<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 10, 1997
REGISTRATION NO. 333-32949
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO.1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ENERGYNORTH NATURAL GAS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW HAMPSHIRE 4920 02-0209312
(STATE OR OTHER (PRIMARY STANDARD
JURISDICTION OF INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR CLASSIFICATION CODE IDENTIFICATION NO.)
ORGANIZATION) NUMBER)
1260 ELM ST., P.O. BOX 329
MANCHESTER, NEW HAMPSHIRE 03105-0329
(603) 625-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROBERT R. GIORDANO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ENERGYNORTH NATURAL GAS, INC.
1260 ELM STREET, P.O. BOX 329
MANCHESTER, NEW HAMPSHIRE 03105-0329
(603) 625-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
RICHARD A. SAMUELS, ESQUIRE JAMES L. NOUSS, JR., ESQUIRE
MCLANE, GRAF, RAULERSON & MIDDLETON BRYAN CAVE LLP
PROFESSIONAL ASSOCIATION ONE METROPOLITAN SQUARE
900 ELM STREET, P.O. BOX 326 211 N. BROADWAY, SUITE 3600
MANCHESTER, NH 03105-0326 ST. LOUIS, MO 63102-27500
(603) 625-6464 (314) 259-2000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
----------------
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
CROSS-REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY
ITEMS OF PART I
OF FORM S-1
<TABLE>
<CAPTION>
FORM S-1 ITEM AND CAPTION LOCATION IN PROSPECTUS
------------------------- ----------------------
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front Cover
Page of Prospectus.................. Front Cover Page; Prospectus Cover
Page
2. Inside Front and Outside Back Cover
Pages of Prospectus................. Available Information; Table of
Contents
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges.. Prospectus Summary; Risk Factors;
The Company; Selected Financial
Data
4. Use of Proceeds...................... Use of Proceeds
5. Determination of Offering Price...... Not Applicable
6. Dilution............................. Not Applicable
7. Selling Security Holders............. Not Applicable
8. Plan of Distribution................. Underwriting
9. Description of Securities to be
Registered.......................... Description of Bonds
10. Interests of Named Experts and
Counsel............................. Legal Matters; Experts
11. Information with Respect to the
Registrant.......................... Prospectus Summary; Selected
Financial Data; Management's
Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Certain
Relationships and Related
Transactions; Management;
Description of Bonds; Financial
Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities......................... Not Applicable
</TABLE>
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 10, 1997
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
LOGO
$22,000,000
ENERGYNORTH NATURAL GAS, INC.
FIRST MORTGAGE BONDS DESIGNATED AS
% SERIES E BONDS DUE SEPTEMBER 30, 2027
-----------
The First Mortgage Bonds Designated as % Series E Bonds Due September 30,
2027 (the "Bonds") offered hereby are being issued by EnergyNorth Natural Gas,
Inc. (the "Company"). Interest on the Bonds is payable semiannually on each
March 31 and September 30 beginning March 31, 1998.
The Bonds will be issued in the form of one Global Security (a "Global
Security") registered in the name of the nominee of The Depository Trust
Company, as Depository and such nominee will be the sole holder of the Bonds.
An owner of an interest in the Bonds ("Beneficial Owner") will not be entitled
to the delivery of a definitive security except in limited circumstances. A
Beneficial Owner's interest in the Global Security will be indicated on, and
transfers will be effected only through, records maintained by the Depository
and its participants. See "DESCRIPTION OF BONDS."
The Bonds are redeemable at any time within 60 days after request on behalf
of a deceased holder, subject to an annual maximum principal amount limitation
of $25,000 per holder and $500,000 in the aggregate. At the option of the
Company, the Bonds will be redeemable, in whole or in part, on or after
September 30, 2002, at 104% of the principal amount, declining by 1% of the
principal amount per year for each of the succeeding four years, plus accrued
interest. There will be no sinking fund established to redeem the Bonds. See
"DESCRIPTION OF BONDS."
There is currently no market for the Bonds and there is no assurance that one
will develop. The Company does not intend to list the Bonds for trading on any
national securities exchange. After application of a portion of the net
proceeds from the sale of the Bonds to redeem certain other outstanding bonds
issued by the Company, the principal amount of the Company's secured
indebtedness having an equal priority lien on the Company's property will be
$21,000,000. See "USE OF PROCEEDS." The Bonds are secured by a lien on certain
assets of the Company and are not secured by assets of EnergyNorth, Inc.
("ENI"), the Company's parent corporation, or of EnergyNorth Propane, Inc.
("ENPI"), ENI's other principal subsidiary. Purchasers of the Bonds will have
no claim on the assets of ENI or ENPI.
-----------
SEE "RISK FACTORS" COMMENCING ON PAGE 5 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Bond.................................. 100% $ $
- --------------------------------------------------------------------------------
Total..................................... $22,000,000 $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The Company has agreed to indemnify Edward D. Jones & Co., L.P. (the
"Underwriter") against certain civil liabilities under the Securities Act
of 1933. See "UNDERWRITING."
(2) Before deduction of expenses payable by the Company estimated at $124,367.
-----------
The Bonds are offered by the Underwriter, subject to prior sale, when, as,
and if issued to and accepted by the Underwriter subject to approval of certain
legal matters by counsel for the Underwriter and certain other conditions. The
Underwriter reserves the right to withdraw, cancel, or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the Global
Security will be made through the facilities of the Depository in New York, New
York, on or about September , 1997 against payment therefor in immediately
available funds.
EDWARD D. JONES & CO., L.P.
The date of this Prospectus is September , 1997
<PAGE>
[Photo depicts map of the EnergyNorth Natural Gas, Inc. Service Territory]
The Company will provide to each Beneficial Owner of the Bonds upon the
written request of any such person a copy of annual reports on Form 10-K and
quarterly reports on Form 10-Q free of charge. Such requests should be
addressed to the Manager, Public and Investor Relations of the Company, P.O.
Box 329, Manchester, NH 03105-0329.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE BONDS,
INCLUDING OVERALLOTMENT, STABILIZING TRANSACTIONS, AND THE PURCHASE OF BONDS
TO COVER SHORT POSITIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
The information set forth below should be read in conjunction with and is
qualified in its entirety by the detailed information and financial statements
contained in this Prospectus.
THE OFFERING
Issuer.................... EnergyNorth Natural Gas, Inc.
Securities Offered........ $22,000,000 aggregate principal amount of First
Mortgage Bonds Designated as % Series E Bonds Due
September 30, 2027.
Risk Factors.............. The Company's operations and the Bonds are subject
to certain risks. See "RISK FACTORS."
Maturity.................. September 30, 2027.
Interest Payment Dates.... Each March 31 and September 30, beginning March 31,
1998 until redemption or maturity.
Collateral........... The Bonds are secured by a first mortgage on
substantially all of the real and personal property
of the Company. The Bonds rank equally and ratably
with all other of the Company's first mortgage
bonds. The Bonds are not secured by assets of ENI
or ENPI, and purchasers of Bonds will have no claim
on the assets of ENI or ENPI.
Use of Proceeds........... The proceeds will be used to retire all existing
First Mortgage Bonds Designated as 8.67% Series A
General and Refunding Mortgage Bonds Due 2002 and
to repay the Company's short-term debt. See "USE OF
PROCEEDS."
Deceased Beneficial
Owner's Redemption
Privilege................ At the option of any deceased Beneficial Owner's
representative, interests in the Bonds are
redeemable at 100% of the principal amount, plus
accrued interest, at any time, subject to the
maximum principal amount of $25,000 per deceased
Beneficial Owner and $500,000 in the aggregate for
all deceased Beneficial Owners, during the initial
period ending September 30, 1998 and for each
twelve-month period thereafter. See "DESCRIPTION OF
BONDS--Limited Right of Redemption Upon Death of a
Beneficial Owner."
Company's Redemption
Privilege................ The Bonds are not subject to redemption at the
option of the Company prior to September 30, 2002.
Thereafter, the Bonds will be redeemable, in whole
or in part, at the Company's option, at 104% of the
principal amount, declining by 1% of the principal
amount per year for each of the succeeding four
years, plus accrued interest. See "DESCRIPTION OF
BONDS-- Redemption at Option of the Company."
Trustee................... Bank of New Hampshire.
3
<PAGE>
SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT RATIOS AND PERCENTAGES)
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED
JUNE 30, 1997 FISCAL YEARS ENDED SEPTEMBER 30,
------------- ----------------------------------
1996 1995 1994
(UNAUDITED) ---------- ---------- ----------
<S> <C> <C> <C> <C>
Total operating revenues..... $92,004 $ 77,510 $ 69,817 $ 88,150
Operating income............. 8,217 8,200 6,540 8,096
Net income................... 5,437 5,427 3,745 4,837
Interest charges............. 3,540 3,508 4,049 3,675
Ratio of earnings to fixed
charges(1).................. 3.28x 3.27x 2.27x 2.83x
Ratio of earnings to fixed
charges pro forma(1)(2)..... 3.03x
Long-term debt (including
capital lease obligations
and excluding current
maturities) as percentage of
total capitalization........ 36.6% 39.6% 42.9% 44.4%
</TABLE>
- --------
(1) For the purpose of computing these ratios, earnings consist of net income
plus income taxes and fixed charges. Fixed charges consist of total
interest, amortization of debt discount, premium and expense, and the
estimated portion of interest implicit in rentals.
(2) Assuming that the Bonds had been outstanding throughout the period and that
the indebtedness to be retired from the proceeds of the sale of the Bonds
had not been outstanding and assuming a 7.5% per annum interest rate on the
Bonds.
CAPITALIZATION AT JUNE 30, 1997
(IN THOUSANDS, EXCEPT PERCENTAGES)
<TABLE>
<CAPTION>
AS
ACTUAL ADJUSTED(2)
------------- -------------
<S> <C> <C> <C> <C>
Long-term debt (including capital lease
obligations and excluding current
maturities)(1)................................. $26,789 36.6% $44,066 48.7%
Common shareholder's equity..................... 46,429 63.4 46,429 51.3
------- ----- ------- -----
Total capitalization.......................... $73,218 100.0% $90,495 100.0%
======= ===== ======= =====
</TABLE>
- --------
(1) Current maturities of long-term debt were $1,663.
(2) Adjusted for the sale of the Bonds at par. The Company targets an average
ratio of 50% long-term obligations to total capitalization and anticipates
retaining future earnings or receiving capital contributions from its
shareholders to achieve this ratio.
4
<PAGE>
RISK FACTORS
Prospective purchasers should carefully consider, together with the other
information contained and incorporated by reference in this Prospectus, the
following risk factors before purchasing the Bonds offered hereby. Prospective
purchasers should note, in particular, that this Prospectus contains forward-
looking statements and that actual results could differ materially from those
contemplated by such statements. Prospective purchasers should also refer to
the factors discussed under "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS--Factors That May Affect Future Results."
These considerations are not intended to represent a complete list of the
general or specific risks that may affect the Bonds or the Company. It should
be recognized that other risks may be significant, presently or in the future,
and the risks set forth below may affect the Bonds or the Company to a greater
extent than indicated.
FACTORS AFFECTING THE GAS UTILITY INDUSTRY
The natural gas utility industry is subject to numerous regulations and
uncertainties, many of which may affect the Company in varying degrees.
Industry issues which have affected or may affect the Company from time to
time include the following:
. Fluctuations in demand attributable to weather (see "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--
General");
. New business and operational requirements for gas supply resulting from
changes in federal regulation of interstate pipelines;
. Competition with other sources of gas supply;
. Competition with alternative sources of energy (see "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--
General");
. Uncertainty in achieving an adequate return on invested capital due to
inflation;
. Difficulty in obtaining rate increases from regulatory authorities in
adequate amounts and on a timely basis;
. Attrition in earnings produced by the combination of increasing expenses
and the costs of new capital which may exceed allowed rates of return;
. The availability of pipeline transportation capacity necessary to secure
supplies of gas;
. Bypass of the Company's intrastate gas transportation system by customers
installing private transmission mains from the interstate transmission
system (see "BUSINESS--Deregulation");
. Volatility in the price of natural gas;
. Increases in construction and operating costs;
. Environmental regulations and costs of environmental remediation;
. The possibility of state regulation requiring the unbundling of various
elements of gas distribution and service;
. Rates and margin for gas transportation service and customer choice of
transportation service without gas sales service (see "BUSINESS--
Competition");
. The possibility of change from cost-based rate regulation; and
. Uncertainty in the projected rate of growth of customers' energy
requirements.
ABSENCE OF PUBLIC MARKET FOR THE BONDS
There is no public trading market for the Bonds, and the Company does not
intend to apply for listing of the Bonds on any national securities exchange
or for quotation of the Bonds on any automated dealer quotation system. The
Company has been advised by the Underwriter that it presently intends to make
a market in the Bonds after the consummation of the offering contemplated
hereby, although the Underwriter is under no obligation to do so, and may
discontinue any market-making activities at any time without any notice. No
assurance can be given as to the liquidity of the trading market for the Bonds
or that an active public market for
5
<PAGE>
the Bonds will develop. If an active public trading market for the Bonds does
not develop, the market price and liquidity of the Bonds may be adversely
affected. If the Bonds are traded, they may trade at a discount from their
initial offering price, depending on prevailing interest rates, the market for
similar securities, performance of the Company, and certain other factors.
EFFECT OF WEATHER
The Company's business is influenced by seasonal weather conditions. The
amount of gas sold and transported for central and space heating purposes and,
to a lesser extent, water heating is directly related to the ambient air
temperature. Consequently, more gas is sold and transported during the winter
months than during the summer months, resulting in seasonal differences in
revenues. Because the Company's rates are set based on normal temperatures,
warmer than normal temperatures will have an adverse impact on the Company's
revenues and earnings. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS."
ENVIRONMENTAL MATTERS
The Company and its predecessors owned or operated several facilities for
the manufacture of gas from coal, a process used through the mid-1900's. The
costs of remediation of by-products produced by that process at two of those
former manufactured-gas facility sites are uncertain, and it is uncertain
whether investigation or remediation of by-product disposal related to other
of the manufactured-gas facilities owned or operated by the Company and its
predecessors will be required in the future and, if required, what the cost of
such investigation or remediation will be. Moreover, although substantially
all of such costs have been allowed to be recovered through rates (over a
period of years but without recovery of carrying costs on the unamortized
balance), and the Company anticipates that such substantial recovery will
continue to be allowed, future proceedings could result in allowance of less
than substantially all such costs, and there can be no assurance that such
costs will not have a material adverse impact on the Company. See "BUSINESS--
Legal Proceedings and Environmental Matters."
THE COMPANY
EnergyNorth Natural Gas, Inc. is a regulated utility engaged in the
purchase, transportation, and sale of natural gas for residential, commercial,
and industrial use in New Hampshire. The Company distributes natural gas
through an underground pipeline distribution network to more than 75 percent
of the natural gas customers in New Hampshire. The Company's approximately
68,000 natural gas customers are located in 27 cities and towns with a
combined population of approximately one-half million residents. The Company
is headquartered in Manchester, New Hampshire and is a wholly-owned subsidiary
of EnergyNorth, Inc. ("ENI"), a public utility holding company, exempt from
registration under the Public Utility Holding Company Act of 1935, also
headquartered in Manchester, New Hampshire. The Company is one of two
principal operating subsidiaries of ENI. ENI's other principal subsidiary is
EnergyNorth Propane, Inc. ("ENPI"), a non-regulated business which sells and
delivers liquefied petroleum gas ("propane" or "LP") to customers both within
and beyond the natural gas pipeline network. See "BUSINESS-General." The
mailing address of the Company's principal executive office is 1260 Elm
Street, P.O. Box 329, Manchester, New Hampshire 03105-0329, and its telephone
number is (603) 625-4000.
USE OF PROCEEDS
The proceeds to the Company from the sale of the Bonds, net of the estimated
underwriting discount and expenses of approximately $125,000, are estimated to
be approximately $20,995,000. The Company intends to use the net proceeds to
retire all of its outstanding First Mortgage Bonds Designated as 8.67% Series
A General and Refunding Mortgage Bonds Due 2002 (approximately $5,900,000) and
to repay its short-term borrowings (approximately $14,500,000), which short-
term borrowings have a weighted average interest rate as of June 30, 1997 of
approximately 6.55% per annum. Any balance of net proceeds will be used for
working capital purposes. Pending such applications, the net proceeds may be
temporarily invested in short-term investment grade securities.
6
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected financial data of the Company. The
selected financial data as of and for the five fiscal years ended September
30, 1996 was derived from the audited financial statements of the Company. The
selected financial data as of and for the twelve months ended June 30, 1997
was derived from unaudited financial statements of the Company which, in the
opinion of management, contain all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation thereof. The results of
operations for the twelve months ended June 30, 1997 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 1997. The financial data set forth below should be read in
conjunction with the Financial Statements and the Notes thereto and
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS " included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED
JUNE 30, 1997 FISCAL YEARS ENDED SEPTEMBER 30,
------------- -----------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Total operating
revenues............... $ 92,004 $ 77,510 $ 69,817 $ 88,150 $ 78,495 $73,067
Net income.............. 5,437 5,427 3,745 4,837 4,960 3,392
Cash dividends.......... 3,651 3,635 3,368 3,199 3,072 2,854
Total assets............ 122,084 122,706 112,287 111,685 104,091 98,212
Capitalization:
Common stockholder's
equity............... 46,429 41,357 38,065 37,688 34,860 32,172
Long-term debt
(including capital
lease obligations)... 26,789 27,102 28,577 30,143 31,786 33,040
Total
capitalization..... 73,218 68,459 66,642 67,831 66,646 65,212
Short-term debt
(including current
portion of long-term
debt).................. 7,163 11,206 3,195 1,709 4,428 4,378
Ratio of earnings to
fixed charges.......... 3.28x 3.27x 2.27x 2.83x 2.88x 2.24x
</TABLE>
- --------
Reclassifications are made periodically to previously issued financial data
to conform to the current presentation.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's rates charged to customers are regulated by the New Hampshire
Public Utilities Commission ("NHPUC"). The NHPUC is required by New Hampshire
law to allow the Company to charge rates that are just and reasonable, such
that the Company is compensated for the cost of providing service and allowed
a reasonable rate of return on its investment. The Company regularly assesses
whether it is earning a reasonable return and files for rate increases when it
determines that it is not being permitted to earn a reasonable return.
The Company generates revenues primarily through the sale and transportation
of natural gas. The Company's gas sales are divided into two categories: firm,
whereby the Company must supply gas to customers on demand; and interruptible,
whereby the Company may, generally during cooler months, discontinue service
to high volume industrial customers. Sales of gas to interruptible customers
do not materially affect the Company's operating income because all margin on
such sales is returned to the Company's firm customers.
The Company's tariff of rates includes cost of gas adjustment ("CGA") rates
which provide for increases and decreases in the rates charged for gas to
reflect estimated changes in the cost of gas. Although changes in CGA rates
affect revenues, they do not affect total margin because the CGA is a tariff
mechanism designed to provide dollar-for-dollar recovery of gas costs. Amounts
recovered under CGA rates are reconciled semiannually against actual costs,
and future CGA rates are adjusted accordingly.
The Company's sales are responsive to colder weather because the majority of
its firm customers use natural gas for space heating purposes. The Company
measures weather through the use of degree days. A degree day is calculated by
subtracting the average temperature for the day from 65 degrees Fahrenheit.
The "normal" number of degree days during any period is calculated based upon
a rolling approximate thirty-year average number of degree days during such
period. The table below discloses degree day data as recorded at the U.S.
weather station in Concord, New Hampshire, comparing actual degree days to the
previous period and to normal. As a result of the size and topographical
variations of the Company's service territory, weather conditions within such
territory often vary. The Company considers Concord, New Hampshire weather
data to be representative of weather conditions within its service territory.
<TABLE>
<CAPTION>
DEGREE DAYS
--------------------
PRIOR CHANGE VS. CHANGE VS.
ACTUAL PERIOD NORMAL PRIOR PERIOD NORMAL
------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Fiscal year ended September 30,
1994............................ 7,877 7,550 7,512 4.3% 4.9%
Fiscal year ended September 30,
1995............................ 6,834 7,877 7,525 (13.2)% (9.2)%
Fiscal year ended September 30,
1996............................ 7,482 6,834 7,549 9.5% (0.9)%
Twelve months ended June 30,
1997............................ 7,357 7,482 7,511 (1.7)% (2.1)%
</TABLE>
Shifts between transportation and sales gas will cause variations in natural
gas revenues since the transportation rate does not include the commodity cost
of gas, which is billed directly to the customer by its marketer. Prior to
August 1, 1997, the Company's rate structure provided approximately the same
margin from sales service and transportation service. Effective August 1,
1997, transportation rates were reduced by approximately 3%. The Company
cannot predict the impact, if any, that the results of this reduction in
transportation rates will have on customers' decisions to switch to
transportation service or the resulting impact decisions to switch would have
on operating income. The Company will seek an adjustment in overall rates if
it determines that reductions in transportation rates and increases in the
number of transportation customers impair its ability to earn its allowed
return. At June 30, 1997, the Company had 37 transportation customers compared
to 25 customers the previous year.
8
<PAGE>
RESULTS OF OPERATIONS--TWELVE MONTHS ENDED JUNE 30, 1997 COMPARED TO TWELVE
MONTHS ENDED SEPTEMBER 30, 1996
Earnings and Operating Revenues
Net income increased to $5,437,000 for the twelve months ended June 30, 1997
from $5,427,000 for fiscal year 1996. Total operating revenues were
$92,004,000 compared to $77,510,000 in the prior period, an 18.7%
increase. Higher purchased gas cost of approximately $15,000,000 passed
through the CGA was the primary reason for the significant increase. Despite a
1.5% increase in the average number of customers, warmer weather resulted in
firm sendout, including firm transportation, that was essentially unchanged
from fiscal year 1996. Margin earned from utility natural gas operations
decreased $427,000, or 1.2%.
Operating Expenses
Decreases in wages and related operating expense reductions, as a result of
reductions in the workforce and overtime requirements, were the primary
reasons for the net decrease in operations and maintenance expense. Continued
capital additions to the distribution system and amortization of environmental
remediation costs account for the increase in depreciation and amortization
expense.
Taxes other than income taxes decreased 2.2% due to property tax abatements
and a reduction in the public utility tax assessment.
While interest on long-term debt decreased 3.4% compared to fiscal year
1996, other interest expense increased 16.6%. Higher average outstanding
short-term borrowings during the twelve months ended June 30, 1997 was the
primary reason for the increase.
RESULTS OF OPERATIONS--FISCAL 1996 COMPARED TO FISCAL 1995
Earnings
Net income for 1996 was a record $5,427,000, which represents a 45% increase
over the $3,745,000 net income for 1995. The 1996 increase in earnings was
primarily due to greater margins resulting mostly from growth in volumes
delivered. Volumes of firm gas delivered to utility customers increased 13.1%
to 11,400,000 Mcf (1,000 cubic feet). Weather in the Company's service area
was near normal in 1996, but 9.5% colder than the prior year (based upon a
comparison of degree days for such periods). In addition, 1995 earnings
included a $215,000 after-tax gain on the sale of railcars.
Operating Revenues
Operating revenues were $77,510,000 in 1996, compared to $69,817,000 in
1995. The increase resulted primarily from increased volumes delivered to firm
residential and commercial heating customers due to the colder weather and
1.7% customer growth in 1996. Revenues from gas transported for customers
under firm transportation service rates increased more than 40% to $979,000,
due to a 45% increase in volumes transported. This increase included a shift
of 162,000 Mcf from firm commercial and industrial sales to firm
transportation sales, representing a decrease of $516,000 in operating revenue
attributable to the commodity cost of gas.
Cost of Gas Sold
Cost of gas was $39,115,000 in 1996 and $35,602,000 in 1995. The increase
was primarily due to higher prices from suppliers (approximately $5,900,000)
and the increase in delivered volumes (approximately $4,700,000), partially
offset by timing differences related to the recovery of gas costs through the
CGA (approximately $7,200,000). The average unit cost of gas sold in 1996 was
$3.96 per Mcf, compared to $3.44 per Mcf in 1995. Increases or decreases in
purchased gas costs from suppliers have no significant impact on margin, as
they are recovered from customers through the CGA.
Operating Expenses
Operations and maintenance expense increased $217,000, or 1.2%, to
$18,624,000 in 1996. Reductions in the workforce, other cost saving
initiatives, and workers' compensation and health insurance refunds helped
offset most of the increases from liability insurance, uncollectible accounts
and other administrative expenses.
9
<PAGE>
Depreciation and amortization expense increased from $4,063,000 to
$4,693,000 in 1996, consistent with the Company's continued investment in the
expansion and upgrading of its distribution system and facilities and
amortization of environmental remediation costs. Net additions to property,
plant, and equipment were $7,496,000 and $6,407,000 in 1996 and 1995,
respectively.
Taxes other than income taxes increased $194,000 to $3,654,000 primarily due
to increases in property taxes, resulting from property tax rate increases and
additions to taxable property. A higher level of pretax income was the main
reason for the $1,479,000 increase in total federal and state income taxes in
1996. In addition, as a result of the resolution of certain federal income tax
issues, the Company reduced federal income taxes by $200,000 in 1995.
Total other income for 1995 includes a gain of $350,000 from the sale of
railcars formerly used to transport liquid propane.
Fiscal 1996 interest expense decreased 13.4% from 1995 due mainly to the
repayment of $1,664,000 of long-term debt and a decrease in average short-term
borrowings and average short-term interest rates.
RESULTS OF OPERATIONS--FISCAL 1995 COMPARED TO FISCAL 1994
Earnings
Net income declined to $3,745,000 in 1995 from 1994 net income of
$4,837,000. A key reason for the decrease in net income was the impact on
operations of significantly warmer weather during the 1995 heating season. In
1994, net income was impacted by record colder than normal temperatures.
Operating Revenues
Operating revenues were approximately $69,800,000 in 1995, a decrease of
20.9% from 1994. The total volume of gas sendout declined 7.5% as temperatures
in 1995 were 13.2% warmer than in 1994 and 9.2% warmer than normal. The
average number of utility customers increased 2.1% to more than 65,000 in
1995.
Cost of Gas Sold
The average unit cost of gas purchased and produced decreased to $3.44 per
Mcf in 1995 from $4.03 per Mcf in 1994.
Operating Expenses
Operations and maintenance expense decreased 4% in 1995, primarily because
of reductions in the workforce combined with reductions in workers'
compensation insurance and bad debt expense.
Capital expenditures for the Company's continuing expansion and system
improvement programs were the reason for the 4.1% increase in depreciation and
amortization in 1995.
A gain of $350,000 from the sale of railcars formerly used to transport
liquid propane is included in total other income for 1995.
Total interest expense was $4,049,000 in 1995, or 10.2% greater than 1994.
The Company's total average short-term borrowings and the weighted average
short-term interest rate were greater than in 1994.
Total federal and state income taxes decreased $535,000 in 1995. The lower
level of pretax income and the resolution of certain tax issues are the
principal reasons for the decrease. Partially offsetting the decrease was the
impact of the repeal of the franchise tax, which was a credit against state
income taxes. The Company recorded state income taxes of $359,000 in 1995. No
state income taxes were recorded in 1994, when the franchise tax was in
effect.
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CAPITAL RESOURCES AND LIQUIDITY
Because of the seasonal nature of the Company's operations, a substantial
portion of cash receipts are generated during the November-March heating
season, which results in the highest cash inflow during late winter and early
spring. However, cash requirements for capital expenditures, dividends, long-
term debt retirement, and working capital do not track this pattern of cash
receipts. The greatest demand for cash is in the fall and early winter to
support the completion of the annual construction program and to fund gas
inventories and other working capital requirements.
Cash provided by operations and financing activities was sufficient to fund
investing activities in 1996. Higher earnings due to increased margins from
greater sales volumes had a favorable impact on funds provided by operating
activities. Prior to November 1996, ENI, the Company's parent, raised
approximately $1,500,000 of common equity through its Dividend Reinvestment
and Stock Purchase Plan and contributed $1,500,000 to the Company's common
capital. Borrowings against lines of credit during 1996 ranged from zero to a
high of approximately $9,500,000. The Company's major uses of cash were
capital expenditures of $7,496,000, environmental remediation of $672,000, and
retirement of $1,664,000 of long-term debt. Deferred gas costs increased
$9,428,000, due to the timing of the recovery of increased gas costs through
the CGA. In addition, dividend payments to ENI totaled $3,635,000 in 1996.
At June 30, 1997, deferred gas cost was in a $2,476,000 overcollected
position resulting from prior summer period activity. The overcollected
amounts are being returned to customers during the current summer period
through the CGA.
Capital expenditures for 1997 are currently projected at approximately
$11,800,000, and annual sinking fund requirements and maturities of long-term
debt are scheduled to be $1,700,000 in 1997. Included in 1997 construction
expenditures is a major main extension project to serve the town of Milford,
New Hampshire. Additional cash requirements will be necessary for the payment
of dividends, environmental remediation, and working capital. Cash to fund
these requirements is expected to be provided principally by internally
generated funds, short-term bank borrowings under the Company's lines of
credit, and debt financing. At September 30, 1996, the Company had available
lines of credit aggregating $12,500,000 with $9,535,000 outstanding. At June
30, 1997 the available lines of credit were $14,700,000 with $5,500,000
outstanding. In addition, a credit line of $9,500,000 was available at
September 30, 1996 and June 30, 1997 under the Company's fuel inventory trust
financing plan. At June 30, 1997, the Company's inventory in trust was
$4,083,000 with an outstanding purchase obligation of $4,101,000.
On June 30, 1997, the Company's capitalization consisted of 58% common
equity and 42% debt, including short-term debt. After issuance of the Bonds
and use of the proceeds (See "USE OF PROCEEDS"), capitalization will consist
of approximately 51% common equity and 49% debt. Return on average common
equity was 12.14% for the twelve months ended June 30, 1997. In order to
contribute to both stability and the ability to market new securities when
appropriate, the Company attempts to maintain a balanced capital structure.
ENVIRONMENTAL MATTERS
The Company is involved in the investigation and remediation of certain
environmental matters. See "BUSINESS--Legal Proceedings and Environmental
Matters." The Company accrues charges in connection with environmental costs
when it is probable that a liability exists and the amount or range of amounts
can be reasonably estimated.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The preceding Management's Discussion and Analysis of Financial Condition
and Results of Operations and the other sections of this Prospectus to which
it refers include: forward-looking statements concerning the impact of changes
in the cost of gas and of the CGA mechanism on total margin; projected capital
expenditures and sources of cash to fund expenditures; and estimated costs of
environmental remediation and anticipated
11
<PAGE>
regulatory approval of recovery mechanisms. The Company's future results,
generally and with respect to such forward-looking statements, may be affected
by many factors, which include but are not limited to: uncertainty as to the
regulatory allowance of recovery of changes in the cost of gas; uncertain
demands for capital expenditures and the availability of cash from various
sources; uncertainty as to whether transportation rates will be reduced in
future regulatory proceedings with resulting decreases in transportation
margins; and uncertainty as to regulatory approval of the full recovery of
environmental costs, transition costs, and other regulatory assets.
NEW ACCOUNTING STANDARDS AND PRONOUNCEMENTS
The Financial Accounting Standards Board has issued new accounting standards
that the Company will adopt in future periods. Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share," establishes
standards for computing and presenting earnings per share, effective fiscal
1998. SFAS No. 130, "Reporting Comprehensive Income," establishes standards
for reporting and the disclosure of comprehensive income and its components,
effective fiscal 1999. It is not expected that the adoption of SFAS Nos. 128
and 130 will have a material impact on the Company's financial reporting.
SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information," establishes standards for the way public business enterprises
report information about operating segments, including disclosures about
products and services, geographic areas, and major customers, effective fiscal
1998. The Company is currently evaluating the impact of SFAS No. 131.
The American Institute of Certified Public Accountants issued a Statement of
Position ("SOP") 96-1, "Environmental Remediation Liabilities." The SOP's
objective is to make the timing of the recognition of environmental
obligations more uniform by discussing the estimation process and providing
benchmarks to aid in determining when to recognize environmental liabilities.
The SOP is effective for the Company in fiscal 1998. The Company does not
expect that the adoption of the SOP will have a material impact on the
Company's financial position or results in operations.
THE "YEAR 2000" ISSUE
Many computer systems are currently based on storing two digits to identify
the year of a transaction (for example, "97" for "1997"), rather than a full
four digits, and are not programmed to consider the start of a new century.
Significant processing inaccuracies and even inoperability could result in the
year 2000 and thereafter. The Company's principal computer systems are
currently capable of processing the year 2000, or are in the process of being
upgraded or replaced by systems that are similarly capable. The Company does
not expect that the costs of addressing the "Year 2000" issue will have a
material impact on the Company's financial position or results in operations.
12
<PAGE>
BUSINESS
GENERAL
The Company, incorporated in the State of New Hampshire in 1945, is engaged
in the purchase, transportation and sale of natural gas for residential,
commercial, and industrial use in New Hampshire. The Company is a wholly-owned
subsidiary of ENI, a public utility holding company, also incorporated in the
State of New Hampshire. ENI is exempt from registration under the Public
Utility Holding Company Act of 1935. Both the Company and ENI are
headquartered at 1260 Elm Street, Manchester, New Hampshire. In 1988, the
Company, which had been named Gas Service, Inc., merged with two other natural
gas distribution subsidiaries of ENI, Manchester Gas Company and Concord
Natural Gas Corporation, and changed its name to EnergyNorth Natural Gas, Inc.
The service territory of the Company has a population of approximately
463,000 in 27 communities situated in southern and central New Hampshire,
which includes the communities of Nashua, Manchester, Concord, and Laconia.
The service area encompasses approximately 922 square miles. Located within 30
to 85 miles of Greater Boston, the Company's service territory offers a
favorable business climate with no general sales or personal income taxes, a
productive labor force, and a comfortable, safe, and clean environment for
residents and tourists.
The State of New Hampshire's non-farm job growth continues to be
significantly above average, ranking first among New England states with a
3.9% annual growth rate in 1996. This compares to a 2.0% average growth rate
nationally and a 1.8% average rate for New England for the same period. New
housing permits are expected to increase 34% in 1997 over 1996. While the New
Hampshire unemployment rate for 1997 is forecasted at 3.5% compared to 4.2% in
1996, the labor force is forecasted to increase by 4.7% in 1997. Job growth
and low unemployment in the Company's service area tend to result in an
increase in volumes transported and sold and numbers of customers. (All
employment and housing statistics in this portion of this Prospectus are taken
from The New England Economic Project's May 1997 Economic Outlook for New
Hampshire). In fiscal 1996, the Company experienced net customer growth of
over 2.4% compared to fiscal 1995.
The Company's marketing focus continues to stress low cost growth by
concentrating on adding new customers along the Company's more than 1,000
miles of gas mains and adding load from the existing customer base, while also
expanding its system of mains into areas in which there is a significant
demand for natural gas service. The Company has an approximate 28% share of
the home heating market (based on households) within its service territory,
creating a potential for increased sales where the natural gas pipeline is
located and alternative fuels are used. In New Hampshire, fuel oil has a
penetration of over 57% of the home heating market. Currently, the comparative
full-service price of natural gas for heating is comparable to fuel oil. From
a total energy perspective, natural gas is a strong competitor with a complete
range of gas appliances and uses, including ranges, water heaters, clothes
dryers, fireplaces and gas logs, outdoor lights, and natural gas heat pumps
for heating and cooling. While these multiple uses provide opportunities to be
the total energy provider to new customers, they also provide opportunities
for expansion within the existing customer base. Due to continued customer
conversions from other energy sources and expansion of its service territory,
the Company has an opportunity for growth in the retail sales market. During
the past five years, the Company has experienced an annual average customer
growth rate of about 2.0%.This compares to an approximate 1.5% national
average for local distribution companies, according to the American Gas
Association. Additional growth in distribution operations may also occur as
industrial and commercial customers turn to natural gas for electric
generation because of a price advantage and as a means to ensure compliance
with the provisions of the Clean Air Act. As the electric industry continues
to move toward deregulation, this option may become more attractive. The
development of new gas-burning technologies for industry and the wider
acceptance of natural gas as a fuel for motor vehicles have provided
opportunities for increased gas usage in market sectors that are not sensitive
to the weather, although the use of natural gas powered vehicles in New
Hampshire is not extensive at present.
THE GAS DISTRIBUTION BUSINESS
The Company distributes natural gas as a regulated public utility pursuant
to franchise authority granted to it by the NHPUC. No operations are outside
of the State of New Hampshire. While the franchise area of the
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Company is primarily residential in character, sales volumes are almost evenly
split between residential and commercial/industrial customers. As of June 30,
1997, the Company served over 68,000 customers, of which approximately 88%
were residential and 12% were commercial and industrial. During fiscal 1996,
no customer purchased more than 4% of the Company's total annual sales and
transportation volume.
The Company offers firm and interruptible transportation service to its
commercial and industrial customers. Transportation service allows a customer
to purchase a natural gas supply directly from a third party marketer. The
marketer delivers the gas to one of the Company's interstate pipeline take
stations. The customer contracts with the Company to transport the gas from
the take station to its facility. To ensure a continual, uninterrupted supply,
the Company also provides an optional, separate standby service as a backup to
the gas supplies of transportation customers. As of September 30, 1996, the
Company provided transportation service to 25 customers, and as of June 30,
1997 to 37 customers.
The Company distributes gas to substantially all of its utility customers
through a system of underground pipelines connected with its three operations
centers in Manchester, Nashua, and Tilton, six take stations located in
Manchester, Londonderry, Windham, Concord, Hooksett, and Suncook, and four
production plant facilities in Manchester, Nashua, Concord, and Tilton. The
pipelines are generally located in public ways and are subject to licenses
granted by municipalities. The Company serves over 75% of New Hampshire's
natural gas customers.
SUMMARY OF REVENUES
Revenues attributable to various categories of gas distribution and related
operations (unaudited) during the twelve months ended June 30, 1997 and during
the last three fiscal years are as follows:
<TABLE>
<CAPTION>
TWELVE MONTHS FISCAL YEARS ENDED SEPTEMBER 30,
ENDED --------------------------------
JUNE 30, 1997 1996 1995 1994
------------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Sales service............... $90,776 $ 76,007 $ 69,067 $ 88,150
Transportation service...... 1,228 1,503 749 --
Service and appliance
sales...................... 1,891 1,781 1,650 1,566
Rentals..................... 771 821 821 811
------- ---------- ---------- ----------
$94,666 $ 80,112 $ 72,287 $ 90,527
======= ========== ========== ==========
</TABLE>
During the winter period, November 1 through March 31, the Company's gas
revenues are substantially higher than during the summer months. The increase
in gas revenues during the winter, and the concomitant increase in gas supply
requirements, occurs because approximately 89% of the Company's customers use
natural gas for heating.
