting, and in case of impasse,  the Chairman or
the acting Chairman shall have a deciding vote.

      

      Article “26”: Deliberations
and resolutions of the board shall be recorded in minutes to be signed by the
chairman and the secretary. Such minutes shall be entered in a special register
signed by the Chairman and the Secretary. The Board may not pass its resolutions
by circulating them to each member individually unless in cases of extreme
necessity, provided that all Board members approve such resolutions in writing
and that such resolutions be brought before the Board in the first succeeding
meeting for approval and recordation in the minutes of Board
meetings.

      

      Article 27: The Board chairman
or any Board member or any other officer in charge of the management of the
Company shall not have any interest, whether direct or indirect, in any of the
Company’s contracts or projects and they shall not participate personally in any
business which may compete with the businesses of the Company.

      

      Article 28: The Company may
not give cash loans of any kind whatsoever to the Board members or guarantee any
loan which either Board member may conclude with third parties.

      

      Article 29:  The
Board of Directors may appoint an executive officer from amongst persons other
than the members thereof to run the normal affairs of the Company under the
supervision of the Board. Based upon a proposal by the managing director or the
executive officer, the Board shall appoint one or more deputy to the managing
director or to the executive officer. The powers, responsibilities, and
remunerations of said deputy/deputies shall be determined by the
Board.

      

      Article 30: Without prejudice
to the right of the Board to modify the powers and authorities of the executive
officer of the Company, the executive officer of the Company shall exercise the
following powers under the Board’s control and supervision:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                1.  

              	
                Prepare
      for Board meetings;

              

      

      
        	
                2.  

              	
                Enforce
      Board resolutions;

              

      

      
        	
                3.  

              	
                Prepare
      the estimative annual balance sheets in accordance with the generally
      acceptable accounting principles and Board
  resolutions;

              

      

      
        	
                4.  

              	
                Run
      the affairs of the Company, supervise the performance of the officers in
      charge of the Company’s management and the Company’s employees in
      conformity with the regulations;

              

      

      
        	
                5.  

              	
                Issue
      and authorize others to issue orders pertaining to the Company’s expenses
      as per the approved annual balance
sheets;

              

      

      
        	
                6.  

              	
                Exercise
      the powers vested in him by Board resolutions and under the Company’s
      bylaws and regulations;

              

      

      
        	
                7.  

              	
                Delegate
      such powers to other officers in charge as he may deem appropriate subject
      to the Company’s bylaws and
regulations;

              

      

      
        	
                8.  

              	
                Sign
      and authorize others to sign contracts, and purchase, sell, transfer, and
      accept real estate on behalf of the Company pursuant to the resolutions
      issued by the Board approving such
acts;

              

      

      
        	
                9.  

              	
                Sell,
      purchase, and receive the price of moveable and immovable assets and
      conclude or revoke transactions based on resolutions issued by the
      Board.

              

      

      
        	
                10.  

              	
                 Open,
      operate, or close all types of accounts with any Saudi or foreign
      financial institutions, subject to the approval of the Board; open
      documentary accounts in favour of the Company’s financers; sign, transfer,
      accept, deduct, guarantee, warrantee, and pay all transfers; draw cheques
      on the accounts of the Company with banks pursuant to the schedule of
      powers approved by the Board; and

              

      

      
        	
                11.  

              	
                Have
      such any other powers as the Board may
  determine.

              

      

      

      Part
“4”

      Shareholders’
Meetings

      

      Article “31”: A valid general
meeting shall represent all shareholders and is held at the principal office of
the Company. Any shareholder, regardless of the number of his shares, shall have
the right to attend the constituent general meeting in person or on behalf of
other shareholders. Each shareholder holding 20 shares shall have the right to
attend the general meeting and may give proxy to another shareholder, other than
the members of the Board of Directors, to attend the general meeting on his
behalf.

      

      Article “32”: The Constituent
General Meeting shall undertake the following matters:

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                1-  

              	
                To
      verify subscription to the capital and fulfillment of the relevant
      provisions in accordance with the Companies Law at the minimum value as
      allocated for the share value;

              

      

      
        	
                2-  

              	
                To
      draw up the final provisions of the Company’s
  bylaws;

              

      

      
        	
                3-  

              	
                To
      appoint the members of the first Board of Directors for a term not
      exceeding five years and the first auditor, if these have not been
      appointed in the Articles of Association or in the Bylaws of the Company;
      and

              

      

      
        	
                4-  

              	
                To
      deliberate on the incorporators’ report for the operations and expenses
      required for the incorporation the
Company.

              

      

      

      The
meeting shall be valid only if attended by a number of subscribers representing
at least half of the Company’s capital. Each subscriber shall have a vote for
each share held or represented by him.

      

      Article 33: Save for the
matters entrusted to the Extraordinary General Meeting, the Ordinary General
Meeting shall be concerned with all the rest of the Company’s affairs, and shall
be held once a year at least during the first six (6) months following the
expiration of the fiscal year. Further, other Ordinary General Meetings may be
held whenever necessary.

      

      Article “34”: The Extraordinary General
Meeting shall be concerned with the amendment of the Company’s Bylaws, save the
provisions expressly excluded. In addition, it may pass resolutions in the
Company’s internal affairs falling within the competence of the Ordinary General
Meeting, under the same terms and conditions approved for the
latter.

      

      Article “35”: The General
Meetings of Shareholder shall be convened at the invitation of the Board of
Directors. The Board of Directors shall invite the Ordinary General Meeting to
convene in case the same is requested by the auditor or by a number of
shareholders representing at least 5% of the Company’s capital. Invitations to
the General Meeting shall be published in the Official Gazette and in a daily
newspaper of general circulation in the city where the Company's head office is
located at least twenty five days prior to the date specified for such meeting.
The invitation shall include the agenda of the meeting and a copy of both the
notice and the agenda shall be forwarded to the Companies General Department at
the Ministry of Commerce & Industry within the time frame specified for
publication.

      

      Article “36”: Once the meeting
is held, a list shall be prepared which shall include the names of the
shareholders present or represented therein, their respective residence
addresses, the number of shares held or represented by them, and the number of
votes to which they are entitled. Any interested party shall have the right to
inspect this list.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article “37”: The Ordinary
General Meeting shall not be valid unless it is attended by shareholders
representing at least half of the Company’s capital. In case such quorum is not
present, a second meeting shall be convened within the thirty days following the
first meeting pursuant to an invitation. Invitations shall be announced in the
same manner stipulated in Article “35” above. The second meeting shall be valid,
regardless of the number of shares represented therein.

       

      Article “38”: For the
Extraordinary General Meeting to be valid, it shall be attended by Shareholders
representing at least half of the Company’s capital. In case such quorum is not
present, a second meeting shall be convened within the thirty days following the
first meeting pursuant to an invitation. Invitations shall be announced in the
same manner stipulated in Article “35” above. The second meeting shall be valid
if attended by a number of the shareholders representing at least one-quarter of
the Company’s capital.

      

      Article “39”: Each subscriber
shall have one vote for each share he represents in the Constituent General
Meeting. Votes in both the Ordinary and Extraordinary meetings shall be
calculated on basis of one vote for each share. Members of the Board of
Directors may not vote on resolutions of the meeting which relieve them from
their liabilities toward undertaking the management of the Company. However, no
shareholder may, in his name, or on behalf of others or in both capacities, have
votes exceeding 20 % of the total shares of the Company, in respect of
resolutions of the ordinary and extraordinary meetings regarding the appointment
and dismissal of  directors and auditors and the amendments to the
Company’s Articles of Association.

      

      Article “40”: Resolutions of
the Constituent General Meeting shall be decided by an absolute majority of the
shares represented therein. However, in case resolutions relate to the
evaluation of in-kind shares or special privileges, it is necessary to obtain
the consent of a 2/3rds
majority  of the subscribers of cash shares, not taking into
consideration the contribution made by the subscribers to in-kind shares or
beneficiaries of special privileges, who shall be excluded from voting on said
resolutions, even if they are holders of cash shares.

      Resolutions
of the Ordinary General Meeting shall be decided by an absolute majority of the
shares represented therein.

      Resolutions
of the Extraordinary General Meeting shall be decided by two-thirds’ majority of
shares represented therein, unless the resolution relates to the increase or
reduction of the Company’s capital, extension of the Company’s term, the
premature winding up the Company, or a merger of the Company into anther entity,
where 3/4th’s
majority shall be required.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article “41”: Each shareholder
shall have the right to discuss the matters listed on the agenda of a general
meeting, and to pose questions to the directors and the Company’s auditor, who
shall be obliged to provide answers to such questions to the extent that the
Company’s interests are not jeopardized. In case the enquiring shareholder finds
the answers unsatisfactory, he may resort to the General Meeting whose decision
in this respect shall be valid and enforceable.

      

      Article “42”: The General
Meeting shall be chaired by the Board Chairman or his deputy in case of his
absence.  The Chairman or his deputy shall appoint a secretary and
vote sorter; and the relevant minutes shall be prepared wherein the names of the
present or represented shareholders shall be entered together with the number of
shares held or represented by them, the number of votes to which they are
entitled, the resolutions adopted and the number of in favor or opposing voters,
in addition to a sufficient summary of the discussions made during the
meeting.  The said minutes shall be regularly recorded after each
meeting in a special register to be signed by the Chairman, his deputy, together
with the secretary and vote sorter.

      

      

      Part
Five

       Auditor

      

      Article 43: The Company shall
have one or more auditors from among those licensed to practice the profession
within the Kingdom as appointed by the General Meeting on an annual basis, where
the auditor's remuneration shall also be fixed.  The auditor may be
re-elected. 

      

      Article 44: No person may hold
the office of auditor and be at the same time a Board member or perform at the
same time any technical or administrative work for the Company. Nor may an
auditor be directly or indirectly a shareholder in any founder shareholder of
the Company or in any Board member.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article 45: The auditor shall
audit the Company’s accounts and shall in particular verify that the balance
sheets and the statements of profit and loss are in conformity with the
accounting records and reflect fairly the Company’s financial position in
accordance with the acceptable accounting principles. The auditor shall at all
times have access to the Company’s books, records, and other documents; and the
auditor may request such statements and clarifications as he may deem necessary
with a view toward obtaining  and verifying the Company’s assets and
liabilities. The managing director or the executive officer shall ensure that
the auditor is enabled to perform his tasks.

      

      The
auditor shall present to the Annual General Meeting a report including the
Company’s position in providing him with necessary information and explanations
together with any irregularities or violations found out by him in respect of
the Companies Law or these Bylaws in addition to his view as to the accuracy of
the Company’s accounts.

      

      Part
Six

       Company
Accounts & Distribution of Profits

      

      Article 46: The Company’s
fiscal year shall commence on the first of  January and end on the
thirty first of December each year, save for the first fiscal year which shall
commence from the date of the ministerial resolution  announcing the
incorporation of the Company and end on the thirty first of December of the
following fiscal  year.

      

      Article 47: The Board of
Directors shall, at the end of each fiscal year, prepare an inventory list of
the Company's assets and liabilities as of such date, in addition to the
balance, sheet, profit/loss statement and a report on the Company's activities
and financial position for the last fiscal year together with his
recommendations on the distribution of net profits at least sixty days prior to
the General Meeting.  The Board of Directors shall put said documents
under the control of the auditor fifty-five days prior to the General Meeting,
where the Board Chairman shall sign the documents referred to above, with a copy
thereof to be lodged in the Company's head office to be put at the disposal of
the shareholders at least twenty-five days prior to the General
Meeting.

      

      Article 48: The annual net
profits of the Company shall be distributed, after deduction of the general
costs and expenses including Zakat, as follows:

      

      
        	
                1.  

              	
                An
      amount equal to ten per cent (10 %) of the net profits shall be set aside
      for the formation of the statutory reserve. The Ordinary General Meeting
      may, when such reserve shall have reached one half of the capital,
      discontinue the setting aside of said
reserve;

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                2.  

              	
                The
      Ordinary General Meeting may, upon the proposal of the Board of Directors,
      set aside a certain percentage of the net profits for the formation of
      other reserves intended for a specific purpose or
  purposes;

              

      

      

      
        	
                3.  

              	
                Out
      of the outstanding balance, an initial payment equal to 5 % of the paid up
      capital shall be distributed among the
  shareholders;

              

      

      

      
        	
                4.  

              	
                Following
      the deduction of expenses, depreciation, and reserves, an amount of SR
      200,000.00, not exceeding 10 % of the outstanding balance of profits,
      shall be paid to the Board members.

              

      

      

      
        	
                5.  

              	
                The
      outstanding balance shall be distributed amongst the shareholders as a
      bonus share in the profits or it shall be carried forward to the next
      years in such a manner as may be approved by the General
      Meeting.

              

      

      

      Article 49: Profits to be
distributed shall be paid to the shareholders at such places and such times as
may be determined by the Board of Directors in accordance with the instructions
issued by the Ministry of Commerce & Industry.

      

      Article 50: In case profits
are not distributed for any fiscal year, no profits pertaining to the subsequent
years may be distributed except after payment of the percentage referred to in
the preceding paragraph 1, Article 9 hereof, to the holders of non-voting shares
which are due for such  year. If for three consecutive years the
Company fails to pay said percentage of profits, the Special Meeting of said
shareholders, convened in accordance with the provisions of Article 86 of the
Companies Law, may decide that said shareholders either attend
the  meetings of the General Meeting of the Company and participate in
voting, or otherwise, appoint their representatives at the Board of Directors in
proportion to their shareholding in the capital of the Company until the Company
is able to pay all the priority profits designated for the holders of said
shares for the preceding years.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article 51: In case the
Company losses amount to three quarters of its capital, the Board of Directors
shall invite the Extraordinary General Meeting to convene to determine whether
the Company shall continue to exist or be dissolved prior to the end of its term
which is specified in Article 6 hereof, where the resolution adopted in General
Meeting shall in any event be published in the Official Gazette.

      

      Part
“7”

       Disputes

      

      Article “52”: Each shareholder
shall have the right to institute the action in liability against the Board of
Directors if the wrongful act committed by them caused a personal prejudice to
said shareholder. However, the shareholder may institute such action only if the
Company’s right to institute it is still valid and after notifying the Company
of his intention to do so.

      

      Part
“8”

      Dissolution
and Liquidation

      

      Article 53: Upon the
expiration of the Company’s term or upon the premature dissolution of the
Company, the Extraordinary General Meeting shall under a proposal by the Board
of Directors determine the method of the Company’s liquidation, appoint a
liquidator/liquidators, and determine their authorities and remunerations. Upon
the termination of the Company, the authorities of the Board of Directors shall
cease to exist. However, the Board of Directors shall remain in control of
management pending the appointment of the liquidator; and the powers of the
bodies of the Company shall remain valid to the extent they are not in conflict
with  the liquidator’s powers.

      

      Part
“9”

       Concluding
Provisions

      

      Article 54:  All
matters not stipulated herein shall be governed by the Companies
Law.

      

      Article 55: These Bylaws shall
be duly filed and published in accordance with the Companies
Law.indentureoftrust.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    [EXECUTION
COPY]

    

    

    

    

    

    

    

    
      

       

      

    

    CONNECTICUT
DEVELOPMENT AUTHORITY

    

    

    

    to

    

    

    

    U.S.
BANK NATIONAL ASSOCIATION,

    as
Trustee

    

    

                                              

     

    INDENTURE
OF TRUST

                                              

    

    

    Dated
as of December 1, 2009

    

    

    

    Connecticut
Development Authority

    $20,000,000
Water Facilities Revenue Bonds

    (The
Connecticut Water Company Project - 2009A Series)

    

    

    

    

    

    
      

       

      

    

    
      
        
          -  -

          NY:1250534.3

        

         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

     Page

     

    Parties
and Preambles 1

    Form of
Bond 4

    

    ARTICLE
I

    DEFINITIONS
AND INTERPRETATION

    
      	
               
      

            	
              Section
      1.1.  Definitions

            

    

    
      	
               
      

            	
              Section
      1.2.  Interpretation

            

    

    ARTICLE
II

    AUTHORIZATION,
TERMS AND ISSUANCE OF BONDS

    
      	
               
      

            	
              Section
      2.1.  Authorization for
Indenture

            

    

    
      	
               
      

            	
              Section
      2.2.  Authorization and Obligation of
  Bonds

            

    

    
      	
               
      

            	
              Section
      2.3.  Issuance and Terms of the
Bonds

            

    

    
      	
               
      

            	
              Section
      2.4.  Redemption of Bonds

            

    

    
      	
               
      

            	
              Section
      2.5.  Execution and Authentication of
  Bonds

            

    

    
      	
               
      

            	
              Section
      2.6.  Delivery of Bonds

            

    

    
      	
               
      

            	
              Section
      2.7.  No Additional Bonds

            

    

    ARTICLE
III

    GENERAL
TERMS AND PROVISIONS OF BONDS

    
      	
               
      

            	
              Section
      3.1.  Date of Bonds

            

    

    
      	
               
      

            	
              Section
      3.2.  Form and
Denominations

            

    

    
      	
               
      

            	
              Section
      3.3.  Legends

            

    

    
      	
               
      

            	
              Section
      3.4.  Medium of Payment

            

    

    
      	
               
      

            	
              Section
      3.5.  Bond Details

            

    

    
      	
               
      

            	
              Section
      3.6.  Interchangeability, Transfer and
  Registry

            

    

    
      	
               
      

            	
              Section
      3.7.  Bonds Mutilated, Destroyed, Stolen or
  Lost

            

    

    
      	
               
      

            	
              Section
      3.8.  Cancellation and Destruction of
  Bonds

            

    

    
      	
               
      

            	
              Section
      3.9.  Requirements With Respect To
  Transfers

            

    

    
      	
               
      

            	
              Section
      3.10.  Registrar

            

    

    ARTICLE
IV

    APPLICATION
OF BOND PROCEEDS AND OTHER AMOUNTS

    
      	
               
      

            	
              Section
      4.1.  Accrued Interest

            

    

    
      	
               
      

            	
              Section
      4.2.  Bond Proceeds

            

    

    
      	
               
      

            	
              Section
      4.3.  Borrower
Contribution

            

    

    ARTICLE
V

    CUSTODY
AND INVESTMENT OF FUNDS

    
      	
               
      

            	
              Section
      5.1.  Creation of Funds

            

    

    
      	
               
      

            	
              Section
      5.2.  Project Fund

            

    

    
      	
               
      

            	
              Section
      5.3.  Debt Service Fund

            

    

    
      	
               
      

            	
              Section
      5.4.  Rebate Fund

            

    

    
      	
               
      

            	
              Section
      5.5.  Renewal Fund

            

    

    
      	
               
      

            	
              Section
      5.6.  Investment of Funds and
Accounts

            

    

    
      	
               
      

            	
              Section
      5.7.  Non-presentment of
Bonds

            

    

    ARTICLE
VI

    REDEMPTION
OF BONDS

    
      	
               
      

            	
              Section
      6.1.  Privilege of Redemption and Redemption
    Price

            

    

    
      	
               
      

            	
              Section
      6.2.  Selection of Bonds to be
  Redeemed

            

    

    
      	
               
      

            	
              Section
      6.3.  Notice of
Redemption

            

    

    
      	
               
      

            	
              Section
      6.4.  Payment of Redeemed
Bonds

            

    

    
      	
               
      

            	
              Section
      6.5.  Notice to Authority and Borrower of Deceased Bondholder
      Redemption

            

    

    
      	
               
      

            	
              Section
      6.6.  Cancellation of Redeemed
Bonds

            

    

    ARTICLE
VII

    PARTICULAR
COVENANTS

    
      	
               
      

            	
              Section
      7.1.  No Pecuniary Liability on Authority or
      Officers

            

    

    
      	
               
      

            	
              Section
      7.2.  Payment of Principal, Redemption Price, if any, and
      Interest

            

    

    
      	
               
      

            	
              Section
      7.3.  Performance of
Covenants

            

    

    
      	
               
      

            	
              Section
      7.4.  Further Assurances

            

    

    
      	
               
      

            	
              Section
      7.5.  Inspection of Project
Books

            

    

    
      	
               
      

            	
              Section
      7.6.  Rights under Financing
Documents

            

    

    
      	
               
      

            	
              Section
      7.7.  Creation of Liens,
Indebtedness

            

    

    
      	
               
      

            	
              Section
      7.8.  Recording and
Filing

            

    

    ARTICLE
VIII

    REMEDIES
OF BONDHOLDERS

    
      	
               
      

            	
              Section
      8.1.  Events of Default; Acceleration of Due
    Dates

            

    

    
      	
               
      

            	
              Section
      8.2.  Enforcement of
Remedies

            

    

    
      	
               
      

            	
              Section
      8.3.  Application of Revenue and Other Moneys After
      Default

            

    

    
      	
               
      

            	
              Section
      8.4.  Actions by Trustee

            

    

    
      	
               
      

            	
              Section
      8.5.  Majority Bondholders Control
  Proceedings

            

    

    
      	
               
      

            	
              Section
      8.6.  Individual Bondholder Action
  Restricted

            

    

    
      	
               
      

            	
              Section
      8.7.  Effect of Discontinuance of
  Proceedings

            

    

    
      	
               
      

            	
              Section
      8.8.  Remedies Not
Exclusive

            

    

    
      	
               
      

            	
              Section
      8.9.  Delay or Omission Upon
Default

            

    

    
      	
               
      

            	
              Section
      8.10.  Notice of Default

            

    

    
      	
               
      

            	
              Section
      8.11.  Waivers of Default

            

    

    ARTICLE
IX

    TRUSTEE
AND PAYING AGENTS

    
      	
               
      

            	
              Section
      9.1.  Appointment and Acceptance of
  Duties

            

    

    
      	
               
      

            	
              Section
      9.2.  Indemnity

            

    

    
      	
               
      

            	
              Section
      9.3.  Responsibilities of
Trustee

            

    

    
      	
               
      

            	
              Section
      9.4.  Compensation

            

    

    
      	
               
      

            	
              Section
      9.5.  Evidence on Which Trustee May
  Act

            

    

    
      	
               
      

            	
              Section
      9.6.  Evidence of Signatures of Owners of the Bonds and
      Ownership of Bonds

            

    

    
      	
               
      

            	
              Section
      9.7.  Trustee and any Paying Agent, May Deal in Bonds and With
      Borrower

            

    

    
      	
               
      

            	
              Section
      9.8.  Resignation or Removal of
  Trustee

            

    

    
      	
               
      

            	
              Section
      9.9.  Successor Trustee

            

    

    
      	
               
      

            	
              Section
      9.10.  Appointment and Responsibilities of Paying
      Agent

            

    

    
      	
               
      

            	
              Section
      9.11.  Resignation or Removal of Paying Agent;
      Successors

            

    

    
      	
               
      

            	
              Section
      9.12.  Monies Held for Particular
  Bonds

            

    

    
      	
               
      

            	
              Section
      9.13.  Continuation
Statements

            

    

    
      	
               
      

            	
              Section
      9.14.  Obligation to Report
Defaults

            

    

    
      	
               
      

            	
              Section
      9.15.  Payments Due on non-Business
  Day

            

    

    
      	
               
      

            	
              Section
      9.16.  Appointment of
Co-Trustee

            

    

    
      	
               
      

            	
              Section
      9.17.  Project
Description

            

    

    ARTICLE
X

    AMENDMENTS
OF INDENTURE

    
      	
               
      

            	
              Section
      10.1.  Limitation on
Modifications

            

    

    
      	
               
      

            	
              Section
      10.2.  Supplemental Indentures Without Consent of Owners of the
      Bonds

            

    

    
      	
               
      

            	
              Section
      10.3.  Supplemental Indentures With Consent of Owners of the
      Bonds

            

    

    
      	
               
      

            	
              Section
      10.4.  Supplemental Indenture Part of the
    Indenture

            

    

    ARTICLE
XI

    AMENDMENTS
OF FINANCING DOCUMENTS

    
      	
               
      

            	
              Section
      11.1.  Rights of Borrower

            

    

    
      	
               
      

            	
              Section
      11.2.  Amendments of Financing Documents Not Requiring Consent
      of Owners of the Bonds

            

    

    
      	
               
      

            	
              Section
      11.3.  Amendments of Financing Documents Requiring Consent of
      Owners of the Bonds

            

    

    ARTICLE
XII

    DISCHARGE
OF INDENTURE

    
      	
               
      

            	
              Section
      12.1.  Defeasance

            

    

    ARTICLE
XIII

    GENERAL
PROVISIONS

    
      	
               
      

            	
              Section
      13.1.  Notices

            

    

    
      	
               
      

            	
              Section
      13.2.  Covenant Against
Discrimination

            

    

    
      	
               
      

            	
              Section
      13.3.  Parties Interested
Herein

            

    

    
      	
               
      

            	
              Section
      13.4.  Effective Date;
Counterparts

            

    

    
      	
               
      

            	
              Section
      13.5.  Date for Identification Purposes
  Only

            

    

    
      	
               
      

            	
              Section
      13.6.  Separability of Invalid
  Provisions

            

    

    

    APPENDICES

     

    Appendix
A - Form of Requisition

    Appendix
B - Form of Redemption Request

     

    

     

    
      
        
          -  -

        

         

      

      
         

        
          

        

      

      
         

      

    

    THIS INDENTURE OF TRUST, made
and dated as of December 1, 2009, by and between the CONNECTICUT DEVELOPMENT
AUTHORITY, a body corporate and politic constituting a public
instrumentality and political subdivision of the State of Connecticut, and U.S. BANK NATIONAL
ASSOCIATION, a national banking association organized, existing and
authorized to accept and execute trusts of the character herein set out under
and by virtue of the laws of the United States of America, with a corporate
trust office located in Hartford, Connecticut, as Trustee,

     

    WITNESSETH
THAT:

     

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

     

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

     

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

     

    WHEREAS, by resolution adopted
on May 20, 2009, in furtherance of the purposes of the Act, the Authority has
accepted the application of The Connecticut Water Company (the “Borrower”) for
assistance in the financing of various capital projects located in the State of
Connecticut; and

     

    WHEREAS, the Borrower
currently owns certain existing facilities within certain municipalities in the
State and at this time requests assistance in the design, acquisition,
installation, improvement and construction of certain facilities consisting of
water treatment and storage facilities, transmission and distribution mains,
service lines, meters, hydrants and pumping equipment for the purpose of
supplying safe potable water to the general public within the
Borrower’s  service area; and

     

    WHEREAS, the Authority has by
a further resolution adopted on October 21, 2009 authorized the issuance of not
to exceed $20,000,000 principal amount of its Water Facilities Revenue Bonds
(The Connecticut Water Company Project - 2009A Series) for the purpose of
providing funds for the Project; and

     

    WHEREAS, the Authority has
determined that the issuance, sale and delivery of the Bonds, as hereinafter
provided, is needed to finance the cost of the Project, and concurrently
herewith the Authority and the Borrower have entered into a Loan Agreement,
dated as of December 1, 2009, providing for a loan by the Authority to the
Borrower for such purpose in an aggregate amount equal to the principal amount
of the Bonds; and

     

    WHEREAS, the Connecticut
Department of Public Utility Control (the “DPUC”) has approved the issuance of
the Note; and

     

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

     

    WHEREAS, the Bonds are to be
originally issued as fully registered bonds and such Bonds and the Trustee’s
certificate of authentication to be endorsed thereon shall be in substantially
the following form, with appropriate variations, omissions and insertions as
permitted or required by this Indenture, to wit:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM OF
BOND

     

    No.
AR- $20,000,000

     

    NEITHER
THE STATE OF CONNECTICUT NOR ANY MUNICIPALITY THEREOF IS OBLIGATED TO PAY, AND
NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE STATE OF CONNECTICUT NOR
ANY MUNICIPALITY THEREOF IS PLEDGED TO THE PAYMENT OF, THE PRINCIPAL, PREMIUM,
IF ANY, OF OR INTEREST ON THIS BOND.

