Document:

Exhibit 10.2

     

    
      

    

    Exhibit
      10.2

    
      
        Southwest
          Bank

      

      PROMISSORY
        NOTE

      

      
        	
                Principal

                $1,500,000.00

              	
                Loan
                  Date

                11-01-2006

              	
                Maturity

                01-01-2007

              	
                Loan
                  No

                12030954-22003

              	
                Call
                  / Coll

                 

              	
                Account

                00000122565

              	
                Officer

                32405

              	
                Initials

              
	
                References
                  in
                  the shaded area are for Lender’s use only and do not limit the
                  applicability of this document to any particular loan or
                  item.

                Any
                  item
                  above containing “***” has been omitted due to text length
                  limitations.

              

      

      

      
        	
                Borrower:

              	
                Siboney
                  Learning Group Inc

                Siboney
                  Corporation

                325
                  Kirkwood Rd #300

                St
                  Louis, MO 63122

              	
                Lender:

              	
                Southwest
                  Bank of St. Louis

                Des
                  Peres

                13205
                  Manchester Road

                Des
                  Peres, MO 63131

              

      

    

    
      	 	 	 
	
              Principal
                Amount: $1,500,000.00

            	
              Initial
                Rate: 8.250%

            	
              Date
                of Note: November 1, 2006    
                

            

    

    

      PROMISE
        TO
        PAY. Siboney
        Learning
        Group Inc and Siboney Corporation (“Borrower”) jointly and severally promise to
        pay to Southwest Bank of St. Louis (“Lender”), or order, in lawful money of
        the United States of America, the principal amount of One Million Five Hundred
        Thousand & 00/100 Dollars ($1,500,000.00) or so much as may be
        outstanding, together with interest on the unpaid outstanding principal balance
        of each advance. Interest shall be calculated from the date of each advance
        until repayment of each advance.

       

      PAYMENT.
        Borrower
        will pay
        this loan in one payment of all outstanding principal plus all accrued unpaid
        interest on January 1, 2007. In addition, Borrower will pay regular monthly
        payments of all accrued unpaid interest due as of each payment date, beginning
        December 1, 2006, with all subsequent interest payments to be due on
        the same day of each month after that. Unless otherwise agreed or required
        by applicable law, payments will be applied to Accrued Interest, Credit Life
        Premiums, Principal, Late Charges, and Escrow. The annual interest rate for
        this
        Note is computed on a 365/360 basis; that is, by applying the ratio of the
        annual interest rate over a year of 360 days, multiplied by the outstanding
        principal balance, multiplied by the actual number of days the principal
        balance
        is outstanding. Borrower will pay Lender at Lender’s address shown above or at
        such other place as Lender may designate in writing.

       

      VARIABLE
        INTEREST RATE.
        The interest rate
        on this Note is subject to change from time to time based on changes in an
        index
        which is Lender’s Prime Rate (the “Index”). This is the rate Lender charges, or
        would charge, on 90-day unsecured loans to the most creditworthy corporate
        customers. This rate may or may not be the lowest rate available from Lender
        at
        any given time. Lender will tell Borrower the current Index rate upon Borrower’s
        request. The interest rate change will not occur more often than each Index
        rate
        change and will become effective without notice to the Borrower. If the Index
        becomes unavailable during the term of the Note, the Lender may substitute
        a
        comparable Index. Borrower understands that Lender may make loans based on
        other
        rates as well. The
        Index currently
        is 8.250% per annum. The interest rate to be applied to the unpaid principal
        balance during this Note will be at a rate equal to the index, resulting in
        an initial rate of 8.250% per annum.NOTICE:
        Under no circumstances will the interest rate on this Note be more than the
        maximum rate allowed by applicable law.

       

      PREPAYMENT.
        Borrower may pay
        without penalty all or a portion of the amount owed earlier than it is due.
        Early payments will not, unless agreed to by Lender in writing, relieve Borrower
        of Borrower’s obligation to continue to make payments of accrued unpaid
        interest. Rather, early payments will reduce the principal balance due. Borrower
        agrees not to send Lender payments marked “paid in full”, “without recourse”, or
        similar language. If Borrower sends such a payment, Lender may accept it
        without
        losing any of Lender’s rights under this Note, and Borrower will remain
        obligated to pay any further amount owed to Lender. All written communications
        concerning disputed amounts, including any check or other payment instrument
        that indicates that the payment constitutes “payment in full” of the amount owed
        or that is tendered with other conditions or limitations or as full satisfaction
        of a disputed amount must be mailed or delivered to: Southwest Bank of St.
        Louis, Des Peres, 13205 Manchester Road, Des Peres, MO 63131.

