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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
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For the fiscal year ended September 30, 1994
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OR,
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
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For the transition period from to
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Commission file number 1-7727
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Connecticut Natural Gas Corporation
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(Exact name of registrant as specified in its charter)
Connecticut 06-0383860
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Columbus Blvd.
P.O. Box 1500
Hartford, Connecticut 06144-1500
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (203) 727-3459
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Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
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Common Stock - $3.125 Par Value New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x No
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State the aggregate market value of the voting stock held by nonaffiliates
of the registrant. (The aggregate market value shall be computed by
reference to the price at which the stock was sold, or the average bid and
asked prices of such stock, as of a specified date within 60 days prior to
the date of filing.)
The aggregate market value of the voting stock held by nonaffiliates
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of the Registrant on November 10, 1994 was $228,382,845.
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Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date (applicable only
to corporate registrants).
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Number of shares of Common Stock outstanding as of the close of business
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on December 9, 1994 was 9,931,279
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DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the<PAGE>
Part of the Form 10-K into which the document is incorporated: (1) Any
annual report to security holders; (2) Any proxy or information statement;
and (3) Any prospectus filed pursuant to rule 424(b) or (c) under the
Securities Act of 1933. The listed documents should be clearly described
for identification purposes.
Definitive Proxy Statement for the Company's January, 1995 Annual
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Meeting (Part III)
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<PAGE>
PART I
ITEM 1. BUSINESS
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General
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Connecticut Natural Gas Corporation (the Company) is an energy provider
headquartered in Hartford, Connecticut. The Company is a Connecticut
corporation organized in 1848. At September 30, 1994, the Company
employed 642 people. The Company is engaged primarily in the distribution
and sale of natural gas at retail in Hartford and 20 other cities and
towns in central Connecticut and in Greenwich, Connecticut. The Company
also provides nonregulated energy-related products and services, primarily
district heating and cooling. The Company, therefore, considers itself to
be primarily in the energy business. The Company's common stock is traded
on the New York Stock Exchange. Previously issued preferred stock is
traded on the over-the-counter market.
Gas operating revenues were $267,752,000 for the fiscal year ended
September 30, 1994 and were derived approximately 54% from residential
customers, 22% from commercial firm customers, 2% from industrial firm
customers, 12% from interruptible customers, 7% from limited term sales
and 3% from the aggregate of transportation of customer-owned gas, sales
of gas to other utilities, sales to cogeneration facilities, and other
gas-related revenues. There were no sales to affiliated companies. The
gas distribution business contributed 91% of consolidated revenues over
the three fiscal years ending 1994. During the fiscal year ended
September 30, 1994, the peak-day sendout of gas was 275,394,000 cubic feet
which occurred on January 20, 1994.
Segment information for all relevant periods is included in the Notes to
the Financial Statements filed in Part II, Item 8 of this report.
Seasonality
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The Company's operations are seasonal. Most of the Company's gas revenues
and related operating expenses occur during the winter heating season,
October to April. Natural gas usage in the Company's service area is
greater for heating purposes in winter and less for cooling in summer.
Natural gas usage for nonheating purposes remains steady throughout the
year. Accordingly, earnings are highest during the first and second
quarters of the fiscal year, which begins October 1, and the third and
fourth quarters frequently show a net loss. The impact of seasonality on
cash flows is discussed in Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations.
The Company's nonregulated district heating and cooling businesses
experience peak loads during the winter heating and summer cooling
seasons.
<PAGE>
Regulatory Jurisdiction
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The Company's gas distribution business is subject to regulation by the
Connecticut Department of Public Utility Control (DPUC) as to franchises,
rates, standards of service, issuance of securities, safety practices and
certain other matters. Retail sales of gas by the Company and
transportation of gas owned by others are made pursuant to rate schedules
and contracts filed with and subject to DPUC approval. In general, the
firm rate schedules provide for reductions in the unit price of gas as
greater quantities are used. The rate schedules contain purchased gas
adjustment provisions as described in Note 1 to the Financial Statements
(included in Part II, Item 8 herein).
Under Connecticut law, the Company's subsidiaries are not public service
companies, and hence they are not subject to regulation by the DPUC.
However, significant intercompany transactions between the Company and
subsidiaries are subject to review and/or approval by the DPUC.
The regulation of interstate sales of natural gas is under the
jurisdiction of the Federal Energy Regulatory Commission (FERC). The
Company is subject to the direct jurisdiction of the FERC for any sales
for resale the Company makes in interstate commerce. The FERC regulates
the Company's pipeline gas suppliers, and the Company closely follows and
participates in numerous proceedings before FERC. Through a nonregulated
subsidiary, ENI Transmission Company (ENIT), the Company is a 2.4% equity
partner in the Iroquois Gas Transmission System Limited Partnership
(Iroquois) which is subject to regulation by FERC.
Gas Supply
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The Company's current gas supply contract portfolio reflects the results
of a continuing supply diversification strategy. The purpose of such a
strategy is to hold a secure, best cost gas supply portfolio, thereby
maintaining a competitive advantage over the other energy providers.
This, in turn, will enhance growth while continuing to serve existing
customers at the lowest possible cost.
The Company purchases natural gas on a long-term basis from producers and,
when economics dictate, on a short-term basis in the spot market.
Pipeline services purchased include firm and interruptible transportation
service. Gas storage service in the northeast and in the southwest
production area is purchased from both pipelines and storage contractors.
The Company's principal and most economical source of gas is pipeline-
delivered natural gas. The Company also utilizes liquefied natural gas
(LNG) and, to a much lesser extent, propane mixed with air (LP-Air). LNG
is usually more expensive than natural gas, and LP-Air is virtually always
more expensive than natural gas. Therefore, they are used primarily
during the winter months for peak shaving when the demand for gas is
greatest and exceeds deliverable supplies of natural gas through the
pipelines.
The Company currently holds pipeline transportation contracts with
Algonquin Gas Transmission Company (Algonquin), CNG Transmission
Corporation (CNGT), Iroquois Gas Transmission System (Iroquois), National
Fuel Gas Supply Corporation (National), Tennessee Gas Pipeline Company
(Tennessee), Texas Eastern Gas Transmission Corporation (TETCO), and
Transcontinental Gas Pipeline Corporation (TRANSCO). Supply contracts
signed directly with upstream producers back these transportation
contracts.
Firm transportation on Algonquin is contracted for on an MMBtu (Million
British Thermal Units) basis under eight (8) contracts. They are all
under rate schedule AFT-1 and total 87,007 MMBtu's in Maximum Daily
Quantity (MDQ) and 26,925,332 MMBtu's in Annual Contract Quantities (ACQ).
The expiration dates for these contracts vary from 1995 to 2004.
<PAGE>
The Company has also contracted for upstream firm transportation on CNGT
for an MDQ of 6,340 MMBtu's and an ACQ of 2,314,100 MMBtu's under rate
schedule FTNN, expiration date 2003; on National for an MDQ of 1,915
MMBtu's and an ACQ of 698,975 MMBtu's under rate schedule EFT; and on
TRANSCO for an MDQ of 1,814 MMBtu and an ACQ of 662,110 MMBtu's under rate
schedule FT, expiration date 2008.
The Company holds five (5) long-haul, firm transportation contracts with
Tennessee which total 41,055 MMBtu's daily and 14,985,075 MMBtu's
annually. These long-haul, firm transportation contracts expire in 2000.
In addition to these contracts, the Company also has several other firm
transportation contracts in place: 27,379 MMBtu's daily and 9,993,335
MMBtu's annually under rate schedule FT-A; 8,231 MMBtu's daily and
3,004,315 MMBtu's annually under rate schedule SST-NE; 5,653 MMBtu's daily
and 2,063,345 MMBtu's annually under rate schedule FSST-NE; and 1,283
MMBtu's daily and 468,295 MMBtu's annually under rate schedule CGT-NE.
These additional contracts expire between 2000 and 2008.
On TETCO the Company has contracted for an MDQ of 58,392 MMBtu's and an
ACQ of 21,313,080 MMBtu's annually of firm transportation under five (5)
contracts. Two contracts are under rate schedule CDS for 30,851 MMBtu's
daily with the remainder of the volume, 27,541 MMBtu's daily, under rate
schedule FT-1. Expiration dates for these contracts vary from 1995
through 2004.
The Company has a contract with Boundary Gas, Inc. for 735,110 MMBtu's per
year of gas supply which expires in 2003. This supply is imported from
Canada and is ultimately delivered to the Company by firm transportation
on Tennessee.
The Company also receives Canadian gas through the Iroquois pipeline. The
firm transportation contracts with Iroquois total 25,000 MCF daily and
9,125,000 MCF annually. The Iroquois firm transportation contract expires
in 2012. Iroquois is a pipeline system extending from the New
York/Canadian border through the states of New York and Connecticut. The
Canadian gas supply is produced in the Alberta Province of Canada and then
transported through Canada on the TransCanada pipeline system. The
Company's Canadian gas supply is purchased under long-term contracts
through Alberta Northeast Gas Limited which is a consortium of local gas
distribution companies. These supply contracts expire in 2007.
The Company has contracted for storage service under which gas available
during the warmer months of the year is stored underground, out of state
for use during the winter and balancing throughout the year. Certain
storage and firm transportation contracts with TETCO provide for 1,849,579
MMBtu's annually and expire between 2000 and 2004.
The Company has two agreements with CNGT which provide storage service
only. One provides for annual storage capacity of 66,775 MMBtu's,
expiration date 2000, and the other for 1,235,603 MMBtu's, expiration date
2006. A similar contract with Tennessee provides for 1,020,705 MMBtu's
annually and expires in 2000. The storage gas under these contracts is
delivered to the Company's city gate via one of the short-haul, firm
transportation contracts with Tennessee.
The Company's storage contract with Penn-York Energy Corporation (PYEC)
for 1,200,000 MCF expires in 1995. Transportation for the volumes
withdrawn from this storage is also provided by Tennessee through short-
haul, firm transportation contracts.
The Company has a production area storage service contract with First
Reserve Corporation. The storage is located in the State of Mississippi
and provides the Company with a deliverability of 10,000 MMBtu's per day
and a storage capacity of 100,000 MMBtu's with rapid turnover ability.
This storage service has access on a firm basis to Tennessee and TETCO.
It is used to back up supply-related force majeure events from the
Company's producer suppliers. This service also allows for supply
balancing and provides additional flexibility in the Company's gas
purchasing.
<PAGE>
The gas supply which feeds into the Company's firm transportation rights
on the interstate pipelines has been contracted for directly with
producers of natural gas (Direct Producer Contracts). The Direct Producer
Contracts are diverse in terms of expiration date, supply location, price,
flexibility, etc. as part of the Company's gas supply diversification
strategy.
The Company continues to be very active in the area of purchasing gas
directly from producers both in the spot market and under long-term
arrangements. Currently the Company purchases all of its gas under such
arrangements. Spot market volumes are those purchased under short-term
arrangements from producers and gas withdrawn from storage which had been
purchased directly from producers for injection to that storage. Spot
market purchases are set by negotiation with the supplier. Previously,
much of the spot market gas was transported under interstate pipelines'
interruptible transportation service, and the long-term producer contracts
were transported under pipelines' firm transportation service. Under FERC
Order 636, the Company expects to much more extensively use firm
transportation service and greatly decrease its use of interruptible
transportation service.
Under FERC Order 636, a pipeline may not terminate service to a long-term
firm transportation shipper if that customer elects to exercise a "right
of first refusal" which requires the customer to match the price and
length terms of another offer to continue to purchase such service
following the initial contract term expiration. The price for such
continued firm transportation service would be capped at the maximum price
determined as a just and reasonable rate under FERC jurisdiction.
In addition to its pipeline gas supplies, the Company owns an LNG plant in
Rocky Hill, Connecticut. This plant has the design capacity to liquefy
approximately 6,000 MCF per day and store 1,206,000 MCF. The LNG plant is
not a source of additional gas, but it permits the Company to liquefy and
store gas during the summer and to deliver the stored gas during the
following winter. The plant has the design capacity to vaporize 60,000
MCF per day.
LP-Air is a source of peak shaving supply to the Company. The Company has
approximately 1,000,000 gallons of on-site propane storage which can
produce the equivalent of approximately 16,584 MCF of natural gas per day.
Regulatory Matters
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In December, 1993 the Connecticut Department of Public Utility Control
(DPUC) issued a final decision on the Company's July, 1993 rate request,
authorizing an increase to the Company's rates of $7,600 or 2.8% and
allowing a return on equity of 11.2%. The Company had requested an
increase of 9.6%, or approximately $25,000. New rates became effective
for service rendered on or after December 16, 1993. Although the rate
decision did not provide the full increase requested, the DPUC approved
recovery of all significant items deferred on the balance sheet, pending
recovery, at September 30, 1993. In addition, the Company has been
allowed to defer for consideration in future rate proceedings expenses
incurred above annual levels authorized in current rates for certain areas
including: conservation expenses, economic development expenses,
postretirement benefits, potential costs related to environmental
remediation and the shortfall on collection of accounts receivable from
hardship customers who are protected by statute from service termination
during the winter months. The overall effect of the treatment given these
items in the rate order is to reduce the impact of the shortfall between
the rate relief requested and the amount which was granted in the final
decision.
<PAGE>
The recovery method and amount related to FERC Order 636 transition costs
was the subject of a special proceeding initiated by the DPUC in January,
1994. In July, 1994 the DPUC issued a decision allowing Connecticut's
natural gas distribution companies to recover these costs from amounts
which would otherwise have been refunded to customers and the opportunity,
if necessary, for surcharges added to customers' future bills. Additional
information regarding FERC Order 636 transition costs is included in the
Management's Discussion and Analysis of Financial Condition and Results of
Operations, filed in Part II, Item 7 of this report, and the Notes to the
Financial Statements, filed in Part II, Item 8 of this report.
In May, 1994 the DPUC approved the Company's Series B Medium Term Note
(MTN) program which permits the issue of up to $75,000 of unsecured MTNs,
under varying terms, over a four-year period, at maturities not exceeding
thirty years.
In August, 1994 the DPUC approved the Company's request to issue up to
400,000 shares of common stock through a public offering which was
completed in October, 1994 for 392,200 shares.
Environmental Considerations
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The Company has not experienced and does not anticipate any significant
problem in complying with laws and regulations pertinent to its business
concerned with protecting the environment. Additional information
regarding environmental considerations is included in the Management's
Discussion and Analysis of Financial Condition and Results of Operations,
filed in Part II, Item 7 of this report, and the Notes to the Financial
Statements, filed in Part II, Item 8 of this report.
Subsidiary Operations (Consolidated)
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At September 30, 1994, consolidated subsidiaries of the Company included
CNG Realty Corp. (CNGR), ENI Transmission Company (ENIT) and Energy
Networks, Inc. (ENI).
CNGR, formed in 1977, is a single purpose corporation which owns the
Operating and Administrative Center located on a 7-acre site in downtown
Hartford, CT. This facility is leased to the Company. CNGR engages in no
other business activity. At September 30, 1994, CNGR had an investment in
plant of approximately $17,394,000 and no revenues from unaffiliated
businesses for the year then ended.
ENIT was formed in 1986 to own the Company's 2.4% share of Iroquois.
Iroquois operates a natural gas pipeline which transports Canadian natural
gas into the states of New York, Massachusetts and Connecticut. At
September 30, 1994, ENIT's investment in Iroquois amounted to $4,353,000.
The Company, together with all other partners in Iroquois, has entered
into a Capital Contribution Support Agreement (agreement) to support a
one-year, renewable letter of credit which was issued to Iroquois. ENIT's
support obligation under this agreement amounts to 2.4% of the outstanding
principal on the letter of credit at any time and was approximately
$860,000 at September 30, 1994. ENIT recorded income of $422,000 related
to Iroquois during fiscal 1994.
ENI was incorporated in 1982 and is a nonregulated company engaged in the
operations described in the following paragraphs. ENI and its wholly
owned subsidiary, The Hartford Steam Company (HSC), provide district
heating and cooling (DHC) services to a number of large buildings in
Hartford, CT. ENI also provides DHC customers with energy system
operating and maintenance services. In 1994 these services were gathered
in to a separate operating group known as Energy Services. ENI's other
nonregulated operating divisions offer energy equipment rentals and
property rentals and own a 3,000 square foot building in Hartford, CT, and
a 42,000 square foot building in Greenwich, CT.
<PAGE>
HSC, incorporated in Connecticut in 1961, owns and operates a central
production plant and distribution system for the processing and
distribution of steam for heating and chilled water for cooling to a
number of offices, stores and other large buildings in downtown Hartford,
CT. HSC's investment in its plant and distribution system was
approximately $40,411,000 as of September 30, 1994. Revenues were
$16,871,000 for the fiscal year then ended, including $382,000 from
affiliated companies.
HSC produces its own chilled water supply for district cooling. HSC
purchases its steam supply for district heating and for the production of
chilled water from two local cogeneration facilities. The primary steam
facility is located on the Company's premises in Hartford. This facility
is owned by an unrelated third party, the Hacogen Corporation (Hacogen).
The second facility is owned by the Downtown Cogeneration Associates
Limited Partnership (DCA) and sells steam to HSC under a twenty-year
contract. ENI is a 50% partner in the DCA with two unrelated third
parties. The DCA owns and operates a four(4)-megawatt cogeneration
facility on the roof of a downtown Hartford retail shopping and office
complex. Electricity generated from this unit is sold to The Connecticut
Light and Power Company under a twenty-year contract.
During fiscal, 1994 Hacogen indicated a desire to negotiate a termination
of its long-term steam supply contract with HSC. Accordingly, management
has entered into discussions with Hacogen. HSC has also developed a plan
for alternative steam supply sources. Management believes that adequate
alternate sources of steam are available and that any change in its source
of steam supply will not have a material impact on customers' supply or
service.
HSC owns boilers which are available to produce steam on a standby basis.
Historically, purchased steam benefited HSC customers through lowering
primary operating costs and reducing required future capital expenditures.
During fiscal 1994, ENI provided cogeneration management and consulting
services to DCA. Fees earned for these services for the fiscal year ended
September 30, 1994, were $147,000.
In 1994 Energy system operating and maintenance services offered by ENI to
DHC customers were gathered in to a separate operating group, Energy
Services, to provide opportunity for growth in both the customer base for
such services and for the scope of services offered to DHC customers, such
as energy conservation services.
The Capitol Area System (CAS) is a district heating and cooling system
serving a section of the City of Hartford, CT. ENI owns the distribution
system and purchases hot and chilled water from a third party. ENI also
provides marketing services to this third party. ENI's investment in the
CAS was approximately $16,887,000 as of September 30, 1994. Revenues were
$5,733,000 for the fiscal year then ended, including $5,048,000 from sales
of hot and chilled water, $69,000 from marketing services provided and
$616,000 from affiliated companies.