     

    CONNECTICUT
DEVELOPMENT AUTHORITY

    WATER
FACILITIES REVENUE BOND

    (THE
CONNECTICUT WATER COMPANY PROJECT - 2009A SERIES)

     

    BOND
DATE:  December 17, 2009

     

    MATURITY
DATE:  December 1, 2039

     

    INTEREST
PAYMENT DATES:  June 1 and December 1

     

    INTEREST
RATE:  5.10%

     

    REGISTERED
OWNER:  CEDE & CO.

     

    PRINCIPAL
AMOUNT:  $20,000,000.00***

     

    CUSIP
NUMBER:  _________________

     

    CONNECTICUT
DEVELOPMENT AUTHORITY (the “Authority”), a body corporate and politic
constituting a public instrumentality and political subdivision of the State of
Connecticut (the “State”), for value received, hereby promises to pay to the
REGISTERED OWNER or registered assigns, on the MATURITY DATE, solely from the
sources and in the manner hereinafter provided, upon presentation and surrender
hereof, in lawful money of the United States of America, the PRINCIPAL AMOUNT
and in like manner to pay interest on the unpaid principal balance thereof until
the Authority’s obligation with respect to the payment of such sum shall be
discharged.  Interest shall be payable (computed on the basis of a
360-day year consisting of twelve 30-day months) from the most recent INTEREST
PAYMENT DATE, to which interest has been paid or duly provided for or, if no
interest has been paid, from the DATE OF THIS BOND at the INTEREST RATE per
annum, payable semi-annually on the INTEREST PAYMENT DATES until the date on
which this bond becomes due, whether at maturity or by acceleration or
redemption.  From and after that date, any unpaid principal will bear
interest at the same rate until paid or duly provided for.

     

    Payment of Principal and
Interest.  The principal and premium, if any, of this Bond is
payable to the REGISTERED OWNER hereof but only upon presentation and surrender
of this bond at the corporate trust office of U.S. Bank National Association, as
Paying Agent (with its successors, the “Paying Agent”).  Interest is
payable by check or draft mailed by the Paying Agent to the REGISTERED OWNER of
this bond (or of one or more predecessor or successor Bonds (as defined below)),
determined as of the close of business on the applicable record date, at its
address as shown on the registration books maintained by the Paying
Agent.  If any payment, redemption or maturity date for principal,
premium or interest shall not be a Business Day then the payment thereof may be
made on the next succeeding Business Day with the same force and effect as if
made on the specified payment date and no interest shall accrue for the period
after the specified payment date.  Payment shall be in any coin or
currency of the United States of America, which, on the respective dates of
payment thereof, is legal tender for the payment of public and private
debts.

     

    The
record date for payment of interest is the fifteenth day of the month
immediately preceding each INTEREST PAYMENT DATE, provided that, with respect to
overdue interest or interest payable on redemption of this bond other than on an
INTEREST PAYMENT DATE or interest on any overdue amount, the Trustee (as defined
below) may establish a special record date.  The special record date
may be not more than thirty (30) days before the date set for
payment.  The Paying Agent will mail notice of a special record date
to the registered owners of the Bonds (the “Bondholders”) at least ten (10) days
before the special record date.  The Paying Agent will promptly
certify to the Authority and the Trustee that it has mailed such notice to all
Bondholders, and such certificate will be conclusive evidence that such notice
was given in the manner required hereby.

     

    Authorization and
Purpose.  This bond is one of an authorized issue of Bonds of
the Authority in the aggregate principal amount of $20,000,000
designated:  Water Facilities Revenue Bonds (The Connecticut Water
Company Project - 2009A Series) (the “Bonds”) which are issued for the purpose
of providing The Connecticut Water Company (the “Borrower”), a corporation
organized and existing under the laws of the State of Connecticut, with funds
for the purpose of financing various capital improvements constituting a portion
of the Borrower’s existing water system (the “Project”), and paying necessary
expenses incidental thereto.  The Bonds are issued pursuant to the
State Commerce Act, constituting Connecticut General Statutes, Sections 32-1a
through 32-23zz, as amended, a resolution adopted by the Authority on October
21, 2009 and an Indenture of Trust, dated as of December 1, 2009 (which
Indenture as from time to time amended and supplemented is herein referred to as
the “Indenture”), duly executed and delivered by the Authority to U.S. Bank
National Association, as trustee (with its successors, the “Trustee”), and are
equally and ratably secured by and entitled to the protection of the Indenture,
which is on file in the office of the Trustee.

     

    Pledge and
Security.  Pursuant to the Indenture, the Authority has
assigned to the Trustee all of its right, title and interest in and to a Loan
Agreement, dated as of December 1, 2009, as it may be amended or supplemented
from time to time (the “Agreement”),  between the Authority and the
Borrower, and the Note evidencing the Borrower’s obligations under the Agreement
(except for certain enforcement and indemnification rights which are reserved in
the Indenture), including all rights to receive loan payments sufficient to pay
the principal and premium if any, of and interest and all other amounts due on
the Bonds as the same become due, to be made by the Borrower pursuant to the
Agreement.  The Agreement sets forth the terms and conditions under
which the Authority will provide for the financing of the Project and under
which the Borrower will use and occupy the Project and the Borrower will make
loan payments to the Authority in such amounts as are necessary to pay the
principal of, premium if any, and interest on the Bonds.  Reference is
hereby made to the Indenture for the definition of any capitalized word or term
used but not defined herein and for a description of the property pledged,
assigned and otherwise available for the payment of the Bonds, the provisions,
among others, with respect to the nature and extent of the security, the rights,
duties and obligations of the Authority, the Trustee and the owners of the
Bonds, and the terms upon which the Bonds are issued and secured, and the
holders of the Bonds are deemed to assent to the provisions of the Indenture by
the acceptance of this bond.

     

    Event of
Default.  In case any Event of Default occurs and is
continuing, the principal amount of this bond together with accrued interest may
be declared due and payable in the manner and with the effect provided in the
Indenture.

     

    General Optional
Redemption.  The Bonds are subject to redemption prior to
maturity from time to time pursuant to the Indenture at the option of the
Authority, which option shall be exercised at the direction of the Borrower, as
a whole or in part on any date on or after December 1, [2014], at a Redemption
Price equal to 100% of the principal amount thereof plus accrued interest to the
redemption date.

     

    Extraordinary Optional
Redemption.  In addition, at the option of the Authority, which
option shall be exercised upon the giving of notice by the Borrower of its
election to redeem Bonds following completion of the Project in accordance with
the Indenture or its intention to prepay amounts due under the Agreement, the
Bonds are subject to redemption prior to maturity at a Redemption Price equal to
100% of the principal amount thereof plus accrued interest to the date of
redemption (a) in part, on any date, to the extent that excess Bond proceeds are
transferred to the Redemption Account from the Project Fund in accordance with
Section 5.2(F) of the Indenture, or (b) as a whole, on any date, if any one or
more of the events of casualty to or condemnation of the Project or change in
law or certain economic events affecting the Project specified in subsection
8.1(B) of the Agreement shall have occurred, as evidenced in each case by the
filing of a certificate of an Authorized Representative of the
Borrower.

     

    Mandatory Taxability
Redemption.  In the event of a Determination of Taxability, the
Bonds shall be redeemed on any day selected by the Borrower that is not more
than 180 days after the occurrence of such Determination of Taxability as
provided in the Indenture, at the Redemption Price equal to 100% of the
principal amount thereof plus accrued interest to the date of
redemption.  Redemption under this paragraph shall be in whole unless
not less than forty-five (45) days prior to the redemption date the Borrower
delivers to the Trustee an opinion of Bond Counsel reasonably satisfactory to
the Trustee to the effect that a redemption of less than all of the Bonds will
preserve the tax-exempt status of interest on the remaining Bonds outstanding
subsequent to such redemption.

     

    Redemption (or Purchase) by
the Borrower in the Event of Death of a Beneficial
Owner.  Unless the Bonds have been declared due and payable
prior to their maturity by reason of an Event of Default, the Representative (as
hereinafter defined) of a deceased Beneficial Owner (as hereinafter defined) who
has owned (or whose estate has owned) the Bonds for a period of at least six
months prior to any request for redemption, has the right after December 1,
2011, to request redemption prior to stated maturity of all or part of such
deceased Beneficial Owner’s interest in the Bonds, and the Borrower will redeem
(or will cause the Authority to redeem) the same subject to the limitations that
the Borrower will not be obligated to redeem (or cause to be redeemed), during
the period from December 1, 2011, through and including December 1, 2012, (the
“Initial Period”), and during any twelve-month period which ends on and includes
each December 1 thereafter (each such twelve-month period being hereinafter
referred to as a “Subsequent Period”), (i) on behalf of a deceased Beneficial
Owner any interest in the Bonds which exceeds $25,000 principal amount (the
“Individual Limitation”) or (ii) interests in the Bonds exceeding $400,000 in
aggregate principal amount (the “Annual Limitation”).  A request for
redemption may be initiated by the Representative of a deceased Beneficial Owner
at any time and in any principal amount.

    

    The Borrower may, at its option, redeem
(or cause to be redeemed) interests of any deceased Beneficial Owner in the
Bonds during the Initial Period or any Subsequent Period in excess of the
Individual Limitation.  Any such redemption, to the extent that it
exceeds the Individual Limitation for any deceased Beneficial Owner, shall not
be included in the computation of the Annual Limitation for such Initial Period
or such Subsequent Period, as the case may be, or for any succeeding Subsequent
Period.  The Borrower may, at its option, redeem (or cause to be
redeemed) interests of deceased Beneficial Owners in the Bonds, during the
Initial Period or any Subsequent Period in an aggregate principal amount
exceeding the Annual Limitation.  Any such redemption, to the extent
it exceeds the Annual Limitation shall not reduce the Annual Limitation for any
Subsequent Period.  Upon any determination by the Borrower to redeem
(or cause to be redeemed) Bonds in excess of the Individual Limitation or the
Annual Limitation, Bonds so redeemed shall be redeemed in the order of the
receipt of Redemption Requests (as hereinafter defined) by the
Trustee.

    

    A request for redemption of an interest
in the Bonds may be initiated by the personal representative or other person
authorized to represent the estate of the deceased Beneficial Owner or by a
surviving joint tenant(s) or tenant(s) by the entirety or the trustee of a trust
(each, a “Representative”).  The Representative shall deliver a
request to the Participant (hereinafter defined) through whom the deceased
Beneficial Owner owned such interest, in form satisfactory to the Participant,
together with evidence of the death of the Beneficial Owner, evidence of the
authority of the Representative satisfactory to the Participant, such waivers,
notices or certificates as may be required under applicable state or federal law
and such other evidence of the right to such redemption as the Participant shall
require.  The request shall specify the principal amount of the
interest in the Bonds to be redeemed.  The Participant shall thereupon
deliver to the Depository a request for redemption substantially in the form
attached as Appendix B to the Indenture (a “Redemption Request”).  The
Depository will, on receipt thereof, forward the same to the
Trustee.  The Trustee shall maintain records with respect to
Redemption Requests received by it including date of receipt, the name of the
Participant filing the Redemption Request and the status of each such Redemption
Request with respect to the Individual Limitation or the Annual
Limitation.  The Trustee will immediately forward a copy of each
Redemption Request it receives, together with the information regarding the
eligibility thereof with respect to the Individual Limitation or the Annual
Limitation with the Borrower.  The Depository, the Authority, the
Borrower and the Trustee may conclusively assume, without independent
investigation, that the statements contained in each Redemption Request are true
and correct and shall have no responsibility for reviewing any documents
submitted to the Participant by the Representative or for determining whether
the applicable decedent is in fact the Beneficial Owner of the interest in the
Bonds to be redeemed or is in fact deceased and whether the Representative is
duly authorized to request redemption on behalf of the applicable Beneficial
Owner.

    

    Subject to the Individual Limitation
and the Annual Limitation, the Borrower will, upon receipt of a Redemption
Request, redeem (or cause to be redeemed) the interest of such deceased
Beneficial Owner in the Bonds on the next interest payment date occurring not
less than 30 days following receipt by the Borrower of the Redemption Request
from the Trustee.  If Redemption Requests exceed the aggregate
principal amount of interests in Bonds required to be redeemed during the
Initial Period or during any Subsequent Period, then such excess Redemption
Requests will be applied in the order received by the Trustee to successive
Subsequent Periods, regardless of the number of Subsequent Periods required to
redeem such interests.  The Borrower may, at any time, notify the
Trustee that it will redeem (or cause to be redeemed), on the next interest
payment date occurring not less than 30 days thereafter, all or any such lesser
amount of Bonds for which Redemption Requests have been received but which are
not then eligible for redemption by reason of the Individual Limitation or the
Annual Limitation.  Any Bonds so redeemed shall be redeemed in the
order of receipt of Redemption Requests by the Trustee.

    

    The price to be paid by the Borrower
for the Bonds to be redeemed pursuant to a Redemption Request is 100% of the
principal amount thereof plus accrued but unpaid interest to the date of
payment.  Subject to arrangements with the Depository, payment for
interests in the Bonds which are to be redeemed shall be made to the Depository
upon presentation of Bonds to the Trustee for redemption in the aggregate
principal amount specified in the Redemption Requests submitted to the Trustee
by the Depository which are to be fulfilled in connection with such
payment.  The principal amount of any Bonds acquired or redeemed by or
at the direction of the Borrower other than by redemption at the option of any
Representative of a deceased Beneficial Owner pursuant to this section shall not
be included in the computation of either the Individual Limitation and the
Annual Limitation for the Initial Period or for any Subsequent
Period.

    

    For purposes of this section, a
“Beneficial Owner” means the Person who has the right to sell, transfer or
otherwise dispose of an interest in a Bond and the right to receive the proceeds
therefrom, as well as the interest and principal payable to the holder
thereof.  In general, a determination of beneficial ownership in the
Bonds will be subject to the rules, regulations and procedures governing the
Depository and institutions that have accounts with the Depository or a nominee
thereof (“Participants”).

    

    For purposes of this section, an
interest in a Bond held in tenancy by the entirety, joint tenancy or by tenants
in common will be deemed to be held by a single Beneficial Owner and the death
of a tenant by the entirety, joint tenant or tenant in common will be deemed the
death of a Beneficial Owner.  The death of a person who, during his
lifetime, was entitled to substantially all of the rights of a Beneficial Owner
of an interest in the Bonds will be deemed the death of the Beneficial Owner,
regardless of the recordation of such interest on the records of the
Participant, if such rights can be established to the satisfaction of the
Participant.  Such interests shall be deemed to exist in typical cases
of nominee ownership, ownership under the Uniform Gifts to Minors Act or the
Uniform Transfers to Minors Act, community property or other similar joint
ownership arrangements, including individual retirement accounts or Keogh [H.R.
10] plans maintained solely by or for the decedent or by or for the decedent and
any spouse, and trust and certain other arrangements where the decedent has the
right to receive all or a portion of the income and such person has
substantially all of the rights of a Beneficial Owner during such person’s
lifetime.

    

    In the case of a Redemption Request
which is presented on behalf of a deceased Beneficial Owner and which has not
been fulfilled at the time the Borrower gives notice of its election to redeem
the Bonds, the Bonds which are the subject of such pending Redemption Request
shall be redeemed prior to any other Bonds.

    

    Any Redemption Request may be withdrawn
by the person(s) presenting the same upon delivery of a written request for such
withdrawal given by the Participant on behalf of such person to the Depository
and by the Depository to the Trustee not less than 60 days prior to the interest
payment date on which such Bonds are eligible for redemption.

    

    The Borrower may, at its option,
purchase any Bonds for which Redemption Requests have been received in lieu of
redeeming (or causing the redemption of) such Bonds.  Any Bonds so
purchased by the Borrower shall either be reoffered for sale and sold within 180
days after the date of purchase or presented to the Trustee for redemption and
cancellation.  The Trustee shall have no duty to monitor or enforce
the Borrower’s obligations under this paragraph.

    

    During such time or times as the Bonds
are not represented by a Global Security and are issued in definitive form, all
references in this Section to Participants and the Depository, including the
Depository’s governing rules, regulations and procedures shall be deemed
deleted, all determinations which under this section the Participants are
required to make shall be made by the Borrower (including, without limitation,
determining whether the applicable decedent is in fact the Beneficial Owner of
the interest in the Bonds to be redeemed or is in fact deceased and whether the
Representative is duly authorized to request redemption on behalf of the
applicable Beneficial Owner), all Redemption Requests, to be effective, shall be
delivered by the Representative to the Trustee, with a copy to the Borrower, and
shall be in the form of a Redemption Request (with appropriate changes to
reflect the fact that such Redemption Request is being executed by a
Representative) and, in addition to all documents that are otherwise required to
accompany a Redemption Request, shall be accompanied by the Bond that is the
subject of such request.

    

    Optional Public Purpose
Redemption.  If the Borrower fails to perform its obligations
under Section 6.4 of the Agreement, the Bonds shall be subject to redemption
prior to maturity as a whole on any date at the option of the Authority in
accordance with Section 7.3 of the Agreement, at the redemption price equal to
100% of the principal amount thereof plus accrued interest to the date of
redemption.

     

    Extraordinary Optional
Redemption Without Premium to Preserve Tax Exempt Status of the
Bonds.  The Bonds shall be subject to extraordinary optional
redemption by the Authority, at the direction of the Borrower, in whole or in
part on any date at a Redemption Price equal to 100% of the unpaid principal
amount thereof, together with accrued interest to the date of redemption, and
without premium, if the Borrower shall have delivered to the Trustee and the
Authority an opinion of Bond Counsel addressed to the Trustee and the Authority
substantially to the effect that (i) a failure so to redeem the Bonds (or the
relevant portion thereof) may adversely affect the exclusion of interest on the
Bonds from the gross income of the holders pursuant to Section 103 of the Code,
and (ii) redemption of Bonds in the amount set forth in such opinion (but in no
smaller amount than that set forth in such opinion) would permit the continuance
of any exclusion so afforded under Section 103 of the Code.

     

    Selection of Bonds to be
Redeemed.  If less than all of the Outstanding Bonds are to be
called for redemption, the Bonds (or portions thereof) to be redeemed shall be
selected as provided in the Indenture.

     

    Notice of
Redemption.  In the event this bond is selected for redemption,
notice (which notice may state that it is subject to the receipt of the
redemption moneys by the Trustee on or before the date fixed for redemption and
which notice shall be of no effect unless such moneys are so received on or
before such date) will be mailed no more than forty-five (45) days nor less than
thirty (30) days prior to the redemption date to the REGISTERED OWNER at its
address shown on the registration books maintained by the Paying
Agent.  Failure to mail notice to the owner of any other Bond or any
defect in the notice to such an owner shall not affect the redemption of this
bond.

     

    If this
bond is of a denomination in excess of five thousand dollars ($5,000), portions
of the principal amount in the amount of five thousand dollars ($5,000) or any
multiple thereof may be redeemed.  If less than all of the principal
amount is to be redeemed, upon surrender of this bond to the Paying Agent, there
will be issued to the REGISTERED OWNER, without charge, a new Bond or Bonds, at
the option of the REGISTERED OWNER, for the unredeemed principal
amount.

     

    Notice of
redemption having been duly mailed, and moneys for the redemption having been
deposited with the Paying Agent, this bond, or the portion called for
redemption, will become due and payable on the redemption date at the applicable
redemption price from and after the date fixed for redemption, interest on this
bond (or such portion) will no longer accrue.

     

    Transfer of
Bonds.  This bond is transferable by the REGISTERED OWNER, in
person or by its attorney duly authorized in writing, at the office of the
Paying Agent, upon surrender of this bond to the Paying Agent for
cancellation.  Upon the transfer, a new Bond or Bonds in authorized
denominations of the same aggregate principal amount will be issued to the
transferee at the same office.  This bond may also be exchanged at the
office of the Paying Agent for a new Bond or Bonds in authorized denominations
of the same aggregate principal amount without transfer to a new registered
owner.  Exchanges and transfers will be without expense to the owner
except for applicable taxes, fees or other governmental charges, if any, and a
sum sufficient to pay the cost of preparing and delivering each new Bond issued
upon such transfer.  The Paying Agent will not be required to make an
exchange or transfer of this bond (a) during the fifteen (15) days preceding any
date fixed for selection for redemption if this bond (or any portion thereof) is
eligible to be selected for redemption or (b) if this bond is selected, called
or being called for redemption in whole or in part, except in the case of a bond
to be redeemed in part, the portion not to be redeemed.

     

    Amendment of
Indenture.  The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Authority and the rights of the owners of the Bonds at any
time by the Authority with the consent of the owners of not less than 51% in
aggregate principal amount of the Bonds at the time outstanding
thereunder.  Any such consent shall be conclusive and binding upon
each such owner and upon all future owners of each Bond and of any such Bond
issued upon the transfer thereof, whether or not notation of such consent is
made thereon.  The Indenture also permits the amendment thereof by the
Authority but without the consent of the owners of the Bonds for certain
specified purposes.

     

    Limitation on Bondholder
Enforcement Rights.  The owner of this bond shall have no right
to enforce the provisions of the Indenture, to institute action to enforce the
provisions and covenants thereof or to institute, appear in or defend any suit
or other proceedings with respect thereto, except as provided in the
Indenture.

     

    Special Obligations of the
Authority.  This bond and the issue of which it forms a part
are special obligations of the Authority, payable solely out of the revenues or
other receipts, funds or moneys of the Authority pledged under the Indenture and
from any amounts otherwise available under the Indenture for the payment of the
Bonds.  Neither the State nor any municipality thereof shall be
obligated to pay the principal or redemption price, if any, of or interest on
this bond and neither the faith and credit nor taxing power of the State or any
municipality thereof is pledged to such payment.  The Bonds do not now
and shall never constitute a debt or liability of the State or any municipality
thereof or bonds issued or guaranteed by either of them within the meaning of
any constitutional or statutory limitation.