       

      LATE
        CHARGE.
        If a payment is
        more than 10 days late, Borrower will be charged 5.000% of the unpaid portion
        of
        the regularly scheduled payment.

       

      INTEREST
        AFTER DEFAULT.
        Upon default,
        including failure to pay upon final maturity, the interest rate on this
        Note  shall be increased by adding a 3.000 percentage point margin (“Default
        Rate
        Margin”). The
        Default Rate Margin shall also apply to each succeeding interest rate change
        that would have applied had there been no default. However, in no event will
        the
        interest rate exceed the maximum interest rate limitations under applicable
        law.

       

      DEFAULT.
        Each of the
        following shall constitute an event of default (“Event of Default”) under this
        Note.

       

      Payment
        Default.
        Borrower fails to
        make any payment when due under this Note.

       

      Other
        Defaults.
        Borrower fails to
        comply with or to perform any other term, obligation, covenant or condition
        contained in this Note or in any of the related documents or to comply with
        or
        to perform any term, obligation, covenant or condition contained in any other
        agreement between Lender and Borrower.

       

      Default
        in
        Favor of Third Parties.
        Borrower or any
        Grantor defaults under any loan, extension of credit, security agreement,
        purchase or sales agreement, or any other agreement, in favor of any other
        creditor or person that may materially affect any of Borrower’s property or
        Borrower’s ability to repay this Note or perform Borrower’s obligations under
        this Note or any of the related documents.

       

      
         

        
          
            
               

              
              

            

            
              
              

              
                

              

            

            
              
              

              PROMISSORY
                NOTE

              
                	
                        Loan
                          No: 12030954-22003-

                      	
                        (Continued)

                      	
                        Page 2 

                      

              

              

               

            

          

        

      

      False
        Statements.
        Any warranty,
        representation or statement made or furnished to Lender by Borrower or on
        Borrower’s behalf under this Note or the related documents is false or
        misleading in any material respect, either now or at the time made or furnished
        or becomes false or misleading at any time thereafter.

       

      Insolvency.
        The dissolution or
        termination of Borrower’s existence as a going business, the insolvency of
        Borrower, the appointment of a receiver for any part of Borrower’s property, any
        assignment for the benefit of creditors, any type of creditor workout, or
        the
        commencement of any proceeding under any bankruptcy or insolvency laws by
        or
        against Borrower.

       

    

    
      Creditor
        or
        Forfeiture Proceedings.
        Commencement of
        foreclosure or forfeiture proceedings, whether by judicial proceeding,
        self-help, repossession or any other method, by any creditor of Borrower
        or by
        any governmental agency against any collateral securing the loan. This includes
        a garnishment of any of Borrower’s accounts, including deposit accounts, with
        Lender. However, this Event of Default shall not apply if there is a good
        faith
        dispute by Borrower as to the validity or reasonableness of the claim which
        is
        the basis of the creditor or forfeiture proceeding and if Borrower gives
        Lender
        written notice of the creditor or forfeiture proceeding and deposits with
        Lender
        monies or a surety bond for the creditor or forfeiture proceeding, in an
        amount
        determined by Lender, in its sole discretion, as being an adequate reserve
        or
        bond for the dispute.

       

      Events
        Affecting Guarantor.
        Any of the
        preceding events occurs with respect to any guarantor, endorser, surety,
        or
        accommodation party of any of the indebtedness or any guarantor, endorser,
        surety, or accommodation party dies or becomes incompetent, or revokes or
        disputes the validity of, or liability under, any guaranty of the indebtedness
        evidenced by this Note. In the event of a death, Lender, at its option, may,
        but
        shall not be required to, permit the guarantor’s estate to assume
        unconditionally the obligations arising under the guaranty in a manner
        satisfactory to Lender, and, in doing so, cure any Event of
        Default.

