LOAN AGREEMENT

[EXECUTION COPY]
EXHIBIT 4.25

CONNECTICUT DEVELOPMENT AUTHORITY

and

THE CONNECTICUT WATER COMPANY

LOAN AGREEMENT

Dated as of October 1, 2005

Connecticut Development Authority
$10,000,000 Water Facilities Revenue Bonds
(The Connecticut Water Company Project — 2005A Series)

Exhibit 4.25

TABLE OF CONTENTS

Exhibit 4.25

-ii-

Exhibit 4.25

Connecticut Development Authority

The Connecticut Water Company

LOAN AGREEMENT

      THIS LOAN AGREEMENT , made and dated as of October 1, 2005, by and between the CONNECTICUT DEVELOPMENT AUTHORITY , a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut, and THE CONNECTICUT WATER COMPANY , a corporation organized and existing under the laws of the State of Connecticut,

WITNESSETH THAT:

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

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

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

      WHEREAS , by resolution adopted on May 19, 2004, in furtherance of the purposes of the Act, the Authority has accepted the application of The Connecticut Water Company (the “Borrower”) for assistance in the financing of various capital projects located in the State of Connecticut; and

Exhibit 4.25

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

      WHEREAS , the Authority has by a further resolution adopted on August 17, 2005 authorized the issuance of not to exceed $10,000,000 principal amount of its Water Facilities Revenue Bonds (The Connecticut Water Company Project — 2005A Series) for the purpose of providing funds for the Projects; and

      WHEREAS , pursuant to such resolution the Bonds (as hereinafter defined) are to be secured by an Indenture of Trust of even date herewith, by and between the Authority and U.S. Bank National Association, as Trustee; and

      WHEREAS , the Bonds shall be special obligations of the Authority, payable solely from the revenues or other receipts, funds or monies 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 acquisition, construction and installation 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; and

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

      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 monies 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):

Exhibit 4.25

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:

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

     “Agreement” means this Loan Agreement and any amendments and supplements hereto.

     “Attributable Debt” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with generally accepted accounting principles.

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

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

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

     “Bonds” means the $10,000,000 Water Facilities Revenue Bonds (The Connecticut Water Company Project — 2005A Series) authorized and issued pursuant to Section 2.3 of the Indenture.

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

     “Bond Insurance Policy” means the municipal bond new issue insurance policy issued by the Bond Insurer that guaranties the payment when due of the principal of and interest on the Bonds as provided therein.

     “Bond Insurer” means Financial Guaranty Insurance Company, a New York stock insurance company, or any successor thereto.

Exhibit 4.25

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

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

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

     “Completion Date” means the date of completion of the Project as specified and established in accordance with Section 4.3 hereof.

     “Debt” means (A) indebtedness of the Borrower or a Significant Subsidiary for borrowed money evidenced by a bond, debenture, note or other written instrument or agreement by which the Borrower or a Significant Subsidiary is obligated to repay such borrowed money and (B) any guaranty by the Borrower or a Significant Subsidiary of any such indebtedness of another Significant Subsidiary. “Debt” does not include, among other things, (w) indebtedness of the Borrower or a Significant Subsidiary under any installment sale or conditional sale agreement or any other agreement relating to indebtedness for the deferred purchase price of property or services, or (x) any trade obligation (including obligations under power or other commodity purchase agreements and any hedges or derivatives associated therewith), or other obligations of the Borrower or a Significant Subsidiary in the ordinary course of business, (y) obligations of the Borrower or a Significant Subsidiary under any lease agreement (including any lease intended as security), whether or not such obligations are required to be capitalized on the balance sheet of the Borrower or a Significant Subsidiary under generally accepted accounting principles.

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

     “Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts.

     “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.

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

Exhibit 4.25

Person” as such terms are defined in the Code. For purposes of this definition, the term owner means the Beneficial Owner of the Bonds so long as the Book-Entry System is in effect.

     “DPUC” means the State Department of Public Utilities Control.

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

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

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

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

     “Indenture” means the Indenture of Trust relating to the Bonds, 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 April 1, 2006 and each April 1 and October 1 thereafter on which interest is payable on the Bonds as provided in the forms of the Bonds.