     

    Estoppel
Clause.  This bond is issued pursuant to and in full compliance
with the Constitution and laws of the State.  It is hereby certified,
recited and declared that all acts, conditions and things required to exist,
happen and be performed precedent to and in the issuance of this bond do exist,
have happened and have been performed in due time, form and manner as required
by law and that the issuance of this bond and of the issue of which it forms a
part, together with all other obligations of the Authority, do not exceed or
violate any constitutional or statutory limitation.

     

    NEITHER
THE AUTHORITY, THE TRUSTEE NOR ANY PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR
OBLIGATION TO PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER
WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY
SUCCESSOR SECURITIES DEPOSITORY, ANY PARTICIPANT, OR ANY INDIRECT PARTICIPANT;
(II) THE PAYMENT BY DTC OR ANY SUCCESSOR SECURITIES DEPOSITORY OR ANY
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL
OF, OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS; (III) THE SELECTION BY DTC OR
ANY SUCCESSOR SECURITIES DEPOSITORY OR ANY DIRECT OR INDIRECT PARTICIPANT OF ANY
PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS;
(IV) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC OR ANY SUCCESSOR SECURITIES
DEPOSITORY AS BONDHOLDER; OR (V) THE DELIVERY TO ANY PARTICIPANT, OR INDIRECT
PARTICIPANT, BENEFICIAL OWNER OR OTHER PERSON OTHER THAN DTC OR ANY SUCCESSOR
SECURITIES DEPOSITORY OF ANY NOTICE WITH RESPECT TO THE BONDS, INCLUDING BUT NOT
LIMITED TO, ANY NOTICE OF REDEMPTION.

     

    No Personal
Liability.  Neither the officers, directors or employees of the
Authority or the Trustee nor any person executing this bond shall be liable
personally or be subject to any personal liability or accountability by reason
of the issuance hereof.

     

    Authentication.  This
bond shall not be valid or become obligatory for any purpose or be entitled to
any security or benefit under the Indenture until the certificate of
authentication hereon shall have been signed by the Trustee or the Paying
Agent.

     

    Authorized
Denomination.  The Bonds are issuable only in fully registered
form in denominations of $5,000 or any multiple thereof.

     

    Persons Deemed
Owners.  The Authority, the Trustee, the Paying Agent and the
Borrower may treat the REGISTERED OWNER as the absolute owner of this bond for
all purposes, notwithstanding any notice to the contrary.

     

    
      
        
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    IN
WITNESS WHEREOF, the CONNECTICUT DEVELOPMENT AUTHORITY has caused this Bond to
be executed in its name by the manual or facsimile signature of its Authorized
Representative.

     

    CONNECTICUT
DEVELOPMENT AUTHORITY

     

    By                                                   

    Authorized
Representative

     

    
      
        
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    [FORM OF
CERTIFICATE OF AUTHENTICATION]

     

    CERTIFICATE
OF AUTHENTICATION

     

    This bond
is one of the Bonds of the issue described in the within mentioned
Indenture.

     

    Date of
Registration:

     

    U.S. BANK
NATIONAL ASSOCIATION, Trustee

     

    By                                                   
[,or

    Authorized
Signature

     

    U.S. BANK
NATIONAL ASSOCIATION,

     

    Paying
Agent

     

    By                                                   

    Authorized
Signature]

    
      
        
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    [FORM OF
ASSIGNMENT]

     

    ASSIGNMENT

     

    For value
received the undersigned sells, assigns and transfers this bond to

     

    ______________________________________________________________________________

     

    (Name and
Address of Assignee)

     

    ______________________________________________________________________________

     

    Social
Security or Other Identifying Number of Assignee

     

    and
irrevocably appoints __________________________________ attorney-in-fact to
transfer it on the books kept for registration of the bond, with full power of
substitution.

     

    ________________________________________________________________________________

     

    NOTE:  The
signature to this assignment must correspond with the name as written on the
face of the bond without alteration or enlargement or other change and must be
guaranteed by a Participant in a Recognized Signature Guaranty Medallion
Program.

     

    Dated:

     

    Signature
Guaranteed:

     

    _____________________________________________________

    Participant
in a Recognized

    Signature
Guaranty Medallion Program

     

    By:
_________________________________________________

         Authorized
Signature

     

    [END OF
FORM OF BOND]

     

    
      
        
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    WHEREAS, all things necessary
to make the Bonds, when authenticated by the Trustee and issued as in this
Indenture provided, the valid, binding and legal obligations of the Authority
according to the import thereof, and to constitute this Indenture a valid pledge
of revenues to the payment of the principal or Redemption Price, if any, of and
interest on the Bonds and all other amounts due in connection therewith and a
valid assignment of the rights of the Authority (except as stated below) under
the Agreement and the Note have been done and performed, and the creation,
execution and delivery of this Indenture and the creation, execution and
issuance of the Bonds subject to the terms hereof, have in all respects been
duly authorized;

     

    NOW,
THEREFORE, KNOW ALL PERSONS BY THESE PRESENTS:

     

    GRANTING
CLAUSES

     

    That the
Authority in consideration of the premises and the acceptance by the Trustee of
the trusts hereby created and of the purchase and acceptance of the Bonds by the
holders and owners thereof, and of the sum of One Dollar, lawful money of the
United States of America, to it duly paid by the Trustee at or before the
execution and delivery of these presents, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, and in order to
secure the payment of the principal of, Redemption Price, if any, and interest
on the Bonds according to their tenor and effect and all other amounts due in
connection therewith and the performance and observance by the Authority of all
the covenants expressed or implied herein and in the Bonds, does hereby grant,
bargain, sell, convey, pledge and assign unto, and grant a security interest in
and to the Trustee, and unto its respective successors in trust, and to their
respective assigns, forever, for the securing of the performance of the
obligations of the Authority hereinafter set forth, the following:

     

    I.

     

    The
Agreement and the Note (except to the extent to which any such document provides
for the indemnification or the payment of expenses of the Authority, rights of
the Authority to inspect the Projects, receive notices and grant approvals),
including all extensions and renewals of the term thereof, if any, together with
all right, title and interest of the Authority therein, including, but without
limiting the generality of the foregoing, the present and continuing right to
claim, collect and receive any of the moneys, income, revenues, issues, profits
and other amounts payable or receivable thereunder, to bring actions and
proceedings thereunder or for the enforcement thereof, and to do any and all
things which the Authority is or may become entitled to do under the Agreement
and the Note, but reserving, however, to the Authority rights of the Authority
under Sections 6.2, 6.4, 7.2(A)(2) and 7.3 of the Agreement upon the conditions
therein set forth;

     

    II.

     

    All Funds
and Accounts (except the Rebate Fund) and moneys therein; and

     

    III.

     

    All
moneys and securities from time to time held by the Trustee or the Paying Agent
under the terms of this Indenture (except moneys and securities in the Rebate
Fund) and any and all other real or personal property of every name and nature
concurrently herewith or from time to time hereafter by delivery or by writing
of any nature conveyed, mortgaged, pledged, assigned or transferred as and for
additional security hereunder by the Authority or by anyone in its behalf, or
with its written consent, to the Trustee or the Paying Agent, which are hereby
authorized to receive any and all such property at any and all times and to hold
and apply the same subject to the terms hereof;

     

    TO HAVE AND TO HOLD all and
singular the trust estate, whether now owned or hereafter acquired, unto the
Trustee and its respective successors and assigns in trust forever to its and
their own proper use and behoof but:

     

    IN TRUST NEVERTHELESS, upon
the terms and trusts herein set forth for the equal and proportionate benefit,
security and protection of all present and future holders and owners of the
Bonds from time to time issued and to be issued under and secured by this
Indenture without privilege, priority or distinction as to the lien or otherwise
of any of the Bonds over any of the other Bonds;

     

    PROVIDED, HOWEVER, that if the
Authority, its successors or assigns, shall well and truly pay, or cause to be
paid, the principal of, Redemption Price, if any, and interest on, the Bonds due
or to become due thereon, and all other amounts due thereunder, at the times and
in the manner mentioned in the Bonds according to their tenor, and shall cause
the payments to be made on the Bonds as required under Article VII hereof, or
shall provide, as permitted hereby, for the payment thereof by depositing with
the Trustee the entire amount due or to become due thereon, and shall well and
truly keep, perform and observe all the covenants and conditions pursuant to the
terms of this Indenture to be kept, performed and observed by it, and shall pay
or cause to be paid to the Trustee all sums of money due or to become due to it
in accordance with the terms and provisions of the Agreement, the Note and this
Indenture, then upon the final payment thereof this Indenture and the rights
hereby granted shall cease, determine and be void; otherwise this Indenture to
be and remain in full force and effect.

     

    THIS INDENTURE OF TRUST FURTHER
WITNESSETH, and it is expressly declared, that all Bonds issued and
secured hereunder are to be issued, authenticated and delivered and all of the
property, rights and interests, including, without limitation the loan payments
and other amounts hereby assigned and pledged are to be dealt with and disposed
of under, upon and subject to the terms, conditions, stipulations, covenants,
agreements, trusts, uses and purposes as hereinafter expressed, and the
Authority has agreed and covenanted, and does hereby agree and covenant with the
Trustee and with the respective holders and owners of the Bonds as
follows:

     

    ARTICLE
I

     

    DEFINITIONS
AND INTERPRETATION

     

    Section
1.1. Definitions.  As used in this
Indenture:

     

    “Account”
or “Accounts” shall mean the Account or Accounts established pursuant to Article
V herein below.

     

    “Act”
means the State Commerce Act, constituting Connecticut General Statutes,
Sections 32-la through 32-23zz, as amended.

     

    “Agreement”
means the Loan Agreement of even date herewith between the Authority and the
Borrower, and any amendments and supplements thereto.

     

    “Authority”
means the Connecticut Development Authority, a body corporate and politic
constituting a public instrumentality and political subdivision of the State of
Connecticut duly organized and existing under the laws of the State, and any
body, board, authority, agency or other political subdivision or instrumentality
of the State which shall hereafter succeed to the powers, duties and functions
thereof.

     

    “Authorized
Investments” means any of the following:

     

    
      	
               
      

            	
              1)

            	
              United
      States government obligations, United States agency obligations, United
      States postal service obligations, repurchase agreements or certificates
      of deposit to which specifically identified United States government,
      agency or postal service obligations are pledged as
      collateral;

            

    

     

    
      	
               
      

            	
              2)

            	
              certificates
      of deposit of any of the fifteen largest domestically chartered banks or
      trust companies in the United
States;

            

    

     

    
      	
               
      

            	
              3)

            	
              commercial
      paper having the highest rating by a nationally recognized securities
      rating service;

            

    

     

    
      	
               
      

            	
              4)

            	
              tax-exempt
      securities not subject to the alternative minimum tax and which have the
      highest rating by a nationally recognized securities rating
      service;

            

    

     

    
      	
               
      

            	
              5)

            	
              savings
      accounts with banks or savings and loan associations the accounts of which
      are federally insured;

            

    

     

    
      	
               
      

            	
              6)

            	
              bank
      acceptances which are eligible collateral for borrowing from Federal
      Reserve Banks;

            

    

     

    
      	
               
      

            	
              7)

            	
              certificates
      of deposit of the Trustee (but only to the extent such certificates of
      deposit do not exceed 10% of the amounts held in all Funds and Accounts
      hereunder);

            

    

     

    
      	
               
      

            	
              8)

            	
              guaranteed
      investment contracts and/or investment
      agreements, acceptable to the Authority, authorized by applicable State
      law for the investment of proceeds of obligations issued by the State and
      participation certificates in the short term investment fund created and
      existing under Section 3-27a, Connecticut General Statutes, as amended,
      and any State administered pool investment fund in which the Authority is
      statutorily permitted or required to invest;
      and

            

    

     

    
      	
               
      

            	
              9)

            	
              Mutual
      funds and money market funds of or available to the Trustee (including any
      proprietary money market fund of the Trustee for which the Trustee or an
      affiliate of the Trustee serves as investment advisor or provides other
      services and receives reasonable compensation thereof) that are rated at
      least AAA or AAAm, as applicable, by S&P or Aaa by Moody’s and invest
      only in other Authorized
Investments.

            

    

     

    “Authorized
Representative” means, in the case of the Authority, the Chairman or Vice
Chairman, the President, the Executive Vice President, Deputy Director or any
Senior Vice President or any Vice President thereof and, in the case of the
Borrower, the Chairman, the President and Chief Executive Officer, the Vice
President-Finance, Chief Financial Officer and Treasurer, and any Vice
President, Assistant Treasurer or Secretary thereof and, when used with
reference to the performance of any act, the discharge of any duty or the
execution of any certificate or other document, any officer, employee or other
person authorized to perform such act, discharge such duty or execute such
certificate or other document.

     

    “Beneficial
Owner” shall have the meaning specified in Section 2.3(F) hereof.  If
any person claims to the Trustee to be a Beneficial Owner, for purposes of
Sections 2.4(C), such person shall prove such claim to the satisfaction of the
Trustee with such documentation and signature guaranties as the Trustee may
request and shall be responsible for and pay any costs associated with such
claim.

     

    “Bonds”
means the $20,000,000 Water Facilities Revenue Bonds (The Connecticut Water
Company Project - 2009A Series) authorized and issued pursuant to Section 2.3
hereof.

     

    “Bond
Counsel” means Winston & Strawn LLP or such other nationally recognized bond
counsel selected by the Authority and reasonably satisfactory to the Borrower
and Trustee.

     

    “Bondholder”,
“holder” or “owner” or words of similar import when used with reference to
Bonds, shall unless otherwise specified, mean any person who shall be the
registered owner of any Outstanding Bond.

     

    “Borrower”
means (i) The Connecticut Water Company, a corporation organized and existing
under the laws of the State of Connecticut, and its successors and assigns and
(ii) any surviving, resulting or transferee corporation as provided in Section
6.1 of the Agreement.

     

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

     

    “Cede
& Co.” means the nominee for The Depository Trust Company (DTC) who shall
act as securities depository for the Bonds.

     

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

     

    “Completion
Date” means the date of completion of the Project as specified and established
in accordance with Article IV of the Agreement.

     

    “Computation
Period” means each period from the date of issuance through the date on which a
determination of the Rebatable Arbitrage is made or required to be made pursuant
to Section 8.3 of the Tax Regulatory Agreement.

     

    “Debt
Service Fund” means the special trust fund so designated, established pursuant
to Section 5.1 hereof.

     

    “Default”
means any event or condition which will, with the lapse of time, or the giving
of notice, or both, become an Event of Default.

     

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

     

    “Depository”
means DTC or any other depository holding the Bonds for purpose of a book-entry
system.

     

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

     

    “Disclosure
Agreement” means the agreement by and between the Borrower and U.S. Bank
National Association, as dissemination agent, dated the date of the initial
delivery of the Bonds and providing for the provision of certain information
subsequent to the issuance of the Bonds.

     

    “Event of
Bankruptcy” means the filing of a petition in bankruptcy or the commencement of
a proceeding under the United States Bankruptcy Code or any other applicable law
concerning insolvency, reorganization or bankruptcy by or against the Authority,
the Borrower, or any guarantor of the Bonds, as debtor.

     

    “Event of
Default” has the meaning given such term in Section 8.1 hereof.

     

    “Federal
Securities” means any direct and general obligations of, or any obligations
whose full and timely payment is unconditionally guaranteed by, the United
States of America.

     

    “Financing
Documents” means  (1), when used with respect to the Borrower, means
the Agreement, the Tax Regulatory Agreement, the Note, the Disclosure Agreement
and the general certificate of the Borrower delivered in connection with the
issuance of the Bonds, and (2) when used with respect to the Authority, means
any of the foregoing documents and agreements to which the Authority is a direct
party.  The Financing Documents do not include any documents or
agreements to which the Borrower is not a direct party, including the Bonds or
the Indenture.

     

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

     

    “Fund” or
“Funds” shall mean the Fund or Funds established pursuant to Article V herein
below.

     

    “Indenture”
means this Indenture as from time to time amended or supplemented by
Supplemental Indentures in accordance with Article X hereof.

     

    “Indirect
Participant” shall have the meaning set forth in Section 2.3(F)
hereof.

     

    “Interest
Payment Date” shall mean each date on which interest is payable on the Bonds as
provided in the form of the Bonds.

     

    “Loan
Payments” means the amounts required to be paid by the Borrower in repayment of
the loan made to the Borrower by the Authority pursuant to the provisions of the
Agreement and the Note, including all amounts realized by the Trustee thereunder
in accordance with Article VIII hereof.

     

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

     

    “Note”
means the promissory note of the Borrower to the Authority, dated the date of
initial delivery of the Bonds in the form attached as Appendix A to the
Agreement, and any amendments or supplements made in conformity with the
Agreement and this Indenture.

     

    “Outstanding”,
when used with reference to a Bond or Bonds, as of any particular date, means
all Bonds which have been authenticated and delivered hereunder,
except:

     

    
      	
               
      

            	
              (1)

            	
              Any
      Bonds cancelled by the Trustee because of payment or redemption prior to
      maturity or surrendered to the Trustee for
  cancellation;

            

    

     

    
      	
               
      

            	
              (2)

            	
              any
      Bond (or portion of a Bond) paid or redeemed or for the payment or
      redemption of which there has been separately set aside and held in the
      Debt Service Fund either:

            

    

     

    
      	
               
      

            	
              (a)

            	
              moneys
      in an amount sufficient to effect payment of the principal or applicable
      Redemption Price thereof, together with accrued interest on such Bond to
      the payment or redemption date, which payment or redemption date shall be,
      specified in irrevocable instructions given to the Trustee to apply such
      moneys to such payment on the date so specified;
  or

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (3)

            	
              Bonds
      in exchange for or in lieu of which other Bonds shall have been
      authenticated and delivered under Article III hereof;
  and

            

    

     

    
      	
               
      

            	
              (4)

            	
              any
      Bond deemed to have been paid as provided in Section 12.1
      hereof.

            

    

     

    “Participant”
means one of the entities that deposits securities, directly or indirectly, in
the Book-Entry Only System.

     

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

     

    “Principal
and Interest Account” means the special trust account of the Debt Service Fund
so designated, established pursuant to Section 5.3 hereof.

     

    “Project
Costs” mean all costs and expenses of the Project for which the Trustee is
permitted to make payment as provided in subsection 5.2(B) hereof.

     

    “Project”
means realty and other interests in the real property, if any, and all personal
property, goods, leasehold improvements, machinery, equipment, furnishings,
furniture, fixtures, tools and attachments wherever located and whether now
owned or hereafter acquired, financed in whole or in part with the proceeds of
the Bonds, and any additions and accessions thereto, substitutions therefor and
replacements thereof, including without limitation the project components
described in the appendix to the Agreement, as amended from time to time in
accordance herewith.

     

    “Project
Fund” means the special trust fund so designated, established pursuant to
Section 5.1 and Section 5.2 hereof.

     

    “Redemption
Account” means the special trust account of the Debt Service Fund so designated,
established pursuant to Section 5.3 hereof.

     

    “Redemption
Price” means, when used with respect to a Bond or a portion thereof, the
principal amount of such Bond or portion thereof plus the applicable premium, if
any, payable upon redemption thereof pursuant to this Indenture.

     

     “Renewal
Fund” means the special trust fund so designated, established pursuant to
Section 5.1 hereof.

     

    “Representation
Letter” has the meaning given such term in Section 2.3(F) hereof.

     

    “Revenues”
means (a) the Loan Payments, (b) all amounts paid to the Trustee with respect to
the principal of, redemption premium, if any, or interest on, the Bonds (1) by
the Borrower as required under the Agreement, and (2) upon deposit in the Debt
Service Fund from the proceeds of the Bonds and (c) investment income with
respect to any moneys held by the Trustee in the Project Fund, the Debt Service
Fund and the Renewal Fund.  The term “Revenues” does not include any
moneys or investments or investment income in the Rebate Fund.

     

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

     

    “State”
means the State of Connecticut.

     

    “Supplemental
Indenture” means any indenture supplemental hereto or amendatory hereof, adopted
by the Authority in accordance with Article X hereof.

     

    “Tax
Incidence Date” means the date as of which interest on the Bonds becomes or
became includable in the gross income of the recipient thereof (other than the
Borrower or another substantial user or related person) for federal income tax
purposes for any cause, as determined by a Determination of
Taxability.

     

    “Tax
Regulatory Agreement” means the Tax Regulatory Agreement, dated as of the date
of initial issuance and delivery of the Bonds, among the Authority, the Borrower
and the Trustee, and any amendments and supplements thereto.

     

    “Term”,
when used with reference to the Agreement, means the term of the Agreement
determined as provided in Article III thereof.

     

    “Trustee”
means U.S. Bank National Association, and its successor or successors hereafter
appointed in the manner provided in this Indenture.

     

    Section
1.2. Interpretation.  (A) In this
Indenture:

     

    (1)           Any
capitalized word or term used but not defined herein shall have the meaning
ascribed to such word or term in the Agreement or the Tax Regulatory Agreement,
as the case may be.

     

    (2)           The
terms “hereby”, “hereof”, “hereto”, “herein”, “hereunder” and any similar terms,
as used in this Indenture, refer to this Indenture, and the term “hereafter”
means after, and the term “heretofore” means before, the date of execution of
this Indenture.

     

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

     

    (4)           
Words importing persons include firms, associations, partnerships (including
limited partnerships), limited liability companies, trusts, corporations and
other legal entities, including public bodies, as well as natural
persons.

     

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

     

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

     

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

     

    (B)           Whenever
the Authority is named or referred to, it shall be deemed to include its
successors and assigns whether so expressed or not.  All of the
covenants, stipulations, obligations, and agreements by or on behalf of, and
other provisions for the benefit of, the Authority contained in this Indenture
shall bind and inure to the benefit of such successors and assigns and shall
bind and inure to the benefit of any officer, board, commission, authority,
agency or instrumentality to whom or to which there shall be transferred by or
in accordance with law any right, power or duty of the Authority, or of its
successors or assigns, the possession of which is necessary or appropriate in
order to comply with any such covenants, stipulations, obligations, agreements
or other provisions hereof.

     

    (C)           If
any one or more of the covenants or agreements provided herein on the part of
the Authority, the Trustee or any Paying Agent to be performed should be
contrary to law, then such covenant or covenants or agreement or agreements,
shall be deemed separable from the remaining covenants and agreements hereof,
and shall in no way affect the validity of the other provisions of this
Indenture or of the Bonds.

     

    (D)           All
approvals, consents and actions of the Trustee under this Indenture, the Bonds
and the Financing Documents may be given or withheld or taken or not taken in
accordance with the direction of the owners of not less than 51% of the
principal amount of the Outstanding Bonds.

     

    (E)           If
the Paying Agent shall be removed and the duties and obligations of such Paying
Agent discharged pursuant to Section 9.10 hereof, then each and every such duty
and obligation to be performed by such Paying Agent set forth herein and in the
Financing Documents shall be performed to the same extent and in the same manner
by the Trustee, and each and every reference herein and in the Financing
Documents to the Paying Agent shall refer to and shall be deemed to refer to the
Trustee unless a successor Paying Agent shall have been appointed.

     

    (F)           For
purposes hereof the Trustee shall not be deemed to have knowledge or actual
knowledge of any fact or the occurrence of any event unless and until an officer
of the Trustee’s corporate trust administration department has written notice
thereof.

     

    (G)           In
the event of any solicitation of consents from and voting by owners of the
Bonds, the Trustee shall establish a record date for such purposes and give DTC
notice of such record date not less than fifteen calendar days in advance of
such record date to the extent possible.

     

    
      
        
          --

        

         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
II

     

    AUTHORIZATION,
TERMS AND ISSUANCE OF BONDS

     

    Section
2.1. Authorization
for Indenture.  This Indenture is
made and entered into by virtue of and pursuant to the provisions of the
Act.  The Authority has ascertained and hereby determines and declares
that the execution and delivery of this Indenture is necessary to carry out the
powers and duties expressly provided by the Act, that each and every act,
matter, thing or course of conduct as to which provision is made herein is
necessary or convenient in order to carry out and effectuate the purposes of the
Authority in accordance with the Act and to carry out powers expressly given
thereby, and that each and every covenant or agreement herein contained and made
is necessary, useful or convenient in order to better secure the Bonds and
necessary, useful or convenient to carry out and effectuate its corporate
purposes under the Act.

     

    Section
2.2. Authorization
and Obligation of Bonds.  (A) Bonds of the
Authority issued hereunder, each to be entitled Water Facilities Revenue Bonds
(The Connecticut Water Company Project - 2009A Series), shall be subject to the
terms, conditions and limitations established herein.  No Bonds may be
authenticated and delivered except in accordance with this Article.