       

      Change
        In
        Ownership.
        Any change in
        ownership of twenty-five percent (25%) or more of the common stock of
        Borrower.

       

      Adverse
        Change.
        A material adverse
        change occurs in Borrower’s financial condition, or Lender believes the prospect
        of payment or performance of this Note is impaired.

       

      Insecurity.
        Lender in good
        faith believes itself insecure.

       

      LENDER’S
        RIGHTS.
        Upon default,
        Lender may declare the entire unpaid principal balance under this Note and
        all accrued unpaid interest immediately due, and then Borrower will pay that
        amount.

       

      ATTORNEYS’
        FEES; EXPENSES.
        Lender may hire or
        pay someone else to help collect this Note if Borrower does not pay. Borrower
        will pay Lender that amount. This includes, subject to any limits under
        applicable law, Lender’s attorneys’ fees and Lender’s legal expenses whether or
        not there is a lawsuit, including attorneys’ fees and expenses for bankruptcy
        proceedings (including efforts to modify or vacate any automatic stay or
        injunction), and appeals. If not prohibited by applicable law, Borrower also
        will pay any court costs, in addition to all other sums provided by
        law.

       

      GOVERNING
        LAW.
        This Note will be
        governed by federal law applicable to Lender and, to the extent not preempted
        by
        federal law, the laws of the State of Missouri without regard to its conflicts
        of law provisions. This Note has been accepted by Lender in the State of
        Missouri.

       

      CHOICE
        OF
        VENUE.
        If there is a
        lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of
        the courts of St Louis County, State of Missouri.

       

      DISHONORED
        ITEM FEE.
        Borrower will pay
        a fee to Lender of $15.00 if Borrower makes a payment on Borrower’s loan and the
        check or preauthorized charge with which Borrower pays is later
        dishonored.

       

      RIGHT
        OF
        SETOFF.
        To the extent
        permitted by applicable law, Lender reserves a right of setoff in all Borrower’s
        accounts with Lender (whether checking, savings, or some other account).
        This
        includes all accounts Borrower holds jointly with someone else and all accounts
        Borrower may open in the future. However, this does not include any IRA or
        Keogh
        accounts, or any trust accounts for which setoff would be prohibited by law.
        Borrower authorizes Lender, to the extent permitted by applicable law, to
        charge
        or setoff all sums owing on the debt against any and all such accounts, and,
        at
        Lender’s option, to administratively freeze all such accounts to allow Lender to
        protect Lender’s charge and setoff rights provided in this
        paragraph.

       

      LINE
        OF
        CREDIT.
        This Note
        evidences a revolving line of credit. Advances under this Note, as well as
        directions for payment from Borrower’s accounts, may be requested orally or in
        writing by Borrower or by an authorized person. Lender may, but need not,
        require that all oral requests be confirmed in writing. Borrower agrees to
        be
        liable for all sums either: (A) advanced in accordance with the instructions
        of
        an authorized person or (B) credited to any of Borrower’s accounts with Lender.
        The unpaid principal balance owing on this Note at any time may be evidenced
        by
        endorsements on this Note or by Lender’s internal records, including daily
        computer print-outs. Lender will have no obligation to advance funds under
        this
        Note if: (A) Borrower or any guarantor is in default under the terms of this
        Note or any agreement that Borrower or any guarantor has with Lender, including
        any agreement made in connection with the signing of this Note;
        (B) Borrower or any guarantor ceases doing business or is insolvent; (C)
        any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
        such guarantor’s guarantee of this Note or any other loan with Lender; (D)
        Borrower has applied funds provided pursuant to this Note for purposes other
        than those authorized by Lender; or (E) Lender in good faith believes itself
        insecure.

       

      SUCCESSOR
        INTERESTS.
        The terms of this
        Note shall be binding upon Borrower, and upon Borrower’s heirs, personal
        representatives, successors and assigns, and shall inure to the benefit of
        Lender and its successors and assigns.