DEREGULATION
The implementation of Federal Energy Regulatory Commission ("FERC") Order
636 provided for the unbundling and deregulation of the interstate pipeline
system and led to the beginning of unbundling of the intrastate pipeline
system in New Hampshire. In late 1993, the NHPUC approved gas transportation
rates and separate standby and balancing services for commercial and
industrial customers.
Gas transportation services have allowed customers to utilize the Company's
distribution system for the transportation of gas purchased from third-party
gas marketers, creating competition from gas marketers for the sale of gas to
end users. At June 30, 1997, the Company had 37 transportation customers.
These customers are, for the most part, large commercial and industrial
customers. The volume transported for transportation customers in fiscal 1996
was 514,000 Mcf, approximately 4% of the Company's total gas sales. The
Company expects the number of transportation customers and the volume of gas
transported to increase.
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<PAGE>
The Company is the sole distributor and transporter of natural gas in its
franchise area. The Tennessee Gas Pipeline Company ("Tennessee Gas") is the
only interstate pipeline to serve the Company's franchise area. For that
reason, and because installation of private transmission mains would typically
be impractical, customers have not attempted to bypass the Company's
distribution system.
COMPETITION
Natural gas competes mainly with electricity and fuel oil. The principal
competitive factors between natural gas and alternative fuels are the price of
the fuel and the conversion costs from one fuel to another. Competition is
greatest among the Company's commercial and industrial customers who have the
capability to use alternative fuels. The Company provides flexible rates for
users with dual-fuel capabilities in order to better compete with the
alternative fuels.
Under current market conditions, natural gas has a significant price
advantage over electricity in New Hampshire. Natural gas heating costs are
currently less than one-third of electric heating costs. At the present time,
the price of natural gas is comparable to the price of full-service oil for
heating. The Company continues to add customers who might otherwise elect to
use oil, because energy decisions are also based on factors other than cost
such as service, cleanliness, and environmental impact. Demand for natural gas
is expected to continue to increase as national attention remains focused on
its environmental advantages, efficiency, and security of supply. Commercial
and industrial customers continue to find gas technologies and equipment
attractive as they deal with the requirements of the Clean Air Act Amendments
of 1990 and other federal environmental legislation.
GAS SUPPLY
General. The Company's gas supply goal is to maintain a balanced portfolio
of supply that will continue to minimize the overall cost of gas while
providing the necessary security to meet demand requirements.
Supply Contracts and Storage. The Company's gas supply is principally
natural gas transported by the interstate pipeline system. The Company has
contracted with Tennessee Gas to deliver 56,833 Dekatherms ("Dths", a unit of
heating value equivalent to one million British Thermal Units) per day on a
firm transportation basis and up to 8,000 Dths per day on an interruptible
basis. Natural gas supplies are purchased both on a long-term contract and
short-term spot market basis. During fiscal 1996, the Company purchased
approximately 6.2% of its annual natural gas requirements in the spot market.
At times during the year, typically during the summer, the Company will
purchase lower cost spot market natural gas supply. The Company's long-term
contracts, under which it has firm supply for approximately 32,529 Dths per
day, have remaining terms of two to nine years.
In fiscal 1996, approximately 68% of the Company's gas requirements came
from domestic pipeline sources, 21% from Canadian pipeline supplies, and
approximately 10% from supplemental pipeline supplies. LP and liquefied
natural gas ("LNG") purchases from both domestic and foreign sources made up
approximately 1% of the Company's total supply requirements. Supplemental
supplies of gas are produced from plants owned and operated by the Company.
All pipeline volumes are transported by Tennessee Gas under FERC tariffed
rate schedules. The supply from Canada is transported to Tennessee Gas's
system using the TransCanada and the Iroquois Gas transmission systems.
In addition to long-term supply sources, the Company stores gas during the
summer months under long-term contracts with the owners of storage facilities
located in Pennsylvania and New York. Gas from these storage facilities, up to
24,304 Dths per day on a firm basis, is delivered to the Company during the
winter months through the Tennessee Gas system. The Company owns other on-site
storage facilities capable of holding 125,438 Dths of LP and 13,057 Dths of
LNG.
15
<PAGE>
The Company contracted for 1,710,000 Dths of supplemental gas vapor, 75,000
Dths of LNG, and an additional 1,000,000 gallons of LP for the winter of 1996-
1997.
The Company's record peak day sendout of gas, in February 1995, was 90,791
Mcf, or approximately 93,000 Dths. The Company expects to be able to secure
the gas supply required to meet existing customer and forecasted new customer
demands through long-term commitments and purchases in the spot market.
Cost of Purchased and Produced Gas. The average unit cost of gas purchased
and produced during fiscal 1996 was approximately $3.96 per Mcf compared to
$3.44 per Mcf for fiscal 1995. The 1996 average unit cost reflects higher
pipeline costs due to supplier rate case settlements and higher cost of gas
supply in the marketplace. During the twelve months ended June 30, 1997, the
average unit cost of gas purchased and produced was approximately $4.30 per
Mcf compared to $3.86 per Mcf for the same period last year. The CGA clause
authorized by the NHPUC permits recovery by the Company from its customers (or
requires refunds to its customers) of gas costs (including pipeline, LP, LNG,
and storage) that are higher (or lower) than the cost of gas included in base
rates. The CGA is determined twice annually, for summer and winter periods.
Margins earned on interruptible sales, 280-day sales, and capacity release
are passed on to firm customers through the CGA. In addition, costs associated
with a fuel inventory trust, including administration fees and carrying costs,
are recovered through the CGA.
The Company is subject to payment of transition costs associated with FERC
Order 636 restructuring. Tennessee Gas began billing these costs late in
fiscal 1993, and the Company has incurred approximately $5,900,000 in
transition costs through September 30, 1996 and approximately $7,600,000
through June 30, 1997, and is recovering these costs through the CGA. As of
June 30, 1997, the Company has recorded additional transition costs of
approximately $1,500,000 that will be billed over a period of 18 months.
Meanwhile, the Company's customers are benefiting from the restructuring,
realizing long-term savings in gas costs.
SUPERVISION AND REGULATION
The Company is subject to regulation by the NHPUC, which has authority over
accounting, rates and charges, the issuance of securities, and certain
operating matters. Changes in utility rates and charges cannot be made without
30 days notice to the NHPUC, which has the power to suspend, investigate, and
change any proposed increase in rates and charges.
The gas distribution business of the Company is subject to extensive safety
regulations and reporting requirements promulgated by the United States
Department of Transportation, but is not otherwise subject to direct
regulation by federal agencies except as to environmental matters. The Company
is also subject to zoning and other regulations by local authorities, and its
capital expenditures, earnings, and operations have not been materially
affected by environmental and local regulation.
LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS
The Company is a party in several proceedings of the sort that arise in the
ordinary course of its business. Such actions, for the most part, are covered
by insurance and, to the extent that they are not fully covered, the damages
sought are not material in amount. The Company is a party to various routine
NHPUC proceedings relating to operations, none of which is expected to have a
material impact on the Company's earnings or assets.
The Company and certain of its predecessors owned or operated several
facilities for the manufacture of gas from coal, a process used through the
mid-1900's that produced by-products that may be considered contaminated or
hazardous under current laws, and some of which may still be present at such
facilities. The Company accrues environmental investigation and clean-up costs
with respect to former manufacturing sites and other environmental matters
when it is probable that a liability exists and the amount or range of amounts
can be reasonably estimated.
16
<PAGE>
In 1995, the Company completed the disposal of the contents of the gasholder
situated on one former gas manufacturing site in Concord, New Hampshire. Total
remediation costs amounted to approximately $3,500,000 and were recorded in
deferred charges. Recovery of these costs from customers began on July 1, 1995
and will extend over a seven-year period. The unamortized balance of
$2,489,000 at June 30, 1997 is excluded from rate base. The Company may not
earn a return or charge rates to customers based on amounts not included in
rate base.
The New Hampshire Department of Environmental Services ("NHDES") has
required remedial action for a portion of the Concord site at which wastes
were disposed from approximately 1852 through 1952. The estimated cost of this
remedial action ranges from $2,100,000 to $3,200,000, and the Company has
recorded $2,100,000 at June 30, 1997 in deferred charges. The Company has
petitioned the NHPUC for approval of the Company's proposed five-year recovery
from ratepayers, including carrying costs, for approximately $1,900,000 of
investigation, remediation, and recovery effort costs.
On September 12, 1995, the Company filed a complaint in the United States
District Court for the District of New Hampshire against UGI Utilities, Inc.,
as the successor to United Gas Improvement Company. The Company seeks
contribution for expenses incurred at the Concord site based upon the
operation of the manufactured gas plant by the United Gas Improvement Company,
a predecessor of UGI Utilities, Inc., during a period of time the manufactured
gas plant was in operation.
On December 8, 1995, the Company filed suit in the United States District
Court for the District of New Hampshire against Associated Electric and Gas
Insurance Services, Ltd., American Home Assurance Company, CIGNA Specialty
Insurance Company, International Insurance Company, Lloyd's, Underwriters at
London, Lexington Insurance Company, and National Union Fire Insurance
Company, later adding Columbia Casualty Company as a defendant, seeking a
declaratory judgment that they owe the Company a defense and/or
indemnification for environmental claims associated with the Concord facility.
The Company filed suit in the New Hampshire (Hillsborough County) Superior
Court on December 8, 1995 against the Continental Insurance Company and
Netherlands Insurance Company seeking a declaratory judgment that they owe the
Company a defense and/or indemnification for environmental claims associated
with the Concord facility. In March and June 1997, the Company reached
settlements with two defendants in those suits in an aggregate amount of
$137,500.
The Company and Public Service Company of New Hampshire ("PSNH"), an
electric utility company, conducted an environmental site characterization of
a second former manufactured gas plant in Laconia, New Hampshire. The Laconia
manufactured gas plant operated between approximately 1887 and 1952, and the
Company owned and operated the facility for approximately the last seven years
of its active life. PSNH also owned and operated the facility during its
active life. Without admitting liability, the Company and PSNH have entered
into an agreement under which the costs of the site characterization are
shared. The Company's share of the costs of the site characterization and a
report to the NHDES totaled $265,000 and has been recorded in deferred charges
as of June 30, 1997. The report describes conditions at the site, including
the presence of by-products of the manufactured gas process in site soils,
groundwater, and sediments in an adjacent water body. Based upon its review of
the report, NHDES has directed PSNH and the Company to prepare and submit a
remedial action plan. The Company expects to incur further costs but is
currently unable to predict the magnitude of any liability that may be imposed
on it for the cost of additional studies or the performance of a remedial
action in connection with the Laconia site. The Company commenced proceedings
in New Hampshire Superior Court and Federal District Court on February 2, 1997
against eighteen of its present and former insurers seeking recovery of
expenses that have been and will be incurred in connection with the
investigation and remediation of contamination from the Laconia plant.
The Company is pursuing and intends to pursue recovery from insurance
carriers and claims against any other responsible parties seeking to ensure
that they contribute appropriately to reimburse the Company for any costs
incurred with respect to environmental matters. The Company intends to seek
and expects to receive approval of rate recovery methods with respect to
environmental matters after it has determined the extent of contamination,
received recommendations with regard to remediation, and commenced remediation
efforts.
See "RISK FACTORS--Environmental Matters" and "FINANCIAL STATEMENTS--
Commitments and Contingencies, Note 8."
17
<PAGE>
PROPERTIES
The Company's utility gas distribution facilities constitute the majority of
its physical assets. As of September 30, 1996, the Company had approximately
1,020 miles of mains and 640 miles of service connections. The utility's mains
and service connections are adequate to meet current service requirements and
are maintained through a regular program of inspection and repair. Offices and
operations centers located in Nashua, Manchester, Concord, and Tilton are
adequate for the needs of the Company and are regularly maintained and in good
condition. Substantially all of the Company's properties are fully utilized.
Substantially all of the Company's utility properties are subject to the liens
of the indentures securing the Company's mortgage bonds. In some cases, motor
vehicles and nonutility assets are subject to purchase money security
interests held by banks.
EMPLOYEES
At June 30, 1997, the Company had 108 full-time employees, represented by
two contracts with Local 12012 of the United Steelworkers of America. The
contracts expire in 2001. Substantially all of the time of ENI's 96 full-time
employees (as of June 30, 1997), is allocated to the Company. None of ENI's
employees are represented by labor unions.
18
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is one of two principal operating subsidiaries of ENI. The other
principal operating subsidiary of ENI is EnergyNorth Propane, Inc., a retailer
of propane which serves customers in central and southern New Hampshire.
EnergyNorth Propane, Inc. is also a 49% member in VGS Propane LLC, a Vermont
limited liability company which provides propane sales and service in Vermont.
ENI's common stock is registered under the Exchange Act and listed on the New
York Stock Exchange under the symbol "EI." Neither ENI nor any of its
subsidiaries (other than the Company) have guaranteed or pledged assets for
repayment of the Bonds.
In general, the senior management of ENI serves as the senior management of
all of its subsidiaries, including the Company, and ENI is the employer of the
senior management. ENI provides for the administrative support and services
and establishes policies, plans, and goals for the Company. The Company has
entered into a Cost Allocation Agreement with ENI and ENI's other subsidiaries
in order to provide for the equitable allocation of costs of goods and
services incurred by ENI or its subsidiaries for the benefit of one or more of
the subsidiaries or for ENI. Generally, cost allocations for ENI's
subsidiaries, including the Company, are based upon each subsidiary's fixed
assets, number of customers, and net income, relative to the other
subsidiaries. For fiscal 1997, the Company's allocation of costs under the
Cost Allocation Agreement is 88%. Management of the Company believes that the
goods and services provided by ENI and its other subsidiaries are obtained on
terms that are at least as fair to the Company as terms that could have been
obtained from unaffiliated third parties. The Company is also a party to a Tax
Sharing Agreement with ENI and its other subsidiaries whereby the Company,
ENI, and ENI's other subsidiaries agree to be responsible for their allocable
share of federal income taxes (or be entitled to their allocable share of any
refunds) in the event that a consolidated tax return is filed. Tax allocations
are based upon calculations made in accordance with federal tax laws and
regulations.
19
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Directors of the Company each serve for a term of one year, or until their
successors have been duly elected and qualified. The term of office of each
executive officer terminates when his or her successor has been duly elected
and qualified. Set forth below is certain information with respect to the
directors and executive officers of the Company.
<TABLE>
<CAPTION>
SERVED AS SERVED AS PRINCIPAL OCCUPATION OR
NAME, AGE AND POSITIONS DIRECTOR EXECUTIVE EMPLOYMENT DURING LAST
HELD WITH THE COMPANY SINCE OFFICER SINCE FIVE YEARS
----------------------- --------- ------------- -----------------------
<S> <C> <C> <C>
Robert R. Giordano,
59(1).................. 1984 1983 President and Chief Executive Officer
President and Chief of the Company; President and Chief
Executive Officer; Executive Officer of ENI; Chairman
Director and Chief Executive Officer of ENPI.
N. George Mattaini,
71(1).................. 1982 1983 Chairman of the Company; Vice Chairman
Chairman of the Board of ENI.
of Directors
Edward T. Borer,
58(1)(2)............... 1982 -- Chairman (and, until 1996, Chief
Director Executive Officer; and, until 1995,
President) of Philadelphia
Corporation for Investment Services,
a registered securities broker/dealer
and investment advisor. Chairman of
ENI.
Michelle L. Chicoine,
41 .................... 1996 1990 Chief Financial Officer (since 1997),
Vice President, Vice President (since 1994), and
Treasurer, Chief Treasurer (since 1990) of the
Financial Officer; Company, ENI and ENPI.
Director
Albert J. Hanlon,
56(3).................. 1991 1988 Senior Vice President of the Company
Senior Vice President; and of ENI.
Director
Frank L. Childs, 53 .... 1996 1995 Vice President of the Company and ENI
Vice President; (since 1995); formerly (1992-1994)
Director Executive Vice President and Chief
Administrative Officer of UNITIL
Corporation, a registered public
utility holding company; formerly
President (until 1994) and Chief
Operating Officer (until 1992) of
Fitchburg Gas and Electric Light
Company, a public utility.
Richard P. Demers, 60 .. -- 1988 Vice President of the Company and of
Vice President ENI; President of ENPI.
David A. Skrzysowski,
51 .................... -- 1989 Vice President and Controller of the
Vice President and Company and of ENI; Vice President of
Controller ENPI.
Stephen W. Smith, 49 ... -- 1997 Vice President of the Company and ENI
Vice President (since 1997); formerly (1993-1996)
Director of Human Resources of
Hampshire Chemical Corporation;
formerly (1984-1992) Manager of Human
Resources of W.R. Grace & Co. --Conn.
</TABLE>
- --------
(1) Director of EnergyNorth, Inc., parent of the Company.
(2) Mr. Borer is a director of Philadelphia Corporation for Investment
Services.
(3) Mr. Hanlon has announced his intention to retire on December 31, 1997.
20
<PAGE>
COMPENSATION OF DIRECTORS
The directors of the Company are not compensated by the Company for services
provided to the Company as directors. However, the directors of the Company
are compensated by ENI, the parent of the Company, for services as directors
and/or officers of ENI. Eighty-eight percent of compensation paid to directors
of ENI is allocated to the Company.
The Chairman of the board of directors of ENI receives an annual retainer of
$42,000, and the Vice Chairman receives an annual retainer of $24,000. All
other directors of ENI receive annual retainers of $10,500. Committee Chairmen
receive additional annual retainers of $2,500. Directors of ENI, other than
the Chairman and Vice Chairman, receive fees of $600 for each board meeting
attended and $500 for each committee meeting attended, with the exception of
multiple meetings of the board of directors held on the day of the annual
meeting of the board of directors. Directors of ENI also receive annual
incentive stock awards of 100 shares of ENI common stock if stated earnings
and total return objectives are met. Directors of ENI who are employees
receive no annual retainers or meeting fees.
Directors of ENI may elect to have portions of the retainers and fees
credited each year to a deferred compensation account pursuant to a plan that
provides for accrual of interest and distribution of the deferral accounts in
lump sum amounts or in equal installments over ten years, at the option of
each director, beginning on the date designated by the director.
21
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation paid by ENI, the
Company's parent, for services rendered in all capacities during the fiscal
years ended September 30, 1996, 1995, and 1994 to the Company's Chief
Executive Officer and the four other executive officers of the Company whose
salary and cash incentive compensation award for the 1996 fiscal year exceeded
$100,000. Substantially all (approximately 92%) of such executive compensation
was charged to the Company, based on an allocation of services performed by
each executive officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- ----------------
CASH INCENTIVE OTHER ANNUAL RESTRICTED STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) COMPENSATION COMPENSATION AWARDS(2) COMPENSATION(3)
- --------------------------- ---- --------- -------------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert R. Giordano...... 1996 $200,334 $59,103 $2,492 $19,677 $7,961
President and CEO 1995 191,021 19,002 3,124 18,989 7,197
of the Company and 1994 181,369 13,808 2,459 13,805 7,131
ENI; Chairman and
CEO of ENPI
Albert J. Hanlon........ 1996 $114,917 $25,835 $1,346 $ 8,593 $4,555
Senior Vice President 1995 111,866 9,279 1,448 9,248 4,560
of the Company and ENI 1994 106,635 6,962 813 6,937 4,136
Richard P. Demers....... 1996 $ 95,333 $20,959 $ 0 $ 6,971 $4,397
Vice President of the 1995 91,927 7,721 827 7,718 4,250
Company and ENI; 1994 88,203 5,686 757 5,665 3,377
President of ENPI
Frank L. Childs(4)...... 1996 $ 93,750 $22,062 $ 0 $ 7,338 $1,946
Vice President of the 1995 68,981 5,613 0 5,610 645
Company and ENI 1994 0 0 0 0 0
Michelle L. Chicoine.... 1996 $ 85,584 $21,550 $1,053 $ 7,164 $4,095
Vice President, 1995 81,041 6,222 927 6,222 3,729
Treasurer and CFO 1994 76,816 4,647 968 4,619 2,369
of the Company,
ENI and ENPI
</TABLE>
- --------
(1) Includes amounts earned and deferred without election by the officer and
amounts deferred pursuant to Deferred Compensation Agreements and the
Company's 401(k) plan.
(2) The aggregate number of shares of restricted stock holdings of the above-
named officers, as of September 30, 1996, is 7,250 shares, having a value
of $138,656.
(3) All other compensation paid in 1996 includes: employer contributions to
the Company's 401(k) plan for Mr. Giordano ($4,882); value of term life
insurance premiums paid for Mr. Giordano ($2,040), Mr. Hanlon ($1,609),
Mr. Demers ($1,334), Mr. Childs ($1,225) and Ms. Chicoine ($1,176);
portion of interest earned in a deferred compensation account by Mr.
Giordano in excess of 120% of federal long-term rate ($1,039).
(4) Mr. Childs joined the Company in January 1995.
22
<PAGE>
The following Pension Plan Table sets forth estimated annual benefits
payable under ENI's Retirement Plan and Supplemental Executive Retirement Plan
("SERP") at age 65 to persons in specified compensation and years of service
classifications, and combined annual benefits payable under the Retirement
Plan and SERP upon such retirement to persons in those compensation
classifications. Substantially all (approximately 92%) of the Retirement Plan
funding expenses and SERP payments are charged to the Company based on an
allocation of services performed by each executive officer. Combined annual
benefits shown in the table do not reflect offsets for benefits of Social
Security and for retirement benefits received from other employers.
PENSION PLAN TABLE
ESTIMATED ANNUAL BENEFITS UNDER RETIREMENT PLAN
UPON RETIREMENT WITH YEARS OF SERVICE INDICATED
<TABLE>
<CAPTION>
COMBINED ANNUAL BENEFITS
AVERAGE ANNUAL EARNINGS UNDER RETIREMENT PLAN
DURING HIGHEST FIVE YEARS 20 YEARS 30 YEARS 40 YEARS AND SERP UPON RETIREMENT
- ------------------------- -------- -------- -------- ------------------------
<S> <C> <C> <C> <C>
$125,000................... $ 45,000 $ 59,375 $ 65,625 $ 93,750
150,000................... 54,000 71,250 78,750 112,500
175,000................... 63,000 83,125 91,875 131,250
200,000................... 72,000 95,000 105,000 150,000
225,000................... 81,000 106,875 118,125 168,750
250,000................... 90,000 118,750 131,250 187,500
300,000................... 108,000 142,500 157,500 225,000
</TABLE>
Non-Contributory Retirement Plan
All full-time salaried employees, including officers and certain part-time
employees, are eligible to participate in ENI's Retirement Plan, provided an
employee has reached the age of 21 and has completed one year of service. The
SERP is a non-contributory plan intended to supplement benefits of the
Retirement Plan for certain named executive officers, effective January 1,
1985. Under both plans, normal retirement is at age 65 with a provision for
early retirement. Benefits under the Retirement Plan vest after five years of
service and under the SERP vest after ten years of service. Earnings under the
plans for the executive officers named in the Summary Compensation Table
consist of regular annual compensation, excluding bonuses or severance pay,
and is the same as the Annual Compensation and Long-Term Compensation shown in
the Summary Compensation Table. Mr. Giordano has 32 credited years of service
under the plans, Mr. Hanlon 25 years, Mr. Demers 9 years, Mr. Childs 2 years,
and Ms. Chicoine 7 years.
Funding of the Retirement Plan is based on actuarial computations and
results in a pool of assets held in trust that is unallocated with respect to
any particular individual. Benefits payable under the Retirement Plan are
calculated on the basis of straight life annuity amounts, accrued over a 25-
year period and are not subject to any deduction for Social Security Benefits
or other offset.
Benefits under the SERP are unfunded, accrue over a 15-year period and once
they are fully vested do not vary with years of service, except that SERP
participants who are included in the plan after September 30, 1995 will have
benefits reduced if they retire prior to normal retirement date under the
Retirement Plan. For an individual retiring at age 65, benefits are calculated
on the basis of 75% of the average of the five highest consecutive years'
earnings, less any amounts receivable for benefits as Social Security, the
Retirement Plan, and other qualified plans of ENI and other employers.
Employment Agreements
ENI, the Company's parent, has employment agreements with Messrs. Giordano
and Hanlon under which it has agreed to employ them for five and two-year
periods, respectively, and which may be extended annually for an additional
year. If ENI terminates the employment of either of these individuals other
than for his breach of
23
<PAGE>
the agreement or misconduct, it is required to continue salary payments
including average incentive compensation, deferred compensation, and amounts
the employee has elected to defer, through the term of the agreement. Such
termination payments will not be made following any termination of employment
that gives rise to payments under the management continuity agreements
described below. The salaries paid to Messrs. Giordano and Hanlon pursuant to
their employment agreements are determined each year by the ENI Board of
Directors but may be no less than $196,000 and $115,000, respectively, per
year.
Management Continuity Agreements
ENI, the Company's parent, has management continuity agreements (the
"Continuity Agreements") with Messrs. Giordano, Hanlon, Demers, and Childs,
and Ms. Chicoine. The Continuity Agreements provide that in the event of
termination of employment or a reduction in compensation, position, or other
conditions of employment within a specified period following a Change in
Control of ENI, as defined in the Continuity Agreements, or termination by the
employee for Good Reason, as defined in the Continuity Agreements, following a
Change in Control, ENI shall pay to the employee a lump sum severance benefit
and certain other benefits. The severance benefit payable to Mr. Giordano is
five times his annual salary and incentive and deferred compensation, and to
Messrs. Hanlon and Childs and Ms. Chicoine 2.95 times each of their annual
salaries and incentive and deferred compensation. The severance benefit
payable to Mr. Demers is the greater of two times his annual salary or 2.75
times his five-year average taxable compensation. In each Continuity
Agreement, except for Mr. Giordano's, no severance benefits are paid to the
extent that such benefits, aggregated with other benefits paid to the
employee, constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986.
REPORT OF THE COMPENSATION COMMITTEE OF THE ENI BOARD OF DIRECTORS
The compensation program for executive officers of the Company is
administered by the Compensation Committee of ENI's board of directors. The
Committee's philosophy is to link executive compensation to improvements in
corporate performance and enhanced profitability and shareholder value. The
compensation program objectives are to (1) provide a competitive, market-based
total compensation package that enables ENI to attract and retain key
executives; (2) integrate all compensation programs with ENI's annual and
long-term business objectives and focus executive efforts on the fulfillment
of those objectives; and (3) provide variable compensation opportunities that
are directly linked with the performance of ENI and that align executive
remuneration with the interests of shareholders and utility subsidiary
ratepayers.
Base Salary
The base salary component of executive compensation reflects the first
objective stated above of attracting and retaining qualified executives.
The salary range for each ENI executive officer ("officer") position,
including the Chief Executive Officer ("CEO"), and the actual base salary of
each officer is reviewed annually. The salary ranges are based upon
independent regional and industry salary surveys, including peer groups, for
comparable positions. These surveys are reviewed and analyzed by ENI's Human
Resources Department with the assistance of outside consultants from time to
time. Specific salary levels are established through an evaluation of each
officer's performance relating to duties and individual achievements. For
fiscal year 1996, the salary range and specific officer salary recommendations
were reviewed and approved by the ENI Compensation Committee.
In establishing 1996 base salary of ENI's CEO, the ENI Compensation
Committee reviewed the competitive market data and also reviewed performance
relating to ENI's earnings level and return on equity, cost containment
efforts, involvement in community and industry leadership activities, and
development of relations with customers. The Committee's evaluation of the
CEO's success in meeting these goals resulted in the determination of his base
salary. The Compensation Committee recommended a base salary, which was
approved by the board of directors.
24
<PAGE>
Key Employee Incentive Plan
Each officer of ENI participates in ENI's Key Employee Performance and
Equity Incentive Plan. The Plan is intended to compensate key employees based
upon performance standards and objectives and to reward performance with share
ownership in ENI. ENI seeks to align the interests of key employees with the
interests of shareholders and utility rate payers. In 1996 the annual
performance criteria which determined eligibility for awards under the Plan
were (1) earnings levels compared to forecast, (2) total average shareholder
return over a rolling three-year period compared to a peer group of comparable
natural gas distribution companies, (3) operations and maintenance expenses
per customer benchmarks compared to inflation, and (4) evaluation of
individual performance. Success in meeting these goals determines the amount
of annual incentive compensation an officer will receive. Targeted awards for
the CEO of ENI under the program range up to 40% of the midpoint of the market
interval and up to 30% for other participating officers. Three-quarters of the
Incentive Plan award is paid in cash and one-quarter is paid in the form of
awards of ENI common stock that are subject to forfeiture and restrictions on
transferability for a period of three years.
The ENI Compensation Committee believes that the total compensation program
for executives of ENI is competitive with the compensation programs provided
by similarly-sized utilities. The Compensation Committee believes that any
amounts paid under the annual incentive plan are appropriately related to
corporate and individual performance, yielding awards that are directly linked
to annual financial and operational results of ENI.
Compensation Committee of the Board
of Directors of ENI: Sylvio Dupuis,
Chairman; Roger L. Avery; Richard B.
Couser
Security Ownership
All shares of the Company's common stock, its only outstanding class of
equity securities, are held by ENI.
25
<PAGE>
DESCRIPTION OF BONDS
GENERAL
The First Mortgage Bonds Designated as % Series E Bonds Due September 30,
2027 (the "Bonds") will be issued as a new series of Bonds under the General
and Refunding Mortgage Indenture dated as of June 30, 1987 among Gas Service,
Inc. ("GSI"), now named EnergyNorth Natural Gas, Inc., and Bank of New
Hampshire, N.A. (predecessor to Bank of New Hampshire) (the "Trustee") as
supplemented and modified by six Supplemental Indentures, including the Sixth
Supplemental Indenture dated as of September 15, 1997 relating to the Bonds
(the "Indenture"). The following statements relating to the Bonds and certain
provisions of the Indenture are summaries of the material terms of the Bonds
and the Indenture, do not purport to be complete, and are subject to and are
qualified in their entirety by reference to the provisions of the Indenture.
THE INDENTURE AND INFORMATION CONCERNING OTHER INDENTURES
The Indenture was entered into June 30, 1987 among GSI and the Trustee.
Contemporaneously with the execution of the Indenture, Manchester Gas Company
("MGC") and Concord Natural Gas Corporation ("CNGC"), both wholly-owned gas
distribution subsidiaries of ENI, entered into indentures with the Trustee
virtually identical to the Indenture (the "MGC Indenture" and the "CNGC
Indenture", respectively). Mortgage bonds designated Series A ("Series A
Bonds") were issued under the Indenture, the MGC Indenture, and the CNGC
Indenture. In 1988, MGC and CNGC merged with and into GSI, which changed its
name to EnergyNorth Natural Gas, Inc. All of the mortgage and security
interests created under each of the Indenture, the MGC Indenture, and CNGC
Indenture (the "Liens") were transferred to the Trustee to be held in trust
for the collective benefit of all of the bondholders under the Indenture, the
MGC Indenture, and the CNGC Indenture. The holders of the Series A Bonds (the
"Series A Bondholders") issued under the Indenture, the MGC Indenture, and the
CNGC Indenture contemporaneously entered into a Subordination and
Intercreditor Agreement and an Intercreditor Agreement stipulating that the
Series A Bondholders, as among themselves, had a lien of equal value and
priority on the property subject to the Liens.
The Company intends to redeem all of the outstanding Series A Bonds with the
proceeds of the sale of the Bonds and retire the MGC Indenture and the CNGC
Indenture. All series of bonds issued subsequent to the issuance of the Series
A Bonds have been issued solely under the Indenture.
When the Company entered into the Indenture in 1987, bonds issued under
First Mortgage Indentures of GSI and MGC (the "First Mortgage Indentures")
remained outstanding. As a result, the Indenture was entitled the "General and
Refunding Mortgage Indenture." In 1992, all remaining outstanding bonds under
the First Mortgage Indentures were redeemed, and the First Mortgage Indentures
were discharged and released. Consequently, there are no bonds outstanding
having priority over the bonds under the Indenture.
BOOK-ENTRY ONLY SYSTEM
The Bonds will be issued in an aggregate initial principal amount of
$22,000,000 and will be represented by one certificate (the "Global Security")
to be registered in the name of the nominee of The Depository Trust Company
("DTC") or any successor depository (the "Depository"). The Depository will
maintain the Bonds in denominations of $1,000 and integral multiples thereof
through book-entry facilities. In accordance with its normal procedures, the
Depository will record the interests of each Depository participating firm
("Participant") in the Bonds whether held for its own account or as a nominee
for another person.
So long as the nominee of the Depository is the registered owner of the
Bonds, such nominee will be considered the sole owner or holder of the Bonds
for all purposes under the Indenture and any applicable laws, except as noted
below. Except as otherwise provided below, a Beneficial Owner, as hereinafter
defined, of interests in the Bonds will not be entitled to receive a physical
certificate representing such ownership interest and will not be considered an
owner or holder of the Bonds under the Indenture. A Beneficial Owner is the
person who has the right to sell, transfer, or otherwise dispose of an
interest in the Bonds and the right to receive
26
<PAGE>
the proceeds therefrom, as well as interest, principal, and premium (if any)
payable in respect thereof. A Beneficial Owner's interest in the Bonds will be
recorded, in integral multiples of $1,000, on the records of the Participant
that maintains such Beneficial Owner's account for such purpose. In turn, the
Participant's interest in such Bonds will be recorded, in integral multiples
of $1,000, on the records of the Depository. Therefore, the Beneficial Owner
must rely on the foregoing arrangements to evidence its interest in the Bonds.
Beneficial ownership of the Bonds may be transferred only by compliance with
the procedures of the Beneficial Owner's Participant (e.g., brokerage firm)
and the Depository.
All rights of ownership must be exercised through the Depository and the
book-entry system, except that a Beneficial Owner is entitled to directly
exercise its rights under Section 316(b) of the Trust Indenture Act of 1939,
as amended, with respect to the payment of principal and interest on the
Bonds. Notices that are to be given to registered owners by the Company or the
Trustee will be given only to the Depository. It is expected that the
Depository will forward the notices to the Participants by its usual
procedures so that such Participants may forward such notices to the
Beneficial Owners. Conveyance of notices and other communications by the
Depository to the Participants and by the Participants to Beneficial Owners
and the voting rights of Participants and Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
The following information concerning DTC and its book-entry has been
obtained from sources the Company believes to be reliable, but it does not
take any responsibility for the accuracy thereof: DTC is a limited-purpose
trust company organized under New York Banking Law, a "banking organization"
within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934 (the "Exchange Act").
DTC holds securities that Participants deposit with it and facilitates the
settlement of securities transactions among Participants in such securities
transactions through electronic computerized book-entry changes in accounts of
Participants, thereby eliminating the need for physical movement of securities
certificates. Participants include securities brokers and dealers (including
the Underwriter), banks, trust companies, clearing corporations, and certain
other organizations, some of whom (and/or their representatives) own DTC.
Access to DTC's book-entry system is also available to others, such as banks,
brokers, dealers, and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly.
Persons who are not Participants may beneficially own securities held by DTC
only through Participants.
INTEREST AND PAYMENT
The Bonds will mature on September 30, 2027. The Bonds will bear interest
from the date of issuance at the rate per annum stated on the cover page
hereof, payable semi-annually on March 31 and September 30 of each year (each
an "Interest Payment Date") commencing March 31, 1998, to the persons in whose
names the Bonds are registered at the close of business on each March 15 and
September 15, respectively, next preceding such Interest Payment Date. If any
payment date would otherwise be a day that is not a business day, the payment
will be postponed to the next day that is a business day, and no interest on
such payment shall accrue for the period from and after such otherwise
scheduled payment date for the purposes of the payment to be made on such next
succeeding business day.
So long as the nominee of the Depository is the registered owner of the
Bonds, payments of interest, principal, and premium (if any) on the Bonds will
be made to the Depository. The Depository will be responsible for crediting
the amount of such distributions to the accounts of the Participants entitled
thereto, in accordance with the Depository's normal procedures. Each
Participant will be responsible for disbursing such distributions to the
Beneficial Owners of the interests in Bonds that it represents. NEITHER THE
COMPANY NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR LIABILITY FOR ANY
ASPECT OF THE RECORDS RELATING TO, NOTICES TO, OR PAYMENTS MADE ON ACCOUNT OF,
BENEFICIAL OWNERSHIP INTERESTS IN THE BONDS, FOR MAINTAINING, SUPERVISING OR
REVIEWING ANY RECORDS RELATING TO SUCH BENEFICIAL OWNERSHIP INTERESTS, OR FOR
THE SELECTION OF ANY BENEFICIAL OWNER TO RECEIVE PAYMENT IN THE EVENT OF A
PARTIAL REDEMPTION OF THE GLOBAL SECURITY OR FOR CONSENTS GIVEN OR OTHER
ACTION TAKEN ON BEHALF OF ANY BENEFICIAL OWNER.
27
<PAGE>
SECURITY AND PRIORITY
The Bonds are secured by a first mortgage on substantially all of the real
and personal property presently owned by or hereafter acquired by the Company,
including: all real estate interests; all personal property; all gas
manufacturing facilities, distribution facilities and storage facilities; all
equipment used in the transmission or storage of gas; contract rights to
purchase natural gas and other products from various suppliers; and all rights
under any permit or license. Excluded from the security for the Bonds under
the terms of the Indenture are the following: all cash, bonds, stocks,
obligations, and other securities not deposited with the Trustee; all contract
rights other than to purchase natural gas or for material construction
contracts; all accounts receivable, notes and bills receivable, judgments, and
other evidences of indebtedness; all electricity, gas, water, appliances,
stock in trade, materials, fuel, supplies, and other products generated,
manufactured, produced, purchased, or acquired for the purpose of sale and/or
resale, transmission, distribution, storage, inventory, or use in the usual
course of business; all products of the land owned by the Company; all
vehicles, automotive equipment, and construction equipment; all office
equipment, furniture, and tools; all property which is characterized as
supplemental fuel inventory; and the Company's books and records. However,
upon an Event of Default (as defined below), the foregoing excluded property
(except the supplemental fuel inventory) may become subject to the lien of the
Indenture. In the event of a merger, consolidation, transfer, sale, or lease
of the Company or its properties, the lien of the Indenture survives against
the property of the Company in the possession of a successor company.
The Bonds will rank equally and ratably (except as to sinking fund and other
analogous funds established for the exclusive benefit of a particular series)
with all bonds issued under the Indenture (and the MGC Indenture and the CNGI
Indenture with respect to Series A Bond issued thereunder), regardless of
series, from time to time issued and outstanding under the Indenture.
TITLE INSURANCE
Title insurance will be issued to the Trustee for the benefit of the
bondholders insuring all real property conveyed to the Trustee as security
under the Indenture.