The energy equipment rentals division owns natural gas water heaters and
natural gas conversion burners which it leases to customers in the
residential market. ENI's investment in such rental equipment was
approximately $2,008,000 as of September 30, 1994, and revenues were
$863,000 for the fiscal year then ended. There were no revenues from
affiliated companies. This division is gradually being phased out through
attrition. No additional capital has been invested. The units are
retired either when an equipment failure occurs or when the opportunity
for the sale of a unit exists.
<PAGE>
The property management operation owns and manages a 42,000 square foot
building in Greenwich, CT. Approximately 50% of the building is occupied
by the Company as an operating and administrative center servicing the
Greenwich area. The remaining 50% is either currently leased or in
negotiation for lease to unaffiliated businesses. Currently ENI is
negotiating with one major tenant for a long-term lease. ENI's gross
investment in this building and land was approximately $3,685,000 as of
September 30, 1994. Rental revenues were approximately $487,000 for the
fiscal year ended September 30, 1994, including $391,000 from affiliated
companies.
Competition
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The Company currently distributes and sells gas and district heating and
cooling services to its customers without substantial competition from
other gas utilities, cooperatives or other providers of natural gas.
Nonetheless, the advent of FERC Order 636 is expected to increase
competetive pressures as other providers of gas seek opportunities to
serve the Company's customers. The Company competes with suppliers of
oil, electricity, coal, propane and other fuels for cooking, heating, air
conditioning and other purposes. Competition is greatest among the
Company's large commercial and industrial customers who have the
capability to use alternative fuels. The Company has attempted to
minimize the volatile effect of this price-sensitive load through the use
of flexible rate schedules which allow gas pricing to meet alternative-
fuel competition; as oil prices fluctuate, so do the Company's revenues
from this class of customers.
The Company's customers may also contract for the purchase of their own
supply of gas directly from a pipeline supplier. Any such customer must
also arrange for transportation services from the Company to deliver this
gas to the customer's premises. Transportation of customer-owned gas
reduces the Company's operating revenues because the commodity value of
the gas is paid by the customers directly to other suppliers. Similarly,
the cost of such gas is not included in the Company's expenses since the
gas is not purchased by the Company for resale.
For sales of short-term gas supplies and transportation services by
contract the Company competes with other sellers and suppliers of natural
gas services, nationwide.
ENI and HSC own and operate district heating and cooling systems
(collectively referred to as DHC) which distribute and sell steam, hot and
chilled water to office complexes and other large buildings in the City of
Hartford. Prior to the potential customer's selection of the heating
and/or cooling technology to be used, DHC competes with suppliers of oil,
electricity, coal, propane and natural gas. Once DHC has been selected,
the competition from alternate fuels becomes greatly diminished because of
the cost of the equipment necessary to utilize an alternative fuel.
However, both new and existing DHC customers may elect to install their
own equipment rather than to be served by ENI or HSC. At such time, the
Company competes with providers of other fuels to supply the energy for
the customer's DHC operation.
Franchises
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The Company holds franchises, granted by the Legislature of the State of
Connecticut, and other consents which it considers to be valid and
adequate to enable it to carry on its operations, substantially as now
carried on, in each of the communities which it serves.
<PAGE>
ITEM 2. PROPERTIES
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At September 30, 1994, the Company owned gas distribution mains, a natural
gas liquefaction plant, propane gas storage tanks, metering stations, gas
service connections, meters, regulators and other equipment necessary for
the operation of a gas distribution system. Substantially all of the
Company's properties are subject to the lien of the Indenture of Mortgage
and Deed of Trust securing its first mortgage bonds. The properties, in
management's opinion, are maintained in good operating condition. The gas
mains are located principally under public streets, roads and highways.
ENI owns a distribution system located in the Capitol area of Hartford, CT
for the distribution of hot water for heating and chilled water for
cooling. This property was financed with industrial revenue, variable
rate, tax exempt demand bonds secured by a letter of credit with a bank.
ENI also owns and manages a 42,000 square foot building in Greenwich,
Connecticut which is occupied by the Company and other tenants. This
facility enables both the administrative and operating functions of the
Greenwich division of the Company to be consolidated at one site. This
subsidiary also owns a small building in Hartford, CT.
The energy equipment rentals division of ENI owns water heaters and
conversion burners which it leases to its customers in the residential
market.
HSC owns a central production plant and distribution system, which
includes a chilled water storage tank, in downtown Hartford, CT for the
processing and distribution of steam for heating and chilled water for
cooling. The property is subject to a mortgage and collateral security
agreement which secures debt under HSC's revolving loan agreement.
CNGR owns the Operating and Administrative Center in Hartford which is
leased by the Company. The center is subject to the lien of the Mortgage
Deed under which the CNGR's first mortgage notes are issued.
ITEM 3. LEGAL PROCEEDINGS
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Two civil and criminal investigations related to environmental issues,
brought against Iroquois in 1992, are still pending. Although the Company
cannot predict the outcome of these proceedings, the Company does not
believe the ultimate resolution of these matters will have a material
adverse effect on the Company's financial condition or results of
operations. Iroquois is a partnership of which the Company is a 2.4%
owner (See Item 1., Subsidiary Operations).
The Company is not a party to any other litigation other than ordinary
routine litigation incident to the operations of the Company or its
subsidiaries. In the opinion of management, the resolution of such
litigation will not have a material adverse effect on the Company's
financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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There were no matters submitted to a vote of security holders during the
last quarter of the fiscal year ending September 30, 1994.
<PAGE>
Executive Officers of the Registrant
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All executive officers' terms of office are one year.
Victor H. Frauenhofer Age - 61
Chairman, President, Chief Executive Officer and Director
Business experience:
1991 - Present Chairman, President and Chief Executive Officer
1987 - 1991 President and Chief Executive Officer
1983 - 1987 President and Chief Operating Officer
James P. Bolduc Age - 45
Senior Vice President - Financial Services and Chief Financial Officer
Business experience:
1993 - Present Senior Vice President - Financial Services
and Chief Financial Officer
1992 - 1993 Vice President, Consumer Services
1989 - 1991 Vice President, Distribution and Customer Service
1987 - 1989 Vice President Corporate, Regulatory
and Customer Services
1985 - 1987 Vice President Diversified Group
Harry Kraiza, Jr. Age - 45
Senior Vice President - Energy Services
Business experience:
1993 - Present Senior Vice President - Energy Services
1989 - 1993 Vice President, Energy Services
1988 - 1989 Director of Energy Services
1987 - 1988 Director of Customer Service
1984 - 1987 Manager of Customer Service
Reginald L. Babcock Age - 43
Vice President - Corporate Services and General Counsel and Secretary
Business experience:
1993 - Present Vice President - Corporate Services and General Counsel
and Secretary
1989 - 1993 Vice President, General Counsel and Secretary
1985 - 1989 Secretary and Counsel
1983 - 1985 Assistant Secretary and Counsel
Wayne T. Jones Age - 45
Vice President - Planning and Corporate Development
Business experience:
1993 - Present Vice President - Planning and Corporate Development
1992 - 1993 Assistant Vice President, Rates and Regulatory Affairs
1989 - 1992 Director, Rates, Regulatory Planning and Conservation
1988 - 1989 Director, Rates and Regulatory Planning
1987 - 1988 Director, Revenue Requirements and Economic Evaluations
1987 - 1987 Director of Administrative Services
Frank H. Livingston, Age - 58
Vice President - Office of the Chairman
Business experience:
1991 - Present Vice President - Office of the Chairman
1989 - 1991 Vice President, Chief Administrative Officer
1973 - 1989 Vice President Administration
<PAGE>
Executive Officers of the Registrant, (continued)
------------------------------------
Donald H. Ludington Age - 58
Executive Vice President and General Manager, Energy Networks, Inc.
Business experience:
1993 - Present Executive Vice President and General Manager,
Energy Networks, Inc.
1992 - 1993 Vice President and Chief Administrative Officer,
Energy Networks, Inc.
1989 - 1992 Vice President, Energy Networks, Inc.
1986 - 1989 Assistant Vice President, General Manager -
Greenwich Division
1983 - 1986 Assistant Treasurer
Anthony C. Mirabella, Age - 54
Vice President - Operations and Chief Engineer
Business experience:
1993 - Present Vice President - Operations and Chief Engineer
1992 - 1993 Vice President, Distribution/Engineering Services
& Chief Engineer
1989 - 1991 Vice President & Chief Engineer
1988 - 1989 Vice President Nonregulated Operations
1987 - 1988 Vice President Affiliated Resources Corporation
1985 - 1987 Vice President Business Development Group
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
-------------------------------------------------------------
SECURITY HOLDER MATTERS
-----------------------
The Company's common stock is listed on the New York Stock Exchange. The
high and low sales prices for each quarterly period during the years ended
September 30, 1994 and 1993 were as presented in the table below. These
prices are based on the New York Stock Exchange Quarterly Market
Statistics report.
<TABLE>
<CAPTION>
QUARTERLY COMMON STOCK PRICES
-----------------------------
1994 1993
-------------------- --------------------
<S> <C> <C> <C> <C>
Fiscal Year High Low High Low
--------------- ------ ------ ------ ------
First Quarter 32 1/4 28 28 3/8 23
Second Quarter 31 3/4 23 7/8 29 5/8 26 7/8
Third Quarter 28 5/8 24 30 1/2 26 1/4
Fourth Quarter 26 3/8 22 1/2 32 3/8 27 5/8
</TABLE>
There were 9,548 record holders of the Company's common stock at November
10, 1994.
Under Connecticut law, dividends may be paid out of unreserved and
unrestricted retained earnings. Cash dividends are declared on the
Company's common stock on a quarterly basis, and the total amount of
dividends declared was $1.48 per share in 1994 and $1.46 per share in
1993. Under the most restrictive terms of the open-end indenture securing
the Company's first mortgage bonds, as amended, retained earnings of
$41,041,000 were available for dividends at September 30, 1994. Except
for certain restrictions relating to the Company's classes of preferred
stock as to which dividends and sinking fund obligations must be paid
prior to the payment of common stock dividends, there are no other
restrictions on the Company's present or future ability to pay such
dividends. The Company expects that cash dividends will continue to be
paid in the future.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
--------------------------------
<TABLE>
<CAPTION>
FIVE-YEAR SUMMARY OF CONSOLIDATED OPERATIONS
(Thousands of Dollars)
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Operating revenues:
Continuing operations $290,662 $265,337 $236,189 $213,825 $232,317
Discontinued operations $ - $ - $ - $ - $ 1,591
Net income applicable
to common stock:
Continuing operations $ 17,637 $ 16,788 $ 15,197 $ 12,273 $ 13,497
Discontinued operations
and gain on disposal $ - $ - $ - $ 517 $ 118
Accounting change $ - $ - $ - $ 1,779 $ -
Earnings per share:
Continuing operations $ 1.85 $ 1.76 $ 1.75 $ 1.44 $ 1.61
Discontinued operations
and gain on disposal $ - $ - $ - $ .06 $ .02
Accounting change $ - $ - $ - $ .21 $ -
Total assets:
Continuing operations $458,554 $444,585 $397,570 $370,854 $351,476
Discontinued operations $ - $ - $ - $ - $ 14
Long-term obligations $154,193 $137,984 $121,621 $111,111 $113,706
Cash dividends declared
per common share $ 1.48 $ 1.46 $ 1.44 $ 1.40 $ 1.36
Dividend payout ratio 80.0% 83.0% 82.3% 81.9% 83.4%
P/E ratio 13 18 13 12 11
Market price as a %
of book value -
year-end 162.0% 225.6% 175.2% 156.4% 138.6%
</TABLE>
(Certain amounts for 1993 and prior years have been reclassified to conform
with 1994 classifications.)
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994
-----------------------------------------
(Thousands of Dollars Except for Per Share Data)
Connecticut Natural Gas Corporation (the Company) is an energy provider
engaged primarily in the regulated distribution and sale of natural gas.
Nonregulated energy-related products and services, primarily district
heating and cooling, are provided through wholly-owned subsidiaries.
Net income applicable to common stock and earnings per share for the
three fiscal years ended September 30, 1994, 1993 and 1992 were $17,637
($1.85), $16,788 ($1.76) and $15,197 ($1.75), respectively. The most
significant benefits to earnings in 1994 came from higher rates, colder
weather and a lower overall effective tax rate due to additional flow
through income tax deductions. Increased charges against earnings in
1994 included additional expenses for uncollectibles and employee
benefits. The variation in weather and the recording of capitalized
interest have made a significant impact on net income from 1992 to 1993.
Other important contributing factors to all years include changes in the
mix of sales, customer usage, the cost of natural gas and related profit
margins.
Rate Matters
In December, 1993 the Connecticut Department of Public Utility Control
(DPUC) issued a final decision on the Company's rate request,
authorizing an increase to the Company's rates of $7,600 or 2.8% and
allowing a return on equity of 11.2%. The Company had requested an
increase of 9.6%, or approximately $25,000. New rates became effective
for service rendered on or after December 16, 1993. Although the rate
decision did not provide the full increase requested, the DPUC approved
recovery of all significant items deferred on the balance sheet, pending
recovery, at September 30, 1993. In addition, the Company has been
allowed to defer for consideration in future rate proceedings expenses
incurred above annual levels authorized in current rates for certain
areas including: conservation expenses, economic development expenses,
expenditures related to postretirement benefits, potential costs related
to environmental remediation and the shortfall on collection of accounts
receivable from hardship customers who are protected by statute from
service termination during the winter months. The overall effect of the
treatment given these items in the rate order is to reduce the impact of
the shortfall between the rate relief requested and the amount which was
granted in the final decision.
RESULTS OF OPERATIONS
---------------------
Gas Operating Margin
Gas operating margin is equal to gas revenues less the cost of gas and
Connecticut gross revenues tax. The following table presents the
changes in revenues, gas operating margin and gas throughput for 1994,
1993 and 1992, respectively:
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994 (continued)
----------------------------------------------------
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Gas Revenues $267,752 $242,922 $213,902
======== ======== ========
Gas Operating Margin $109,949 $ 96,129 $ 93,964
======== ======== ========
Gas Throughput (mmcf)
System Sales 32,723 32,918 31,052
Limited Term Sales 7,904 6,902 -
Off-System Sales 1,240 720 1,821
Transportation Services 7,325 7,912 7,470
------- ------- -------
Total System Throughput 49,192 48,452 40,343
======= ======= =======
</TABLE>
Higher firm rates, effective December, 1993 (see Rate Matters),
amplified by the impact of higher volumes of firm sales, are the
principal reasons for the increase in gas operating margins in fiscal
1994. Over the three-year period ending September 30, 1994, the overall
increase in firm sales volumes is primarily a function of the weather
which has been continually colder from year to year.
Weather dramatically impacts contributed operating margin by class, due
to required shifts in overall throughput mix. System sales have the
greatest impact on operating margin between the reported periods due to
the weather's effect on winter heating requirements and an increase in
average new customers by class. The majority of these sales produce the
highest per unit operating margin of all customer classes because they
require firm delivery of natural gas to supply their needs.
A portion of system sales is interruptible, and related margin earned
above a prescribed target level is shared with firm ratepayers, as
directed by the DPUC. The December, 1993 rate decision allowed a higher
margin sharing target. As a result, no interruptible margin earned in
1994 qualified for such sharing. A higher level of margin sharing
occurred during 1993 as compared to 1992. Interruptible per unit
margins were higher in 1994 and lower in 1993 because of variations in
related gas costs.
Limited Term Sales (LTS) permit the Company to market short-term gas
supplies and transportation services by contract with customers
nationwide. LTS have increased significantly over the last three years.
However, LTS contribute the smallest per unit operating margin. The
significance of this sales program lies in the Company's ability to
generate additional operating margin from a source not restricted by the
capacity of the Company's own distribution system or curtailment
limitations driven by system demand.
Off-system sales are made to other utilities when supplies and capacity
are available. Operating results for off-system sales have not impacted
operating margin because their recognition in income has been deferred
pending a regulatory decision on their treatment. Transportation
services have produced steady contributions, the result of additional
customers to this class, with consistent per unit operating margins.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994 (continued)
----------------------------------------------------
Federal Energy Regulatory Commission (FERC) Order No. 636 Transition
Costs
The Company began to incur FERC Order 636 transition costs from its
pipeline suppliers in June, 1993. These costs are expected to be billed
to the Company over three years.
In July, 1994 the DPUC issued a decision allowing Connecticut natural
gas distribution companies to recover these costs from amounts which
would otherwise have been refunded to customers and the opportunity, if
necessary, for surcharges added to customers' future bills. Through
September 30, 1994 the Company has paid and recovered $8,075 of an
estimated $15,000 of transition costs.
In the opinion of management, the Company has available a sufficient
number of recovery mechanisms to provide for the full recovery of its
estimated transition cost liability. For this reason it is the opinion
of management that FERC Order 636 transition costs will not have a
material impact on the Company's financial condition or results of
operations. The estimated unpaid liability of $6,925 at September 30,
1994 is included in Accounts Payable and Accrued Expenses and Accrued
Transition Costs.
The Company believes it was fully prepared and had appropriately
positioned itself for change within the FERC Order 636 environment
because the issuance of the Order had been anticipated for some time.
Take-or-Pay Charges
At September 30, 1994 the Company has recovered substantially all of its
take-or-pay liability.
Operating and Maintenance Expenses
Operations and Maintenance expenses are significantly higher in 1994,
reflecting the recognition of several significant items, including
higher uncollectibles, an early retirement program and pension and
benefit expenses. The Company also experienced higher costs for labor,
conservation programs, environmental monitoring services, regulatory
commission expenses and outside purchased services. Some of these
increases are the result of 1994 recognition of expense items which had
been deferred pending the DPUC approval of their recovery (see Rate
Matters and Note 2 to the financial statements).
Slow economic recovery in the region continues to challenge the Company
in the area of uncollectibles. This was recognized by the DPUC in its
December, 1993 decision which allowed the Company to record a higher
rate of uncollectibles expense and the recovery of amounts forgiven
under the Company's hardship arrearage forgiveness program (see Note 1
to the financial statements). Higher customer bills, reflecting both
new higher rates and higher usage during a colder winter, contributed to
the higher uncollectibles recorded in fiscal 1994.
The Company announced a voluntary early retirement opportunity (VERO) in
August, 1994 and twenty employees accepted retirement effective November
1, 1994. The $1,341 of expenses associated with this program were
recognized by the Company in the fourth quarter of fiscal 1994. The
VERO was one part of an overall ten percent reduction in the nonunion
workforce accomplished through the combination of the VERO and general
attrition. This reduction in staffing is expected to result in an
annual ongoing payroll and benefit cost reduction of approximately
$1,250.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994 (continued)
----------------------------------------------------
Effective October 1, 1993 the Company adopted Statement of Financial
Accounting Standards No. 106 "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (SFAS No. 106). In fiscal 1994 $1,946 was
charged to Operating and Maintenance Expenses for SFAS No. 106 costs.