       

      GENERAL
        PROVISIONS.
        If any part of
        this Note cannot be enforced, this fact will not affect the rest of the Note.
        Lender may delay or forgo enforcing any of its rights or remedies under this
        Note without losing them. Each Borrower understands and agrees that, with
        or
        without notice to Borrower, Lender may with respect to any other Borrower
        (a)
        make one or more additional secured or unsecured loans or otherwise extend
        additional credit; (b) alter, compromise, renew, extend, accelerate, or
        otherwise change one or more times the time for payment or other terms of
        any
        indebtedness, including increases and decreases of the rate of interest on
        the
        indebtedness; (c) exchange, enforce, waive, subordinate, fail or decide not
        to
        perfect, and release any security, with or without the substitution of new
        collateral; (d) apply such security and direct the

       

      
         

        
           

          
            
              
                 

                
                

              

              
                
                

                
                  

                

              

              
                
                

                PROMISSORY
                  NOTE

                
                  	
                          Loan
                            No: 12030954-22003-

                        	
                          (Continued)

                        	
                          Page 3 

                        

                

                

                 

              

            

          

        

      

       

      order
        or manner of
        sale thereof, including without limitation, any non-judicial sale permitted
        by
        the terms of the controlling security agreements, as Lender in its discretion
        may determine; (e) release, substitute, agree not to sue, or deal with any
        one
        or more of Borrower’s sureties, endorsers, or other guarantors on any terms or
        in any manner Lender may choose; and (f) determine how, when and what
        application of payments and credits shall be made on any other indebtedness
        owing by such other Borrower. Borrower and any other person who signs,
        guarantees or endorses this Note, to the extent allowed by law, waive
        presentment, demand for payment, and notice of dishonor. Upon any change
        in the terms
        of this Note, and unless otherwise expressly stated in writing, no party
        who
        signs this Note, whether as maker, guarantor, accommodation maker or endorser,
        shall be released from liability. All such parties agree that Lender may
        renew
        or extend (repeatedly and for any length of time) this loan or release any
        party
        or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s
        security interest in the collateral; and take any other action deemed necessary
        by Lender without the consent of or notice to anyone. All such parties also
        agree that Lender may modify this loan without the consent of or notice to
        anyone other than the party with whom the modification is made. The obligations
        under this Note are joint and several.

    

    
       

      ORAL
        AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM
        ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH
        DEBT
        ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED
        THAT
        IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S))
        AND
        US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE
        REACH
        COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE
        AND
        EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER
        AGREE IN WRITING TO MODIFY IT.

      

      JURY
        WAIVER.
        Lender and
        Borrower hereby waive the right to any jury trial in any action, proceeding,
        or
        counterclaim brought by either Lender or Borrower against the
        other.

      

      PRIOR
        TO
        SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
        THIS
        NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER AGREES
        TO
        THE TERMS OF THE NOTE.

      

      BORROWER
        ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY
        NOTE.

      

      BORROWER:

    

    

    SIBONEY
      LEARNING
      GROUP INC

    

    
      	
              By: /s/ William
                D.
                Edwards                                              
                

              William
                D.
                Edwards, President of

              Siboney
                Learning Group Inc.

            	
              By:/s/ Rebecca
                Braddock                                                      
                

              Rebecca
                Braddock, Secretary of 

              Siboney
                Learning Group Inc.

            
	
               

            	
               

            
	
               

            	
               

            
	
               

            	
               

            
	
               

            	
               

            
	
              SIBONEY
                CORPORATION

            	
               

            
	
               

            	
               

            
	
              By: /s/ William
                D.
                Edwards                                                 
                

              William
                D.
                Edwards, President of

              Siboney
                Corporation

            	
              By:/s/ Rebecca
                Braddock                                                      
                

              Rebecca
                Braddock, Secretary of

              Siboney
                CorporationEXHIBIT 10.1
                                                                    ------------

                 THIRD MODIFICATION AND REAFFIRMATION AGREEMENT

           THIS AGREEMENT, dated as of August 28, 2006, by and between
BIRMINGHAM UTILITIES, INC. (the "Borrower"), a Connecticut corporation, having
its chief executive office at 230 Beaver Street, Ansonia, Connecticut,
BIRMINGHAM H2O SERVICES, INC. ("Birmingham H2O ") and EASTERN CONNECTICUT
REGIONAL WATER COMPANY, INC. ("Eastern" and collectively with Birmingham H2O,
the "Guarantor") each a Connecticut corporation having its chief executive
office at 230 Beaver Street, Ansonia, Connecticut and CITIZENS BANK OF
CONNECTICUT, a Connecticut stock savings bank with a place of business at 209
Church Street, New Haven, Connecticut (the "Bank").

