Document:

EX10-157

 

 

REIMBURSEMENT AGREEMENT

between

THE ENERGY NETWORK, INC.

and

FLEET NATIONAL BANK

dated as of

January 1, 2000

 

TABLE OF CONTENTS

SECTION l.Definitions1

SECTION 2.Reimbursement and Other Payments6

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

SECTION 4.Reduction of Letter of Credit Amount12

SECTION 5.Obligations Absolute12

SECTION 6.Representations and Warranties of the
Borrower12

SECTION 7.Affirmative Covenants Other Than Reporting
Requirements16

SECTION 8.Negative Covenants20

SECTION 9.[Intentionally Left Blank]23

SECTION 10.Events of Default23

SECTION 11.Right to Cure25

SECTION 12.Amendments and Waivers26

SECTION 13.Notices26

SECTION 14.No Waiver; Remedies26

SECTION 15.Indemnification27

SECTION 16.Continuing Obligation; Survival27

SECTION 17.Transfer of the Letter of Credit28

SECTION 18.Limited Liability of the Bank28

SECTION 19.Costs, Expenses and Taxes28

SECTION 20.Severability29

SECTION 21.Governing Law29

SECTION 22.Consent to Jurisdiction; JURY TRIAL WAIVER30

SECTION 23.Table of Contents; Headings30

 

Exhibit A - Project Description

Exhibit B - Irrevocable Letter of Credit

Exhibit C - Form of Request for Termination Date Extension

Exhibit D - List of Subsidiaries

Exhibit E - Litigation

Exhibit F - Financial Statement Certificate

Exhibit G - Existing Indebtedness and Liens

REIMBURSEMENT AGREEMENT

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

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

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

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

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

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

 

SECTION 1. Definitions.

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

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

"Assignment of Contracts and Security Agreement" means that
certain Assignment of Contracts and Security Agreement of even date herewith
between the Borrower and the Bank.

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

"Bank Obligations" means all obligations (now existing or
hereafter arising, matured or unmatured, fixed or contingent) of the Borrower to
the Bank arising under this Agreement and/or under any of the Related
Documents.

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

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

"Charter" means the Articles of Organization or other
organizational documents of a corporation referred to herein, all as amended to
date.

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

"Code" shall mean the Internal Revenue Code of
1986, a amended from time to time.

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

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

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

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

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

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

"Environmental Laws" means any and all federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, licenses or other governmental restrictions relating to the environment
or the release of any materials into the environment, including, without
limitation, CERCLA and the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Sections 6901-6987. 

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

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

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

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

"Guarantor" shall mean, jointly, severally and
collectively, TEN Transmission Company, The Hartford Steam Company, and ENI Gas
Services, Inc.

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

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

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

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

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

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

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

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

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

"Loan" has the meaning specified in the introductory clauses to
this Agreement.

"Material Adverse Change" shall mean a material
adverse change in (i) the business, prospects, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of
Borrower or (ii) the Collateral, in each case as determined by the Bank in its
sole discretion.

"Mortgage and Security Agreement" means that
certain Open-End Leasehold/Easement Mortgage and Security Agreement of even date
herewith from the Borrower to the Bank.

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

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

"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(b)Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect from time to time and
consistently applied.

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

SECTION 2.Reimbursement and Other Payments.

(a)Certain Fees and Charges. The Borrower agrees to pay to the
Bank (i) upon each transfer of the Letter of Credit by the Trustee, a transfer
fee equal to the Bank's then customary charge therefor; (ii) on the same
Business Day as any drawing under the Letter of Credit, a drawing fee in the
amount of $150; (iii) upon notice from the Bank, any and all out-of-pocket
charges and expenses which the Bank may pay or incur relative to drawings under
the Letter of Credit; (iv) interest on any and all amounts unpaid by the
Borrower when due under this Agreement (except as otherwise expressly provided
in Subsection 2(e) below) from the date such amounts become due until payment in
full, payable on demand, at a fluctuating interest rate per annum (computed on
the basis of a year of 360 days for the actual number of days elapsed) which
shall at times be equal to the sum of (x) 4.00% per annum plus (y) the Prime
Rate as in effect from time to time (but such fluctuating interest rate shall in
no event be higher than the maximum rate permitted by then applicable law); (v)
a late fee of 5.00% on any and all amounts unpaid by the Borrower within ten
days after the same are due under this Agreement, payable on demand; and (vi)
any and all costs and expenses (including, without limitation, reasonable
attorneys' fees) reasonably incurred by the Bank in exercising or enforcing any
rights or performing any obligations under this Agreement.

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

(c)Reimbursement for Drawings. The Borrower hereby agrees to
pay to the Bank immediately after (and on the same Business Day as) any amount
is drawn under the Letter of Credit pursuant to any Interest Drawing, Partial
Redemption Drawing or Final Drawing or pursuant to any Tender Drawing (but as to
a Tender Drawing, except as otherwise provided below, only to the extent that
such drawing represents accrued interest on the Bonds), a sum equal to the
amount so drawn. The Borrower also agrees to pay to the Bank, with respect to
any Tender Drawing as to which the conditions contained in Subsection 3(d) are
not fulfilled, any amount drawn under the Letter of Credit pursuant to such
Tender Drawing, such amount to be paid to the Bank immediately after and on the
same Business Day as such drawing. All amounts payable under this Subsection
2(c) shall bear interest from the date on which any such amount became payable
until paid in full, at the rate provided in clause (iv) of Subsection 2(a),
payable on demand.

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

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

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

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

(ii)Prior to or simultaneously with the resale of Bonds acquired
with the proceeds of one or more draws under the Letter of Credit by one or more
Tender Drawings, the Borrower shall prepay the then outstanding Tender Advances
(in the order in which they were made) by paying to the Bank an amount equal to
the sum of (x) the portion of the purchase price corresponding to the aggregate
principal amount of the Bonds being resold or to be resold, plus (y) the
portion of the purchase price corresponding to the aggregate amount of accrued
and unpaid interest on such Bonds, plus (z) the aggregate amount of
accrued and unpaid interest on such Tender Advances, less the amount paid
pursuant to the immediately preceding clause. Such payment shall be applied by
the Bank in reimbursement of such drawings (and as prepayment of Tender Advances
resulting from such drawings in the manner described above), and, when such
payment with respect to clause (x) and (y) of the immediately preceding sentence
is accompanied by a certificate completed and signed by the Trustee in the form
of Annex F to the Letter of Credit, the Borrower irrevocably authorizes the Bank
to rely on such certificate and to reinstate the Letter of Credit in accordance
therewith.

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

(iv)Outstanding Tender Advances may be prepaid at any time by or
on behalf of the Borrower on notice from the Borrower directing the Bank to
deliver Bonds held by the Bank or its designee pursuant to the Pledge Agreement
for sale pursuant to the Indenture and specifying the principal amount of Bonds
to be so sold, which notice may be given by telephone (promptly confirmed in
writing) but which shall not be effective unless received by the Bank prior to
10:00 A.M. (New York time) on the day of the proposed prepayment referred to
above; provided that the Bank shall not deliver any such Bonds for sale
or otherwise until the Letter of Credit has been reinstated pursuant to the
terms of this Agreement and the Letter of Credit.