In its December, 1993 rate decision the DPUC approved a five-year phase-
in of SFAS No. 106 expenses (see Notes 2 and 4 to the financial
statements).
Operations and maintenance expenses are relatively unchanged from 1992
to 1993. This change was well below the average change in the Consumer
Price Index (i.e., the rate of inflation) over the same period.
Expenses related to the regulated operations had generally declined
since 1991. Uncollectibles that may have otherwise been written off in
1992 were deferred pending recovery in rates (see Rate Matters and Note
2 to the financial statements). Fewer expenses were also recognized in
1993 because of the 1992 completion of several deferred expense
amortizations, increased revenue generated from charge service
activities and changes in the recognition of certain expenses due to
changes in accounting estimates. These benefits more than offset the
impact of annual increases in wages and benefits.
Income Taxes
In October, 1994 the Company received formal approval from the Internal
Revenue Service (IRS) to deduct for tax purposes current as well as
certain prior incurred cost of removal expenses associated with
retirements of plant and equipment. During fiscal 1994 the Company
recognized current period cost of removal expenses which benefited
earnings by $.09 per share. The Company anticipates recording the tax
benefit of additional cost of removal deductions related to the IRS
approval during fiscal 1995.
Additional flow-through amortization deductions associated with a major
capitalized information system have provided a benefit to fiscal 1994
earnings of $.11 per share from lower income taxes. However, higher
overall income taxes recognized as a result of higher earnings offset
some of these income tax benefits.
IRS audits of the Company's federal income tax returns for 1986, 1987
and 1988 were completed during fiscal 1994. The outcome did not have a
material impact on the Company's financial condition or results of
operations.
A State of Connecticut audit of the Company's 1989 through 1992 state
sales tax returns is in progress at this time. Management does not
believe that the outcome of the audit will be significant to future
results or operations.
Effective October 1, 1993 the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No.
109). Because the Company had already adopted Statement of Financial
Accounting Standards No. 96 during 1988, the adoption of SFAS No. 109
did not have a material impact on the Company's financial condition or
results of operations.
Depreciation
The increase in depreciation reflects the Company's continued investment
in depreciable plant and higher rates allowed for the regulated
operations in the December, 1993 rate decision (see Rate Matters and
Note 2 to the financial statements). Plant costs continue to increase
year to year because of price increases for goods and services and
higher per unit internal costs associated with the installation of new
and replacement of existing distribution system mains and services.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994 (continued)
----------------------------------------------------
Other Income/(Deductions)
Other Income/(Deductions) has declined significantly from year to year
since 1992. Higher promotional advertising expenses and lower income
from merchandise sales were partially offset by lower insurance costs
and higher interest income in fiscal 1994. In 1993 the Company
recognized less income from merchandise sales and increased insurance
costs and donations. Partially offsetting these higher costs in 1993 is
the allowance for funds used during construction (AFUDC) related to the
development of a new customer information system (CIS/DCIS). There was
no similarly large project in 1994. All years reflect the income
contribution from the Company's 2.4% interest in the Iroquois Gas
Transmission System (Iroquois).
Interest and Debt Expense
Long-term debt interest is greater in 1994 because of additional issues
of debt for the funding of construction expenditures and gas supplies.
From 1991 to 1993 the Company restructured its long-term debt at
significantly lower rates. As a result of these activities, outstanding
long-term debt increased, but related interest expense declined
significantly from 1992 to 1993 (see Liquidity and Capital Resources).
Other Interest primarily relates to interest on short-term borrowings.
Short-term interest has fluctuated as a result of changes in interest
rates, short-term cash requirements and conversions to long-term debt.
Both average borrowings and interest rates have been higher in 1994.
Declining short-term interest rates from 1992 to 1993 resulted in lower
other interest expense.
Interest and debt expense for 1993 was also reduced by the benefit of a
higher AFUDC (debt component) related to the development of the new
CIS/DCIS system (see Other Income/(Deductions)) which was put into
service in fiscal 1993.
Nonregulated Operations
The contribution to net income from nonregulated operations is
predominantly generated from district heating and cooling operations
(DHC) and was greater in 1994 and 1992 and less in 1993. This reflects
the steadily increasing net benefit to income from higher DHC rates and
more steam and hot water sales during colder winters. The benefit of
higher rates is partially offset by lower chilled water sales because of
lower customer usage and the DHC's decision to defer the third year
phase-in of higher chilled water service rates which was scheduled for
January, 1994. DHC income earned from operations in 1993 was partially
offset by the absence of other income from its activities with its
primary steam supplier (see Steam Supply, herein, and Note 10 to the
financial statements). Nonregulated operations earnings have
continually benefited from reduced interest expense since 1992,
primarily because of lower variable interest rates on long-term debt.
Additional contribution to net income from nonregulated operations has
been realized each year from the Company's equity in the earnings of
Iroquois (see Other Income/(Deductions)). Equipment rentals contribute
less and less to results of operations each year, reflecting the phase-
out of this operation through attrition. The property management
contribution is also less, because of lower tenant occupancy levels.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994 (continued)
----------------------------------------------------
Steam Supply
The nonregulated operations are party to three long-term contracts for
the purchase of steam.
The nonregulated operations' primary steam supplier has indicated a
desire to negotiate a termination of its long-term steam supply contract
with The Hartford Steam Company, a wholly-owned subsidiary of Energy
Networks, Inc., a wholly-owned nonregulated subsidiary of the Company.
Accordingly, management has entered into discussions with this supplier
and, at a minimum, will seek reimbursement of all amounts recorded from
the supplier and any additional amounts that may be owing as a result of
the termination of the steam supply contract and related agreements.
The nonregulated operations have also developed a plan for alternative
steam supply sources. Management believes that adequate alternate
sources of steam are available and that any change in its source of
steam supply will not have any material impact on customers' supply or
service. Furthermore, management does not believe that the resolution
of this matter will have any material adverse effect on the Company's
financial condition or results of operations. However, the ultimate
impact will depend upon a number of factors including the final terms of
any settlement agreed to with the supplier and the terms of any new
steam supply.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The regulated gas operations are the principal segment of the Company's
business, and a substantial portion of the Company's cash is obtained
during the winter heating season. The Company manages its seasonal cash
requirements, primarily to fund gas purchases and customer accounts
receivable, by using cash flows generated from operations and short-term
financing from lines of credit or issues of commercial paper.
Cash flows from operations are generally sufficient to satisfy the
nonregulated operations' cash requirements. Existing credit lines are
used to balance seasonal variations in available cash resources.
Cash Flows from Operating Activities
Cash flows from operations increased from 1993 to 1994, although less
than the decline experienced from 1992 to 1993. Higher firm natural gas
operating margins, because of higher rates, effective December, 1993,
and higher sales volumes because of colder weather are principally
responsible for greater cash flows from operations experienced in fiscal
1994. On an on-going basis the cost of gas and volumes of gas sold are
the principal factors which influence cash flows from operations from
year to year. The price of natural gas impacts the amount of purchased
gas costs subject to refund or recovery. The volumes of gas sold
magnify the impact of changing prices. The Company's average per unit
commodity cost of gas was highest in 1993 and lowest in 1992. Margins
earned from LTS, interruptible and transportation services, although
they are usually shared with firm customers, add some to the amount of
cash available to pay for the expenses of operations.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994 (continued)
----------------------------------------------------
In 1993 the Company received its first cash distributions from it's 2.4%
partnership interest in Iroquois (see Note 1 to the financial
statements). Cash distributions will vary from year to year depending
on Iroquois' cash available for reserve requirements and their decision
to retain cash to support the cost of capital projects. Distributions
of $240 and $1,154 were received from Iroquois in 1994 and 1993,
respectively.
Investing Activities
Actual construction expenditures in 1992, 1993 and 1994 were $26,145,
$25,531 and $27,859, respectively. The Company estimates its
consolidated construction expenditures for the fiscal years 1995, 1996,
1997, 1998 and 1999 to be approximately $30,300, $30,000, $31,000,
$31,000 and $33,000, respectively. The increases in anticipated
construction programs over historical actual levels is due to an
accelerated replacement program for cast iron and bare steel pipe in the
natural gas distribution system. Other construction expenditures from
1995 to 1998 for the nonregulated operations include $1,900 for
compliance with Clean Air Act requirements. The Company plans to fund
capital expenditures and other commitments through a combination of
sources.
Financing Activities
The Company uses short-term debt to finance the seasonal build-up of gas
inventories and other working capital requirements. Capital
expenditures are also temporarily funded with short-term debt. The
Company raises short-term funds through the sale of commercial paper and
the use of available bank lines of credit and a revolving credit
agreement (see Note 8 to the financial statements). Long-term debt and
equity issues are used in a balanced fashion to reduce outstanding
short-term debt and to permanently finance completed construction. In
fiscal 1993, the Company completed a two-year effort focused on
restructuring its debt portfolio to lower its overall cost of capital.
In October, 1994 and 1992 the Company sold 392,200 and 750,000 shares of
its $3.125 par Common Stock at $22.75 and $23.125 per share,
respectively. The Company received net proceeds of approximately $8,500
in 1994 and $16,600 in 1992 which were used by the regulated operations
to retire existing short-term borrowings and for working capital
purposes. The October, 1994 transaction closed subsequent to year-end
and will be recorded for financial statement purposes in fiscal 1995.
In June, 1994, with the approval of the DPUC, the Company established
its Series B Medium Term Note (MTN) program which permits the issue of
up to $75,000 of unsecured MTNs over a four-year period at maturities
not exceeding thirty years, under varying terms. In July, 1994 the
Company issued $10,000 of MTNs at 7.82%, due 2004, with no call
provisions or sinking fund requirements. In August, 1994 the Company
issued $5,000 of MTNs at 8.12%, due 2014, with no call provisions or
sinking fund requirements and $5,000 of MTNs at 8.49%, due 2024,
callable after 2004, with no sinking fund requirements. The proceeds
were used by the regulated operations to refinance $15,000 of existing
short-term debt, and the remaining $5,000 was used for working capital.
The average interest rate of the retired short-term debt was 4.85%.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994 (continued)
----------------------------------------------------
The Company's Series A MTN program for $75,000 was completed in
September, 1993 with the issue of $20,000 of MTNs at 6.85%, due 2013.
The MTNs are unsecured and have no call provisions or sinking fund
requirements. The proceeds were used by the regulated operations to
refinance $20,000 of existing short-term debt. The average interest
rate of the retired short-term debt was 3.49%.
In December, 1993 the Company entered into an agreement for a $10,000
temporary unsecured line of credit with a bank, for use by the regulated
gas operations. This line of credit expired on April 30, 1994. The
interest rate was based upon the prime or money market rate and was
determined at the time of each borrowing. There was a flat facility fee
equal to 1/8% of the commitment.
In July, 1993 the Company issued a secured note for $15,100, at 6.89%,
due 2010. The principal is payable in seventeen (17) consecutive annual
installments, beginning in July, 1994. The proceeds were used to
repurchase $13,900 of 9.25% and $226 of 14.5% existing first mortgage
debt at an aggregate premium of $723, and for working capital purposes
related to this refinancing. The premium was capitalized and will be
amortized over the life of the note, as authorized by the DPUC. The
associated income tax benefits were accounted for using the flow-through
method of accounting.
In March, 1993 the Company entered into a revolving credit agreement
with a large regional bank. The Company can borrow up to $20,000, less
any commercial paper outstanding, at a Eurodollar, Certificate of
Deposit or Base Rate of Interest plus a variable margin.
In November, 1993 the nonregulated operations entered into an agreement
for a $5,000 temporary unsecured line of credit with a bank. This
agreement is in the process of being converted to an unsecured line of
credit expiring in 1997. There is a 1/5 of 1% commitment fee on the
unused line of credit.
The nonregulated operations have maintained a $9,000 line of credit
under a revolving credit agreement with a bank. This agreement expired
on September 29, 1994, and was renegotiated as a secured line of credit
for $5,000, through October, 1997. There is a 1/5 of 1% commitment fee
on the unused line of credit.
Environmental Matters
There are three sites on which are located the Company's former gas
manufacturing facilities. The Company has not been required to
undertake any remedial activities on these sites by any state or federal
agency since 1989. The Company will continue to review the condition of
these sites. No determination has been made as to whether any
remediation will be required. In the December, 1993 rate decision the
DPUC allowed the deferral of any environmental remediation costs that
may be incurred related to manufactured gas sites for consideration for
recovery in future rate proceedings.
In 1990 the owner of property adjacent to one of these sites claimed
that contaminants similar to residues from gas manufacturing activities
were present on its property. The Company is unable to predict the
outcome of this matter.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS, SEPTEMBER 30, 1994 (concluded)
----------------------------------------------------
In May, 1994 the Company paid an immaterial amount to fulfill its
obligation as a potentially responsible party (PRP) in connection with
the Yellow River Road Superfund site in Florida. The Company is also a
PRP in connection with the Ellis Road Superfund site. Outside counsel
has advised the Company that it does not expect the Company's maximum
liability with respect to this site to exceed $10. The Ellis Road site
is somewhat related to the Yellow River Road site and involves
approximately 200 PRPs. Progress in settling this site was expected to
follow the settlement of the Yellow River Road site.
NEW ACCOUNTING STANDARDS
In November, 1992 the FASB issued Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits"
(SFAS No. 112). This statement requires employers to recognize any
obligation which exists to provide certain benefits to former or
inactive employees after employment but before retirement. The Company
is required to adopt this new standard during fiscal 1995. In the
opinion of management the impact of this new standard will not be
material.
INFLATION AND CHANGING PRICES
Inflation impacts the prices the Company must pay for operating and
maintenance expenses and construction costs. The Company's rate
schedules for natural gas and DHC sales include provisions that permit
changes in gas costs and service costs, respectively, to be passed on to
customers. The Company attempts to minimize the effects of inflation on
other costs through cost control, productivity improvements and
regulatory actions where appropriate.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Stockholders and The Board of Directors
of Connecticut Natural Gas Corporation:
We have audited the accompanying consolidated balance sheets and
consolidated statements of capitalization of Connecticut Natural Gas
Corporation (a Connecticut Corporation) and subsidiaries as of September
30, 1994 and 1993, and the related consolidated statements of income,
common stock equity and cash flows for each of the three years in the
period ended September 30, 1994. 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Connecticut Natural Gas Corporation and subsidiaries as of September 30,
1994 and 1993, and the results of their operations and their cash flows
for each of the three years in the period ended September 30, 1994, in
conformity with generally accepted accounting principles.