                                   WITNESSETH:

           WHEREAS, the Borrower executed a Commercial Revolving Promissory Note
dated December 30, 2003 in the original principal amount of $7,000,000.00 (the
"Note"), pursuant to a Commercial Loan Agreement dated November 20, 2002, as
modified by a First Modification and Reaffirmation Agreement dated December 30,
2003, a Second Modification and Reaffirmation Agreement dated as of April 28,
2005, and certain letter agreements dated as of April 21, 2006 and July 26, 2006
(collectively the "Loan Agreement") in connection with a $7,000,000.00 revolving
loan facility (the "Revolving Loan"); and

           WHEREAS, the Revolving Loan is unconditionally guaranteed by
Birmingham H2O pursuant to its Guaranty dated December 30, 2003 (the "Birmingham
H2O Guaranty") and by Eastern pursuant to its Guaranty dated as of April 28,
2005 (the "Eastern Guaranty" and collectively with the Birmingham H2O Guaranty,
the "Guaranty"); and

           WHEREAS, in connection with the. Revolving Loan, Borrower and/or
Guarantor executed and delivered various other documents, instruments and/or
indemnities to Bank, each as modified by said First Modification and
Reaffirmation Agreement (hereinafter collectively, including without limitation
the Note, the Loan Agreement and the Guaranty, the "Loan Documents"); and

           WHEREAS, the Borrower has requested and the Bank has agreed to modify
certain terms of the Revolving Loan and extend the maturity date of the
Revolving Loan; and

           WHEREAS, the Bank has agreed to modify the terms and extend the
maturity date of the Revolving Loan on the condition that (a) the Borrower and
Guarantor modify and reaffirm the Loan Documents, (b) on the other conditions
set forth below; and

           WHEREAS, Guarantor acknowledges and agrees that it will receive
direct and indirect benefit from the modification and extension of the Revolving
Loan;

           NOW, THEREFORE, in consideration of the Revolving Loan and mutual
promises and covenants contained herein, the parties hereto agree as follows:

<PAGE>

I.         REAFFIRMATION OF NOTE BALANCE
           -----------------------------

           As of the date hereof, there is $6,405,000.00 of outstanding
principal balance due Bank under the Note. `

II.        Modification of Note, LOAN Agreement and Loan Documents
           -------------------------------------------------------

           A. The Note is amended in the following respects:

                      The Maturity Date provision set forth on page 2 of the
                      Note is amended to delete the date "April 27, 2006" and to
                      insert in lieu hereof the date "August 27, 2007".

           B. The Loan Agreement is amended in the following respects:

               1.   Paragraph 1.6, Maturity Date, is amended as follows:

                    "1.6 - Maturity Date. The Loan is payable in full on August
               27, 2007 (the "Revolving Loan Maturity Date")."

               2.   Paragraph 5.8, Financial Covenants, Subparagraph A, Net
                    Worth, is amended by deleting the numerical amount
                    "$12,000,000.00" and inserting in its place the amount
                    "$11,000,000.00".

               3.   Paragraph 5.8, Financial Covenants, Subparagraph B, Total
                    Liabilities to Net Worth, is amended by deleting the phrase
                    "1.30 to 1.00" and inserting in its place and stead the
                    phrase "2.25 to 1.00".

           C. The Loan Documents are modified to the extent required to
              incorporate the changed Maturity Date.

           In all other respects, the Note, the Loan Agreement, and the Loan
Documents are ratified and affirmed and continue in full force and effect.

III.       MODIFICATION AND REAFFIRMATION OF GUARANTY
           ------------------------------------------

           Birmingham H20 and Eastern each hereby consent to the modifications
and extension of the Maturity Date contained herein and hereby ratify and
confirm: (a) that it unconditionally reaffirms to Bank its obligations under
Birmingham H2O Guaranty, and (b) Borrower's Obligations include, without
limitation, the Note and Loan Documents, as modified hereby. Birmingham H2O and
Eastern each acknowledge that its reaffirmation and ratification of the Guaranty
is a material inducement for Bank to enter into this Agreement and that Bank
would not do so without said reaffirmation and ratification. This Agreement, the
Birmingham H20 Guaranty and the Eastern Guaranty are Birmingham H20's and
Eastern's valid and binding obligations, respectively, enforceable against
Birmingham H2O and Eastern in accordance with their terms.