REDEMPTION AT OPTION OF THE COMPANY
The Bonds will be redeemable at any time on or after September 30, 2002, as
a whole or in part, at the election of the Company, on not less than 30 nor
more than 60 days' notice given as provided in the Indenture, at 104% of the
principal amount of the Bonds, declining by 1% of the principal amount per
year for each of the succeeding four years, together with accrued and unpaid
interest to the date of redemption, as further illustrated in the table set
forth below, provided that Bonds are redeemed on or after September 30 of the
years indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE %
---- ----------
<S> <C>
2002........................................................... 104%
2003........................................................... 103%
2004........................................................... 102%
2005........................................................... 101%
2006 and thereafter............................................ 100%
</TABLE>
On and after the date fixed for redemption, interest will cease to accrue on
Bonds or portions thereof called for redemption, unless the Company shall
default in the payment of the redemption price.
If the Company elects to redeem less than all of the outstanding Bonds, the
Trustee shall prorate the principal amount of such bonds to be redeemed among
all holders of outstanding Bonds in proportion to the outstanding principal
amount of such bonds held by each holder. The aggregate principal amount of
each partial redemption of Bonds shall be allocated in units of $1,000, or
integral multiples thereof, among the holders of such bonds at the time
outstanding, in proportion as nearly as practicable, to the respective unpaid
principal amount of such bonds held thereby, with adjustment, to the extent
practicable, to equalize for any prior redemption not made in exactly such
proportion.
28
<PAGE>
LIMITED RIGHT OF REDEMPTION UPON DEATH OF A BENEFICIAL OWNER
Unless the Bonds have been declared due and payable prior to their maturity
by reason of an Event of Default, the representative of a deceased Beneficial
Owner has the right to request redemption of all or part of his or her
interest in the Bonds, expressed in integral multiples of $1,000 principal
amount, for payment prior to maturity. The Company will redeem the same
subject to the limitations that the Company will not be obligated to redeem
during the period beginning with the original issuance of the Bonds of this
series and ending on September 30, 1998 and during any twelve-month period
ending on September 30 thereafter, (i) at the request of a representative on
behalf of a deceased Beneficial Owner any interest in the Bonds which exceeds
an aggregate principal amount of $25,000 or (ii) interests in the Bonds in an
aggregate principal amount exceeding $500,000. A Redemption Request, as
hereinafter defined, may be presented to the Trustee at any time and in any
principal amount. If the Company, although not obligated to do so, chooses to
redeem interests of a deceased Beneficial Owner in the Bonds in any such
period in excess of the $25,000 limitation, such redemption, to the extent
that it exceeds the $25,000 limitation for any deceased Beneficial Owner,
shall not be included in the computation of the $500,000 aggregate limitation
for such period or any succeeding period.
Subject to the $25,000 and $500,000 limitations, the Company will upon the
death of any Beneficial Owner redeem the interests of the Beneficial Owner in
the Bonds within 60 days following receipt by the Trustee of a Redemption
Request from such Beneficial Owner's personal representative, or surviving
joint tenant(s), tenant(s) by the entirety or tenant(s) in common, or other
persons entitled to effect such a Redemption Request. If Redemption Requests
exceed the aggregate principal amount of interests in Bonds required to be
redeemed during any twelve-month period, such excess Redemption Requests will
be applied to successive periods, regardless of the number of periods required
to redeem such interests.
A Redemption Request may be made by delivering a request to the Depository,
in the case of a Participant which is the Beneficial Owner of such interest,
or to the Participant through whom the Beneficial Owner owns such interest, in
form satisfactory to the Participant, together with evidence of death and
authority of the representative satisfactory to the Participant and Trustee. A
surviving joint tenant, tenant in common or a tenant by the entirety, or other
person seeking the redemption of an interest in Bonds by reason of the death
of another may make the request for redemption and shall submit such other
evidence of the right to such redemption as the Participant shall require. The
request shall specify the principal amount of interest in the Bonds to be
redeemed. A request for redemption in form satisfactory to the Participant and
accompanied by the documents relevant to the request as above provided,
together with a certification by the Participant that it holds the interest on
behalf of the deceased Beneficial Owner with respect to whom the request for
redemption is being made (a "Redemption Request"), shall be provided to the
Depository by a Participant and the Depository will forward the request to the
Trustee. Redemption Requests shall be in form satisfactory to the Trustee.
The price to be paid by the Company for an interest in the Bonds to be
redeemed pursuant to a request on behalf of a deceased Beneficial Owner is one
hundred percent (100%) of the principal amount thereof plus accrued but unpaid
interest to the date of payment. Subject to arrangements with the Depository,
payment for an interest in the Bonds which are to be redeemed shall be made to
the Depository upon presentation of Bonds to the Trustee for redemption in the
aggregate principal amount specified in the Redemption Requests submitted to
the Trustee by the Depository which are to be fulfilled in connection with
such payment. Any acquisition of Bonds by the Company other than by redemption
at the option of a representative on behalf of a deceased Beneficial Owner
shall not be included in the computation of either the $25,000 or $500,000
limitations for any period.
Interests in the Bonds held in tenancy by the entirety, joint tenancy, or by
tenants in common will be deemed to be held by a single Beneficial Owner, and
the death of a tenant in common, tenant by the entirety, or joint tenant will
be deemed the death of a Beneficial Owner. The death of a person who, during
such person's lifetime,
29
<PAGE>
was entitled to substantially all of the rights of a Beneficial Owner of an
interest in the Bonds will be deemed the death of the Beneficial Owner,
regardless of the recordation of such interest on the records of the
Participant, if such rights can be established to the satisfaction of the
Participant and the Trustee. Such interest shall be deemed to exist in typical
cases of nominee ownership, ownership under the Uniform Gifts to Minors Act or
the Uniform Transfer to Minors Act, community property or other joint
ownership arrangements between a husband and wife (including individual
retirement accounts or Keogh plans maintained solely by or for the decedent or
by or for the decedent and any spouse), and trust and certain other
arrangements where one person has substantially all of the rights of a
Beneficial Owner during such person's lifetime.
In the case of a Redemption Request which is presented on behalf of a
deceased Beneficial Owner and which has not been fulfilled at the time the
Company gives notice of its election to redeem the Bonds, the Bonds which are
the subject of such Redemption Request shall not be eligible for redemption
pursuant to the Company's option to redeem but shall remain subject to
fulfillment pursuant to such Redemption Request.
Subject to the provisions of the immediately preceding paragraph, any
Redemption Request may be withdrawn upon delivery of a written request for
such withdrawal given to the Trustee by the Depository prior to September 1,
1998, in the case of the initial period beginning with the original issuance
of the Bonds and ending on September 30, 1998, or prior to September 1, in the
case of any subsequent twelve-month period ending on September 30.
Because of the limitations of the Company's requirement to redeem, no
Beneficial Owner can have any assurance that his or her interest in the Bonds
will be paid prior to maturity.
SINKING FUND
The Bonds are not subject to a sinking fund.
COVENANTS
The Company may issue additional bonds (in unlimited principal amounts)
under the Indenture only if, after giving effect to such issuance, its Net
Earnings Available for Interest (as defined in the Indenture) for a period of
12 consecutive months during the 24 months immediately preceding the month in
which bonds are issued is at least equal to 1.75 times the total annual
interest charges on all Outstanding Bonds (as defined in the Indenture) under
the Indenture (excluding any bonds for which provision has been made in
compliance with any requirement of the Indenture for their retirement) and all
other indebtedness for borrowed money then secured by a lien equal to or
superior to the lien of the Indenture on any part of the Company's property
which is subject to the Indenture (except any such indebtedness the evidences
of which shall then be held in any sinking fund or otherwise and any such
indebtedness where the necessary moneys for which the payment or redemption
have been deposited with a trustee or mortgagee) (the "Debt"). Further,
additional bonds may be issued only if, after giving effect to the proposed
bond issuance, Outstanding Bonds do not exceed 70% of Bondable Capacity (as
calculated in accordance with the provisions of the Indenture). On June 30,
1997, after giving effect to the issuance of the Bonds and the redemption of
the Series A Bonds, Net Earnings Available for Interest were times the
total annual interest charges for the Debt, and Outstanding Bonds were equal
to 52% of Bondable Capacity.
Before the Trustee may take any action under any provision of the Indenture,
the Trustee must receive, among other things, an officers' certificate and an
opinion of counsel stating that all conditions and covenants which must be
complied with pursuant to the terms of the Indenture before the Trustee may
take the requested action have been complied with.
Subject to the restrictions described above, the Indenture would not afford
any protection to bondholders solely in the event of the Company's involvement
in a highly-leveraged transaction.
30
<PAGE>
EVENTS OF DEFAULT; NOTICE AND WAIVER
The Indenture provides that the following shall constitute events of default
("Events of Default"):
(a) failure to pay the principal of any bonds secured by and outstanding
under the Indenture when due;
(b) failure to pay interest on any bond secured by and outstanding under
the Indenture for a period of 5 days after such interest shall have become
due;
(c) failure to pay any sinking fund payment for a period of 5 days after
such payment shall have become due under any supplement to the Indenture;
(d) certain events of bankruptcy, insolvency or reorganization;
(e) failure to perform or observe certain covenants, agreements, or
conditions on the part of the Company with respect to the payment of taxes,
the maintenance of certain liens on the trust estate, the maintenance of
certain insurance, and the sale of certain property;
(f) failure to perform or observe any of the other covenants, agreements,
or conditions on the part of the Company in the Indenture, and the
continuance of such failure for a period of 30 days after the earlier of
(i) knowledge by an officer of the Company, or (ii) written notice thereof
to the Company from the Trustee or from the holders of not less than 33
1/3% of the aggregate principal amount of the Bonds outstanding;
(g) default under any covenant or agreement of the Company contained in
any agreement between the Company and the original purchaser or the holders
of the bonds of a particular series so long as (i) such covenant or
agreement expressly states that a default thereunder constitutes a default
under the Indenture and (ii) a copy of such agreement or covenant is
provided to the Trustee;
(h) the rendering against the Company of a judgment or judgments for the
payment of monies in excess of $250,000 in the aggregate and the
continuance of such judgment unsatisfied and without stay for a period of
30 days; and
(i) with respect to Indebtedness for Money Borrowed (as defined in the
Indenture) in the aggregate amount in excess of $250,000 (excluding the
bonds) either (i) failure to pay any amount due or any interest or premium
thereon, when due, or (ii) default in the performance or observance of any
other obligation or condition with respect to such Indebtedness (as defined
in the Indenture) if the effect of such default either accelerates the
maturity of the Indebtedness or permits such Indebtedness to become due and
payable prior to its stated maturity.
Upon the occurrence of an Event of Default, the Trustee may, and upon the
request of the holders of 33 1/3% in aggregate principal amount of the
outstanding bonds shall, by written notice to the Company, declare the
principal and all accrued and unpaid interest on the bonds immediately due and
payable. The Trustee, upon request of the holders of a majority in aggregate
principal amount of the outstanding bonds, shall rescind any such declaration
if such default is cured.
The Indenture provides that within 45 days after the occurrence of an Event
of Default the Trustee will give the holders of the bonds notice of all
uncured Events of Default known to it; but, except in the case of a default in
the payment of principal or premium, if any, or interest on any of the bonds,
or in the payment of any sinking, improvement, purchase, amortization, or
other fund installment, the Trustee shall be protected for withholding such
notice if the Trustee in good faith determines that the withholding of such
notice is in the interest of such holders.
The holders of a majority in aggregate principal amount of the outstanding
bonds may on behalf of the holders of all the bonds waive certain past
defaults, except a default in the payment of the principal or premium or
interest on the bonds or in respect of a covenant or provision of the
Indenture that cannot be modified or amended without the consent of all of the
outstanding bondholders affected. Upon such waiver, such Event of Default
shall be deemed to be cured and no longer to exist for any purpose under the
Indenture.
31
<PAGE>
Holders of bonds have no right to enforce any remedy under the Indenture
unless the Trustee has first had a reasonable opportunity to do so following
notice of default to the Trustee and request by the holders of 25% in
aggregate principal amount of the bonds for action by the Trustee with offer
of indemnity satisfactory to the Trustee against cost, expenses and
liabilities that may be incurred thereby, but this provision does not impair
the absolute right of any holder of bonds to enforce payment of the principal
of and interest on his or her bond when due.
MODIFICATION OF INDENTURE
Modifications and amendments of the Indenture which materially affect the
rights of the holders of the bonds outstanding under the Indenture may be made
by the Company and the Trustee only with the consent of the holders of no less
than 66 2/3% in principal amount of the bonds of each series then outstanding,
provided that no such modification or amendment may: (1) permit the extension
of the time or times of payment of the principal of, or the interest or the
premium (if any) on, any bond, or a reduction in the rate of interest or the
amount of premium thereon, or otherwise affect the terms of payment of the
principal of, or the interest or the premium (if any) on, any bond; (2)
otherwise than as permitted by the Indenture, permit the creation of any lien
ranking prior or equal to the lien of the Indenture with respect to any of the
mortgaged properties; or (3) permit the reduction of the percentage of bonds
required for the making of any such modification or alteration.
RELEASE OF PROPERTY
Unless an Event of Default shall have occurred and be continuing, the
Company is entitled to possess, use and enjoy all the property and
appurtenances, franchise and rights conveyed by the Indenture. Subject to
various limitations and requirements, the Company may obtain a release of any
part of the mortgaged property upon receipt by the Trustee of cash or other
consideration, if any, received or to be received from the sale, surrender or
other disposition of the property to be released.
RELEASE AND DISCHARGE OF INDENTURE
The Company may require the discharge of the Indenture if: (1) the Company
pays or makes appropriate provision for the payment to the holders of the
outstanding bonds of the principal, premium if any, and any interest due and
to become due thereon; and (2) the Company delivers an opinion of counsel and
an officers' certificate in accordance with the Indenture to the Trustee.
SUCCESSOR CORPORATION
Under the Indenture, the Company may not consolidate with or merge into or
convey or lease all or substantially all of its assets to another corporation,
unless immediately after such transaction, no Event of Default will exist and
such corporation assumes all the obligations of the Company under the bonds
and the Indenture.
CONCERNING THE TRUSTEE
Bank of New Hampshire is the Trustee under the Indenture. Its address is 143
Main Street, Concord, New Hampshire. The Company has appointed Bank of New
Hampshire as the Registrar under the Indenture.
The Indenture provides that all indebtedness to the Trustee for compensation
thereunder shall be secured by a lien prior to that of the bonds upon the
trust estate.
32
<PAGE>
UNDERWRITING
The sole Underwriter, Edward D. Jones & Co., L.P., whose address is 12555
Manchester Road, St. Louis, Missouri 63131-3729, has agreed, subject to the
terms and conditions of the Underwriting Agreement, to purchase the Bonds from
the Company.
The Company has been advised that the Underwriter proposes to offer the
Bonds directly to the public at the public offering price set forth on the
cover page of this Prospectus. The Underwriter may organize a selling group of
other securities dealers, all of whom will be members of the National
Association of Securities Dealers, Inc. The Underwriter may allow concessions
to members of the selling group in such amounts as it may determine. After the
initial public offering, the public offering price and concessions to dealers
may be changed.
The Company has been advised that the Underwriter intends to make a market
in the Bonds. In order to facilitate the offering of the Bonds, the
Underwriter may engage in transactions that stabilize, maintain or otherwise
affect the price of the Bonds. Specifically, the Underwriter may over-allot in
connection with the offering, creating a short position in the Bonds for its
own account. In addition, to cover over-allotments or to stabilize the price
of the Bonds, the Underwriter may bid for, and purchase, the Bonds in the open
market. The Underwriter may reclaim selling concessions allowed to a dealer
for distributing the Bonds in the offering, if the Underwriter repurchases
previously distributed Bonds in transactions to cover short positions in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Bonds above independent market levels. The
Underwriter is not required to engage in these activities, and may end any of
these activities at any time.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933.
LEGAL MATTERS
Certain legal matters in connection with the offering have been passed upon
for the Company by McLane, Graf, Raulerson & Middleton, Professional
Association, Manchester, New Hampshire. Richard A. Samuels, a shareholder and
director of McLane, Graf, Raulerson & Middleton, Professional Association, is
Assistant Secretary of the Company and Secretary of ENI, the Company's parent.
Certain matters will be passed upon for the Underwriter by Bryan Cave LLP,
St. Louis, Missouri.
EXPERTS
The audited financial statements and schedules of the Company included in
this Prospectus and elsewhere in the Registration Statement, of which this
Prospectus is a part, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
are included herein in reliance upon the authority of such firm as experts in
accounting and auditing in giving said reports.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange Act
under Section 15(d) of the Exchange Act and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"SEC"). Such reports and other information can be inspected and copied at the
SEC's Public Reference Room; Judiciary Plaza; 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following Regional Offices of the SEC:
7 World Trade Center, Suite 1300, New York, New York 10048; and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can be obtained from the Public Reference Section of
the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The SEC also maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC (http://www.sec.gov).
33
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................................. F-2
Balance Sheets, June 30, 1997 (unaudited), September 30, 1996 and 1995.... F-3
Statements of Income, Twelve Months Ended June 30, 1997 (unaudited),
Fiscal Years Ended September 30, 1996, 1995 and 1994..................... F-4
Statements of Retained Earnings, Twelve Months Ended June 30, 1997
(unaudited), Fiscal Years Ended September 30, 1996, 1995 and 1994........ F-5
Statements of Cash Flows, Twelve Months Ended June 30, 1997 (unaudited),
Fiscal Years Ended September 30, 1996, 1995 and 1994..................... F-6
Notes to Financial Statements............................................. F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of EnergyNorth Natural Gas, Inc.:
We have audited the accompanying balance sheets of EnergyNorth Natural Gas,
Inc. (a New Hampshire corporation and a wholly owned subsidiary of
EnergyNorth, Inc.) as of September 30, 1996 and 1995, and the related
statements of income, retained earnings and cash flows for each of the three
years in the period ended September 30, 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of EnergyNorth Natural Gas,
Inc. as of September 30, 1996 and 1995, and the results of its operations and
its cash flows for each of the years in the period ended September 30, 1996,
in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Boston, Massachusetts
November 1, 1996
F-2
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
SEPTEMBER 30,
JUNE 30, -----------------
1997 1996 1995
----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Utility plant, at cost...................... $143,711 $136,198 $129,864
Accumulated depreciation and amortization... 47,686 44,679 41,448
-------- -------- --------
Net utility plant........................... 96,025 91,519 88,416
-------- -------- --------
Current assets:
Cash and temporary cash investments......... 459 311 404
Accounts receivable (net of allowances of
$1,333, $1,176 and $907, respectively)..... 6,047 1,831 1,921
Unbilled revenues........................... 593 582 586
Deferred gas costs.......................... -- 3,783 --
Materials and supplies...................... 1,523 1,453 1,498
Supplemental gas supplies................... 5,335 8,825 7,899
Prepaid and deferred taxes.................. 1,412 1,562 1,673
Recoverable FERC 636 transition costs....... 1,514 1,733 1,733
Prepaid expenses and other.................. 413 1,098 1,156
-------- -------- --------
Total current assets...................... 17,296 21,178 16,870
-------- -------- --------
Deferred charges:
Regulatory asset--income taxes.............. 2,402 2,401 2,401
Recoverable environmental costs............. 6,268 6,840 3,741
Other deferred charges...................... 93 768 859
-------- -------- --------
Total deferred charges.................... 8,763 10,009 7,001
-------- -------- --------
Total assets.............................. $122,084 $122,706 $112,287
======== ======== ========
STOCKHOLDER'S EQUITY AND LIABILITIES
Capitalization:
Common stock--par value of $25 per share,
120,000 shares authorized, issued and
outstanding................................ $ 3,000 $ 3,000 $ 3,000
Amount in excess of par..................... 22,538 22,538 21,038
Retained earnings........................... 20,891 15,819 14,027
-------- -------- --------
Total common stockholder's equity......... 46,429 41,357 38,065
-------- -------- --------
Long-term debt.............................. 26,789 27,102 28,552
Capital lease obligations................... -- -- 25
-------- -------- --------
Total long-term obligations............... 26,789 27,102 28,577
-------- -------- --------
Total capitalization...................... 73,218 68,459 66,642
-------- -------- --------
Current liabilities:
Notes payable to banks...................... 5,500 9,535 1,500
Current portion of long-term debt........... 1,663 1,646 1,652
Current portion of capital lease
obligations................................ -- 25 43
Inventory purchase obligation............... 4,101 7,867 7,130
Accounts payable............................ 5,615 5,287 4,307
Accounts payable to affiliates.............. 763 589 1,285
Deferred gas costs.......................... 2,476 -- 5,645
Accrued interest............................ 1,055 831 857
Accrued taxes............................... 2,596 1,617 192
Accrued FERC 636 transition costs........... 1,514 1,733 1,733
Customer deposits, environmental and
other...................................... 1,933 3,963 1,260
-------- -------- --------
Total current liabilities................. 27,216 33,093 25,604
-------- -------- --------
Commitments and contingencies
Deferred credits:
Deferred income taxes....................... 16,272 15,619 14,339
Unamortized investment tax credits.......... 1,768 1,870 2,010
Regulatory liability........................ 1,284 1,374 1,497
Contributions in aid of construction and
other...................................... 2,326 2,291 2,195
-------- -------- --------
Total deferred credits.................... 21,650 21,154 20,041
-------- -------- --------
Total stockholder's equity and
liabilities.............................. $122,084 $122,706 $112,287
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
12 MONTHS ENDED SEPTEMBER 30,
JUNE 30, -----------------------
1997 1996 1995 1994
--------------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Operating revenues:
Utility gas service................... $91,029 $76,620 $68,988 $86,376
Other................................. 975 890 829 1,774
------- ------- ------- -------
Total operating revenues............ 92,004 77,510 69,817 88,150
------- ------- ------- -------
Operating expenses:
Cost of gas sold...................... 53,879 39,115 35,602 51,058
Operations and maintenance............ 18,140 18,624 18,407 19,180
Depreciation and amortization......... 4,864 4,693 4,063 3,897
Taxes other than income taxes......... 3,574 3,654 3,460 3,639
Federal and state income taxes........ 3,330 3,224 1,745 2,280
------- ------- ------- -------
Total operating expenses............ 83,787 69,310 63,277 80,054
------- ------- ------- -------
Operating income........................ 8,217 8,200 6,540 8,096
Other income............................ 760 735 1,254 416
------- ------- ------- -------
Income before interest expense.......... 8,977 8,935 7,794 8,512
Interest expense:
Interest on long-term debt............ 2,653 2,747 2,883 3,001
Other interest........................ 887 761 1,166 674
------- ------- ------- -------
Total interest expense.............. 3,540 3,508 4,049 3,675
------- ------- ------- -------
Net income.............................. $ 5,437 $ 5,427 $ 3,745 $ 4,837
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
STATEMENTS OF RETAINED EARNINGS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
12 MONTHS ENDED SEPTEMBER 30,
JUNE 30, -----------------------
1997 1996 1995 1994
--------------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Balance at beginning of year ......... $19,105 $14,027 $13,650 $12,012
Add--net income....................... 5,437 5,427 3,745 4,837
------- ------- ------- -------
24,542 19,454 17,395 16,849
Deduct--cash dividends on common
stock................................ 3,651 3,635 3,368 3,199
------- ------- ------- -------
Balance at end of year................ $20,891 $15,819 $14,027 $13,650
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
12 MONTHS ENDED SEPTEMBER 30,
JUNE 30, -------------------------
1997 1996 1995 1994
--------------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income....................... $ 5,437 $ 5,427 $ 3,745 $ 4,837
Noncash items:
Depreciation and amortization.. 5,114 5,177 4,486 4,271
Deferred taxes and investment
tax credits, net.............. 928 1,017 1,066 569
Changes in:
Accounts receivable, net....... (1,843) 90 303 (372)
Unbilled revenues.............. 12 4 (42) (76)
Inventories.................... (820) (881) 47 704
Prepaid expenses and other..... (16) 58 (93) 224
Deferred gas costs............. 4,587 (9,428) 909 5,499
Accounts payable............... 225 980 36 247
Accounts payable to affiliates,
net........................... (719) (696) 901 (269)
Accrued liabilities............ (630) (279) (104) (167)
Accrued/prepaid taxes.......... 246 1,536 (419) 112
Payments for environmental costs
and other....................... (1,315) (821) (2,672) (1,511)
-------- ------- ------- -------
Net cash provided by
operating activities........ 11,206 2,184 8,163 14,068
-------- ------- ------- -------
Cash flows from investing
activities:
Additions to property............ (11,752) (7,496) (6,407) (6,298)
-------- ------- ------- -------
Cash flows from financing
activities:
Capital contributions from
parent.......................... 1,500 1,500 -- 1,190
Issues of long-term debt......... 211 208 149 80
Change in notes payable to
banks........................... 3,500 8,035 1,500 (3,050)
Increase in inventory purchase
obligation...................... 9,194 9,284 6,770 9,962
Change in customer deposits and
other........................... (271) 81 7 128
Cash dividends on common stock... (3,651) (3,635) (3,368) (3,199)
Refunding requirements:
Repayment of long-term debt.... (1,660) (1,664) (1,687) (1,356)
Repayment of capital lease
obligations................... (36) (43) (41) (41)
Repayment of inventory purchase
obligation.................... (8,059) (8,547) (6,974) (9,655)
-------- ------- ------- -------
Net cash provided by (used
for) financing activities... 728 5,219 (3,644) (5,941)
-------- ------- ------- -------
Net increase (decrease) in cash and
temporary cash investments........ 182 (93) (1,888) 1,829
Cash and temporary cash invest-
ments, beginning of year.......... 277 404 2,292 463
-------- ------- ------- -------
Cash and temporary cash invest-
ments, end of year................ $ 459 $ 311 $ 404 $ 2,292
======== ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS
(INCLUDING DATA APPLICABLE TO UNAUDITED PERIOD)
NOTE 1. ACCOUNTING POLICIES
The significant accounting policies followed by EnergyNorth Natural Gas,
Inc. (the "Company") are set forth below.
Business Organization
The Company is a wholly owned subsidiary of EnergyNorth, Inc. Transactions
between the Company and other affiliated companies include payments for
management, accounting, data processing and other services. The Company is a
regulated gas distribution utility located in southern and central New
Hampshire and also provides service and sells appliances. The rates and
accounting practices followed by the Company are regulated by the New
Hampshire Public Utilities Commission ("NHPUC"). The Company's accounting
policies conform to generally accepted accounting principles applicable to
rate-regulated enterprises and reflect the effects of the ratemaking process
in accordance with Statement of Financial Accounting Standards ("SFAS") No.
71, "Accounting for Certain Types of Regulation."
Revenue Recognition
Utility revenues derived from the sale or transportation of natural gas are
based on rates authorized by the NHPUC. Customers' meters are read and bills
are rendered on a cycle basis throughout the month. The Company records
unbilled revenues related to gas delivered but not billed at the end of the
accounting period.
Cost of Gas Adjustment Clause
The Company's tariff includes a cost of gas adjustment ("CGA") clause that
permits billings to customers for changes in its cost of gas over a base
period cost. The tariff provides for a CGA calculation for a summer period and
a winter period. Any difference between the cost of gas incurred and amounts
billed to customers is deferred for ratemaking and accounting purposes to the
next corresponding period. Interest accrues on these amounts at the prime
rate, adjusted quarterly.
Inventories
Inventories are valued on the basis of the lower of average cost or market.
Depreciation
The Company provides for depreciation on the straight-line basis. The rates
applied are approved by the NHPUC. Such rates were equivalent to a composite
rate of 3.4% for the twelve months ended June 30, 1997 and for the fiscal
years ended September 30, 1996, 1995 and 1994. Under depreciation practices
required by the NHPUC, when gas utility assets under the composite method are
retired from service, the cost of the retired assets are removed from the
property accounts and charged, together with any cost of removal, to the
accumulated depreciation accounts. For all other assets, when assets are sold
or retired, the cost of the assets and their related accumulated depreciation
are removed from the respective accounts, net removal costs are recorded and
any gain or loss is included in income.
Deferred Charges
Total deferred charges consist primarily of regulatory assets and the cost
of issuing debt. The Company has established various regulatory assets in
cases where the NHPUC has permitted, or is expected to permit, recovery of
specific costs over a period of time. At September 30, 1996, regulatory assets
included $6,800,000 for
F-7
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
environmental investigation and disposal costs and $2,400,000 of unrecovered
deferred state income taxes (see Note 6). At June 30, 1997, regulatory assets
included $6,300,000 for environmental investigation and disposal costs and
$2,400,000 of unrecovered deferred state income taxes.
The unamortized cost of issuing debt at September 30, 1996 was $664,000 and
at June 30, 1997 was $619,000. Deferred financing costs are amortized over the
life of the related security. Other deferred charges are amortized over the
recovery period specified by the NHPUC.
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of," issued in March 1995 and effective
October 1, 1996, establishes accounting standards for the impairment of long-
lived assets. SFAS No. 121 requires that any assets, including regulatory
assets, which are no longer probable of recovery through future revenues, be
revalued based on estimated future cash flows. If the revaluation is less than
the book value of the asset, an impairment loss would be charged to earnings.
While circumstances may change, based on the current regulatory environment in
the Company's service area, the adoption of SFAS No. 121 has not had a
material impact on the Company's financial position or results of operations.
Investment Tax Credits
Investment tax credits are being amortized over the estimated useful life of
the property that gave rise to the credit.
Fair Value of Financial Instruments
Because of the short maturity of certain assets, which include cash,
temporary cash investments and accounts receivable, and certain liabilities,
which include accounts payable and notes payable to banks, these instruments
are stated at amounts that approximate fair value.
If long-term debt outstanding at September 30, 1996 were refinanced using
new issue debt rates of interest that on average are lower than the
outstanding rates, the present value of those obligations would increase from
the amounts outstanding on the September 30, 1996 balance sheet by 11.8%. In
the event of refinancing, there would be no gain or loss as, under established
regulatory procedure, any such difference would be reflected in rates and have
no effect on gross income.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
that affect assets and liabilities, the disclosure of contingent assets and
liabilities, and revenues and expenses. Actual amounts could differ from those
estimates.
Reclassifications
Reclassifications are made periodically to previously issued financial
statements to conform to the current year's presentation.
F-8
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE 2. CASH FLOWS
Supplemental disclosures of cash flow information are as follows (in
thousands):
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
12 MONTHS ENDED SEPTEMBER 30,
JUNE 30, --------------------
1997 1996 1995 1994
--------------- ------ ------ ------
<S> <C> <C> <C> <C>
Cash paid during the period for:
Interest (net of amount capitalized).... $3,709 $3,369 $4,132 $3,372
Income taxes............................ 2,391 508 898 1,595
</TABLE>
In preparing the accompanying statements of cash flows, all highly liquid
investments having maturities of three months or less when acquired were
considered to be cash equivalents and classified as cash and temporary
investments.
NOTE 3. INVENTORY FINANCING
The Company finances gas inventory purchases through the use of a single
purpose trust, which purchases gas with funds loaned to it by a bank. As the
Company requires gas to service customers, gas is repurchased from the trust
at original product cost plus financing costs and trust fees. The cost of gas
and related financing are recoverable through the CGA.
The bank credit agreement provides for a .375% commitment fee on the credit
line and interest at prime (8.25% at September 30, 1996 and 8.5% at June 30,
1997) with a fixed rate interest option at less than prime on the outstanding
balance. The trust agreement provides for a management fee of $8,000 annually.
The credit agreement between the trust and the bank provides for a total
commitment of up to $9,500,000 through February 1998.
As of September 30, 1996 and 1995, the gas inventories under the trust
agreement and controlled by the Company totaled $7,800,000 and $7,100,000,
respectively, and are included in inventories on the accompanying balance
sheets. At June 30, 1997, gas inventories under the trust agreement were
$4,100,000. Inventory purchase obligations under this financing agreement are
reflected as a current liability on the accompanying balance sheets.
NOTE 4. NOTES PAYABLE TO BANKS
As of June 30, 1997, the Company had available $14,700,000 under various
unsecured bank lines of credit that are renewed annually, $5,500,000 of which
was outstanding. The lines bear interest at prime, or less than prime on
certain of the lines for fixed periods of time, and are due on demand. The
terms of the credit agreements require annual commitment fees of .25% to .35%
of the lines.
F-9
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE 5. LONG-TERM DEBT
At June 30, 1997 and September 30, 1996 and 1995, long-term debt consisted
of the following (in thousands):
<TABLE>
<CAPTION>
FINAL SEPTEMBER 30,
INTEREST PAYMENT JUNE 30, ---------------
RATE DUE 1997 1996 1995
--------------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
General and Refunding
Bonds:
8.67% 2002 $ 7,088 $ 7,088 $ 8,270
8.44% 2009 4,000 4,333 4,667
9.70% 2019 7,000 7,000 7,000
9.75% 2020 10,000 10,000 10,000
Vehicle notes............ Prime plus .50% 2001 364 327 267
------- ------- -------
Total................ 28,452 28,748 30,204
Less--current portion.... 1,663 1,646 1,652
------- ------- -------
Total long-term
debt................ $26,789 $27,102 $28,552
======= ======= =======
</TABLE>
Interest payments for the General and Refunding Bonds are due semiannually.
The General and Refunding Bonds are collateralized by first mortgage liens on
substantially all real property and operating plant facilities.
The aggregate amounts of principal due for all long-term debt for each of
the five years subsequent to September 30, 1996 are as follows (in thousands):
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
----------- ------
<S> <C>
1997................................................................ $1,646
1998................................................................ 1,612
1999................................................................ 1,582
2000................................................................ 1,551
2001................................................................ 1,516
</TABLE>
NOTE 6. INCOME TAXES
The Company files a consolidated federal income tax return with its parent
company. For financial reporting and rate purposes, the Company provides taxes
on a separate return basis.
At September 30, 1996 and 1995, the SFAS No. 109 regulatory liability
amounted to $1,000,000 and $1,100,000, respectively, for the tax benefit of
unamortized investment tax credits, and $339,000 and $384,000, respectively,
for the excess reserves for deferred taxes as a result of pre-July 1, 1987
deferred income taxes that were recorded in excess of the current federal
statutory income tax rate.
A deferred state income tax liability and a corresponding regulatory asset
of approximately $2,400,000, representing revenues the Company expects to
recover from utility gas service customers, were established at September 30,
1994 as a result of recording deferred state income taxes on the cumulative
temporary differences due to a change in New Hampshire tax law. Effective June
2, 1994, the 1% franchise tax assessed on sales of natural gas was repealed.
Prior to the change in tax law, the franchise tax was permitted as a credit
against the New Hampshire Business Profits Tax ("NHBPT"). Because franchise
tax payments exceeded the NHBPT, the Company never incurred a NHBPT liability;
therefore, no deferred state income taxes related to temporary differences
were recorded.
F-10
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The tax effects of cumulative differences that gave rise to the deferred tax
liabilities and deferred tax assets for the years ended September 30, 1996 and
1995 were as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Deferred tax assets:
Contributions in aid of construction...................... $ 696 $ 666
Unamortized investment tax credits........................ 636 683
Allowance for doubtful accounts........................... 454 351
Deferred gas costs........................................ -- 1,373
Other..................................................... 821 655
------- -------
Total deferred tax assets............................... 2,607 3,728
------- -------
Deferred tax liabilities:
Property-related.......................................... 14,742 13,860
Deferred gas costs........................................ 1,773 --
Environmental costs....................................... 1,499 1,445
Other..................................................... 1,372 1,245
------- -------
Total deferred tax liabilities.......................... 19,386 16,550
------- -------
Net deferred tax liability.................................. $16,779 $12,822
======= =======
</TABLE>
Deferred income taxes were classified in the accompanying balance sheets as
of September 30, 1996 and 1995 as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Current..................................................... $ 1,160 $(1,517)
Long-term................................................... 15,619 14,339
------- -------
Total................................................... $16,779 $12,822
======= =======
</TABLE>
The components of federal and state income taxes reflected in the
accompanying statements of income for the years ended September 30, 1996, 1995
and 1994 were as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Federal:
Current............................................ $ (323) $ 961 $1,944
Deferred........................................... 3,119 566 481
Investment tax credits............................. (140) (141) (145)
------ ------ ------
Total federal.................................... 2,656 1,386 2,280
------ ------ ------
State:
Current............................................ (129) 227 --
Deferred........................................... 697 132 --
------ ------ ------
Total state...................................... 568 359 --
------ ------ ------
Total provision for income taxes..................... $3,224 $1,745 $2,280
====== ====== ======
</TABLE>
F-11
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The total federal and state income tax provision, as a percentage of income
before federal and state income taxes, was 37.3%, 31.8% and 32% for the years
ended September 30, 1996, 1995 and 1994, respectively. The following table
reconciles the income tax provision calculated using the federal statutory tax
rate of 34% to the book provision for federal income taxes (in thousands).
<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Tax calculated at statutory rate................... $2,941 $1,867 $2,420
Increase (reduction) in effective tax resulting
from:
Amortization of investment tax credit............ (140) (141) (145)
Adjustment due to change in tax rates............ (28) (28) (28)
State taxes, net of federal tax benefit.......... 375 241 --
Other, net....................................... 76 (194) 33
------ ------ ------
Total provision for income taxes................... $3,224 $1,745 $2,280
====== ====== ======
NOTE 7. EMPLOYEE BENEFIT PLANS
Pension Plans
The Company has a noncontributory defined benefit plan covering
substantially all employees. Benefits are based on years of credited service
and average earnings during the five highest consecutive years of earnings
prior to the normal retirement date. The Company is also charged for pension
expense for the management pension plan of the parent company.
The Company's funding policy is to annually contribute to the plans an
amount that is not less than the minimum amount required by the Employee
Retirement Income Security Act of 1974 and not more than the maximum
deductible for income tax purposes.
Net periodic pension cost included the following components (in thousands):
<CAPTION>
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Service cost for benefits earned................... $ 249 $ 236 $ 231
Interest cost on projected benefit obligations..... 472 458 440
Actual return on plan assets....................... (542) (953) 314
Net amortization and deferral...................... (90) 369 (860)
Parent company allocation.......................... 344 389 387
------ ------ ------
Net periodic pension cost.......................... $ 433 $ 499 $ 512
====== ====== ======
The following table sets forth the funded status of the plans at September
30, 1996, 1995 and 1994 (in thousands):
<CAPTION>
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Vested benefit obligation.......................... $5,983 $5,239 $5,120
====== ====== ======
Accumulated benefit obligation..................... $6,228 $5,455 $5,322
====== ====== ======
Projected benefit obligation....................... $6,971 $6,429 $6,246
Plan assets at fair value.......................... 7,300 6,839 5,896
------ ------ ------
Funded status...................................... 329 410 (350)
Unrecognized transition asset...................... (384) (444) (504)
Unrecognized prior service cost.................... 351 407 463
Unrecognized net loss.............................. 447 185 782
------ ------ ------
Prepaid pension.................................... $ 743 $ 558 $ 391
====== ====== ======
</TABLE>
F-12
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Assumptions used to determine the projected benefit obligation were as
follows:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Discount rate.............................................. 7.5% 7.5% 7.5%
Rate of increase in future compensation levels............. 4.0% 4.0% 4.5%
Expected long-term rate of return on assets................ 9.0% 9.0% 9.0%
</TABLE>
Plan assets are invested in common stocks and bonds.