(g)Increased Costs. If any law, regulation or change in any
law or regulation or in the interpretation thereof or any ruling, decree,
judgment, guideline, directive or recommendation (whether or not having the
force of law) by any regulatory body, court, central bank or any administrative
or governmental authority having or claiming jurisdiction (including, without
limitation, a request or requirement that affects the manner in which the Bank
or any participant in the Letter of Credit or any confirming bank with respect
to the Letter of Credit allocates capital resources to its commitments including
its obligations hereunder), shall either (i) impose upon, modify, require, make
or deem applicable to the Bank or any participant in the Letter of Credit or to
any confirming bank with respect to the Letter of Credit any reserve
requirement, special deposit requirement or the like against or affecting the
Letter of Credit or such participation or any confirmation thereof, or (ii)
subject the Bank or any such participant to any tax, charge, fee, deduction or
withholding of any kind whatsoever in connection with the Letter of Credit or
any participation or any confirmation thereof or change the basis of taxation of
the Bank or of any such participant or any such confirming bank (other than a
change in the rate of tax based on the overall net income of the Bank or of any
such participant or any such confirming bank), or (iii) impose any condition
upon or cause in any manner the addition of any supplement to or increase of any
kind to the Bank's or such participant's or confirming bank's capital or cost
base for issuing the Letter of Credit or participating therein or confirming
thereof, or (iv) impose upon, modify, require, make or deem applicable to the
Bank or any such participant or such confirming bank any capital requirement,
increased capital requirement or similar requirement, including, without
limitation, a request or requirement that affects the manner in which the Bank
or any such participant allocates capital resources to its commitments including
its obligations hereunder and/or under the Letter of Credit or any such
participation or confirmation, and the result of any of the events referred to
in (i), (ii), (iii) or (iv) above shall be to increase the costs in any way to
the Bank or any such participant or any such confirming bank of issuing or
maintaining the Letter of Credit or participating therein or confirming thereof
or to reduce the amounts payable by the Borrower hereunder or to reduce the rate
of return on the Bank's capital, as a consequence of issuing or maintaining the
Letter of Credit or participating therein or confirming thereof, to a level
below that which the Bank or any such participant or any such confirming bank
could have achieved but for any such events; then and in any such event the
Borrower shall, promptly upon receipt of written notice by the Bank of such
increased costs and/or decreased benefits stating the reason therefor, pay to
the Bank all such additional amounts that, in the Bank's sole good faith
calculation, as allocated to the Letter of Credit or any such participation or
confirmation, shall be sufficient to compensate the Bank or any such participant
or any such confirming bank for all such increased costs and/or decreased
benefits, all as certified by the Bank in said written notice to the Borrower.
Such certification shall be conclusive and binding on the parties hereto, absent
manifest error. In determining such amount, the Bank may use any reasonable
averaging or attribution methods.

(h)Payments. All payments by the Borrower to the Bank
hereunder shall be made in lawful currency of the United States and in
immediately available funds at the offices of the Bank at One Hundred Federal
Street, Boston, Massachusetts 02110, or such other place as the Bank may
designate. Whenever any payment hereunder shall be due on a day which is not a
Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day, and any interest payable thereon shall be payable for
such extended time at the specified rate. Any payments received after 12:00 noon
on any day will be deemed received on the next succeeding Business Day.
SECTION 3. Issuance; Conditions Precedent; Extension.

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

(b)As conditions precedent to the issuance of the Letter of Credit,
the Bank shall have received on or before the Date of Issuance the following,
each in form and substance satisfactory to the Bank:
(i)A copy of the Borrower's Charter and all amendments thereto, certified
by the Secretary of State of the State of Connecticut.

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

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

(iv)True and correct copies of the resolutions of the board of directors
of the Borrower (and, if needed, the members of the Borrower) approving this
Agreement and each of the Related Documents. Such resolutions shall be certified
as to the accuracy, due adoption and continuing force and effect thereof by the
Secretary of the Borrower.

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

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

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

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

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

(x)An opinion or opinions of counsel to the Borrower as to legal
existence and authority of the Borrower, corporate capacity of the Borrower, due
authorization of transactions, enforceability of documents, no conflict with
law, no conflict with other agreements, no litigation, perfection of security
interests, and other matters reasonably requested by the Bank, such opinion or
opinions to be satisfactory in form and substance to the Bank.

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

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

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

(c)The following statements shall be true and correct on the Date of
Issuance and the Bank shall have received a certificate signed by an authorized
officer of the Borrower, dated the Date of Issuance, stating that:
(i)the representations and warranties contained in Section 6 hereof are
correct on and as of the Date of Issuance as though made on and as of such date;
and

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

(d)Each payment made by the Bank under the Letter of Credit pursuant
to a Tender Drawing shall constitute a Tender Advance hereunder only
if on the date of such payment the following statements shall be
true:
(i)The representations and warranties contained in Section 6 of this
Agreement, Section 5 of the Pledge Agreement and the other Related Documents are
correct on and as of the date of such Tender Advance as though made on and as of
such date; and

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

On the date of each payment by the Bank of a Tender Drawing, the Borrower
shall give the Bank a certificate, signed by an authorized officer of the
Borrower, stating that on the date of such payment the above statements are true
and correct.

(e)Upon the written request of the Borrower received by the Bank no
later than 225 days prior to the Termination Date then in effect under
subsection (i) of the definition thereof (or such later date to which the Bank
may consent in writing), the Bank shall within 45 days of such request notify
the Borrower, the Issuer, the Trustee and the Remarketing Agent whether or not
it will extend the scheduled Termination Date for a period of one year (or such
other period as the Bank may agree in its sole discretion). If the Bank notifies
the Borrower, the Issuer, the Trustee and the Remarketing Agent that the
scheduled Termination Date shall be so extended, the Bank shall within 30 days
of such notification, deliver to the Trustee and the Borrower a written
acknowledgment of such extension. If the Bank fails to notify the Borrower of
its decision within such 30-day period, the Bank shall be deemed to have
rejected such request. Any such request by the Borrower for an extension of the
Termination Date shall be substantially in the form of Exhibit C hereto
(or in such other form to which the Bank may consent in writing) and, unless the
Bank shall otherwise consent, shall include (i) a statement of the outstanding
principal amount of the Bonds, (ii) a reasonably detailed description of any and
all Events of Default and all conditions, events and acts which with notice or
lapse of time or both would become an Event of Default and (iii) any other
pertinent information requested by the Bank. Nothing contained in this Agreement
or elsewhere shall be deemed an agreement by the Bank to extend the Termination
Date whether on the terms contained herein or on any other terms.

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

SECTION 5.Obligations Absolute. The obligations of the
Borrower under this Agreement shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this Agreement,
under all circumstances whatsoever, including, without limitation, the following
circumstances:
(a)any lack of validity or enforceability of the Letter of Credit or any
of the other Related Documents;

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

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

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

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

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

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

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

(a)The Borrower is a corporation duly organized, legally existing and
in good standing under the laws of the State of Connecticut and has the legal
power and authority to enter into and perform this Agreement and each of the
Related Documents in which it is named as a party, to grant the security
interests and liens described in the Security Documents, to fulfill its
obligations set forth herein and therein and to carry out the transactions
contemplated hereby and thereby. The Borrower has all requisite corporate power
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted and is duly qualified and in good standing in
each jurisdiction where the failure so to be qualified could have a material
adverse effect on the Borrower and/or its operations. At the date of this
Agreement, the Borrower has only Subsidiaries listed on Exhibit D. The Borrower
is not a member of any partnership or joint venture, other than Downtown
Cogeneration Associates Limited Partnership.