     

    (B)           All
Bonds shall be entitled to the benefit of the continuing pledge and lien created
by this Indenture to secure the full and final payment of the principal or
Redemption Price, if any, thereof and the interest thereon and all other amounts
due under the Financing Documents.  The Bonds shall be special
obligations of the Authority, payable solely out of the revenues or other
receipts, funds or moneys pledged therefor pursuant to this Indenture and from
any amounts otherwise available under this Indenture for the payment of the
Bonds.  Neither the State nor any municipality thereof shall be
obligated to pay the principal or Redemption Price, if any, of or the interest
on the Bonds and neither the faith and credit nor the taxing power of the State
or any municipality thereof is pledged to pay such principal, Redemption Price
or interest.  The Bonds shall never constitute a debt or liability of
the State or any municipality thereof or bonds issued or guaranteed by the State
or any municipality thereof within the meaning of any constitutional or
statutory limitation.

     

    Section
2.3. Issuance
and Terms of the Bonds.  (A) There shall
be issued under and secured by this Indenture a series of Bonds to be designated
Water Facilities Revenue Bonds (The Connecticut Water Company Project - 2009A
Series) in the principal amount of $20,000,000.  The Bonds shall be
issuable in fully registered form without coupons and shall be dated as provided
in Section 3.1 hereof.

     

    (B)           The
Bonds shall mature on December 1, 2039 and bear interest at the per annum rate
of 5.10% payable on June 1, 2010 and on each December 1 and June 1 thereafter
until maturity or prior redemption.

     

    (C)           Interest
on the Bonds shall be computed on the basis of a 360-day year consisting of
twelve (12) 30-day months.

     

    (D)           The
Bonds shall be numbered from one upward in consecutive numerical
order.  Bonds issued in exchange shall be numbered in such manner as
the Trustee and the Paying Agent in their discretion shall
determine.

     

    (E)           The
principal or Redemption Price, if any, of the Bonds as they respectively become
due shall be payable upon presentation and surrender of the Bonds at the
corporate trust office of the Trustee in Hartford, Connecticut, or at the office
designated for such payment of any successor Paying Agent.  Payment of
each installment of interest on the Bonds shall be made to the registered owners
thereof who shall appear on the registration books of the Authority maintained
by the Trustee at the close of business on the fifteenth day of the calendar
month next preceding such Interest Payment Date, by check or draft mailed to
each such registered owner at his address as it appears on such registration
books.  Alternatively, payment shall be made as otherwise agreed in
writing by the Bondholder and the Trustee and, at the written request to the
Trustee of and at the expense of any holder of at least $1,000,000 in Bonds,
such payment may be made by wire transfer or other reasonable method to an
account or place designated by such registered owner.

     

    (F)           Book-Entry
Only System for the Bonds

     

    (1)           The
Depository Trust Company (“DTC”), New York, New York shall act as securities
depository for the Bonds.  One fully registered bond in the aggregate
principal amount of the Bonds shall be registered in the name of Cede & Co.,
as nominee for DTC.  Notwithstanding any provision herein to the
contrary, the provisions of this Section 2.3(F) and the Representation Letter
(as defined below) shall apply with respect to any Bond registered to Cede &
Co. or any other nominee of DTC, New York, New York, while the Book-Entry Only
System (meaning the system of registration described in paragraph (2) of this
Section 2.3(F)) is in effect.  DTC is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
“clearing corporation” within the meaning of the New York Uniform Commercial
Code, and a “clearing agency” registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934.  DTC holds securities that
its participants (“Participants”) deposit with DTC.  DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants’ accounts, thereby eliminating
the need for physical movement of securities certificates.  Direct
Participants (“Direct Participants”) include securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other
organizations.  DTC is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and
the National Association of Securities Dealers, Inc.  Access to the
DTC system is also available to others such as securities brokers and dealers,
banks, and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly (“Indirect
Participants”).  The Rules applicable to DTC and its Participants are
on file with the Securities and Exchange Commission.

     

    (2)           The
Bonds in or to be in the Book-Entry Only System shall be issued in the form of a
separate single authenticated fully registered Bond in substantially the form
provided for in this Indenture (a “Global Security”).  Any legend
required to be on the Bonds by DTC may be added by the Trustee or Paying
Agent.  On the date of original delivery thereof, the Bonds shall be
registered in the registry books of the Paying Agent in the name of Cede &
Co., as nominee of The Depository Trust Company as agent for the Authority in
maintaining the Book-Entry Only System.

     

    WITH
RESPECT TO BONDS REGISTERED IN THE REGISTRY BOOKS KEPT BY THE PAYING AGENT IN
THE NAME OF CEDE & CO., AS NOMINEE OF DTC, THE AUTHORITY, THE PAYING AGENT,
THE BORROWER AND THE TRUSTEE SHALL HAVE NO RESPONSIBILITY OR OBLIGATION TO ANY
PARTICIPANT (WHICH MEANS SECURITIES BROKERS AND DEALERS, BANKS, TRUST COMPANIES,
CLEARING CORPORATIONS AND VARIOUS OTHER ENTITIES, SOME OF WHOM OR THEIR
REPRESENTATIVES OWN DTC) OR TO ANY BENEFICIAL OWNER (WHICH MEANS, WHEN USED WITH
REFERENCE TO THE BOOK-ENTRY ONLY SYSTEM, THE PERSON WHO IS CONSIDERED THE
BENEFICIAL OWNER OF THE BONDS PURSUANT TO THE ARRANGEMENTS FOR BOOK ENTRY
DETERMINATION OF OWNERSHIP APPLICABLE TO DTC) WITH RESPECT TO THE
FOLLOWING:  (A) THE ACCURACY OF THE RECORDS OF DTC, CEDE & CO. OR
ANY PARTICIPANT WITH RESPECT TO ANY OWNERSHIP INTEREST IN THE BONDS, (B) THE
DELIVERY TO OR FROM ANY PARTICIPANT, ANY BENEFICIAL OWNER OR ANY OTHER PERSON,
OTHER THAN DTC, OF ANY NOTICE WITH RESPECT TO THE OTHER PERSON, OTHER THAN DTC,
OF ANY NOTICE WITH RESPECT TO THE BONDS, INCLUDING ANY NOTICE OF REDEMPTION
(WHETHER MANDATORY OR OPTIONAL), OR (C) THE PAYMENT TO ANY PARTICIPANT, ANY
BENEFICIAL OWNER OR ANY OTHER PERSON, OTHER THAN DTC, OF ANY AMOUNT WITH RESPECT
TO THE PRINCIPAL OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS.

     

    The
Paying Agent shall pay all principal of and premium, if any, and interest on the
Bonds only to or upon the order of DTC, and all such payments shall be valid and
effective fully to satisfy and discharge the Authority’s obligations with
respect to the principal of and premium, if any, and interest on Bonds to the
extent of the sum or sums so paid.  No person other than DTC shall be
entitled to receive an authenticated Bond evidencing the obligation of the
Authority to make payments of principal and premium, if any, and interest
pursuant to this Indenture.  Upon delivery by DTC to the Paying Agent
of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., the words “Cede & Co.” in this Indenture
shall refer to such new nominee of DTC.

     

    The
Authority, the Borrower, the Trustee and the Paying Agent shall be entitled to
treat the registered owner of a Bond (initially, DTC or its nominee) as the
absolute owner thereof for all purposes of this Indenture and any applicable
laws, notwithstanding any notice to the contrary received by any of
them.  So long as all Bonds are registered in the name of DTC or its
nominee or any qualified successor, the Borrower and the Paying Agent shall
cooperate with DTC or its nominee or any qualified successor in effecting
payment of the principal of, redemption premium, if any, and interest on the
Bonds by arranging for payment in such manner that funds for such payments are
properly identified and are made to DTC when due.

     

    (3)           Upon
receipt by the Trustee or the Paying Agent of written notice from DTC to the
effect that DTC is unable or unwilling to discharge its responsibilities, the
Authority shall issue and the Paying Agent shall transfer and exchange Bonds as
requested by DTC in appropriate amounts and in authorized denominations, and
whenever DTC requests the Authority, the Paying Agent and the Trustee to do so,
the Trustee, the Paying Agent and the Authority will, at the expense of the
Borrower, cooperate with DTC in taking appropriate action after reasonable
notice (A) to arrange for a substitute bond depository willing and able upon
reasonable and customary terms to maintain custody of the Bonds or (B) to make
available for transfer and exchange Bonds registered in whatever name or names
and in whatever authorized denominations as DTC shall designate.

     

    (4)           In
such event, the Borrower shall so notify DTC, the Paying Agent and the Trustee,
whereupon DTC will notify the Participants of the availability through DTC of
Bond certificates.  In such event, the Authority shall issue and the
Paying Agent shall transfer and exchange Bond certificates as requested by DTC
in appropriate amounts and in authorized denominations.  Whenever DTC
requests the Paying Agent to do so, the Paying Agent will cooperate with DTC in
taking appropriate action after reasonable notice to make available for transfer
and exchange Bonds registered in whatever name or names and in whatever
authorized denominations as DTC shall designate.

     

    (5)           The
Authority may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository).  In that event,
Bond certificates will be printed and delivered.

     

    (6)           Notwithstanding
any other provisions of this Indenture to the contrary, so long as any Bond is
registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to the principal of, premium, if any, and interest on such Bond and all
notices with respect to such Bond shall be made and given, respectively, to DTC
as provided in the Blanket Letter of Representation, dated March 29, 1995, from
the Authority to DTC (the “Representation Letter”).

     

    (7)           Notwithstanding
any other provisions of this Indenture to the contrary, so long as any of the
Bonds outstanding are held in the Book-Entry Only System, if less than all of
such Bonds are to be redeemed upon any redemption of Bonds hereunder, the
particular Bonds or portions of Bonds to be converted or redeemed shall be
selected by DTC in such manner as DTC may determine.

     

    Notwithstanding
any provision herein to the contrary, the Trustee and the Paying Agent may
comply with the provisions of the Letter of Representation or similar document
required by DTC or any successor securities depository in order to maintain the
Book-Entry Only System for the Bonds.

     

    Section
2.4. Redemption
of Bonds.  (A) General Optional
Redemption.  At the option of the Authority, which option shall
be exercised upon the giving of written notice by the Borrower of its intention
to prepay amounts due under the Agreement pursuant to subsection 8.1(A) thereof
and the Note, the Bonds shall be subject to redemption prior to maturity from
time to time upon not less than 30 days’ notice in writing, as a whole or in
part on any date on or after December 1, 2014, at a Redemption Price equal to
100% of the principal amount thereof plus accrued interest to the date of
redemption.

     

    (B)           Extraordinary Optional
Redemption.  In addition, at the option of the Authority, which
option shall be exercised upon the giving of written notice by the Borrower of
its election to redeem Bonds following completion of Project pursuant to Section
5.2(F) hereof or its intention to prepay amounts due under the Agreement
pursuant to Section 8.1(B) thereof, the Outstanding Bonds shall be subject to
redemption prior to maturity at the redemption price of 100% of the principal
amount thereof plus accrued interest to the date of redemption (a) in part, on
any date, to the extent excess Bond proceeds are transferred to the Redemption
Account from the Project Fund in accordance with Section 5.2(F) of the
Indenture, or (b) as a whole, on any date, if any one or more of the events of
casualty to or condemnation of the Project, change in law, or certain economic
events specified in Section 8.1(B) of the Agreement shall have occurred, as
evidenced in each case by the filing with the Trustee of a certificate of an
Authorized Representative of the Borrower.

     

    (C)           Mandatory Taxability
Redemption.  In the event of a Determination of Taxability, the
Bonds shall be redeemed in the manner and as provided in this Indenture, at the
redemption price equal to 100% of the principal amount thereof plus accrued
interest to the date of redemption on any day selected by the Borrower, that is
not more than 180 days after such Determination of Taxability.  In the
case of any redemption pursuant to this subsection, the Authority or the
Borrower or any Bondholder shall deliver to the Trustee a certificate of an
Authorized Representative specifying the event giving rise to such inclusion in
the gross income of the recipient thereof and the dates which are the Tax
Incidence Date and the date of the Determination of Taxability.  Such
certificate shall be delivered at least ten days before notice of redemption is
required to be given.  Redemption under this paragraph shall be in
whole unless not less than forty-five (45) days prior to the redemption date the
Borrower delivers to the Trustee an opinion of Bond Counsel reasonably
satisfactory to the Trustee to the effect that a redemption of less than all of
the Bonds will preserve the tax-exempt status of interest on the remaining Bonds
outstanding subsequent to such redemption.

     

    For
purposes of this Subsection C only, the owner of a Bond means the Beneficial
Owner of said Bond so long as the Book-Entry Only System shall be in
effect.

     

    (D)           Redemption (or Purchase) by
the Borrower in the Event of Death of a Beneficial
Owner.  Unless the Bonds have been declared due and payable
prior to their maturity by reason of an Event of Default, the Representative (as
hereinafter defined) of a deceased Beneficial Owner (as hereinafter defined) who
has owned (or whose estate has owned) the Bonds for a period of at least six
months prior to any request for redemption, has the right after December 1,
2011, to request redemption prior to stated maturity of all or part of interest
in the Bonds, and the Borrower will redeem (or will cause the Authority to
redeem) the same subject to the limitations that the Borrower will not be
obligated to redeem (or cause to be redeemed), during the period from December
1, 2011, through and including December 1, 2012, (the “Initial Period”), and
during any twelve-month period which ends on and includes each December 1
thereafter (each such twelve-month period being hereinafter referred to as a
“Subsequent Period”), (i) on behalf of a deceased Beneficial Owner any interest
in the Bonds which exceeds $25,000 principal amount (the “Individual
Limitation”) or (ii) interests in the Bonds exceeding $400,000 in aggregate
principal amount (the “Annual Limitation”).  A request for redemption
may be initiated by the Representative of a deceased Beneficial Owner at any
time and in any principal amount.

     

    The
Borrower may, at its option, redeem (or cause to be redeemed) interests of any
deceased Beneficial Owner in the Bonds during the Initial Period or any
Subsequent Period in excess of the Individual Limitation.  Any such
redemption, to the extent that it exceeds the Individual Limitation for any
deceased Beneficial Owner, shall not be included in the computation of the
Annual Limitation for such Initial Period or such Subsequent Period, as the case
may be, or for any succeeding Subsequent Period.  The Borrower may, at
its option, redeem (or cause to be redeemed) interests of deceased Beneficial
Owners in the Bonds, during the Initial Period or any Subsequent Period in an
aggregate principal amount exceeding the Annual Limitation.  Any such
redemption, to the extent it exceeds the Annual Limitation shall not reduce the
Annual Limitation for any Subsequent Period.  Upon any determination
by the Borrower to redeem (or cause to be redeemed) Bonds in excess of the
Individual Limitation or the Annual Limitation, Bonds so redeemed shall be
redeemed in the order of the receipt of Redemption Requests (as hereinafter
defined) by the Trustee.

     

    A request
for redemption of an interest in the Bonds may be initiated by the personal
representative or other person authorized to represent the estate of the
deceased Beneficial Owner or by a surviving joint tenant(s) or tenant(s) by the
entirety or the trustee of a trust (each, a “Representative”).  The
Representative shall deliver a request to the Participant (hereinafter defined)
through whom the deceased Beneficial Owner owned such interest, in form
satisfactory to the Participant, together with evidence of the death of the
Beneficial Owner, evidence of the authority of the Representative satisfactory
to the Participant, such waivers, notices or certificates as may be required
under applicable state or federal law and such other evidence of the right to
such redemption as the Participant shall require.  The request shall
specify the principal amount of the interest in the Bonds to be
redeemed.  The Participant shall thereupon deliver to the Depository a
request for redemption substantially in the form attached as Appendix B to this
Indenture (a “Redemption Request”).  The Depository will, on receipt
thereof, forward the same to the Trustee.  The Trustee shall maintain
records with respect to Redemption Requests received by it including date of
receipt, the name of the Participant filing the Redemption Request and the
status of each such Redemption Request with respect to the Individual Limitation
or the Annual Limitation.  The Trustee will immediately forward each
Redemption Request it receives, together with the information regarding the
eligibility thereof with respect to the Individual Limitation or the Annual
Limitation with the Borrower.  The Depository, the Authority, the
Borrower and the Trustee may conclusively assume, without independent
investigation, that the statements contained in each Redemption Request are true
and correct and shall have no responsibility for reviewing any documents
submitted to the Participant by the Representative or for determining whether
the applicable decedent is in fact the Beneficial Owner of the interest in the
Bonds to be redeemed or is in fact deceased and whether the Representative is
duly authorized to request redemption on behalf of the applicable Beneficial
Owner.

     

    Subject
to the Individual Limitation and the Annual Limitation, the Borrower will, after
the death of any Beneficial Owner, redeem (or cause to be redeemed) the interest
of such Beneficial Owner in the Bonds on the next interest payment date
occurring not less than 30 days following receipt by the Borrower of the
Redemption Request from the Trustee.  If Redemption Requests exceed
the aggregate principal amount of interests in Bonds required to be redeemed
during the Initial Period or during any Subsequent Period, then such excess
Redemption Requests will be applied in the order received by the Trustee to
successive Subsequent Periods, regardless of the number of Subsequent Periods
required to redeem such interests.  The Borrower may, at any time,
notify the Trustee that it will redeem (or cause to be redeemed), on the next
interest payment date occurring not less than 30 days thereafter, all or any
such lesser amount of Bonds for which Redemption Requests have been received but
which are not then eligible for redemption by reason of the Individual
Limitation or the Annual Limitation.  Any Bonds so redeemed shall be
redeemed in the order of receipt of Redemption Requests by the
Trustee.

     

    The price
to be paid by the Borrower for the Bonds to be redeemed pursuant to a Redemption
Request is 100% of the principal amount thereof plus accrued but unpaid interest
to the date of payment.  Subject to arrangements with the Depository,
payment for interests in the Bonds which are to be redeemed shall be made to the
Depository upon presentation of Bonds to the Trustee for redemption in the
aggregate principal amount specified in the Redemption Requests submitted to the
Trustee by the Depository which are to be fulfilled in connection with such
payment.  The principal amount of any Bonds acquired or redeemed by or
at the direction of the Borrower other than by redemption at the option of any
Representative of a deceased Beneficial Owner pursuant to this section shall not
be included in the computation of either the Individual Limitation and the
Annual Limitation for the Initial Period or for any Subsequent
Period.

     

    For
purposes of this section, a “Beneficial Owner” means the Person who has the
right to sell, transfer or otherwise dispose of an interest in a Bond and the
right to receive the proceeds therefrom, as well as the interest and principal
payable to the holder thereof.  In general, a determination of
beneficial ownership in the Bonds will be subject to the rules, regulations and
procedures governing the Depository and institutions that have accounts with the
Depository or a nominee thereof (“Participants”).

     

    For
purposes of this section, an interest in a Bond held in tenancy by the entirety,
joint tenancy or by tenants in common will be deemed to be held by a single
Beneficial Owner and the death of a tenant by the entirety, joint tenant or
tenant in common will be deemed the death of a Beneficial Owner.  The
death of a person who, during his lifetime, was entitled to substantially all of
the rights of a Beneficial Owner of an interest in the Bonds will be deemed the
death of the Beneficial Owner, regardless of the recordation of such interest on
the records of the Participant, if such rights can be established to the
satisfaction of the Participant.  Such interests shall be deemed to
exist in typical cases of nominee ownership, ownership under the Uniform Gifts
to Minors Act or the Uniform Transfers to Minors Act, community property or
other similar joint ownership arrangements, including individual retirement
accounts or Keogh [H.R. 10] plans maintained solely by or for the decedent or by
or for the decedent and any spouse, and trust and certain other arrangements
where the decedent has the right to receive all or a portion of the income and
such person has substantially all of the rights of a Beneficial Owner during
such person’s lifetime.

     

    In the
case of a redemption request which is presented on behalf of a deceased
Beneficial Owner and which has not been fulfilled at the time the Borrower gives
notice of its election to redeem the Bonds, the Bonds which are the subject of
such pending redemption request shall be redeemed prior to any other
Bonds.

     

    Any
Redemption Request may be withdrawn by the person(s) presenting the same upon
delivery of a written request for such withdrawal given by the Participant on
behalf of such person to the Depository and by the Depository to the Trustee not
less than 60 days prior to the interest payment date on which such Bonds are
eligible for redemption.

     

    The
Borrower may, at its option, purchase any Bonds for which Redemption Requests
have been received in lieu of redeeming (or causing the redemption of) such
Bonds.  Any Bonds so purchased by the Borrower shall either be
reoffered for sale and sold within 180 days after the date of purchase or
presented to the Trustee for redemption and cancellation.  The Trustee
shall have no duty to monitor or enforce the Borrower’s obligations under this
paragraph.

     

    During
such time or times as the Bonds are not represented by a Global Security (as
such term is defined in Section 2.3(F) hereof) and are issued in definitive
form, all references in this Section to Participants and the Depository,
including the Depository’s governing rules, regulations and procedures shall be
deemed deleted, all determinations which under this section the Participants are
required to make shall be made by the Borrower (including, without limitation,
determining whether the applicable decedent is in fact the Beneficial Owner of
the interest in the Bonds to be redeemed or is in fact deceased and whether the
Representative is duly authorized to request redemption on behalf of the
applicable Beneficial Owner), all Redemption Requests, to be effective, shall be
delivered by the Representative to the Trustee, with a copy to the Borrower, and
shall be in the form of a Redemption Request (with appropriate changes to
reflect the fact that such Redemption Request is being executed by a
Representative) and, in addition to all documents that are otherwise required to
accompany a Redemption Request, shall be accompanied by the Bond that is the
subject of such request.

     

    (E)           [Reserved].

     

    (F)           Optional Public Purpose
Redemption.  If the Borrower fails to perform its obligations
under Section 6.4 of the Agreement, the Bonds shall be subject to redemption
prior to maturity as a whole on any date at the option of the Authority in
accordance with Section 7.3 of the Agreement, at the redemption price equal to
100% of the principal amount thereof plus accrued interest to the date of
redemption.

     

    (G)           Extraordinary Optional
Redemption Without Premium to Preserve Tax Exempt Status of the
Bonds.  The Bonds shall be subject to extraordinary optional
redemption by the Authority, at the direction of the Borrower, in whole or in
part on any date at a Redemption Price equal to 100% of the unpaid principal
amount thereof, together with accrued interest to the date of redemption, and
without premium, if the Borrower shall have delivered to the Trustee and the
Authority an opinion of Bond Counsel addressed to the Trustee and the Authority
substantially to the effect that (i) a failure so to redeem the Bonds (or the
relevant portion thereof) may adversely affect the exclusion of interest on the
Bonds from the gross income of the holders pursuant to Section 103 of the Code,
and (ii) redemption of Bonds in the amount set forth in such opinion (but in no
smaller amount than that set forth in such opinion) would permit the continuance
of any exclusion so afforded under Section 103 of the Code.

     

    (H)           Upon
any redemption of Bonds there shall also be due and payable, concurrently with
the payment of the Redemption Price, interest accrued on the Bonds and all other
amounts then due under the Financing Documents.

     

    (I)           Redemption
of Bonds permitted or required by this Article II shall be made as follows, and
the Trustee shall give the notice of redemption referred to in Section 6.3
hereof in respect of each such redemption:

     

    (1)           Redemption
shall be made pursuant to the general optional redemption provisions of Section
2.4(A) in such principal amounts as the Borrower shall request in a written
notice to the Trustee in accordance with Section 8.2 of the
Agreement.

     

    (2)           
Redemption shall be made pursuant to the extraordinary optional redemption
provisions of Section 2.4(B) at such date as the Borrower shall request in a
written notice to the Authority and Trustee in accordance with Section 5.2(F)
hereof or Section 8.2 of the Agreement, as the case may be, to which shall be
attached the certificates referred to in Section 5.2(F) hereof and Section
8.1(B) thereof.

     

    (3)           Redemption
shall be made pursuant to the mandatory taxability redemption provisions of
Section 2.4(C) at the earliest possible date following receipt of the
certificate prescribed in Section 2.4(C) hereof and of the payments made by the
Borrower prescribed in Section 6.3 of the Agreement, without the necessity of
any instructions or further act of the Authority or the Borrower.

     

    (4)           Redemption
shall be made pursuant to the provisions of Section 2.4(D) in accordance with
said Section and with Article VI of this Indenture.

     

    (5)           [Reserved].

     

    (6)           Redemption
shall be made pursuant to the provisions of Section 2.4(F) in accordance with
Section 7.3 of the Agreement.

     

    (7)           Redemption
shall be made pursuant to the provisions of Section 2.4(G) at the earliest
possible date following the delivery to the Trustee and the Authority of the
opinion of Bond Counsel described in Section 2.4(G) hereof, without the
necessity of any instructions or further act of the Authority or the
Borrower.

     

    Section
2.5. Execution
and Authentication of Bonds.  (A) After their
authorization as provided in this Article, Bonds may be executed by or on behalf
of the Authority and delivered to the Trustee or the Paying Agent for
authentication.  Each Bond shall be executed in the name of the
Authority by the manual or facsimile signature of any one or more Authorized
Representatives of the Authority.