As explained in the notes to the financial statements, effective October
1, 1993, the Company changed its method of accounting for income taxes
and postretirement benefits other than pensions.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the
schedule index are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the
auditing procedures applied in the audits of the basic financial
statements and, in our opinion, fairly state 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
-------------------------------
(ARTHUR ANDERSEN LLP)
Hartford, Connecticut
November 21, 1994
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
September 30, 1994 and 1993
(Thousands of Dollars)
Assets
1994 1993
---- ----
<S> <C> <C>
Plant and Equipment:
Plant in service $ 428,366 $ 402,175
Construction work in progress 2,762 1,355
--------- ---------
431,128 403,530
Less-Allowance for depreciation 119,392 106,919
--------- ---------
311,736 296,611
--------- ---------
Investments, at equity 5,147 4,874
--------- ---------
Current Assets:
Cash and cash equivalents 1,126 1,546
Accounts receivable (less allowance for
doubtful accounts of $4,017 in 1994
and $3,068 in 1993) 24,376 22,911
Accrued utility revenue 3,714 4,632
Inventories 18,326 20,413
Prepaid expenses 10,107 3,379
Recoverable purchased gas costs 3,769 -
--------- ---------
Total Current Assets 61,418 52,881
--------- ---------
Other Assets:
Unrecovered future taxes 46,759 51,023
Recoverable transition costs 6,925 15,000
Other assets 26,569 24,196
--------- ---------
Total Other Assets 80,253 90,219
--------- ---------
$ 458,554 $ 444,585
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets (Concluded)
September 30, 1994 and 1993
(Thousands of Dollars)
Capitalization and Liabilities
1994 1993
---- ----
<S> <C> <C>
Capitalization (see accompanying statements):
Common stock equity $ 139,481 $ 136,322
Preferred stock, not subject to
mandatory redemption 909 944
Long-term debt 154,193 137,984
--------- ---------
294,583 275,250
--------- ---------
Notes Payable Under Revolving Credit Agreements - 4,500
--------- ---------
Current Liabilities:
Current portion of long-term debt 3,791 4,653
Notes payable and commercial paper 18,500 10,000
Accounts payable and accrued expenses 37,906 42,084
Refundable purchased gas costs - 3,758
Accrued taxes 3,543 1,105
Accrued interest 4,236 3,423
--------- ---------
Total Current Liabilities 67,976 65,023
--------- ---------
Deferred Credits:
Deferred income taxes 36,916 27,450
Unfunded deferred income taxes 46,759 51,023
Investment tax credits 3,644 3,864
Refundable taxes 3,275 4,024
Accrued transition costs 1,925 7,678
Other 3,476 5,773
--------- ---------
Total Deferred Credits 95,995 99,812
--------- ---------
Commitments and Contingencies
--------- ---------
$ 458,554 $ 444,585
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Income
For the Years Ended September 30, 1994, 1993 and 1992
(Thousands of Dollars Except for Per Share Data)
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Operating Revenues $ 290,662 $ 265,337 $ 236,189
Less: Cost of Energy 155,547 145,904 118,822
State Gross Revenues Tax 11,863 11,095 10,421
--------- --------- ---------
Operating Margin 123,252 108,338 106,946
--------- --------- ---------
Operating Expenses:
Operations 48,361 39,709 39,947
Maintenance 7,683 7,469 7,864
Depreciation and amortization 15,507 12,649 11,333
Income taxes 13,353 13,438 12,334
Local property taxes 5,259 5,090 5,585
Other taxes 2,177 1,797 1,984
--------- --------- ---------
92,340 80,152 79,047
--------- --------- ---------
Operating Income 30,912 28,186 27,899
--------- --------- ---------
Other Income/(Deductions),
net of income taxes:
Allowance for equity funds used
during construction 21 607 19
Equity in partnership earnings 868 970 936
Other income/(deductions) (1,007) (614) 524
Income taxes (113) (552) (374)
--------- --------- ---------
(231) 411 1,105
--------- --------- ---------
Interest and Debt Expense, net:
Interest on long-term debt 10,997 9,985 11,485
Other interest 1,573 1,782 1,908
Allowance for borrowed funds used
during construction (14) (404) (12)
Amortization of debt expense 422 379 358
--------- --------- ---------
12,978 11,742 13,739
--------- --------- ---------
Net Income 17,703 16,855 15,265
Less-Dividends on Preferred Stock 66 67 68
--------- --------- ---------
Net Income Applicable to Common Stock $ 17,637 $ 16,788 $ 15,197
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Income (Concluded)
For the Years Ended September 30, 1994, 1993 and 1992
(Thousands of Dollars Except for Per Share Data)
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Net Income Applicable to Common Stock $ 17,637 $ 16,788 $ 15,197
========= ========= =========
Average Common Shares Outstanding
During the Period 9,539,695 9,527,772 8,704,897
========= ========= =========
Income Per Average Share of
Common Stock $ 1.85 $ 1.76 $ 1.75
========= ========= =========
Dividend Per Share of Common Stock $ 1.48 $ 1.46 $ 1.44
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
For the Years Ended September 30, 1994, 1993 and 1992
(Thousands of Dollars)
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Cash Flows from Operations: $ 24,929 $ 20,729 $ 42,235
-------- -------- --------
Cash Flows from Investing Activities:
Capital expenditures (27,859) (25,531) (26,145)
Other investing activities (1,890) (9,186) (11,444)
-------- -------- --------
Net cash used in investing activities (29,749) (34,717) (37,589)
-------- -------- --------
Cash Flows from Financing Activities:
Dividends paid (14,184) (13,999) (12,609)
Issuance of common stock - 16,913 3,953
Other stock activity, net (763) (16) (12)
Issuance of long-term debt 20,000 35,100 55,000
Principal retired on long-term debt (4,653) (19,354) (44,515)
Short-term debt 4,000 (3,450) (7,350)
-------- -------- --------
Net cash provided (used) by
financing activities 4,400 15,194 (5,533)
-------- -------- --------
Increase (Decrease) in Cash and
Cash Equivalents (420) 1,206 (887)
Cash and Cash Equivalents at
Beginning of Year 1,546 340 1,227
-------- -------- --------
Cash and Cash Equivalents at
End of Year $ 1,126 $ 1,546 $ 340
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows (Concluded)
For the Years Ended September 30, 1994, 1993 and 1992
(Thousands of Dollars)
1994 1993 1992
---- ---- ----
<C> <C> <C> <C>
Schedule Reconciling Earnings to
Cash Flows from Continuing Operations:
Income $ 17,703 $ 16,855 $ 15,265
-------- -------- --------
Adjustments to reconcile income
to net cash:
Depreciation and amortization 16,296 13,028 11,691
Provision for uncollectible
accounts 6,582 3,469 3,247
Deferred income taxes, net 8,538 915 5,169
Undistributed affiliate earnings (868) (970) (936)
Cash distributions received from
investments 240 1,154 -
Change in assets and liabilities:
Accounts receivable (9,047) (4,340) (8,190)
Accrued utility revenue 918 (339) 72
Inventories 2,087 (7,073) (1,489)
Unrecovered/(refundable)
purchased gas costs (7,527) (8,564) 11,524
Prepaid expenses (6,728) (1,021) 1,122
Accounts payable and accrued expenses (927) 10,011 4,334
Other assets/liabilities (2,338) (2,396) 426
-------- -------- --------
Total adjustments 7,226 3,874 26,970
-------- -------- --------
Cash flows from
operations $ 24,929 $ 20,729 $ 42,235
======== ======== ========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Year for:
Interest $ 10,138 $ 8,794 $ 9,379
======== ======== ========
Income taxes $ 9,972 $ 9,837 $ 8,337
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Capitalization
September 30, 1994 and 1993
(Thousands of Dollars)
<S> <C> <C>
1994 1993
Common Stock Equity: ---- ----
Common stock, $3.125 par value, authorized
20,000,000 shares, issued 9,542,296 shares
in 1994 and 1993, outstanding 9,539,079
shares in 1994 and 9,542,296 shares in 1993 $ 29,820 $ 29,820
Capital in excess of par value 66,657 66,915
Retained earnings 43,264 39,744
-------- --------
139,741 136,479
-------- --------
Less: Unearned compensation - restricted
stock awards (157) (157)
Treasury stock, 3,217 shares in 1994 (103) -
-------- --------
139,481 136,322
-------- --------
Preferred Stock, Not Subject to Mandatory
Redemption:
$3.125 par value, 8%, noncallable, authorized
916,952 shares in 1994 and 927,687 shares
in 1993, issued and outstanding 141,480 shares
in 1994 and 152,215 shares in 1993, entitled to
preference on liquidation at $6.25 per share 442 476
$100 par value, callable, authorized 9,999,635
shares in 1994 and 9,999,644 shares in 1993
6% Series B, issued and outstanding 4,671
shares in 1994 and 4,680 shares in 1993 467 468
-------- --------
909 944
-------- --------
Long-Term Debt:
First Mortgage Bonds -
8.8%, due 2001 14,000 16,000
9.16%, due 2004 18,000 18,000
Industrial Revenue Demand Bonds -
1986 and 1988 series,
weighted average interest rate of
2.677% in 1994 and 3.18% in 1993, due 2006 13,400 14,000
First Mortgage Notes -
10.5%, due 2010 1,058 1,084
Secured Note, 6.89%, due 2010 14,495 14,997
Secured Term Note, 8.3%, due 1994 - 900
Secured Term Note, 10.72%, due 1997 2,031 2,656
Unsecured Medium Term Notes -
6.48%, due 1997 10,000 10,000
7.61% to 7.82%, due 2002 to 2004 20,000 10,000
6.85% to 8.12%, due 2012 to 2014 30,000 25,000
8.96% to 9.1%, due 2016 to 2017 30,000 30,000
8.49%, due 2024 5,000 -
Less - Current Maturities (3,791) (4,653)
-------- --------
154,193 137,984
-------- --------
$294,583 $275,250
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Common Stock Equity
For the Years Ended September 30, 1994, 1993 and 1992
(Thousands of Dollars Except for Share Data)
Common Stock
------------------- Capital in
Number of Par Excess of Treasury Unearned Retained
Shares Value Par Value Stock Compensation Earnings
--------- ------- ---------- -------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30,
1991 8,608,991 $26,906 $49,128 $ (16) $ (321) $34,232
Issuance through dividend
reinvestment and employee
benefit plans 182,315 570 3,294 - - -
Net income after preferred
dividends - - - - - 15,197
Issuance of treasury stock 750 - - 14 - -
Amortization and
adjustment of restricted
shares - - 75 - 13 -
Dividends - - - - - (12,541)
--------- ------- ------- ------ ------ --------
Balance at September 30,
1992 8,792,056 27,476 52,497 (2) (308) 36,888
Public offering 750,000 2,344 14,217 - - -
Issuance through dividend
reinvestment and employee
benefit plans 136 - 4 - - -
Net income after preferred
dividends - - - - - 16,788
Issuance of treasury stock 104 - 1 2 - -
Amortization and
adjustment of restricted
shares - - 196 - 151 -
Dividends - - - - - (13,932)
--------- ------- ------- ------ ------ --------
Balance at September 30,
1993 9,542,296 29,820 66,915 - (157) 39,744
Net income after preferred
dividends - - - - - 17,637
Purchase of restricted
stock awards - - - - (728) -
Amortization and
adjustment of restricted
shares (3,217) - (258) (103) 728 -
Dividends - - - - - (14,117)
--------- ------- ------- ------ ------ --------
Balance at September 30,
1994 9,539,079 $29,820 $66,657 $ (103) $ (157) $43,264
========= ======= ======= ====== ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(In thousands of dollars, except per share amounts)
September 30, 1994
1. Summary of Significant Accounting Policies:
Principles of consolidation-
The consolidated financial statements represent the Connecticut Natural Gas
Corporation (the Company), including its wholly-owned nonregulated
subsidiaries: Energy Networks, Inc. (ENI), ENI Transmission Company (ENIT)
and CNG Realty Corp. (CNGR). All significant intercompany transactions and
accounts have been eliminated in consolidation. Certain prior year amounts
have been reclassified to conform with current year classifications.
Revenues-
Revenues are recorded based on the amount of product delivered to customers
through the end of the accounting period. Regulated gas operations
revenues are based on rates authorized by the Connecticut Department of
Public Utility Control (DPUC).
The Company is required to provide service (and grant credit) to
residential customers within its defined service territory and is precluded
by the DPUC from discontinuing service to hardship customers during a
winter moratorium period (November - April). The Company reviews new
customers' credit worthiness and may request security deposits from
nonhardship customers based on that review.
In compliance with Connecticut law, the Company has a receivable
forgiveness program for qualified hardship natural gas customers. The
total payments made by these customers and energy assistance funds received
on their behalf are matched and forgiven by the Company. Amounts forgiven
are deferred and recovered from ratepayers in a future period in accordance
with DPUC treatment as outlined in the Company's December, 1993 rate
decision (see Note 2). This decision allowed annual recovery of $1,770 for
hardship forgiveness amounts and deferral for future recovery of certain
unrecovered hardship receivable balances. At September 30, 1994 and 1993
the deferred balances pending future amortization and recovery from
ratepayers were $5,700 and $3,500, respectively.
Purchased gas costs-
The Company passes on to its firm customers increases or decreases in gas
costs from those reflected in its tariff charges. In accordance with this
procedure, any current under or over-recoveries of gas costs are charged or
credited to cost of gas and included in current assets or liabilities.
Such amounts are collected or refunded in subsequent periods under
purchased gas adjustment provisions.
Allowance for funds used during construction-
In the ordinary course of business an allowance for funds used during
construction (AFUDC) is calculated on the construction of physical assets
(such as gas mains and services) which are constructed over a long period
of time. AFUDC is computed at the weighted average cost of capital allowed
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
by the DPUC for the regulated operations and at current borrowing rates for
the nonregulated operations. The AFUDC included in the statements of
income in fiscal 1993 is primarily related to the Company's new customer
information and distribution/construction information system which went
into operation in 1993.
Plant-
Plant is stated at original cost which includes indirect costs consisting
of payroll taxes, pension and other employee benefit costs, general and
administrative costs, and, for certain long-term construction projects,
AFUDC.
Substantially all of the plant of the regulated operations is subject to
the lien of the Indenture of Mortgage and Deed of Trust securing its First
Mortgage Bonds. Most properties of the nonregulated operations are also
subject to the liens associated with their term loans or letters of credit
(see Notes 7 and 8).
Depreciation-
The Company and its subsidiaries, except CNGR, provide depreciation on a
straight-line basis. The rates applied by the regulated operations are
approved by the DPUC. The current allowed rates were increased in the
December, 1993 rate decision (see Note 2) and include a cost of removal and
salvage factor. Such rates were equivalent to a composite rate of 4.2% in
1994, 3.7% in 1993 and 3.6% in 1992, excluding the operating and
administrative center. The operating and administrative center is owned by
CNGR and is being depreciated under a DPUC approved sinking fund method
through 2010.
The depreciation rates for nonregulated depreciable plant were 3.3% in 1994
and 1993 and 3.7% in 1992.
Cash and cash equivalents-
Cash in excess of daily requirements is invested in short-term interest
bearing securities with maturities of three months or less.
Investments-
Investments at September 30, 1994 include $4,353 for ENIT's 2.4% ownership
interest in the Iroquois Gas Transmission System Partnership (Iroquois).
Iroquois operates a natural gas pipeline which transports Canadian natural
gas into New York State, Massachusetts and Connecticut. The Company also
has a $794 (50% ownership) investment in the Downtown Cogeneration
Associates Limited Partnership (DCA) which owns and operates a cogeneration
facility in Hartford, CT. These investments are being accounted for on the
equity method of accounting.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
Inventories-
Gas inventories are stated at their weighted average cost. Other
inventories are stated at the lower of cost or market using the first-in,
first-out or average cost method.
2. Rate Proceedings
In December, 1993 the DPUC issued a decision which allowed the Company to
increase its rates $7,600 or 2.8%. This decision reduced the Company's
allowed rate of return on equity from 12.9% to 11.2% and provided for
adequate recovery of all significant items deferred on the balance sheet
pending recovery at September 30, 1993. New rates became effective for
service rendered on or after December 16, 1993.
3. Pension and Employee Benefit Plans:
The Company has noncontributory retirement plans (Plans) covering
substantially all employees. Pension benefits are based on years of
credited service and employees' average annual earnings, as defined in the
Plans. The Company's funding policy is to contribute, annually, an amount
at least equal to that which will satisfy the requirements of the Employee
Retirement Income Security Act.
The assumptions used in determining the pension obligations were:
<TABLE>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Weighted Average Discount Rate ......... 8.25% 8.25% 8.25%
Rate of Increase in Future Compensation
Levels .............................. 5.00% 5.50% 5.50%
Expected Long-term Rate of Return on
Assets .............................. 8.95% 8.95% 8.95%
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
The following table represents the Plans' funded status and amounts
included in the balance sheets at September 30, 1994 and 1993:
<TABLE>
1994 1993
---- ----
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested
benefits of $57,164 in 1994 and of $52,120 in
1993 $ 58,494 $ 53,463
======== ========
Projected benefit obligation for service rendered
to date $ 72,752 $ 69,967
Assets at fair value, primarily publicly traded stocks
and bonds 80,518 79,541
-------- --------
Value of assets over the projected benefit obligation
7,766 9,574
Unrecognized net gain from past experience different
from that assumed (6,929) (8,704)
Prior service cost not yet recognized in net periodic
pension cost 1,110 1,224
Unrecognized net asset at January 1, 1986 being
recognized over 15 years (2,014) (2,439)
-------- --------
Accrued pension liability $ (67) $ (345)
======== ========
</TABLE>
Net pension costs included in the statements of income for the years ending
September 30, include the following components:
<TABLE>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Service cost $ 2,021 $ 2,009 $ 1,880
Interest cost 5,469 5,068 4,704
Return on plan assets (2,597) (6,410) (6,126)
Net amortization and deferral (4,784) (327) (400)
-------- -------- --------
Net cost $ 109 $ 340 $ 58
======== ======== ========
</TABLE>
The Company also provides its officers with a supplemental retirement plan.
The actuarially determined accumulated benefit obligation was approximately
$3,400 at both September 30, 1994 and 1993. The cost of this plan is being
accrued over the service lives of the individual officers. Net expense
related to this plan was $505 for 1994, $306 for 1993 and $282 for 1992.
The Company contributes to a trust to fund the liability for supplemental
retirement plan benefits. The trust balance included in other assets at
September 30, 1994 and 1993 was $2,073 and $1,415, respectively.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
In thousands of dollars, except per share amounts)
In August, 1994 the Company announced an early retirement program for
nonunion employees which resulted in the reduction of approximately 3% of
the total workforce through voluntary early retirement. The cost of this
program of $1,341 included pension enhancements and other benefits and was
fully recognized by the Company in the fourth quarter of fiscal 1994.
In November, 1992 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 112, "Employers' Accounting
for Postemployment Benefits" (SFAS No. 112). This statement requires
employers to record any obligation which exists to provide certain benefits
to former or inactive employees after employment but before retirement.
The Company is required to adopt these new standards during fiscal 1995.
In the opinion of management, the impact of SFAS No. 112 will not be
material.
4. Postretirement Benefits Other Than Pensions:
The Company provides certain health care and life insurance benefits
through a benefit plan to retired employees. These benefits are available
for employees leaving the Company who are otherwise eligible to retire and
have met specific service requirements. Through September 30, 1993 the
Company recognized the cost of these benefits as they were paid (pay-as-
you-go). In December, 1990 the FASB issued Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (SFAS No. 106). This new standard requires
that the expected cost of postretirement benefits, primarily health care
and life insurance benefits, must be charged to expense during the years
that eligible employees render service.
Effective October 1, 1993 the Company adopted SFAS No. 106 on a prospective
basis and began amortizing its approximately $22,000 accumulated benefit
obligation over a twenty-year period. Total health care and life insurance
costs under SFAS No. 106 were $2,931 in 1994 compared to costs of $1,575 in
1993 and $1,715 in 1992 on a pay-as-you-go basis. In its December, 1993
rate decision (see Note 2) the DPUC approved a five-year phase-in of SFAS
No. 106 expenses with an allowed annual recovery of $1,946 and deferral of
each year's additional SFAS No. 106 expenses for future recovery through
amortization over a five-year period. At September 30, 1994 $985 has been
deferred pending future amortization and recovery through 1999.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
In thousands of dollars, except per share amounts)
The following table represents the plan's funded status reconciled to the
consolidated balance sheet at September 30, 1994:
<TABLE>
1994
<S> <C>
----
Accumulated postretirement benefit obligation of:
Retirees $ 3,186
Fully eligible active employees 5,332
Active employees not eligible to retire 13,241
--------
Total accumulated postretirement benefit obligation
21,759
Less: Market value of plan assets 1,803
--------
Accumulated postretirement benefit obligation in
excess of plan assets 19,956
Unrecognized transition amount (18,635)
Unrecognized net gain 254
--------
Accrued postretirement benefit liability $ 1,575
========
</TABLE>
The components of SFAS No. 106 health care and life insurance costs for the
fiscal year ended September 30, 1994 are:
<TABLE>
1994
----
<S> <C> <C>
Service cost $ 367
Interest cost 1,664
Return on plan assets (81)
Net amortization 981
--------
Net health care and life insurance costs
$ 2,931
========
</TABLE>
For measurement purposes annual rates of increase of 16% and 12% are
assumed for nonmedicare and medicare eligible retirees, respectively, in
the per capita cost of covered health care benefits. The rate was assumed
to decrease to 6% for both groups in 2003. The effect of increasing the
assumed health care cost trend rates by one percentage point in each year
would increase the accumulated postretirement benefit obligation as of
September 30, 1994 by $964 and the aggregate of the service and interest
cost for the year then ended by $130. The weighted average discount rate
used in determining the accumulated post retirement benefit obligation was
8.25% and was determined by analyzing the interest rates, as of September
30, 1994, of long-term, high quality corporate debt securities having a
duration comparable to the plan.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
The Company has established Employee Benefit Trusts (VEBA) to pay current
retiree health care and life insurance benefits and to fund the Company's
retirement benefit liability. In 1994 the Company funded $1,350 for SFAS
No. 106 costs. The VEBA balances at September 30, 1994 and 1993 were
$1,803 and $1,507, respectively and are primarily invested in life
insurance policies and equity products.
5. Income Taxes:
The following is an analysis of the provision for federal and state income
taxes:
<TABLE>
<CAPTION>
September 30,
------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Charged to operations:
Federal:
Current $ 3,822 $10,877 $ 5,247
Deferred 6,098 (1,024) 3,429
------- ------- -------
9,920 9,853 8,676
------- ------- -------
State:
Current 1,424 4,325 2,218
Deferred 2,230 (519) 1,661
------- ------- -------
3,654 3,806 3,879
------- ------- -------
Deferred investment tax credits (221) (221) (221)
------- ------- -------
Total charged to operations 13,353 13,438 12,334
------- ------- -------
Charged to other income/(deductions):
Federal:
Current 198 356 255
Deferred (118) 47 -
------- ------- -------
80 403 255
------- ------- -------
State:
Current 77 133 119
Deferred (44) 16 -
------- ------- -------
33 149 119
------- ------- -------
Total charged to other income/(deductions)
113 552 374
------- ------- -------
Total $13,466 $13,990 $12,708
======= ======= =======
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
Depreciation for federal income tax purposes is computed using accelerated
cost recovery methods and different lives as permitted under the Internal
Revenue Code (Code). The DPUC has allowed the Company to normalize taxes
on accelerated depreciation, as required under the Code, for depreciable
property additions made by the regulated operations subsequent to 1980.