(b)The execution, delivery and performance by the Borrower of this
Agreement, the Security Documents and the other documents required to be
executed by the Borrower pursuant hereto have been duly authorized by all
necessary corporate action, will not require any consent of any third party not
obtained prior to the date hereof, and will not conflict with, violate the
provisions of, or cause a default or constitute an event which, with the passage
of time or the giving of notice or both, could constitute a default on the part
of the Borrower under any mortgage, indenture, judgment, decree, rule,
regulation, law or order, or any material contract or agreement applicable to
the Borrower or under any provision of the Charter or by-laws of the Borrower,
or result in the imposition of any lien or encumbrance on any property or assets
of the Borrower, except for the liens created by the Security Agreement, the
Mortgage and/or the related collateral assignments. This Agreement, the Security
Documents and any other documents delivered to the Bank by the Borrower pursuant
hereto are the valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms.

(c)There are no actions, suits, proceedings or investigations pending
or, to the knowledge of the Borrower, threatened, anticipated or contemplated
(nor, to the knowledge of the Borrower, is there any basis therefor) against or
affecting the Borrower before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which could
prevent or hinder the consummation of the transactions contemplated hereby or
call into question the validity of this Agreement, any of the Related Documents
or any other instrument provided for or contemplated by this Agreement or any
action taken or to be taken in connection with the transactions contemplated
hereby or thereby or which in any single case or in the aggregate could
reasonably be expected to result in any material adverse change in the business,
prospects, condition, affairs or operations of the Borrower or any material
impairment of the right or ability of the Borrower to carry on its operations as
now conducted or as proposed to be conducted. Without conceding that any of same
are material, the Borrower represents that the only judicial or administrative
proceedings to which it is party are those set forth on Exhibit E
hereto.

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

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

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

(g)The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System), and no
part of the proceeds of the Loan will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock or in any other manner which would involve a violation of any
of the regulations of the Board of Governors of the Federal Reserve System. The
Borrower is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

(h)The audited financial statements of the Borrower as at September
30, 1999, heretofore delivered to the Bank, are complete and accurate and fairly
present the financial condition of the Borrower as at the dates thereof and for
the periods covered thereby, having been prepared in accordance with generally
accepted accounting principles consistently applied. The Borrower has no
liability, contingent or otherwise, not disclosed in the aforesaid financial
statements or in any notes thereto that could materially affect the financial
condition of the Borrower. The following representations are true on the Date of
Issuance; since the date of the most recently delivered financial statements:
(A) there has been no material adverse change in the business, assets or
condition, financial or otherwise, of the Borrower; (B) neither the business,
condition, or operations of the Borrower nor any of its properties or assets has
been materially adversely affected as the result of any legislative or
regulatory change, any revocation or change in any franchise, license or right
to do business, or any other event or occurrence, whether or not insured
against; (C) the Borrower has not experienced any material controversy or
problem with its employees or with any labor organization; and (D) the Borrower
has not entered into any material transaction other than in the ordinary course
of business.

(i)Pension Plans, Etc.

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

(ii) Funding of Employee Benefit Plans. All
contributions and other payments required to be made by the Borrower or any
Commonly Controlled Entity to all employee benefit plans, as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which either the Borrower or any Commonly Controlled Entity maintains
or maintained or to which any of them contributes or has contributed (the
"Employee Benefit Plans") have been made or reserves adequate for such purposes
has been set aside and reflect on the Borrower's financial statements. Except as
provided in the following sentence, no Employee Benefit Plan is a plan subject
to Section 412 of the Code or Section 302 of ERISA, nor is any Employee Benefit
Plan a multiemployer plan as defined in Section 4001(a)(3) of ERISA. The three
defined benefit plans maintained by the Borrower and its Commonly Controlled
Entities are subject to Section 412 of the Code and Section 302 of ERISA. Each
other Employee Benefit Plan which is an employee pension benefit plan, as
defined in Section 3(2) of ERISA, has been determined to be qualified under
Section 401(a) or Section 403(a) of the Code and nothing has occurred which
would cause the loss of such qualification or the imposition of any tax
liability or penalty under the Code or ERISA on the Borrower.

(iii) Administration, Etc. Each Employee
Benefit Plan has been and is administered in accordance with its terms and
applicable law. To its knowledge, the Borrower has not breached any fiduciary
duty imposed on it under ERISA with respect to any Employee Benefit Plan, or
engaged in any prohibited transaction, as defined in Title I of ERISA or Section
4975 of the Code, involving any Employee Benefit Plan for which no exemption is
available.

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

(v) Claims. There are no claims (other than
routine claims for benefits), actions or lawsuits asserted or instituted with
respect to, and the Borrower has no knowledge of any threatened claims or
litigation with respect to, any Employee Benefit Plan or any fiduciary
thereof.

(j)Environmental Matters. The Borrower:

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

(ii) Except as disclosed in the Annual Report on Form
10-K of the CTG Resources, Inc. for the Borrower's 1999 fiscal year, has no
knowledge, after reasonable inquiry, that any real property owned or occupied by
the Borrower has ever been used either by the Borrower, any tenant or any
predecessor in interest, to generate, treat, store, transport, transfer, dispose
of, release or otherwise handle any Hazardous Material, except in material
compliance with all Environmental Laws.

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

(l)There is no condemnation or similar proceeding pending with
respect to or affecting any of the Borrower's properties, and the Borrower is
not aware that any such proceeding is contemplated.

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

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

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

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

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

(b)Preservation of Assets; Compliance with
Law.

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

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

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

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

(e)Financial Reporting. Furnish to the
Bank:

(i)Within ninety (90) days of the end of each
fiscal year, consolidated and consolidating Financial Statements certified
(without qualification) by independent certified public accountants selected by
the Borrower and approved by the Bank, showing the financial condition at the
close of such fiscal year, the results of operations during such year and
containing a statement to the effect that its independent public accountants
have examined the provisions of this Agreement and that no Event of Default, nor
any event which with notice or lapse of time, or both, would constitute such an
Event of Default, has occurred;

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

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

(iv)Promptly, from time to time such other
information regarding its operations, assets, business, affairs and financial
condition or the operations, assets, business, affairs and financial condition
of any of its subsidiaries, as the Bank may reasonably request.

(f)Visitation and Inspection Rights.
Permit agents or representatives of the Bank to inspect and to discuss the
affairs, finances and accounts of the Borrower with its officers, at any time
and from time to time during normal business hours upon twenty-four hours notice
to the Borrower, at the Borrower's reasonable expense after an Event of Default
(including, without limitation, the reasonable fees and expenses of such agents
or representatives), (i) the Collateral, and (ii) the Borrower's books and
records and to make abstracts or reproductions thereof and to duplicate, reduce
to hard copy or otherwise use any and all computer or electronically stored
information or data.

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

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

(i)Financial Covenants.

(i)For purposes of this Section, the following
terms shall have the following definitions and any undefined terms shall be
defined in accordance with GAAP:
(a)"Debt Service" shall mean for any relevant
accounting period the aggregate amount of principal and interest payments due
from the Borrower with respect to its Total Debt.