     

    (B)           In
case any officer who shall have signed any of the Bonds shall cease to be such
officer before the Bonds so signed shall have been authenticated and delivered
by the Trustee or the Paying Agent, such Bonds may nevertheless be authenticated
and delivered as herein provided as if the person who so signed such Bonds had
not ceased to be such officer.  Any Bond may be signed on behalf of
the Authority by any person who, on the date of such act, shall hold the proper
office, notwithstanding that at the date of such Bond such person may not have
held such office.

     

    (C)           The
Bonds shall each bear thereon a certificate of authentication, in the form set
forth in the recitals to this Indenture, executed manually by the Trustee or the
Paying Agent.  Only such Bonds as shall bear thereon such certificate
of authentication shall be entitled to any right or benefit under this Indenture
and no Bond shall be valid or obligatory for any purpose until such certificate
of authentication shall have been duly executed by the Trustee or the Paying
Agent.  Such certificate of the Trustee or the Paying Agent upon any
Bond executed on behalf of the Authority shall be conclusive evidence that the
Bond so authenticated has been duly authenticated and delivered under this
Indenture and that the holder thereof is entitled to the benefits
hereof.

     

    Section
2.6. Delivery
of Bonds.  The Bonds shall
be executed in the form and manner set forth herein and shall be deposited with
the Trustee and thereupon shall be authenticated by the Trustee or the Paying
Agent.  Upon payment to the Trustee of the proceeds of sale thereof,
such Bonds shall be delivered by the Trustee or the Paying Agent to or upon the
order of the purchasers thereof, but only upon receipt by the Trustee
of:

     

    (1)           A
certified copy of the Authority’s resolution authorizing the issuance of the
Bonds and, the execution and delivery of this Indenture and the Financing
Documents;

     

    (2)           Original
executed counterparts of the Financing Documents other than the Note, and the
originally executed Note;

     

    (3)           A
request and authorization to the Trustee or the Paying Agent on behalf of the
Authority to authenticate and deliver the Bonds to the purchasers therein
identified upon payment to the Trustee, for the account of the Authority, of a
sum specified in such request and authorization, plus any accrued interest on
the Bonds to the date of such delivery.  The proceeds of such payment
shall be paid over to the Trustee and deposited in the Project Fund and Debt
Service Fund pursuant to Article IV hereof; and

     

    (4)           A
written opinion by Bond Counsel to the effect that the issuance of such Bonds
has been duly authorized and that all conditions precedent to the delivery
thereof set forth in this Indenture have been fulfilled.

     

    Section
2.7. No
Additional Bonds.  No Additional
Bonds on a parity with the Bonds may be issued under this
Indenture.

     

    
      
        
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    ARTICLE
III

     

    GENERAL
TERMS AND PROVISIONS OF BONDS

     

    Section
3.1. Date of
Bonds.  The Bonds shall
be dated and bear interest from their date of delivery, except in the case of
Bonds delivered in any exchange or transfer hereunder on or subsequent to the
first Interest Payment Date of the Bond for which it is exchanged or
transferred, which shall bear interest from the Interest Payment Date next
preceding the date of such delivery, unless, as shown by the records of the
Trustee, interest on the Bond surrendered in exchange for such Bond shall be in
default, in which case such Bond shall bear interest from the date to which
interest has been paid in full on the Bond so surrendered.

     

    Section
3.2. Form and
Denominations.  Bonds shall be
issued in fully registered form, without coupons, in denominations of $5,000 or
any multiple thereof.  Subject to the provisions of Section 3.3
hereof, the Bonds shall be in substantially the form set forth in the recitals
to this Indenture, with such variations, omissions and insertions as are
permitted or required by this Indenture.

     

    Section
3.3. Legends.  Each Bond shall
contain on the face thereof a statement to the effect that neither the State nor
any municipality thereof shall be obligated to pay the principal of the Bond or
interest thereon and neither the faith and credit nor taxing power of the State
or any municipality thereof is pledged to such payment.  The Bonds
may, in addition, contain or have endorsed thereon such provisions,
specifications and descriptive words not inconsistent with the provisions of
this Indenture as may be necessary or desirable to comply with custom or
otherwise as may be determined by the Authority prior to the delivery
thereof.

     

    Section
3.4. Medium of
Payment.  The principal or
Redemption Price, if any, of and interest on the Bonds shall be payable in any
coin or currency of the United States of America which, on the respective dates
of payment thereof, is legal tender for the payment of public and private
debts.  Such payment may be made as provided in Section 2.3
hereof.

     

    Section
3.5. Bond
Details.  Subject to the
provisions hereof, the Bonds shall be dated, shall mature in such years and such
amounts, shall bear interest at such rate or rates per annum, shall be subject
to redemption on such terms and conditions and shall be payable as to principal
or Redemption Price, if any, and interest at such place or places as shall be
specified in this Indenture.

     

    Section
3.6. Interchangeability,
Transfer and Registry.  (A) Each Bond
shall be transferable only upon compliance with the restrictions on transfer set
forth on such Bond and only upon the books of the Authority, which shall be kept
for the purpose at the principal office of the Paying Agent, by the registered
owner thereof in person or by his attorney duly authorized in writing, upon
presentation thereof together with a written instrument of transfer satisfactory
to the Paying Agent duly executed by the registered owner or his duly authorized
attorney.  Upon the transfer of any Bond, the Paying Agent shall
prepare and issue in the name of the transferee one or more new Bonds in
authorized denominations of the same aggregate principal amount as the
surrendered Bond.

     

    (B)           Any
Bond, upon surrender thereof at the office of the Paying Agent with a written
instrument of transfer satisfactory to the Paying Agent, duly executed by the
registered owner or his attorney duly authorized in writing, may be exchanged at
the office of the Paying Agent for a new Bond or Bonds in authorized
denominations of the same aggregate principal amount without transfer to a new
registered owner.  No transfer will be effective unless represented by
such surrender and reissue.

     

    (C)           Except
as otherwise specifically provided herein, the Authority, the Borrower, the
Trustee, and any Paying Agent may deem and treat the person in whose name any
Bond shall be registered as the absolute owner of such Bond, whether such Bond
shall be overdue or not, for the purpose of receiving payment of, or on account
of, the principal and Redemption Price, if any, of and interest on such Bond and
for all other purposes, and all payments made to any such registered owner or
upon his order shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid, and neither
the Authority, the Borrower, the Trustee nor any Paying Agent, nor any agent of
the foregoing, shall be affected by any notice to the contrary.

     

    (D)           The
Paying Agent shall not be required to exchange or transfer (a) any Bond during
the fifteen (15) day period preceding any Interest Payment Date or the date
fixed for selection of Bonds for redemption, or (b) any Bonds selected, called
or being called for redemption in whole or in part except, in the case of any
Bond to be redeemed in part, the portion thereof not so to be
redeemed.

     

    Section
3.7. Bonds
Mutilated, Destroyed, Stolen or Lost.  In case any Bond
shall become mutilated or be destroyed, stolen or lost, the Authority shall
execute and thereupon the Trustee or the Paying Agent shall authenticate and
deliver, a new Bond of the same principal amount as the Bond so mutilated,
destroyed, stolen or lost, in exchange and substitution for such mutilated Bond,
upon surrender and cancellation of such mutilated Bond or in lieu of and
substitution for the Bond destroyed, stolen or lost, upon filing with the
Trustee of evidence satisfactory to the Authority, the Trustee and the Paying
Agent that such Bond has been destroyed, stolen or lost and proof of ownership
thereof, and upon furnishing the Authority, the Trustee and the Paying Agent
with indemnity satisfactory to them and complying with such other reasonable
requirements as the Authority and the Trustee and the Paying Agent may prescribe
and paying such expenses as the Authority, the Trustee and the Paying Agent may
incur.  All Bonds so surrendered to the Trustee shall be cancelled by
it.  Any such new Bonds issued pursuant to this Section in
substitution for Bonds alleged to be destroyed, stolen or lost shall constitute
original additional contractual obligations on the part of the Authority,
whether or not the Bonds so alleged to be destroyed, stolen or lost be at any
time enforceable by anyone, and shall be equally secured by and entitled to
equal and proportionate benefits with all other Bonds issued hereunder in any
moneys or securities held by the Authority, the Trustee or the Paying Agent for
the benefit of the owners of the Bonds.

     

    Section
3.8. Cancellation
and Destruction of Bonds.  All Bonds paid or
redeemed in full, either at or before maturity, shall be delivered to the Paying
Agent when such payment or redemption is made, and such Bonds together with all
Bonds purchased by the Paying Agent, together with all Bonds surrendered in any
exchange or transfers, shall thereupon be promptly cancelled.  All
Bonds acquired and owned by the Borrower and delivered to the Paying Agent for
cancellation shall be deemed paid and shall be promptly
cancelled.  Bonds so cancelled shall be cremated or otherwise
destroyed by the Paying Agent, who shall execute a certificate of cremation or
destruction in duplicate under signature of one of its authorized officers
describing the Bonds so cremated or otherwise destroyed, and one executed
certificate shall be filed with the Authority and the other executed certificate
shall be retained by the Paying Agent.  The Paying Agent shall provide
written notice to Moody’s, if the Bonds are then rated by Moody’s and to
S&P, if the Bonds are then rated by S&P, of the final payment or
redemption of any of the Bonds, either at or before maturity, upon cancellation
of any such Bonds.

     

    Section
3.9. Requirements
With Respect To Transfers.  In all cases in
which the privilege of transferring Bonds is exercised, the Authority shall
execute and the Trustee or the Paying Agent shall authenticate and deliver Bonds
in accordance with the provisions of this Indenture.  All Bonds
surrendered in any such transfer shall forthwith be cancelled by the Trustee or
the Paying Agent.  For every such transfer of Bonds, the Authority,
the Trustee or the Paying Agent may, as a condition precedent to the privilege
of making such transfer, make a charge sufficient to reimburse it for any tax,
fee or other governmental charge required to be paid with respect to such
transfer and may charge a sum sufficient to pay the cost of preparing and
delivering each new Bond issued upon such transfer, which sum or sums shall be
paid by the person requesting such transfer.

     

    Section
3.10. Registrar.  The Trustee shall
also be Registrar for the Bonds, and shall maintain a register showing the names
of all registered owners of Bonds, Bond numbers and amounts, and other
information appropriate to the discharge of its duties hereunder.  The
Trustee shall make available to the Borrower for its inspection during normal
business hours the registration books for the Bonds, as may be requested by the
Borrower in connection with any purchase or tender offer by it with respect to
the Bonds.

     

    

     

    
      
        
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    ARTICLE
IV

     

    APPLICATION
OF BOND PROCEEDS AND OTHER AMOUNTS

     

    Section
4.1. Accrued
Interest.  Simultaneously
with the delivery of any Bonds by the Trustee, the amount received as accrued
interest thereon, if any, shall be deposited in the Principal and Interest
Account of the Debt Service Fund.

     

    Section
4.2. Bond
Proceeds.  The proceeds of
sale and delivery of any Bonds, together with any premium received on account of
the sale thereof (but excluding any accrued interest on the Bonds), shall,
simultaneously with the delivery thereof by the Trustee, be deposited as
follows:

     

    
      	
               
      

            	
              (A)

            	
              $19,600,000.00
      will be deposited in the Project Account of the Project Fund;
      and

            

    

     

    
      	
               
      

            	
              (B)

            	
              $400,000.00
      will be deposited in the Costs of Issuance Account of the Project
      Fund.

            

    

     

    Section
4.3. Borrower
Contribution.  A contribution of
the Borrower in the amount of $358,354.05 (which shall be applied to the payment
of certain costs and expenses incurred in connection with the issuance,
execution and sale of the Bonds for which the Borrower is responsible, including
compensation and expenses of the Trustee, bond insurance premium, legal,
accounting and consulting expenses and fees, costs of printing and engraving,
underwriting expenses and recording and filing fees) shall simultaneously with
the delivery of the Bonds be deposited by the Trustee in the Costs of Issuance
Account of the Project Fund.  Notwithstanding anything to the contrary
contained in this Indenture, such contribution shall not be subject to the lien
of this Indenture and any portion of such contribution not disbursed for the
payment of costs and expenses incurred in connection with the issuance,
execution and sale of the Bonds within sixty (60) days of the date of issuance
of the Bonds (including investment earnings, if any attributable thereto) shall
be returned to the Borrower.

     

    
      
        
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    ARTICLE
V

     

    CUSTODY
AND INVESTMENT OF FUNDS

     

    Section
5.1. Creation
of Funds.  (A) The Authority hereby establishes and creates the
following special trust Funds and Accounts within such Funds:

     

    (1)           Project
Fund

     

    (a)  Project
Account

     

    (b)  Costs
of Issuance Account

     

    (2)           Debt
Service Fund

     

    (a)  Principal
and Interest Account

     

    (b)  Redemption
Account

     

    (3)           Rebate
Fund

     

    (4)           Renewal
Fund

     

    (B)           The
Rebate Fund shall be held by the Trustee free and clear of any lien, charge or
pledge created by this Indenture.  All of the Funds and Accounts
created hereunder shall be held by the Trustee, including one or more
depositories in trust for the Trustee.  All moneys and investments
deposited with the Trustee or any Paying Agent shall be held in trust and
applied only in accordance with this Indenture and shall be trust funds for the
purposes of this Indenture.

     

    (C)           The
Trustee, in its sole discretion, may establish accounts and subaccounts within
the Funds established pursuant to Section 5.1(A) for its internal administrative
or accounting purposes in order to facilitate the performance of its duties and
obligations hereunder.

     

    Section
5.2. Project
Fund.  (A) The Trustee shall establish two separate accounts
within the Project Fund to be respectively designated “Project Account” and
“Costs of Issuance Account”.  There shall be deposited in the various
Accounts of the Project Fund any and all amounts required to be deposited
therein pursuant to Sections 4.2 and 4.3 hereof or otherwise required to be
deposited therein pursuant to the Agreement or this Indenture.

     

    (B)           The
Trustee shall apply the amounts in the various Accounts of the Project Fund, at
the direction of the Borrower, to pay the costs of the Project and the costs of
issuance of the Bonds including, but not limited to:

     

    (1)           The
costs of title insurance, surveys, legal fees and recording and other closing
expenses;

     

    (2)           Obligations
incurred for labor and materials;

     

    (3)           All
costs of contract bonds and of insurance of all kinds that may be required or
necessary during the course of construction of the Project;

     

    (4)           All
costs of engineering services, including the costs of test borings, surveys,
estimates, plans and specifications and preliminary investigation therefor and
for supervising construction, as well as for the performance of all other duties
required by or consequent upon the proper construction of, and alterations,
additions and improvements to, the Project;

     

    (5)           All
expenses incurred in connection with the issuance, execution and sale of the
Bonds, including compensation and expenses of the Trustee, the Authority’s
issuance fee, Bond Counsel fees, and expenses, underwriting discount, legal,
accounting and consulting expenses and fees, costs of printing and engraving,
and recording and filing fees;

     

    (6)           All
costs which the Borrower shall be required to pay, under the terms of any
contract or contracts, for the acquisition, construction, installation or
equipping of the Project, including any amounts required to reimburse the
Borrower for advances or payments made for any of the above items or for any
other costs incurred and for work done which are properly chargeable to the
Project;

     

    (7)           Interest
due and payable on the Bonds from the date of issuance to the Completion Date of
the Project;

     

    (8)           Any
other costs and expenses relating to the Project.

     

    (C)           The
Trustee is hereby authorized and directed to issue its checks or to effect wire
transfers for each disbursement from the various Accounts of the Project Fund
(excepting any fees payable to the Trustee as to which no further authority is
required) upon a requisition submitted to the Trustee and signed by an
Authorized Representative of the Borrower in substantially the form attached
hereto as Appendix A.  Such requisition shall state with respect to
each payment to be made:  (1) the Account within the Project Fund from
which such disbursement is to be made, (2) the requisition number, (3) the name
and address of the person, firm or corporation to whom payment is due, or to
whom a reimbursable advance, if any, has been made, (4) the amount to be paid,
(5) that each obligation mentioned therein has been properly incurred within the
provisions of the Agreement, is a proper charge against the Project Fund, is
unpaid or unreimbursed, and has not been the basis of any previous withdrawal,
(6) that the requisition and the use of proceeds set forth therein are
consistent in all material respects with the Tax Regulatory Agreement with
respect to the Bonds, and (7) unless the Trustee has received the certificate
described in subsection 5.2(F) hereof, 95% or more of the amount requisitioned
is to be applied to costs (a) paid or incurred after the date which is sixty
(60) days prior to the adoption of the Authority’s inducement resolution for the
Project, (b) for the acquisition, construction or reconstruction of land or
property of a character subject to the allowance for depreciation provided in
Section 167 of the Internal Revenue Code of 1986, as amended, and (c) which are
chargeable to the capital account of the Project or would be so chargeable
either with an election by the Borrower or but for the election of the Borrower
to deduct the amount of the item.

     

    Notwithstanding
anything to the contrary contained herein, any portion of the contribution of
the Borrower made pursuant to Section 4.3 hereof remaining on deposit in the
Costs of Issuance Account of the Project Fund sixty (60) days following the date
of issuance of the Bonds (including investment earnings, if any, attributable
thereto) shall be returned to the Borrower.

     

    (D)           In
making any such payment from the various Accounts of the Project Fund, the
Trustee may rely on such requisitions and proof delivered to it and the Trustee
shall be relieved of all liability with respect to making such payments in
accordance with the foregoing.

     

    (E)           The
Trustee shall hold in the Project Fund an amount equal to 5% of the net proceeds
of the Bonds ($1,000,000) until the Trustee has received, with respect to the
Bonds, a certified statement of Project Costs together with the Borrower’s
certificate to the effect that Project Costs in an amount equal to 95% or more
of the proceeds of the Bonds (as defined in the Agreement) have been paid or
incurred for the acquisition, construction or reconstruction of land or
depreciable property under the Internal Revenue Code of 1986, as amended, and
have been or could be capitalized by the Borrower for Federal income tax
purposes.  Such documents may be delivered upon issuance of the Bonds
and may anticipate the use of the final amounts to be requisitioned permitted by
subsections 5.2(E) and (F) hereof.  Upon the receipt of such
documents, the Trustee shall apply the balance in the Project Fund to or at the
direction of the Borrower in accordance with such documents.  The
Borrower shall notify the Trustee of any inability to deliver such documents,
and in that event the Trustee shall upon the receipt of such notification
transfer the balance in the Project Fund to the Redemption Account of the Debt
Service Fund.

     

    (F)           The
completion of the Project shall be evidenced by the filing with the Authority
and the Trustee of a certificate of an Authorized Representative of the Borrower
in accordance with Article IV of the Agreement, stating the date of such
completion and the amount, if any, required in its opinion for the payment of
any remaining part of the costs of the Project.  Upon the filing of
such certificate, the balance in the Project Fund in excess of the amount, if
any, stated in such certificate, shall be applied by the Trustee in accordance
with the written order of any Authorized Representative of the Borrower in one
or more of the following ways:

     

    (1)           Deposited
in the Redemption Account of the Debt Service Fund; or

     

    (2)           Used
in any other manner which preserves the exemption of interest on the Bonds from
federal income taxation, provided there is delivered to the Trustee an opinion
of Bond Counsel to the effect that the use of such moneys is permitted by law
and will not adversely affect the exemption from federal income taxation of
interest on the Bonds.  The Trustee may rely on such opinion in any
disbursement of funds pursuant to this subsection 5.2(F)(2).

     

    Thereafter,
upon payment of all the costs and expenses incident to the Project, any balance
in the Project Fund shall be deposited in the Redemption Account of the Debt
Service Fund.

     

    (G)           Promptly
following June 30 in each year, until there is no balance remaining in the
Project Fund, the Trustee shall deliver a report to the Authority setting forth
the amounts remaining in the Project Fund as of such date and a schedule of the
securities in which such amounts are invested.

     

    (H)           In
the event the Borrower shall be required to or shall elect to cause the Bonds to
be redeemed in full pursuant to Article VIII of the Agreement, the balance in
the Project Fund which is not required to pay incurred Project Costs shall be
deposited in the Redemption Account of the Debt Service Fund.

     

    Section
5.3. Debt
Service Fund.  (A) The Trustee shall establish two separate
accounts within the Debt Service Fund to be respectively designated “Principal
and Interest Account” and “Redemption Account”.

     

    (B)           The
Trustee shall promptly deposit the following receipts in the Debt Service
Fund:

     

    (1)           Any
amount required pursuant to Section 4.1 hereof to be deposited from the proceeds
of the Bonds, which shall be credited to the Principal and Interest
Account.

     

    (2)           All
amounts received by the Trustee pursuant to Section 3.1 of the Agreement, which
shall be credited to the Principal and Interest Account, in the manner set forth
in this Indenture and the Agreement, and applied together with amounts available
in the Principal and Interest Account, to pay (i) the interest due on the
Outstanding Bonds on the Interest Payment Date next succeeding such payment and
(ii) the principal, if any, of the Outstanding Bonds due (otherwise than by call
for redemption) on such Interest Payment Date.

     

    (3)           Excess
or remaining amounts in the Project Fund required to be deposited in the
Redemption Account of the Debt Service Fund pursuant to subsections 5.2(E) and
5.2(F) hereof, which shall be credited to the Redemption Account.

     

    (4)           Any
other amounts required to be paid to the Debt Service Fund for payment of
principal and interest due on the Bonds, which shall be credited to the
Principal and Interest Account.

     

    (5)           Prepayments
under the Agreement received by the Trustee pursuant to Article VIII thereof,
which shall be credited to the Redemption Account.

     

    (6)           All
other receipts when and if required by the Financing Documents or any subsequent
agreement or by this Indenture to be paid into the Debt Service Fund, which
shall be credited to the Principal and Interest Account or the Redemption
Account, as appropriate.

     

    (7)           Any
amounts constituting income or interest earned and gains realized in excess of
losses suffered by any Fund and Account hereunder, excluding the Project Fund,
which shall be credited to the Principal and Interest Account in accordance with
Section 5.6(B) hereof.  Income or interest earned and gains realized
in excess of losses suffered by the Project Fund shall be retained in the
Project Fund prior to the Completion Date of the Project, and transferred to the
Principal and Interest Account of the Debt Service Fund subsequent to the
Completion Date.

     

    (C)           There
shall be paid from the Principal and Interest Account to the respective Paying
Agents on each Interest Payment Date for the Bonds the amounts required for the
payment of the principal and interest due on the Bonds on such
date.  Such amounts shall be applied by the Paying Agents to the
payment of principal and interest on the Bonds when due.  All other
amounts payable on the Bonds from the Principal and Interest Account shall be
paid to the respective Paying Agents upon receipt, and shall immediately be paid
by such Paying Agents to the Bondholders.

     

    (D)           Amounts
in the Redemption Account shall be applied, as promptly as practicable, by the
Trustee at the direction of the Borrower to the purchase of Bonds at prices not
exceeding the optional Redemption Price thereof applicable on the next
redemption date plus accrued interest and all other amounts then due under the
Financing Documents in connection with such redemption.  Such
redemption date shall be the earliest date upon which Bonds are subject to
redemption from such amounts.  Any amount in the Redemption Account
not so applied to the purchase of Bonds by forty-five days prior to the next
date on which the Bonds are so redeemable shall be applied to the redemption of
Bonds on such redemption date; provided that if such amount aggregates less than
$10,000, it need not be then applied to such redemption.  Amounts in
the Redemption Account to be applied to the redemption of Bonds shall be paid to
the respective Paying Agents on or before the redemption date and applied by
them on such redemption date to the payment of the Redemption Price of the Bonds
being redeemed plus interest on such Bonds accrued to the redemption date and
all other amounts then due under the Financing Documents in connection with such
redemption.

     

    (E)           Any
amounts remaining in the Debt Service Fund after payment in full of the Bonds,
the fees, charges and expenses of the Trustee and the Paying Agents and all
other amounts required to be paid hereunder or under the Financing Documents
shall be paid to the Borrower upon the expiration or sooner termination of the
Term of the Agreement.

     

    Section
5.4. Rebate
Fund.  (A) There shall be credited to the Rebate Fund all
amounts required to be credited thereto from interest earnings or net gain on
disposition of investments pursuant to this Article V.

     

    (B)           On
the first Business Day following each Computation Period (as defined in the Tax
Regulatory Agreement), upon direction in writing from the Borrower, pursuant to
the Tax Regulatory Agreement, the Trustee shall withdraw from the Funds and
Accounts and deposit to the Rebate Fund an amount such that the amount held in
the Rebate Fund after such deposit is equal to the Rebatable Arbitrage (as
defined in the Tax Regulatory Agreement) calculated as of the last day of the
Computation Period; provided, however, that the Trustee may transfer monies from
any Fund or Account only to the extent such transfer does not result in an Event
of Default hereunder.  In the event of any deficiency, the balance
required shall be provided by the Borrower pursuant to Section 8.3 of the Tax
Regulatory Agreement.  Computations of the amounts on deposit in each
Fund and Account and of the Rebatable Arbitrage shall be furnished to the
Trustee by the Borrower in accordance with Section 8.3 of the Tax Regulatory
Agreement.  Any amounts on deposit in the Rebate Fund in excess of the
Rebatable Arbitrage shall be deposited to the Debt Service Fund.