                                        2
<PAGE>

IV.        REAFFIRMATION
           -------------

     A. Subject to the amendments and modifications set forth in this Agreement
and in the other documents and instruments executed and delivered this day in
connection with the Revolving Loan, (i) each Borrower and Guarantor adopts,
publishes and reaffirms all of the representations, warranties and covenants
(both affirmative and negative) and indemnities and waivers made by such
Borrower or Guarantor, as the case may be, contained in the Loan Agreement and
each of the Loan Documents, and (ii) all of the representations and warranties
set forth in the Loan Agreement and the Loan Documents are true and correct as
if made on behalf of each Borrower and Guarantor on the date hereof.

     B. Each Borrower and Guarantor represents, acknowledges and affirms that it
has no claim, defense, offset or counterclaim whatsoever against Bank with
respect to the Note, the Loan Agreement, any Loan Document, or any document
evidencing or securing any Loan or the modifications made herein, and that Bank
is relying on this representation in agreeing to said modifications. Each
Borrower and Guarantor further acknowledges that Bank would not agree to said
modifications unless each Borrower and Guarantor made the representations
contained in this paragraph and elsewhere in this Agreement freely and
willingly, after due consultation with its attorneys. Each Borrower and
Guarantor further represents that this Agreement and all of the Loan Documents
executed by it are its valid and binding obligations and enforceable in
accordance with their terms. Each Borrower and Guarantor further represents that
no Event of Default (as defined in the Loan Agreement or any of the Loan
Documents) has occurred nor, to its knowledge, has there occurred any event or
condition which, with notice or the passage of time or both would constitute an
Event of Default.

     C. In furtherance of the immediately preceding paragraph, the Borrower and
Guarantor hereby release and forever discharge the Bank, its officers, agents,
successors and assigns, from any and all claims, actions, causes of action,
obligations and liabilities of any kind known or unknown which the Borrower or
Guarantor or any of them has or may have as of the date hereof whether relating
to the Note, the Loan Agreement or any Loan Document or any of the transactions
contemplated hereby or consummated in connection herewith, or any negotiations
in connection with any of the foregoing.

     D. The parties agree that nothing contained herein shall in any way impair
the Note, the Loan Agreement or any other Loan Document, or any document
evidencing or securing the Revolving Loan. The parties farther agree that
nothing contained herein or modified pursuant to this Agreement shall affect or
be construed to release or affect the liability of any other party or parties
who may now or hereafter be liable under, pursuant to, or on account of any Loan
Document.

     E. Each Borrower and Guarantor affirms its understanding of the Events of
Default enumerated in Section 6 of the Loan Agreement.

                                        3
<PAGE>

     F. Except as modified by this Agreement and by the other documents and
instruments executed and delivered in connection herewith, the Loan Documents
including all Exhibits and Schedules thereto shall remain unchanged and in full
force and effect. Borrower shall keep and perform all of the terms and
agreements contained therein.

     G. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, successors and assigns. This Agreement
shall be construed in accordance with the laws of the State of Connecticut and
may only be amended in writing.

     H. This Agreement may be signed in one or more counterparts all of which
shall constitute one document.

     IN WITNESS WHEREOF, the parties hereto have caused this Third Modification
and Reaffirmation Agreement to be duly executed as of the day and year first
above written.

Signed, Sealed and Delivered             BANK:
In the Presence of:                      CITIZENS BANK OF CONNECTICUT

                                         By: /s/ Paul M. Canelli
-----------------------------                --------------------------
                                             Paul M. Canelli
                                             Its Vice President
-----------------------------

                                         BORROWER:
                                         BIRMINGHAM UTILITIES, INC.

                                         By: /s/ John S. Tomac
-----------------------------                --------------------------
                                             John S. Tomac
                                             Its President
-----------------------------

                                         BIRMINGHAM H2O SERVICES, INC.