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

(c)"Interest Coverage Ratio" shall mean for
any relevant accounting period the ratio of (x) earnings before interest, taxes
and dividends (EBIT) plus amounts received under the Forward Equity Purchase
Agreement to (y) the aggregate amount of interest payments due from the Borrower
with respect to its Total Debt.

(d)"Senior Debt" shall mean the Loan, all debt
secured pari passu with the Loan pursuant to the Stock Pledge Agreement
and any other indebtedness of the Borrower owed to the Bank, including all debt
related to the Credit Facilities.

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

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

(ii)At all times during the period the Letter of
Credit is outstanding, the Borrower agrees to fulfill each of the following
financial covenants:
(a)Not permit the ratio of Total Debt to Tangible Net
Worth to exceed 2.25 to 1 on a consolidated basis, to be tested quarterly;

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

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

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

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

(k)Insurance. Keep all of its insurable
properties, now or hereafter owned, adequately insured at all times against loss
or damage by fire or other casualty to the extent customary with respect to like
properties of companies conducting similar businesses; maintain public
liability, business interruption and worker's compensation insurance insuring
the Borrower to the extent customary with respect to companies conducting
similar businesses, all by financially sound and reputable insurers.

(l)Environmental Indemnification. With respect
to environmental matters:

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

(ii)notify the Bank promptly in the event of any
Environmental Event, promptly forward to the Bank copies of any notices received
by the Borrower relating to any Environmental Event and promptly pay when due
any fine or assessment against the Borrower, the Bank or any such real property
relating to any Environmental Event, provided, however, the
Borrower may contest in good faith any such fine or assessment, and withhold
payment thereof, if the Borrower properly commences and thereafter diligently
pursues the contest.; and

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

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

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

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

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

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

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

(iii) indebtedness for which the Borrower has
received the prior written consent of the Bank, which consent shall not be
unreasonably withheld;

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

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

(vi) $45,000,000 in 6.99% Senior Secured Notes due
2009; and

(vii) $15,000,000 in 6.90% Senior Secured Notes due
2010.

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

(i) liens securing the payment of taxes, either not
yet due or the validity of which is being contested in good faith by appropriate
proceedings, and as to which it shall have set aside on its books adequate
reserves;

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

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

(iv) liens in favor of the Bank;

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

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

(c)Guarantees. Without the consent of the
Bank, which shall not be unreasonably withheld, guarantee, endorse or otherwise
in any way become or be responsible for obligations of any other person, except
endorsements of negotiable instruments for collection in the ordinary course of
business.

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

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

(f)Investments. Purchase, invest in or
otherwise acquire or hold securities, including, without limitation, capital
stock and evidences of indebtedness of, or make loans or advances to, but
excluding from such prohibition commercial paper rated A/2 or P-2 or better and
Euro-Time deposits, or enter into any arrangement for the purpose of providing
funds or credit to, any other person, except:

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

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

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

(h)Dividends. Pay any dividends, or make any
distribution of cash or property, or both, to holders of shares of its capital
stock, or directly or indirectly, redeem, purchase or otherwise acquire for a
consideration, any shares of its capital stock, of any class, unless such would
not significantly alter the Borrower's financial capabilities or cause a default
under a covenant contained in this Agreement.

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

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

(k)ERISA. (a) Fail, or permit any Commonly
Controlled Entity to fail, to comply with the requirements of ERISA with respect
to any Employee Benefit Plan; (b) permit any funded Employee Pension Plan to
lose its qualified status under Section 401(a) or 403(a) of the Code; (c) fail,
or permit any Commonly Controlled Entity to fail, to meet the minimum funding
standards of Section 302 of ERISA and Section 412 of the Code; (d) fail, or
permit any Commonly Controlled Entity to fail, to discharge any obligations to
the PBGC with respect to the termination of an Employee Pension Plan or to any
Multiemployer Plan on account of its withdrawal or partial withdrawal therefrom
or allow to exist any event or condition which presents a substantial risk of
the Borrower incurring liability to the PBGC by reason of the termination of any
Employee Pension Plan; (e) create or adopt, or permit any Commonly Controlled
Entity to create or adopt, any new Employee Pension Plan which would
significantly alter the Borrower's financial capabilities or cause a default
under a covenant contained in this Agreement without the prior written consent
of the Bank; (f) modify, or permit any Commonly Controlled Entity to modify, any
existing Employee Pension Plan so as to increase its obligations thereunder
which would significantly alter the Borrower's financial capabilities or cause a
default under a covenant contained in this Agreement, except in the ordinary
course of business consistent with past practice or with the prior written
consent of the Bank; (g) create or adopt any new Employee Welfare Plan or modify
any existing Employee Welfare Plan, or permit any Commonly Controlled Entity to
create or adopt any new Employee Welfare Plan or modify any existing Employee
Welfare Plan, to provide continuing benefits or coverage for any participant (or
beneficiary) after the termination of the participant's employment except as may
be required by COBRA, regulations thereunder or applicable state statutory law
which would significantly alter the Borrower's financial capabilities or cause a
default under a covenant contained in this Agreement or with the prior written
consent of the Bank; or (h) engage, or permit any Commonly Controlled Entity to
engage, in any transaction which would reasonably result in the assessment of a
direct or indirect liability to the Borrower or any Commonly Controlled Entity
under Section 409 or 502 of ERISA or Section 4975 of the Code.

(l)Negative Pledge. Without the Bank's consent, which shall
not be unreasonably withheld, (a) sell, transfer, pledge or assign any shares of
stock or other ownership interests in the Borrower or any of its subsidiaries or
(b) execute or agree to any further negative pledges of such shares of stock or
other ownership interests in the Borrower or any of its subsidiaries.

SECTION 9.Intentionally left blank.

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

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

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

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

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

(e) the occurrence of a default or event of default with
respect to any evidence of indebtedness of the Borrower (other than to the
Bank), in excess of one million dollars ($1,000,000), if the effect of such
default is to accelerate the maturity of such indebtedness or to permit the
holder thereof to cause such indebtedness to become due prior to the stated
maturity thereof, or if any such indebtedness of the Borrower is not paid when
due and payable, whether at the due date thereof or by acceleration or
otherwise;

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

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

(h) there shall be filed against the Borrower an
involuntary petition seeking reorganization of the Borrower or the appointment
of a receiver, trustee, custodian or liquidator of the Borrower or any material
part of its assets, or an involuntary petition under any bankruptcy,
reorganization or insolvency law of any jurisdiction, whether now or hereafter
in effect;

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

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

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

(l) the Borrower suffers or sustains a Material Adverse
Change or the Bank in good faith determines that the prospect of repayment of
the Borrower's obligations hereunder is materially impaired; or

(m) for any reason, the ratio of (x) the total
debt (the sum of all short term debt, current maturities of long term
indebtedness (CMLTD) and long-term debt) of CTG Resources, Inc. (the parent of
the Borrower) to (y) the capitalization of CTG Resources, Inc., exceeds 70% in
any two consecutive fiscal quarters;

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

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

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

If an Event of Default occurs, the Bank may exercise any one or more of
the following rights and remedies (all of which shall be cumulative):
(i)Notify the Trustee of such Event of Default and direct the
Trustee in writing to accelerate the Bonds pursuant to the Indenture, resulting
in the Trustee declaring the principal of such Bonds then outstanding and the
interest accrued thereon immediately due and payable under the Indenture and in
the Trustee drawing under the Letter of Credit by a Final Drawing, whereupon all
amounts drawn under the Letter of Credit, all Tender Advances, all interest
thereon and all other amounts payable hereunder or in respect hereof shall
automatically be forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Borrower.