For certain other temporary differences, tax reductions are accounted for
as a reduction of federal income tax expense in accordance with the flow-
through method of accounting as required by the DPUC. Under the
established ratemaking practices followed by the DPUC, deferred income
taxes not provided for previously are collected in customer rates when such
taxes become payable.
Deferred income taxes are primarily a result of normalized plant items and
temporary differences related to gas costs. For the regulated operations,
deferred investment tax credits are amortized to income over the average
life of the related property. The nonregulated operations provide deferred
taxes on all temporary differences, including depreciation.
Effective October 1, 1993 the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109),
which supersedes Statement of Financial Accounting Standards No. 96,
adopted by the Company in 1988. In accordance with SFAS No. 109, the
regulated operations reflect refundable taxes to ratepayers for reductions
in the statutory federal income tax rate on normalized plant related
temporary differences. The regulated operations also recognize the
cumulative deferred income taxes on temporary differences which were
previously flowed through to ratepayers. At September 30, 1994 and 1993
the Company had $46,759 and $51,023, respectively, on the balance sheet as
an unfunded deferred income tax liability, with a corresponding unrecovered
receivable, for temporary differences previously flowed through to
ratepayers. These amounts have been adjusted for the tax effect of future
revenue requirements and will be amortized over the life of the related
depreciable assets concurrent with their recovery in rates.
In October, 1994 the Company received formal approval from the Internal
Revenue Service (IRS) to deduct for tax purposes current as well as certain
prior incurred cost of removal expenses associated with retirements of
plant and equipment. During fiscal 1994 the Company recognized current
period cost of removal expenses which reduced the 1994 federal and state
income tax provision by $880 or $.09 per share. The Company anticipates
recording the tax benefit of additional cost of removal deductions related
to the IRS approval during fiscal 1995.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
A reconciliation of the consolidated federal income tax expense, at the
statutory tax rate of 35% for 1994, blended tax rate of 34.75% for 1993 and
at the tax rate of 34% for 1992, to the consolidated federal income tax
expense is as follows:
<TABLE>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Consolidated statutory federal income tax expense
$ 9,619 $ 9,309 $ 8,152
Change in consolidated federal income tax expense
resulting from:
Excess book over tax depreciation 1,797 1,590 1,338
Investment tax credits (221) (221) (221)
Bad debts 131 (315) (39)
Contributions in aid of construction 66 64 60
Premiums on reacquired debt, net 50 (209) (636)
1993 tax act impact - 244 -
Tax reserves 105 (618) -
Computer software (899) - -
Cost of removal (744) - -
All other items (125) 191 56
------- ------- -------
Consolidated federal income tax expense $ 9,779 $10,035 $ 8,710
======= ======= =======
</TABLE>
IRS audits of the Company's federal income tax returns for 1986, 1987 and
1988 were settled during fiscal 1994. The outcome did not have a material
impact on the Company's financial condition or results of operations.
6. Capital Stock:
Common stock-
In October, 1994 and 1992 the Company sold 392,200 and 750,000 shares of
its $3.125 Par Common Stock at $22.75 and $23.125 per share, respectively.
The Company received net proceeds of approximately $8,500 in 1994 and
$16,600 in 1992 which were used by the regulated operations to retire
existing short-term borrowings and for working capital purposes. The
October, 1994 transaction closed subsequent to year-end and will be
recorded for financial statement purposes in fiscal 1995.
Dividend reinvestment plan and employee savings plans-
The Company maintains a Dividend Reinvestment Plan (DRIP) which provides
the Company's holders of common stock and preferred stock the opportunity
to receive shares of the Company's common stock in lieu of some or all of
their cash dividends. In addition, the Company has Employee Savings Plans
(ESP), which are designed to encourage and assist employees to save and
invest for long-term financial security. All amounts paid into the ESP by
the Company are used to purchase the Company's common stock. At September
30, 1994 there were 1,068,355 shares of the Company's common stock reserved
for issuance under the DRIP and ESP. In the fiscal years ended September
30, 1994, 1993 and 1992 the Company's contribution to the ESP on behalf of
employees was $956, $890 and $825, respectively.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
Executive restricted stock plan-
In 1990 the Company adopted a restricted stock performance plan. The plan
terminates in the year 2000 and is authorized to issue up to 200,000
shares. On October 1, 1990 and October 1, 1993 key employees were granted
22,146 and 24,040 restricted shares of the Company's common stock under
this plan. Restrictions lapse and the shares vest over a three to five
year period beginning October 1, 1990, and 1993, respectively as certain
performance goals are achieved. In October, 1994 and 1993 5,773 and 7,382,
respectively, of the restricted shares became fully vested and were awarded
to qualifying employees.
The market value of the shares awarded under this plan has been recorded as
unearned compensation and is a separate component of common equity. The
unearned compensation is being charged to expense over the vesting period
based on achievement of the performance criteria. Compensation charged to
expense was $166 in 1994, $464 in 1993 and $158 in 1992.
Preferred stock-
The Company is prohibited from, among other things, paying dividends on
common stock and purchasing, redeeming or retiring common stock, if
dividends on preferred stock are in arrears.
The following table sets forth the changes in the number of shares
outstanding for each class of the Company's preferred stock not subject to
mandatory redemption, for the years ended September 30, 1994, 1993 and
1992, respectively:
<TABLE>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
$3.125 par value (10,735) (6,052) (2,804)
======= ======= =======
$100 par value (9) - (158)
======= ======= =======
</TABLE>
7. Long-term Debt:
The Company has various issues of first mortgage bonds and first mortgage
notes outstanding with maturities from 2001 to 2010. Under the most
restrictive terms of the indenture securing the bonds, retained earnings of
$41,041 are available for dividends at September 30, 1994. Sinking fund
requirements for outstanding bonds were paid in cash.
In July, 1993 the Company issued a secured note for $15,100, at 6.89%, due
2010. The principal is payable in seventeen (17) consecutive annual
installments, beginning in July, 1994. The proceeds were used to
repurchase $13,900 of 9.25% and $226 of 14.5% existing first mortgage debt
at an aggregate premium of $723, and for working capital purposes. The
premium has been capitalized and is being amortized over the life of the
note, as authorized by the DPUC. The associated income tax benefits were
accounted for using the flow-through method of accounting.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
In September, 1993 the Company issued $20,000 of Medium Term Notes (MTN) at
6.85%, due 2013. The MTNs are unsecured and have no call provisions or
sinking fund requirements. The September, 1993 proceeds were used by the
regulated operations to refinance $20,000 of existing short-term debt.
This issue completed the $75,000 Series A MTN program approved by the DPUC
in 1992.
In June, 1994, with the approval of the DPUC, the Company established a
Series B MTN program which permits the issue of up to $75,000 of unsecured
MTNs over a four-year period at maturities not exceeding thirty years,
under varying terms. Under this program the Company has issued the
following MTNs in fiscal 1994 with no sinking fund requirements:
<TABLE>
Date Face Value Interest Rate Maturity Call Provision
--------------- ---------- ------------- ----------- ------------------
<S> <C> <C> <C> <C>
July, 1994 $10,000 7.82% 2004 None
August, 1994 $ 5,000 8.12% 2014 None
August, 1994 $ 5,000 8.49% 2024 Callable in 2004
</TABLE>
The proceeds were used by the regulated operations to refinance $15,000 of
existing short-term debt and for general working capital purposes. The
average interest rate of the retired short-term debt was 4.85%.
Long-term debt amounts which are due during each of the five years ending
September 30 through 1999, are as follows:
<TABLE>
<CAPTION>
Sinking Fund Requirements and Maturities
----------------------------------------
Year Total
---- -------
<S> <C>
1995 $ 3,791
1996 3,930
1997 13,505
1998 5,993
1999 6,142
-------
$33,361
=======
</TABLE>
8. Short-term Borrowings and Lines of Credit:
The Company maintains a line of credit under a revolving credit agreement
with a large regional bank. Under this agreement the Company can borrow up
to $20,000, less any commercial paper outstanding, at a Eurodollar,
Certificate of Deposit or Base Rate of interest plus a variable margin.
The initial expiration date is March 30, 1996, with two optional one-year
extensions. There is also a .1% facility fee and a .075% commitment fee on
the unused portion of the agreement. At September 30, 1994, there were no
borrowings outstanding under this agreement. At September 30, 1994, there
were $11,000 of commercial paper outstanding.
The Company also maintains a one-year line of credit with a bank for
$9,000. The Company pays a 3/8 of 1% commitment fee on the unused portion.
The interest rate varies according to market conditions. The terms of this
line of credit require no maintenance or compensating balance. This line
of credit expires on February 20, 1995. At September 30, 1994, there were
$3,800 of borrowings outstanding under this line of credit.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
In December, 1993 the Company entered into an agreement for a $10,000
temporary unsecured line of credit with a bank for use by the regulated gas
operations. This line of credit expired on April 30, 1994.
In November, 1993 ENI entered into an agreement for a $5,000 temporary
unsecured line of credit with a bank. The interest rate is based on
current money market rates determined at the time of each borrowing. This
agreement is in the process of being converted to a three-year unsecured
line of credit expiring in 1997, with a 1/5 of 1% commitment fee on the
unused line. The interest rate will be based upon the certificate of
deposit, libor or money market rate plus a variable margin and is
determined at the time of each borrowing. At September 30, 1994 there were
no borrowings outstanding under this arrangement.
The Hartford Steam Company (HSC), a wholly-owned subsidiary of ENI, has
maintained a line of credit under a revolving credit agreement with a bank.
Under the terms of this agreement HSC could borrow up to $9,000 at
prime, bank or libor rate plus a fraction of a percent with no compensating
balance requirements, through September 29, 1994. HSC has obtained a
commitment for a replacement agreement for a $5,000 secured line of credit,
through October, 1997, with a 1/5 of 1% commitment fee on the unused
portion of the available credit line. The interest rate is based upon the
certificate of deposit, libor or money market rate plus a variable margin,
determined at the time of each borrowing. At September 30, 1994, there
were $3,700 of borrowings outstanding under this arrangement.
Additional information relating to lines of credit and commercial paper for
each of the three fiscal years ended September 30, is set forth below:
<TABLE>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Balance at end of year
Borrowings $18,500 $14,500 $17,950
Unused lines of credit 20,500 23,500 20,050
------- ------- -------
Total $39,000 $38,000 $38,000
======= ======= =======
Maximum borrowings outstanding
during the year $42,900 $29,800 $28,900
Average outstanding borrowings
during the year $21,673 $15,916 $13,184
Interest rates
End of year 4.82%-6.25% 3.3%-6.25% 3.62%-4.5%
Average for year 3.96% 3.83% 3.94%
</TABLE>
9. Fair Value of Financial Instruments:
The fair value amounts disclosed below have been reported to meet the
disclosure requirements of Statement of Financial Accounting Standards No.
107, "Disclosures About Fair Values of Financial Instruments" and are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange.
The carrying amount of cash and cash equivalents; accounts receivable;
notes payable under revolving credit agreements; notes payable and
commercial paper; accounts payable and accrued expenses; and unrecovered or
refundable purchased gas costs approximates fair value.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
At September 30, 1994 and 1993 the fair value of the Company's long-term
debt, including current maturities, is $158,962 and $160,567, respectively.
The fair value at year-end 1994 and 1993, of $144,583 and $128,637 of
fixed-rate long-term debt, based on the market value of similar
instruments, is estimated at $145,562 in 1994 and $146,567 in 1993. The
carrying amount of the variable-rate long-term debt of $13,400 in 1994 and
$14,000 in 1993 approximates fair value.
The Company has guaranteed 2.4% of a letter of credit for Iroquois,
equivalent to approximately $958 at September 30, 1994 and 1993, which
approximates fair value. The letter of credit is used to satisfy
Iroquois's cash retention requirements with respect to agreements between
Iroquois and its lenders.
10. Commitments and Contingencies:
Construction expenditures-
Construction expenditures for the fiscal year ending September 30, 1995 are
estimated at $27,405 for the regulated operations and $2,868 for the
nonregulated operations.
Gas supply-
The Company is party to short-term and long-term contracts for the purchase
of natural gas and transportation and storage services.
FERC Order No. 636 transition costs-
The Company began to be billed for transition costs associated with Federal
Energy Regulatory Commission (FERC) Order No. 636 from its pipeline
suppliers in June, 1993. These costs are expected to be billed to the
Company over three years. Through September 30, 1994 the Company has paid
and recovered from ratepayers $8,075 of an estimated $15,000 of transition
costs.
In July, 1994 the DPUC issued a decision allowing companies under its
jurisdiction to recover these costs from amounts which would otherwise have
been refunded to customers and the opportunity, if necessary, for
surcharges added to customers' future bills.
In the opinion of management the Company has available a sufficient number
of recovery mechanisms to provide for the full recovery of all transition
costs. For this reason it is the opinion of management that these
transition costs will not have a material impact on the Company's financial
condition or results of operations. The unpaid estimated liability of
$6,925 at September 30, 1994 is included in Accounts Payable and Accrued
Expenses and Accrued Transition Costs.
Steam supply-
The nonregulated operations are party to three long-term contracts for the
purchase of steam.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
The nonregulated operations' primary steam supplier has indicated a desire
to negotiate a termination of its long-term steam supply contract with HSC.
Accordingly, management has entered into discussions with this supplier
and, at a minimum, will seek reimbursement of all amounts recorded from the
supplier and any additional amounts that may be owing as a result of the
termination of the steam supply contract and related agreements. The
nonregulated operations have also developed a plan for alternative steam
supply sources. Management believes that adequate alternate sources of
steam are available and that any change in its source of steam supply will
not have any material impact on customers' supply or service. Furthermore,
management does not believe that the resolution of this matter will have
any material adverse effect on the Company's financial condition or results
of operations. However, the ultimate impact will depend upon a number of
factors including the final terms of any settlement agreed to with the
supplier and the terms of any new steam supply.
Letter of credit-
As a condition of its ownership in the DCA, ENI is contingently liable
under a letter of credit amounting to $2,000.
Environmental matters-
There are three sites on which are located the Company's former gas
manufacturing facilities. The Company has not been required to undertake
any action on these sites by any state or federal agency since 1989. The
Company will continue to review the condition of these sites. No
determination has been made as to whether any remediation will be required.
In the December, 1993 rate decision the DPUC allowed the deferral of any
potential environmental remediation costs that may be incurred related to
manufactured gas sites for consideration for recovery in future rate
proceedings.
In 1990 the owner of property adjacent to one of these sites claimed that
contaminants similar to residues from gas manufacturing activities were
present on its property. The Company is unable to predict the outcome of
this matter.
Management does not anticipate any material future cash requirements
relating to these environmental issues. As a result, the above matters are
not expected to have a material adverse effect on the Company's financial
condition or results of operations. If circumstances changed and
environmental expenditures were required, the Company would seek
appropriate regulatory recovery of any amounts expended to return these
sites to their original condition.
The nonregulated operations are subject to compliance with Clean Air Act
requirements. They expect to incur approximately $2,000 of capital
expenditures over the next five fiscal years to satisfy these requirements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
Legal proceedings-
Two civil and criminal investigations related to environmental issues,
brought against Iroquois in 1992, are still pending. Although the Company
cannot predict the outcome of these proceedings, the Company does not
believe the ultimate resolution of these matters will have a material
adverse effect on the Company's financial condition or results of
operations. Iroquois is a partnership of which the Company is a 2.4% owner
(see Note 1).
The Company is not a party to any other litigation other than ordinary
routine litigation incident to the operations of the Company or its
subsidiaries. In the opinion of management, the resolution of such
litigation will not have a material adverse effect on the Company's
financial condition or results of operations.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands of dollars, except per share amounts)
11. Segment Information:
The Company operates in two segments: gas related activities and
nonregulated activities. Gas related activities consist primarily of
natural gas distribution to residential, commercial and industrial
customers. Nonregulated activities consist primarily of district heating
and cooling services.
Intersegment sales are priced in accordance with terms of existing tariffs
and contracts. Information about the Company's operations, by business
segment, is presented below:
<TABLE>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Gas related activities $269,433 $244,516 $215,931
Nonregulated activities 24,298 24,284 24,034
Intersegment revenues (3,069) (3,463) (3,776)
-------- -------- --------
Total $290,662 $265,337 $236,189
======== ======== ========
Pre-Tax Operating Income:
Gas related activities $ 37,636 $ 35,182 $ 33,940
Nonregulated activities 6,629 6,442 6,293
-------- -------- --------
Total 44,265 41,624 40,233
Income taxes 13,353 13,438 12,334
-------- -------- --------
Consolidated Operating Income $ 30,912 $ 28,186 $ 27,899
======== ======== ========
Depreciation and Amortization:
Gas related activities $ 13,481 $ 10,699 $ 9,243
Nonregulated activities 2,026 1,950 2,090
-------- -------- --------
Total $ 15,507 $ 12,649 $ 11,333
======== ======== ========
Property Additions:
Gas related activities $ 25,352 $ 22,696 $ 24,088
Nonregulated activities 2,507 2,835 2,057
-------- -------- --------
Total $ 27,859 $ 25,531 $ 26,145
======== ======== ========
Identifiable Assets:
Gas related activities $394,229 $380,745 $334,602
Nonregulated activities 64,325 63,840 62,968
-------- -------- --------
Consolidated Identifiable Assets
$458,554 $444,585 $397,570
======== ======== ========
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
(In thousands of dollars, except per share amounts)
12. Quarterly Results (Unaudited):
The following table sets forth information with respect to the consolidated
quarterly results of operations for the fiscal years 1994 and 1993. The
amounts are unaudited but, in the opinion of management, include only
normal, recurring adjustments necessary to present fairly the results of
operations.
The quarterly results of operations reflect the seasonal nature of the
Company's operations. The results of any one quarter during the year are
not indicative of the results of future quarters or the results of the
Company's fiscal year.