     

    (C)           The
Trustee, upon receipt of written instructions from an Authorized Representative
of the Borrower in accordance with Section 8.3 of the Tax Regulatory Agreement,
shall pay to the United States out of amounts in the Rebate Fund (1) not later
than 30 days after the end of each five-year period following the date of
issuance of the Bonds, an amount such that, together with amounts previously
paid, the total amount paid to the United States is equal to 90% of the
Rebatable Arbitrage calculated as of the end of the most recent Computation
Period, and (2) not later than 30 days after the date on which all of the Bonds
have been paid or redeemed, 100% of the Rebatable Arbitrage as of the end of the
final Computation Period.

     

    (D)           In
transferring any funds to the Rebate Fund and making any payments to the United
States from the Rebate Fund, the Trustee may rely on the written directions and
computations provided it by the Borrower and the Trustee shall be relieved of
all liability with respect to the making of such transfers and payments in
accordance with the foregoing.

     

    Section
5.5. Renewal
Fund.  (A)  There shall be paid into the Renewal Fund
all amounts to be deposited therein pursuant to Section 5.3 of the Agreement,
and such amounts shall be applied as provided therein.

     

    (B)           Any
surplus remaining in the Renewal Fund after the completion of any payments for
the replacement, repair, reconstruction, alteration, relocation or restoration,
of the Project with respect to any event of damage, destruction or condemnation
shall be transferred to the Redemption Account of the Debt Service Fund, but the
excess, if any, of such amount as will be sufficient to discharge and satisfy
this Indenture and pay all Bonds as provided in Section 12.1 hereof shall be
paid over to the Borrower free and clear of any pledge or lien
hereunder.

     

    Section
5.6. Investment
of Funds and Accounts.  (A) Except as otherwise provided in
this Indenture, amounts in the Funds and Accounts held hereunder shall, if and
to the extent then permitted by law, be invested in Authorized
Investments.  Investments authorized under this Section shall be made
by the Trustee at the written request of an Authorized Representative of the
Borrower, and may be made by the Trustee through its own bond
department.  Any investment hereunder shall be made in accordance with
the Tax Regulatory Agreement, including particularly the terms and conditions of
Article VII thereof relating to arbitrage.  Such investments shall
mature in such amounts and at such times as may be necessary to provide funds
when needed to make payments from such Funds and Accounts, and any such
investments shall, subject to the provisions hereof, at all times be deemed to
be a part of the Fund and Account, from which the investment was
made.

     

    (B)           Except
as provided in the following sentence, the income or interest earned and gains
realized in excess of losses suffered by any Fund and Account held hereunder
from the date of delivery of the Bonds shall be credited to the Principal and
Interest Account of the Debt Service Fund (except income or interest earned and
gains realized in excess of losses suffered by the Rebate Fund, which shall be
credited to the Rebate Fund).  Income or interest earned and gains
realized in excess of losses suffered by the Project Fund shall be retained
therein prior to the Completion Date of the Project and transferred to the
Principal and Interest Account of the Debt Service Fund subsequent to the
Completion Date.

     

    (C)           Prior
to each Interest Payment Date on the Bonds, the Trustee shall notify the
Borrower of the amount of any net investment income or gain received and
collected subsequent to the preceding interest payment date and the amount then
available in the Debt Service Fund.

     

    Section
5.7. Non-presentment
of Bonds.  In the event any Bond shall not be presented for
payment when the remaining principal thereof becomes due, either at final
maturity, or at the date fixed for redemption thereof, or otherwise, and funds
sufficient to pay any such Bond shall have been made available to the Trustee
for the benefit of the holder or holders thereof, all liability of the Authority
to the holder thereof for the payment of such Bond shall forthwith cease,
determine and be completely discharged, and thereupon it shall be the duty of
the Trustee to hold such funds, without liability for interest thereon, for the
benefit of the holder of such Bond, who shall thereafter be restricted
exclusively to such funds, for any claim of whatever nature on his part under
this Indenture or on, or with respect to, such Bond.  Funds remaining
with the Trustee as above unclaimed for six years shall be paid to the
Borrower.

     

    ARTICLE
VI

     

    REDEMPTION
OF BONDS

     

    Section
6.1. Privilege
of Redemption and Redemption Price.  Bonds or portions
thereof subject to redemption prior to maturity shall be redeemable, upon mailed
notice as provided in this Article, at the times, at the Redemption Prices and
upon such terms, in addition to and consistent with the terms contained in this
Article, as shall be specified in Section 2.4 hereof and in such
Bonds.

     

    Section
6.2. Selection
of Bonds to be Redeemed.  So long as the
Bonds are in book-entry form, when Bonds are called, allocation shall be made by
DTC or any successor securities depository and not by the Authority or the
Trustee.  In the event of redemption of less than all the Outstanding
Bonds of like maturity, the Trustee shall select by lot, using such method of
selection as it shall deem proper in its discretion, the principal amount of
such Bonds to be redeemed.  For purposes of this Section, Bonds or
portions of Bonds which have theretofore been selected by lot for redemption
shall not be deemed Outstanding.  In the event that the book-entry
system is discontinued, if less than all of the Bonds are to be redeemed at the
option of the Borrower, the Bonds or portion thereof to be redeemed shall be
selected by the Borrower.

     

    Section
6.3. Notice of
Redemption.  Except with
respect to deceased Bondholder redemptions as described in Section 2.4(D) hereof
(the notice provisions relating to which are set forth in the Form of Bond
contained in the recitals to this Indenture), when redemption is required or
permitted by this Indenture, upon written notification of the Trustee by the
Borrower of such redemption not less than seven (7) days prior to the date on
which the Trustee must give notice to Holders as provided in this Section or the
Letter of Representation among the Authority, the Trustee and DTC (if the book
entry system is still in effect), the Trustee shall give notice of such
redemption in the name of the Authority, specifying the subsection of Section
2.4 hereof under which the redemption is to be made, the numbers and amounts of
the Bonds or portions thereof to be redeemed, the redemption date and the place
or places where amounts due upon such redemption will be
payable.  Such notice shall further state that on such date there
shall become due and payable upon each Bond or portion thereof to be redeemed
the Redemption Price thereof together with interest accrued to the redemption
date and all other amounts then due under the Financing Documents, and that from
and after such date interest thereon shall cease to accrue and be
payable.  Alternatively, at the option of the Authority, such notice
may state that it is subject to the receipt of the redemption moneys by the
Trustee on or before the date fixed for redemption and which notice shall be of
no effect unless such moneys are so received on or before such
date.  Notice of redemption shall be given by the Trustee in the name
and on behalf of the Authority by mailing a copy of each such notice to the
registered owner of each Bond by first-class mail postage prepaid, addressed to
him at his last known address as it appears upon the bond register, no more than
forty-five (45) nor less than thirty (30) days prior to the date fixed for
redemption.  Such notice shall be effective when mailed and any
failure to receive such notice shall not affect the validity of the proceedings
for redemption.  In the event of a postal strike, the Trustee shall
give notice by other appropriate means selected by the Trustee in its
discretion.

     

    Section
6.4. Payment
of Redeemed Bonds.  (A) Notice having
been given in the manner provided in Section 6.3 hereof, the Bonds or portions
thereof so called for redemption shall become due and payable on the redemption
dates so designated at the Redemption Price, plus interest accrued to the
redemption date and all other amounts then due under the Financing
Documents.  If, on the redemption date, monies for the redemption of
all the Bonds or portions thereof to be redeemed, together with interest to the
redemption date, and all other amounts then due under the Financing Documents,
shall be held by the Paying Agent so as to be available therefor on such date
and if notice of redemption shall have been given as aforesaid, then, from and
after the redemption date, interest on the Bonds or portions thereof so called
for redemption shall cease to accrue and become payable.  If such
monies shall not be so available on the redemption date, such Bonds or portions
thereof shall continue to bear interest until paid at the same rate as they
would have borne had they not been called for redemption.

     

    (B)           Payment
of the Redemption Price together with interest and all other amounts then due to
the Bondholders under the Financing Documents shall be made to or upon the order
of the registered owner, only upon presentation of the Bond for cancellation or
notation as provided in Section 6.6 hereof.

     

    Section
6.5. Notice to
Authority and Borrower of Deceased Bondholder Redemption.  Not later than
ten Business Days after receipt of a request for redemption pursuant to Section
2.4(D) hereof by the Trustee, the Trustee shall give notice to the Authority and
the Borrower specifying the amount of Bonds requested to be redeemed, the amount
of Bonds eligible for redemption, the date on which such Bonds eligible for
redemption shall be redeemed and the amount of funds required to be deposited in
the Redemption Account.

     

    Section
6.6. Cancellation
of Redeemed Bonds.  (A) All Bonds
redeemed in full under the provisions of this Article shall forthwith be
cancelled and destroyed by the Trustee and a certificate of destruction
furnished to the Authority, and no Bonds shall be executed, authenticated,
issued or delivered in exchange or substitution therefor or for or in respect of
any paid portion of a fully registered Bond.  In the event that a
portion only of a Bond shall be so called for redemption, then, at the option of
the registered owner thereof if such owner is a securities depository, such Bond
may be either submitted to the Trustee for notation thereon of the payment of
the portion of the principal thereof called for redemption or surrendered for
redemption.  If so surrendered, one or more new Bonds shall be issued
for the unredeemed portion hereof.

     

    (B)           If
there shall be called for redemption less than all of a Bond, the Authority
shall execute and the Trustee shall authenticate and deliver, upon the surrender
of such Bond, without charge to the owner thereof, for the unredeemed balance of
the principal amount of the Bond so surrendered, Bonds in any of the authorized
denominations.

     

    
      
        
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    ARTICLE
VII

     

    PARTICULAR
COVENANTS

     

    Section
7.1. No
Pecuniary Liability on Authority or Officers.  (A) No covenant
or agreement contained in this Indenture or in the Bonds or any obligations
herein or therein imposed upon the Authority or the breach thereof, shall
constitute or give rise to a charge upon its general credit, or impose upon the
Authority a pecuniary liability except as set forth herein.  In making
the agreements, provisions and covenants set forth in this Indenture, the
Authority has not obligated itself except with respect to the application of the
Revenues as hereinabove provided.

     

    (B)           All
covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be covenants, stipulations, promises,
agreements and obligations of the Authority and not of any member, officer,
agent or employee thereof in his individual capacity.  No recourse
shall be had for the payment of the principal or Redemption Price, if any, of or
interest on the Bonds, for the performance of any obligation hereunder, or for
any claim based thereon or hereunder against any such member, officer, agent or
employee or against any natural person executing the Bonds.  No such
member, officer, agent, employee or natural person is or shall become personally
liable for any such payment, performance or other claim, and in no event shall
any monetary or deficiency judgment be sought or secured against any such
member, officer, agent, employee or other natural person.

     

    Section
7.2. Payment
of Principal, Redemption Price, if any, and Interest.  The Authority
covenants that it will promptly pay, solely from the Revenues or other monies
derived in connection with the Project or otherwise available hereunder, the
principal or Redemption Price, if any, of and interest on every Bond issued
under this Indenture, together with all other amounts due under the Financing
Documents, at the place, on the dates and in the manner provided herein and in
the Bonds according to the true intent and meaning thereof.

     

    Section
7.3. Performance
of Covenants.  The Authority
covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Indenture, in any
and every Bond executed, authenticated and delivered hereunder and in all of its
proceedings pertaining thereto.  The Authority covenants that it is
duly authorized under the Constitution and laws of the State, including
particularly and without limitation the Act, to issue the Bonds authorized
hereby and to execute this Indenture, to create, accept and assign the liens in
the property described herein and created hereby, to grant the security interest
herein provided, to assign the Financing Documents and to pledge the revenues
and other amounts hereby pledged in the manner and to the extent herein set
forth; that all action on its part for the issuance of the Bonds and the
execution and delivery of this Indenture has been duly and effectively taken,
and that the Bonds in the hands of the holders and owners thereof are and will
be valid and enforceable obligations according to their terms and the terms of
this Indenture, except to the extent that such enforceability may be limited by
bankruptcy or insolvency or other laws affecting creditors’ rights generally or
by general principles of equity.

     

    Section
7.4. Further
Assurances.  The Authority and
the Trustee each covenants that it will do, execute, acknowledge and deliver or
cause to be done, executed, acknowledged and delivered, such indentures
supplemental hereto and such further acts, instruments and transfers as the
other may reasonably require for the better assuring, transferring, conveying
pledging, assigning and confirming unto the Trustee all and singular the
property and rights assigned hereby and the amounts pledged hereby to the
payment of the principal or Redemption Price, if any, of and interest on the
Bonds and all other amounts due under the Financing Documents.

     

    Section
7.5. Inspection
of Project Books.  The Authority
covenants and agrees that all books and documents in its possession relating to
the Project and the revenues derived from the Project shall at all times be open
to inspection by such accountants or other agencies as the Trustee may from time
to time designate.

     

    Section
7.6. Rights
under Financing Documents.  The Financing
Documents, originals or duly executed counterparts of which have been filed with
the Trustee, set forth the covenants and obligations of the Authority and the
Borrower, including provisions that subsequent to the issuance of Bonds and
prior to their payment in full or provision for payment thereof in accordance
with the provisions hereof, the Financing Documents may not be effectively
amended, changed, modified, altered or terminated without the written consents
provided for therein, and reference is hereby made to the same for a detailed
statement of the covenants and obligations of the Borrower
thereunder.  Subject to the provisions of Article IX hereof and to the
extent explicitly set forth herein and in the Loan Agreement, the Trustee agrees
to enforce all covenants and obligations of the Borrower under the Financing
Documents and it is agreed that the Trustee may and is hereby granted the right
to enforce all rights of the Authority and all obligations of the Borrower under
and pursuant to the Financing Documents.  Nothing in this Section
shall permit any reduction in the payments required to be made by the Borrower
under or pursuant to the Financing Documents or any alteration in the terms of
payment thereof.  All covenants and agreements on the part of the
Authority shall, except as otherwise specifically provided herein, be for the
benefit of the holders from time to time of the Bonds and may be enforced in the
manner provided by Article VIII hereof on behalf of such holders by the
Trustee.

     

    Section
7.7. Creation
of Liens, Indebtedness.  The Authority
shall not create or suffer to be created any lien or charge upon or pledge of
the Revenues, except the lien, charge and pledge created by this Indenture and
the Bonds.  The Authority shall not incur any indebtedness or issue
any evidence of indebtedness, other than the Bonds herein authorized, secured by
a lien on or pledge of such Revenues.

     

    Section
7.8. Recording
and Filing.  The Authority
covenants that it will cause the Financing Documents, this Indenture and all
supplements thereto and hereto, as well as such other security agreements,
financing statements, and other instruments as may be required from time to time
to be kept, to be recorded and filed in such manner and in such places as may be
required by law in order to fully preserve and protect the security of the
holders and owners of the Bonds and the rights of the Trustee
hereunder.

     

    
      
        
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    ARTICLE
VIII

     

    REMEDIES
OF BONDHOLDERS

     

    Section
8.1. Events of
Default; Acceleration of Due Dates.  (A) Each of the
following events is hereby defined as and shall constitute an “Event of
Default”:

     

    (1)           Failure
to duly and punctually pay (a) the interest or (b) any installment of the
principal or Redemption Price of any Bond, whether at the stated maturity
thereof or upon proceedings for redemption thereof (excluding redemptions for
which a conditional notice has been given in accordance with Section 6.3 of this
Indenture in which case the failure to pay the Redemption Price of any Bonds
shall not constitute an Event of Default under this Section 8.1(1) unless monies
are on deposit with the Trustee and available to pay the Redemption Price on the
redemption date).

     

    (2)           Failure
to duly and punctually pay any amount, other than the amounts specified in (1)
above, due under the Financing Documents and the continuance of such failure for
more than thirty (30) days.

     

    (3)           Failure
to perform or observe any other of the covenants, agreements or conditions on
the part of the Authority in this Indenture or in the Bonds contained and not
otherwise a default hereunder and the continuance thereof for a period of sixty
(60) days after written notice given by the Trustee or by the owners of not less
than 51% of the principal amount of Bonds then Outstanding.

     

    (4)           The
occurrence of an “Event of Default” under any of the Financing Documents (other
than the Disclosure Agreement).

     

    (B)           Subject
to Section 6.4(B) of the Loan Agreement, upon the happening and continuance of
any Event of Default specified in subsection 8.1(A) hereof (unless the principal
of all the Bonds shall have already become due and payable), the Trustee may, and upon request
in writing from the owners of not less than 51% in principal amount of the Bonds
then Outstanding, shall, declare the
principal of all the Bonds then Outstanding, and the interest accrued thereon,
to be due and payable immediately, and upon such declaration the same shall
become and be immediately due and payable, anything in this Indenture or in any
of the Bonds contained to the contrary notwithstanding.

     

    (C)           The
right of the Trustee or of the owners of not less than 51% in principal amount
of the Outstanding Bonds to make any declaration authorized under subsection
8.1(B) hereof with respect to any failure under subsection 8.1(A)(1) hereof,
however, is subject to the condition that if, at any time before such
declaration, all overdue installments of interest upon the Bonds and the
principal of all Bonds which shall have matured by their terms, together with
the reasonable and proper charges, expenses and liabilities of the Trustee,
shall either be paid by or for account of the Authority or provision
satisfactory to the Trustee shall be made for such payment, and all other events
of default cured and waived as provided in Section 8.11 then in every such case
any such default and its consequences shall ipso facto be deemed to be
annulled, but no such annulment shall extend to or affect any subsequent default
or impair or exhaust any right or power consequent thereon.

     

    Section
8.2. Enforcement
of Remedies.  (A) Upon the
happening and continuance of any Event of Default, then and in every case, but
subject to the provisions of Section 9.2 hereof and Section 6.4(B) of the Loan
Agreement, the Trustee may proceed, and upon the written request of the owners
of not less than 51% in the principal amount of the Bonds Outstanding shall
proceed, to protect and enforce its rights and the rights of the Bondholders
under the Act, the Bonds, the Financing Documents and this Indenture, and under
any agreement executed in connection with the foregoing, forthwith by such
suits, actions or special proceedings in equity or at law, or by proceedings in
the office of any board or officer having jurisdiction, whether for the specific
performance of any covenant or agreement contained in this Indenture or the
Financing Documents or in aid of the execution of any power granted therein or
in the Act or for the enforcement of any legal or equitable rights or remedies
as the Trustee, being advised by counsel, shall deem most effectual to protect
and enforce such rights or to perform any of its duties under this
Indenture.

     

    (B)           [Reserved]

     

    (C)           In
the enforcement of any right or remedy under this Indenture or under the Act,
the Trustee shall be entitled to sue for, enforce payment on and receive any or
all amounts then or during any default becoming, and any time remaining, due
from the Authority for principal, Redemption Price, interest or otherwise under
any of the provisions of the Financing Documents, this Indenture or of the
Bonds, and unpaid, and, to the extent permitted by law, with interest on overdue
payments at the applicable rate or rates of interest specified in the Bonds,
together with any and all costs and expenses of collection and of all
proceedings under the Financing Documents, this Indenture and under the Bonds,
without prejudice to any other right or remedy of the Trustee or of the
Bondholders, and to recover and enforce judgment or decree against the
Authority, but solely as provided in the Financing Documents, this Indenture and
in the Bonds, for any portion of such amounts remaining unpaid, with interest,
to the extent permitted by law, costs and expenses, and to collect in any manner
provided by law, the moneys adjudged or decreed to be payable.

     

    (D)           Regardless
of the happening of an Event of Default, the Trustee, if requested in writing by
the owners of not less than 51% in principal amount of the Bonds then
Outstanding, and furnished with security and indemnity to its satisfaction,
shall institute and maintain such suits and proceedings as it may be advised
shall be necessary or expedient to prevent any impairment of the security under
this Indenture by any acts which may be unlawful or in violation of this
Indenture or of any resolution authorizing Bonds, and such suits and proceedings
as the Trustee may be advised shall be necessary or expedient to preserve or
protect its interests and the interests of the Bondholders; but no such request
shall be otherwise than in accordance with the provisions of law and of the
Indenture or be unduly prejudicial to the interests of the holders of Bonds not
making such request.

     

    Section
8.3. Application
of Revenue and Other Moneys After Default.  (A)  All
moneys received by the Trustee pursuant to any right given or action taken under
the provisions of this Article, after payment of the cost and expenses of the
proceedings resulting in the collection of such moneys and of the fees,
expenses, liabilities and advances incurred or made by the Trustee and any
Paying Agent, shall be deposited in the applicable account of the Debt Service
Fund and all moneys so deposited in such Fund and available for payment of the
Bonds shall be applied as follows:

     

    (1)           Unless
the principal of all of the Bonds shall have become or have been declared due
and payable:

     

    FIRST To the payment
of all amounts due under the Financing Documents, exclusive of unpaid principal
and interest on the Note;

     

    SECOND To the payment
to the persons entitled thereto of all installments of interest then due on the
Bonds, in the order of the maturity of the installments of such interest and, if
the amount available shall not be sufficient to pay in full any particular
installment, then to the payment ratably, according to the amounts due on such
installment, to the persons entitled thereto, without any discrimination or
preference; and

     

    THIRD To the payment
to the persons entitled thereto of the unpaid principal or Redemption Price, if
any, of any of the Bonds which shall have become due (other than Bonds called
for redemption for the payment of which moneys are held pursuant to the
provisions of this Indenture), in order of maturity, from the respective dates
upon which they become due and, if the amount available shall not be sufficient
to pay in full Bonds due on any particular date, then to the payment ratably,
according to the amount of principal or Redemption Price due on such date, to
the persons entitled thereto without any discrimination or
preference.

     

    (2)           If
the principal of all the Bonds shall have become or have been declared due and
payable, to the payment of all amounts due under the Financing Documents, then
to the payment of the principal and interest (at the rate or rates expressed
thereon) then due and unpaid upon the Bonds without preference or priority of
principal over interest or of interest over principal, or of any installment of
interest over any other installment of interest, or any Bond over any other
Bond, ratably, according to the amounts due respectively for principal and
interest, to the persons entitled thereto without any discrimination or
preference.

     

    (B)           Whenever
moneys are to be applied pursuant to the provisions of this Section, such moneys
shall be applied at such times, and from time to time, as the Trustee shall
determine, having due regard to the amount of such moneys available for
application and the likelihood of additional moneys becoming available for such
application in the future.  Whenever the Trustee shall apply such
funds, it shall fix the date upon which such application shall be
made.  The Trustee shall give such notice as it may deem appropriate
of the deposit with it of any such moneys and of the fixing of any such date,
and shall not be required to make payment to the owner of any Bonds until such
Bonds shall be presented to the Trustee for appropriate endorsement or for
cancellation if fully paid.

     

    (C)           Whenever
all Bonds and interest thereon and all other amounts due under the Financing
Documents have been paid under the provisions of this Section and all fees,
expenses and charges of the Trustee and Paying Agents have been paid, any
balance remaining in the Debt Service Fund shall be paid to or upon the order of
the Borrower.

     

    Section
8.4. Actions
by Trustee.  All rights of
action under this Indenture or under any of the Bonds may be enforced by the
Trustee without the possession of any of the Bonds or the production thereof in
any trial or other proceedings relating  thereto and any such suit or
proceedings instituted by the Trustee shall be brought in its name as Trustee
without the necessity of joining as plaintiffs or defendants any owners of the
Bonds, and any recovery of judgment, subject to the provisions of Section 8.3
hereof, shall be for the benefit of the holders of the Outstanding
Bonds.

     

    Section
8.5. Majority
Bondholders Control Proceedings.  The holders of at
least 51% in aggregate principal amount of Bonds then Outstanding shall have the
right, at any time, by an instrument or instruments in writing executed and
delivered to the Trustee, to direct the method and place of conducting all
proceedings to be taken in connection with the enforcement of the terms and
conditions of the Indenture, or for any other proceedings hereunder; but such
direction shall not be otherwise than in accordance with the provisions of law
and of this Indenture.