The Company has an employee 401(k) savings and investment plan covering
substantially all employees. The Company made contributions of $61,000,
$57,000 and $56,000 for the years ended September 30, 1996, 1995 and 1994,
respectively.
Other Postemployment Benefits
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits to qualified retired employees.
In accordance with SFAS No. 106, the Company began recording the cost of
postretirement benefits on an accrual basis in 1994. The expense recorded in
fiscal 1996, 1995 and 1994 for providing postretirement benefits, including
amortization of the accumulated projected benefit obligation over a 20-year
period, was $222,000, $278,000 and $451,000, respectively.
The Company has funded these benefit costs by making cash contributions, at
the same level of expense recorded, to a voluntary employee benefit
association ("VEBA") trust.
The following table sets forth the funded status of the plan at September
30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Accumulated postretirement benefit obligation as of July
31:
Retirees.............................................. $ 1,225 $ 1,005
Fully eligible active plan participants............... 372 530
Other active participants............................. 685 656
------- -------
2,282 2,191
Plan assets at fair market value........................ (738) (557)
Unrecognized transition obligation...................... (2,381) (2,521)
Unrecognized net gain................................... 891 956
------- -------
Accrued postretirement benefit cost at July 31.......... 54 69
Contributions for the two-month period ending September
30..................................................... 55 70
------- -------
Accrued postretirement benefit cost at September 30..... $ (1) $ (1)
======= =======
</TABLE>
The components of the net periodic postretirement benefit cost at September
30, 1996 and 1995 are as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Service cost--benefits
attributed to services
during the year........ $ 48 $ 44
Interest cost on accumu-
lated postretirement
benefit obligation..... 161 162
Actual asset return..... (48) (73)
Net amortization and de-
ferral................. 61 145
---- ----
Net periodic
postretirement benefit
cost................... $222 $278
==== ====
</TABLE>
F-13
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
An 11% average annual rate of increase in the per capita costs of covered
health care benefits was assumed for fiscal 1996, reduced in steps of 1% to a
level of 5% at 2002 and thereafter. This decrease results from changes in
estimates of future health care inflation, assumed changes in health care
utilization and related effects. Increasing the assumed health care cost trend
rates by one percentage point in each year would have resulted in a $198,000
increase in the accumulated postretirement benefit obligation as of July 31,
1996 and an increase in the aggregate of the service cost and interest cost
components of net periodic postretirement benefit cost for fiscal 1996 of
$15,000. A discount rate of 7.5% was used to determine the accumulated
postretirement benefit obligation. The expected long-term rate of return on
plan assets is 9%. Plan assets are invested in common stocks and bonds.
NOTE 8. COMMITMENTS AND CONTINGENCIES
Contracts
The Company has various contractual agreements covering the transportation
of natural gas, underground storage facilities and the purchase of natural
gas, which are recoverable under the Company's CGA. These contracts expire at
various times from 1997 to 2011.
Litigation
The Company has been named in certain lawsuits arising from normal
operations. In the opinion of management, the outcome of these lawsuits will
not have a material adverse effect on the financial position or results of
operations of the Company.
Environmental Issues
The Company and certain of its predecessors owned or operated several
facilities for the manufacture of gas from coal, a process used through the
mid-1900's that produced by-products that may be considered contaminated or
hazardous under current law, and some of which may still be present at such
facilities. The Company accrues environmental investigation and clean-up costs
with respect to former manufacturing sites and other environmental matters
when it is probable that a liability exists and the amount or range of amounts
can be reasonably estimated.
One former manufactured gas facility in Concord, New Hampshire has been
investigated and partially remediated. Disposal of the contents of the
gasholder situated at this former gas manufacturing facility has been
completed. Total remediation costs amounted to approximately $3,500,000 and
were recorded in deferred charges. Recovery of costs from customers began on
July 1, 1995 and will extend over a seven-year period. The unamortized balance
of approximately $2,500,000 at June 30, 1997 is excluded from rate base.
The New Hampshire Department of Environmental Services ("NHDES") has
required remedial action for a portion of the Concord site at which wastes
were disposed of from approximately 1852 through 1952. The estimated cost of
this remedial action ranges from $2,100,000 to $3,200,000, and the Company has
recorded $2,100,000 at June 30, 1997 in deferred charges. The Company has
petitioned the NHPUC for approval of the Company's proposed five-year recovery
from ratepayers, including carrying costs, for approximately $1,900,000 of
investigation, remediation and recovery effort costs.
The Company is pursuing recovery from its insurance carriers as well as from
insurance carriers of its predecessors with respect to the Concord site. In
addition, the Company is pursuing recovery against an entity that the Company
alleges owned or operated the manufactured gas plant during the late 1800's
and early 1900's.
F-14
<PAGE>
ENERGYNORTH NATURAL GAS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The Company and Public Service Company of New Hampshire ("PSNH"), an
electric utility company, conducted an environmental site characterization of
a second former manufactured gas plant in Laconia, New Hampshire. The Laconia
manufactured gas plant operated between approximately 1887 and 1952, and the
Company owned and operated the facility for approximately the last seven years
of its active life. PSNH also owned and operated the facility during its
active life. Without admitting liability, the Company and PSNH have entered
into an agreement under which costs of the site characterization are shared.
The Company's share of the costs of the site characterization and a report to
the NHDES, totaled $265,000 and has been recorded in deferred charges as of
June 30, 1997. The Company expects to incur further expenses but is currently
unable to predict the magnitude of any liability that may be imposed on it for
the cost of additional studies or the performance of a remedial action in
connection with the Laconia site. The Company is pursuing recovery from its
insurance carriers for costs incurred with respect to the Laconia site.
The Company is pursuing and intends to pursue recovery from insurance
carriers and claims against any other responsible parties seeking to ensure
that they contribute appropriately to reimburse the Company for any costs
incurred with respect to environmental matters. The Company intends to seek
and expects to receive approval of rate recovery methods with respect to
environmental matters after it has determined the extent of contamination,
received recommendations with regard to remediation, and commenced remediation
efforts.
Transition Costs
Federal Energy Regulatory Commission Order 636 allows interstate pipeline
companies to recover transition costs created as they buy out of long-term
fixed-price gas contracts. Since the Company's supplier began direct billing
these costs on September 1, 1993 as a component of demand charges, $7,600,000
has been billed through June 30, 1997. The Company has recorded additional
transition costs of approximately $1,500,000 that will be billed over a period
of 18 months. The Company is recovering transition costs through the cost of
gas adjustment.
F-15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNEC-
TION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COM-
PANY OR THE UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SO-
LICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE ANY OF THE DATES
AS OF WHICH INFORMATION IS FURNISHED HEREIN OR THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 5
The Company.............................................................. 6
Use of Proceeds.......................................................... 6
Selected Financial Data.................................................. 7
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 8
Business................................................................. 13
Certain Relationships and Related Transactions........................... 19
Management............................................................... 20
Description of Bonds..................................................... 26
Underwriting............................................................. 33
Legal Matters............................................................ 33
Experts.................................................................. 33
Available Information.................................................... 33
Index to Financial Statements............................................ F-1
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$22,000,000
ENERGYNORTH
NATURAL GAS, INC.
FIRST MORTGAGE BONDS
DESIGNATED AS
% SERIES E BONDS
DUE SEPTEMBER 30, 2027
LOGO
----------------
PROSPECTUS
----------------
EDWARD D. JONES & CO., L.P.
DATED , 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<CAPTION>
ITEM AMOUNT
---- --------
<S> <C>
Filing fee--Securities and Exchange Commission.................... $ 6,667
Blue Sky filing fees and expenses (including estimated legal
fees)............................................................ $ 7,500
NASD filing fee................................................... $ 2,700
Legal fees and expenses (estimated)............................... $ 50,000
Accounting fees (estimated)....................................... $ 25,000
Printing and engraving (estimated)................................ $ 25,000
Trustee fees...................................................... $ 2,500
Miscellaneous..................................................... $ 5,000
--------
Total........................................................... $124,367
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
New Hampshire Revised Statutes Annotated ("RSA") 293-A, Sections 8.51 and
8.56, empower a corporation, subject to certain limitations, to indemnify its
directors and officers against expenses (including attorney's fees, judgments,
fines and amounts paid in settlement) actually and reasonably incurred by them
in connection with any civil or criminal suit or proceeding (other than a
derivative action) to which they are parties or threatened to be made parties
by reason of being directors or officers, if they acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of
the corporation (and with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful). The power to
indemnify in connection with an action or suit by or in the right of the
corporation (a derivative action) is more limited. Indemnification against
expenses actually and reasonably incurred is required if a director or officer
is wholly successful in defense of an action, suit or proceeding of the type
where indemnity is permitted by the statute. Unless ordered by a court,
indemnification under the statute, other than mandatory indemnification
against expenses, may be made only if a determination that indemnification is
proper has been made by a prescribed vote of the board of directors, special
legal counsel in certain cases, by the shareholders or by the prescribed vote
of a committee duly designated by the board of directors, in certain cases.
Indemnification provided for by RSA 293-A:8.50-8.58 is not exclusive and a
corporation is empowered to maintain insurance on behalf of its directors and
officers against any liability asserted against them in that capacity, whether
or not the corporation would have the power under that section to indemnify
them.
The by-laws of the Company provide that it shall indemnify any director or
officer pursuant to the provisions of RSA 293-A:8.50-8.58. The Company
maintains insurance on behalf of its directors and officers against liability
asserted them in that capacity.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following is a complete list of Exhibits filed as part of this
Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<C> <S>
1 Underwriting Agreement between EnergyNorth Natural Gas, Inc. and
Edward D. Jones & Co., L.P.
*3.1 Articles of Incorporation of EnergyNorth Natural Gas, Inc.
*3.2 Bylaws of EnergyNorth Natural Gas, Inc.
</TABLE>
- --------
* Previously filed.
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<C> <S>
4.1 Gas Service, Inc. General and Refunding Mortgage Indenture, dated
as of June 30, 1987, as amended, and supplemented by a First
Supplemental Indenture, dated as of October 1, 1988, and by a
Second Supplemental Indenture, dated as of August 31, 1989, is
incorporated by reference to Exhibit 4.1 of EnergyNorth, Inc.'s
Form 10-K (File No. 0-11035) for the fiscal year ended September
30, 1989.
4.2 Third Supplemental Indenture, dated as of September 1, 1990, to
Gas Service, Inc. General and Refunding Mortgage Indenture, dated
as of June 30,1987, is incorporated by reference to Exhibit 4.2
of EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the
fiscal year ended September 30, 1990.
4.3 Fourth Supplemental Indenture, dated as of January 10, 1992, to
Gas Service, Inc. General and Refunding Mortgage Indenture, dated
as of June 30, 1987, is incorporated by reference to Exhibit 4.3
of EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the
fiscal year ended September 30, 1992.
4.4 Fifth Supplemental Indenture, dated as of February 1, 1995, to Gas
Service, Inc. General and Refunding Mortgage Indenture, dated as
of June 30, 1987 is incorporated by reference to Exhibit 4.4 to
EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the fiscal
year ended September 30, 1996.
4.5 Sixth Supplemental Indenture, dated as of September 15, 1997, to
Gas Service, Inc. General and Refunding Mortgage Indenture, dated
as of June 30, 1987.
4.6 Copies of Bond Indentures and a note and credit agreement defining
the rights of holders of long-term debt of certain subsidiaries
of EnergyNorth, Inc., under which the amounts of bonds or the
note issued do not exceed 10% of the consolidated assets of
EnergyNorth, Inc. will be furnished to the Securities and
Exchange Commission upon request.
*5 Opinion of McLane, Graf, Raulerson & Middleton, Professional
Association as to the legality of the Bonds being registered.
10.1 Gas transportation agreement (FT-A), dated as of September 1,
1993, between Tennessee Gas Pipeline Company and EnergyNorth
Natural Gas, Inc. is incorporated by reference to Exhibit 10.1 to
EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the fiscal
year ended September 30, 1993.
10.2 Gas transportation agreement (contract No. 632), dated as of
September 1, 1993, between Tennessee Gas Pipeline Company and
EnergyNorth Natural Gas, Inc. is incorporated by reference to
Exhibit 10.2 to EnergyNorth, Inc.'s Form 10-K (File No. 0-11035)
for the fiscal year ended September 30, 1995.
10.3 Supplemental Executive Retirement Plan of EnergyNorth, Inc., as
amended, is incorporated by reference to Exhibit 10.3 to
EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the fiscal
year ended September 30, 1996.
10.4 Deferred Compensation Agreement, dated as of November 30, 1993,
between Robert R. Giordano and EnergyNorth, Inc. is incorporated
by reference to Exhibit 10.3 to EnergyNorth, Inc.'s Form 10-K
(File No. 0-11035) for the fiscal year ended September 30, 1993.
10.5 Deferred Compensation Agreement, dated as of November 30, 1993,
between Albert J. Hanlon and EnergyNorth, Inc. is incorporated by
reference to Exhibit 10.5 to EnergyNorth, Inc.'s Form 10-K (File
No. 0-11035) for the fiscal year ended September 30, 1993.
10.6 Amendment to Deferred Compensation Agreement, dated as of October
1, 1996, between Robert R. Giordano and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.6 to EnergyNorth, Inc.'s
10-K (File No. 0-11035) for the fiscal year ended September 30,
1996.
10.7 Amendment to Deferred Compensation Agreement, dated as of October
1, 1996, between Albert J. Hanlon and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.6 EnergyNorth, Inc.'s 10-
K (File No. 0-11035) for the fiscal year ended September 30,
1996.
</TABLE>
- --------
* Previously filed.
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<C> <S>
10.8 Deferred Compensation Agreement, dated as of November 30, 1993,
between Richard P. Demers and EnergyNorth, Inc. is incorporated
by reference to Exhibit 10.6 to EnergyNorth, Inc.'s 10-K (File
No. 0-11035) for the fiscal year ended September 30, 1996.
10.9 Deferred Compensation Agreement, dated as of November 30, 1995,
between Frank L. Childs and EnergyNorth, Inc. is incorporated by
reference to Exhibit 10.6 to EnergyNorth, Inc.'s 10-K (File No.
0-11035) for the fiscal year ended September 30, 1996.
10.10 Deferred Compensation Agreement, dated as of November 30, 1993,
between Michelle L. Chicoine and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.6 to EnergyNorth, Inc.'s
10-K (File No. 0-11035) for the fiscal year ended September 30,
1996.
10.11 EnergyNorth, Inc. 1992 Directors' Deferred Compensation Plan, as
amended, is incorporated by reference to Exhibit 10.11 to
EnergyNorth, Inc.'s 10-K (File No. 0-11035) for the fiscal year
ended September 30, 1996.
10.12 Employment Agreement, dated as of December 1, 1995, between Robert
R. Giordano and EnergyNorth, Inc. is incorporated by reference to
Exhibit 10.9 to EnergyNorth, Inc.'s Form 10-K (File No. 0-11035)
for the fiscal year ended September 30, 1995.
10.13 Employment Agreement, dated as of December 1, 1995, between Albert
J. Hanlon and EnergyNorth, Inc. is incorporated by reference to
Exhibit 10.11 to EnergyNorth, Inc.'s Form
10-K (File No. 0-11035) for the fiscal year ended September
30,1995.
10.14 Management Continuity Agreement, dated as of December 7, 1995,
between Robert R. Giordano and EnergyNorth, Inc. is incorporated
by reference to Exhibit 10.12 to EnergyNorth, Inc.'s Form 10-K
(File No. 0-11035) for the fiscal year ended September 30, 1995.
10.15 Management Continuity Agreement, dated as of December 7, 1995,
between Albert J. Hanlon and EnergyNorth, Inc. is incorporated by
reference to Exhibit 10.14 to EnergyNorth, Inc.'s Form
10-K (File No. 0-11035) for the fiscal year ended September 30,
1995.
10.16 Management Continuity Agreement, dated as of December 2, 1996,
between Michelle L. Chicoine and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.18 to EnergyNorth, Inc.'s
Form 10-K (File No. 0-11035) for the fiscal year ended September
30, 1996.
10.17 Management Continuity Agreement, dated as of December 2, 1996,
between Frank L. Childs and EnergyNorth, Inc. is incorporated by
reference to Exhibit 10.19 to EnergyNorth, Inc.'s Form
10-K (File No. 0-11035) for the fiscal year ended September 30,
1996.
10.18 Management Continuity Agreement, dated as of December 7, 1995,
between Richard P. Demers and EnergyNorth, Inc. is incorporated
by reference to Exhibit 10.20 to EnergyNorth, Inc.'s Form 10-K
(File No. 0-11035) for the fiscal year ended September 30, 1996.
10.19 EnergyNorth, Inc. Key Employee Performance and Equity Incentive
Plan, as amended, is incorporated by reference to Exhibit 10.15
to EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the
fiscal year ended September 30, 1995.
10.20 EnergyNorth, Inc. Director Incentive Plan is incorporated by
reference to Exhibit 10 to EnergyNorth, Inc.'s Form 10-Q (File
No. 0-11035) for the quarter ended March 31, 1997.
10.21 Tax Sharing Agreement, dated as of October 1, 1988.
*10.22 Cost Allocation Agreement, dated as of October 1, 1996.
12 Statement re: Computation of Ratios.
*23.1 Consent of McLane, Graf, Raulerson & Middleton, Professional
Association is contained in Exhibit 5 and incorporated herein by
reference.
*23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney is incorporated by reference to Page II-5 of
EnergyNorth Natural Gas, Inc.'s Registration Statement on Form S-
1 (File No. 333-32949).
25 Statement of Eligibility of Bank of New Hampshire as Trustee on
Form T-1.
*27 Financial Data Schedule.
</TABLE>
- --------
* Previously filed.
II-3
<PAGE>
(b)The following financial statement schedule of EnergyNorth Natural Gas,
Inc. is submitted herewith:
Schedule II--Valuation and Qualifying Accounts for the Three Years Ended
September 30, 1996 and Twelve Months Ended June 30, 1997 (unaudited)
All schedules other than those above have been omitted because they are not
required or are inapplicable.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
the registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4), or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT AMENDMENT NO. 1 TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
MANCHESTER, STATE OF NEW HAMPSHIRE, ON SEPTEMBER 10, 1997.
EnergyNorth Natural Gas, Inc.
/s/ Robert R. Giordano*
By:___________________________________
Robert R. Giordano
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Robert R. Giordano* Director, President September 10, 1997
- ------------------------------------ and Chief
ROBERT R. GIORDANO Executive Officer
/s/ N. George Mattaini* Chairman of the September 10, 1997
- ------------------------------------ Board of Directors
N. GEORGE MATTAINI
/s/ Edward T. Borer* Director September 10, 1997
- ------------------------------------
EDWARD T. BORER
/s/ Michelle L. Chicoine Director, Chief September 10, 1997
- ------------------------------------ Financial Officer,
MICHELLE L. CHICOINE Vice President,
Treasurer
/s/ Albert J. Hanlon* Director, Senior September 10, 1997
- ------------------------------------ Vice President
ALBERT J. HANLON
/s/ Frank L. Childs* Director, Vice September 10, 1997
- ------------------------------------ President
FRANK L. CHILDS
/s/ David A. Skrzysowski* Vice President and September 10, 1997
- ------------------------------------ Controller (Chief
DAVID A. SKRZYSOWSKI Accounting
Officer)
</TABLE>
- --------
*By Michelle L. Chicoine as
Attorney-In-Fact
II-5
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To the Board of Directors of EnergyNorth Natural Gas, Inc.:
We have audited, in accordance with generally accepted auditing standards, the
financial statements of EnergyNorth Natural Gas, Inc. included in this
Registration Statement and have issued our report thereon dated November 1,
1996. Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed under Item 16(b) of
the Registration Statement is presented for purposes of complying with the
Securities and Exchange Commission rules and is not part of the basic
financial statements. This schedule for the three years ended September 30,
1996 has been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
Boston, Massachusetts
November 1, 1996
S-1
<PAGE>
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
Reserves which are deducted in the balance sheets from assets to which they
apply:
<TABLE>
<CAPTION>
ADDITIONS
----------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS(1) DEDUCTIONS PERIOD
----------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Twelve months ended
June 30, 1997 Allowance for
(unaudited)............ doubtful accounts $1,205 $1,080 $133 $1,085 $1,333
Fiscal year ended
September 30, 1996..... Allowance for
doubtful accounts 907 1,130 138 999 1,176
Fiscal year ended
September 30, 1995..... Allowance for
doubtful accounts 992 990 167 1,242 907
Fiscal year ended
September 30, 1994..... Allowance for
doubtful accounts 850 1,280 145 1,283 992
</TABLE>
- --------
(1) Represents recoveries on accounts previously written off.
S-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NO.
------- ----------- ----
<C> <S> <C>
1 Underwriting Agreement between EnergyNorth Natural Gas, Inc.
and Edward D. Jones & Co., L.P.
*3.1 Articles of Incorporation of EnergyNorth Natural Gas, Inc.
*3.2 Bylaws of EnergyNorth Natural Gas, Inc.
4.1 Gas Service, Inc. General and Refunding Mortgage Indenture,
dated as of June 30, 1987, as amended, and supplemented by a
First Supplemental Indenture, dated as of October 1, 1988, and
by a Second Supplemental Indenture, dated as of August 31,
1989, is incorporated by reference to Exhibit 4.1 of
EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the
fiscal year ended September 30, 1989
4.2 Third Supplemental Indenture, dated as of September 1, 1990, to
Gas Service, Inc. General and Refunding Mortgage Indenture,
dated as of June 30,1987, is incorporated by reference to
Exhibit 4.2 of EnergyNorth, Inc.'s Form 10-K (File No. 0-
11035) for the fiscal year ended September 30, 1990
4.3 Fourth Supplemental Indenture, dated as of January 10, 1992, to
Gas Service, Inc. General and Refunding Mortgage Indenture,
dated as of June 30, 1987, is incorporated by reference to
Exhibit 4.3 of EnergyNorth, Inc.'s Form 10-K (File No. 0-
11035) for the fiscal year ended September 30, 1992
4.4 Fifth Supplemental Indenture, dated as of February 1, 1995, to
Gas Service, Inc. General and Refunding Mortgage Indenture,
dated as of June 30, 1987 is incorporated by reference to
Exhibit 4.4 to EnergyNorth, Inc.'s Form 10-K (File No. 0-
11035) for the fiscal year ended September 30, 1996
4.5 Sixth Supplemental Indenture, dated as of September 15, 1997,
to Gas Service, Inc. General and Refunding Mortgage Indenture,
dated as of June 30, 1987
4.6 Copies of Bond Indentures and a note and credit agreement
defining the rights of holders of long-term debt of certain
subsidiaries of EnergyNorth, Inc., under which the amounts of
bonds or the note issued do not exceed 10% of the consolidated
assets of EnergyNorth, Inc. will be furnished to the
Securities and Exchange Commission upon request
*5 Opinion of McLane, Graf, Raulerson & Middleton, Professional
Association as to the legality of the Bonds being registered
10.1 Gas transportation agreement (FT-A), dated as of September 1,
1993, between Tennessee Gas Pipeline Company and EnergyNorth
Natural Gas, Inc. is incorporated by reference to Exhibit 10.1
to EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the
fiscal year ended September 30, 1993
10.2 Gas transportation agreement (contract No. 632), dated as of
September 1, 1993, between Tennessee Gas Pipeline Company and
EnergyNorth Natural Gas, Inc. is incorporated by reference to
Exhibit 10.2 of EnergyNorth, Inc.'s Form 10-K (File No. 0-
11035) for the fiscal year ended September 30, 1995
10.3 Supplemental Executive Retirement Plan of EnergyNorth, Inc., as
amended, is incorporated by reference to Exhibit 10.3 to
EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for the
fiscal year ended September 30, 1996
10.4 Deferred Compensation Agreement, dated as of November 30, 1993,
between Robert R. Giordano and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.3 to EnergyNorth,
Inc.'s Form 10-K (File No. 0-11035) for the fiscal year ended
September 30, 1993
10.5 Deferred Compensation Agreement, dated as of November 30, 1993,
between Albert J. Hanlon and EnergyNorth, Inc. is incorporated
by reference to Exhibit 10.5 to EnergyNorth, Inc.'s Form 10-K
(File No. 0-11035) for the fiscal year ended September 30,
1993
</TABLE>
- --------
* Previously filed.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NO.
------- ----------- ----
<C> <S> <C>
10.6 Amendment to Deferred Compensation Agreement, dated as of
October 1, 1996, between Robert R. Giordano and EnergyNorth,
Inc. is incorporated by reference to Exhibit 10.6 to
EnergyNorth, Inc.'s 10-K (File No. 0-11035) for the fiscal
year ended September 30, 1996
10.7 Amendment to Deferred Compensation Agreement, dated as of
October 1, 1996, between Albert J. Hanlon and EnergyNorth,
Inc. is incorporated by reference to Exhibit 10.6 EnergyNorth,
Inc.'s 10-K (File No. 0-11035) for the fiscal year ended
September 30, 1996
10.8 Deferred Compensation Agreement, dated as of November 30, 1993,
between Richard P. Demers and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.6 to EnergyNorth,
Inc.'s 10-K (File No. 0-11035) for the fiscal year ended
September 30, 1996
10.9 Deferred Compensation Agreement, dated as of November 30, 1995,
between Frank L. Childs and EnergyNorth, Inc. is incorporated
by reference to Exhibit 10.6 to EnergyNorth, Inc.'s 10-K (File
No. 0-11035) for the fiscal year ended September 30, 1996
10.10 Deferred Compensation Agreement, dated as of November 30, 1993,
between Michelle L. Chicoine and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.6 to EnergyNorth,
Inc.'s 10-K (File No. 0-11035) for the fiscal year ended
September 30, 1996
10.11 EnergyNorth, Inc. 1992 Directors' Deferred Compensation Plan,
as amended, is incorporated by reference to Exhibit 10.11 to
EnergyNorth, Inc.'s 10-K (File No. 0-11035) for the fiscal
year ended September 30, 1996
10.12 Employment Agreement, dated as of December 1, 1995, between
Robert R. Giordano and EnergyNorth, Inc. is incorporated by
reference to Exhibit 10.9 to EnergyNorth, Inc.'s Form 10-K
(File No. 0-11035) for the fiscal year ended September 30,
1995
10.13 Employment Agreement, dated as of December 1, 1995, between
Albert J. Hanlon and EnergyNorth, Inc. is incorporated by
reference to Exhibit 10.11 to EnergyNorth, Inc.'s Form 10-K
(File No. 0-11035) for the fiscal year ended September 30,1995
10.14 Management Continuity Agreement, dated as of December 7, 1995,
between Robert R. Giordano and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.12 to EnergyNorth,
Inc.'s Form 10-K (File No. 0-11035) for the fiscal year ended
September 30, 1995
10.15 Management Continuity Agreement, dated as of December 7, 1995,
between Albert J. Hanlon and EnergyNorth, Inc. is incorporated
by reference to Exhibit 10.14 to EnergyNorth, Inc.'s Form 10-K
(File No. 0-11035) for the fiscal year ended September 30,
1995
10.16 Management Continuity Agreement, dated as of December 2, 1996,
between Michelle L. Chicoine and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.18 to EnergyNorth,
Inc.'s Form 10-K (File No. 0-11035) for the fiscal year ended
September 30, 1996
10.17 Management Continuity Agreement, dated as of December 2, 1996,
between Frank L. Childs and EnergyNorth, Inc. is incorporated
by reference to Exhibit 10.19 to EnergyNorth, Inc.'s Form 10-K
(File No. 0-11035) for the fiscal year ended September 30,
1996
10.18 Management Continuity Agreement, dated as of December 7, 1995,
between Richard P. Demers and EnergyNorth, Inc. is
incorporated by reference to Exhibit 10.20 to EnergyNorth,
Inc.'s Form 10-K (File No. 0-11035) for the fiscal year ended
September 30, 1996
10.19 EnergyNorth, Inc. Key Employee Performance and Equity Incentive
Plan, as amended, is incorporated by reference to Exhibit
10.15 to EnergyNorth, Inc.'s Form 10-K (File No. 0-11035) for
the fiscal year ended September 30, 1995
10.20 EnergyNorth, Inc. Director Incentive Plan is incorporated by
reference to Exhibit 10 to EnergyNorth, Inc.'s Form 10-Q (File
No. 0-11035) for the quarter ended March 31, 1997
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NO.
------- ----------- ----
<C> <S> <C>
10.21 Tax Sharing Agreement, dated as of October 1, 1988
*10.22 Cost Allocation Agreement, dated as of October 1, 1996
12 Statement re: Computation of Ratios
*23.1 Consent of McLane, Graf, Raulerson & Middleton, Professional
Association is contained in Exhibit 5 and incorporated herein
by reference
*23.2 Consent of Arthur Andersen LLP
24 Power of Attorney is incorporated by reference to Page II-5 of
EnergyNorth Natural Gas, Inc.'s Registration Statement on Form
S-1 (File No. 333-32949).
25 Statement of Eligibility of Bank of New Hampshire as Trustee on
Form T-1
*27 Financial Data Schedule
</TABLE>
- --------
* Previously filed.
<PAGE>
Exhibit 1
$22,000,000
ENERGYNORTH NATURAL GAS, INC.
FIRST MORTGAGE BONDS
Designated as
___% Series E Bonds,
due September 30, 2027
UNDERWRITING AGREEMENT
----------------------
_______________, 1997
EDWARD D. JONES & CO., L.P.
12555 Manchester Road
St. Louis, Missouri 63131
Ladies and Gentlemen:
The undersigned, EnergyNorth Natural Gas, Inc., a New Hampshire corporation
(the "Company"), hereby confirms its agreement with Edward D. Jones & Co., L.P.,
a Missouri limited partnership (the "Underwriter") as follows:
1. Offering. The Company proposes to issue and sell to the Underwriter
--------
$22,000,000 aggregate principal amount of its First Mortgage Bonds Designated as
___% Series E Bonds, due September 30, 2027 (the "Bonds"). The Bonds will be
issued by the Company under its General and Refunding Mortgage Indenture (the
"Original Indenture") dated as of June 30, 1987, under which Bank of New
Hampshire is now the trustee (the "Trustee"), as heretofore amended and
supplemented by (i) a First Supplemental Indenture dated as of October 1, 1988,
(ii) a Second Supplemental Indenture dated as of August 1, 1989, (iii) a Third
Supplemental Indenture dated as of September 1, 1990, (iv) a Fourth Supplemental
Indenture dated as of January 10, 1992, and (v) a Fifth Supplemental Indenture
dated as of February 1, 1995, and as to be further supplemented and amended by a
Sixth Supplemental Indenture dated as of September 15, 1997 (the "Sixth
Supplemental Indenture") including the series in which the Bonds are to be
issued. The term "Indenture", as hereinafter used, means such Original
Indenture as so amended and supplemented. The Company understands that the
Underwriter proposes to make a public offering of the Bonds as soon as it deems
advisable after this Agreement has been executed and delivered.
<PAGE>
2. Purchase, Sale and Delivery of the Bonds.
----------------------------------------
On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Company agrees to
sell to the Underwriter and the Underwriter agrees to purchase the Bonds, at a
price of $_____ per each $1,000 principal amount of the Bonds.
Payment for the Bonds to be sold hereunder is to be made in immediately
available funds by wire transfer or certified or bank cashier's checks drawn to
the order of the Company against delivery of certificates therefor to the
Underwriter through the facilities of the Depository Trust Company for the
account of the Underwriter at 10:00 a.m., St. Louis time, on September ___,
1997, or, if such day is not a business day, on the next business day, or at
such other time and date not later than five (5) business days thereafter as may
be agreed upon in writing between the Underwriter and the Company, such time and
date being herein referred to as the "Closing Date." The Company shall deliver
certificates for the Bonds to the Depository Trust Company in good delivery form
and in such denominations and in such registrations as the Underwriter shall
request in writing not later than 10:00 a.m. the second full business day prior
to the Closing Date, and shall make available said certificates for inspection
and packaging by the Depository Trust Company not later than 10:00 a.m. at least
one full business day prior to the Closing Date.
3. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to the Underwriter that:
(a) The Company meets the requirements for use of Form S-1 under the
Securities Act of 1933, as amended (the "Act"), has prepared a registration
statement on Form S-1 (Registration No. 333-32949) for the registration of the
Bonds and one or more amendments thereto in conformity with the requirements
of the Act and all applicable instructions and the published rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Act, has filed such registration
statement and amendments with the Commission and either (A) has prepared and
proposes to file, prior to the effective date of such registration statement,
an amendment to such registration statement, including a final prospectus,
setting forth the initial public offering price of the Bonds and related
information or (B) if the Company has elected to rely upon Rule 430A of the
Rules and Regulations, will prepare and file a prospectus in accordance with
the provisions of Rule 430A and Rule 424(b) of the Rules and Regulations
promptly after execution of this Agreement. Copies of such registration
statement and amendments (including all forms of preliminary prospectuses)
have been delivered to the Underwriter, and the Company will not, before the
registration statement becomes effective, file any other amendment or
supplement thereto to which the Underwriter objects after being furnished with
a copy thereof. (The information, if any, included in such prospectus that was
omitted from the prospectus included in such registration statement at the
time it becomes effective but that is deemed, pursuant to Rule 430A(b), to be
part of the registration statement at the time it becomes effective, is
referred to herein as the "Rule 430A Information." Each prospectus used before
the time
2
<PAGE>
such registration statement becomes effective, and any prospectus that omits
the Rule 430A Information, used after such effectiveness and prior to the
execution and delivery of this Agreement, is referred to herein as a
"preliminary prospectus." Such registration statement, including all
prospectuses included as a part thereof, all financial schedules and exhibits
thereto, all documents incorporated by reference therein, as amended at the
time it becomes effective, and, if applicable, the Rule 430A Information, is
herein called the "Registration Statement," and the prospectus, including the
documents incorporated by reference therein, included in the Registration
Statement at the time it becomes effective is herein called the "Prospectus,"
except that, if the final prospectus furnished to the Underwriter after the
execution of this Agreement for use in connection with the offering of the
Bonds differs from the prospectus included in the Registration Statement at
the time it becomes effective (whether or not such prospectus is required to
be filed pursuant to Rule 424(b)), the term "Prospectus" shall refer to the
final prospectus first furnished to the Underwriter for such use.) For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any term sheet or any amendment or
supplement to any of the foregoing shall be deemed to include the
electronically transmitted copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
(b) The Commission has not issued any order preventing or suspending the
use of any preliminary prospectus, and each preliminary prospectus, at the
time of the filing thereof with the Commission, did not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that none of the representations and warranties in this subparagraph
(b) shall apply to statements in, or omissions from, any preliminary
prospectus made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriter specifically for
use in such preliminary prospectus.
(c) When the Registration Statement becomes effective (such date being
referred to herein as the "Effective Date"), and at all times subsequent
thereto, up to and including the Closing Date, the Registration Statement and
the Prospectus, and all amendments and supplements thereto, will comply with
the provisions of the Act and the Rules and Regulations. When the Registration
Statement becomes effective, and when any post-effective amendment thereto
becomes effective, the Registration Statement (as amended, if the Company has
filed with the Commission any post-effective amendment thereto) will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. When the Registration Statement becomes effective, and at all
times subsequent thereto, up to and including the Closing Date, the Prospectus
(as amended or supplemented, if the Company has filed with the Commission any
amendment thereof or supplement thereto) will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not
3
<PAGE>
misleading. None of the representations and warranties in this subparagraph
(c) will apply to statements in, or omissions from, the Registration Statement
or the Prospectus or any amendment or supplement thereto made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Underwriter specifically for use in the Registration Statement
or the Prospectus or any such amendment or supplement. The Prospectus
delivered to the Underwriter for use in connection with the offering of the
Bonds will, at the time of such delivery, be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of New Hampshire, and is not
required to qualify as a foreign corporation in any jurisdiction. The Company
has no subsidiaries.
(e) The authorized and outstanding capitalization of the Company is set
forth in the Registration Statement under "Capitalization," and all the issued
shares of common stock of the Company, par value $25 per share (the "Common
Stock") have been duly authorized and validly issued and are fully paid and
non-assessable. None of such shares of Common Stock were issued in violation
of preemptive or other similar rights arising by operation of law, under the
charter or by-laws of the Company or under any agreement to which the Company
is a party or otherwise. All of the issued and outstanding shares of capital
stock of the Company are owned by EnergyNorth, Inc., a New Hampshire
corporation. The Company does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
(f) The statements concerning the Bonds in the Prospectus under the caption
"Description of the Bonds" conform with and accurately describe the rights set
forth in the instruments defining the same.
(g) The Company has full right, power and authority to enter into this
Agreement and to perform all of its obligations hereunder or contemplated
hereby. This Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms.
(h) The Bonds have been duly authorized by the Company for issuance and
sale pursuant to this Agreement and, at the Closing Date, will have been duly
executed by the Company and, when authenticated in the manner provided for in
the Indenture and delivered against payment of the consideration therefor
specified in this Agreement, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by general
principles of equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally. The Bonds will be in the form contemplated by,
and
4
<PAGE>
entitled to the benefits of, the Indenture and will conform in all material
respects to the description thereof contained in the Prospectus.
(i) The Indenture has been duly authorized, executed and delivered by the
Company and qualified under the 1939 Act and constitutes a legal, valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms; the Indenture will conform in all materials
respects to the description thereof contained in the Prospectus.
(j) The Company has good and marketable title to the properties
specifically described in and conveyed by the Indenture (except such property
as may have been disposed of or released from the lien thereof in accordance
with the terms thereof) subject only to the lien of the Indenture, to
permitted liens, as defined in the Indenture, as to property acquired by the
Company subsequent to the execution of the Original Indenture, to any liens
existing thereon or purchase money liens placed thereon at the time of such
acquisition as permitted by the Indenture, and to certain other reservations,
rights of grantors under revocable permits, easements, licenses, zoning laws
and ordinances and restrictions and minor defects or irregularities of title
which do not, individually or in the aggregate, materially impair the use of
the property affected thereby in the operation of the business of the Company;
the Company has good title to all personal property owned by the Company, free
and clear of all liens, encumbrances and defects except the liens of the
Indenture and such liens, encumbrances and defects as do not interfere with
the use made and proposed to be made of such property by the Company; and any
real property and buildings held under lease by the Company is held by the
Company under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company; the distribution main
easements enjoyed by the Company are valid, subsisting and enforceable
easements with such exceptions as are not material and do not interfere with
the conduct of the business of the Company; the Company has no knowledge of
and has not received any notice with respect to the commencement of any action
by any governmental agency or private individual to revoke any material
license or right-of-way pursuant to which the Company maintains its gas
distribution system.