(ii)Enforce its rights and remedies under the Security
Documents.

(iii)Enforce the provisions of this Agreement by legal
proceedings for the specific performance of any covenant or agreement contained
herein or for the enforcement of any other appropriate legal or equitable
remedy. The Bank may recover damages caused by any breach by the Borrower of the
provisions of this Agreement, including court costs, reasonable attorneys' fees
and other costs and expenses incurred in the enforcement of the obligations of
the Borrower hereunder.

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

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

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

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

SECTION 12. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing
and signed by the party to be charged. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. The Borrower will not agree or consent to any amendment to any of the
Related Documents without prior written consent of the Bank which shall not be
unreasonably withheld. The Borrower will not initiate or consent to any change
in the Mode applicable to the Bonds under the Indenture to provide for any Mode
other than a Weekly Mode (as defined in the Indenture).

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

PartyAddress

Borrower:The Energy Network, Inc.

100 Columbus Boulevard

Hartford, Connecticut 06103

Bank:Fleet National Bank

One Hundred Federal Street

Mail Stop: BOS 01-08-04

Boston, MA 02110

Attention: Thomas L. Rose,

 Vice President

SECTION 14. No Waiver: Remedies. No failure on the part of the
Bank to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The provisions of this Agreement are not in limitation of nor
limited by inconsistent or differing provisions contained in the Security
Documents or the indenture or elsewhere, and any rights or remedies hereunder
are cumulative with (and not in exclusion of) all other rights and remedies
hereunder, or arising under any other agreement or provided by law. The Borrower
specifically acknowledges that the Indenture may permit incurrence of additional
Indebtedness and additional liens, permits certain property dispositions and
contemplates other matters which are prohibited by this Agreement and agrees
that, as between the Borrower and the Bank, the provisions of this Agreement are
controlling over the provisions of the Indenture.

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

SECTION 16. Continuing Obligation: Survival. This Agreement is a
continuing obligation and shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors,
transferees and assigns; provided, however, that the Borrower may
not assign or delegate all or any part of this Agreement without the prior
written consent of the Bank. All representations and warranties of the Borrower
contained herein or made in connection herewith shall survive the making of this
Agreement or any payment made by the Bank under the Letter of Credit. The Bank
may, in accordance with applicable law, from time to time assign or grant
participations in this Agreement and/or the Letter of Credit issued hereunder.
Without limitation of the foregoing generality:
(i)The Bank may at any time pledge all or any portion of its
rights under this Agreement and the Related Documents to any of the 12 Federal
Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or the enforcement thereof shall release the Bank
from its obligations under this Agreement or Related Documents.

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

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

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

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

SECTION 19. Costs, Expenses and Taxes. The Borrower agrees to pay
on demand all reasonable costs and expenses (including, without limitation,
reasonable legal fees) of the Bank in connection with the preparation,
negotiation, execution, delivery, filing and recording of this Agreement and any
other documents which may be delivered in connection with this Agreement, and
any amendments or modifications of any of the foregoing, or in connection with
the examination, review or administration of any of the foregoing, or in
connection with the confirmation, perfection and/or protection of the security
interests granted or intended to be granted to the Bank, as well as the costs
and expenses (including, without limitation, the reasonable fees and expenses of
legal counsel) incurred by the Bank in connection with interpreting,
administering, preserving, enforcing or exercising any rights or remedies under
this Agreement, the Security Agreement and all other instruments and documents
to be delivered hereunder, all whether or not legal action is instituted. In
addition, the Borrower shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing and recording of this Agreement, the Security Agreement and such other
documents, and agrees to save the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees. The Borrower further agrees to pay, and to save the
Bank harmless from, any and all brokers' fees, investment bankers' fees and the
like which may be asserted in connection with any of the transactions
contemplated by this Agreement. The Bank did not have any broker or investment
banker in connection herewith. Any fees, expenses, other charges or other
payments which the Bank is entitled to receive from the Borrower hereunder shall
bear interest until paid at a fluctuating rate per annum which shall at all
times be equal to the lesser of (i) 4.00% per annum plus the Prime Rate or (ii)
the maximum rate permitted by then applicable law.

SECTION 20. Severability; Miscellaneous. Any provision of this
Agreement which is prohibited, unenforceable or not authorized in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction. Upon receipt of an
affidavit of an officer of the Bank as to the loss, theft, destruction or
mutilation of this Agreement or any Related Document which is not of public
record and, in the case of any such mutilation, upon surrender and cancellation
of such document, the Borrower will issue, in lieu thereof, a replacement
document of like tenor. All agreements between the Borrower and the Bank are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of maturity of the Bonds or otherwise, shall the
amount paid or agreed to be paid to the Bank for the use or the forbearance of
any Indebtedness exceed the maximum permissible under applicable law. In this
regard, it is expressly agreed that it is the intent of the Borrower and the
Bank, in the execution, delivery and acceptance of this Agreement, to contract
in strict compliance with the laws of the State of Connecticut. If, under any
circumstances whatsoever, performance or fulfillment of any provision of this
Agreement or any of the Related Documents at the time such provision is to be
performed or fulfilled shall involve exceeding the limit of validity prescribed
by applicable law, then the obligation so to be fulfilled shall be reduced
automatically to the limits of such validity, and if under any circumstances
whatsoever the Bank should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance of the Bank Obligations and
not to the payment of interest. The provisions of this Section shall control
every other provision of this Agreement and of each Related Document.

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

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

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

(c)Each of the parties hereto hereby waives trial by jury in any
action, proceeding or counterclaim brought by either of them against the other
on any matters whatsoever (including, without limitation, any action, proceeding
or counterclaim arising out of or in any way connected with this agreement, the
security agreement or any other agreements executed in connection herewith or
the administration thereof or any of the transactions contemplated herein or
therein). The provisions of this section have been fully discussed by the
parties hereto, and these provisions shall be subject to no exceptions. no party
has in any way agreed with or represented to any other party that the provisions
of this section will not be fully enforced in all instances.

SECTION 23. Table of Contents; Headings. The Table of Contents
and Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.

 

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

THE ENERGY NETWORK, INC.

 

By:

 Name:

 Title:

 

FLEET NATIONAL BANK

 

By:

 Name:

 Title:

EXHIBIT A

Project Description
The heating and cooling system providing for the
generation and transfer of steam and hot and chilled water located in the south
western section of Hartford, Connecticut, in the vicinity of Trinity College and
designated the SINA Project.

 

EXHIBIT B

Letter of Credit

(See Attached)

 

 

 
IRREVOCABLE DIRECT PAY LETTER OF CREDIT NO. *******

DATE OF ISSUE: January 14, 2000

 

	
ISSUING BANK:

Fleet National Bank

a Member of Fleet Financial

Group

c/o Fleet Pennsylvania Services

One Fleet Way

Scranton, PA 18507
	
APPLICANT:

The Energy Network, Inc.