     “Insurance Agreement” means the Insurance Agreement, dated as of October 1, 2005, by and between the Borrower and the Bond Insurer.

     “Lien” means any mortgage, deed of trust, pledge, security interest, encumbrance, easement, lease, reservation, restriction, servitude, charge or similar right and any other lien of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof, and any defect, irregularity, exception or limitation in record title or, when the context so requires, any lien, claim or interest arising from any of the foregoing.

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

     “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) incurred by the Trustee in the collection thereof.

Exhibit 4.25

     “Net Tangible Assets” means the total amount of the Borrower’s assets determined on a consolidated basis in accordance with generally accepted accounting principles as of a date determined pursuant to Section 6.2 of this Agreement, less (i) the sum of the Borrower’s consolidated current liabilities determined in accordance with generally accepted accounting principles, and (ii) the amount of the Borrower’s consolidated assets classified as intangible assets, determined in accordance with generally accepted accounting principles, including, but not limited to, such items as goodwill, trademarks, trade names, patents, and unamortized debt discount and expense and regulatory assets carried as an asset on the Borrower’s consolidated balance sheet.

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

     (a) monies 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 monies to such payment on the date so specified; or

     (b) obligations of the kind described in subsection 12.1(B) 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 monies in an amount sufficient to effect payment of the principal or applicable Redemption Price of such Bond, together with accrued interest on such Bond to the payment or redemption date, which payment or redemption date shall be specified in irrevocable instructions given to the Trustee to apply such obligations to such payment on the date so specified; or

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

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

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

     “Permitted Encumbrances” mean, as of any particular date, (i) liens for taxes not yet due and payable, (ii) any lien created by this Agreement and the Indenture, (iii) utility, access and other easements and rights-of-way, that will not interfere with or impair the value or use of the Project as herein provided,

Exhibit 4.25

(iv) any mechanic’s, laborer’s, materialman’s, supplier’s or vendor’s lien or right in respect thereof if payment is not yet due and payable and for which statutory lien rights exist, (v) such minor defects, irregularities, easements, and rights-of- way (including agreements with any railroad the purpose of which is to service the railroad siding) as normally exist with respect to property similar in character to the Project and which do not materially impair the value or use of the property affected thereby for the purpose for which it was acquired hereunder, and (vi) any mortgage, lien, security interest or other encumbrance to which the Authority and the Bond Insurer may consent as provided in Section 4.8 hereof.

     “Principal Property” means any property of the Borrower or any Significant Subsidiary.

     “Principal User” means any principal user of the Project within the meaning of Section 144(a)(2)(B) of the Code, including without limitation any person who is a greater-than-10-percent-owner (or if none, the person(s) who holds the largest ownership interest in the Project), lessee or user of more than 10% of the Project measured either by occupiable space or fair rental value under any formal or informal agreement or, under the particular facts and circumstances, anyone who is a principal customer of the Project. The term “principal customer” means any person, who purchases output of the Project under a contract if the percentage of output taken or to be taken by such person, multiplied by a fraction the numerator of which is the term of such contract and the denominator of which is the economic life of the Project, exceeds 10%. In the case of a person who purchases output of an electric or thermal energy, gas, water or other similar facility, such person is a principal customer if the total output purchased by such person during any one year period beginning with the date the facility is placed in service is more than 10 percent of the facility’s output during each such period. Co-owners or co-lessees who are shareholders in a corporation or who are collectively treated as a partnership subject to subchapter K under section 761(a) of the Code are not treated as Principal Users merely by reason of their ownership of corporate or partnership interests.

     “Project” means the Borrower’s interest in the Project Realty and other interests in the real property, and in all Project Equipment wherever located and whether now owned or hereafter acquired or refinanced in whole or in part with the proceeds of the Bonds and any additions and accessions thereto, substitutions therefor and replacements, improvements, extensions and restorations thereof, described in the appendices hereto, as amended from time to time in accordance with this Agreement.

     “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, financed in whole or in part with the proceeds of the Bonds, and any additions and accessions thereto, substitutions therefor and replacements thereof, including, without limitation the Project Equipment described in Appendix C hereto, as amended from time to time in accordance herewith.