(k) The Indenture constitutes a legally valid and direct enforceable first
mortgage lien, upon substantially all of the Company's properties and
franchises, now owned or hereafter acquired, other than the Supplemental Fuel
Inventory (as defined in the Indenture), free from all prior liens, charges or
encumbrances, except as hereinbefore set forth in paragraph (j) above, and, in
the case of property hereafter acquired, any thereof existing at the time of
acquisition. All real property which is encumbered by the lien of the
Indenture is located in the Counties of Hillsborough, Merrimack and Belknap in
the State of New Hampshire.
(l) The Company has all requisite corporate power and authority necessary
to own or hold its properties and conduct its business as described in the
Prospectus and owns or holds all material licenses, certificates, permits and
other required authorizations
5
<PAGE>
from governmental authorities necessary to own or hold its properties and
conduct its business. The Company has not received any notice of proceedings
relating to the revocation or modification of any such license, certificate,
permit or authorization or infringement of or conflict with asserted rights of
others with respect to any license, patent, patent rights, copyright,
trademark or trade name, which individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially
adversely affect the business operations, assets, condition (financial or
otherwise) or prospects of the Company.
(m) The Company's properties are well-maintained, in good repair, and
suitable for their intended purposes. Except as set forth in the Prospectus,
there have been no releases into the environment of hazardous substances or
materials, toxic substances, hazardous wastes or petroleum products or wastes,
as defined in federal, state and local laws ("Hazardous Materials") on, under
or from any of the Company properties other than those releases allowed under
any permit, license, certificate or other authorization from a governmental
authority issued to the Company or other than those releases, the remediation
of which have not and will not have a material adverse effect on the business,
operations or financial condition of the Company. Except as set forth in the
Prospectus, there have been no investigations or reports involving the Company
by any governmental authority which in any way pertain to Hazardous Materials
and have had or may have a materially adverse effect on the business of the
Company. The Company has not violated and is not violating in any material
respect any federal, state or local law, regulation, ordinance or requirement
regarding Hazardous Materials. Except as set forth in the Prospectus, the
Company has not received any notice identifying it as responsible or
potentially responsible for remediation or cleanup costs in connection with
property other than the Company's property the remediation of which have not
and will not have a material adverse effect on the business, operations or
financial condition of the Company.
(n) Except as set forth in the Prospectus, there are no actions, suits,
proceedings, hearings, claims or investigations pending or threatened before
or by any court, governmental authority, or instrumentality (or any state of
facts which would give rise thereto) against the Company or involving any of
its properties or business that may result in a material adverse change in the
business, operations, assets, condition (financial or otherwise) or prospects
of the Company, or which may adversely affect the transactions or other acts
contemplated by this Agreement or the validity or enforceability hereof.
(o) Except as reflected in or contemplated by the Prospectus, since the
respective dates for which information is given in the Prospectus and up to
and including the Closing Date: (i) the Company has not incurred, nor will
have incurred, any liabilities or obligations, direct or contingent, which are
material to the business of the Company, or has entered into, or will have
entered into, any transaction which is material to the business of the
Company; (ii) there has been no change in the capital stock or short-term or
long-term debt of the Company, and the Company has not declared or paid any
dividend or made any other distribution on or in respect of its respective
capital stock
6
<PAGE>
other than a dividend payment on its Common Stock in the amount of
approximately $935,000 paid on or about September 12, 1997; (iii) there has
been no material adverse change, or any development specifically related to
the business of the Company, involving a prospective material adverse change
in the condition (financial or otherwise), net worth or results of operations
of the Company, whether or not arising in its ordinary course of business; and
(iv) there have been no transactions entered into by the Company other than
those in the ordinary course of business.
(p) The Company is not in default under its Certificate of Incorporation,
Bylaws or any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it or any of its properties is
bound, except where the consequences, direct or indirect, of such default or
defaults, if any, will not have a material adverse effect on the business,
operations or financial condition of the Company. The execution and delivery
of this Agreement, the consummation of the transactions herein contemplated
and the fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the Company pursuant to the terms of, any
indenture (including, without limitation, the Indenture), mortgage, deed of
trust or other agreement or instrument to which the Company is a party or is
bound, the Certificate of Incorporation or Bylaws of the Company or any order,
rule or regulation applicable to the Company of any court or of any regulatory
body or administrative agency or other governmental body having jurisdiction.
(q) The financial statements and schedules of the Company included in the
Registration Statement and the Prospectus fairly present, and the financial
statements and schedules of the Company included in any amendment or
supplement to the Registration Statement and the Prospectus will fairly
present, the financial condition of the Company and the results of its
operations and changes in its financial position as of the dates and for the
periods therein specified. Said financial statements have been and will be
prepared in accordance with generally accepted accounting principles,
consistently maintained and applied throughout the periods involved.
(r) The Company has filed all tax and information returns and reports
required to be filed by the Company with respect to federal, state, local and
foreign income, earnings, payroll, gross receipts, employment or payroll
related (including Social Security, unemployment, disability and employee
withholding), franchise, sales, transfer, use, occupancy, property, ad
valorem, excise and other taxes and governmental charges of any nature (and
all penalties, additions to tax and interest related to any of the foregoing),
and all amounts shown to be due on each of such returns and reports have been
or will be paid when due. There are no grounds for the assertion or assessment
of any additional taxes or governmental charges against the Company or the
assets of the Company, which, if successfully asserted and assessed, would
have a material adverse effect on the business or condition, financial or
otherwise, of the Company.
7
<PAGE>
(s) The books, records and accounts of the Company accurately and fairly
reflect, in reasonable detail, the transactions and dispositions of the assets
of the Company, and the system of internal accounting controls maintained by
the Company is sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary to (A) permit
preparation of financial statements and (B) maintain accountability for
assets, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any difference.
(t) The accountants who have certified the financial statements and
supporting schedules included in the Registration Statement or incorporated by
reference therein are independent public accountants, as required by the Act
and the Rules and Regulations.
(u) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body (including, without limitation, the Public Utilities
Commission of the State of New Hampshire) necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation
of the transactions herein contemplated (except such additional steps as may
be required by the National Association of Securities Dealers, Inc. (the
"NASD") with respect to underwriting compensation and except for any filings
under applicable state securities or other Blue Sky laws required to be made
subsequent to the Closing Date) has been obtained or made and is in full force
and effect or has been duly waived.
(v) Each lease, contract, agreement or document of a character required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement is so described or filed as
required. All leases, contracts and agreements referred to in or filed as
exhibits to the Registration Statement to which the Company is a party have
been duly and validly executed by the Company, and are, together with such
other leases, contracts and agreements by which the Company are bound, in full
force and effect except as set forth in the Prospectus.
(w) The Company is not a "holding company" as such term is defined in the
Public Utility Holding Company Act of 1935 (the "1935 Act"). The Company is a
"subsidiary company" of a "holding company" and an "affiliate" of a "holding
company", as such terms are defined in the 1935 Act, and such "holding
company" and the Company are presently exempt from the provisions of the 1935
Act (except Section 9(a)(2) thereof).
(x) The Company possesses all licenses, franchises, permits, certificates,
authorizations approvals, consents, orders and other operating rights from the
Federal Energy Regulatory Commission, the State of New Hampshire and all
governmental authorities or agencies necessary for the ownership or lease of
the properties owned or
8
<PAGE>
leased by the Company and for the operation of the business carried on by the
Company; all such licenses, franchises, permits, certificates, authorizations,
approvals, consents and orders are in full force and effect and contain no
unduly burdensome provisions that would interfere with the conduct of the
business of the Company and, except as otherwise set forth in the Registration
Statement and the Prospectus, there are no legal or governmental proceedings
pending or threatened that would result in a modification, suspension or
revocation thereof.
(z) None of the Company or any of its subsidiaries is an "investment
company" or under the "control" of an "investment company" as such terms are
defined under the Investment Company Act of 1940, as amended (the "1940 Act")
(aa) Immediately after the sale of the Bonds by the Company hereunder, the
aggregate amount of the Bonds which shall have been issued and sold by the
Company hereunder and of any debt securities of the Company (other than the
Bonds) that shall have been issued and sold pursuant to the Registration
Statement will not exceed the amount of debt securities registered under the
Registration Statement.
(bb) None of the Company or any of its directors, officers or controlling
persons, has taken, directly or indirectly, any action resulting in a
violation of Regulation M under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or designed to cause or result in, or that has
constituted or that reasonably might be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Bonds.
(cc) No "forward looking statement" (as defined in Rule 175 under the 1933
Act) contained in the Registration Statement, any preliminary prospectus or
the Prospectus was made or reaffirmed without a reasonable basis or was
disclosed other than in good faith.
(dd) There are no claims for services in the nature of finder's or
origination fees with respect to the sale of the Bonds hereunder.
(ee) The aggregate principal amount of bonds outstanding under the General
and Refunding Mortgage Indenture dated as of June 30, 1987, as heretofore
amended and supplemented, between Concord Natural Gas Corporation (a
predecessor by merger of the Company), and Bank of New Hampshire, N.A., as
trustee (the "Concord Gas Indenture"), does not exceed $1,365,000 and the
principal payments on such bonds are as follows:
Fiscal Year Amount
----------- -------
1998-2001 $272,500
2002 $275,000
9
<PAGE>
The aggregate principal amount of bonds outstanding under the General and
Refunding Mortgage Indenture dated as of June 30, 1987, as heretofore amended
and supplemented, between Manchester Gas Company and Bank of New Hampshire,
N.A., as trustee (the "Manchester Gas General and Refunding Indenture") does not
exceed $2,270,000 and the principal payments on such bonds are as follows:
Fiscal Year Amount
----------- ------
1998-2001 $ 455,000
2002 $ 450,000
The aggregate principal amount of bonds outstanding under the Indenture
does not exceed $23,270,000 and the principal payments on such bonds are as
follows
Fiscal Year Amount
----------- ------
1998-2001 $ 455,000
2002 $ 450,000
2009 $ 4,000,000
2019 $ 7,000,000
2020 $10,000,000
No holder of any indebtedness of the Company has, and no event has occurred
which will permit such holder or future holder to have, a prior lien on the
property encumbered by the Indenture.
No holder of any Indebtedness of the Company has, and no event has occurred
which will permit such holder to have, a pari passu lien on the property
---- -----
encumbered by the Indenture, other than holders of bonds heretofore issued under
(a) the Manchester Gas General and Refunding Indenture, or (b) the Concord Gas
Indenture.
Supplemental indentures have been duly authorized, executed and delivered
by the Company (or a predecessor corporation) and recorded or filed for record
in such manner and in such places as the Concord Gas Indenture and the
Manchester Gas General and Refunding Indenture have been recorded or filed.
Until such time as all of the Bonds have been retired, no further action is
required to close such indentures and to prevent the further issuance of any
bonds thereunder. The Company's outstanding First Mortgage Bonds Designated as
8.67% Series A General and Refunding Mortgage Bonds Due 2002 will be redeemed
with a portion of the net proceeds from the issuance of the Bonds.
4. Agreements of the Company. The Company agrees that:
-------------------------
(a) Prior to the Effective Date and at any time when a prospectus
relating to the Bonds is required to be delivered under the Act or the Rules
and Regulations, the Company will not file or make any amendment or post-
effective amendment to the
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<PAGE>
Registration Statement or any amendment or supplement to the Prospectus to
which the Underwriter has objected in writing within a reasonable time after
being furnished copies thereof.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and will advise
the Underwriter immediately and confirm that advice in writing (i) of the
effectiveness of the Registration Statement, (ii) if any post-effective
amendment thereto, any supplement to the Prospectus or any amended Prospectus
shall have been filed, (iii) of any request of the Commission to amend or
supplement the Registration Statement or Prospectus or to provide additional
information, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, of the suspension
of the qualification of the Bonds for sale in any state or other jurisdiction
or of the initiation or threat of any proceeding for any such purpose. The
Company will use its best efforts to prevent the issuance of any stop order or
suspension order and to obtain promptly the withdrawal of any such stop order
or suspension order.
(c) The Company will promptly deliver to the Underwriter, without charge,
five copies of (i) the Registration Statement, as originally filed, each
amendment thereto, and each post-effective amendment thereto filed at any time
when a prospectus relating to the Bonds is required to be delivered under the
Act, at least one of which has been signed by the proper officers and at least
a majority of directors of the Company, either directly or by their
attorney(s)-in fact and include a signed copy of each consent and certificate
of experts named in the Registration Statement, together with all exhibits
filed therewith or incorporated by reference therein and (ii) conformed copies
of the Registration Statement, as originally filed, each amendment thereto,
and each post-effective amendment thereto filed at any time when a prospectus
relating to the Bonds is required to be delivered under the Act or the Rules
and Regulations, as the Underwriter may reasonably require. The Company will
promptly deliver, without charge, to the Underwriter and such others whose
names and addresses are designated by the Underwriter: (A) from time to time
until the effective date of the Registration Statement, as many printed copies
as the Underwriter may reasonably request of any preliminary prospectus filed
with the Commission prior to the effective date of the Registration Statement
and (B) as soon as possible after the Registration Statement becomes
effective, and from time to time thereafter, as many printed copies as the
Underwriter may reasonably request of the Prospectus and of any amended or
supplemented Prospectus.
(d) During the period of time in which the Prospectus is required to be
delivered under the Act, the Company will comply to the best of its ability
with the Act and the Rules and Regulations so as to permit the continuance of
sales of and dealings in the Bonds under the Act and the Exchange Act and will
keep current in the filing of all material reports and forms required to be
filed with any regulatory authority having jurisdiction over the Company.
(e) If, at any time when a prospectus relating to the Bonds is required to
be
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<PAGE>
delivered under the Act or the Rules and Regulations, any event occurs which
causes the Prospectus as then amended or supplemented to include any untrue
statement of a material fact, or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, or if, at any time, it is necessary to amend or
supplement the Prospectus to comply with the Act or the Rules and Regulations,
the Company will promptly notify the Underwriter and promptly prepare and file
with the Commission an amendment or supplement to the Registration Statement,
an appropriate filing pursuant to Section 13 or 14 of the Exchange Act
correcting such statement or omission or an amendment effecting such
compliance and deliver in connection therewith such Prospectus or Prospectuses
to the Underwriter in such quantity as may be necessary to permit compliance
with the requirements of the Act and the Rules and Regulations.
(f) The Company will use its best efforts to qualify the Bonds for sale
under the securities laws of such jurisdictions as the Underwriter may
reasonably have designated in writing and will make such applications, file
such documents and consents to service of process, and furnish such
information as may be reasonably required for that purpose, provided that the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction where it is not now
so qualified or required to file such a consent or where such action would
subject the Company to taxation where it is not now subject. The Company will,
from time to time, prepare and file such statements, consents, reports, and
other documents as are or may be required to continue such qualifications in
effect for so long a period as the Underwriter may reasonably request for
distribution of the Bonds.
(g) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than 16 months after the
Effective Date, an earnings statement (in form complying with the provisions
of Section 11(a) of the Act in the manner contemplated by Rule 158 under the
Act, which need not be certified by independent public accountants unless
required by the Act or the Rules and Regulations) covering a period of at
least 12 months commencing after the Effective Date and will advise the
Underwriter in writing when such statement has been so made available.
(h) The Company will apply the net proceeds from the offering of the
Bonds in accordance with the uses set forth in the Prospectus.
(i) The Company will, for a period of five years from the Closing Date,
deliver to the Underwriter copies of (A) annual reports and copies of all
other documents, reports and information furnished by the Company to its
stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or
the Exchange Act, (B) every press release released by the Company, and (C)
such additional documents and information as the Underwriter may from time to
time reasonably request. The Company will deliver to the Underwriter similar
reports with respect to all significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the Company's
financial statements.
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<PAGE>
(j) The Company will use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the applicable Closing Date and to satisfy all conditions
precedent to the delivery of the Bonds.
(k) The Company will comply with the Act, the Exchange Act, the Rules and
Regulation and the rules and regulations of the Commission under the Exchange
Act (the "Exchange Act Rules and Regulations"), so as to permit the
continuance of sales and dealings under the Act, the Exchange Act, the Rules
and Regulations and the Exchange Act Rules and Regulations, and the Company
will keep current in the filings of all material reports and forms required to
be filed with any regulatory body having jurisdiction over the securities of
the Company, including, without limitation, the Commission.
(l) During a period of 120 days from the date of the Prospectus, the
Company will not, without the prior written consent of the Underwriter,
directly or indirectly, issue, sell, contract to sell, grant any option for
the sale of, or otherwise transfer or dispose of any debt securities of the
Company which mature more than one year after the Closing Date and which are
substantially similar to the Bonds. During such 120 day period, however, the
Company may redeem the Company's outstanding First Mortgage Bonds Designated
as 8.67% Series A General and Refunding Mortgage Bonds Due 2002.
(m) None of the Company or any of its respective directors, officers or
controlling persons, will take, directly or indirectly, any action resulting
in a violation of Regulation M under the Exchange Act, or designed to cause or
result in, or that reasonably might be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Bonds.
(n) The Company has or will have, on or before the Closing Date,
furnished to the Trustee the resolutions, certificates and other instruments
and cash, if any, required to be delivered prior to or upon the issuance of
the Bonds to be delivered on the Closing Date pursuant to the provisions of
the Indenture. The Company will request the Trustee to authenticate the Bonds
pursuant to Article II of the Indenture. The Company will, on or before the
Closing Date, be able to comply with all other conditions with respect to the
authentication of the Bonds imposed by the Indenture.
5. Expenses. The Company and the Underwriter agree as follows:
--------
(a) Whether or not the Registration Statement becomes effective, the
Company will pay all of the costs, expenses and fees incident to the
performance of its obligations under this Agreement, including, without
limiting the generality of the foregoing, the following: accounting fees of
the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by, the
13
<PAGE>
Underwriter copies of the Registration Statement, Preliminary Prospectuses,
the Prospectus, this Agreement, the Selected Dealer Agreement, the Blue Sky
Survey and any supplements or amendments thereto; the filing fees of the
Commission; the filing fees and expenses incident to securing any required
review by the NASD of the terms of the sale of the Bonds; the expenses of
preparation, issuance and delivery of the certificates for the Bonds to the
Underwriter; the fees and expenses of the transfer agent for the Bonds
(including legal fees and disbursements, if any, of counsel to the transfer
agent); any taxes, including transfer taxes, on the sale of the Bonds to the
Underwriter; the expenses, including the reasonable fees and disbursements of
counsel, incurred in connection with the qualification of the Bonds under
State securities or Blue Sky laws; and all other costs, expenses and fees
incident to the performance of the Company's obligations hereunder which are
not otherwise specifically provided for in this section.
(b) The Underwriter will pay (i) the fees and disbursements of the
Underwriter's counsel, except as set forth in (a) above and Section 10(b)
hereof, and (ii) their own out-of-pocket expenditures.
6. Conditions of the Underwriter's Obligations. The obligations of the
-------------------------------------------
Underwriter to purchase and pay for the Bonds shall be subject in its discretion
to the accuracy of and compliance with the representations and the warranties of
the Company herein contained as of the date hereof, and the Closing Date, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective no later than
1:00 p.m., St. Louis time, on the date of this Agreement, or such later time
and date as shall be consented to in writing by the Underwriter, neither a
stop order suspending the effectiveness of such Registration Statement shall
have been issued under the Act nor proceedings therefor shall have been
initiated or threatened by the Commission, and all requests for additional
information on the part of the Commission shall have been complied with to the
reasonable satisfaction of the Underwriter.
(b) The Underwriter shall not have discovered and disclosed to the Company
on or prior to the Closing Date, if any, that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of fact which, in the opinion of the Underwriter or counsel for the
Underwriter, is material or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(c) At the Closing Date, the Underwriter shall have received a favorable
opinion, dated the Closing Date, of McLane, Graf, Raulerson & Middleton,
substantially in the form attached hereto. In giving such opinion, said
counsel may rely as to matters of fact upon statements and certifications of
officers of the Company and of other appropriate persons and may rely as to
matters of law, other than the laws of the United States and the State of New
Hampshire, upon an opinion or opinions of local counsel, provided that any
such opinion or opinions are delivered to the Underwriter and that said
14
<PAGE>
counsel shall state that they have no reason to believe that such opinions are
not correct.
(d) At the Closing Date, the Underwriter shall have received from Bryan
Cave LLP an opinion or opinions with respect to the sufficiency of the Company
proceedings and other legal matters relating to this Agreement, the
Registration Statement, the Prospectus and such related matters as the
Underwriter may reasonably require, and there shall have been furnished to
such counsel such documents as they may request to enable them to pass upon
such matters. In giving such opinion or opinions, Bryan Cave LLP may rely as
to matters of fact upon statements and certifications of officers of the
Company and of other appropriate persons and may rely as to matters of law,
other than the laws of the United States and the State of Missouri, upon an
opinion or opinions of local counsel, who may be counsel for the Company,
provided that any such opinion or opinions are delivered to the Underwriter
and that said counsel shall state that they have no reason to believe that
such opinions are not correct.
(e) At the Closing Date, the Underwriter shall have received a
certificate, dated the Closing Date signed by the chief executive officer or
president and principal financial or accounting officer of the Company, in
form and substance satisfactory to the Underwriter, to the effect that: (i)
the representations and warranties of the Company in this Agreement are true
and correct as if made on the Closing Date and the Company has performed and
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied at or prior to the Closing Date; (ii) since
the respective dates for which information is given in the Prospectus, there
has not been any material adverse change in the condition, financial or
otherwise, of the Company or in the earnings, affairs or business prospects of
the Company, whether or not arising in the ordinary course of business, other
than as described in the Prospectus; (iii) since such dates, the Company has
not entered into any material transactions other than transactions in the
ordinary course of business or as described in the Prospectus; (iv) no stop
order affecting the Registration Statement is in effect or, to the best of
such officers' knowledge, threatened; and (v) covering such other matters as
the Underwriter may otherwise request.
(f) On the date of this Agreement, the Underwriter shall have received a
letter from Arthur Andersen LLP, dated such date and addressed to the
Underwriter in form and substance satisfactory to the Underwriter, with
respect to the financial statements and certain financial and statistical
information contained in the Registration Statement and the Prospectus.
(g) At the Closing Date, the Underwriter shall have received a letter from
Arthur Andersen LLP, dated the Closing Date, and addressed to the Underwriter
in form and substance satisfactory to the Underwriter, confirming as of the
Closing Date, their letter dated the date hereof and delivered to the
Underwriter pursuant to Section 6(f) hereof.
(h) Before the Closing Date, Bryan Cave LLP, counsel for the Underwriter,
15
<PAGE>
shall have been furnished with such opinions and copies of such documents as
they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Bonds as herein contemplated and related proceedings
or in order to evidence the accuracy or completeness of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained. All proceedings taken by the Company in connection with the
issuance and sale of the Bonds as herein contemplated and all opinions and
certificates mentioned above or elsewhere in this Agreement shall be
satisfactory in form and substance in all material respects to the Underwriter
and said counsel.
(i) Except as contemplated in the Prospectus, subsequent to the respective
dates for which information is given in the Registration Statement and the
Prospectus, there shall not have been any material change in the capital
Bonds, short-term debt or long-term debt of the Company or any material
adverse change, or any development specifically related to the business of the
Company involving a prospective material adverse change, in the condition
(financial or otherwise), net worth or results of operations of the Company
considered as a whole, which, in the judgment of the Underwriter, makes it
impracticable to offer or deliver the Bonds on the terms and in the manner
contemplated in the Prospectus.
(j) At the Closing date, the Underwriter shall have received from
Cleveland, Waters & Bass, counsel for the Trustee, an opinion substantially in
the form attached hereto.
(k) On or prior to the Closing Date, the Sixth Supplemental Indenture
shall have been duly authorized, executed and delivered by the Company and the
Trustee, and shall be in full force and effect, and the Indenture (including
the Sixth Supplemental Indenture) and all other documents, including, without
limitation, Uniform Commercial Code financing statements shall have been duly
executed and properly recorded or filed in such manner and in each
jurisdiction in which recording is required to establish the mortgage lien and
security interest created by the Indenture as a mortgage lien on and/or a
security interest in the property encumbered by the lien of the Indenture.
If any of the conditions specified in this Section 6 shall not have been
fulfilled, this Agreement may be terminated by the Underwriter upon notice to
the Company or such conditions may be waived, modified or the time for
fulfillment thereof may be extended by the Underwriter upon notice to the
Company.
7. Conditions of the Company's Obligations. The obligations of the
---------------------------------------
Company to deliver the Certificates representing the Bonds shall be subject to
the condition that no stop order suspending the effectiveness of the
Registration Statement shall be in effect at the Closing Date and no proceedings
therefor shall be pending or threatened by the Commission at the Closing Date.
In the event the conditions specified in this Section 7 shall not be
fulfilled, this
16
<PAGE>
Agreement may be terminated by the Company upon delivery of notice to the
Underwriter. Any such notice shall be without liability of the Company to the
Underwriter, except as otherwise provided in Section 10(b) hereof, and without
liability of the Underwriter to the Company.
8. Indemnification.
---------------
(a) The Company will indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Underwriter or such controlling person may be subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, any amendment or supplement to the foregoing, any
related preliminary prospectus or based upon written information furnished by
the Company filed in any jurisdiction in order to qualify the Bonds under the
securities laws thereof or filed with the Commission or any securities
exchange or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and, subject to the limitations set forth in Section 8(c) hereof,
will reimburse the Underwriter and each controlling person for any legal or
other expenses reasonably incurred by the Underwriter or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or omission made
in any of such documents in reliance upon and in conformity with written
information furnished to the Company by the Underwriter specifically for use
in the Prospectus or any such document; provided further, however, that the
indemnification contained in this paragraph with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriter (or any person
controlling the Underwriter) on account of any such losses, claims, damages,
liabilities or expenses arising from the sale of the Bonds by the Underwriter
to any person if a copy of the Prospectus (as amended or supplemented if any
amendments or supplements thereto shall have been furnished to the Underwriter
prior to the written confirmation of the sale involved) shall not have been
given or sent to such person by or on behalf of the Underwriter with or prior
to the written confirmation of the sale involved, and the untrue or alleged
untrue statement or omission or alleged omission of a material fact contained
in such preliminary prospectus was corrected in the Prospectus (as amended or
supplemented if amended or supplemented as aforesaid). Indemnification
pursuant to this Section 8 will be in addition to any liability which the
Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the Registration
Statement, and each person, if any, who controls the Company within the
meaning of the Act, against any losses, claims, damages or liabilities to
which the Company or any such director, officer or controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or action in respect thereof) arise out of or are
17
<PAGE>
based upon an untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, any amendment or
supplement thereto, any related preliminary prospectus or based upon written
information furnished by the Company filed in any jurisdiction in order to
qualify the Bonds under the securities laws thereof or filed with the
Commission or any securities exchange or any omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the
Underwriter specifically for use in the Prospectus or any such document and,
subject to the limitations set forth in Section 8(c) hereof, will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. Indemnification
pursuant to this Section 8 will be in addition to any liability which the
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of any claim or the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 8. In case any claim or
action is brought against any indemnified party, and the indemnified party
notifies the indemnifying party of the claim or the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, with counsel chosen by the indemnifying
party and reasonably satisfactory to the indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such claim or action, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation. The
indemnified party shall have the right to employ its 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 indemnifying party, (ii) the
indemnified party shall have reasonably concluded that there may be a conflict
of interest between the indemnifying party and the indemnified party in the
conduct of the defense of such action (in which case the indemnifying party
shall not have the right to direct the defense of such action on behalf of the
indemnified party) or (iii) the indemnifying party shall not in fact have
employed counsel to assume the defense of such action, in each of which cases
the fees and expenses of counsel shall be at the expense of the indemnifying
party, provided, however, that in no case shall the indemnifying party be
responsible for the fees and expenses of more than one such counsel. An
indemnifying party shall not be liable for any settlement of any action or
claim effected without its consent.
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<PAGE>
(d) The Company acknowledges that the last full paragraph on the cover
page of the Prospectus and the statements under the caption "Underwriting" in
the Prospectus constitute the only information furnished in writing by or on
behalf of the Underwriter for inclusion in the Registration Statement and
Prospectus.
9. Contribution. If the indemnification provided for in Section 8 of
------------
this Agreement is unavailable to an indemnified party in respect of any losses,
claims, damages or liabilities referred to therein, then the indemnifying party
under Sections 8(a) and (b), as the case may be, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriter on the
other from the offering of the Bonds or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriter on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriter on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering of the Bonds
(before deducting expenses) received by the Company bear to the total
underwriting discount and commissions received by the Underwriter, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and of the Underwriter shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Company or by the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding sentence.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8 shall be deemed to
include, subject to the limitations set forth above and in Section 8 hereof, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
10. Effective Date and Termination.
------------------------------
(a) This Agreement shall become effective (i) if the Commission has not
declared the Registration Statement effective under the Act, at 11:00 a.m.,
St. Louis time, on the first full business day following the Effective
Date, or (ii) if the Commission has declared the Registration Statement
effective, (A) at 11:00 a.m., St. Louis time, on the day following the date
hereof, or (B) at such earlier time as the Underwriter shall first
19
<PAGE>
release the Bonds for sale to the public. For the purposes of this Section,
the Bonds shall be deemed to have been released for sale to the public upon
release by the Underwriter for publication of a newspaper advertisement
relating thereto or upon release by the Underwriter of facsimile transmissions
offering the Bonds for sale to securities dealers, whichever shall first
occur. By giving notice as hereinafter specified before the time this
Agreement becomes effective, the Underwriter or the Company may prevent this
Agreement from becoming effective without liability of any party to any other
party, except that the provisions of Sections 6 and 9 hereof shall at all
times be effective.
(b) This Agreement may be terminated at any time prior to the Closing
Date by the Underwriter by written notice to the Company, if in the judgment
of the Underwriter it is impracticable to offer for sale or to enforce
contracts made by the Underwriter for the resale of the Bonds by reason of (i)
the Company sustaining a loss, whether or not insured, by reason of fire,
flood, accident or other calamity, which, in the opinion of the Underwriter,
substantially affects the value of the properties of the Company or which
materially interferes with the operation of the business of the Company, (ii)
trading generally in securities on the New York Stock Exchange, Inc. having
been suspended or limited or minimum prices having been established on such
exchange, (iii) a banking moratorium having been declared by the United States
or by New York state authorities, or (iv) an outbreak of major hostilities or
other national or international calamity having occurred.
(c) If the obligations of the parties to this Agreement shall be
terminated pursuant to Section 6 or 7 hereof or this Section 10, or if the
purchases provided for herein are not consummated because of any refusal,
inability or failure on the part of the Company to comply with any of the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform all of its obligations under
this Agreement, the Company shall not be liable to the Underwriter for damages
on account of loss of anticipated profits arising out of the transactions
covered by this Agreement, but the Company shall remain liable to the extent
provided in Sections 5(a) and 8(a) hereof, and, except where termination
occurs pursuant to clause (ii), (iii) or (iv) of Section 10(b) hereof, the
Company shall pay the out-of-pocket expenses incurred by the Underwriter in
contemplation of the performance by it of its obligations hereunder,
including the fees and disbursements of its counsel and its traveling expenses
and postage, telegraph and telephone charges.
(d) If the Underwriter elects to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by the Underwriter by telephone or
telegram, confirmed by letter. If the Company elects to prevent this Agreement
from becoming effective, the Underwriter shall be notified promptly by the
Company by telephone or telegram, confirmed by letter.
11. Survival of Indemnities, Representations and Warranties. The
-------------------------------------------------------
respective indemnities of the Company and the Underwriter and the respective
representations and warranties of the Company and the Underwriter set forth in
this Agreement will remain in full
20
<PAGE>
force and effect, regardless of any investigation made by or on behalf of the
Company or the Underwriter or any of their respective officers, directors,
partners or any controlling person, and will survive delivery of and payment for
the Bonds or termination of this Agreement pursuant to Section 10 hereof, as the
case may be.
12. Parties in Interest; Entire Agreement. This Agreement shall inure to
-------------------------------------
the benefit of the Company, the Underwriter, the officers, directors and
partners of such parties, each controlling person referred to in Section 8
hereof, and their respective successors. Nothing in this Agreement is intended
or shall be construed to give to any other person, firm or corporation any legal
or equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained.
The term "successor" as used in this Agreement shall not include any
purchaser, as such purchaser, of any Bonds from the Underwriter.
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes any agreement previously
entered into.
13. Notices. All communication, terminations and notices hereunder shall
-------
be in writing and sent to the Company and to the Underwriter. Notices shall be
mailed, delivered, transmitted by facsimile or telegraphed and confirmed to the
Underwriter at 12555 Manchester Road, St. Louis, Missouri 63131-3729
(telecopier: (314) ________) (Attn: ____________________) (or such other place
as the Underwriter may specify in writing) with a copy to Bryan Cave LLP, One
Metropolitan Square, Suite 3600, St. Louis, Missouri 63102 (telecopier (314)
259-2020) (Attn: James L. Nouss, Jr., Esq.) and to the Company at 1260 Elm
Street, P.O. Box 329, Manchester, New Hampshire 03105-0329 (telecopier: (603)
624-6864) (Attn: Robert R. Giordano) (or such other place as the Company may
specify in writing) with a copy to McLane, Graf, Raulerson & Middleton, P.A.,
900 Elm Street, P.O. Box 326, Manchester, New Hampshire 03105-0326 (telecopier:
(603) 625-5650) (Attn: Richard A. Samuels, Esq.).
14. Counterparts. This Agreement may be executed in any number of
------------
counterparts which, taken together, shall constitute one and the same
instrument.
15. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Missouri.
21
<PAGE>
Please sign the enclosed duplicate of this letter whereupon this letter will
become a binding agreement between the parties in accordance with its terms.
Very Truly Yours,
ENERGYNORTH NATURAL GAS, INC.
By
----------------------------------
----------------------------------
----------------------------------
The foregoing Agreement is hereby confirmed and
accepted, as of the date first above written.
EDWARD D. JONES & CO., L.P.
By
____________________________
Authorized Signatory
22
<PAGE>
Exhibit 4.5
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGYNORTH NATURAL GAS, INC.
(Formerly Gas Service, Inc.)
TO
BANK OF NEW HAMPSHIRE
Trustee
-------------------
SIXTH SUPPLEMENTAL INDENTURE
Dated as of
September 15, 1997
-------------------
Supplemental
To
General and Refunding Mortgage Indenture
Dated as of June 30, 1987
-------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SIXTH SUPPLEMENTAL INDENTURE
THIS SIXTH SUPPLEMENTAL INDENTURE dated and entered into as of
September 15, 1997, by and between ENERGYNORTH NATURAL GAS, INC., a corporation
duly organized and existing under and by virtue of the laws of the State of New
Hampshire, having its principal office and place of business in Manchester,
County of Hillsborough, in the State of New Hampshire (hereinafter called the
"Company") and BANK OF NEW HAMPSHIRE, a New Hampshire trust company, as
successor trustee to Bank of New Hampshire, N.A., having its principal corporate
trust office and place of business in Concord, New Hampshire, and a current
mailing address of 143 North Main Street, Concord, New Hampshire 03301, as
Trustee (hereinafter referred to as the "Trustee") under the General and
Refunding Mortgage Indenture dated as of June 30, 1987 (the "Original
Indenture") from Gas Service, Inc. (now named EnergyNorth Natural Gas, Inc.), as
heretofore amended and supplemented by a First Supplemental Indenture dated as
of October 1, 1988, a Second Supplemental Indenture dated as of August 31, 1989,
a Third Supplemental Indenture dated as of September 1, 1990, a Fourth
Supplemental Indenture dated as of January 10, 1992, and a Fifth Supplemental
Indenture dated as of February 1, 1995 (said General and Refunding Mortgage
Indenture together with the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture, the Fourth
Supplemental Indenture, the Fifth Supplemental Indenture, and this Sixth
Supplemental Indenture, being sometimes hereinafter referred to as the
"Indenture"); and
WHEREAS, the Company by resolution of its Board of Directors duly
adopted has determined forthwith to issue an additional series of bonds to be
secured by the Indenture to be known and designated as "First Mortgage Bonds
_____% Series E Due 2027" (said bonds being referred to as the "Series E Bonds"
or "bonds of Series E"); and
WHEREAS, on or subsequent to the date of the Fourth Supplemental
Indenture, the Company has constructed or acquired certain additional properties
which are subject in any event to the lien and effect of the Indenture, but
nevertheless, in accordance with the provisions of Section 17.01(a) of the
Indenture, the Company desires to execute and deliver this Sixth Supplemental
Indenture for the purpose of specifically conveying to the Trustee upon the
trusts and for the purpose of the Indenture all of such additional properties
constructed or acquired and now owned by the Company, except property of the
character of that expressly excepted and excluded from the lien of the
Indenture; and
WHEREAS, the Company desires in accordance with the provisions of
Section 5.01(e) of the Indenture to execute this Sixth Supplemental Indenture
for the purpose of creating the Series E Bonds and providing for the terms
thereof as contemplated in Section 2.03 of the Indenture, all as set forth in
this Sixth Supplemental Indenture; and
WHEREAS, the Company has, by proper resolution of its Board of
Directors, duly voted to execute, acknowledge and file with the Trustee and to
request the Trustee to execute this Sixth Supplemental Indenture; and
<PAGE>
WHEREAS, each of the Series E Bonds is to be substantially in the
following form, to-wit:
2
<PAGE>
(FORM OF SERIES E BOND)
No. RD- $
---------------
ENERGYNORTH NATURAL GAS, INC.
First Mortgage Bond
% Series E Due 2027
-----
ENERGYNORTH NATURAL GAS, INC., a corporation of the State of New
Hampshire (hereinafter called the "Company"), for value received, hereby
promises to pay to ______________________________, or registered assigns, the
principal sum of __________________________________________________
($__________) at the principal corporate trust office of Bank of New Hampshire
(hereinafter called the "Trustee", which term shall include its successors in
the trusts hereinafter referred to) in the City of Concord (or at the principal
corporate trust office of its then successor Trustee) or, at the option of the
registered owner hereof, at the office of any other paying agent appointed by
the Company, on __________ and to pay interest thereon from the date hereof at
the rate per annum specified in the title of this Bond, semi-annually on March
31 and September 30 in each year commencing March 31, 1998 and to pay interest
on any overdue installment of principal, premium, if any, and interest at the
rate of ____% per annum (to the extent legally enforceable) (in each case
computed on the basis of a 360-day year of twelve 30-day months) at the
principal corporate trust office of the Trustee or, at the option of the
registered owner hereof, at the office of any such paying agent, until the
principal hereof shall have been paid in full; such interest payable on any
March 31 or September 30 shall (subject to certain exceptions provided in the
Indenture referred to below) be paid to the person in whose name this Bond or
the bond in exchange or substitution for which this Bond shall have been issued,
shall have been registered at the close of business on the March 15 or September
15, as the case may be, next preceding such March 31 or September 30. At the
option of the person in whose name this Bond shall have been registered,
principal, premium, if any, and interest may be paid by wire transfer in
immediately available funds or by check payable to the order of and mailed to
the address of the person entitled thereto as the name and address of such
person shall appear on the bond register maintained pursuant to the Indenture.