     

    Section
8.6. Individual
Bondholder Action Restricted.  (A) No owner of
the Bonds shall have any right to institute any suit, action or proceeding at
law or in equity for the enforcement of any provision of this Indenture or the
execution of any trust under this Indenture or for any remedy under this
Indenture, unless such owners shall have previously given to the Trustee written
notice of the happening of an “Event of Default”, as provided in this Article,
and the owners of at least 51% in principal amount of the Bonds then Outstanding
shall have filed a written request with the Trustee, and shall have offered it
reasonable opportunity, either to exercise the powers granted in this Indenture
or by the Act or by the laws of the State or to institute such action, suit or
proceeding in its own name, and unless such owners shall have offered to the
Trustee adequate security and indemnity against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee shall have
refused to comply with such request for a period of sixty days after receipt by
it of such notice, request and offer of indemnity, it being understood and
intended that no owner of any Bond shall have any right in any manner whatever
by his or their action to affect, disturb or prejudice the pledge created by
this Indenture, or to enforce any right under this Indenture, except in the
manner herein provided; and that all proceedings at law or in equity to enforce
any provision of this Indenture shall be instituted, had and maintained in the
manner provided in this Indenture and for the equal benefit of all owners of the
Outstanding Bonds.

     

    (B)           Nothing
herein or in the Bonds contained shall affect or impair the right of any owner
of the Bonds to payment of the principal or Redemption Price, if any, of and
interest on any Bond or other amounts due under the Financing Documents at and
after the maturity thereof, or the obligation of the Authority to pay the
principal or Redemption Price, if applicable, of and interest on each of the
Bonds or other amounts due under the Financing Documents to the respective
owners thereof at the time, place, from the source and in the manner herein and
in such Bonds expressed.

     

    Section
8.7. Effect of
Discontinuance of Proceedings.  In case any
proceeding taken by the Trustee on account of any Event of Default shall have
been dismissed, discontinued or abandoned for any reason, or shall have been
determined adversely, then and in every such case the Authority, the Trustee,
and the owners of the Bonds shall be restored, respectively, to their former
positions and rights hereunder, and all rights, remedies, powers and duties of
the Trustee shall continue as though no such proceedings had been
taken.

     

    Section
8.8. Remedies
Not Exclusive.  No remedy by the
terms of this Indenture conferred upon or reserved to the Trustee or to the
owners of the Bonds is intended to be exclusive of any other remedy, and each
and every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.

     

    Section
8.9. Delay or
Omission Upon Default.  No delay or
omission of the Trustee or of the owners of any Bond to exercise any right or
power arising upon any Event of Default shall impair any right or power or shall
be construed to be a waiver of any such default or any acquiescence therein; and
every power and remedy given by this Article to the Trustee and the owner of any
Bond, respectively, may be exercised from time to time and as often as may be
deemed expedient by the Trustee or by the owner of the Bonds.

     

    Section
8.10. Notice of
Default.  The Trustee shall
immediately mail (upon the Trustee’s actual knowledge thereof), to each owner of
the Bonds, written notice of an Event of Default under Section 8.1(A)(1) hereof
of which it has actual knowledge.  The Trustee shall promptly mail
(within thirty (30) days of the Trustee’s actual knowledge thereof), to each
owner of the Bonds, written notice of the occurrence of any Event of Default
under Sections 8.1(A)(2), 8.1(A)(3) and 8.1(A)(4) hereof of which it has actual
knowledge.  Actual knowledge means the actual knowledge of an officer
in the Trustee’s corporate trust administration department.  The
Trustee shall not, however, be subject to any liability to any owner of the
Bonds by reason of its failure to mail any notice required by this
Section.  The Trustee shall not be required to monitor the compliance
by the Authority with the terms of this Indenture, or the Borrower with the
terms of the Agreement, except as aforesaid.

     

    Section
8.11. Waivers
of Default.  The Trustee shall waive
any Event of Default hereunder and its consequences upon the written request of
the owners of 51% in aggregate principal amount of the Bonds then Outstanding;
except that there shall not be waived without the consent of the owners of all
the Bonds Outstanding (a) any default in the payment of the principal of and
Redemption Price on any Outstanding Bonds at the date of maturity specified
therein or (b) any default in the payment when due of the interest on any such
Bonds unless, prior to such waiver, all arrears of interest, at the rate borne
by the Bonds on overdue installments of interest, to the extent permitted by
law, in respect of which such default shall have occurred or all arrears of
payments of principal due on the Bonds when due, as the case may be, and all
expenses of the Trustee and any Paying Agent in connection with such default
shall have been paid or provided for, and in case of any such waiver, or in case
any proceeding taken by the Trustee on account of any such default shall have
been dismissed, discontinued or abandoned or determined adversely, then and in
every such case the Authority, the Trustee and the owners of the Bonds shall be
restored to their former positions and rights hereunder respectively, but no
such waiver, dismissal, discontinuance, abandonment or determination shall
extend to any subsequent or other default, or impair any right consequent
thereon.

     

    
      
        
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    ARTICLE
IX

     

    TRUSTEE
AND PAYING AGENTS

     

    Section
9.1. Appointment
and Acceptance of Duties.  (A) U.S. Bank
National Association is hereby appointed as Trustee.  The Trustee
shall signify its acceptance of the duties and obligations of the Trustee by
executing this Indenture.  All provisions of this Article shall be
construed as extending to and including all the rights, duties and obligations
imposed upon the Trustee under the Agreement and the other Financing Documents
as fully for all intents and purposes as if this Article were contained in the
Agreement and the other Financing Documents.

     

    (B)           The
Trustee is hereby appointed as Paying Agent for the Bonds.  The
Authority may also from time to time appoint one or more other Paying Agents in
the manner and subject to the conditions set forth in Section 9.10 hereof for
the appointment of a successor Paying Agent.  Each Paying Agent shall
signify its acceptance of the duties and obligations imposed upon it by this
Indenture by executing and delivering to the Authority and to the Trustee a
written acceptance thereof.  The principal offices of the Paying
Agents are designated as the respective offices or agencies of the Authority for
the payment of the interest on and principal or Redemption Price of the Bonds,
except that interest on all registered Bonds and the principal and Redemption
Price of all registered Bonds shall be payable at the corporate trust office of
the Trustee located in Hartford, Connecticut.

     

    Section
9.2. Indemnity.  The Trustee shall
be under no obligation to institute any suit, or to take any remedial proceeding
under this Indenture, or to enter any appearance in or in any way defend any
suit in which it may be made defendant, or to take any steps in the execution of
the trusts hereby created or in the enforcement of any rights and powers
hereunder, until it shall be indemnified and provided with adequate security to
its satisfaction against any and all reasonable costs and expenses, outlays, and
counsel fees and other disbursements, and against all liability not due to its
willful misconduct, gross negligence or bad faith.

     

    The
Trustee shall be indemnified for and held harmless against any loss, liability
or expense incurred without gross negligence or bad faith on its part arising
out of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.  No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that payment of such funds or adequate indemnity against such risk or
liability is not assured to it.

     

    Section
9.3. Responsibilities
of Trustee.  (A) The Trustee
shall have no responsibility in respect of the validity or sufficiency of this
Indenture or the security provided hereunder or the due execution hereof by the
Authority, or in respect of the title or the value of the Project, or in respect
of the validity of any Bonds authenticated and delivered by the Trustee in
accordance with this Indenture or to see to the recording or filing of the
Indenture or any financing statement (except the filing of continuation
statements as provided in Section 9.13 hereof) or any other document or
instrument whatsoever.  The recitals, statements and representations
contained herein and in the Bonds shall be taken and construed as made by and on
the part of the Authority and not by the Trustee, and the Trustee does not
assume any responsibility for the correctness of the same; except that the
Trustee shall be responsible for its representation contained in its certificate
on the Bonds.  The obligation hereunder to pay or reimburse the
Trustee for expenses, advances, reimbursements and to indemnify and hold
harmless the Trustee pursuant to Section 9.2 hereof shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of all
obligations under this Indenture.

     

    (B)           The
Trustee shall not be liable or responsible because of the failure of the
Authority to perform any act required of it by this Indenture or the Financing
Documents or because of the loss of any monies arising through the insolvency or
the act or default or omission of any depositary other than itself in which such
monies shall have been deposited.  The Trustee shall not be
responsible for the application of any of the proceeds of the Bonds or any other
monies deposited with it and paid out, invested, withdrawn or transferred in
accordance herewith or for any loss resulting from any such
investment.  The Trustee shall not be liable in connection with the
performance of its duties hereunder except for its own willful misconduct, gross
negligence or bad faith.  The immunities and exemptions from liability
of the Trustee shall extend to its directors, officers, employees and
agents.

     

    (C)           The
Trustee, prior to the occurrence of an Event of Default and subsequent to an
Event of Default that has been cured, undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture.  In case
an Event of Default has occurred of which the Trustee has actual knowledge (as
defined in Section 8.10 hereinabove) and which has not been cured the Trustee,
subject to Section 9.2 hereof, shall exercise such of the rights and powers
vested in it hereby and use the same degree of care and skill in their exercise,
as a prudent person would exercise under the circumstances in the conduct of his
own affairs; provided, that if in the opinion of the Trustee such action might
involve expense or liability, it shall not be obligated to take such action
(other than the payment of any Bonds when due from funds held under this
Indenture for the payment thereof or the acceleration of any Bonds pursuant to
Section 8.1(B) hereof), unless it is furnished with indemnity and security to
its satisfaction therefor.

     

    (D)           The
Trustee shall in all instances act in good faith in incurring costs, expenses
and legal fees in connection with the transactions contemplated by this
Indenture and the Agreement.

     

    (E)           The
Trustee shall not be liable or responsible for the failure of the Borrower to
effect or maintain insurance on the Project as provided in the Financing
Documents nor shall it be responsible for any loss by reason of want or
insufficiency in insurance or by reason of the failure of any insurer in which
the insurance is carried to pay the full amount of any loss against which it may
have insured the Authority, the Borrower, the Trustee or any other
person.

     

    Section
9.4. Compensation.  The Trustee and
Paying Agents shall be entitled to receive and collect from the Borrower as
provided in the Financing Documents payment for reasonable fees for services
rendered hereunder and all advances, counsel fees and expenses and other
expenses reasonably and necessarily made or incurred by the Trustee or Paying
Agents in connection therewith.

     

    Section
9.5. Evidence
on Which Trustee May Act.  (A) In case at
any time it shall be necessary or desirable for the Trustee to make any
investigation concerning any fact preparatory to taking or not taking any
action, or doing or not doing anything, as such Trustee, and in any case in
which this Indenture or the Financing Documents provide for permitting or taking
any action, it may rely upon any certificate required or permitted to be filed
with it under the provisions hereof or of the Financing Documents, and any such
certificate shall be evidence of such fact or protect it in any action that it
may or may not take, or in respect of anything it may or may not do, in good
faith, by reason of the supposed existence of such fact.

     

    (B)           The
Trustee shall be protected and shall incur no liability in acting or proceeding,
or in not acting or not proceeding, in good faith, reasonably and in accordance
with the terms of this Indenture or the Financing Documents, upon any
resolution, order, notice, request, consent, waiver, certificate, statement,
affidavit, requisition, bond or other paper or document which it shall in good
faith reasonably believe to be genuine and to have been adopted or signed by the
proper board or person, or to have been prepared and furnished pursuant to any
of the provisions of this Indenture or the Financing Documents, or upon the
written opinion of any attorney (who may be an attorney for the Authority or the
Borrower), engineer, appraiser, or accountant reasonably believed by the Trustee
to be qualified in relation to the subject matter.  The Trustee is not
required to investigate the qualifications of any such expert.

     

    Section
9.6. Evidence
of Signatures of Owners of the Bonds and Ownership of Bonds.  (A) Any request,
consent, revocation of consent or other instrument which this Indenture may
require or permit to be signed and executed by the owners of the Bonds may be in
one or more instruments of similar tenor, and shall be signed or executed by
such owners of the Bonds in person or by their attorneys appointed in
writing.  Proof of (i) the execution of any such instrument, or of any
instrument appointing any such attorney, or (ii) the holding by any person of
the Bonds shall be sufficient for any purpose of this Indenture (except as
otherwise herein expressly provided) if made in the following manner, or in any
other manner satisfactory to the Trustee, which may nevertheless in its
discretion require further or other proof in cases where it deems the same
desirable:

     

    (1)           The
fact and date of the execution by any owner of the Bonds or his attorney of such
instruments may be proved by a guarantee of the signature thereon by an officer
of a bank or trust company or by the certificate of any notary public or other
officer authorized to take acknowledgments of deeds, that the person signing
such request or other instrument acknowledged to him the execution thereof, or
by an affidavit of a witness of such execution, duly sworn to before such notary
public or other officer.  Where such execution is by an officer of a
corporation or a member of an association, a limited liability company or a
partnership, on behalf of such corporation, association, limited liability
company  or partnership, such signature guarantee, certificate or
affidavit shall be accompanied by sufficient proof of his
authority.

     

    (2)           The
ownership of registered Bonds and the amount, numbers and other identification,
and date of owning the same shall be proved by the registry books.

     

    (B)           Except
as otherwise provided in Section 10.3 hereof with respect to revocation of a
consent, any request or consent by the owner of any Bond shall bind all future
owners of such Bond in respect of anything done or suffered to be done by the
Authority or the Trustee or any Paying Agent in accordance
therewith.

     

    Section
9.7. Trustee
and any Paying Agent, May Deal in Bonds and With Borrower.  Any national
banking association, bank or trust company acting as a Trustee, or Paying Agent,
and its directors, officers, employees or agents, may in good faith buy, sell,
own, hold and deal in any of the Bonds and may join in any action which any
owner of the Bonds may be entitled to take and may otherwise deal with the
Borrower with like effect as if such association, bank or trust company were not
such Trustee or Paying Agent.

     

    Section
9.8. Resignation
or Removal of Trustee.  (A) The Trustee
may resign and thereby become discharged from the trusts created under this
Indenture by notice in writing to be given to the Authority and the Borrower and
by notice mailed, postage prepaid to the owners of the Bonds not less than sixty
(60) days before such resignation is to take effect, but such resignation shall
not take effect until the appointment of a successor Trustee pursuant to Section
9.9 hereof and such successor Trustee shall accept such trust.

     

    (B)           The
Trustee may be removed at any time thirty (30) days after an instrument or
concurrent instruments in writing, is filed with the Trustee and signed by the
owners of not less than a majority in principal amount of the Bonds then
Outstanding or their attorneys-in-fact duly authorized, but such removal shall
not take effect until the appointment of a successor Trustee pursuant to Section
9.9 hereof and such successor Trustee shall accept such trust.  The
Trustee shall promptly give notice of such filing to the Authority.

     

    Section
9.9. Successor
Trustee.  (A) If at any
time the Trustee shall resign, or shall be removed, be dissolved or otherwise
become incapable of acting or shall be adjudged a bankrupt or insolvent, or if a
receiver, liquidator or conservator thereof, or of its property, shall be
appointed, or if any public officer shall take charge or control of the Trustee
or of its property or affairs, the position of Trustee shall thereupon become
vacant.  If the position of Trustee shall become vacant for any of the
foregoing reasons or for any other reason, the Authority shall appoint a
successor Trustee to fill such vacancy.  If the Authority fails to act
prior to the date of resignation of any Trustee or within fifteen days after the
position of Trustee becomes vacant, the Trustee may appoint a temporary
successor Trustee.  The Authority may thereafter appoint a successor
Trustee to succeed such temporary Trustee.  Within forty-five (45)
days after such appointment, the successor Trustee shall cause notice of such
appointment to be mailed, postage prepaid, to the Borrower and all owners of the
Bonds.

     

    (B)           At
any time within one year after such vacancy shall have occurred, the owners of a
majority in principal amount of the Bonds then Outstanding, by an instrument or
concurrent instruments in writing, signed by such owners of the Bonds or their
attorneys-in-fact thereunto duly authorized and filed with the Authority, may
appoint a successor Trustee, which shall, immediately and without further act,
supersede any Trustee theretofore appointed.  If no appointment of a
successor Trustee shall be made pursuant to the foregoing provisions of this
Section, the owner of any Bond then Outstanding or any retiring Trustee may
apply to any court of competent jurisdiction to appoint a successor
Trustee.  Such court may thereupon, after such notice, if any, as such
court may deem proper and prescribe, appoint a successor Trustee.  In
either event, within thirty (30) days after such appointment, the successor
Trustee shall cause notice of such appointment to be marked, postage prepaid, to
the Borrower.

     

    (C)           Any
Trustee appointed under this Section shall be a national banking association or
a bank or trust company duly organized under the laws of the State or under the
laws of any state of the United States authorized to exercise corporate trust
powers.  At the time of its appointment, any successor Trustee shall
have a capital stock and surplus aggregating not less than
$100,000,000.

     

    (D)           Every
successor Trustee shall execute, acknowledge and deliver to its predecessor, and
also to the Authority, an instrument in writing accepting such appointment, and
thereupon such successor Trustee, without any further act, deed, or conveyance,
shall become fully vested with all monies, estates, properties, rights,
immunities, powers and trusts, and subject to all the duties and obligations of
its predecessor, with like effect as if originally named as such Trustee; but
such predecessor shall, nevertheless, on the written request of its successor or
of the Authority, and upon payment of the compensation, expenses, charges and
other disbursements of such predecessor which are due and payable pursuant to
Section 9.4 hereof, execute and deliver an instrument transferring to such
successor Trustee all the estate, properties, rights, immunities, powers and
trusts of such predecessor, except any indemnification rights.  Every
predecessor Trustee shall also deliver all property and monies held by it under
the Indenture to its successor.  Should any instrument in writing from
the Authority be required by any successor Trustee for more fully and certainly
vesting in such Trustee, the estate, properties, rights, immunities, powers and
trusts vested or intended to be vested in the predecessor Trustee any such
instrument in writing shall, on request, be executed, acknowledged and delivered
by the Authority.  Any successor Trustee shall promptly notify the
Paying Agents of its appointment as Trustee.

     

    (E)           Any
company into which the Trustee may be merged or converted or with which it may
be consolidated or any company resulting from any merger, conversion or
consolidation to which it shall be a party or any company to which the Trustee
may sell or transfer all or substantially all of its corporate trust business,
provided such company shall be a national banking association or a bank or trust
company duly organized under the laws of any state of the United States, shall
have a capital stock and surplus aggregating not less than $100,000,000, and
shall be authorized by law to perform all the duties imposed upon it by the
Indenture, shall be the successor to such Trustee, both in its capacity as
Trustee and in its capacity as Paying Agent if the Trustee is serving as Paying
Agent, without the execution or filing of any paper or the performance of any
further act.

     

    (F)           Any
Trustee which becomes incapable of acting as Trustee shall pay over, assign and
deliver to its successor any monies, funds or investments held by it in the
manner provided in Section 9.9(D) and shall render an accounting to the
Authority.

     

    Section
9.10. Appointment
and Responsibilities of Paying Agent.  The initial
Paying Agent shall be U.S. Bank National Association.  The Paying
Agent shall be entitled to the advice of counsel (who may be counsel for any
party) and shall not be liable for any action taken in good faith in reliance on
such advice.  The Paying Agent may rely conclusively on any telephone
or written notice, certificate or other document furnished to it under this
Indenture and reasonably believed by it to be genuine.  The Paying
Agent shall not be liable for any action taken or omitted to be taken by it in
good faith and reasonably believed by it to be within the discretion or power
conferred upon it, or taken by it pursuant to any direction or instruction by
which it is governed under this Indenture or omitted to be taken by it by reason
of the lack of direction or instruction required for such action, or be
responsible for the consequences of any error of judgment reasonably made by
it.  When any payment or other action by the Paying Agent is called
for by this Indenture, it may defer such action pending receipt of such
evidence, if any, as it may reasonably require in support thereof.  A
permissive right or power to act shall not be construed as a requirement to
act.  The Paying Agent shall not in any event be liable for the
application or misapplication of funds, or for other acts or defaults, by any
person, firm or corporation except by the Paying Agent’s respective directors,
officers, agents and employees.  For the purposes of this Indenture
matters shall not be considered to be known to the Paying Agent unless they are
known to an officer in its corporate trust administration
division.  The Paying Agent shall not require indemnification prior to
making any payment when due of principal, premium or interest on any Bond to be
made by the Paying Agent to any Bondholder, except and unless such drawing or
payment is prohibited by or violates applicable law or any outstanding or
pending court or governmental order or decree.

     

    Section
9.11. Resignation
or Removal of Paying Agent; Successors.  (A) Any Paying
Agent may at any time resign and be discharged of the duties and obligations
created by the Indenture by giving at least sixty days’ written notice to the
Authority, the Trustee and the Borrower.  Any successor Paying Agent
shall be appointed by the Authority, at the direction of the Borrower, with the
approval of the Trustee, and shall be a bank or trust company duly organized
under the laws of any state of the United States or a national banking
association, having a capital stock and surplus aggregating at least
$100,000,000, and willing and able to accept the office on reasonable and
customary terms and authorized by law to perform all the duties imposed upon it
by this Indenture.  The Paying Agent may be removed at any time by the
Authority at the direction of the Borrower by a written instrument filed with
the Trustee and the Paying Agent.  The Paying Agent may, but need not
be, the same person as the Trustee.

     

    (B)           
If the position of Paying Agent shall become vacant for any reason, or if any
bankruptcy, insolvency or similar proceeding shall be commenced by or against
the Paying Agent, the Authority shall appoint a successor Paying Agent
designated by the Borrower to fill the vacancy.  A written acceptance
of office shall be filed by the successor Paying Agent.  The Trustee
shall give notice of the appointment of a successor Paying Agent in writing to
each Bondholder.  The Trustee will promptly certify to the Borrower
that it has mailed such notice to all Bondholders, and such certificate will be
conclusive evidence that such notice was given in the manner required
hereby.

     

    (C)           Any
corporation, association, limited liability company partnership or firm which
succeeds to the business of the Paying Agent as a whole or substantially as a
whole, whether by sale, merger, consolidation or otherwise, shall thereby become
vested with all the property, rights and powers of the Paying Agent under this
Indenture and shall be subject to all the duties and obligations of the Paying
Agent under this Indenture.

     

    The
Paying Agent shall send or cause to be sent notice to Bondholders of a change of
address for the delivery of Bonds or notice or the payment of principal of
Bonds.

     

    Section
9.12. Monies
Held for Particular Bonds.  The amounts held
by the Trustee or Paying Agents for the payment of the interest, principal or
Redemption Price due on any date with respect to particular Bonds, on and after
such date and pending such payment, shall be set aside on its books and held in
trust by it for the owners of the Bonds entitled thereto.  Such funds
shall be invested in Federal Securities at the direction of the Borrower for the
account of the Borrower or shall otherwise remain uninvested.

     

    Section
9.13. Continuation
Statements.  The Trustee shall
cause all continuation statements necessary to preserve and protect the security
interest of the Trustee in the collateral pledged by the Authority in the
granting clauses hereof to be filed in the applicable State offices so as to
continue the perfected status thereof pursuant to the Uniform Commercial Code of
the State.

     

    Section
9.14. Obligation
to Report Defaults.  In accordance
with the provisions of Section 8.10 hereof, upon an officer in the Trustee’s
corporate trust administration department becoming aware of any condition or
event which constitutes, or with the giving of notice or the passage of time
would constitute, an Event of Default under the Financing Documents or this
Indenture, the Trustee shall deliver to the Authority a written notice stating
the existence thereof and the action it proposes to take with respect
thereto.  Becoming aware means the actual knowledge of an officer in
the Trustee’s corporate trust department.

     

    Section
9.15. Payments
Due on non-Business Day.  In any case where
the date of maturity of interest on or principal of the Bonds or the date fixed
for redemption of any Bonds shall, in the city of payment, be a day other than a
Business Day, then payment of such amount shall be made as provided in the forms
of the Bonds.

     

    Section
9.16. Appointment
of Co-Trustee.  (A) It is the
purpose of this Indenture that there shall be no violation of any law of any
jurisdiction denying or restricting the right of banking corporations or
associations to transact business as trustee in such jurisdiction.  It
is recognized that in case of litigation under this Indenture or the Agreement,
and in particular in case of the enforcement of either on default, or in case
the Trustee deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the powers, rights or remedies herein
granted to the Trustee or hold title to the properties, in trust, as herein
granted, or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that the Trustee appoint an additional
individual or institution as a separate trustee or co-Trustee.  The
following provisions of this Section are adapted to these ends.

     

    (B)           In
the event that the Trustee appoints an additional individual or institution as a
separate trustee or co-Trustee, each and every remedy, power, right, claim,
demand, cause of action, immunity, estate, title, interest and lien expressed or
intended by this Indenture to be exercised by or vested in or conveyed to the
Trustee with respect thereto shall be exercisable by and vest in such separate
trustee or co-Trustee but only to the extent necessary to enable such separate
trustee or co-Trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate
trustee or co-Trustee shall run to and be enforceable by either of
them.

     

    (C)           Should
any instrument in writing from the Authority be required by the separate trustee
or co-Trustee so appointed by the Trustee for more fully and certainly vesting
in and confirming to him or it such properties, rights, powers, trusts, duties
and obligations, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Authority.  In case any
separate trustee or co-Trustee, or a successor to either, shall die, become
incapable of acting, resign or be removed, all the estates, properties, rights,
powers, trusts, duties and obligations of such separate trustee or co-Trustee,
so far as permitted by law, shall vest in and be exercised by the Trustee until
the appointment of a new trustee or successor to such separate trustee or
co-Trustee.