<TABLE>
<CAPTION>
Consolidated Results of Operations
----------------------------------
--------------------------------------------------------------------------------------------
December 31, March 31, June 30, September 30,
Quarter Ended 1993 1994 1994 1994
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Revenues $ 80,140 $122,565 $ 50,003 $ 37,954
Operating Income $ 9,920 $ 18,256 $ 2,442 $ 294
Net Income (Loss) $ 6,680 $ 15,036 $ (908) $ (3,105)
Net Income (Loss) Per Common
Share $ .70 $ 1.57 $ (.10) $ (.33)
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
December 31, March 31, June 30, September 30,
Quarter Ended 1992 1993 1993 1993
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Revenues $ 76,551 $106,397 $ 42,267 $ 40,122
Operating Income $ 9,116 $ 16,537 $ 2,176 $ 357
Net Income (Loss) $ 6,146 $ 13,350 $ 123 $ (2,764)
Net Income (Loss) Per Common
Share $ .65 $ 1.40 $ .01 $ (.29)
</TABLE>
<PAGE>
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
------------------------------------------------------------
There have been no disagreements required to be disclosed under this item.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-----------------------------------------------------------
The information required by this item regarding directors of the
registrant and the disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is contained in the section entitled "Biographical
Information" in the Company's definitive proxy statement for its January,
1995 Annual Meeting, which the Company files with the Securities and
Exchange Commission pursuant to Regulation 14A of the Securities Exchange
Act of 1934. This information is hereby incorporated by reference. The
information required by this item regarding executive officers of the
registrant is included in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
-------------------------------
The information required by this item is contained in the sections
entitled "Compensation of Directors","Compensation Committee Report on
Executive Compensation", "Compensation Committee Interlocks and Insider
Participation", "Summary Executive Compensation", "Long Term Incentive
Plan Awards Table", "Retirement Plans" and "Comparison of Five Year
Cumulative Total Return" performance graph in the Company's definitive
proxy statement for its January, 1995 Annual Meeting, which the Company
files with the Securities and Exchange Commission pursuant to Regulation
14A. This information is hereby incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------
The information required by this item is contained in the section
entitled "Ownership of Company Stock" in the Company's definitive proxy
statement for its January, 1995 Annual Meeting, which the Company files
with the Securities and Exchange Commission pursuant to Regulation 14A.
This information is hereby incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------
There were no transactions during the year which would require disclosure
pursuant to this item.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------
(a) 1. Financial Statements:
--------------------
The consolidated balance sheets, statements of income, statements of
cash flows, statements of capitalization and statements of common
stock equity, together with the notes to the financial statements
and report thereon of Arthur Andersen LLP dated November 21, 1994,
are included in Part II, Item 8 herein.
2. Financial Statement Schedules:
-----------------------------
The following financial statement schedules included herein under
Item 14(d) are filed as part of this report. Schedules I, II, III,
IV, VII, IX, X, XI, XII, and XIII are not submitted because they are
not applicable or the information required to be included therein is
contained in the financial statements and footnotes.
V Property, Plant and Equipment (including intangibles) for the
fiscal years ended September 30, 1994, 1993 and 1992
VI Accumulated Depreciation and Amortization of Property, Plant
and Equipment for the fiscal years ended September 30, 1994,
1993, and 1992
VIII Valuation and Qualifying Accounts and Reserves for the fiscal
years ended September 30, 1994, 1993 and 1992
Individual financial statements for the Company have been omitted as
not being required since -
1. Consolidated statements of the Company and one or more of its
subsidiaries are filed; and
2. The Company's total assets, exclusive of investments in and
advances to its consolidated subsidiaries, constitute 75
percent or more of the total assets shown by the most recent
year-end consolidated balance sheet filed and the Company's
total gross revenues, exclusive of interest and dividends
received, or its equity in the income of the consolidated
subsidiaries, for the most recent period for which an income
statement is filed, constitute 75 percent or more of the
total gross revenues shown by the consolidated income
statement filed.
3. Exhibits
--------
Exhibit
Number
------------
3 Articles of Incorporation and By-Laws
(i) Charter of the Company and all Amendments thereto
(ii) By-Laws of the Company, as amended
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
4 Instruments Defining Rights of Security Holders, Including Indentures
(i) Indenture of Mortgage and Deed of Trust between The Hartford
Gas Company and The First National Bank of Hartford, Trustee
dated February 1, 1947, filed as Exhibit No. 2.2 to the
Company's Registration Statement on Form S-7 filed with the
Commission on December 8, 1970 (Commission File No. 2-38993)
(ii) In addition to the Indenture of Mortgage and Deed of Trust
referred to in 4(i) above, there have been sixteen
supplemental indentures thereto, all of which have been filed
with the Commission as follows:
(a) Supplemental indentures 1-9 filed as Exhibit No. 2.2 to
the Company's Registration Statement on Form S-7 filed
with the Commission on December 8, 1970 (Commission File
No. 2-38993)
(b) Tenth Supplemental Indenture filed as Exhibit No. 2.3 to
the Company's Registration Statement on Form S-7 filed
with the Commission on March 3, 1972 (Commission File
No. 2-43286)
(c) Eleventh Supplemental Indenture filed as Exhibit No. V
to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1974, filed with the
Commission in March, 1975 (Commission File No. 1-7727)
(d) Twelfth Supplemental Indenture filed as Exhibit No. 4(h)
to the Company's Registration Statement on Form S-7
filed with the Commission on December 23, 1981
(Commission File No. 2-75457)
(e) Thirteenth Supplemental Indenture filed as Exhibit No. 4
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1982, filed with the Commission
in August, 1982 (Commission File No. 1-7727)
(f) Fourteenth Supplemental Indenture filed as Exhibit No.
4(iii) to the Company's Current Report on Form 8-K,
dated August 28, 1986, filed with the Commission in
September, 1986 (Commission File No. 1-7727)
(g) Fifteenth Supplemental Indenture filed as Exhibit No.
4(iii) to the Company's Current Report on Form 8-K,
dated December 8, 1987, filed with the Commission in
December, 1987 (Commission File No. 1-7727)
(h) Sixteenth Supplemental Indenture filed as Exhibit No.
4(ii)(h) to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1989, filed with the
Commission in November, 1989 (Commission File No. 1-
7727)
9 Voting Trust Agreement
Not applicable
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
10 Material Contracts
(i) Underground storage service agreement (rate schedule SS-1)
between the Company and PYEC, filed as Exhibit No. 10(vii) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1981, filed with the Commission on March
30, 1982 (Commission File No. 1-7727)
(ii) Storage service transportation contract (rate schedule SST-
NE) between the Company and Tennessee for firm delivery of
gas stored by PYEC, filed as Exhibit No. 10(x) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1981, filed with the Commission on March
30, 1982 (Commission File No. 1-7727)
(iii) Agreement dated November 1, 1980 between the Company and
Robert H. Willis, filed as Exhibit No. 10(j) to the Company's
Registration Statement on Form S-7 filed with the Commission
on December 23, 1981 (Commission File No. 2-75457)
(iv) Firm storage service transportation contract (rate schedule
FSST-NE) between the Company and Tennessee for delivery of
gas stored by Penn York, filed as Exhibit No. 10(xviii) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1985, filed with the Commission on March
30, 1986 (Commission File No. 1-7727)
(v) Loan Agreement and Amendments thereto, between The Hartford
Steam Company and Connecticut National Bank, filed as Exhibit
No. 10(xxii) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1986, filed with the
Commission on March 31, 1987 (Commission File No. 1-7727)
(vi) Steam Supply Agreement and Amendments thereto, between the
Hartford Steam Company and O'Brien Energy Systems, Inc. dated
September 19, 1985, and as amended on February 25, 1987, and
October 6, 1987, filed as Exhibit No. 10(xxi) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987, filed with the Commission on March
29, 1988 (Commission File No. 1-7727)
(vii) Canadian gas transportation contract (rate schedule CGT-NE)
between the Company and Tennessee, dated December 1, 1987,
filed as Exhibit No. 10(xxiii) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1987,
filed with the Commission on March 29, 1988 (Commission File
No. 1-7727)
(viii) Gas purchase contract between the Company and TransCanada
Pipelines Limited, dated September 14, 1987, filed as Exhibit
No. 10(xxiv) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, filed with the
Commission on March 29, 1988 (Commission File No. 1-7727)
(ix) Gas sales agreement between the Company and Boundary Gas,
Inc., dated September 14, 1987, filed as Exhibit No. 10(xxv)
to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987, filed with the Commission on
March 29, 1988 (Commission File No. 1-7727)
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
10 (x) Restated and Amended Letter of Credit and Reimbursement
Agreement by and between Affiliated Resources Corporation and
Canadian Imperial Bank of Commerce, New York Agency, dated
March 1, 1988, filed as Exhibit No. 10(xxiv) to the Company's
Annual Report Form 10-K for the fiscal year ended December
31, 1988, filed with the Commission on March 29, 1989
(Commission File No. 1-7727)
(xi) Third Amendment, dated April 7, 1988, to the Steam Supply
Agreement, between The Hartford Steam Company and O'Brien
Energy Systems, Inc. dated September 19, 1985 (filed as
Exhibit No. 10(xxi) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1987, filed with
the Commission on March 29, 1988 (Commission File No. 1-
7727)), filed as Exhibit No. 10(xxv) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1988, filed with the Commission on March 29, 1989 (Commission
File No. 1-7727)
(xii) Fourth Amendment, dated March 1, 1989, to the Steam Supply
Agreement between The Hartford Steam Company and O'Brien
Energy Systems, Inc., dated September 19, 1985 (filed as
Exhibit No. 10(xxi) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1987, filed with
the Commission on March 29, 1988 (Commission File No. 1-
7727)), filed as Exhibit No. 10(xxiv) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1989, filed with the Commission on March 28, 1990 (Commission
File No. 1-7727)
(xiii) Steam Supply Agreement between The Hartford Steam Company and
Independent Energy Operations, Inc., dated December 3, 1987,
filed as Exhibit No. 10(xxv) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1989,
filed with the Commission on March 28, 1990 (Commission File
No. 1-7727)
(xiv) Partial Release of Mortgage agreement, dated March 1, 1989,
to the Open-End Mortgage and Security Agreement between The
Hartford Steam Company and The Connecticut National Bank,
dated March 1, 1983 (filed as Exhibit No. 10(xxii) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1986, filed with the Commission on March
31, 1987 (Commission File No. 1-7727)), filed as Exhibit No.
10(xxvi) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, filed with the
Commission on March 28, 1990 (Commission File No. 1-7727)
(xv) Fourth Amendment, dated August 15, 1989, to the Open End
Mortgage and Security Agreement between The Hartford Steam
Company and The Connecticut National Bank, dated March 1,
1983 (filed as Exhibit No. 10(xxii) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1986, filed with the Commission on March 31, 1987 (Commission
File No. 1-7727)), filed as Exhibit No. 10(xxvii) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989, filed with the Commission on March
28, 1990 (Commission File No. 1-7727)
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
10 (xvi) Open-End Mortgage and Security Agreement between Energy
Networks, Inc. and The Connecticut National Bank, dated March
1, 1989, filed as Exhibit No. 10(xxviii) to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1989, filed with the Commission on March 28, 1990
(Commission File No. 1-7727)
(xvii) Collateral Assignment of Lease and Rentals, dated March 1,
1989, to the Open-End Mortgage and Security Agreement between
Energy Networks, Inc. and The Connecticut National Bank,
dated March 1, 1989 (filed as Exhibit 10(xxviii) herein),
filed as Exhibit No. 10(xxix) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1989,
filed with the Commission on March 28, 1990 (Commission File
No. 1-7727)
(xviii) Amended and Restated Loan Agreement between The Hartford
Steam Company and The Connecticut National Bank, dated March
31, 1983, filed as Exhibit No. 10(xxx) to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1989, filed with the Commission on March 28, 1990
(Commission File No. 1-7727)
(xix) Precedent Agreement to First Amendment, dated September 14,
1988, to the Gas Sales Agreement between the Company and
Boundary Gas, Inc., dated September 14, 1987 (filed as
Exhibit No. 10(xxv) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1987, filed with
the Commission on March 29, 1988 (Commission File No. 1-
7727)), filed as Exhibit No. 10(xxxi) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1989, filed with the Commission March 28, 1990 (Commission
File No. 1-7727)
(xx) First Amendment, dated January 1, 1990, to the Gas Sales
Agreement between the Company and Boundary Gas, Inc., dated
September 14, 1987 (filed as Exhibit No. 10(xxv) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987, filed with the Commission on March
29, 1988 (Commission File No. 1-7727)), filed as Exhibit
10(xxxii) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, filed with the
Commission on March 28, 1990 (Commission File No. 1-7727)
(xxi) Sixth Amendment, dated September 30, 1991, to the Loan
Agreement between The Hartford Steam Company and The
Connecticut National Bank, dated March 1, 1983 (filed as
Exhibit No. 10(xxii) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1986, filed with
the Commission on March 31, 1987 (Commission File No. 1-
7727)), filed as Exhibit No. 10(xxxviii) to the Company's
Transition Report on Form 10-K for the period October 1, 1990
to September 30, 1991, filed with the Commission on December
23, 1991, (Commission File No. 1-7727)
(xxii) Medium Term Notes, Series A, Placement Agency Agreement among
Connecticut Natural Gas Corporation, PaineWebber Incorporated
and Smith Barney, Harris Upham & Co. Incorporated, dated
November 1, 1991, filed as Exhibit No. 10(xxxix) to the
Company's Transition Report on Form 10-K for the period
October 1, 1990 to September 30, 1991, filed with the
Commission on December 23, 1991, (Commission File No. 1-7727)
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
10 (xxiii) Issuing and Paying Agency Agreement between The Connecticut
National Bank and Connecticut Natural Gas Corporation, for
the Medium Term Notes, Series A, dated November 1, 1991,
filed as Exhibit No. 10(xl) to the Company's Transition
Report on Form 10-K for the period October 1, 1990 to
September 30, 1991, filed with the Commission on December 23,
1991, (Commission File No. 1-7727)
(xxiv) Connecticut Natural Gas Corporation Executive Restricted
Stock Plan, filed as Exhibit A to the Company's definitive
proxy statement dated March 26, 1991, filed with the
Commission on March 26, 1991 (Commission File No. 1-7727)
(xxv) Gas Transportation Contract for Firm Reserved Service, dated
February 7, 1991, between the Company and the Iroquois Gas
Transmission System, L.P., filed as Exhibit No. 10(xxxvii) to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1992, filed with the Commission on
December 23, 1992, (Commission File No. 1-7727)
(xxvi) Gas Sales Agreement No. 1, dated February 7, 1991, between
the Company and Alberta Northeast Gas Limited, filed as
Exhibit No. 10(xxxviii) to the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1992, filed
with the Commission on December 23, 1992, (Commission File
No. 1-7727)
(xxvii) Gas Sales Agreement No. 2, dated February 7, 1991, between
the Company and Alberta Northeast Gas Limited, filed as
Exhibit No. 10(xxxix) to the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1992, filed with
the Commission on December 23, 1992, (Commission File No. 1-
7727)
(xxviii) Gas Sales Agreement (ProGas), dated February 7, 1991, between
the Company and Alberta Northeast Gas Limited, filed as
Exhibit No. 10(xl) to the Company's Annual Report on Form 10-
K for the fiscal year ended September 30, 1992, filed with
the Commission on December 23, 1992, (Commission File No. 1-
7727)
(xxix) Gas Sales Agreement (ATCOR), dated February 7, 1991, between
the Company and Alberta Northeast Limited, filed as Exhibit
No. 10(xli) to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1992, filed with the
Commission on December 23, 1992, (Commission File No. 1-7727)
(xxx) Gas Sales Agreement (AEC), dated February 7, 1991, between
the Company and Alberta Northeast Gas Limited, filed as
Exhibit No. 10(xlii) to the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1992, filed with
the Commission on December 23, 1992, (Commission File No. 1-
7727)
(xxxi) Gas Transportation Contract for Firm Reserved Service, dated
October 20, 1992, between the Company and the Iroquois Gas
Transmission System, L.P., filed as Exhibit No. 10(xlvii) to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1992, filed with the Commission on
December 23, 1992, (Commission File No. 1-7727)
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
10 (xxxii) Revolving Credit Agreement, dated March 30, 1993, between the
Company and The First National Bank of Boston, filed as
Exhibit No. 10(xlviii) to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1993, filed with
the Commission on May 3, 1993 (Commission File No. 1-7727)
(xxxiii) Secured Note Purchase Agreement, dated July 15, 1993, between
the CNG Realty Corp. and the Aid Association for Lutherans,
filed as Exhibit No. 10(xlix) to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1993,
filed with the Commission on August 3, 1993 (Commission File
No. 1-7727)
(xxxiv) Capital Contribution Support Agreement, dated April 15, 1993,
among Connecticut Natural Gas Corporation, ENI Transmission
Company and Bank of Montreal, filed as Exhibit No. 10(l) to
the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993, filed with the Commission on August 3,
1993 (Commission File No. 1-7727)
(xxxv) Steam and Chilled Water Supply Agreement, dated May 28, 1986,
between Capitol District Energy Center Cogeneration
Associates and Energy Networks, Incorporated, filed as
Exhibit No. 10(xxxvii) to the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1993, filed with
the Commission December 28, 1993 (Commission File No. 1-7727)
(xxxvi) Service Agreement #89102 (Rate Schedule AFT-1), dated June 1,
1993, between the Company and Algonquin Gas Transmission
Company, filed as Exhibit No. 10(xxxviii) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xxxvii) Service Agreement #93005 (Rate Schedule AFT-1), dated June 1,
1993, between the Company and Algonquin Gas Transmission
Company, filed as Exhibit No. 10(xxxix) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xxxviii) Service Agreement #93205 (Rate Schedule AFT-1), dated June 1,
1993, between the Company and Algonquin Gas Transmission