Both principal and premium, if any, and interest shall be paid in any coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts.
The Company hereby agrees that the interest rate per annum on this
Bond specified in the title of this Bond and the interest rate of ____% per
annum on any overdue installment of principal, premium, if any, and interest
shall be the applicable interest rates, notwithstanding the rate of interest
prescribed by statute from time to time.
This Bond is one of a duly authorized issue of First Mortgage Bonds of
the Company, the aggregate principal amount of which is not limited except as
such may be limited
3
<PAGE>
by law, to be issued in series with distinctive designations, the series of
which this Bond is one, designated as Series E, being limited to an aggregate
principal amount of twenty-two million dollars ($22,000,000), all bonds of all
series, including the bonds of Series E, to be issued under and secured by a
certain General and Refunding Mortgage Indenture dated as of June 30, 1987 by
and between the Company and Bank of New Hampshire, N.A., Trustee (said General
and Refunding Indenture, as heretofore or hereafter amended and supplemented,
being hereinafter referred to as the "Indenture"), to which Indenture reference
is hereby made for a description of the mortgaged and pledged property, the
nature and extent of the security and benefit thereof, the terms and conditions
under which the bonds may be issued and secured, the rights and remedies under
the Indenture of the bondholders, and the rights and obligations under the
Indenture of the Company and the Trustee. An executed counterpart of the
Indenture is on file at the principal corporate trust office of the Trustee.
As stated therein, the Indenture may in certain respects be modified
without the consent of the bondholders and may, with the consent of holders of
not less than sixty-six and two-thirds percent (66-2/3%) in principal amount of
the bonds of all series then issued and outstanding, be modified in certain
other respects in each case upon the conditions and in the manner provided in
the Indenture, but, among other restrictions, no such modification shall affect
or impair the obligation of the Company in respect of the principal of and
premium, if any, and interest on this Bond.
In the event of certain defaults, the principal of this Bond may be
declared or may become due and payable prior to maturity in the manner and with
the effect provided in the Indenture. As stated in the Indenture, a majority in
aggregate principal amount of the bonds of all series at any time outstanding
may waive a past default and its consequences, except a default in the payment
of the principal of or premium, if any, or interest on any bond, or a default in
respect of a covenant or provision of the Indenture which cannot be modified
without the consent of the holder of each outstanding bond affected.
No reference herein to the Indenture and no provisions of this Bond or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Bond as herein set forth; provided that no recourse under or
upon any obligation, covenant or agreement contained in the Indenture, or in
this Bond, or under any judgment obtained against the Company, or by the
enforcement of any assessment or penalty, or by an legal or equitable
proceedings by virtue of any constitution or statute or rule of law or
otherwise, shall be had against any incorporator, stockholder, officer, or
director, past, present or future, as such of the Company, or of any predecessor
or successor company, either directly of through the Company or such predecessor
or successor company, or otherwise, for the payment for or to the Company
or any receiver thereof, or for or to the holder of this Bond, of any sum that
may be due and unpaid by the Company upon and any and all personal liability of
every name and nature, whether at common law or in equity or by statute or by
constitution or otherwise, or any such incorporator, stockholder, officer or
director, as such, for the payment for or to the Company or any receiver
thereof, or for or to the holder of this Bond of any sum that may remain due and
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unpaid upon this Bond is hereby expressly waived and released as a condition of
and as part of the consideration to the execution of the Indenture and the issue
of this Bond; provided, however, that nothing herein or in the Indenture
contained shall be taken to prevent recourse to and the enforcement of the
liability, if any, of any stockholder or subscriber to capital stock upon or in
respect of shares of capital stock not fully paid or the liability of any
stockholder or subscriber to capital stock under any agreement entered into by
such stockholder or subscriber to capital stock.
Upon compliance with the conditions prescribed in the Indenture and
upon surrender of this Bond, accompanied by a written instrument of assignment
in form satisfactory to the Trustee and duly executed by the registered owner in
person or by duly authorized attorney, at the principal corporate trust office
of the Trustee in the City of Concord, or at such other agency of the Company as
shall be maintained for such purposes this Bond is transferable on the bond
register and thereupon a new bond or bonds of the same series and for a like
aggregate principal amount of authorized denominations will be issued in the
name of the transferee.
The Company, the Trustee, any authenticating agent, any paying agent,
and any registrar may deem and treat the registered holder hereof as the
absolute owner of this Bond (whether or not this Bond shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Company or any registrar), for the purpose of receiving payment hereof
or on account hereof or interest or any premium hereon (subject to certain
provisions provided in the Indenture) and for all other purposes, and neither
the Company, the Trustee, any authenticating agent, any paying agent, nor any
registrar shall be affected by any notice to the contrary.
The bonds of Series E consist of fully registered bonds without
coupons in the denominations of one thousand dollars ($1,000), and multiples
thereof. This Bond, singly or with other bonds of the same series and
registered in the same name, may be exchanged for one or more bonds of the same
series and for a like aggregate principal amount in authorized denominations.
All bonds to be so exchanged shall be surrendered at the principal corporate
trust office of the Trustee in the City of Concord, or at such other agency of
the Company as shall be maintained for such purpose, and, if required by the
Trustee, accompanied by written instruments of assignment in form satisfactory
to the Trustee and duly executed by the registered owner in person or by duly
authorized attorney.
At the option of the Company and upon the notice and otherwise in the
manner and with the effect as provided in the Indenture, and particularly in the
Sixth Supplemental Indenture dated as of September 15, 1997 (the "Sixth
Supplemental Indenture"), any or all of the bonds of Series E may be redeemed by
the Company at any time on or after September 30, 2002, upon payment of 104% of
the principal amount of the bonds of Series E to be redeemed, declining by 1% of
the principal amount per year for each of the succeeding four years, and accrued
interest thereon to the date of such redemption.
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Notice of redemption shall be given by mail, first class postage
prepaid, to the holders of the bonds to be redeemed at least thirty (30) days
but no more than sixty (60) days prior to the date fixed for redemption, at
their last addresses as they shall appear on the register, or otherwise as
provided in the Indenture.
In case of the call for payment of less than the whole principal
amount of this Bond, upon payment of the redemption price to the registered
owner hereof and surrender of this Bond, there shall be issued to such
registered owner another bond of Series E in principal amount equal to the
unredeemed balance hereof.
This Bond shall be governed by and construed in accordance with the
law of the State of New Hampshire.
This Bond shall not be valid or obligatory for any purpose or entitled
to any security or benefit under the Indenture until the certificate of
authentication hereon shall have been signed by the Trustee or any
authenticating agent on its behalf.
IN WITNESS WHEREOF, EnergyNorth Natural Gas, Inc. has caused this Bond
to be executed in its name by its President or one of its Vice Presidents by his
or her signature or a facsimile thereof, and its corporate seal or a facsimile
thereof to be affixed hereto or imprinted hereon and attested by the signature
or facsimile signature of its Secretary or an Assistant Secretary.
Dated: ENERGYNORTH NATURAL GAS, INC.
By:
------------------------------------
Its:
[Corporate Seal]
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ATTEST:
- --------------------------------
Secretary
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(FORM OF CERTIFICATE OF AUTHENTICATION)
This is one of the First Mortgage bonds ___% Series E Due 2027
referred to in the within-mentioned Sixth Supplemental Indenture dated as of
__________, 1997.
BANK OF NEW HAMPSHIRE,
AS TRUSTEE
By:
----------------------------------------
Authorized Officer
- ----------------------------------------------------
(FORM OF ASSIGNMENT)
For value received, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please Insert Social Security Or Other
Identifying Number of Assignee)
the within bond of EnergyNorth Natural Gas, Inc. and all rights thereunder,
hereby irrevocably constituting and appointing ____________________ attorney to
transfer said bond on the register of the Company, with full power of
substitution in the premises.
Dated:
NOTICE: The signature(s) to this assignment must correspond with the name(s)
as written upon the face of the within bond in every particular, without
alteration or enlargement or any change whatever.
- ----------------------------------------------------
NOW THEREFORE, THIS SIXTH SUPPLEMENTAL INDENTURE WITNESSETH that, in
consideration of the premises, and of the acceptance and purchase of the Series
E Bonds by the registered owner thereof, and of the mutual covenants herein
contained, and of the sum of $10 duly paid to the Company by the Trustee and of
other good and valuable consideration, the receipt whereof is hereby
acknowledged, and for the purpose of securing the due and punctual payment of
the principal of, and premium, if any, and interest on the bonds which have been
or shall be at any time issued and outstanding under the Indenture, and for the
purpose of securing the faithful performance and observance of all covenants and
conditions set
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forth in the Indenture and/or in any supplemental indenture, the Company has
executed and delivered this Sixth Supplemental Indenture, has given, granted,
bargained, sold, warranted, pledged, assigned, transferred, mortgaged, created a
security interest in, conveyed and confirmed, and by these presents does give,
grant, bargain, sell, warrant, pledge, assign, transfer, mortgage, create a
security interest in, convey and confirm (with mortgage covenants) unto Bank of
New Hampshire, Trustee, as herein provided, and its successor or successors in
the trust hereby created, and to its or their assigns, forever, all and
singular, the plants, rights, permits, franchises, easements and property, real,
personal, and mixed that has been acquired by the Company subsequent to January
10, 1992, together with the rents, issues, and profits thereof (including,
without limiting the generality of the foregoing, all real property specifically
described in Schedule A hereto); except such of said properties, rights or
interests therein as may have been or may be released by the Trustee, or sold
and disposed of, in whole or in part, as permitted by the provisions of the
Indenture;
SUBJECT, HOWEVER, to Permitted Liens (as that term is defined in Article I
of the Indenture);
AND SUBJECT FURTHER, to all defects and limitations of title and to all
other liens, charges, encumbrances, reservations, exceptions, exclusions,
restrictions, conditions, limitations, covenants, and interests existing at the
time of the acquisition of said properties, rights, or interests, including,
without limitation, the General and Refunding Mortgage Indenture dated as of
June 30, 1987, as amended and supplemented, between Manchester Gas Company and
Bank of New Hampshire, N.A. (the "Manchester Gas General and Refunding
Indenture") and the General and Refunding Mortgage Indenture dated as of June
30, 1987, as amended and supplemented, between Concord Natural Gas Corporation
and Bank of New Hampshire, N.A. (the "Concord Gas Indenture"), and any
substitutions, replacements, additions, betterments, extensions, and
enlargements thereof, none of which substantially interfere with the free use
and enjoyment by the Company of the property and rights hereinbefore described
for the general purposes and uses of the Company's gas business;
BUT SPECIFICALLY RESERVING, EXCEPTING AND EXCLUDING from this Sixth
Supplemental Indenture and from the grant, conveyance, mortgage, transfer and
assignment herein contained, all property, interests, and rights of the kind and
to the extent specified in subclauses (a) through (l), inclusive, including the
proviso thereto, of the granting clauses, on pages 9, 10, and 11 of the Original
Indenture.
TO HAVE AND TO HOLD all said plants, rights, permits, franchises,
easements, and property hereby conveyed, assigned, pledged, or mortgaged or
intended so to be, unto the Trustee, its successor or successors in trust, and
to its and their assigns forever;
BUT IN TRUST, NEVERTHELESS, for the additional and equal pro rata benefit,
security, and protection of the holders from time to time of all bonds
outstanding hereunder, without priority of one bond over any other (except as
provided in Section 8.04 of the Indenture and except as any special sinking,
purchase, amortization, improvement, or other fund
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established in accordance with the provisions of the Indenture may afford
additional or special security for the bonds of any particular series and except
independent security as provided in Section 2.03 of the Indenture), and upon the
trusts and subject to the conditions set forth in the Indenture;
PROVIDED, HOWEVER, that the maximum amount of bonds secured hereby is
$66,000,000 which amount includes $5,000,000 principal amount of bonds of Series
A, $7,000,000 principal amount of bonds of Series B, $10,000,000 principal
amount of bonds of Series C, $5,000,000 principal amount of the bonds of Series
D, $22,000,000 principal amount of Series E and premium, if any, interest and
default penalties, if any, on such bonds of Series A, Series B, Series C, Series
D, and Series E together with any advances made by the Trustee to protect its
interest in the trust estate. The maximum amount of bonds secured hereby shall
be increased upon the issuance of any additional series of bonds as provided in
a supplemental indenture hereto establishing such series of bonds. Pursuant to
the provisions of the First Supplemental Indenture dated as of October 1, 1988,
the Company has heretofore conveyed the mortgaged and pledged property to the
Trustee under the Concord Gas Indenture and to the Trustee under the Manchester
Gas General and Refunding Indenture as additional security for the bonds issued
under said indentures.
PROVIDED, HOWEVER, and these presents are upon the condition that, if the
Company shall pay or cause to be paid or make appropriate provisions for the
payment unto the holders of the outstanding bonds of the principal, premium, if
any, and interest to become due thereon at the times and in the manner
stipulated therein and in this Indenture, and shall pay or cause to be paid all
other sums payable under this Indenture by the Company, then this Supplemental
Indenture and the estate and rights hereby granted shall, pursuant to the
provisions of Article XIII of the Original Indenture, cease, terminate and be
void, but otherwise shall be and remain in full force and effect.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED, upon the trust and for
the purposes aforesaid and in order, pursuant to the terms of the Indenture, to
provide for the issuance under the Indenture of Series E Bonds and to fix the
terms and conditions of the Series E Bonds and in order to modify and amend the
Indenture in the particulars and to the extent hereinafter in this Sixth
Supplemental Indenture specifically provided, the Company hereby covenants and
agrees with the Trustee as follows:
ARTICLE I
SERIES E BONDS
(S)1.1. Title and Terms of Series E Bonds. There shall be a series of
bonds designated "First Mortgage Bonds ____% Series E Due 2027" (said bonds
being referred to as the "Series E Bonds" or "bonds of Series E"). The Series E
Bonds shall be limited in aggregate principal amount to twenty-two million
dollars ($22,000,000), shall be issuable only as fully registered
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bonds without coupons, and shall be issued substantially in the form
hereinbefore set forth. The Series E Bonds shall mature on September 30, 2027
and may be issued in denominations of one thousand dollars ($1,000) and any
multiple thereof.
The Series E Bonds shall bear interest (computed on the basis of a
360-day year of twelve 30-day months), until payment of the principal thereof
has been made or duly provided for, at the rate per annum specified in the title
of the Series E Bonds, payable semi-annually on March 31 and September 30 in
each year, commencing on March 31, 1998 and (to the extent legally enforceable)
to pay interest at the rate of ____% per annum on any overdue installment of
principal, premium, if any, and interest.
Each bond of Series E shall be dated the date of its authentication
and interest shall be payable on the principal represented thereby from the date
thereof.
Interest on any Series E Bond shall be paid to the person in whose
name such bond (or, notwithstanding the cancellation thereof, the bond in
exchange or substitution for which such bond shall have been issued) is
registered at the close of business on the applicable record date; provided,
however, that if the Company shall default in the payment of the interest due on
any interest payment date on the principal represented by any Series E Bond,
such defaulted interest shall be paid to the person in whose name such bond (or
any bond issued upon registration of transfer or exchange thereof) is registered
on a subsequent record date established by notice given by mail by or on behalf
of the Company to the holders of Series E Bonds not less than ten (10) days
preceding such subsequent record date. The term "record date" shall mean, with
respect to any semiannual interest payment date for the Series E Bonds, the
close of business on the 15th day of March or the 15th day of September, as the
case may be, next preceding such interest payment date, or with respect to any
payment of defaulted interest, the close of business on any subsequent record
date established as provided above which shall be at least five (5) business
days prior to the payment date for such defaulted interest.
At the option of the registered owner, principal, premium, if any, and
interest on the Series E Bonds may be paid by wire transfer in immediately
available funds or by certified check payable to the order of and mailed to the
address of the person entitled thereto as the name and address of such person
shall appear on the bond register maintained pursuant to Section 2.08 of the
Indenture. The principal of, premium, if any, and interest on the Series E
Bonds shall be payable in any coin or currency of the United States of America
which, at the time of payment, is legal tender for the payment of public and
private debts, at the principal corporate trust office of the Trustee in the
City of Concord, or at the principal corporate trust office of its successor as
Trustee, or, at the option of the holder, at the principal office of any other
paying agent appointed by the Company for the purpose.
(S)1.2. Original Issue of Series E Bonds. Provided that no event of
default has occurred and is continuing, at any time after the execution and
delivery of this Sixth Supplemental Indenture, upon the application of the
Company, the Trustee shall authenticate and
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deliver to or upon the order of the Company the entire twenty-two million
dollars ($22,000,000) in aggregate principal amount of bonds of Series E upon
receipt by the Trustee of:
(a) An Officers' Certificate, Engineer's Certificate,
Accountant's Certificate and Opinion of Counsel complying with the
requirements of Section 4.01 of the Indenture with respect to such Property
Additions as is sufficient to constitute a Net Bondable Capacity equal to
or exceeding $22,000,000;
(b) The instruments required by Section 5.01 of the
Indenture; and
(c) The Series E Bonds duly executed by the Company.
(S)1.3. Optional Redemption of Series E Bonds. Notwithstanding any
provisions in Article VIII or Article IX of the Indenture, the bonds of Series E
shall be subject to redemption only in the manner and with the effect provided
in this Article I. The Company shall have the option, at any time, on or after
September 30, 2002, of redeeming the outstanding Series E Bonds, either in whole
or in part (but if in part then in units of $100,000 or any integral multiple of
$10,000 in excess thereof), by payment of 104% of the principal amount of the
Series E Bonds to be prepaid, declining by 1% of the principal amount per year
for each of the succeeding four years, and accrued interest thereon to the date
of such prepayment. Any redemption of a Series E Bond pursuant to Section 10.10
of the Indenture shall be at a redemption price determined in the manner set
forth in this (S)1.3. The entire remaining principal amount of the bonds of
Series E shall become due and payable on September 30, 2027.
Notwithstanding any provision to the contrary under any Section of the
Indenture, in the case of the redemption of only a portion of the outstanding
Series E Bonds, the Trustee shall prorate the principal amount of such bonds to
be redeemed among all holders of outstanding Series E Bonds in proportion to the
outstanding principal amount of such bonds held by each holder. The aggregate
principal amount of each partial redemption of Series E Bonds shall be allocated
in units of $1,000, or integral multiples thereof, among the holders of such
bonds at the time outstanding, in proportion, as nearly as practicable, to the
respective unpaid principal amounts of such bonds held thereby, with adjustment,
to the extent practicable, to equalize for any prior redemption not made in
exactly such proportion.
(S)1.4. Limited Right of Redemption Upon Death of a Beneficial Owner.
Unless the Series E Bonds have been declared due and payable prior to their
maturity by reason of an event of default, the representative of a deceased
owner of an interest in the Series E Bonds ("Beneficial Owner") has the right to
request redemption of all or part of his or her interest in the Bonds, expressed
in integral multiples of $1,000 principal amount, for payment prior to maturity.
The Company will redeem the same subject to the limitations that the Company
will not be obligated to redeem during the period beginning with the original
issuance of the Series E Bonds of this series and ending September 30, 1998 and
during any twelve-month period ending September 30 thereafter, (i) at the
request of a representative on behalf of a deceased Beneficial Owner any
interest in the Series E Bonds which exceeds an aggregate principal amount of
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$25,000 or (ii) interests in the Series E Bonds in an aggregate principal amount
exceeding $500,000. A Redemption Request, as hereinafter defined, may be
presented to the Trustee at any time and in any principal amount. If the
Company, although not obligated to do so, chooses to redeem interests of a
deceased Beneficial Owner in the Series E Bonds in any such period in excess of
the $25,000 limitation, such redemption, to the extent that it exceeds the
$25,000 limitation for any deceased Beneficial Owner, shall not be included in
the computation of the $500,000 aggregate limitation for such period or any
succeeding period.
Subject to the $25,000 and $500,000 limitations, the Company will upon
the death of any Beneficial Owner redeem the interests of the Beneficial Owner
in the Series E Bonds within 60 days following receipt by the Trustee of a
Redemption Request from such Beneficial Owner's personal representative, or
surviving joint tenant(s), tenant(s) by the entirety or tenant(s) in common, or
other persons entitled to effect such a Redemption Request. If Redemption
Requests exceed the aggregate principal amount of interests in Series E Bonds
required to be redeemed during any twelve-month period, such excess Redemption
Requests will be applied to successive periods, regardless of the number of
periods required to redeem such interests.
A Redemption Request may be made by delivering a request to the
Depository Trust Company or any successor depository ("Depository"), in the case
of a participating firm (a "Participant") which is the Beneficial Owner of such
interest, or to the Participant through whom the Beneficial Owner owns such
interest, in form satisfactory to the Participant, together with evidence of
death and authority of the representative satisfactory to the Participant and
Trustee. A surviving joint tenant, tenant in common or a tenant by the entirety
or other person seeking the redemption of an interest in Series E Bonds by
reason of the death of another may make the request for redemption and shall
submit such other evidence of the right to such redemption as the Participant
shall require. The request shall specify the principal amount of interest in the
Series E Bonds to be redeemed. A request for redemption in form satisfactory to
the Participant and accompanied by the documents relevant to the request as
above provided, together with a certification by the Participant that it holds
the interest on behalf of the deceased Beneficial Owner with respect to whom the
request for redemption is being made (a "Redemption Request"), shall be provided
to the Depository by a Participant and the Depository will forward the request
to the Trustee. Redemption Requests shall be in form satisfactory to the
Trustee.
The price to be paid by the Company for an interest in the Series E
Bonds to be redeemed pursuant to a request on behalf of a deceased Beneficial
Owner is one hundred percent (100%) of the principal amount thereof plus accrued
but unpaid interest to the date of payment. Subject to arrangements with the
Depository, payment for an interest in the Bonds which are to be redeemed shall
be made to the Depository upon presentation of Bonds to the Trustee for
redemption in the aggregate principal amount specified in the Redemption
Requests submitted
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to the Trustee by the Depository which are to be fulfilled in connection with
such payment. Any acquisition of Series E Bonds by the Company other than by
redemption at the option of a representative on behalf of a deceased Beneficial
Owner shall not be included in the computation of either the $25,000 or $500,000
limitations for any period.
Interests in the Series E Bonds held in tenancy by the entirety, joint
tenancy, or by tenants in common will be deemed to be held by a single
Beneficial Owner, and the death of a tenant in common, tenant by the entirety,
or joint tenant will be deemed the death of a Beneficial Owner. The death of a
person who, during such person's lifetime, was entitled to substantially all of
the rights of a Beneficial Owner of an interest in the Series E Bonds will be
deemed the death of the Beneficial Owner, regardless of the recordation of such
interest on the records of the Participant, if such rights can be established to
the satisfaction of the Participant and the Trustee. Such interest shall be
deemed to exist in typical cases of nominee ownership, ownership under the
Uniform Gifts to Minors Act or the Uniform Transfer to Minors Act, community
property or other joint ownership arrangements between a husband and wife
(including individual retirement accounts or Keogh plans maintained solely by or
for the decedent or by or for the decedent and any spouse), and trust and
certain other arrangements where one person has substantially all of the rights
of a Beneficial Owner during such person's lifetime.
In the case of a Redemption Request which is presented on behalf of a
deceased Beneficial Owner and which has not been fulfilled at the time the
Company gives notice of its election to redeem the Series E Bonds, the Series E
Bonds which are the subject of such Redemption Request shall not be eligible for
redemption pursuant to the Company's option to redeem but shall remain subject
to fulfillment pursuant to such Redemption Request.
Subject to the provisions of the immediately preceding paragraph, any
Redemption Request may be withdrawn upon delivery of a written request for such
withdrawal given to the Trustee by the Depository prior to September 1, 1998, in
the case of the initial period beginning with the original issuance of the
Bonds, or prior to September 1, in the case of any subsequent twelve-month
period.
Because of the limitations of the Company's requirement to redeem, no
Beneficial Owner can have any assurance that his or her interest in the Series E
Bonds will be paid prior to maturity.
(S)1.5. Home Office Payment. The Company may enter into a written
agreement with any holder of Series E Bonds providing that payment of such bonds
at stated maturity or when called for redemption in part be made directly by
mail, wire transfer or in any other manner to the holder thereof without
presentation or surrender thereof if there shall be delivered to the Trustee an
agreement (which may be a composite with other such agreements) between the
Company and such holder (or other person acting as agent for such holder or for
whom such holder is a nominee) that payment shall be so made and that in the
event the holder thereof shall
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sell or transfer any such bonds it will, prior to the delivery of such bonds,
make a proper notation of the amount of principal which has been paid thereon to
the date of transfer. The Trustee shall not be liable or responsible to any such
holder or transferee or to the Company or to any other person for any act or
omission to act on the part of the Company or any such holder in connection with
any such agreement. The Company will indemnify and save the Trustee harmless
against any liability resulting from any such act or omission and against any
liability resulting from any action taken by the Trustee in accordance with the
provisions of any such agreement.
(S)1.6. Notice of Redemption of Series E Bonds. Prior to any
redemption of bonds of Series E, the Trustee, in the name and on behalf of the
Company, shall mail, by first class postage prepaid, or prepaid overnight
courier, a notice of redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the bond register. Such notice shall be mailed not less than thirty (30) days
but no more than sixty (60) days prior to the day fixed for redemption and shall
conform to the requirements of Section 8.02 of the Indenture. Such notice
shall, in any case, specify (i) the date of such redemption, (ii) the principal
amount of such holder's Series E Bonds to be redeemed on such date, and (iii)
accrued interest payable in connection with such redemption.
(S)1.7. Waiver of Presentment and Surrender; Replacement of Bonds.
(a) With respect to Series E Bonds and in accordance with the
provisions of Section 8.07 of the Indenture, there shall be no requirement that
such bonds be presented or surrendered to the Trustee at the time of any payment
on such bonds including at stated maturity; and
(b) Notwithstanding the provisions of Section 2.12 of the
Indenture, the requirements of said Section shall not apply to the extent that
other provision is made in any agreement between the Company and the original
purchasers or any holder of a Series E Bond, so long as a copy of such agreement
is provided to the Trustee.
ARTICLE II
MISCELLANEOUS
(S)2.1. The provisions of this Sixth Supplemental Indenture shall be
effective from and after the execution hereof; and the Indenture, as previously
and as hereby modified and amended, shall remain in full force and effect.
(S)2.2. Each reference in the Indenture to any article, section,
term, or provision of the Indenture shall mean and be deemed to refer to such
article, section, term, or provision of the Indenture, as amended, except where
the context otherwise indicates.
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(S)2.3. In the event of any inconsistency between the provisions of
this Sixth Supplemental Indenture and the provisions of the Original Indenture,
the First Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture, the Fourth Supplemental Indenture, or the Fifth
Supplemental Indenture, this Sixth Supplemental Indenture shall control.
(S)2.4. All terms contained in this Sixth Supplemental Indenture
which are defined in the Original Indenture, as amended and supplemented by the
First Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture, the Fourth Supplemental Indenture, and the Fifth
Supplemental Indenture shall, except as otherwise specifically provided herein
or as the context clearly otherwise indicates, have the meanings given to such
terms in the Original Indenture, as so amended and supplemented. The use and
construction herein of terms is in accordance with the use and construction
thereof in the Original Indenture, as amended and supplemented by the First
Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture, the Fourth Supplemental Indenture, and the Fifth
Supplemental Indenture.
(S)2.5. This Sixth Supplemental Indenture shall become void when the
Indenture shall be void.
(S)2.6. The covenants, stipulations, promises, and agreements
contained in this Sixth Supplemental Indenture, made by or on behalf of the
Company or the Trustee, respectively, shall inure to the benefit of and bind
their respective successors and assigns.
(S)2.7. This Sixth Supplemental Indenture is, among other things, a
security agreement and is signed as such by the Company and by the Trustee as
secured party.
(S)2.8. This Sixth Supplemental Indenture may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
(S)2.9. The cover of this Sixth Supplemental Indenture and all
article and descriptive headings are inserted for convenience only, and shall
not affect any construction or interpretation hereof.
(S)2.10. This Sixth Supplemental Indenture shall be governed by, and
construed and enforced in accordance with, the laws of the State of New
Hampshire.
ARTICLE III
AMENDMENT TO INDENTURE
16
<PAGE>
(S)3.1. Article X of the Original Indenture shall be amended by
substituting "$250,000" for "$100,000" in Sections 10.05(a)(2) and 10.05(a)(3),
so as to increase the value of mortgaged property sold or exchanged by the
Company requiring independent engineer and accountant certificates.
ARTICLE IV
CONFIRMATION
(S)4.1. As supplemented and modified by this Sixth Supplemental
Indenture, this Indenture is in all respects ratified and confirmed, and this
Indenture and the First, Second, Third, Fourth, Fifth, and Sixth Supplemental
Indentures shall be read, taken and construed as one and the same instrument.
IN WITNESS WHEREOF, ENERGYNORTH NATURAL GAS, INC. has caused this
instrument to be executed in its corporate name by its President or one of its
Vice-Presidents and by its Treasurer or one of its Assistant Treasurers and its
corporate seal to be hereunto affixed and to be attested by its Secretary or
Assistant Secretary, and BANK OF NEW HAMPSHIRE, to evidence its acceptance of
the trust hereby created, has caused this instrument to be executed in its
corporate name by its Trust Officer and its corporate seal to be hereunto
affixed and to be attested by its Secretary, all as of the day and year first
above written.
ENERGYNORTH NATURAL GAS, INC.
By:
----------------------------------------
Its:
---------------------------------------
[CORPORATE SEAL]
and:
---------------------------------------
Its:
---------------------------------------
ATTEST:
- --------------------------------
Its:
----------------------------
17
<PAGE>
Signed, sealed and delivered
by EnergyNorth Natural Gas, Inc.
in the presence of:
- --------------------------------
- --------------------------------
18
<PAGE>
BANK OF NEW HAMPSHIRE
By:
----------------------------------------
Its:
---------------------------------------
[Corporate Seal]
ATTEST:
- --------------------------------
Its:
----------------------------
Signed, sealed and delivered
by Bank of New Hampshire
in the presence of:
- --------------------------------
- --------------------------------
19
<PAGE>
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH, SS.
On this ____ day of __________, 1997 before me personally appeared
____________________ and ____________________, to me personally known, who being
by me duly sworn, did say that they are ____________________ and
________________ ____________________, respectively, of ENERGYNORTH NATURAL GAS,
INC., that the seal affixed to the foregoing instrument is the corporate seal of
said corporation, and that said instrument was signed by them and sealed on
behalf of said corporation, and that said instrument was signed by them and
sealed on behalf of said corporation by authority of its Board of Directors; and
the said ____________________ and ____________________ acknowledged said
instrument to be the free act and deed of said corporation.
-------------------------------------------
Notary Public
[NOTARIAL SEAL]
My Commission expires:
-----------------
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH, SS.
On this ____ day of __________, 1997 before me personally appeared
____________________ and ____________________, to me personally known, who being
by me duly sworn, did say that they are ____________________ and
________________ ____________________, respectively, of BANK OF NEW HAMPSHIRE,
that the seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed by them and sealed on behalf of
said corporation, and that said instrument was signed by them and sealed on
behalf of said corporation by authority of its Board of Directors; and the said
____________________ and ____________________ acknowledged said instrument to be
the free act and deed of said corporation.
-------------------------------------------
Notary Public
[NOTARIAL SEAL]
My Commission expires:
------------------
20
<PAGE>
Exhibit 10.21
TAX SHARING AGREEMENT
---------------------
THIS AGREEMENT made as of October 1, 1988 by and between ENERGYNORTH, INC.,
a New Hampshire corporation (EnergyNorth); ENERGYNORTH NATURAL GAS, INC., a New
Hampshire Corporation (ENGI); CONCORD GAS SERVICE, (a subsidiary of ENGI), a
New Hampshire corporation (Concord Service); ENERGYNORTH PROPANE, INC., a New
Hampshire corporation (Propane); and ENERGYNORTH REALTY, INC., a New Hampshire
corporation (Realty).
W I T N E S S E T H T H A T:
- - - - - - - - - - - - - -
WHEREAS, the term "AFFILIATES" as used herein shall be deemed to refer to
ENGI, Concord Service, Propane, Realty together with any other corporation which
becomes a subsidiary of EnergyNorth, the term 'CONSOLIDATED AFFILIATES" shall be
deemed to refer to the AFFILIATES together with EnergyNorth, and the
CONSOLIDATED AFFILIATES as a collective tax paying unit is sometimes referred to
as the "GROUP"; and
WHEREAS, EnergyNorth owns at least 80 percent of the issued and outstanding
shares of each class of voting common stock of ENGI, Realty and Propane; and
Concord Service is a wholly-owned subsidiary of ENGI: each of the CONSOLIDATED
AFFILIATES is a member of an affiliated group within the meaning of Section 1504
of the Internal Revenue Code of 1986, as amended (the "Code"), of which
EnergyNorth is the common parent corporation; and EnergyNorth proposes to
include each of the
<PAGE>
2
AFFILIATES in filing a consolidated Federal income tax return for the fiscal
year ending September 30, 1989, and thereafter.
NOW, THEREFORE, EnergyNorth and the AFFILIATES agree as follows:
1. Consolidated Return Election. If at any time and from time to time
----------------------------
EnergyNorth so elects, each of the AFFILIATES will join in the filing of a
consolidated Federal income tax return for the fiscal year ending September 30,
1989 and for any subsequent period for which the Group is required or permitted
to file such a return. EnergyNorth agrees to file such consents, elections and
other documents and to take such other action as may be necessary or appropriate
to carry out the purposes of this Section 1. Any period for which any of the
AFFILIATES is included in a consolidated Federal income tax return filed by
EnergyNorth is referred to in this Agreement as a "Consolidated Return Year".
2. Affiliates' Liability to EnergyNorth for Consolidated Return Year.
------------------------------------------------------------------
Within 90 days after the filing of each consolidated return by EnergyNorth, each
of the AFFILIATES included therein shall pay to EnergyNorth the amount, if any,
of the Federal income tax for which the AFFILIATE would have been liable for
that year, computed in accordance with Treasury Regulations, Section 1.1552-1(a)
(2) (ii) as though that AFFILIATE had filed a separate return for such year,
giving effect to any net operating loss carryovers, capital loss carryovers,
investment tax credit carryovers, foreign tax credit carryovers, capital loss
carryovers or other similar items, incurred by that AFFILIATE for any period
ending on or before the date of this Agreement.
<PAGE>
3
The foregoing allocation of Federal Income tax liability is being made in
accordance with Treasury Regulations, Sections 1.1552-1(a) (2) and 1.1502-33(d)
(2) (ii), and no amount shall be allocated to any CONSOLIDATED AFFILIATE in
excess of the amount permitted under Treasury Regulations, Section 1.1502-33(d)
(2) (ii). Accordingly, after taking into account the allocable portion of the
Group's Federal income tax liability, no amount shall be allocated to any
CONSOLIDATED AFFILIATE in excess of the amount permitted in accordance with
Treasury Regulations, Section 1.1502-33(d) (2) (ii) (b).
3. Affiliate's Liability to EnergyNorth for Estimated Tax Payments.
---------------------------------------------------------------
Within 90 days following the payment by EnergyNorth of any estimated taxes on
behalf of any affiliate the affiliate will pay to EnergyNorth the amount of any
such estimated tax payment. The computation of such payment shall be consistent
with the formula set out in Section 2, above, and the liability of each
affiliate to EnergyNorth for consolidated return payments will be adjusted to
reflect all estimated payments made by or on behalf of any member of the
CONSOLIDATED AFFILIATES.
4. EnergyNorth's Liability to Each Affiliate for Consolidated Return
-----------------------------------------------------------------
Year. If for any Consolidated Return Year, any AFFILIATE included in the
- ----
consolidated return filed by EnergyNorth for such year has available a net
operating loss, capital loss, foreign tax credit, investment tax credit or
similar item (computed by taking into account carryovers of such items from
periods ending on or before the date of this agreement) that reduces the
consolidated tax liability of the Group below the amount that would have been
payable if that AFFILIATE did not have such item available, EnergyNorth shall
pay the
<PAGE>
4
amount of the reduction attributable to such AFFILIATE within 90 days after the
filing of the consolidated return for such year.
The amount of such reduction shall be equal to a portion of the excess of
(i) the total of the separate return tax liabilities of each of the CONSOLIDATED
AFFILIATES computed in accordance with Section 2 of this Agreement, over (ii)
the Federal income tax liability of the Group for the year. The portion of such
reduction attributable to an AFFILIATE shall be computed by multiplying the
total reduction by a fraction, the numerator of which is the value of the tax
benefits contributed by the AFFILIATE to the Group and the denominator of which
is the value of the total value of such benefits contributed by all CONSOLIDATED
AFFILIATES during the year.
For purposes of the foregoing paragraph a deduction or credit generated by
a CONSOLIDATED AFFILIATE which is in excess of the amount required to eliminate
its separate tax return liability but which is utilized in the computation of
the Federal income tax liability of the Group shall be deemed to be a tax
benefit contributed by the CONSOLIDATED AFFILIATE to the Group. The value of a
deduction which constitutes such a benefit shall be determined by applying the
then current corporate income tax rate to the amount of deduction. The value of
a credit that constitutes such a benefit shall be the tax saving. The value of
capital losses used to offset capital gains shall be computed at the then
current tax rate applicable to capital gains for corporations.
5. Affiliates' Liability for Separate Return Years. If any of the
------------------------------------------------
AFFILIATES leaves the Group and files separate Federal income tax returns, it
shall pay to EnergyNorth within 120 days of the end of each of the first five
taxable years for which it files such
<PAGE>
5
returns, the excess, if any, of (a) the Federal income tax that such AFFILIATE
would have paid for such year (on separate return basis giving effect to its net
operating loss carryovers) if it never had been a member of the Group, over (b)
the amount of Federal income tax such AFFILIATE has actually paid or will
actually pay for such years.
6. Tax Adjustments. In the event of any adjustments to the tax returns
------------------
of any of the CONSOLIDATED AFFILIATES as filed (by reason of an amended return,
a claim for refund or an audit by the Internal Revenue Service), the liability,
if any, of each of the AFFILIATES under Sections 2, 3, 4 and 5 shall be
redetermined to give effect to any such adjustment as if it had been made as
part of the original computation of tax liability, and payments between
EnergyNorth and the appropriate AFFILIATES shall be made within 120 days after
any such payments are made or refunds are received, or, in the case of contested
proceedings, within 120 days after a final determination of the contested
proceedings. Interest and penalties, if any, attributable to such an adjustment
shall be paid by each AFFILIATE to EnergyNorth in proportion to the increase in
such AFFILIATE'S separate return tax liability computed under Section 2 of this
Agreement that it is required to be paid to EnergyNorth.