100 Columbus Boulevard

Hartford, Connecticut 06144

	
 
	
BENEFICIARY:

State Street Bank and Trust Company,

as Trustee under Indenture of

Trust Agreement dated as of

January 1, 2000

Goodwin Square

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

	
 
	
Amount/Currency:

Up to USD $4,364,500.00

Up to Four Million Three Hundred Sixty-Four Thousand Five Hundred and
00/100ths US Dollars

	
 
	
Date and Place of Expiry:

January 14, 2001 at the

Issuing Bank

Dear Sirs:

At the request and for the account of our customer, The Energy Network,
Inc., 100 Columbus Boulevard, Hartford, Connecticut 06144 (the "Borrower"), we
hereby establish in your favor, as Trustee under the below-defined Indenture
pursuant to which $4,300,000 in aggregate principal amount of Connecticut
Development Authority Industrial Revenue Variable Rate Demand Bonds (The Energy
Network/SINA Project-2000 Series) (the "Bonds") are being issued by the
Connecticut Development Authority (the "Issuer"), this Irrevocable Direct Pay
Letter of Credit No. ******* in the amount of $4,364,500 (the
"Stated Amount"), of which (1) $4,300,000 (as from time to time reduced or
reinstated as provided in this Letter of Credit, the "Principal Component")
shall support the payment of the principal or portion of the purchase price
corresponding to principal of the Bonds, and (2) $64,500 (as from time to time
reduced or reinstated as provided in this Letter of Credit, the "Interest
Component") shall support the payment of up to 45 days' interest on the Bonds or
portion of the purchase price corresponding to interest at an assumed rate of
12% per annum, effective immediately and expiring at 5:00 P.M. (Scranton time)
on the below-defined Stated Termination Date or earlier as hereinafter provided.
Any payment pursuant to a drawing under this Letter of Credit will be made by us
with our own funds, and not from any separate funds of the Issuer or the
Borrower. As used herein, the term "Indenture" will be deemed to mean that
certain Indenture of Trust dated as of January 1, 2000 among the Issuer and
State Street Bank and Trust Company, as trustee (the "Trustee"). As used herein,
the term "Stated Termination Date" means January 14, 2001.

We hereby irrevocably authorize you to draw on us, in an aggregate amount not
to exceed the amount of this Letter of Credit set forth above and in accordance
with the terms and conditions and subject to the reductions in amount as
hereinafter set forth, (1) in one drawing per month (subject to the provisions
contained in the next following paragraph) by your draft (in the form of Annex A
attached hereto), payable at sight on a Business Day, and accompanied by your
written and completed certificate signed by you in the form of Annex B attached
hereto (such draft accompanied by such certificate being your "Interest
Drawing"), an amount not exceeding the Interest Component, computed at an
assumed rate of 12% per annum; (2) in one or more drawings by one or more of
your drafts (in the form of Annex A attached hereto), payable at sight on a
Business Day, and accompanied by your written and completed certificate signed
by you in the form of Annex C attached hereto (any such draft accompanied by
such certificate being your "Tender Drawing"), an aggregate amount not exceeding
the sum of the Principal Component and the Interest Component; (3) in one or
more drawings by one or more of your drafts (in the form of Annex A attached
hereto), payable at sight on a Business Day, and accompanied by your written and
completed certificate signed by you in the form of Annex D attached hereto (any
such draft accompanied by such certificate being your "Partial Redemption
Drawing"), an aggregate amount not exceeding the sum of the Principal Component
and the Interest Component; and (4) in a single drawing by your draft (in the
form of Annex A attached hereto), payable at sight on a Business Day, and
accompanied by your written and completed certificate signed by you in the form
of Annex E attached hereto (such draft accompanied by such certificate being
your "Final Drawing", and any Interest Drawing, Tender Drawing, Partial
Redemption Drawing or Final Drawing referred to herein being a "Drawing"), an
amount not exceeding the sum of the Principal Component and the Interest
Component. Each such Drawing shall cover principal of and/or accrued and unpaid
interest on the Bonds. "Business Day" means any day (i) that is not a Saturday,
Sunday or legal holiday, (ii) that is a day on which banks are not required or
authorized to close in Hartford, Connecticut or New York, New York, (iii) that
is a day on which banking institutions in each of the cities in which the
principal corporate trust office of the Trustee, the principal office of the
Remarketing Agent (as defined in the Indenture) and our principal office are
located are not required or authorized to remain closed and (iv) that is a day
on which the New York Stock Exchange is not closed.

If you shall draw on us by your Interest Drawing under clause (1) of the
first sentence of the immediately preceding paragraph and you shall not have
received from us within ten (10) calendar days from the date of such drawing a
written notice to the effect that a default exists under our reimbursement
agreement with the Borrower and that the Interest Component of the Letter of
Credit will not be reinstated, your right to draw on us in a single drawing by
your Interest Drawing under said clause (1) shall be automatically reinstated
and, effective the eleventh (11th) calendar day from the date of such drawing,
you shall again be authorized to draw on us by your Interest Drawing in
accordance with said clause (1); provided, however, that the Interest Component
of this Letter of Credit shall be decreased as hereinafter provided in
connection with amounts drawn pursuant to Partial Redemption Drawings and any
Tender Drawing. The automatic reinstatement of your right to draw on us by your
Interest Drawing shall be applicable to successive drawings by your Interest
Drawings under clause (1) of the first sentence of the immediately preceding
paragraph so long as this Letter of Credit shall not have terminated as set
forth below.

Upon our honoring any Tender Drawing or Partial Redemption Drawing presented
by you hereunder, (i) the Principal Component of this Letter of Credit and the
amounts available to be drawn hereunder by you with respect to principal of the
Bonds by any subsequent Drawing shall be automatically decreased by an amount
equal to the Principal Component of such Tender Drawing or Partial Redemption
Drawing, and (ii) the Interest Component of this Letter of Credit and the
amounts available to be drawn hereunder by you with respect to accrued and
unpaid interest on the Bonds by any subsequent Drawing shall be automatically
decreased by an amount equal to the portion of the Interest Component relating
to Bonds purchased or redeemed with the proceeds of such Tender Drawing or
Partial Redemption Drawing, but shall automatically reinstate as
follows:
(A) with respect to any decrease upon payment of any Tender Drawing, the
amount of the Principal Component of this Letter of Credit and the portion of
the Interest Component relating thereto shall be increased when and to the
extent, but only when and to the extent, that we are reimbursed by or on behalf
of the Borrower for any amount drawn hereunder by any Tender Drawing. Any amount
received by us from or on behalf of the Borrower in reimbursement of amounts
drawn hereunder by any Tender Drawing shall, if accompanied by your completed
certificate signed by you in the form of Annex F attached hereto, be applied to
the extent of the amount indicated therein to reimburse us for amounts drawn
hereunder by your Tender Drawings; and