Company, filed as Exhibit No. 10(xl) to the Company's Annual
Report on Form 10-K for the fiscal year ended September 30,
1993, filed with the Commission December 28, 1993 (Commission
File No. 1-7727)
(xxxix) Service Agreement #93305 (Rate Schedule AFT-1), dated June 1,
1993, between the Company and Algonquin Gas Transmission
Company, filed as Exhibit No. 10(xli) to the Company's Annual
Report on Form 10-K for the fiscal year ended September 30,
1993, filed with the Commission December 28, 1993 (Commission
File No. 1-7727)
(xl) Service Agreement #93404 (Rate Schedule AFT-1), dated June 1,
1993, between the Company and Algonquin Gas Transmission
Company, filed as Exhibit No. 10(xlii) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
10 (xli) Service Agreement #9B103 (Rate Schedule AFT-1), dated June 1,
1993, between the Company and Algonquin Gas Transmission
Company, filed as Exhibit No. 10(xliii) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xlii) Service Agreement #9W005 (Rate Schedule AFT-1), dated June 1,
1993, between the Company and Algonquin Gas Transmission
Company, filed as Exhibit No. 10(xliv) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xliii) Service Agreement #.6426, dated June 1, 1993, between the
Company and Transcontinental Gas Pipe Line Corporation, filed
as Exhibit No. 10(xlv) to the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1993, filed with
the Commission December 28, 1993 (Commission File No. 1-7727)
(xliv) Service Agreement #800380 (Rate Schedule CDS), dated June 1,
1993, between the Company and Texas Eastern Transmission
Corporation, filed as Exhibit No. 10(xlvi) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xlv) Service Agreement #800341 (Rate Schedule FT-1), dated June 1,
1993, between the Company and Texas Eastern Transmission
Corporation, filed as Exhibit No. 10(xlvii) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xlvi) Service Agreement #800294 (Rate Schedule FT-1), dated June 1,
1993, between the Company and Texas Eastern Transmission
Corporation, filed as Exhibit No. 10(xlviii) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xlvii) Service Agreement #800295 (Rate Schedule FT-1), dated June 1,
1993, between the Company and Texas Eastern Transmission
Corporation, filed as Exhibit No. 10(xlix) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xlviii) Service Agreement #400148 (Rate Schedule SS-1), dated June 1,
1993, between the Company and Texas Eastern Transmission
Corporation, filed as Exhibit No. 10(l) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(xlix) Service Agreement #400149 (Rate Schedule SS-1), dated June 1,
1993, between the Company and Texas Eastern Transmission
Corporation, filed as Exhibit No. 10(li) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
10 (l) Service Agreement #400150 (Rate Schedule SS-1), dated June 1,
1993, between the Company and Texas Eastern Transmission
Corporation, filed as Exhibit No. 10(lii) to the Company's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, filed with the Commission December 28,
1993 (Commission File No. 1-7727)
(li) Service Agreement (Rate Schedule FTNN), dated October 1,
1993, between the Company and CNG Transmission Corporation,
filed as Exhibit No. 10(liii) to the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 1993,
filed with the Commission December 28, 1993 (Commission File
No. 1-7727)
(lii) Service Agreement (Rate Schedule GSS), dated November 1,
1993, between the Company and CNG Transmission Corporation,
filed as Exhibit No. 10(liv) to the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 1993,
filed with the Commission December 28, 1993 (Commission File
No. 1-7727)
(liii) Amended and Restated CNG Officers' Retirement Plan, dated
June 28, 1994
(liv) The Connecticut Natural Gas Corporation Officers' Retirement
Plan Trust Agreement, dated January 9, 1989
(lv) First Amendment to the Connecticut Natural Gas Corporation
Officers' Retirement Plan and Deferred Compensation Plan
Trust Agreement, dated August 5, 1993
(lvi) The Connecticut Natural Gas Corporation Deferred Compensation
Plan, as amended, dated January 1, 1993
(lvii) First Amendment to the Connecticut Natural Gas Corporation
Deferred Compensation Plan, dated December 2, 1993
(lviii) Second Amendment to the Connecticut Natural Gas Corporation
Deferred Compensation Plan, dated June 28, 1994
(lix) Agreement and Declaration of Trust, Connecticut Natural Gas
Corporation Employee Benefit Trust, dated December 28, 1987
(lx) First Amendment to Agreement and Declaration of Trust,
Connecticut Natural Gas Corporation Employee Benefit Trust,
Dated December 2, 1993
(lxi) Agreement and Declaration of Trust, Connecticut Natural Gas
Corporation Union Employee Benefit Trust, dated December 2,
1993
(lxii) CNG Annual Incentive Plan, 1994
(lxiii) Settlement Agreement and Release of All Claims by and between
Connecticut Natural Gas Corporation and Donato P. Lauria,
dated November 29, 1993
<PAGE>
(a) 3. Exhibits (continued)
--------
Exhibit
Number
------------
10 (lxiv) Letter of Credit and Reimbursement Agreement by and between
Energy Networks, Inc. and The Bank of Nova Scotia, dated
October 14, 1994
(lxv) Second Amended and Restated Loan Agreement by and between The
Hartford Steam Company and Shawmut Bank Connecticut, N.A.,
dated October 28, 1994
(lxvi) Medium Term Notes, Series B, Placement Agency Agreement among
Connecticut Natural Gas Corporation, Smith Barney Inc., and
A.G. Edwards & Sons, Inc., dated June 14, 1994
(lxvii) Issuing and Paying Agency Agreement between Shawmut Bank
Connecticut, National Association, and Connecticut Natural
Gas Corporation, for Medium Term Notes, Series B, dated June
14, 1994
(lxviii) Service Agreement (EFT Service), dated July 31, 1993, between
the Company and National Fuel Gas Supply Corporation
(lxix) Gas Storage Contract, dated February 16, 1990, between the
Company and ENDEVCO Industrial Gas Sales Company
11 Computation of Consolidated Primary and Fully Diluted Earnings Per
Share
12 Computation of Ratios
Not applicable
13 Annual Report to Stockholders for the Fiscal Year Ended September 30,
1994
Not applicable
16 Letter Regarding Change in Certifying Accountant
Not applicable
18 Letter Regarding Change in Accounting Principles
Not applicable
21 Subsidiaries of the Registrant
22 Published Report Regarding Matters Submitted to Vote of Security
Holders
None
23 Consent of Independent Public Accountants
24 Power of Attorney
27 Financial Data Schedule
28 Information from Reports Furnished to State Insurance Regulatory
Authorities
Not applicable
<PAGE>
(a) 3. Exhibits (concluded)
--------
Exhibit
Number
------------
99 Additional Exhibits
(i) Exhibit Index
(ii) Information required by Form 11-K with respect to the
Connecticut Natural Gas Corporation Employee Savings Plan for
the fiscal year ending December 31, 1993, filed as Exhibit
99(ii) to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1993, filed with the
Commission on December 28, 1993, as amended by Form 10-K
Amendment No. 1, filed with the Commission on June 28, 1994
(Commission File No. 1-7727)
(iii) Information required by Form 11-K with respect to the
Connecticut Natural Gas Corporation Union Employee Savings
Plan for the fiscal year ending December 31, 1993, filed as
Exhibit 99(iii) to the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 1993, filed with the
Commission on December 28, 1993, as amended by Form 10-K
Amendment No. 1, filed with the Commission on June 28, 1994
(Commission File No. 1-7727)
Exhibits 4(i), 4(ii)(a), 4(ii)(b), 4(ii)(c), 4(ii)(d), 4(ii)(e), 4(ii)(f),
4(ii)(g), 4(ii)(h), 10(i), 10(ii), 10(iii), 10(iv), 10(v), 10(vi), 10(vii),
10(viii), 10(ix), 10(x), 10(xi), 10(xii), 10(xiii), 10(xiv), 10(xv),
10(xvi), 10(xvii), 10(xviii), 10(xix), 10(xx), 10(xxi), 10(xxii),
10(xxiii), 10(xxiv), 10(xxv), 10(xxvi), 10(xxvii), 10(xxviii), 10(xxix),
10(xxx), 10(xxxi), 10(xxxii), 10(xxxiii), 10(xxxiv), 10(xxxv), 10(xxxvi),
10(xxxvii), 10(xxxviii), 10(xxxix), 10(xl), 10(xli), 10(xlii), 10(xliii),
10(xliv), 10(xlv), 10(xlvi), 10(xlvii), 10(xlviii), 10(xlix), 10(l),
10(li), 10(lii), 99(ii) and 99(iii) listed above which have been filed with
the Securities and Exchange Commission pursuant to the Securities Act of
1933 and the Securities Exchange Act of 1934, and which were designated as
noted above and have not been amended, are hereby incorporated by
reference. All other exhibits referred to above are filed herewith.
(b) Reports on Form 8-K
-------------------
There were no current reports filed on Form 8-K during the last quarter
of fiscal 1994.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CONNECTICUT NATURAL GAS CORPORATION
-----------------------------------
(Registrant)
S/ Victor H. Frauenhofer
------------------------------------
(Victor H. Frauenhofer)
Chairman and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
S/ Victor H. Frauenhofer Chairman, President, December 21, 1994
------------------------------- (Principal Executive
(Victor H. Frauenhofer) Officer) and Director
S/ James P. Bolduc Senior Vice President - December 21, 1994
------------------------------- Financial Services and
(James P. Bolduc) Chief Financial Officer
S/ R. L. Babcock December 21, 1994
-------------------------------
(R. L. Babcock)
as Attorney-in-fact for:
Bessye W. Bennett, Esq. Director
James F. English, Jr. Director
Herman J. Fonteyne Director
Beverly L. Hamilton Director
Harvey S. Levenson Director
Denis F. Mullane Director
Richard J. Shima Director
Laurence A. Tanner Director
DeRoy C. Thomas Director
Angelo Tomasso, Jr. Director
</TABLE>
<PAGE>
CONNECTICUT NATURAL GAS CORPORATION
Annual Report on Form 10-K
Schedule Index
Fiscal Year Ended September 30, 1994
Item Description
---------- -----------
V. Financial Statement Schedule V; Property, Plant and
Equipment (including intangibles) for the fiscal years
ended September 30, 1994, 1993 and 1992
VI. Financial Statement Schedule VI; Accumulated
Depreciation and Amortization of Property, Plant and
Equipment for the fiscal years ended September 30,
1994, 1993 and 1992
VIII. Financial Statement Schedule VIII; Valuation and
Qualifying Accounts and Reserves for the fiscal years
ended September 30, 1994, 1993 and 1992
<PAGE>
<TABLE>
<CAPTION>
(d) Financial Statement Schedules
-----------------------------
Page 1 of 3
CONNECTICUT NATURAL GAS CORPORATION AND SUBSIDIARIES
----------------------------------------------------
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (INCLUDING INTANGIBLES)
------------------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 1994
-------------------------------------
(THOUSANDS OF DOLLARS)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance
Beginning Additions Retirements Changes at End of
Classification of Period at Cost or Sales Add(Deduct) Period
-------------------- ---------- --------- ----------- ----------- ---------
<C> <C> <C> <C> <C> <C>
REGULATED GAS PLANT:
Intangible $ 491 $ - $ - $ - $ 491
Production 3,921 118 16 - 4,023
Storage 10,837 386 - - 11,223
Distribution 268,039 19,358 (1) 822 2,339 (3) 288,914
Construction work in progress 1,379 2,444 - (1,324)(3) 2,499
General 40,046 3,046 911 1,412 (2) 43,593
--------- --------- --------- --------- ---------
324,713 25,352 1,749 2,427 350,743
--------- --------- --------- --------- ---------
OPERATING & ADMINISTRATIVE CENTER 17,394 - - - 17,394
--------- --------- --------- --------- ---------
NONREGULATED PLANT:
Production 21,693 861 483 - 22,071
Distribution 37,990 1,286 385 - 38,891
Storage 1,764 2 - - 1,766
Construction work in progress (24) 287 - - 263
--------- --------- --------- --------- ---------
61,423 2,436 868 - 62,991
--------- --------- --------- --------- ---------
$ 403,530 $ 27,788 $ 2,617 $ 2,427 $ 431,128
========= ========= ========= ========= =========
<FN>
NOTES:
(1) This amount is comprised primarily of additions to services, mains, meters and meter installations and primarily
reflects expenditures for main relocations, replacements and improvements and additional customers during the
year.
(2) This amount is related to the Company's new Customer Information and Distribution Information Systems,
transferred from other assets to plant in service during 1994.
(3) This amount represents the transfer of $1,324 of construction work in progress and $1,015 of other assets
transferred to plant in service during 1994 for additions to the natural gas distribution system.
See Part II, Item 8, Notes to the Financial Statements for discussion of depreciation methods and rates.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(d) Financial Statement Schedules
-----------------------------
Page 2 of 3
CONNECTICUT NATURAL GAS CORPORATION AND SUBSIDIARIES
----------------------------------------------------
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (INCLUDING INTANGIBLES)
------------------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 1993
-------------------------------------
(THOUSANDS OF DOLLARS)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance
Beginning Additions Retirements Changes at End of
Classification of Period at Cost or Sales Add(Deduct) Period
-------------------- ---------- --------- ----------- ----------- ---------
<C> <C> <C> <C> <C> <C>
REGULATED GAS PLANT:
Intangible $ 491 $ - $ - $ - $ 491
Production 3,837 104 20 - 3,921
Storage 10,760 77 - - 10,837
Distribution 248,961 18,774 (1) 553 857 (3) 268,039
Construction work in progress 1,113 1,123 - (857)(3) 1,379
General 22,914 3,209 780 14,703 (2) 40,046
--------- --------- --------- --------- ---------
288,076 23,287 1,353 14,703 324,713
--------- --------- --------- --------- ---------
OPERATING & ADMINISTRATIVE CENTER 17,394 - - - 17,394
--------- --------- --------- --------- ---------
NONREGULATED PLANT:
Production 20,710 999 119 103 (4) 21,693
Distribution 36,423 420 73 1,220 (4) 37,990
Storage 1,754 15 5 - 1,764
Construction work in progress 1,001 298 - (1,323)(4) (24)
--------- --------- --------- --------- ---------
59,888 1,732 197 - 61,423
--------- --------- --------- --------- ---------
$ 365,358 $ 25,019 $ 1,550 $ 14,703 $ 403,530
========= ========= ========= ========= =========
<FN>
NOTES:
(1) This amount is comprised primarily of additions to services, mains, meters and meter installations
and primarily reflects expenditures for main relocations, replacements and improvements and
additional customers during the year.
(2) This amount represents $14,600 related to the Company's new Customer Information and Distribution
Information Systems and $103 of other software transferred from Other Assets to Plant in Service
during 1993.
(3) This amount represents the transfer of construction work in progress of $857 to plant in service
during 1993 for additions to the natural gas distribution system.<PAGE>
(4) Amounts represents the transfer of construction work in progress of $1,323 to plant in service during
1993 for additions to the district heating and cooling system.
See Part II, Item 8, Notes to the Financial Statements for discussion of depreciation methods and rates.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(d) Financial Statement Schedules
-----------------------------
Page 3 of 3
CONNECTICUT NATURAL GAS CORPORATION AND SUBSIDIARIES
----------------------------------------------------
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (INCLUDING INTANGIBLES)
------------------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 1992
-------------------------------------
(THOUSANDS OF DOLLARS)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance
Beginning Additions Retirements Changes at End of
Classification of Period at Cost or Sales Add(Deduct) Period
-------------------- ---------- --------- ----------- ----------- ---------
<C> <C> <C> <C> <C> <C>
REGULATED GAS PLANT:
Intangible $ 491 $ - $ - $ - $ 491
Production 3,679 204 46 - 3,837
Storage 10,550 218 8 - 10,760
Distribution 228,795 20,593 (1) 815 388 (2) 248,961
Construction work in progress - 1,145 - (32) 1,113
General 17,542 1,891 362 3,843 (2) 22,914
--------- --------- --------- --------- ---------
261,057 24,051 1,231 4,199 288,076
--------- --------- --------- --------- ---------
OPERATING & ADMINISTRATIVE CENTER 18,302 37 15 (930)(2) 17,394
--------- --------- --------- --------- ---------
NONREGULATED PLANT:
Production 19,795 1,204 289 - 20,710
Distribution 33,405 587 866 3,297 (3) 36,423
Storage 1,753 1 - - 1,754
Construction work in progress 5 996 - - 1,001
--------- --------- --------- --------- ---------
54,958 2,788 1,155 3,297 59,888
--------- --------- --------- --------- ---------
$ 334,317 $ 26,876 $ 2,401 $ 6,566 $ 365,358
========= ========= ========= ========= =========
<FN>
NOTES:
(1) This amount is comprised primarily of additions to services, mains, meters and meter installations
and primarily reflects expenditures for main relocations, replacements and improvements and
additional customers during the year.
(2) Amounts primarily represent $1,028 of leasehold improvements transferred to regulated gas plant from
the operating and administrative center and $3,472 transferred from other assets to plant in service.
(3) Amount represents $3,297 transferred to continuing operations plant in service in 1992 from
discontinued operations.
See Part II, Item 8, Notes to the Financial Statements for discussion of depreciation methods and rates.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(d) Financial Statement Schedules
----------------------------- Page 1 of 1
CONNECTICUT NATURAL GAS CORPORATION AND SUBSIDIARIES
---------------------------------------------------
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
----------------------------------------------------------------------------------------
FOR THE YEARS ENDED SEPTEMBER 30, 1994, 1993 AND 1992
-----------------------------------------------------
(THOUSANDS OF DOLLARS)
Column A Column B Column C Column D Column E Column F
Additions
Balance Charged Other Balance
At to Costs Charges at
Beginning and Retirements add End of
Description of Period Expenses (1) (Deduct) Period
----------- --------- --------- ----------- -------- -------
<S> <C> <C> <C> <C> <C>
YEAR ENDED SEPTEMBER 30, 1994
-----------------------------
Depreciation:
Regulated gas plant $ 90,114 $13,079 (2) $ 2,837 $ 591 (3) $100,947
Operating and adminis-
trative Center 2,585 459 - - 3,044
Nonregulated plant 14,220 2,017 836 - 15,401
-------- ------- ------- ------- --------
$106,919 $15,555 $ 3,673 $ 591 $119,392
======== ======= ======= ======= ========
YEAR ENDED SEPTEMBER 30, 1993
-----------------------------
Depreciation:
Regulated gas plant $ 81,417 $10,771 (2) $ 2,448 $ 374 (3) $ 90,114
Operating and adminis-
trative Center 2,250 335 - - 2,585
Nonregulated plant 12,466 1,957 203 - 14,220
-------- ------- ------- ------- --------
$ 96,133 $13,063 $ 2,651 $ 374 $106,919
======== ======= ======= ======= ========
YEAR ENDED SEPTEMBER 30, 1992
-----------------------------
Depreciation:
Regulated gas plant $ 72,196 $ 9,348 (2) $ 1,993 $ 1,866 (3) $ 81,417
Operating and adminis-
trative Center 1,978 332 15 (45) 2,250
Nonregulated plant 10,977 1,981 1,092 600 (4) 12,466
-------- ------- ------- ------- --------
$ 85,151 $11,661 $ 3,100 $ 2,421 $ 96,133
Other ======== ======= ======= ======= ========
<FN>
NOTES:
(1) Cost of removing the property retired is included, and salvage has been deducted.
(2) The totals include charges of $13,022 in 1994, $10,364 in 1993 and $8,911 in 1992 to
depreciation expense. The balance has been allocated to operating expense in accordance
with the Company's practice of allocating depreciation on transportation and special work
equipment, respectively, on a functional basis.
(3) The portion of the depreciation provision charged to other accounts represents
depreciation charged principally to construction in accordance with the Company's policy
explained in Note 2 in the amount of $468 in 1994, $120 in 1993 and $114 in 1992. The
Company received reimbursements of $123 in 1994, $254 in 1993 and $365 in 1992 from state
and local governments due to relocation of facilities for highway purposes. In 1992
$1,342 represents amortization related to deferred accounts transferred to plant in
service and $45 is related to the transfer of leasehold improvements from the Operating<PAGE>
and Administrative Center.