     “Project Realty” means the realty and other interests in the real property financed in whole or in part from the proceeds of the Bonds, together with all replacements, improvements, extensions, substitutions, restorations and additions thereto which are made pursuant hereto, including without limitation, the Project Realty described in Appendix B, as amended from time to time in accordance herewith.

     “Rating Agency” shall mean S&P, Moody’s and Fitch, or, in each case, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, 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 and with the prior written consent or approval of the Bond Insurer.

Exhibit 4.25

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

     “Related Person” means, with respect to any Principal User, a person which is a related person (as defined in Section 144(a)(3) of the Code, and by reference to Sections 267, 707(b) and 1563(a) of the Code, except that 50% is to be substituted for 80% in Section 1563(a)).

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

     “Significant Subsidiary” shall have the meaning specified in Rule 1-02(w) of Regulation S-X under the Securities Act of 1933, as amended.

     “State” means the State of Connecticut.

     “Substantial User” means any substantial user of the Project within the meaning of Section 147(a) of the Code.

     “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.

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

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

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

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

      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.

Exhibit 4.25

     (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) 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.

Exhibit 4.25

ARTICLE II
REPRESENTATIONS AND WARRANTIES

Section 2.1. Representations by the Authority .

     The Authority represents and warrants that:

     (1) It 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, the Indenture 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 monies 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, the Indenture 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 Indenture and 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 by the Indenture, or which, in any way, would adversely affect the validity of the Bonds, or the validity of or

Exhibit 4.25

enforceability of the Indenture or 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 Indenture.

     (8) 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 contemplated by this Agreement.

     (9) The representations of the Authority set forth in the Tax Regulatory Agreement 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 has been duly incorporated and validly exists as a corporation under the laws of the State of Connecticut, is not in violation of any provision of its certificate of incorporation or its 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 of 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 material 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 corporate powers of the Borrower and have been duly authorized and approved by the board of directors of 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.

Exhibit 4.25

     (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 other than the fees to various parties to the transactions contemplated hereby which have been heretofore paid or provided.

     (7) The Project is included within the definition of a “project” in the Act. The Borrower intends the Project to continue to be an authorized project under the Act during the Term of this Agreement.

     (8) All amounts shown in Schedule D of the Tax Regulatory Agreement are eligible costs of a project financed by bonds issued by the Authority under the Act, and may be financed by amounts in the various Accounts of the Project Fund under the Indenture. None of the proceeds of the Bonds will be used directly or indirectly as working capital or to finance inventory.

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

     (10) The Borrower intends to proceed with due diligence to complete the Project pursuant to Section 4.1 hereof. The Borrower has obtained, or will obtain, or will cause to be obtained, all necessary material approvals from any and all governmental agencies requisite to the Project, and has also obtained or will cause to be obtained, all material 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 that it will complete the Project, or cause the Project to be 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, among other factors, has induced the Borrower to locate the Project in the State. The Borrower does not presently intend to lease 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) The Borrower has good and marketable title in fee simple to the Project Realty subject only to Permitted Encumbrances and to irregularities or defects in title which may exist which do not materially impair the use of such properties in the Borrower’s business.

     (15) The Borrower has good and merchantable title to the Project Equipment owned by the Borrower as of the date hereof, free and clear of liens and encumbrances, other than Permitted Encumbrances.

Exhibit 4.25

     (16) As of the date of 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.

     (17) The Borrower will use all of the proceeds of the Bonds to finance the Project Costs.

Exhibit 4.25

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 $10,000,000 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 the fifth Business Day immediately preceding 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 then on deposit in the Debt Service Fund and available therefor, shall be equal to the amount payable on such due date with respect to the Bonds as provided in Section 5.3 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 Financing Documents, together with interest thereon at the then applicable rate as set forth herein in Section 6.4(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) Anything herein to the contrary notwithstanding, any amount at any time held in the Principal and Interest Account of the Debt Service Fund by the Trustee pursuant to this Section shall be credited against the next succeeding loan payment obligation of the Borrower as provided in subsection 3.1(C) hereof. If, on any due date for payments with respect to the Bonds, the balance in the Debt Service Fund is insufficient to make such payments, the Borrower agrees forthwith to pay to the Trustee by no later than 11:00 a.m. on such due date the amount of the deficiency. If at any time the amount held by the Trustee in the Debt Service Fund shall be sufficient to pay or provide for the payment of the Bonds in accordance with Section 12.1 of the Indenture, the Borrower shall not be obligated to make any further payments under the foregoing provisions.