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

Funds from us under this Letter of Credit are available to you against
presentation of your Interest Drawing, your Tender Drawing, your Partial
Redemption Drawing and your Final Drawing. Each sight draft drawn under this
Letter of Credit must bear on its face the clause "Drawn under Fleet National
Bank Irrevocable Direct Pay Letter of Credit No. *******." Each
Drawing shall be presented to us at the following address: [Fleet National Bank,
c/o Fleet Pennsylvania Services, Trade Services Operations, One Fleet Way,
Scranton, PA 18507, attention: Standby Letter of Credit Unit, Mail Code
PASCNO4E.] A Drawing shall be deemed to have been presented on the date actually
received by us. Presentation will also be deemed made upon our receipt of your
telecopier transmission to us (at Fax No. [(717) 330-4187)] of a facsimile of
the appropriate sight draft and drawing certificate properly completed and
signed, together with your undertaking to send to us by regular U.S. Mail, for
receipt on the next following Business Day, the signed originals of such
documents. Presentation may not be made in any manner other than as provided in
this paragraph. If we receive any of your Drawings (other than a Tender Drawing)
at our aforesaid office, all in strict conformity with the terms and conditions
of this Letter of Credit, not later than 12:00 noon (New York City time) on a
Business Day (provided that this Letter of Credit has not then terminated), we
will cause payment of same by 1:00 P.M. (New York City time) on the next
following Business Day in accordance with your payment instructions. If we
receive any of your Drawings (other than a Tender Drawing) at such office, all
in strict conformity with the terms and conditions of this Letter of Credit,
after 12:00 A.M. (New York City time) on a Business Day (provided that this
Letter of Credit has not then terminated), we will cause payment of same by
12:00 noon (New York City time) on the second succeeding Business Day in
accordance with your payment instructions. If we receive any Tender Drawing at
our aforesaid office, all in strict conformity with the terms and conditions of
this Letter of Credit, not later than 10:00 A.M. (New York City time) on any
Business Day (provided that this Letter of Credit has not then terminated), we
will cause payment of same by 2:00 P.M. (New York City time) on the same
Business Day in accordance with your payment instructions. If we receive any
Tender Drawing at such office, all in strict conformity with the terms and
conditions of this Letter of Credit, after 10:00 A.M. (New York City time) on
any Business Day (provided that this Letter of Credit has not then terminated),
we will cause payment of same by 12:00 noon (New York City time) on the next
following Business Day in accordance with your payment instructions. If
requested by you, payment under this Letter of Credit may be made by wire
transfer of Federal Reserve Bank of Boston funds to your account in a bank on
the Federal Reserve wire system or by deposit of same day funds into a
designated account that you maintain with us. As used in this Letter of Credit
"cause payment" shall mean (i) the deposit of same day funds into a designated
account with us, if such deposit is requested; or (ii) if wire transfer is
requested, the entry of an appropriate wire transfer in the Federal Reserve wire
system and the obtaining of a Federal Reserve reference number.

Upon the earliest of (i) our honoring your Final Drawing presented hereunder
accompanied by this Letter of Credit, (ii) 5:00 p.m. (New York City time) on the
date on which we receive a certificate signed by you accompanied by this Letter
of Credit stating that the Borrower has provided and you have accepted a
substitute or replacement "Credit Facility" (as defined in the Indenture) in
accordance with the terms of the Indenture that is effective the date of such
certificate, or (iii) the Stated Termination Date, this Letter of Credit shall
terminate.

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

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

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

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

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

Very truly yours,

FLEET NATIONAL BANK

 

By:____________________________________
Authorized Signature

 

 

Annex A

[Form of Sight Draft]

DRAWN UNDER FLEET NATIONAL BANK

IRREVOCABLE DIRECT PAY

LETTER OF CREDIT NO. *******

Date:____________

AMOUNT: _______________________

Pay at sight

Pay to the order of ________________________, as trustee

(U.S. $_________________)

Charge to account of Fleet National Bank

Irrevocable Direct Pay Letter of Credit No. ******* dated
January 14, 2000

TO:Fleet National Bank

c/o Fleet Pennsylvania Services

Trade Services Operations

One Fleet Way

Scranton, PA 18507

Attention: Standby Letter of Credit Unit

___________________, as Trustee

By:_________________________

 Authorized Officer

The signature below constitutes an endorsement of this sight draft.

___________________, as Trustee

By:_________________________

 Authorized Officer

Annex B

[Form of Certificate for Interest Drawing]

"CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT

OF UP TO 45 DAYS' INTEREST

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

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

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

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

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

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

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

[ ], as Trustee

 

By:________________________________"

Name:

Title:

Annex C

[Form of Certificate for Tender Drawing]

"CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF

THE PURCHASE PRICE OF BONDS TENDERED AT THE OPTION OF

THE HOLDERS THEREOF OR PURSUANT TO MANDATORY TENDER

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

 

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

(1)The Trustee is the Trustee under the Indenture.

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

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

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

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

(6)The amount of the Tender Drawing of which this Certificate is a part
was computed in compliance with the terms and conditions of the Bonds and the
Indenture and does not exceed the amount available to be drawn by the Trustee
under the Letter of Credit; the amount being drawn hereby in respect of interest
does not exceed the Interest Component and the amount being drawn hereby in
respect of principal does not exceed the Principal Component.

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

 

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

[ ], as Trustee

 

By:_____________________________"

Name:

Title:

Annex D

[Form of Certificate for Partial Redemption Drawing]

"CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT

OF PRINCIPAL AND UP TO 45 DAYS' INTEREST UPON PARTIAL

REDEMPTION

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

 

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

(1)The Trustee is the Trustee under the Indenture.

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

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

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

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

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

The Trustee acknowledges that, pursuant to the terms of the Letter of Credit,
upon the Bank's honoring the Partial Redemption Drawing of which this
Certificate is a part, the amount of the Letter of Credit and the amounts
available to be drawn by the Trustee thereunder by any subsequent Drawing are
automatically and permanently decreased by the amounts set forth in the Letter
of Credit. The Trustee acknowledges that pursuant to the immediately preceding
sentence, the Principal Component of the Letter of Credit is being permanently
reduced by $_____________ (the amount set forth in clause (i) of Paragraph 3
above) and the maximum amount to which the Interest Component can be reinstated
under the Letter of Credit is being permanently reduced by $___________ (the
product of (x) the amount set forth in clause (i) of Paragraph 3 above, times
(y) 0.12, times (z) 45/360).

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

[ ], as Trustee

 

By:__________________________"

 Name:

 Title:

Annex E

[Form of Certificate for Final Drawing]

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

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

 

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

(l)The Trustee is the Trustee under the Indenture.

(2)The Trustee is making a drawing under the Letter of Credit with
respect to a payment*

[ ] upon stated maturity,

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

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

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

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

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

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

(4)The amount of the Final Drawing of which this Certificate is a part
was computed in compliance with the terms and conditions of the Bonds and the
Indenture and does not exceed the amount available to be drawn by the Trustee
under the Letter of Credit; the amount being drawn hereby in respect of interest
does not exceed the Interest Component and the amount being drawn hereby in
respect of principal does not exceed the Principal Component.

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

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

 

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

[ ], as Trustee

 

By:_________________________"

 Name:

 Title:

Annex F

[Form of Reinstatement Certificate for Tender
Drawing]

"CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE UNDER
IRREVOCABLE DIRECT PAY LETTER OF CREDIT NO. *******

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

(1)The Trustee is the Trustee under the Indenture.

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

 

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

[ ], as Trustee

 

By:_______________________"

 Name:

 Title:

Annex G

[Form of Transfer Certificate]

"INSTRUCTION TO TRANSFER

 

[Date]

 

Fleet National Bank

c/o Fleet Pennsylvania Services

Trade Services Operations

One Fleet Way

Scranton, PA 18507

Attention: Standby Letter of

Credit Unit

Mail Code: PASCNO4E

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

Ladies and Gentlemen:

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

________________________________

[Name of Transferee]

__________________________________

[Address]

 

 

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

By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the Transferee and the Transferee shall have the
sole rights as beneficiary thereof, including sole rights relating to any
amendments of the Letter of Credit, whether increases in the amount to be drawn
thereunder, extensions of the expiration date thereof, or other amendments, and
whether such amendments now exist or are made after the date hereof. All
amendments of the Letter of Credit are to be delivered directly to the
Transferee without necessity of any consent of or notice to the undersigned
beneficiary. The undersigned hereby certifies that the Transferee has become
successor Trustee under the Indenture, and has accepted such appointment in
writing.