7. Subsidiaries of Affiliates. If at any time, any of the AFFILIATES
---------------------------
acquires or creates one or more subsidiary corporations that are includable
corporations of the Group, they shall be subject to this agreement and all
references to the AFFILIATES herein shall be interpreted to include such
subsidiaries as a group.
8. Successors. This Agreement shall be binding on and inure to the
-----------
benefit of any successor, by merger, acquisition of assets or otherwise, to any
of the parties hereto
<PAGE>
(including but not limited to any successor of EnergyNorth or any of the
AFFILIATES succeeding to the tax attributes of such corporation under Section
381 of the Code) to the same extent as if such successor had been an original
party to this Agreement.
IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have set their hands this 4th day of August 1989.
ENERGYNORTH, INC.
By: /s/ N. George Mattaini
Title: President and CEO
ENERGYNORTH NATURAL GAS, INC.
By: /s/ Michael J. Mancini, Jr.
Title: Senior Vice President
CONCORD GAS SERVICE CORPORATION
By: /s/ Michael J. Mancini, Jr.
Title: Senior Vice President
ENERGYNORTH PROPANE, INC.
By: /s/ Richard P. Demers
Title: President
ENERGYNORTH REALTY, INC.
By: /s/ Michael J. Mancini
Title: Senior Vice President
<PAGE>
Exhibit 12
ENERGYNORTH NATURAL GAS, INC.
FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EXHIBIT 12 STATEMENT RE: COMPUTATION OF RATIOS
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
(unaudited)
Twelve Months
Ended June 30, 1997 Fiscal Years Ended September 30,
------------------------- -----------------------------------------------------------------
Pro Forma Historical 1996 1995 1994 1993 1992
------------------------- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
Net income $5,437,000 $5,437,000 $5,427,000 $3,745,000 $4,837,000 $4,960,000 $3,392,000
Add back:
Provision for income taxes 3,330,000 3,330,000 3,224,000 1,745,000 2,280,000 1,997,000 1,542,000
Fixed charges 4,322,000 3,840,000 3,803,000 4,333,000 3,888,000 3,710,000 3,993,000
------------------------- -----------------------------------------------------------------
Adjusted earnings $13,089,000 $12,607,000 $12,454,000 $9,823,000 $11,005,000 $10,667,000 $8,927,000
========================= =================================================================
Fixed charges
Total interest expense 4,021,000 3,540,000 3,508,000 4,049,000 3,675,000 3,490,000 3,770,000
Interest element of rentals 300,000 300,000 295,000 284,000 213,000 220,000 223,000
------------------------- -----------------------------------------------------------------
Total fixed charges $4,321,000 $3,840,000 $3,803,000 $4,333,000 $3,888,000 $3,710,000 $3,993,000
========================= =================================================================
Ratio of earnings to fixed charges
(Adjusted earnings divided by
fixed charges) 3.03x 3.28x 3.27x 2.27x 2.83x 2.88x 2.24x
========================= =================================================================
</TABLE>
NOTE:
In computing the ratio of earnings to fixed charges, earnings are based on net
income from continuing operations plus income taxes and fixed charges. Fixed
charges consist of total interest, amortization of debt discount and expense,
and the estimated portion of interest implicit in rentals. The pro forma ratio
of earnings to fixed charges assumes that the Bonds had been outstanding
throughout the period and that the indebtedness to be retired from the proceeds
of sale of the Bonds had not been outstanding and assumes a 7.5% per annum
interest rate on the Bonds.
<PAGE>
Form T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a trustee pursuant to
section 305(b)(2). [_]
BANK OF NEW HAMPSHIRE
(Exact name of trustee as specified in its charter)
NEW HAMPSHIRE
(Jurisdiction of incorporation or organization if not a U.S. national bank)
02-0346918
(I.R.S. Employer Identification Number )
300 FRANKLIN STREET, MANCHESTER, NH
(Address of principal executive offices)
03101
(Zip code)
LORRAINE M. GRACIANO
BANK OF NEW HAMPSHIRE
143 NORTH MAIN STREET
CONCORD, NEW HAMPSHIRE 03301
(603) 225-4530
(Name, address and telephone number of agent for service)
Copies to:
Michael C. Moyers, Esquire Richard A. Samuels, Esquire
Cleveland, Waters & Bass McLane, Graf, Raulerson & Middleton,
2 Capitol Plaza, P.O. Box 1137 Professional Association
Concord, NH 03302 900 Elm Street, P.O. Box 326
Manchester, NH 03105-0326
ENERGYNORTH NATURAL GAS, INC.
(Exact name of obligor as specified in its charter)
NEW HAMPSHIRE
(State or other jurisdiction of incorporation or organization )
02-0209312
(I.R.S. Employer Identification Number)
1260 ELM STREET, P.O. BOX 329, MANCHESTER, NEW HAMPSHIRE
(Address of principal executive office)
03105-0329
(Zip code)
FIRST MORTGAGE BONDS, __% SERIES E BONDS DUE SEPTEMBER 30, 2027
(Title of Indenture Securities)
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE --
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
NH Department of Banking, 169 Manchester Street, Concord, NH 03301
Federal Deposit Insurance Corporation, Washington, D.C.
Federal Reserve Bank of Boston, Boston, Massachusetts
(B) WHETHER IT IS AUTHORIZED TO EXERCISE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATION WITH THE OBLIGOR AND UNDERWRITERS. IF THE OBLIGOR IS AN
AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the trustee.
3. VOTING SECURITIES OF THE TRUSTEE. FURNISH THE FOLLOWING INFORMATION AS TO
EACH CLASS OF VOTING SECURITIES OF THE TRUSTEE:
AS OF AUGUST 31, 1997
---------------------------------------------------
TITLE OF CLASS AMOUNT OUTSTANDING
------------------------- ------------------------
Common Stock, 27,474,169 shares
par value $0.01 per share
4. TRUSTEESHIPS UNDER OTHER INDENTURES. IF THE TRUSTEE IS A TRUSTEE UNDER
ANOTHER INDENTURE UNDER WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF
INTEREST OR PARTICIPATION IN ANY OTHER SECURITIES, OF THE OBLIGOR ARE
OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(a) Title of the securities outstanding under each such other indenture.
Concord Natural Gas Corporation, General and Refunding Mortgage Bonds,
8.67% Series A Due 2002; issued under the Concord Natural Gas
Corporation General and Refunding Mortgage Indenture dated as of June
30, 1987.
Energynorth Natural Gas, Inc. (f/k/a Gas Service, Inc.), General and
Refunding Mortgage Bonds:
8.67% Series A Due 2002,
9.7% Series B Due 2019,
9.75% Series C Due 2020 and
8.44% Series D Due 2009,
issued under the Energynorth Natural Gas, Inc. (f/k/a Gas Service,
Inc.) General and Refunding Mortgage Indenture dated as of June 30,
1987.
Manchester Gas Company, General and Refunding Mortgage Bonds, 8.67%
Series A Due 2002; issued under the Manchester Gas Company General and
Refunding Mortgage Indenture dated as of June 30, 1987.
2
<PAGE>
On October 1, 1988, Concord Natural Gas Corporation, Gas Service, Inc.
and Manchester Gas Company merged. Energynorth Natural Gas, Inc.,
formerly known as Gas Service, Inc., the obligor (the "Obligor") of the
proposed First Mortgage Bonds, __% Series E due September 30, 2027 (the
"Series E Bonds") was the surviving corporation in such merger. At the
time of such merger, the merging companies, together with Bank of New
Hampshire as the trustee under the 1987 Indentures of Concord Natural
Gas Corporation, Gas Service, Inc. and Manchester Gas Company (the "1987
Indentures"), entered into an intercreditor agreement providing, among
other things, that the Obligor, as the surviving corporation to the
merger, shall become the obligor of all Series A bonds issued under the
1987 Indentures, that all Series A bonds shall rank pari passu, and that
all of the assets of the Obligor shall serve as collateral under each of
the 1987 Indentures.
A portion of the proceeds from the sale of the Series E bonds will be
applied to the redemption or repurchase of all Series A bonds
outstanding under the 1987 Indentures, and the 1987 Indentures of the
Obligor's predecessors, Concord Natural Gas Corporation and Manchester
Gas Company, will be discharged.
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the
Act arises as a result of the trusteeship under any such other indenture,
including a statement as to how the indenture securities will rank as
compared with the securities issued under such other indenture.
The trustee makes no claim that a conflicting interest within the
meaning of Section 310(b)(1) of the Act will not arise as a result of
its service as trustee under the 1987 Indentures and the indenture to be
qualified hereunder. All securities outstanding under the 1987
Indentures and the indenture to be qualified hereunder shall rank pari
passu.
5. INTERLOCKING DIRECTORATES AND SIMILAR IF THE TRUSTEE OR ANY OF THE DIRECTORS
OR RELATIONSHIPS WITH THE OBLIGOR OR UNDERWRITERS. EXECUTIVE OFFICERS OF THE
TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR
REPRESENTATIVE OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR,
IDENTIFY EACH SUCH PERSON HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF
EACH SUCH CONNECTION.
Not applicable
6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE
OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER, AND EXECUTIVE
OFFICER OF THE OBLIGOR:
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COLUMN 3
- ----------------------------- --------------------- --------------------- --------------------
The obligor, together with its directors and executive officers, did not own beneficially as of
August 31, 1997, as a group, more than 1% of the outstanding voting securities of the trustee.
</TABLE>
3
<PAGE>
7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE
OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH DIRECTOR,
PARTNER AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER:
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COLUMN 3
- ----------------------------- ------------------- ------------------- -----------------------
The underwriter, together with its directors, partners and executive officers, did not own
beneficially as of August 31, 1997, as a group, more than 1% of the outstanding voting
securities of the trustee.
</TABLE>
8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE. FURNISH THE
FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR OWNED BENEFICIALLY OR HELD
AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT BY THE TRUSTEE:
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMOUNT OWNED
WHETHER THE SECURITIES BENEFICIALLY OR HELD PERCENTAGE OF CLASS
ARE VOTING OR AS COLLATERAL SECURITY REPRESENTED BY AMOUNT
TITLE OF CLASS NONVOTING SECURITIES FOR OBLIGATIONS IN GIVEN IN COLUMN 3
DEFAULT
- ---------------------- ---------------------- ------------------------- -----------------------
None
</TABLE>
9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE. IF THE TRUSTEE OWNS
BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT ANY
SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR, FURNISH THE FOLLOWING INFORMATION
AS TO EACH CLASS OF SECURITIES OF SUCH UNDERWRITER ANY OF WHICH ARE SO OWNED OR
HELD BY THE TRUSTEE:
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMOUNT OWNED
BENEFICIALLY OR HELD
AS COLLATERAL SECURITY PERCENTAGE OF CLASS
TITLE OF ISSUER AND FOR OBLIGATIONS IN REPRESENTED BY AMOUNT
TITLE OF CLASS AMOUNT OUTSTANDING DEFAULT BY TRUSTEE GIVEN IN COLUMN 3
- ---------------------- --------------------- ------------------------- -----------------------
None
</TABLE>
4
<PAGE>
10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR. IF THE TRUSTEE OWNS BENEFICIALLY
OR HOLDS AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT VOTING SECURITIES OF
A PERSON WHO, TO THE KNOWLEDGE OF THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE
VOTING SECURITIES OF THE OBLIGOR OR (2) IS AN AFFILIATE, OTHER THAN A
SUBSIDIARY, OF THE OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING
SECURITIES OF SUCH PERSON:
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
- ---------------------------------------------------------------------------------------------------------------------
AMOUNT OWNED BENEFICIALLY
OR HELD AS COLLATERAL
SECURITY FOR OBLIGATIONS IN PERCENTAGE OF CLASS
TITLE OF ISSUER AND TITLE DEFAULT BY REPRESENTED BY AMOUNT GIVEN
OF CLASS AMOUNT OUTSTANDING TRUSTEE IN COLUMN 3
- ------------------------------ ------------------------- ------------------------- --------------------------------
<S> <C> <C> <C>
ENERGYNORTH, INC. 3,243,543 73,995 2.28%
COMMON STOCK, PAR VALUE
$1.00 PER SHARE
</TABLE>
11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON OWNING 50
PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR. IF THE TRUSTEE OWNS
BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT ANY
SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE TRUSTEE, OWNS 50 PERCENT OR
MORE OF THE VOTING SECURITIES OF THE OBLIGOR, FURNISH THE FOLLOWING INFORMATION
AS TO EACH CLASS OF SECURITIES OF SUCH PERSON ANY OF WHICH ARE SO OWNED OR HELD
BY THE TRUSTEE:
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
- -------------------------------------------------------------------------------------------------
AMOUNT OWNED
BENEFICIALLY OR HELD
AS COLLATERAL SECURITY PERCENTAGE OF CLASS
TITLE OF ISSUER AND FOR OBLIGATIONS IN REPRESENTED BY AMOUNT
TITLE OF CLASS AMOUNT OUTSTANDING DEFAULT BY TRUSTEE GIVEN IN COLUMN 3
- ---------------------- ---------------------- ------------------------- ------------------------
<S> <C> <C> <C>
None
</TABLE>
12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE. EXCEPT AS NOTED IN THE
INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE TRUSTEE, FURNISH THE FOLLOWING
INFORMATION:
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
- -------------------------------------------------------------------------------------------------------------------
NATURE OF INDEBTEDNESS AMOUNT OUTSTANDING DATE DUE
- --------------------------------------- -------------------------------- -------------------------------
<S> <C> <C>
Various Vehicle Financing Contracts $412,000 10/1/97 through 8/1/01
</TABLE>
13. DEFAULTS BY THE OBLIGOR.
(A) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
5
<PAGE>
There is not now, nor has there been, any default with respect to the
securities under this indenture.
(B) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE
HAS BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE
INDENTURE OR SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There have been no defaults under the 1987 Indentures or any series
issued thereunder.
14. AFFILIATIONS WITH THE UNDERWRITERS. IF ANY UNDERWRITER IS AN AFFILIATE OF
THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
Not applicable.
15. FOREIGN TRUSTEE. IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN
TRUSTEE IS AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER THE INDENTURE QUALIFIED OR TO
BE QUALIFIED UNDER THE ACT.
Not applicable.
16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT
OF ELIGIBILITY.
Exhibit T1A Copy of articles of association of the trustee as now in
effect.
Exhibit T1B(a) Copy of certificate of authority of the trustee to commence
business - NH Board of Trust Company Incorporation Approval
dated April 10, 1987 of the Certificate of the Directors of
Bank of New Hampshire-Portsmouth for authority to conduct
business.
Exhibit T1B(b) Copy of certificate of authority of the trustee to commence
business - Order of the NH Bank Commissioner (August 16,
1991) and the NH Attorney General (August 22, 1991) upon
the Petition of Bank of New Hampshire, N.A., Strafford
National Bank, The Suncook Bank, The Bristol Bank and Bank
of New Hampshire-Portsmouth for Authority to Contract for
Union through Merger.
Exhibit T1B(c) Copy of certificate of authority of the trustee to commence
business - NH Board of Trust Company Incorporation Approval
dated April 20, 1991 of the Petition of Bank of New
Hampshire-Portsmouth for authority to amend its Articles of
Agreement.
Exhibit T1C Copy of the authorization of the trustee to exercise
corporate trust powers - See the foregoing Exhibits T1A and
T1B(a)-(c).
Exhibit T1D Copy of the existing bylaws of the trustee.
Exhibit T1E Copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
Exhibit T1F Consent of the Trustee required by Section 321(b) of the
Act.
6
<PAGE>
NOTE
As of August 31, 1997, the trustee had 4,064,165 shares of common stock,
par value $2.50 per share, outstanding, all of which are owned by its parent
company, People's Heritage Financial Group, Inc. The table in Item 3 lists the
outstanding voting securities of People's Heritage Financial Group, Inc.
The term "trustee" as it is used in Items 2, 5, 6, 7, 8, 9, 10, 11 and 14
refers to each of Bank of New Hampshire and its parent company, People's
Heritage Financial Group, Inc.
This Form T-1 is filed prior to the trustee's final determination of all
facts on which to base responsive answers to Items 2, 5, 6, 7, 9, 10, 11 and 14.
Said items may, however, be considered correct unless amended by an amendment to
this Form T-1.
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or its executive officers
and directors, the trustee has relied upon information furnished to it by the
obligor and will rely on information furnished by the obligor or its
underwriter(s), and the trustee disclaims responsibility for the accuracy or
completeness of any such information.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE TRUSTEE,
BANK OF NEW HAMPSHIRE, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAW OF THE
STATE OF NEW HAMPSHIRE, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY AND
QUALIFICATION TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, ALL IN THE CITY OF CONCORD, AND STATE OF NEW HAMPSHIRE, ON THE
_________20TH_____ DAY OF ____AUGUST___, 1997.
BANK OF NEW HAMPSHIRE
BY /S/ ROBERT B. ESAU
____________________________________
ROBERT B. ESAU,
EXECUTIVE VICE PRESIDENT
7
<PAGE>
THE STATE OF NEW HAMPSHIRE
ARTICLES OF AGREEMENT
OF
BANK OF NEW HAMPSHIRE-PORTSMOUTH
The following are the Articles of Agreement of Bank of New Hampshire-
Portsmouth, a corporation formed under the provisions of Chapter 392 of the New
Hampshire Revised Statutes Annotated and any amendments thereto.
ARTICLE I
---------
The name of this corporation shall be Bank of New Hampshire-Portsmouth.
ARTICLE II
----------
The purpose and objects for which this corporation is established, and the
powers which it shall possess, are:
a. To do a general banking business and to conduct a commercial bank
business, including, without limiting the generality of the foregoing, the
power to receive on deposit, storage or otherwise, money, securities, jewelry,
documents, evidences of debt, and other personal property of a similar
character, for safekeeping, upon such terms or conditions as may be agreed
upon, which deposits may be made by corporations and persons acting
individually or in any fiduciary capacity; to collect and disburse the income
and principal of said property when due; to advance or loan money or credits
on personal security or property; to advance or loan money or credits on notes
secured by mortgages of real estate or guaranteed by agencies of the United
States to the extent from time to time permitted by applicable laws; to make
any and all other loans and investments which may be from time to time
permitted by applicable laws; to negotiate, purchase, and sell stocks, bonds,
and other evidences of debt.
b. To carry out all other purposes and objects, and exercise all other
powers, authorized by Chapters 384, 390 and 392 of the New Hampshire Revised
Statutes Annotated, or by any other applicable law as now existing or as
hereafter enacted or amended.
<PAGE>
c. To provide to corporations, associations, and other business
entities, engaged in any form of business, investment and management
counseling, systems analysis, computer services, bookkeeping and statistical
services, and similar services.
d. To aid in any manner that the Board of Directors may deem
advantageous to this corporation, or to the holders of its stock, any
corporation or association, domestic or foreign, any securities of which are
held by or for this corporation, directly or indirectly, or in which, or in
the welfare of which, this corporation shall have any interest.
e. To the extent permitted by, and in accordance with the requirements
of, any applicable law or regulation to purchase, take, receive, or otherwise
acquire, hold, own, pledge, transfer, or otherwise dispose of its own
securities (including the shares of its capital stock); provided, however,
that the corporation shall in no case directly or indirectly vote upon any
share of its own stock.
f. To acquire (by purchase, exchange, lease or otherwise) for its own
use, in whole or in part, or for investment, real and personal property of
every kind, including corporate securities, chosen in action, and other
intangible property, but not in an amount in excess of that permitted by law,
and to hold, improve, manage, lease, sell, mortgage, convey or otherwise
dispose of such property.
g. To make any guaranty respecting stocks, dividends, securities,
indebtedness, interest, contracts or other obligations created by any domestic
or foreign corporations, associations, partnerships, individuals, or other
entities.
h. To act as executor or trustee under any will, or administrator or
guardian of any estate, under the same circumstances in the same manner as in
the case of legally qualified persons, and in all proceedings, in court or
elsewhere, all accounts, inventories, and other papers may be signed and sworn
to, in behalf of the corporation by any officer duly authorized by it.
i. To indemnify any person made a party to any action, suit, or
proceeding, whether civil or criminal, by reason of the fact that he, his
testator or intestate, is or was a director, officer, or employee of the
corporation, or of any other enterprise which he served in such capacity at
the request of the corporation, against the reasonable expenses, including
attorneys' fees, actually and reasonably incurred by him in connection with
the defense of the action, suit, or proceeding, or in connection with any
appeal in it, and to reimburse any such person any amount paid upon any
judgment or the reasonable costs of settlement of any such action, suit or
proceeding; but to make no indemnification or reimbursement in relation to
matters as to which it shall be finally adjudged in this action, suit, or
proceeding that the director, officer, or employee is liable for gross
negligence or willful misconduct in the performance of duty to the
corporation.
2
<PAGE>
j. To make donations for the public welfare and for charitable,
scientific and educational purposes.
k. To carry out all or any part of its purposes and objects as
principal, factor, agent, contractor or otherwise either alone or in
conjunction with any person, firm, association or corporation; and, in
carrying on its business and for the purpose of attaining or furthering any of
its purposes and objects, to make and perform contracts of any kind or
description, provided the same be not contrary to law, and to enter into any
lawful arrangement or sharing profits, union of interests, partnership, or
joint venture with any corporation, association, partnership, individual, or
other legal entity.
l. In furtherance and not in limitation of these objects and powers,
this corporation foregoing purposes shall have the general powers conferred by
the laws of the State of New Hampshire and all powers necessary, desirable or
incidental to the carrying out completely of its corporate purposes and
objects, or any of them.
m. The powers enumerated in the foregoing sections shall be construed as
purposes and objects as wells as powers, and the matters expressed in such
sections, unless otherwise expressly provided, shall not be limited by
reference to, or inference from, the terms of any other sections, each of such
sections being regarded as creating independent powers, purposes and objects.
No section shall be construed so as to authorize action forbidden by law.
ARTICLE III
-----------
The principal place of business of the corporation shall be located at
Portsmouth, in Rockingham County and the State of New Hampshire, but the Bank
may carry on any portion of its business at any place permitted by the banking
laws of the State of New Hampshire.
ARTICLE IV
----------
Any meetings of stockholders of the corporation may be held either within
or outside the State of New Hampshire.
ARTICLE V
---------
l. The capital stock of the corporation shall consist of 100,000 shares
having a par value of $10 per share.
2. No holder of shares of stock of any class of the corporation, whether
now or hereafter authorized, shall have any preemptive or preferential rights of
subscription to or purchase of any shares of any class of stock of this
corporation, or any warrants carrying rights to
3
<PAGE>
such stock, or securities convertible into such stock, whether now or hereafter
authorized, and whether issued for cash, property, services or otherwise.
3. The capital stock may be increased or decreased from time to time, in
accordance with the provisions of the banking laws of the State of New
Hampshire.
ARTICLE VI
----------
The power to alter, amend, or repeal the By-Laws or to adopt new By-Laws is
vested in the Board of Directors, but the affirmative vote of the number of
directors which is equal to a majority of the number who would constitute a full
Board of Directors at the time of such action shall be necessary to effect any
such action.
ARTICLE VII
-----------
Any contract or other transaction between the corporation and one or more
of its directors, or between the corporation and any firm of which one or more
of its directors are members or employees, or in which they are interested, or
between the corporation and any corporation or association of which one or more
of its directors are shareholders, members, directors, officers, or employees,
or in which they are interested, shall be valid for all purposes,
notwithstanding the presence of such director or directors at the meeting of the
Board of Directors of the corporation, which acts upon, or in reference to, such
contract or transaction, and notwithstanding his or their participation in such
action, if the fact of such interest shall be disclosed or known to the Board of
Directors and the Board of Directors shall, nevertheless, authorize, approve or
ratify such contract or transaction, such interested director or directors to be
counted in determining whether a quorum is present and to be entitled to vote on
such authorization, approval or ratification. This section shall not be
construed to invalidate any contract or other transaction which would otherwise
be valid under common and statutory law application thereto, nor shall it
authorize or validate any transaction which is contrary to the provisions of New
Hampshire RSA 384:15, as may be amended from time to time, or other applicable
statute
ARTICLE VIII
------------
The number of directors constituting the initial Board of Directors of this
Corporation is five (5):
Davis P.Thurber
Paul R. Shea
4
<PAGE>
Robert L. Bailey
Robert B. Field, Jr.
R. Scott Bacon
The Board of Directors is authorized to increase or decrease the number of
directors. The minimum number shall be five (5) Directors, and the maximum
number shall be twenty-five (25) directors.
The directors shall take office at the time the New Hampshire Board of
Trust Company Incorporation approves the petition of Bank of New Hampshire -
Portsmouth to establish this corporation pursuant to Chapter 392 of the New
Hampshire Revised Statutes Annotated and any amendments thereto. After such
approval, the officers and directors of this corporation, their several terms of
office, mode of election, respective duties and all other things pertaining
thereto, shall be defined and established in the By-Laws adopted by the
Corporation.
IN WITNESS WHEREOF we the undersigned, being each of the incorporators
hereinbefore named, for the purposes of forming a trust company pursuant to the
laws of New Hampshire, do make this certificate hereby declaring and ratifying
that this is our act and deed and the facts herein stated are true, and
accordingly have hereunto set our hands this 3rd day of December , 1986.
--- --------
INCORPORATORS RESIDENCE ADDRESS
Davis P. Thurber Illegible
s/Davis P. Thurber
- ------------------------------ ------------------------------
Paul R. Shea Illegible
s/Paul R. Shea
- ------------------------------ ------------------------------
Gerald C. Gaucher Illegible
s/Gerald C. Gaucher
- ------------------------------ ------------------------------
Gregory D. Landroche Checkerberry Lane
s/Gregory D. Landroche Goffstown, NH 03045
- ------------------------------ ------------------------------
Alice L. DeSouza 39 Mirror Street
s/Alice L. DeSouza Manchester, NH 03104
- ------------------------------ ------------------------------
David P. Van Der Beken 18 Old Evergreen Rd.
s/David P. Van Der Beken Bedford, NH 03102
- ------------------------------ ------------------------------
R. Scott Bacon Drake Drive, RFD 1
s/R. Scott Bacon Northfield, NH 03276
- ------------------------------ ------------------------------
Frederic R. Pilch Rt. 1, Box 110
s/Frederic R. Pilch Contoocook, NH 03229
- ------------------------------ ------------------------------
5
<PAGE>
Edward Baines 16 Harvard St.
s/Edward Baines Concord, NH 03301
- ------------------------------ ------------------------------
Charles C. Cornelio RFD 2, Wallace Rd.
s/Charles C. Cornelio Goffstown, NH 03045
- ------------------------------ ------------------------------
6
<PAGE>
82-167
FILED
MAY 1, 1987
NEW HAMPSHIRE
SECRETARY OF STATE
STATE OF NEW HAMPSHIRE
APPROVAL OF CERTIFICATE
We, the undersigned members of the Board of Trust Company Incorporation,
find that the public convenience and advantage will be promoted by the
establishment of Bank of New Hampshire-Portsmouth, New Hampshire, and that
proceedings relative to the organization and establishment thereof conform to
the provisions of law relating thereto, and in accordance with the provisions of
RSA 392, we hereby approve the foregoing certificate.
Board of Trust Company Incorporation
s/Roland Roberge
------------------------------------
Roland Roberge
s/Larry M. Smukler
------------------------------------
Larry M. Smukler
s/Georgie A. Thomas
------------------------------------
Georgie A. Thomas
Concord , New Hampshire
Dated: April 10, 1987
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: BANK OF NEW HAMPSHIRE Call Date: 6/30/97 ST-BK: 33-0622 FFIEC 032
Address: P.O. BOX 600 Page RC-1
City, State Zip: MANCHESTER, NH 03101
FDIC Certificate No.: | 2 | 6 | 9| 9 |0 |
-------------------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - - Balance Sheet
<TABLE>
<CAPTION>
___________________
| C300 |
__________________________________
Dollar Amounts in Thousands | RCON Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------------------------------
<C> <S> |<C> <C> |
ASSETS | / / / / / / / / / / / / / / / / |
1. Cash and balances due from depository institutions (from Schedule RC-A): | / / / / / / / / / / / / / / |
a. Noninterest-bearing balances and currency and coin (1)............. | 0081 101,035 |1.a.
b. Interest-bearing balances (2)...................................... | 0071 20 |1.b.
2. Securities: | / / / / / / / / / / / / / / |
a. Held-to-maturity securities (from Schedule RC-B, column A)......... | 1754 0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)....... | 1773 375,598 |2.b.
3. Federal Funds cold and Securities purchased under agreements to resell | 1350 8,000 |3.
4. Loans and lease financing receivables; ____________________| / / / / / / / / / / / / / / / |
a. Loans and leases, net of unearned income (from Schedule RC-C) |RCON 2122|1,239,436| / / / / / / / / / / / / / / / |4.a.
b. LESS: Allowance for loan and lease losses..................... |RCON 3123| 19,178| / / / / / / / / / / / / / / / |4.b.
c. LESS: Allocated transfer risk reserve......................... |RCON 3128| 0| / / / / / / / / / / / / / / / |4.c.
____________________| |
d. Loans and leases, net of unearned income, | |
allowance, and reserve (item 4.1 minus 4.b and 4.c)................ | 2125 1,220,258 |4.d.
5. Trading assets (from Schedule RC-D)................................... | 3545 0 |5.
6. Premises and fixed assets (including capitalized leases).............. | 2145 19,278 |6.
7. Other real estate owned (from Schedule RC-M).......................... | 2150 3,575 |7.
8. Investments in unconsolidated subsidiaries and associated companies | |
(from Schedule RC-M).................................................. | 2130 643 |8.
9. Customers' liability to this bank on acceptances outstanding.......... | 2155 0 |9.
10. Intangible assets (from Schedule RC-M)................................ | 2143 20,162 |10.
11. Other assets (from Schedule RC-F)..................................... | 2160 20,757 |11.
12. Total assets (sum of items 1 through 11).............................. | 2170 1,769,326 |12.
-----------------------------------
</TABLE>
- ---------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: BANK OF NEW HAMPSHIRE Call Date: 6/30/97 ST-BK: 33-0622 FFIEC 032
Address: P.O. BOX 600 Page RC-2
City, State Zip: MANCHESTER, NH 03101
FDIC Certificate No: | 2 | 6 | 9| 9 |0 |
</TABLE>
Schedule RC - - Continued
<TABLE>
<CAPTION>
________________________
Dollar Amounts in Thousands |RCON Bil Mil Thou |
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
| |
LIABILITIES | / / / / / / / / / / / |
13 Deposits: | / / / / / / / / / / |
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E)................ | 2200 1,474,649 |13.a.
____________________| |
(1) Noninterest-bearing (1)............................................|RCON 6631| 265,877| |13.a.(1)
(2) Interest-bearing...................................................|RCON 6636|1,208,772| |13.a.(2)
____________________| |
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ | |
(1) Noninterest-bearing................................................................... | |
14 Federal funds purchased and securities sold under agreements to repurchase................... | 2800 76,356 |14.
15 a. Demand notes issued to the U.S. Treasury................................................. | 2840 3,035 |15.a.
b. Trading liabilities (from Schedule RC-D)................................................. | 3548 0 |15.b.
16 Other borrowed money (includes mortgage indebtedness and obligations under capitalized lease: | / / / / / / / / / / |
a. With a remaining maturity of one year or less............................................ | 2332 0 |16.a.
b. With a remaining maturity of more than one year through three years...................... | A547 65,659 |16.b.
c. With a remaining maturity of more than three years....................................... | A548 0 |16.c.
17 Not applicable | / / / / / / / / / / / |
18 Bank's liability on acceptances executed and outstanding..................................... | 2920 0 |18.
19 Subordinated notes and debentures (2)........................................................ | 3200 0 |19.
20 Other liabilities (form Schedule RC-G)....................................................... | 2930 13,084 |20.
21 Total Liabilities (sum of items 13 through 20)............................................... | 2948 1,632,783 |21.
22 Not applicable | / / / / / / / / / / / |
EQUITY CAPITAL | / / / / / / / / / / / |
23 Perpetual preferred stock and related surplus | 3838 0 |23.
24 Common Stock................................................................................. | 3230 1,000 |24.
25 Surplus (exclude all surplus related to preferred stock)..................................... | 3839 40,403 |25.
26 a. Undivided profits and capital reserves................................................... | 3632 94,496 |26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities................... | 8434 644 |26.b.
27 Cumulative foreign currency translation adjustments.......................................... | / / / / / / / / / / / |
28 Total equity capital (sum of items 23 through 27)............................................ | 3210 136,543 |28.
29 Total liabilities and equity capital (sum of items 21 and 28)................................ | 3300 1,769,326 |29.
-------------------------
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Indicate in the box at the right the number of the statement below that best describes the ________________________
most comprehensive level of auditing work performed for the bank by independent external | | Number |
auditors as of any date during 1996...........................................................| RCON 6724 | N/A |M.1.
________________________
</TABLE>
<TABLE>
<S> <C> <C> <C>
1. Independent audit of the bank conducted in accordance with 4. Directors' examination of the bank performed by other
generally accepted auditing standards by a certified public external auditors (may be required by state
accounting firm which submits a report on the bank chartering authority)
2. Independent audit of the bank's parent holding company
conducted in accordance with generally accepted auditing 5. Review of the bank's financial statements by external
standards by a certified public accounting firm which submits a auditors
report on the consolidated holding company (but not on the bank
separately) 6. Compilation of the bank's financial statements by
3. Directors' examination of the bank conducted in accordance with external auditors
generally accepted auditing standards by a certified public
accounting firm (may be required by state chartering authority) 7. Other audit procedures (excluding tax preparation
work)
8. No external audit work
</TABLE>
_______
(1) Includes total demand deposits and Noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE>
ADOPTED:
October 1, 1991
AMENDED/REVISED
October 23, 1991
February 23, 1994
for and as of
January 1, 1994
, 19__
___________19__
__________19__
BY-LAWS OF THE
"BANK OF NEW HAMPSHIRE"
ARTICLE I
IDENTIFICATION
SECTION 1.1 Name. The name of the corporation is:
"BANK OF NEW HAMPSHIRE" (the "Bank").
SECTION 1.2 Place of Business. The principal business office of the Bank
within the State of New Hampshire shall be at Manchester, New Hampshire, but the
Bank may have such different principal places of business and may have other
business offices either within or without the State of New Hampshire as the
Board of Directors may from time to time establish.
SECTION 1.3 Corporate Seal. The seal of the Bank, subject to alteration by
the Board of Directors shall be circular in form and mounted upon a metal die
suitable for imprinting the same upon paper, with the words and figures "BANK OF
NEW HAMPSHIRE - 1991" (See also ARTICLE VII).
SECTION 1.4 Fiscal Year. The fiscal year of the Bank shall be such period
as the Board of Directors may from time to time determine and establish.
SECTION 1.5 Integration of Articles of Agreement. All matters set forth in
the Articles of Agreement are hereby made a part of these By-Laws.
<PAGE>
ARTICLE II
CAPITAL STOCK
SECTION 2.1 Capital Stock. The amount of capital stock and the par value,
if any, of the shares shall be as fixed in the Articles of Agreement as from
time to time amended. At all times when there are two (2) or more classes of
stock, the several classes of stock shall have the respective designations,
preferences, voting powers, restrictions, and/or qualifications thereof stated
and expressed in such Articles of Agreement.
SECTION 2.2 Certificates. The shares of the Bank shall be represented by
certificates signed by the President or a Vice President and the Treasurer of
the Bank, and shall be sealed with the seal of the Bank or a facsimile thereof.
The signatures of the President or a Vice President and the Treasurer upon a
certificate may be facsimiles if the certificate is countersigned by a Transfer
Agent or Registrar, other than the Bank itself or an employee of the Bank. In
case any officer who has signed or whose facsimile signature has been placed
upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Bank with the same effect as if
he were such officer at the date of its issue.
SECTION 2.3 Ownership. Ownership of shares of the Bank shall be evidenced
by certificates in such form as shall be prescribed by the Board of Directors.
SECTION 2.4 Transfer of Ownership.
(a) The property in a certificate, and the shares of stock represented
thereby, can be transferred as against persons other than the Bank, by delivery
of the certificate, endorsed by an appropriate person, or without endorsement,
but only to the extent and with the effect prescribed by the applicable laws of
New Hampshire.
(b) The rights against the Bank inherent in the share of stock represented
by such certificate are transferable only by registration of such shares in the
name of the transferee as the registered holder thereof on the Stockholders
Ledger maintained by the Bank or its Transfer Agent; the right to such
registration shall be conditioned upon presentation of the certificate endorsed
by an appropriate person, and upon compliance with the requirements imposed by
the applicable laws of New Hampshire, or by the Bank or its Transfer Agent in
accordance with such laws.
SECTION 2.5 Replacement Certificates. The Bank may issue a new certificate
for shares of stock in the place of any certificate theretofore issued and
alleged to have been lost, stolen, or destroyed, but the Board of Directors may
require the owner of such lost, stolen, or destroyed certificate, or his legal
representative, to furnish affidavit as to such loss, theft, or destruction, and
to give a bond in such form and substance, and with such surety or sureties,
with fixed or open penalty, as it may direct, to indemnify the Bank against any
claim that may be made on account of the alleged loss, theft, or destruction of
such certificate.
<PAGE>
ARTICLE III
MEETINGS OF SHAREHOLDERS
SECTION 3.1 Annual Meeting. The regular annual meeting of the shareholders
for the election of directors and the transaction of whatever other business may
properly come before the meeting shall be held at the Main Office of Bank in
Manchester, New Hampshire, or such other place as the Board of Directors may
designate, on the fourth (4th) Wednesday of February each year, if such day is
not a legal holiday, and if a legal holiday, then on the first (1st) following
day that is not a legal holiday.
Failure to hold the annual meeting at the designated time and place shall
not work a forfeiture or dissolution of the Bank, and Board of Directors may
vote at any regular directors' meeting to establish a postponed date for the
annual meeting.
Notice of the annual meeting, stating the time, place and purpose of the
meeting, shall be mailed, postage prepaid, at least ten (10) days prior to the
date thereof, addressed to each shareholder at his address appearing on the
books of the Bank. If, for any cause, an election of directors is not held on
said day, the Board of Directors shall order the election to be held on some
subsequent day, as soon thereafter as practicable, according to the provisions
of law, and notice thereof shall be given in the manner herein provided for the
annual meeting.
The order of business at annual meetings, and so far as practicable at all
other meetings of shareholders, shall be as follows: (1) proof of due notice of
meeting; (2) examination of proxies and announcement of quorum; (3) election of
directors; (4) disposition of agenda matters, (5) Annual Reports of officers and
committees; (6) adjournment.
SECTION 3.2 Special Meetings. Except as otherwise specifically provided by
statute, special meetings of the shareholders may be called for any purpose at
any time by (a) the Board of Directors, or (b) by any three (3) or more
shareholders owning, in the aggregate, not less than ten percent (l0%) of the
capital stock of the Bank. Every such special meeting, unless otherwise
provided by law, shall be called by mailing, postage prepaid, not less than ten
(10) days prior to the date fixed for such meeting, to each shareholder at his
address appearing on the books of the Bank, a notice stating the time, place and
purpose of the meeting.
