PROMISSORY NOTE AND SINGLE ADVANCE TERM LOAN SUPPLEMENT

THIS PROMISSORY NOTE AND SUPPLEMENT (this “Promissory Note and Supplement”) to the Master Loan Agreement dated as of October 29, 2012 (the “MLA”) is entered into as of June 1, 2016, between THE CONNECTICUT WATER COMPANY, Clinton, Connecticut, a Connecticut corporation (the “Company”) and CoBANK, ACB, a federally chartered instrumentality of the United States (“CoBank”).

SECTION 1.    The Term Loan. On the terms and conditions set forth in the MLA and this Promissory Note and Supplement, CoBank agrees to make a loan to the Company in an amount not to exceed $30,000,000 (the “Commitment”). The Commitment shall expire at 12:00 noon (Company’s local time) on June 3, 2016, or on such later date as CoBank may, in its sole discretion, authorize in writing.

SECTION 2.    Purpose. The purpose of the Commitment is to: (A) refinance short-term debt of the Company; (B) finance closing costs hereunder; and (C) finance capital expenditures relating to its water business.

SECTION 3.    Availability. Notwithstanding Section 2 of the MLA and provided that each of the conditions precedent set forth herein and in the MLA have been satisfied, the loan will be made available to the Company on a date to be agreed upon by the parties (the “Closing Date”) upon written request of an authorized officer of the Company. The loan will be made available in a single advance by CoBank wire transferring the proceeds of the loan to CDA.

SECTION 4.    Interest. The Company agrees to pay interest on the unpaid balance of the loan at 4.36% per annum. Interest shall be calculated on the actual number of days the loan is outstanding on the basis of a year consisting of 360 days. Interest shall be: (1) calculated quarterly in arrears on the last day of each February, May, August, and November and on the final maturity date of the loan; and (2) due and payable quarterly in arrears by the 20th day of each March, June, September, and December and on the final maturity date of the loan.

SECTION 6.    Promissory Note. The Company promises to repay the unpaid principal balance and any unpaid accrued interest of the loan on May 20, 2036, or such later date as CoBank may, in its sole discretion, authorize in writing. In addition to the above, the Company promises to pay interest on the unpaid principal balance of the loan at the times and in accordance with the provisions set forth above. If any installment due date is not a Business Day, then such installment shall be due and payable on the next Business Day and, in the case of principal, interest shall continue to accrue thereon until paid.

SECTION 7.    Prepayment. Subject to the broken funding surcharge provision of the MLA (Section 12 (A)), the Company may prepay all or any portion of the loan. Unless otherwise agreed, all prepayments will be applied to such balances, fixed or variable, as CoBank shall specify.

SECTION 8.    Security. Notwithstanding the provisions of the MLA, including, without limitation, Section 4(A) and (B) of the MLA, the Company’s obligations hereunder shall be unsecured, except that this Promissory Note and Supplement shall be guaranteed in accordance with Section 4(B) of the MLA and any related guaranty agreement.

SECTION 9.    Additional Conditions Precedent. In addition to the conditions precedent set forth in the MLA, CoBank’s obligation to make the loan is subject to the conditions precedent that CoBank and Connecticut Water Service, Inc. shall have entered into an Amendment to the guaranty agreement in form and content acceptable to CoBank.

SECTION 10.    Additional Affirmative Covenants. In addition to the affirmative covenants set forth in the MLA, the Company agrees that while this Promissory Note and Supplement is in effect and unless CoBank otherwise consents in writing, the Company will immediately, secure the Company’s obligations hereunder and, to the extent related hereto, the MLA as specifically provided in the Security, Guarantee(s) and Title Insurance Section (Section 4) of the MLA, in the event that the Company secures any of its obligations with another lender, bond holder or bond issuer, excluding liens granted in connection with purchase money indebtedness.

SECTION 11.     Counterparts and Electronic Delivery. This Promissory Note and Supplement may be executed in counterparts (and by different parties in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single agreement. In addition, this Promissory Note and Supplement may be delivered by electronic means.

IN WITNESS WHEREOF, the parties have caused this Promissory Note and Supplement to the MLA to be executed by their duly authorized officers as of the date shown above.

By: /s/ Shannon Smith                    By: /s/ David C. Benoit                

Name: Shannon Smith                    Name: David C. Benoit                

Title: Assistant Corporate Secretary            Title: Senior Vice President – Finance and CFO