                                         By: /s/ John S. Tomac
-----------------------------                --------------------------
                                             John S. Tomac
                                             Its President

                                       4
<PAGE>

           Personally appeared Paul M. Canelli, Vice President of Citizens Bank
of Connecticut, hereunto duly authorized, signer and sealer of the foregoing
instrument, and acknowledged the same to be his/her free act and deed, and the
free act and deedo of said banking association before me.

                                     Commissioner of the Superior Court Notary
                                     Public
                                     My Commission Expires:

STATE OF CONNECTICUT)
                    ) ss: New Haven, COUNTY OF NEW HAVEN)

           Personally appeared, John S. Tomac, President of Birmingham
Utilities, Inc., a Connecticut corporation, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed as such
president and the free ct and deed of said corporation, before me.

                        POST-CLOSING COMPLIANCE AGREEMENT
                        ---------------------------------

           The undersigned, as Borrower and Guarantor, respectively of that
certain loan from CITIZENS BANK OF CONNECTICUT ("Lender") to BIRMINGHAM
UTILITIES, INC. in the original principal amount of SEVEN MILLION AND 00/100
DOLLARS ($7,000,000.00) originally made December 30, 2003, and modified of even
date herewith (the "Loan"), hereby represents, covenants and agrees as follows:

           1. The Loan was modified this date by Lender in accordance with
applicable Lender lending practices and upon documents prepared for that purpose
by the law firm of Susman, Duffy & Segaloff, P.C.

           2. The undersigned acknowledges that in modifying the Loan, Lender
has required the proper documentation of the Loan in compliance with Lender
required standards and practices for a loan of this type.

           3. The undersigned acknowledges the potential for errors and
omissions in the preparation and closing of a transaction of this type, and
agree that good faith and fair dealing oblige it to assist in remedying such
errors and omissions where necessary in order to insure that the documentation
of the Loan conform to the intent of the parties and the requirements of
Lender's practices.

           NOW THEREFORE, in order to induce Lender to make and modify the Loan,
and in consideration therefor, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the undersigned does hereby
covenant and agree as follows:

           The undersigned shall exercise the utmost good faith and due
diligence in complying with the reasonable requests of Lender, or

                                        5
<PAGE>

any Holder of the note which evidences the Loan, which Lender or Holder may
hereafter deem necessary and/or appropriate to accomplish the proper
documentation of the Loan, including, without limitation, the execution or
re-execution of any documents as may be reasonably required.

           IN WITNESS WHEREOF, I have hereunto set my hand and seal this 28th
day of August 2006.

                                         BIRMINGHAM UTILITIES, INC.

                                         By: /s/ John S. Tomac
                                             --------------------------
                                             John S. Tomac
                                             Its President

                                        6
<PAGE>

                                         BIRMINGHAM H2O SERVICES, INC.

                                         By: /s/ John S. Tomac
                                             --------------------------
                                             John S. Tomac
                                             Its President

                                         EASTERN CONNECTICUT REGIONAL
                                         WATER COMPANY, INC.

                                         By: /s/ John S. Tomac
                                             --------------------------
                                             John S. Tomac
                                             Its President

                                             August 28, 2006

STATE OF CONNECTICUT)
                    ) ss: New Haven,
COUNTY OF NEW HAVEN)

           Personally appeared, John S. Tomac, President of Birmingham
Utilities, Inc., a Connecticut corporation, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed as such
president and the free act and deed of said corporation, before me.

Commissioner of the Superior Court
Notary Public                            Commission Expires: August 28, 2006

STATE OF CONNECTICUT)
                    ) ss: New Haven,
COUNTY OF NEW HAVEN)

           Personally appeared, John S. Tomac, President of Birmingham H2O
Services, Inc., a Connecticut corporation, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed as such
president and the free, act and deed of said corporation, before me.

Commissioner of the Superior Court
Notary Public                            Commission Expires: August 28, 2006

STATE OF CONNECTICUT)
                    ) ss: New Haven,
COUNTY OF NEW HAVEN)

           Personally appeared, John S. Tomac, President of Eastern Connecticut
Regional Water of the foregoing instrumert rider

                                         Commissioner of the Superior Court
                                         Notary Public
                                         My Commission Expires:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]