     

    Section
9.17. Project
Description.  The Trustee shall
maintain in current form as an Appendix to the Agreement a list of the property
constituting the Project and, on the basis of the descriptions furnished by the
Borrower pursuant to the Agreement, shall amend the list in writing to reflect
changes in the Project.

     

    
      
        
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    ARTICLE
X

     

    AMENDMENTS
OF INDENTURE

     

    Section
10.1. Limitation
on Modifications.  This Indenture
shall not be modified or amended in any respect except as provided in and in
accordance with and subject to the provisions of this Article.

     

    Section
10.2. Supplemental
Indentures Without Consent of Owners of the Bonds.  (A) Subject to
paragraph (C) of this Section 10.2, the Authority may, from time to time and at
any time, adopt Supplemental Indentures without notice to or consent of the
owners of the Bonds for any of the following purposes:

     

    (1)           To
cure any formal defect, omission or ambiguity in this Indenture or in any
description of property subject to the lien hereof, if such action is not
adverse to the interests of the owners of the Bonds.

     

    (2)           To
grant to or confer upon the Trustee for the benefit of the owners of the Bonds
any additional rights, remedies, powers, authority or security which may
lawfully be granted or conferred and which are not contrary to or inconsistent
with this Indenture as theretofore in effect.

     

    (3)           To
add to the covenants and agreements of the Authority in this Indenture other
covenants and agreements to be observed by the Authority which are not contrary
to or inconsistent with this Indenture as theretofore in effect.

     

    (4)           To
add to the limitations and restrictions in this Indenture other limitations and
restrictions to be observed by the Authority which are not contrary to or
inconsistent with this Indenture as theretofore in effect.

     

    (5)           To
confirm, as further assurance, any pledge under, and the subjection to any lien
or pledge created or to be created by, this Indenture, of Revenues or other
income from or in connection with the Project or of any other monies, securities
or funds, or to subject to the lien or pledge of this Indenture additional
revenues, properties or collateral.

     

    (6)           To
make any other changes which do not materially adversely affect the interest of
owners of the Bonds, as evidenced to the Trustee by an opinion of Bond
Counsel.

     

    (7)           To
enable the Authority and the Borrower to receive or maintain a rating on the
Bonds from S&P and/or Moody’s; provided, however, that nothing in this
Section 10.2(7) shall limit or restrict the rights of Bondholders to consent to
modifications, alterations or amendments to this Indenture as provided in
Section 10.3 hereof.

     

    (B)           Before
the Authority shall adopt any Supplemental Indenture pursuant to this Section,
there shall have been filed with the Trustee an opinion of Bond Counsel
satisfactory to the Trustee stating that such Supplemental Indenture is
authorized or permitted by this Indenture and the Act, complies with the terms
of this Indenture, and that upon enactment it will be valid and binding upon the
Authority in accordance with its terms.

     

    Section
10.3. Supplemental
Indentures With Consent of Owners of the Bonds.  (A) Subject to
the terms and provisions contained in this Article, the owners of not less than
51% in aggregate principal amount of the Bonds then Outstanding (or in the event
that the proposed change does not affect all owners of Bonds, the owners of not
less than 51% of the Bonds so affected), shall have the right from time to time,
to consent to and approve the adoption by the Authority of any Supplemental
Indenture as shall be deemed necessary or desirable by the Authority for the
purpose of modifying, altering, amending, adding to or rescinding, in any
particular, any of the terms or provisions contained herein.  Nothing
herein contained shall permit, or be construed as permitting, without the
consent of all of the owners of the Bonds affected thereby (i) a change in the
terms of redemption or maturity of the principal of or the interest on any
Outstanding Bond, or a reduction in the principal amount or redemption price of
any Outstanding Bond or the rate of interest thereon, without the consent of the
owner of such Bond, (ii) the creation of a lien upon or pledge of Revenues other
than the lien or pledge created by this Indenture, (iii) a preference or
priority of any Bond or Bonds over any other Bond or Bonds, or (iv) a reduction
in the aggregate principal amount of the Bonds required for consent to such
Supplemental Indenture.

     

    (B)           If
at any time the Authority shall determine to adopt any Supplemental Indenture
for any of the purposes of this Section, it shall cause notice of the proposed
Supplemental Indenture to be mailed, postage prepaid, to all owners of the
Bonds.  Such notice shall briefly set forth the nature of the proposed
Supplemental Indenture, and shall state that a copy thereof is on file at the
offices of the Trustee for inspection by all owners of the Bonds.

     

    (C)           Within
one year after the date of such notice, the Authority may adopt such
Supplemental Indenture in substantially the form described in such notice only
if there shall have first been filed with the Authority (i) the written consent
of the owners of not less than 51% in aggregate principal amount of the Bonds
then Outstanding so affected, and (ii) an opinion of counsel satisfactory to the
Trustee stating that such Supplemental Indenture is authorized or permitted by
this Indenture and complies with its terms, and that upon adoption it will be
valid and binding upon the Authority in accordance with its
terms.  Each valid consent of a Bondholder shall be effective only if
accompanied by proof of the owning, at the date of such consent, of the Bonds
with respect to which such consent is given.  A certificate or
certificates by the Trustee that it has examined such proof and that such proof
is sufficient in accordance with this Indenture shall be conclusive that the
consents have been given by the owners of the Bonds described in such
certificate or certificates.  Any such consent shall be binding upon
the owner of the Bonds giving such consent and upon any subsequent owner of such
Bonds and of any Bonds issued in exchange therefor (whether or not such
subsequent owner thereof has notice thereof), unless such consent is revoked in
writing by the owner of such Bonds giving such consent or a subsequent owner
thereof by filing such revocation with the Trustee prior to the adoption of such
Supplemental Indenture.

     

    (D)           If
the owners of not less than the percentage of Bonds required by this Section
shall have consented to and approved the execution thereof as herein provided,
no owner of any Bond shall have any right to object to the enactment of such
Supplemental Indenture, or to object to any of the terms and provisions
contained therein or the operation thereof, or in any manner to question the
propriety of the adoption thereof, or to enjoin or restrain the Authority from
adopting the same or from taking any action pursuant to the provisions
thereof.

     

    (E)           Upon
the adoption of any Supplemental Indenture pursuant to the provisions of this
Section, this Indenture shall be deemed to be modified and amended in accordance
therewith, and the respective rights, duties and obligations under this
Indenture of the Authority, the Trustee, the Paying Agent and all owners of
Bonds then Outstanding shall thereafter be determined, exercised and enforced
under this Indenture, subject in all respects to such modifications and
amendments.

     

    Section
10.4. Supplemental
Indenture Part of the Indenture.  Any Supplemental
Indenture adopted in accordance with the provisions of this Article shall
thereafter form a part of this Indenture and all the terms and conditions
contained in any such Supplemental Indenture as to any provisions authorized to
be contained therein shall be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.  The Trustee shall execute
any Supplemental Indenture adopted in accordance with the provisions of Sections
10.2 or 10.3 hereof; provided, however, that the Trustee may, but shall not be
obligated to, enter into any such instrument which adversely affects the
Trustee’s own rights, duties or immunities under this Indenture or
otherwise.

     

    
      
        
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    ARTICLE
XI

     

    AMENDMENTS
OF FINANCING DOCUMENTS

     

    Section
11.1. Rights of
Borrower.  Anything herein
to the contrary notwithstanding, any Supplemental Indenture under Article X
hereof which affects in any manner any rights, powers, authority, duties or
obligations of the Borrower under the Financing Documents or of any subsequent
user of the Project or requires a revision of the Financing Documents or
subsequent agreement with respect to the Project shall not become effective
unless and until the Borrower or such subsequent user, as the case may be, shall
have given its written consent signed by its duly Authorized Representative to
such Supplemental Indenture.

     

    Section
11.2. Amendments
of Financing Documents Not Requiring Consent of Owners of the Bonds.  The Authority and
the Trustee may, without the consent of or notice to the owners of the Bonds,
consent to any amendment, change or modification of the Financing Documents for
the purpose of (i) curing any ambiguity or formal defect therein or which, in
the judgment of the Trustee will not materially prejudice the Trustee or the
owners of the Bonds or (ii) to make any other changes which do not materially
adversely affect the interests of the owners of the Bonds, as evidenced to the
Trustee by an opinion of counsel.  The Trustee shall have no liability
to any owner of the Bonds or any other person for any action taken by it in good
faith pursuant to this Section.

     

    Section
11.3. Amendments
of Financing Documents Requiring Consent of Owners of the Bonds.  Except as
provided in Section 11.2 hereof, the Authority and the Trustee shall not consent
to any amendment, change or modification of the Financing Documents, including
the substitution of an assignee for the Borrower and the release of the Borrower
from the obligations of the Financing Documents, without mailing of notice and
the written approval or consent of the owners of not less than 51% in aggregate
principal amount of the Bonds at the time Outstanding and so affected given and
procured as in Section 10.3 hereof provided.  If at any time the
Borrower or a subsequent user of the Project shall request the consent of the
Trustee to any such proposed amendment, change or modification, the Trustee
shall cause notice of such proposed amendment, change or modification to be
mailed in the same manner as is provided in Article X hereof with respect to
Supplemental Indentures.  Such notice shall briefly set forth the
nature of such proposed amendment, change or modification and shall state that
copies of the instrument embodying the same are on file at the principal office
of the Trustee for inspection by the owners of the Bonds.

     

    

     

    
      
        
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    ARTICLE
XII

     

    DISCHARGE
OF INDENTURE

     

    Section
12.1. Defeasance.  (A) If the
Authority shall pay or cause to be paid, or there shall otherwise be paid, to
the owners of all Bonds the principal or Redemption Price, if applicable,
interest and all other amounts due or to become due thereon or in respect
thereof, and all other amounts due or to become due under the Financing
Documents, at the times and in the manner stipulated therein and in this
Indenture, and if all the fees, expenses and advances of the Trustee and all
Paying Agents have been paid, then the pledge of any revenues or receipts from
or in connection with the Financing Documents or the Project under this
Indenture and the estate and rights hereby granted, and all covenants,
agreements and other obligations of the Authority to the owners of the Bonds
hereunder shall thereupon cease, terminate and become void and be discharged and
satisfied and such Bonds shall thereupon cease to be entitled to any lien,
benefit or security hereunder, except as to moneys or securities held by the
Trustee or the Paying Agents as provided below in this subsection.  At
the time of such cessation, termination discharge and satisfaction, (1) the
Trustee shall cancel and discharge the lien of this Indenture and execute and
deliver to the Borrower all such instruments as may be appropriate to satisfy
such lien and to evidence such discharge and satisfaction, and (2) the Trustee,
the Authority and the Paying Agents shall pay over or deliver to the Borrower or
on its order all moneys or securities held by them pursuant to the Indenture
which are not required (a) for the payment of principal or Redemption Price, if
applicable, or interest on Bonds not theretofore surrendered for such payment or
redemption, or (b) for the payment of all such other amounts due or to become
due under the Financing Documents.

     

    (B)           Bonds
or interest installments for the payment or redemption of which moneys (or
Federal Securities, the principal of and interest on which when due, together
with the moneys, if any, set aside at the same time, will provide funds
sufficient for such payment or redemption) shall then be set aside and held in
trust by the Trustee or Paying Agents, whether at or prior to the maturity or
the redemption date of such Bonds, shall be deemed to have been paid within the
meaning and with the effect expressed in subsection (A) of this Section, if (a)
in case any such Bonds are to be redeemed prior to maturity, all action
necessary to redeem such Bonds shall have been taken and notice of such
redemption shall have been duly given or provision satisfactory to the Trustee
shall have been made for the giving of such notice, and (b) if the maturity or
redemption date of any such Bond shall not then have arrived, (i) provision
shall have been made by deposit with the Trustee or other methods satisfactory
to the Trustee for the payment to the owners of any such Bonds upon surrender
thereof, whether or not prior to the maturity or redemption date thereof, of the
full amount to which they would be entitled by way of principal or Redemption
Price and interest and all other amounts then due under the Financing Documents
to the date of such maturity or redemption, and (ii) provision satisfactory to
the Trustee shall have been made for the mailing of a notice to the owners of
such Bonds that such moneys are so available for such payment.

     

    
      
        
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    ARTICLE
XIII

     

    GENERAL
PROVISIONS

     

    Section
13.1. Notices.  (A) Any notice, request,
demand, communication, direction or other paper shall be sufficiently given and
shall be deemed given when delivered or mailed by registered or certified mail,
return receipt requested, postage prepaid, or sent by telegram, addressed as
follows: if to the Authority, at 999 West Street, Rocky Hill, Connecticut 06067,
Attention: Program Manager - Loan Administration; if to the Borrower, 93 Main
Street, Clinton, Connecticut  06413, Attention:  Vice
President-Finance, and if to the Trustee, Goodwin Square, 225 Asylum Street,
Hartford, Connecticut 06103, Attention: Corporate Trust
Administration.  A duplicate copy of each notice required to be given
hereunder by the Trustee to either the Authority or the Borrower, shall also be
given to the other.  Any notice party may designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.

     

    (B)           Notice
hereunder may be waived prospectively or retrospectively by the person entitled
to such notice, but no waiver shall affect any notice requirement as to other
persons.

    

    (C)           Notwithstanding
anything to the contrary contained herein, all notices, requests, demands,
communications or directions to the Trustee shall be given in
writing.

    

    Section
13.2. Covenant
Against Discrimination.  The Trustee
agrees and warrants that in the performance of this Indenture it will not
discriminate against any person or group of persons on the grounds of race,
color, religion, national origin, age, sex, sexual orientation, marital status,
physical or learning disability, political beliefs, mental retardation, or
history of mental disorder in any manner prohibited by the laws of the United
States or of the State.

     

    Section
13.3. Parties
Interested Herein.  Except as
otherwise specifically provided herein, nothing in this Indenture expressed or
implied is intended or shall be construed to confer upon, or to give to, any
person or entity, other than the Authority, the Trustee, the Borrower, the
Paying Agent and the registered owners of the Bonds, any right, remedy or claim
under or by reason of this Indenture or any covenant, condition or stipulation
hereof, and all covenants, stipulations, promises and agreements in this
Indenture contained by and on behalf of the Authority shall be for the sole and
exclusive benefit of the Authority, the Trustee, the Borrower, the Paying Agent
and the registered owners of the Bonds.

     

    Section
13.4. Effective
Date; Counterparts.  This Indenture
shall become effective on delivery.  It may be simultaneously executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.

     

    Section
13.5. Continuing
Disclosure.  The Borrower has
undertaken all responsibility for compliance with applicable continuing
disclosure requirements, if any, and the Authority and the Trustee shall have no
liability to the Bondholders or any other person with respect to S.E.C. Rule
15c2-12.

     

    Section
13.6. Compliance
with C.G.S. Sections 4a-60 and 4a-60a.  (A)  CGS
Section 4a-60.  In accordance with Connecticut General Statutes Section
4a-60(a)(1), as amended by Connecticut Public Act 07-142, and to the extent
required by Connecticut law, the Trustee agrees and warrants as follows: (1) in
the performance of this Indenture it will not discriminate or permit
discrimination against any person or group of persons on the grounds of race,
color, religious creed, age, marital or civil union status, national origin,
ancestry, sex, mental retardation or physical disability, including, but not
limited to, blindness, unless it is shown by the Trustee that such disability
prevents performance of the work involved, in any manner prohibited by the laws
of the United States or of the State of Connecticut and further to take
affirmative action to insure that applicants with job-related qualifications are
employed and that employees are treated when employed without regard to their
race, color, religious creed, age, marital or civil union status, national
origin, ancestry, sex, mental retardation, or physical disability, including,
but not limited to, blindness, unless it is shown by the Trustee that such
disability prevents performance of the work involved; (2) in all solicitations
or advertisements for employees placed by or on behalf of the Trustee, to state
that it is an “affirmative action-equal opportunity employer” in accordance with
regulations adopted by the Commission on Human Rights and Opportunities (the
“CHRO”); (3) to provide each labor union or representative of workers with which
the Trustee  has a collective bargaining agreement or other contract or
understanding and each vendor with which the Trustee has a contract or
understanding, a notice to be provided by the CHRO advising the labor union or
workers’ representative of the Trustee’s commitments under Connecticut General
Statutes Section 4a-60, and to post copies of the notice in conspicuous places
available to employees and applicants for employment; (4) to comply with each
provision of Connecticut General Statutes Sections 4a-60, 46a-68e and 46a-68f
and with each regulation or relevant order issued by the CHRO pursuant to
Connecticut General Statutes Sections 46a-56, 46a-68e and 46a-68f; (5) to
provide the CHRO with such information requested by the CHRO, and permit access
to pertinent books, records and accounts, concerning the employment practices
and procedures of the Trustee as relate to the provisions of Connecticut General
Statutes Sections 4a-60a and 46a-56.

     

    (B)           CGS
Section 4a-60a.  In accordance with Connecticut General Statutes Section
4a-60a(a)(1), as amended by Connecticut Public Act 07-142, and to the extent
required by Connecticut law, the Trustee agrees and warrants as follows: (1)
that in the performance of this Indenture, the Trustee will not discriminate or
permit discrimination against any person or group of persons on the grounds of
sexual orientation, in any manner prohibited by the laws of the United States or
of the State of Connecticut, and that employees are treated when employed
without regard to their sexual orientation; (2) to provide each labor union or
representative of workers with which the Trustee has a collective bargaining
agreement or other contract or understanding and each vendor with which the
Trustee has a contract or understanding, a notice to be provided by the CHRO
advising the labor union or workers’ representative of the Trustee’s commitments
under Connecticut General Statutes Section 4a-60a, and to post copies of the
notice in conspicuous places available to employees and applicants for
employment; (3) to comply with each provision of Connecticut General Statutes
Section 4a-60a and with each regulation or relevant order issued by the CHRO
pursuant to Connecticut General Statutes Section 46a-56; (4) to provide the CHRO
with such information requested by the CHRO, and permit access to pertinent
books, records and accounts, concerning the employment practices and procedures
of the Trustee which relate to the provisions of Connecticut General Statutes
Sections 4a-60a and 46a-56; and (5) to include provisions (1) through (4) this
section in every subcontract or purchase order entered into by the Trustee 
in order to fulfill any obligation of this Indenture, and such provisions shall
be binding on a subcontractor, vendor or manufacturer unless exempted by
regulations or orders of the CHRO and take such action with respect to any such
subcontract or purchase order as the CHRO may direct as a means of enforcing
such provisions in accordance with Connecticut General Statutes Section
4a-60a.

     

    Section
13.7. Date for
Identification Purposes Only.  The date of this
Indenture shall be for identification purposes only and shall not be construed
to imply that this Indenture was executed on such date.

     

    Section
13.8. Separability
of Invalid Provisions.  In case any one
or more of the provisions contained in this Indenture or in the Bonds shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.

     

    
      
        
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    IN WITNESS WHEREOF, the
Connecticut Development Authority has caused these presents to be signed in its
name and behalf by an Authorized Representative, and to evidence its acceptance
of the trusts hereby created, U.S. Bank National Association, has caused these
presents to be signed in its name and behalf by its duly authorized officer, as
of the date first above written.

     

    CONNECTICUT
DEVELOPMENT AUTHORITY

     

    By                                                   

    Name:  Karin
A. Lawrence

    Authorized
Representative

     

    

     

    U.S.
BANK NATIONAL ASSOCIATION

     

    By                                                   

    Name:  Cauna
M. Silva

    Title:  Vice
President

    

    

    

    
      
        
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    APPENDIX A TO
INDENTURE

     

    REQUISITION

     

    The
Connecticut Water Company (the “Borrower”) hereby requests U.S. Bank National
Association, as trustee (the “Trustee”) under the Indenture of Trust, dated
December 1, 2009, between U.S. Bank National Association and the Connecticut
Development Authority (the “Indenture”), to withdraw $___________ from the
___________ Account of the Project Fund established under the Indenture for
purposes permitted by Section 5.2 thereof.  In connection with this
withdrawal, the Borrower states as follows:

     

    1.           The
number of this requisition is ____________________.

     

    2.           Payments
aggregating _____________ are due to the following persons in the following
amounts for expenditures incurred in connection with the Project:

     

    
      	
              Person

            	
              Address

            	
              Amount

            	
              Item

            
	 
      	 
      	 
      	 
      

    

    3.           Payment
is due to the Borrower in the total amount of $____________ in reimbursement for
amounts paid by the Borrower in connection with the Project:

     

    
      	
              Amount

            	
              Item

            
	 
      	 
      

    

    Attached
hereto are receipts or other evidences of payment showing payment of each such
amount and the person to whom payment was made.

     

    4.           Each
amount set forth in paragraphs 2 and 3 hereof has been properly paid or incurred
within the provisions of the Agreement and the Indenture, is a proper charge
against the Project Fund, is unpaid or unreimbursed, and has not been the basis
for any previous withdrawal.

     

    5.           This
requisition and the use of proceeds set forth herein are consistent in all
material respects with the Tax Regulatory Agreement.

     

    6.           Ninety-five
percent or more of the amount requisitioned is to be applied to costs (a) paid
or incurred not more than sixty (60) days prior to the adoption of the
Authority’s inducement resolution for the Project on May 20, 2009, (b) for the
acquisition, construction or reconstruction of land or property of a character
subject to the allowance for depreciation provided in Section 167 of the
Internal Revenue Code of 1986, as amended, and (c) which are chargeable to the
capital account of the Project or would be so chargeable either with an election
by the Borrower or but for the election of the Borrower to deduct the amount of
the item.

     

    Capitalized
terms used in this requisition are used as defined in the
Indenture.

     

    
      
        
           

          A-

          NY:1250534.3

        

         

      

      
         

        
          

        

      

      
         

      

    

    I am an
Authorized Representative of the Borrower under the Agreement.

     

    
      	
               
      

            	
              THE
      CONNECTICUT WATER COMPANY

            

    

     

    By:  ________________________________

    Name:

    Title:

     

    
      
        
           

          A-

          NY:1250534.3

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX B TO
INDENTURE

    

    FORM
OF REDEMPTION REQUEST

    $_________________

    CONNECTICUT
DEVELOPMENT AUTHORITY

    WATER
FACILITIES REFUNDING REVENUE BONDS

    (THE
CONNECTICUT WATER COMPANY PROJECT – 2009A SERIES)

    

    due
December 1, 2039

    (the
“Bonds”)

    

    CUSIP
NO. __________

    

    The
undersigned, ________________________ (the “Participant”), does hereby certify,
pursuant to the provisions of that certain Indenture of Trust, dated as of
December 1, 2009 (the “Indenture”), made by the Connecticut Development
Authority (the “Authority”) and U.S. Bank National Association, as Trustee (the
“Trustee”), to The Depository Trust Company (the “Depository”), The Connecticut
Water Company (the “Borrower”), the Authority and the Trustee that:

     

    1.           [Name
of deceased Beneficial Owner] is deceased.

     

    2.           [Name
of deceased Beneficial Owner] had a $__________ interest in the above referenced
Bonds.

     

    3.           [Name
of Representative] is [Beneficial Owner’s personal representative/other person
authorized to represent the estate of the Beneficial Owner/surviving joint
tenant/surviving tenant by the entirety/trustee of a trust] of [Name of deceased
Beneficial Owner] and has delivered to the undersigned a request for redemption
in form satisfactory to the undersigned, requesting that $__________ principal
amount of said Bonds be redeemed pursuant to said Indenture.  The
documents accompanying such request, all of which are in proper form, are in all
respects satisfactory to the undersigned and the [Name of Representative] is a
Representative and is entitled to have the Bonds to which this Request relates
redeemed.

     

    4.           The
Participant holds the interest in the Bonds with respect to which this Request
for Redemption is being made on behalf of [Name of deceased Beneficial
Owner].

     

    5.           The
Participant hereby certifies that it will indemnify and hold harmless the
Depository, the Trustee, the Authority and the Borrower (including their
respective officers, directors, agents, attorneys and employees), against all
damages, loss, cost, expense (including reasonable attorneys’ and accountants’
fees and expenses), obligations, claims or liability (collectively, the
“Damages”) incurred by the indemnified party or parties as a result of or in
connection with the redemption of Bonds to which this Request
relates.  The Participant will, at the request of the Borrower,
forward to the Borrower, a copy of the documents submitted by [Name of
Representative] in support of the request for redemption.

     

    
      
        
           

          B-

          NY:1250534.3

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
undersigned has executed this redemption request as of ____________,
_____.

     

    

    [PARTICIPANT
NAME]

    

    

    By:                                                                

    Name:                                                                

    Title:                                                                

    

     

    

     

    

     

    
      
        
           

          B-

          NY:1250534.3

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