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

 

Very truly yours,

[ ], as predecessor Trustee

 

By:________________________________

 Authorized Officer

 

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

 

[Name of Transferee]

 

By:

Authorized Officer

EXHIBIT C

FORM REQUEST FOR EXTENSION OF TERMINATION DATE

OF LETTER OF CREDIT

[date]

Fleet National Bank

One Hundred Federal Street

Boston, Massachusetts 02110

Re:Request for Extension of Termination Date of Letter of
Credit

Ladies/Gentlemen:

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

1. The outstanding principal amount of the Bonds;

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

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

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

Very truly yours,

The Energy Network, Inc.

By:___________________________

 Name:__________________

 Title: ___________________

EXHIBIT D

List of Subsidiaries

EXHIBIT E

Litigation

 

EXHIBIT F

Financial Statement Certificate 

 

Fleet National Bank

One Hundred Federal Street

Boston, Massachusetts 02110

Attention: Thomas L. Rose, Vice President

Ladies and Gentlemen:

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

The undersigned hereby certifies that the amounts set
forth below, with abbreviated descriptions, to the best of my information and
belief, accurately present amounts required to be calculated by various
covenants of the Reimbursement Credit Agreement as of the last day of the fiscal
quarter/fiscal year noted above and all terms used herein have the identical
meaning as in the Reimbursement Credit Agreement.

1.7(i)(B)(i) - Total Debt to Tangible Net
Worth
Total Debt_______________

Tangible Net Worth_______________

Ratio of Total Debt to Tangible Net
Worth_______________

Maximum Permitted 2.25 to 1

2.7(i)(B)(ii) - Minimum Tangible Net Worth
Tangible Net Worth_______________

Minimum Required $30,000,000

3.7(i)(i)(b) Debt Service Coverage Ratio
EBITDA plus equity purchase
funds_______________

Debt Service_______________

Debt Service Coverage
Ratio_______________

Minimum Required 1.25 to 1

4.7(i)(i)(c) Interest Coverage Ratio

EBIT_______________

Interest expense_______________

Interest Coverage Ratio_______________

Minimum Required 2.5 to 1

5.10(m) CTG's Debt to Capitalization

CTG total debt ________________

CTG capitalization________________

CTG ratio of debt to
capitalization________________

Maximum Permitted 70%

6.10(n) S&P Rating of CTG Operating
Subsidiaries

Lowest Standard & Poor's debt rating of each

operating subsidiary of CTG________________

Minimum Required BBB

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

Sincerely,

THE ENERGY NETWORK, INC.

 

By:

Title:

EXHIBIT G

Existing Other Indebtedness and LiensEX10-158

 

 

 

 

CONNECTICUT DEVELOPMENT AUTHORITY

and

 

 

THE ENERGY NETWORK, INC.

 

 

           
             
             

LOAN AGREEMENT

 

 

 

 

Dated as of January 1, 2000

Connecticut Development Authority

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

(The Energy Network/SINA Project - 2000 Series)

 

 

 

TABLE OF CONTENTS

Page
ARTICLE I.

Section 1.1Definitions5

Section 1.2.Interpretation9

ARTICLE II.

Section 2.1.Representations by the Authority10

Section 2.2.Representations by the Borrower12

ARTICLE III.

Section 3.1.Loan Clauses14

Section 3.2.Other Amounts Payable and Other Obligations15

Section 3.3.Manner of Payment16

Section 3.4.Obligation Unconditional16

Section 3.5.Security Clauses16

Section 3.6.Issuance of Bonds17

Section 3.7.No Additional Bonds17

Section 3.8.Effective Date and Term17

Section 3.9.Use of Priority Amounts17

Section 3.10.Effect of Drawings Under Credit Facility17

Section 3.11. Borrower's Purchase of Bonds17

Section 3.12.Letter of Credit18

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

Section 3.14. Securities Laws19

ARTICLE IV.

Section 4.1.Completion of the Project20

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

Section 4.3.Taxes20

Section 4.4.Insurance21

Section 4.5.Compliance with Law21

Section 4.6.Maintenance and Repair22

Section 4.7.Disposition of Project by Borrower22

Section 4.8.Leasing of the Project22

Section 4.9.Project Equipment22

 

ARTICLE V.

Section 5.1.No Abatement of Payments Hereunder23

Section 5.2.Project Disposition Upon Condemnation, Damage or
Destruction23

Section 5.3.Application of Net Proceeds of Insurance or
Condemnation23

ARTICLE VI.

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

Section 6.2.Indemnification, Payment of Expenses, and Advances24

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

Section 6.4.Public Purpose Covenants27

Section 6.5.Further Assurances and Corrective Instruments28

Section 6.6.Covenant by Borrower as to Compliance with
Indenture28

Section 6.7.Assignment of Agreement or Note28

Section 6.8.Inspection28

Section 6.9.Default Notification28

Section 6.10.Covenant Against Discrimination28

Section 6.11.Authority Costs and Expenses29

Section 6.12.Securities Laws29

ARTICLE VII.

Section 7.1.Events of Default29

Section 7.2.Remedies on Default30

Section 7.3.Remedies on Public Purpose Default31

Section 7.4.No Duty to Mitigate Damages32

Section 7.5.Remedies Cumulative32

ARTICLE VIII.

Section 8.1.Optional Prepayment33

Section 8.2.Notice and Sources of Prepayment34

Section 8.3.Mandatory Prepayment on Public Purpose Default34

Section 8.4.Mandatory Prepayment on Taxability34

ARTICLE IX.

Section 9.1.Indenture34

Section 9.2.Benefit of and Enforcement by Bondholders35

Section 9.3.Force Majeure35

Section 9.4.Amendments35

Section 9.5.Notices35

Section 9.6.Prior Agreements Superseded36

Section 9.7.Execution of Counterparts37

APPENDICES

Appendix APromissory Note

 

Connecticut Development Authority

The Energy Network, Inc.

LOAN AGREEMENT

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

WITNESSETH THAT:

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

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

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

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

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

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

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

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

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

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

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

ARTICLE I.

DEFINITIONS AND INTERPRETATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"State" means the State of Connecticut.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE III.

THE LOAN

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE IV.

THE PROJECT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE V.

CONDEMNATION

DAMAGE AND DESTRUCTION

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

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

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

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

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

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

ARTICLE VI.

COVENANTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VII. 

EVENTS OF DEFAULT AND REMEDIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VIII.

PREPAYMENT PROVISIONS

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

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

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

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

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

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

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

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

ARTICLE IX.

GENERAL

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

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

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

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

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

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

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

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

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

Connecticut Development Authority

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Authorized Representative

The Energy Network, Inc.

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Name: 

Title: 

THE ENERGY NETWORK, INC.

PROMISSORY NOTE

 

 

$4,300,000January 14, 2000

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

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

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

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

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

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

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

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

The Energy Network, Inc.

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AUTHORITY ENDORSEMENT

 

 

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

 

 

Connecticut Development Authority

 

 

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Authorized Representative

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