      Section 3.2. Other Amounts Payable . (A) The Borrower hereby further expressly agrees to pay to the Trustee as and when the same shall become due, (i) an amount equal to the initial and annual fees of the Trustee for the ordinary services of the Trustee rendered and its ordinary expenses incurred under the Indenture, including fees and expenses as Paying Agent and the reasonable fees and expenses of Trustee’s counsel, including fees and expenses as registrar and in connection with preparation and delivery of new Bonds upon exchanges or transfers, (ii) the reasonable fees and expenses of the Trustee and any Paying Agents on the Bonds for acting as paying agents as provided in the Indenture, including reasonable fees and expenses of its counsel, (iii) the reasonable fees and charges of the Trustee for extraordinary services rendered by it and extraordinary expenses incurred by it under the Indenture, including reasonable counsel fees and expenses, and (iv) reasonable fees and expenses of Bond Counsel and the Authority for any future action requested of either.

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

Exhibit 4.25

     (C) The Borrower agrees to pay all Rebatable Arbitrage (and penalties, if any) due to the United States of America pursuant to Section 148 (f) of the Code.

     (D) The Borrower also agrees to pay directly to the Authority on the date of issuance and delivery of the Bonds and on the second anniversary date of the date of issuance and delivery of the Bonds and each anniversary date thereafter, 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.

     (E) The Borrower shall pay or reimburse the Bond Insurer for any and all charges, fees, costs, and expenses that the Bond Insurer may reasonably pay or incur in connection with the following: (i) the administration, enforcement, defense, or preservation of any rights or security hereunder or under any other transaction documents; (ii) the pursuit of any remedies hereunder, under any other transaction document, or otherwise afforded by law or equity, (iii) any amendment, waiver, or other action with respect to or related to this Agreement or any other transaction document whether or not executed or completed; (iv) the violation by the Borrower of any law, rule, or regulation or any judgment, order or decree applicable to it; (v) any advances or payments made by the Bond Insurer to cure defaults of the Borrower under the transaction documents; or (vi) any litigation or other dispute in connection with this Agreement, any other transaction document, or the transactions contemplated hereby or thereby, other than amounts resulting from the failure of the Bond Insurer to honor its payment obligations under the Bond Insurance Policy. The Bond Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver, or consent proposed in respect of this Agreement or any other transaction document. The obligations of the Borrower to the Bond Insurer shall survive discharge and termination of this Agreement.

      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 Financing Documents 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. Securities 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 Financing Documents to which it is a party (except its rights under Sections 6.4, 6.6, 7.2(A)(2) and 7.3 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.

Exhibit 4.25

      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 August 17, 2005, 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. 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 6.4 and 6.5 hereof, however, shall survive the expiration of this Agreement in accordance with the provisions of such Sections.

     (B) Within 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 3.8. No Additional Bonds . No Additional Bonds on a parity with the Bonds may be issued under the Indenture.

Exhibit 4.25

ARTICLE IV
THE PROJECT

      Section 4.1. Completion of the Project . (A) The Borrower agrees that it will undertake and complete the Project for the purposes and in the manner intended hereby and 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 in the manner herein provided.

     (B) The Borrower may modify, alter and amend the plans for the Project from time to time and at any time, provided that such modifications, alterations and amendments do not materially impair the operation of the Project as water facilities under the Act and provided that no material modifications, alterations or amendments shall be made unless the Borrower shall have theretofore delivered to the Trustee an opinion of Bond Counsel to the effect that such amendment, modification or alteration and the expenditure of amounts from the Project Fund in connection therewith will not cause interest on the Bonds to be subject to federal income taxation, together with any written representations or certifications of fact made by or on behalf of the Borrower upon which such counsel has relied in rendering such opinion.

     (C) 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