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 1.1 Definitions 5 Section...

EX10-158

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 1.1 Definitions 5 Section 1.2. Interpretation 9 ARTICLE II. Section 2.1. Representations by the Authority 10 Section 2.2. Representations by the Borrower 12 ARTICLE III. Section 3.1. Loan Clauses 14 Section 3.2. Other Amounts Payable and Other Obligations 15 Section 3.3. Manner of Payment 16 Section 3.4. Obligation Unconditional 16 Section 3.5. Security Clauses 16 Section 3.6. Issuance of Bonds 17 Section 3.7. No Additional Bonds 17 Section 3.8. Effective Date and Term 17 Section 3.9. Use of Priority Amounts 17 Section 3.10. Effect of Drawings Under Credit Facility 17 Section 3.11. Borrower's Purchase of Bonds 17 Section 3.12. Letter of Credit 18 Section 3.13. Requirements for Delivery of an Alternative Credit Facility. 18 Section 3.14. Securities Laws 19 ARTICLE IV. Section 4.1. Completion of the Project 20 Section 4.2. No Warranty Regarding Condition, Suitability or Cost of Project 20 Section 4.3. Taxes 20 Section 4.4. Insurance 21 Section 4.5. Compliance with Law 21 Section 4.6. Maintenance and Repair 22 Section 4.7. Disposition of Project by Borrower 22 Section 4.8. Leasing of the Project 22 Section 4.9. Project Equipment 22 ARTICLE V. Section 5.1. No Abatement of Payments Hereunder 23 Section 5.2. Project Disposition Upon Condemnation, Damage or Destruction 23 Section 5.3. Application of Net Proceeds of Insurance or Condemnation 23 ARTICLE VI. Section 6.1. The Borrower to Maintain its Status as a Corporation; Conditions under which Exceptions Permitted 23 Section 6.2. Indemnification, Payment of Expenses, and Advances 24 Section 6.3. Incorporation of Tax Regulatory Agreement; Payments Upon Taxability 26 Section 6.4. Public Purpose Covenants 27 Section 6.5. Further Assurances and Corrective Instruments 28 Section 6.6. Covenant by Borrower as to Compliance with Indenture 28 Section 6.7. Assignment of Agreement or Note 28 Section 6.8. Inspection 28 Section 6.9. Default Notification 28 Section 6.10. Covenant Against Discrimination 28 Section 6.11. Authority Costs and Expenses 29 Section 6.12. Securities Laws 29 ARTICLE VII. Section 7.1. Events of Default 29 Section 7.2. Remedies on Default 30 Section 7.3. Remedies on Public Purpose Default 31 Section 7.4. No Duty to Mitigate Damages 32 Section 7.5. Remedies Cumulative 32 ARTICLE VIII. Section 8.1. Optional Prepayment 33 Section 8.2. Notice and Sources of Prepayment 34 Section 8.3. Mandatory Prepayment on Public Purpose Default 34 Section 8.4. Mandatory Prepayment on Taxability 34 ARTICLE IX. Section 9.1. Indenture 34 Section 9.2. Benefit of and Enforcement by Bondholders 35 Section 9.3. Force Majeure 35 Section 9.4. Amendments 35 Section 9.5. Notices 35 Section 9.6. Prior Agreements Superseded 36 Section 9.7. Execution of Counterparts 37

APPENDICES

Appendix A Promissory 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, xxxxx 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 0000 Xxxxx Xxxxxx, 00 Xxxxxx Xxxxxx, 00 Xxxxxx Xxxxxx, 00 Xxxxxx Xxxxxx and 000 Xxxxxxxxxx Xxxxxx, 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 Xxxxx'x 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

(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 0000 Xxxxx Xxxxxx, 00 Xxxxxx Xxxxxx, 00 Xxxxxx Xxxxxx, 00 Xxxxxx Xxxxxx and 000 Xxxxxxxxxx Xxxxxx, 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 XxXxxx-Xxxx 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.

(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.

(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 Xxxxx'x and "P-1" as a short term rating by Xxxxx'x;

(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.

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 000 Xxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxxx 00000, Attention: Program Manager - Loan Administration; if to the Borrower, at The Energy Network, Inc., X.X. Xxx 0000, 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Treasurer; if to the Trustee, at Xxxxxxx Square, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Corporate Trust; and if to the Bank, at Fleet National Bank, Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, 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

By ; & nbsp; &nb sp; ;

Authorized Representative

The Energy Network, Inc.

By ; & nbsp; &nb sp; ;

Name:

Title:

THE ENERGY NETWORK, INC.

PROMISSORY NOTE

$4,300,000 January 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.

By: &n bsp; &nbs p; &n bsp;

Name: &n bsp; &nbs p; &n bsp;

Title: &n bsp; &nbs p; &n bsp;

AUTHORITY ENDORSEMENT