SECTION 3.3 Nominations for Director. Nominations for election to the Board
of Directors, or as an Honorary Director, may be made by the Board of Directors
or by any shareholder of any outstanding class of capital stock of the Bank
entitled to vote for the election of Directors. Nominations, other than those
made by or on behalf of the existing management of the Bank, shall be made in
writing and shall be delivered or mailed to the President of the Bank not less
than fourteen (14) days nor more than fifty (50) days prior to any meeting of
shareholders called for the election of directors, provided however, that if
less than twenty-one (21) days'
<PAGE>
notice of the meeting is given to shareholders, such nomination shall be mailed
or delivered to the President of the Bank not later than the close of business
on the seventh (7th) day following the day on which the notice of such meeting
was mailed. Such notification shall contain the following information to the
extent known to the notifying shareholder: (a) the name and address of each
proposed nominee; (b) the principal occupation of each proposed nominee; (c) the
total number of shares of capital stock of the Bank that will be voted for each
proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of capital stock of the Bank owned by
the notifying shareholder. Nominations not made in accordance herewith may, in
his discretion, be disregarded by the Chairman of the meeting, and upon his
instructions, the vote tellers may disregard all votes cast for each such
nominee.
SECTION 3.4 Judges of Election. Every election of directors shall be
managed by three (3) judges, who shall be appointed from among the shareholders
by the Chairman of the meeting (the "Judges of Election"). The Judges of
Election shall hold and conduct the election at which they are appointed to
serve, and, after the election, they shall file with the Clerk a certificate
under their hands, certifying the result thereof and the name of the directors
elected. The Judges of Election, at the request of the Chairman of the meeting,
shall act as tellers of any other vote by ballot taken at such meeting, and
shall certify the result thereof.
SECTION 3.5 Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this Bank shall act as proxy. Proxies shall be valid only for one (1)
meeting, to be specified therein, and any adjournments of such meeting. No
proxy shall be valid after six (6) months from the date of its execution.
Proxies shall be dated and shall be filed with the records of the meeting.
SECTION 3.6 Quorum. A majority of the outstanding capital stock,
represented in person or by-proxy, shall-constitute a quorum at- any meeting of
shareholders, -unless otherwise provided by law, but less than a quorum may
adjourn any -meeting, from time to time, and the meeting may be held, a-
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Agreement.
SECTION 3.7 Voting Rights. In deciding on questions at meetings of
shareholders, except in the election of Directors, each shareholder shall be
entitled to one (l) vote for each share of stock held.
SECTION 3.8 Election of Directors - Cumulative Voting. In all elections of
Directors, each shareholder shall have the right to vote the number of shares
owned by him for as many persons as there are Directors to be elected, or to
cumulate such shares and give one candidate as many votes as the number of
Directors multiplied by the number of his shares shall equal, or to distribute
them on the same principle among as many candidates as he shall think fit.
<PAGE>
ARTICLE IV
DIRECTORS
SECTION 4.1 Board of Directors. The business and affairs of the Bank shall
be managed and administered by the Board of Directors, all of whom shall be of
full age, all of whom shall be citizens of the United States, and a majority of
whom shall be citizens and residents of the State of New Hampshire. Except as
expressly limited by law or by the Articles of Agreement, or an amendment
thereto, all corporate powers of the Bank shall be vested in and may be
exercised by said Board.
SECTION 4 .2 Number. The Board of Directors of this Bank shall consist of
not less than five (5) nor more than twenty-five (25) members. At any meeting
of the shareholders held for the purpose of electing Directors, or changing the
number thereof, the number of Directors may be determined by a majority of the
votes case by the shareholders in person or by proxy. A majority of the Board
of Directors shall be necessary to constitute a quorum for the transaction of
business at any Directors' meeting.
The Board of Directors, by the vote of a majority of the full Board, may,
between annual meetings of shareholders, increase the membership of the Board by
not more than two (2) members and by like vote appoint qualified persons to fill
the vacancies created thereby.
No person who shall have reached his seventieth (70th) birthday shall- be
eligible for election to -the Board of Directors.
SECTION 4.3 Organization Meetings. The Clerk, upon receiving the
certificate of the Judges of Election of the result of any election, shall
notify the Directors-elect of their election and of the time and place at which
they are required to meet for the purpose of organizing the new Board, taking
the Oath of Office prescribed by NH RSA (S) 384:11, and electing and appointing
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officers of the Bank for the succeeding year. Such meeting shall be held on the
day of the election or as soon thereafter as practicable, and, in any event,
within thirty (30) days thereof. If, at the time fixed for such meeting, there
shall not be a quorum present, the Directors present may adjourn the meeting,
from time to time, until a quorum is obtained. Notice of those selected as
Directors shall be published as required by NH RSA (S) 384:11. The business of
a Regular Meeting may also be conducted at an Organizational Meeting.
SECTION 4.4 Regular Meetings. The Regular Meeting(s) of the Board of
Directors shall be held, without notice, on the fourth (4th) Wednesday of each
month, at the Data Services Center of the Bank, or other place within or without
the State of New Hampshire, as may be authorized by the Board of Directors.
If a Regular Meeting is to be held at a place other than the Data Services
Center of the Bank, notice shall be given by telegram, mailgram, or by any other
electronic, electrical, or
<PAGE>
telephonic means which results in or produces a written or printed document or
facsimile thereof, letter, or in person, stating the time and place of each such
Regular Meeting.
When any Regular Meeting of the Board falls upon a holiday, the meeting
shall be held on the next banking business day unless the Board shall designate
some other day.
SECTION 4.5 Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman, Vice Chairman, if any, or President of the Bank,
or at the request of three (3) or more Directors. Each member of the Board of
Directors shall be given notice by telegram, mailgram, or by any other
electronic, electrical, or telephonic means which results in or produces a
written or printed document or facsimile thereof, letter, or in person, stating
the time and place of each such special meeting; excepting the Organizational
Meeting which is provided for in SECTION 4.3 of these By-Laws. Notice of any
Special Meeting of the Board of Directors may be waived in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, and shall be the equivalent to the giving of such notice.
Attendance of a Director at a Special Meeting shall constitute a waiver of
notice of such Special Meeting, except where a Director attends such a meeting
for the express purpose of objecting to the transaction of any business because
such special meeting is not lawfully convened.
SECTION 4. 6 Consent Action. Action of the directors may be taken without a
meeting by consent of all Directors executed in accordance with the formalities
of NH RSA (S) 293-A: 44.
SECTION 4.7 Quorum. A majority of the Directors shall constitute a quorum
of any meeting, except when otherwise provided by law, but a less number may
adjourn any meeting from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the Board of Directors except when
otherwise provided by law or the Articles of Agreement.
A Director who is present at a meeting of the Board of Directors at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the adjournment
thereof, or shall forward such dissent by registered mail to the Clerk of the
Bank immediately after the adjournment of the meeting. Such right to dissent
shall not apply to a director who voted in favor of such action.
SECTION 4.8 Vacancies. When any vacancy occurs among the Directors, the
remaining members of the Board, in accordance with the laws of the State of New
Hampshire, may appoint a Director to fill such vacancy at any regular meeting of
the Board, or at a special meeting called for that purpose. A Director elected
to fill a vacancy shall be elected for the unexpired term of his predecessor in
office.
SECTION 4.9 Fees. Each member of the Board of Directors shall receive
reasonable fees as determined by the Board, except for employees of the Bank who
shall receive no fees, for attendance at Regular, Organizational, or Special
Meetings.
<PAGE>
SECTION 4.10 Reimbursement and/or Indemnification of Directors, Officers or
Employees. Any person may be indemnified for reimbursed by the Bank for
reasonable expenses actually incurred by him in connection with any action,
suit, or proceeding to which he is made a party by reason of his being or having
been a Director, committee member, officer, or employee of this Bank; provided,
however, that no person shall be so indemnified or reimbursed in relation to any
action, suit, or proceeding in which he shall finally be adjudged to have been
negligent in the performance of his duties or to have committed an act or failed
to perform a duty for which there is a common-law or a statutory liability; and
provided further, that no person shall be so indemnified or reimbursed in
relation to any action, suit, or proceeding which has been made the subject of a
compromise or settlement, except with the approval of the holders of record of a
majority of the outstanding shares of this Bank; and, provided further, that no
such indemnification or reimbursement shall be made which is contrary to the
Articles of Agreement of this Bank, or statutes and s off the State of New
Hampshire, applicable law and/or the United States of America. The foregoing
right of indemnification or reimbursement shall not be exclusive of other rights
to which such person may be entitled as a matter of law.
SECTION 4.11 Honorary Directors. At any meeting of the shareholders held
for the purpose of electing Directors, the shareholders may elect not more than
three (3) Honorary Directors of the Bank, such persons to serve in a non-voting
advisory capacity without the power of final decision in matters concerning the
business of the Bank. Any listing of such Honorary Directors shall distinguish
between them and the Bank's Board of Directors or indicate their advisory
status. However, notwithstanding such advisory nature of their office, all such
Honorary Directors shall be invited to attend and receive timely notice of any
regular or special meetings of the Board.
ARTICLE V
COMMITTEES OF THE BOARD
SECTION 5.1 Executive Committee. There shall be an Executive Committee,
appointed annually by the Board of Directors, consisting of the Chairman of the
Board, the Vice Chairman, if any, the President and at least two (2) other
Directors. The Executive Committee shall meet at the call of the Chairman of
the Board, the Vice Chairman, if any, or the President and shall report, in
writing, its actions at the next Regular Meeting of the Board of Directors,
which shall approve or disapprove the report and record such action in the
minutes of the meeting.
The Chairman of the Board or other officer or Director designated by the
Board of Directors, shall be the Chairman of this Committee. This Committee,
when the Board of Directors is not in session, shall have and may exercise all
of the authority of the Board of Directors except to the extent, if any, that
such authority shall be limited by the resolution appointing the Committee and
except that the Committee shall not have the authority of the Board of Directors
in reference to (i) amending the Articles of Agreement, (ii) adopting a plan of
<PAGE>
merger or consolidation, (iii) recommending to the shareholders the sale, lease
or other disposition of all or substantially all of the property and assets of
the Bank otherwise than in the usual and regular course of its business, (iv)
recommending to the shareholders a voluntary dissolution of the Bank or a
revocation thereof, and (v) amending the By-Laws of the Bank.
SECTION 5.2 Investment Committee. There shall be an Investment Committee as
prescribed by NH RSA 384:4, appointed annually by the Board of Directors
consisting off all appointees to the Executives committee, established pursuant
to Section 5.1 above, except the Chairman of the Board, and the Vice Chairman,
-----------------
if any. The Committee shall have the power to approve all loans, all changes in
mortgage or other security for loans, all purchase and sale of bonds, shares,
notes, and other investments, and shall perform such other duties, not
inconsistent herewith, as the By-Laws prescribe. No change in any interest rate
or loan shall be made without the approval of the Investment Committee or the
Board of Directors.
SECTION 5.3 Trust and Investment Services Committee. (Amended 2/23/94).
There shall be a Trust and Investment Services Committee appointed annually by
the Board of Directors composed of not less than five (5) members, at least
three (3) of whom shall be members of the Board of Directors of the Bank or, for
so long as the Bank is its wholly-owned subsidiary, members of the board of
directors of Bank of New Hampshire Corporation. The Board of Directors shall
designate the Chairman of this Committee. The secretary of the Committee shall
be one of the Trust Officers, or Assistant Trust Officers of the Bank, or such
other person, as shall be designated by the Chairman of the Committee. This
Committee shall have the power, on behalf of the Bank, to accept or reject all
executorships, trusteeships, agencies or other fiduciary relationships of the
Bank. It shall have the power, subject to the limitations of the trust laws of
the State of New Hampshire, the laws of the United States and the respective
Trust Instruments, to invest, retain, and dispose of such funds as are in the
possession of the Bank in a fiduciary capacity. The Committee shall, at least
once during each period of twelve (12) months, review all of the assets held in
and for each fiduciary account, to determine their safety and current value and
the advisability of retaining or disposing of them. A report of all such
reviews, together with the action taken as a result thereof, shall be noted in
the minutes of the Committee. The minutes of the meetings shall be submitted
regularly to the Board of Directors and receive its approval or disapproval.
This Committee may have such additional duties relating to the Trust and
Investment Services Division as may be prescribed from time to time by the Board
of Directors.
SECTION 5.4 Examining (Audit) Committee. (Amended 2/23/94). There shall be
a standing committee of this Bank known as the Examining (Audit) Committee,
appointed annually by the Board of Directors. Each member of this Committee
shall serve until his successor is appointed and the Committee shall consist of
at least three (3) members of the Board of Directors, none of whom shall be
active officers of the Bank. The duties of the Committee shall be to make
suitable examinations every six (6) months of the affairs of the Bank. The
result of such examination shall be reported, in writing, to the Board at the
next regular meeting thereafter, stating whether the Bank is in a sound and
solvent condition, whether adequate internal audit controls and procedures are
being maintained, and recommending to the Board such changes in the manner of
doing business, etc., as shall be deemed advisable. The duties of the Examining
- - (Audit) Committee also shall be to make, at least once during each period of
twelve (12) months,
<PAGE>
suitable audits of the Trust and investment Services Division or to cause
suitable audits of such department to be made by auditors responsible only to
the Board of Directors. It also shall be the duty of this Committee, likewise,
to ascertain whether a review of all assets in each Trust, as to their safety
and current value and the advisability of retaining or disposing of them, has
been made, and also whether Trust funds awaiting investment or distribution have
been held uninvested or undistributed any longer than reasonably necessary. The
Committee shall make promptly a full report of such audits and examinations of
the Trust and Investment Services Division, in writing, to the Board of
Directors of the Bank, together with its recommendations as to the actions, if
any, which may be necessary to correct any unsatisfactory condition. The
reports of this Committee, as filed with the Board of Directors, shall be noted
in the minutes of the Board, together with a record of action taken by the Board
in connection therewith.
The Examining (Audit) Committee, upon its own recommendation and with the
approval of the Board of Directors, may employ a qualified firm of Certified
Public Accountants to make an examination and audit of the Bank at least once a
year. If such a procedure is followed, the one (1) annual examination and audit
of such firm of Certified Public Accountants and the presentation of its report
to the Board of Directors, will be deemed sufficient to comply with the
requirements of this SECTION of these By-Laws. Nevertheless, the firm of
Certified Public Accountants should be instructed to read this SECTION of these
By-Laws and to make the scope of its examination and audit sufficient to comply
with the requirements herein.
SECTION 5.5 Retirement Committee. There shall be a Retirement Committee of
this Bank consisting of at least three (3) members, elected annually by the
Board of Directors to serve at the pleasure of said Board. Membership may
include persons who are not otherwise members of the Board of Directors. This
Committee shall administer "The Retirement Plan for Employees of Bank of New
Hampshire Corporation," as the same shall be amended from time to time, or any
successor or restated plan.
SECTION 5.6 Advisory Committees. The Board of Directors may appoint, from
time to time, Division, Branch, and/or Area Advisory Committees. Such Advisory
Committees shall consist of not less than five (5) nor more than twenty-five
(25) members, and shall be elected by a majority of votes at any regular or
properly convened special meeting of the Board of Directors at which a quorum is
present and voting. Advisory Committee members so elected shall serve until the
next annual meeting of the Board of Directors or until their successors are
elected and qualified. No person who has reached his (seventieth) 70th
birthday, except a director of-a bank merged into this Bank, shall be eligible
for election to an Advisory Committee.
Each Advisory Committee shall perform such functions as may be assigned to
it by the Board of Directors, shall keep minutes of its meetings which shall be
submitted to the Board of Directors for review, ratification or approval, and
shall meet regularly at such time and place as the Committee shall determine or
the Board' of Directors shall require.
Unless appointed by the Board of Directors, each Advisory Committee shall
elect its own Chairman and secretary.
<PAGE>
SECTION 5.7 Other Committees. The Board of Directors may appoint, from time
to time, other temporary committees, including, but not limited to a Compliance
Committee whenever the Board of Directors deems it advisable in dealing with
federal and state regulations, composed of one (1) or more members, and for such
purposes and with such powers as the Board may determine. Unless otherwise
specified, at the time of the appointment of the Committee, the President shall
be the Chairman of each such temporary Committee, unless otherwise ordered by
the Board of Directors.
SECTION 5.8 Vacancies on Committees. The Chairman of the Board shall have
the power to designate another Director or Officer to serve on any standing
Committee during the absence or inability of any member thereof to so serve.
SECTION 5.9 Committee Meetings. Each Committee shall determine its own time
and place of meetings unless otherwise directed by the Board of Directors and
each member of the Committee shall receive reasonable fees for each meeting
attended as determined by the Board, except for employees of the Bank who shall
receive no fees for attendance at such meetings.
ARTICLE VI
OFFICERS AND EMPLOYEES
SECTION 6.1 Chairman of the Board. The Board of Directors may appoint one
of its members to be Chairman of the Board to serve at the pleasure of the
Board.
The Chairman of the Board shall preside at all meetings of the Board of
Directors. The Chairman of the Board shall supervise the carrying out of the
policies adopted and/or approved by the Board.
The Chairman of the Board shall have general executive powers, as well as
the specific powers conferred by these By-Laws. He shall also have and may
exercise such further powers and duties as from time to time may be conferred
upon, or assigned to him by the Board of Directors.
SECTION 6.2 Vice Chairman of the Board. The Board of Directors may appoint
one (1) of its members as Vice-Chairman of the Board to serve at the pleasure of
the Board.
In the absence of the Chairman of the Board, the Vice Chairman of the Board
shall preside at any meeting of the Board and supervise the carrying out of
policies approved by the Board.
<PAGE>
The Vice Chairman of the Board shall have general executive powers, as well-
as the specific powers conferred by these By-Laws. He also shall have and may
exercise such further powers and duties as from time to time may be conferred
upon, or assigned to him by the Board of Directors.
SECTION 6.3 President. The Board of Directors shall appoint one of its
members to be President of the Bank. In the absence of the Chairman and Vice
Chairman, he shall preside at any meeting of the Board.
The President shall have general executive powers, and shall have and may
exercise any and all other powers and duties pertaining by law, regulation, or
practice, to the office of President, or imposed by these By-Laws. He shall
also have and may exercise such further powers and duties as from time to time
may be conferred upon, or assigned to, him by the Board of directors.
In the event that the President is unable or unwilling to carry out the
duties of President, the provisions of Section 10.5 herein shall become
------------
applicable; and, if necessary, the Board of Directors will elect such person
appointed by same as President to the Board of Directors as mandated by New
Hampshire law.
SECTION 6.4 Vice President. The Board of Directors shall appoint one (1) or
more Vice Presidents, which may include Senior and/or Executive Vice Presidents.
Each Vice President shall have such powers and duties as may be assigned to him
by the Board of Directors.
SECTION 6.5 Treasurer. The Treasurer of this Bank shall be responsible for
all moneys, funds and valuables of this Bank, keep proper records of all
transactions of the Bank, except trust assets provided for in SECTION 6.7 of
-----------
these By-Laws. The Treasurer, or his duly appointed delegate (who may be the
Chief Financial Officer of Bank of New Hampshire Corporation), shall report to
the Board of Directors at each regular meeting the condition of the Bank, submit
to the Board of Directors, when requested, a detailed statement of the Income
and Expense of the Bank, pay the Bank's current expenses, and perform such other
duties as may be assigned to him, from time to time by the Board of Directors or
by the President of the Bank.
SECTION 6.6 Clerk of the Bank. The Clerk of the Bank shall be responsible
for the Minute Book of the Bank. In this Minute Book he shall maintain and
properly preserve the organization papers of this Bank, the Articles of
Agreement, the returns of elections, the By-Laws and any amendments thereof, the
proceedings of all regular and special meetings of the Board of Directors and of
the shareholders, and the reports of the Committees and Directors. The minutes
of each such meeting shall be signed by the presiding officer or the Clerk. The
Clerk shall be a resident of the State of New Hampshire.
<PAGE>
SECTION 6.7 Officer in Charge of the Trust and Investment Services Division.
(Amended 2/23/94). All fiduciary powers of the Bank shall be exercised through
the Trust and Investment Services Division. The Board of Directors shall
designate an officer as the officer in charge of the Trust and Investment
Services Division. He shall be responsible for the operation of the Trust and
Investment Services Division and generally supervise and direct all its
activities and do and perform all acts and things whatsoever necessary and
proper in carrying out the business of the Trust and Investment Services
Division, in accordance with the provisions of State and Federal Laws, and the
directions of the Board of Directors, the Trust and Investment Services
Committee and his superior Bank Officers. He shall be responsible for all
monies, funds, valuable papers and documents held by the Bank in a fiduciary
capacity. He shall keep, or cause to be kept, accurate books of account of the
transactions of the Bank and, together with all Trust and Investment Services
Division property in his possession, shall be subject at all times to the
inspection and control of the Board of Directors.
SECTION 6.8 Other Officers. The Board of Directors may appoint one or more
Assistant Vice Presidents, one or more Assistant Clerks, one or more Assistant
Treasurers, one or more Assistant Trust Officers, one or more Managers and
Assistant Managers of Branches and such other officers and attorneys-in-fact as
from time to time may appear to the Board of Directors to be required or
desirable to transact the business of the Bank. The Board of Directors may
assign to the Chairman of the Board and/or to the President the duty for the
performance of such appointments. All such officers shall respectively exercise
such powers and perform such duties as pertain to their several offices, or as
may be conferred upon, or assigned to, them by the Board of Directors, the
Chairman of the Board, the Vice Chairman of the Board, or the President.
SECTION 6.9 Tenure of Office. The Chairman of the Board of Directors, the
Vice Chairman, the President, the Executive Vice President, Clerk, and any other
officer who is required by the Articles of Agreement or these By-Laws to be a
member of the Board of Directors, shall be elected annually to office, and shall
hold his office for the current year for which the Board of which he is a member
was elected unless in the meantime he shall resign, be disqualified or be
removed from office. Each other officer, including the Treasurer, and employee
"shall' holds his office or "employment at the pleasure 'of' the Board of
Directors, and, to the extent the Board of Directors has assigned the duty for
the performance of appointments pursuant to SECTION 6.8 above, officers
-----------
appointed pursuant thereto may be removed by the Chairman of the Board and/or
the President. Any vacancy occurring in the office of the Chairman of the
Board, Vice Chairman, President or Senior Executive Vice President shall be
filled promptly by the remaining members of the Board of Directors. Except to
the extent the Board of Directors assigns the duty for the performance of
appointments pursuant to SECTION 6.8 above, all officers shall be elected or
-----------
appointed or employed by the Board of Directors, by whom their several duties
shall be prescribed. Nevertheless, the Board of Directors may delegate to the
Chairman, Vice Chairman, President or Senior Executive Vice President, the
authority to prescribe the duties of other officers of the Bank not inconsistent
with law, the Articles of Agreement and these By-Laws, and to appoint other
employees, prescribe their duties and to dismiss them.
<PAGE>
Notwithstanding such delegation of authority, any officer or employee may be
dismissed at any time by the Board of Directors.
SECTION 6.10 Surety Bonds. Each officer and employee of the Bank shall give
bond of suitable amount with security to be approved by the Board of Directors,
conditioned on the honest and faithful discharge of his duties as such officer
or employee. At the discretion of the Board, such bonds may be in schedule or
blanket form and the premiums shall be paid by the Bank. The amount of such
bonds, the form of coverage and the name of the company providing the surety
therefor shall be reviewed by the Board of Directors each year at the first
regular meeting of the Board following the organization meeting of the new
Board. Action shall be taken by the Board at that time approving the amount of
the bond to be provided to each officer and employee of the Bank for the ensuing
year.
ARTICLE VII
CORPORATE SEAL
SECTION 7.1 Form. The following is the impression of the Seal adopted by
the Board of Directors of the Bank:
[impression]
SECTION 7.2 Authority to Use Seal. The Chairman of the Board, the Vice
Chairman, the President, the Senior Executive Vice President, Executive Vice
President, each Vice President, each Assistant Vice President, the Treasurer,
each Assistant Treasurer, each Trust Officer and each Assistant Trust Officer
shall have the authority to affix the Corporate Seal of the Bank and to attest
the same.
ARTICLE VIII
BANKING HOURS
SECTION 8.1 Regular Hours of Business. The Directors may, from time to
time, determine upon what days and during what hours the main office of the Bank
and some or all of the branches shall be open for the transaction of business,
provided that the doing of business on any such day is not prohibited by New
Hampshire law.
<PAGE>
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Real Estate. All transfers and conveyances of real estate,
title to which is vested in this Bank, shall be made by written instrument
pursuant to the order of the Board of Directors, signed by the President, Senior
Executive Vice President, Executive Vice President, or a Vice President and
attested by the Treasurer or an Assistant Treasurer under the seal of this Bank.
SECTION 9.2 Contracts, Drafts, Checks, etc. All contracts, checks, drafts
and other instruments shall be signed by the President, Senior Executive Vice
President, Executive Vice President, or a Vice President, or the Treasurer or an
Assistant Treasurer or such other officers as may be designated by the Board of
Directors.
SECTION 9.3 Authority to Vote Stock Held in Fiduciary Capacity. The vote of
this Bank as stockholder in any corporation in which it may hold capital stock
in a fiduciary capacity shall be cast at the Shareholders' Meeting by the
Chairman of the Board, the Vice Chairman, President, Senior Executive Vice
President, Executive Vice President, any Vice President, any Trust Officer, or
any Assistant Trust Officer, in person, or by some person authorized by written
proxy signed by one of said officers; provided, however, that such proxy, if
given to any person not an officer or director of this Bank, shall be limited to
a single meeting, and either shall be limited to voting for Trustees or
Directors, or shall direct how such proxy holder shall vote. The above proviso,
however, shall not apply to stock held by this Bank under a written agreement
which expressly provides for the giving of proxies. Whenever this Bank has been
or may be appointed attorney-in-fact with power of substitution in and about any
transfer of shares of capital stock of any corporation, the Chairman of the
Board, Vice Chairman, the President, or Senior Executive VicE President,
Executive Vice President, any Vice President, any 'Trust Officer, or any
Assistant Trust Officer, may, by proper written instrument, substitute an
attorney-in-fact to act in the same place and stead of this Bank in and about
such transfer.
SECTION 9.4 Trust Property and Records. (Amended 2/23/94). Adequate books
and records shall be maintained in the Trust and Investment Services Division
for all fiduciary activities, both individual and corporate, and such books and
records shall be kept separate and distinct from other books and records of this
Bank. All accounts opened shall be kept so as to enable the Bank at any time to
furnish information or reports required by Federal or State authorities. There
shall be maintained in the Trust and Investment Services Division a file
containing the original instruments creating each Trust, or properly
authenticated copies
<PAGE>
thereof, the properly receipted vouchers evidencing payments under each Trust,
and the properly evidenced reports to Court or other accountings for Trusts.
The securities and investments held in each Trust shall be kept separate and
distinct from those owned by the Bank, and separate and distinct from those of
any other Trust, unless legally invested in a collective trust fund, and shall
be in the joint custody of two or more officers or other employees designated by
the Board of Directors from time to time. The securities shall be so kept as to
make it impossible for any one designated officer or employee to have access to
them without the presence of one of the other designated officers or employees.
SECTION 9.5 Execution of Trust and Investment Services Division Instruments.
(Amended 2/23/94). The Directors may from time to time designate from among the
following qualified officers, the Chairman of the Board, the President, any
officer of the Trust and Investment Services Division holding the office of Vice
President, or above, and such other more junior officer of the Trust and
Investment Services Division by name, those who shall have power and authority
to sign, execute, acknowledge, verify and deliver or accept on behalf of the
Bank, all agreements, indentures, mortgages, deeds, conveyances, transfers,
certificates, receipts, discharges, satisfactions, settlements, petitions,
schedules, accounts, affidavits, bonds, undertakings, proxies, and other
instruments or documents in connection with the exercise of any of the fiduciary
powers of the Bank and in connection with the exercise of any of the powers
vested in the Bank and in connection with the exercise of any of the powers
vested in the Bank under powers of attorney, and the seal of the Bank may be
affixed thereto and attested in accordance with the provisions of SECTION 7.2 of
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these By-Laws.
SECTION 9.6 Blanket Bond. The Bank shall keep continuously in force a
banker's blanket bond in such amount as the Board of Directors may deem
necessary, issued by a company approved by the Board of Directors, covering all
of the Directors, officers, employees and independent contractors - performing
work for the Corporation.
ARTICLE X
CONTINUITY OF MANAGEMENT IN EMERGENCIES
SECTION 10.1 Emergency Operations by Surviving Staff. The event there shall
occur, or be declared by appropriate governmental authority, a state of disaster
or calamity which will prevent the conduct and management of the affairs and
business of this Bank by its directors and officers as otherwise provided in
these By-Laws, the officers and employees of this Bank shall continue to conduct
the affairs of this under such guidance from the directors as may be available
subject to conformance with any governmental directives during the emergency, as
outlined in the SECTIONS which follow.
--------
<PAGE>
SECTION 10.2 Action by Reduced Number of Directors. notwithstanding any
other provisions of the By-Laws, in the event a disaster or calamity prevents
the conduct and management of this Bank, as described in SECTION 10.1 then two
------------
(2) or more available members of the then incumbent Board of Directors shall
constitute a quorum of the Board. If the is only one incumbent Director
available at or near the place where the Bank in fact conducts its business, he
may elect temporary acting Board of Directors with all the powers of Board, and
such Board may designate temporary officers to a with the powers of any officer
not then and there available.
The temporary Board may consist of only three (3) person who need not
qualify under ARTICLE III of the By-Laws. The powers of such temporary Board
and temporary officers shall cease at such time as a quorum of the duly elected
Board of Directors shall convene.
SECTION 10.3 Alternate Relocation of Office. If any office of this Bank
shall, in the opinion of the Chief Executive Officer, or his successor under
this ARTICLE X, become unfit for use because of enemy attack or defense against
the same or because of civil disturbances in connection with either of the
foregoing, such office may be relocated in suitable quarters as may be
designated by the Board of Directors. In the event the Board of Directors is
unable make such designation, the same shall be made by the Chief Executive
Officer or his successor under this ARTICLE X. Bank shall return to its
regularly authorized place of bus as soon as practicable and such temporary
place of business shall be discontinued.
SECTION 10.4 Officer Succession. If, in the event of disaster or calamity,
as described in SECTION 10.1, either the Chief Executive Officer or the
------------
Treasurer cannot be located or is unable or unwilling to continue his normal
duties under the By-Laws, then the authority and duties of such Chief Executive
Officer or Treasurer shall, without further action of this Board of Directors,
be automatically assumed as outlined in this ARTICLE X.
Such persons shall assume such authority and duties until they resign or are
unable or unwilling to assume or continue the normal duties of the positions or
until the incumbent officers or persons higher up in the order disignated in the
SECTIONS which follow shall become available to perform the duties of Chief
Executive Officer or Treasurer, as the case may be, or until a successor is
elected in accordance with the By-Laws.
SECTION 10.5 Chief Executive Officer. Responsibility shall be assumed by
the first available, able and willing to serve of the persons herein named in
the order of designation.
<PAGE>
1. Chairman of the Board
2. Vice Chairman of the Board
3. President
4. Senior Executive Vice President
5. Executive Vice President
6. Vice President
7. The first available, able and willing to serve of the persons named, in
the order designated, or on a list on file with the bank at its main
office and signed by the incumbent Chairman of the Board.
SECTION 10.6 Treasurer. Responsibility shall be assumed by the first
available, able and willing to serve of the persons named, in the order
designated, on a list on file with the Bank at its main office and signed by the
incumbent chairman of the Board.
SECTION 10.7 Operations of Article X. This ARTICLE X shall become operative
only on the occurrence of a disaster or calamity as outlined in SECTION 10.1
------------
confirmed by a declaration of such by the proper governmental authority
affecting this Bank and shall supersede any other By-Laws of this Bank which may
be inconsistent with this ARTICLE X and this ARTICLE shall remain effective only
until the Bank can resume normal or substantially normal operations under this
ARTICLE X and the Board of Directors.
ARTICLE XI
BY-LAWS
SECTION 11.1 Inspection. A copy of the By-Laws, with all amendments
thereto, shall at all times be kept in a convenient place at the Main Office of
the Bank, and shall be open for inspection to all shareholders, during banking
hours.
SECTION 11.2 Shareholders Meetings. A copy of these By-Laws, with all
amendments thereto, shall be available during all Annual and Special Meetings of
the shareholders.
SECTION 11.3 Amendments. The By-Laws may be amended, revised, altered or
repealed, at any Regular Meeting of the Board of Directors, or at any Special
Meeting of the Board of Directors, properly convened in accordance with the
provisions of Section 4.5 provide that as to a Special Meeting (I) written
-----------
notice of the proposed change, (ii) the text of the proposed changes, and (iii)
the reasons for the proposed changes and the identification of the sponsor
thereof, are set forth in the
<PAGE>
notice, all subject, however, to the approval of the shareholders when required
by law, by a vote of a majority of the whole number of the Directors.
Adopted at Manchester, New Hampshire, the 1st day of October, 1991, Amended
February 23, 1994, for and as of January 1, 1994.
Attest, /s/ Gregory D. Landroche
------------------------
Clerk
<PAGE>
PETITION FOR AUTHORITY TO
CONTRACT FOR UNION THROUGH MERGER
BANK OF NEW HAMPSHIRE, N.A.
STRAFFORD NATIONAL BANK
THE SUNCOOK BANK
THE BRISTOL BANK
and
BANK OF NEW HAMPSHIRE-PORTSMOUTH
ORDER
-----
Pursuant to New Hampshire RSA 388:9, the above-captioned petition was heard
on Monday, August 5, 1991 at 10:00 a.m. in the Office of the Bank Commissioner,
169 Manchester Street, Concord, New Hampshire. Notice of the petition and
hearing had been previously published by, and in accordance with the order of
the Bank Commissioner in the Manchester Union Leader, Concord Monitor, Foster's
Daily Democrat and Bristol Enterprise newspapers. In the course of the hearing,
evidence was received from the Petitioners. A copy of the proposed Contract for
Union Through Merger had previously been filed with the Bank Commissioner. The
certificates of votes of the stockholders of the five institutions have been
filed with the Bank Commissioner.
Based upon the entire record, as outlined above, the Bank Commissioner
finds and rules that the public convenience and advantage and the interest of
Bank of New Hampshire, N.A., Manchester, New Hampshire; Strafford National Bank,
Dover, New Hampshire; The Suncook Bank, Suncook, New Hampshire, The Bristol
Bank, Bristol, New Hampshire and Bank of New Hampshire-Portsmouth, Portsmouth,
New Hampshire, and their stockholders and depositors will be promoted, and that
the union can be made without reducing the amount standing to the credit of any
depositor as of the effective date of the union, and without the necessity of
imposing any restriction on the withdrawal of funds by depositors (other than
any resection presently in force) and approves the fairness of the terms and
conditions of the proposed issuance and exchange of securities incident to the
transactions described herein as to the parties and Bank of New Hampshire
Corporation's shareholders.
Accordingly, the proposed Contract for Union Through Merger of Bank of New
Hampshire, N.A., Manchester, New Hampshire; Strafford National Bank, Dover, New
Hampshire; The Suncook Bank, Suncook, New Hampshire and The Bristol Bank,
Bristol, New Hampshire with and into Bank of New Hampshire-Portsmouth,
Portsmouth, New Hampshire under the name "Bank of New Hampshire" is hereby
authorized on the express condition that the resulting bank agrees and continues
to operate in compliance with the existing Formal Agreement between the
Comptroller of the Currency and the Bank of New Hampshire, N.A., dated May 23,
1991, until such time as the New Hampshire Banking Department conducts an
examination of the resulting bank and determines if any appropriate regulatory
action is necessary.
<PAGE>
Pursuant to RSA 388:16, authorization is also hereby granted to the
resulting bank to operate as branch offices as a result of consolidation, the
business of Bank of New Hampshire-Portsmouth, Portsmouth, New Hampshire;
Strafford National Bank, Dover, New Hampshire; The Suncook Bank, Suncook, New
Hampshire and The Bristol Bank, Bristol, New Hampshire. Notice to the
depositors of Bank of New Hampshire, N.A., Manchester, New Hampshire; Strafford
National Bank, Dover, New Hampshire; The Suncook Bank, Suncook, New Hampshire;
The Bristol Bank, Bristol, New Hampshire and Bank of New Hampshire-Portsmouth,
Portsmouth, New Hampshire shall be given in accordance with New Hampshire RSA
388:11.
Dated August 16, 1991 /s/ A. Roland Roberge
---------------- ------------------------
A. Roland Roberge
Bank Commissioner
Pursuant to New Hampshire RSA 388:14, the adoption of charter and change of name
is approved by the Attorney General.
Dated August 22, 1991 /s/Monica A. Ciolfi
---------------- ------------------------
Monica A. Ciolfi
Assistant Attorney General
<PAGE>
APPROVAL OF PETITION
APPROVAL OF PETITION
--------------------
We, the undersigned members of the Board of Trust Company Incorporation, find
that the public convenience and advantage will be promoted by the amendments to
the charter of Bank of New Hampshire-Portsmouth, Portsmouth, New Hampshire, and
that the proceedings in connection with said petition conform to the provisions
of RSA Chapter 392.
Article I formerly reading:
"The name of this Corporation shall be Bank of New Hampshire-
Portsmouth."
shall be amended to read:
"The name of this Corporation shall be Bank of New Hampshire."
Article III formerly reading:
"The principal place of business of the corporation shall be located
at Portsmouth, in Rockingham County and the State of New Hampshire,
but the Bank may carry on any portion of its business at any place
permitted by the banking laws of the State of New Hampshire."
shall be amended to read:
"The principal place of business of the corporation shall be located
at 300 Franklin Street, City of Manchester in the County of
Hillsborough and the State of New Hampshire, but the Bank may carry on
any portion if its business at any place permitted by the banking laws
of the State of New Hampshire."
Board of Trust Company Incorporation
s/A. Roland Roberge
------------------------------------
A. Roland Roberge
s/Monica A. Ciolfi
------------------------------------
Monica A. Ciolfi
s/Georgie A. Thomas
------------------------------------
Georgie A. Thomas
Dated: August 20, 1991
FILED
OCTOBER 2, 1991
NEW HAMPSHIRE
SECRETARY OF STATE
<PAGE>
August 1, 1997
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549
Re: Bank of New Hampshire
To whom it may concern:
Bank of New Hampshire, a New Hampshire chartered commercial bank, hereby
consents that reports of examinations by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Commission upon request
therefor pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended.
BANK OF NEW HAMPSHIRE
By: /s/ R. Scott Bacon
------------------------
Name: R. Scott Bacon
Title: President & CEO