(4) Represents $600 in 1992 related to discontinued operations property transferred to
continuing operations.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(d) Financial Statement Schedules
----------------------------- Page 1 of 1
CONNECTICUT NATURAL GAS CORPORATION AND SUBSIDIARIES
---------------------------------------------------
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
--------------------------------------------------------------
FOR THE YEARS ENDED SEPTEMBER 30, 1994, 1993 AND 1992
-----------------------------------------------------
(THOUSANDS OF DOLLARS)
Column A Column B Column C Column D Column E
Additions
--------------------------
Balance At Charged Charged Deductions Balance
Beginning To Costs To Other From At End
Description of Period And Expenses Accounts Reserves (1) of Period
----------- ---------- ------------ -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
YEAR ENDED SEPTEMBER 30, 1994
-----------------------------
RESERVE DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSET TO WHICH IT APPLIES:
Allowance for doubtful
accounts -
Gas $ 2,491 $ 5,990 $ - $ 5,208 $ 3,273
Other (2) 577 592 19 444 744
-------- -------- -------- -------- --------
$ 3,068 $ 6,582 $ 19 $ 5,652 $ 4,017
======== ======== ======== ======== ========
YEAR ENDED SEPTEMBER 30, 1993
-----------------------------
RESERVE DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSET TO WHICH IT APPLIES:
Allowance for doubtful
accounts -
Gas (3) $ 2,153 $ 3,019 $ 2,200 $ 4,881 $ 2,491
Other (4) 948 450 52 873 577
-------- -------- -------- -------- --------
$ 3,101 $ 3,469 $ 2,252 $ 5,754 $ 3,068
======== ======== ======== ======== ========
YEAR ENDED SEPTEMBER 30, 1992
-----------------------------
RESERVE DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSET TO WHICH IT APPLIES:
Allowance for doubtful
accounts -
Gas $ 2,098 $ 3,022 $ - $ 2,967 $ 2,153
Other (5) 813 225 135 225 948
-------- -------- -------- -------- --------
$ 2,911 $ 3,247 $ 135 $ 3,192 $ 3,101
======== ======== ======== ======== ========
<FN>
Note: (1) Deductions From Reserves include the write-off of uncollectible accounts, net of
recoveries of accounts previously written off.
(2) $19 Charged to Other Accounts represents interest on receivables.
(3) $2,200 Charged to Other Accounts was recognized as a regulatory asset in other
assets on the balance sheet, pending approval in the Company's December, 1993 rate
decision (See Item 7, Management's discussion and Analysis of Financial Condition
and Results of Operations and Item 8, Notes to the Financial Statements)
(4) $52 Charged to Other Accounts represents interest on receivables.
(5) $111 Charged to Other Accounts represents an allowance for doubtful accounts<PAGE>
reclassified to continuing operations; $24 represents interest on receivables.
</TABLE>
<PAGE>
Exhibit 99(i)
Page 1 of 2
CONNECTICUT NATURAL GAS CORPORATION
Annual Report on Form 10-K
Exhibit Index
Fiscal Year Ended September 30, 1994
Document
Item Description Description
------------ ----------- ------------
99(i) Exhibit Index Ex-99.1
3(i) Charter of the Company and All Amendments Ex-3.1
Thereto
3(ii) Bylaws of the Company, as amended Ex-3.2
10(liii) Amended and Restated CNG Officers' Ex-10.53
Retirement Plan
10(liv) The Connecticut Natural Gas Corporation Ex-10.54
Officers' Retirement Plan Trust Agreement
10(lv) First Amendment to the Connecticut Natural Ex-10.55
Gas Corporation Officers' Retirement Plan
and Deferred Compensation Plan Trust
Agreement
10(lvi) The Connecticut Natural Gas Corporation Ex-10.56
Deferred Compensation Plan
10(lvii) First Amendment to the Connecticut Natural Ex-10.57
Gas Corporation Deferred Compensation Plan
10(lviii) Second Amendment to the Connecticut Ex-10.58
Natural Gas Corporation Deferred
Compensation Plan
10(lix) Agreement and Declaration of Trust, Ex-10.59
Connecticut Natural Gas Corporation
Employee Benefit Trust
10(lx) First Amendment to Agreement and Ex-10.60
Declaration of Trust, Connecticut Natural
Gas Corporation Employee Benefit Trust
10(lxi) Agreement and Declaration of Trust, Ex-10.61
Connecticut Natural Gas Corporation Union
Employee Benefit Trust
10(lxii) CNG Annual Incentive Plan, 1994 Ex-10.62
10(lxiii) Settlement Agreement and Release of All Ex-10.63
Claims by and between Connecticut Natural
Gas Corporation and Donato P. Lauria
10(lxiv) Letter of Credit and Reimbursement Ex-10.64
Agreement by and between Energy Networks,
Inc. and The Bank of Nova Scotia<PAGE>
Exhibit 99(i)
Page 2 of 2
CONNECTICUT NATURAL GAS CORPORATION
Annual Report on Form 10-K
Exhibit Index (concluded)
Fiscal Year Ended September 30, 1994
Document
Item Description Description
------------ ----------- ------------
10(lxv) Second Amended and Restated Loan Agreement Ex-10.65
by and between The Hartford Steam Company
and Shawmut Bank Connecticut, N.A.
10(lxvi) Medium Term Notes, Series B, Placement Ex-10.66
Agency Agreement among Connecticut Natural
Gas Corporation, Smith Barney Inc., and
A.G. Edwards & Sons, Inc.
10(lxvii) Issuing and Paying Agency Agreement Ex-10.67
between Shawmut Bank Connecticut, National
Association, and Connecticut Natural Gas
Corporation, for Medium Term Notes, Series
B
10(lxviii) Service Agreement (EFT Service) between Ex-10.68
the Company and National Fuel Gas Supply
Corporation
10(lxix) Gas Storage Contract between the Company Ex-10.69
and ENDEVCO Industrial Gas Sales Company
11 Computation of Consolidated Primary and Ex-11
Fully Diluted Earnings Per Share
21 Subsidiaries of the Registrant Ex-21
23 Consent of Independent Public Accountants Ex-23
24 Power of Attorney Ex-24
27 Financial Data Schedule Ex-27
<PAGE>
Exhibit 3(i)
Page 1 of 184
ACT INCORPORATING THE HARTFORD CITY GAS LIGHT COMPANY
Passed 1848
Resolved by this Assembly, That Solomon Porter, Harvey Seymour, Ezra
Clark, Jr., Thomas Belknap, William B. Ely and Richard D. Hubbard, with
such other persons as shall associate with them for that purpose, are
constituted a body politic and corporate, by the name of "The Hartford City
Gas Light Company," and by that name are empowered to sue and be sued,
plead and be impleaded, in any court in this state; to make and have a
common seal, and the same to break, alter or renew at pleasure; and the
said company is hereby vested with all the powers, privileges and
immunities which are or may be necessary to carry into effect the purposes
and objects of this act as herein after set forth; and said company is
hereby authorized and empowered to manufacture, make and sell gas, to be
made from rosin, coal, oil, and any other material or materials, and to
furnish such quantities of gas as may be required in the city of Hartford,
for lighting streets, stores and buildings or other purposes; and to enter
into and execute contracts, agreements or covenants in relation to the
objects of said company, and to enforce the same. And said company shall
be capable of purchasing, taking and holding, and of granting, selling and
conveying any estate, real or personal, necessary to give effect to the
specified purposes of this company, and for the accommodation of their
business and concerns.
SEC. 2. That said company shall be empowered to lay down their gas
pipes and to erect gas posts, burners and reflectors in the streets,
alleys, lanes, avenues or public grounds of the said city of Hartford, and
to do all things necessary to light the said city and the dwellings, stores
and other places situated therein; provided, that the streets, side and
cross-walks, public grounds, lanes and avenues shall not be injured, but
all be left in as good and perfect condition as before the laying of said
pipes or the erection of said posts.
SEC. 3. The capital stock of said company shall be one hundred
thousand dollars, with the privilege of increasing the same to two hundred
thousand dollars, to be divided into shares of twenty-five dollars each,
which shares shall be deemed personal property, and be transferred in such
manner and such places as the by-laws of said company shall direct.
SEC. 4. The persons named in the first section hereof, or a majority
of them, shall open books to receive subscriptions for the capital stock of
said company, at such times and places as they or a majority of them shall
direct; and shall give such notice of the times
<PAGE>
Exhibit 3(i)
Page 2 of 184
and places of opening said books as they may deem reasonable, and shall
receive said subscription under such regulations as they may adopt for the
purpose; and in case the subscriptions shall exceed four thousand shares,
the same shall be reduced and apportioned in such manner as may be deemed
most beneficial to the corporation; and in case an amount not less than
fifty thousand dollars shall be subscribed to the capital stock of said
company, they may, at their discretion, close the books of subscription,
and proceed to the organization of said company, as herein after provided.
SEC. 5. The government and direction of affairs of the company shall
be vested in a board of nine directors, who shall be chosen by the
stockholders of said company, in the manner herein after provided, and
shall hold their offices till others are duly elected and qualified to take
their places as directors; and the said directors (four of whom shall be a
quorum for the transaction of business) shall elect one of their number to
be president of the board, who shall also be president of said company;
they shall also choose a clerk, who shall be sworn to a faithful discharge
of his duty, and a treasurer, who shall give bonds with security to said
company in such sum as said directors may require, for the faithful
discharge of his trust.
SEC. 6. The persons authorized by the fourth section of this act to
open books for subscriptions to the capital stock of said company are
hereby authorized and directed, after the books of subscription to the
capital stock of said company are closed, to call the first meeting of
stockholders of said company in such way and at such time and place as they
may appoint, for the choice of directors of said company; and in all
meetings of the stockholders of said company each share shall entitle the
holder thereof to one vote, which vote may be given by said stockholder in
person or by lawful proxy. And the annual meeting of the stockholders of
said company for the choice of directors shall be holden at such time and
place, and upon such notice as said company in their by-laws may prescribe.
And in case it shall so happen that an election of directors shall not be
made on the day appointed by the by-laws of said company, said company
shall not for that cause be deemed to be dissolved, but such election may
be holden on any day which shall be appointed by the directors of said
company; and said directors shall have power to fill any vacancy in their
own number which may occur by death, resignation or otherwise.
SEC. 7. The said directors shall have full power to make and
prescribe such by-laws, rules and regulations as they shall deem needful
-2-
<PAGE>
Exhibit 3(i)
Page 3 of 184
and proper, touching the disposition and management of the stock, property,
estate and effects of said company, not contrary to the laws and
constitution of the United States or of this state, or the provisions of
this act, the transfer of shares, the duties and conduct of their officers
and their servants; also, for the election and meetings of their directors,
and other matters appertaining to their business and concerns; and may
appoint as many officers, clerks and servants, with such salaries and
allowances as shall to them seem necessary; and the said board of directors
shall have power to make and declare such dividend and dividends among the
stockholders, from time to time, as the net profits and earnings of the
business of the said company shall enable them to do.
SEC. 8. If any person shall willfully and maliciously do or cause to
be done any act or acts whatever, whereby any building, construction or
works of said company, or any gas pipe, gas post, burner or reflector, or
any matter or thing appertaining to the same, shall be stopped, obstructed,
injured or destroyed, the person or persons so offending shall be deemed
guilty of a misdemeanor, and being thereof convicted, shall be punished by
afine, not exceeding one hundred dollars, or imprisonment in the county
gaol, not exceeding six months, or by such fine and imprisonment both, at
the discretion of the court having cognizance of such offense; provided,
however, that such criminal prosecution shall not in any way impair the
right of action for damages by a civil suit hereby authorized to be brought
for any such injury as aforesaid, by and in the name of the said
corporation, in any court in this state having cognizance of the same.
SEC. 9. The said company shall cause to be kept at their office
proper books of accounts, in which shall be fairly and truly entered all
the transactions of the company, which books shall be at all times open for
the inspection of the stockholders.
SEC. 10. This act may be altered, amended or repealed at the
pleasure of the general assembly.
-3-
<PAGE>
Exhibit 3(i)
Page 4 of 184
ACT AMENDING THE CHARTER OF THE HARTFORD CITY GAS LIGHT COMPANY
Passed 1851
Upon the petition of the Hartford City Gas Light Company, praying for
certain alterations in their charter:
Resolved by this Assembly, That the Hartford City Gas Light Company
be
and they are authorized and empowered to do any and all acts, and exercise
any and all rights, franchises and privileges within the limits of the town
of Hartford, which, by their original act of incorporation, they are
authorized to do and exercise within the limits of the city of Hartford;
and that all the works which said company have constructed, or hereafter
may construct, and all property which said company now own, or hereafter
may own, without the limits of said city, but within the limits of said
town, shall be owned and held by said company, subject to said original act
of incorporation.
<PAGE>
Exhibit 3(i)
Page 5 of 184
ACT AUTHORIZING THE HARTFORD CITY GAS-LIGHT COMPANY
TO INCREASE ITS CAPITAL STOCK
Approved June 12, 1861
Resolved by this Assembly, That the Hartford City Gas-Light Company
be and said corporation hereby is fully authorized and empowered, from time
to time, to increase its capital stock to a sum not exceeding in the whole
five hundred thousand dollars.
<PAGE>
Exhibit 3(i)
Page 6 of 184
ACT AMENDING THE CHARTER OF THE HARTFORD CITY GAS LIGHT COMPANY
Approved July 12, 1870
Resolved by this Assembly. SEC. 1. That the Hartford City Gas Light
Company are hereby authorized and empowered to do any and all acts, and
exercise any and all rights and privileges within the limits of the town of
Hartford, which, by their original act of incorporation they are authorized
to do and exercise within the limits of the city of Hartford; and that all
the works which said company have constructed, or may construct, without
the limits of said city, but within the limits of said town, shall be owned
and held by said company, subject to said original act of incorporation.
SEC. 2. That said Hartford City Gas Light Company is hereby
authorized to increase its capital stock to an amount not exceeding seven
hundred and fifty thousand dollars.
SEC. 3. This act may be amended or repealed at the pleasure of the
general assembly
<PAGE>
Exhibit 3(i)
Page 7 of 184
HARTFORD CITY GAS LIGHT COMPANY
--------------------------------
Hartford Conn. 11th Jan. 1871
At a meeting of the Stockholders of the Hartford City Gas Light
Company, held this day at the office of the Company it was
VOTED: "That the amendment of the Charter of the Hartford City Gas
Light Company authorizing and empowering the said Company to extend their
works beyond the limits of the "city" and within the limites of the "town"
of Hartford, and also to increase their "capital stock" to an amount not
exceeding seven hundred and fifty thousand dollars, as passed by the
"General Assembly" at its session held in the City of New Haven in 1870,
and approved July 13th, 1870 be and the same is hereby approved and
accepted."
Attest,
J.P. Harbison
Secretary
Rec'd and filed January 12, 1871.
<PAGE>
Exhibit 3(i)
Page 8 of 184
ACT AMENDING THE CHARTER OF THE HARTFORD CITY GAS LIGHT COMPANY
Approved March 25, 1879
Resolved by this Assembly: That the Hartford City Gas Light Company
be, and said corporation hereby is, fully authorized and empowered, from
time to time, to increase its capital stock to a sum not exceeding in the
whole one million dollars: but no stock shall be issued for a greater sum
than the capital actually paid in.
<PAGE>
Exhibit 3(i)
Page 9 of 184
[Senate Joint Resolution No. 109.]
[161]
AMENDING THE CHARTER OF THE HARTFORD GAS LIGHT COMPANY
RESOLVED BY THIS ASSEMBLY: That in addition to the powers and
privileges granted The Hartford Gas Light Company by its charter, the said
corporation is hereby authorized and empowered to generate, produce, use,
distribute, and sell electricity within the town of Hartford for any
purpose for which electricity may be used, and may light any public or
private buildings or grounds, streets, avenues, lanes, parks, and squares
within said territory, by means of electricity conducted by wires above or
beneath the surface of the ground through, over, along, or across the
streets and public grounds of said town, and may make, enter into, and
execute contracts in relation to the objects and purposes of said
corporation, and may enforce the same. Said corporation is authorized to
erect and construct such buildings, poles, posts, and fixtures, and to lay
down, construct, and maintain beneath the surface of the ground, and in the
public streets and grounds in said town, lines of wire enclosed in pipes,
or otherwise insulated and protected, or other apparatus for conducting
electric currents, as may be necessary or convenient to carry on the
business of said corporation; PROVIDED HOWEVER, that in using or occupying
in any way any highway or public ground said company shall not use or
exercise any power or privilege hereinbefore granted except in conformity
with, and subject to, the then existing provisions of the general laws of
this state relating to the similar use of such highways or public grounds
by any company or corporation for a similar purpose. For all purposes of
classification said company shall be held and deemed to be a gas company.
Approved April 7, 1887.
41
<PAGE>
Exhibit 3(i)
Page 10 of 184
The Hartford City Gas Light Company
Acceptance of Charter Amendment
--------------------------------
Hartford, Conn. 20 April 1887
I hereby certify that at a meeting of the Stockholders of the
Hartford City Gas Light Company duly warned, held on the 18th day of April,
1887, it was unanimously:
Voted: To accept the amendment to the charter of this Company
granted by act of the General Assembly of this State, approved April 7,
1887.
Attest
Thomas Evans;
Secretary
Hartford City Gas Light Company
Rec'd and filed April 22, 1887.
<PAGE>
Exhibit 3(i)
Page 11 of 184
ACT AMENDING THE CHARTER OF THE HARTFORD CITY GAS LIGHT COMPANY
Approved March 30, 1899
Resolved by this Assembly: That the Hartford City Gas Light Company,
in addition to the powers, privileges, and immunities granted in its
charter, is hereby authorized and empowered to lay down gas mains and pipes
and to erect gas posts or fixtures in the streets, highways, and public
grounds of the towns of Wethersfield, West Hartford, and Windsor; and to do
all things necessary or convenient in order to furnish gas for any purpose
to the inhabitants of said towns, and to make and execute contracts or
agreements in relation thereto and to enforce the same; provided, that said
streets, highways, and public grounds shall not be injured, but all left in
as good condition as before the laying of said mains and pipes. And the
use of said streets, highways, and public grounds and the location of said
mains, pipes, and fixtures therein shall be subject to the approval,
consent, and supervision of the selectmen of the town within which such,
streets, highways, and public grounds are situated.
<PAGE>
Exhibit 3(i)
Page 12 of 184
ACT AMENDING THE CHARTER OF THE HARTFORD CITY GAS LIGHT COMPANY
Approved April 19, 1899
Resolved by this Assembly: That The Hartford City Gas Light Company
be and said corporation hereby is fully authorized and empowered from time
to time to increase its capital stock to a sum not exceeding in the whole
one million dollars; but no stock shall be issued for a greater sum than
the capital actually paid in in cash.
<PAGE>
Exhibit 3(i)
Page 13 of 184
Acceptance of Amendment
------------------------
Hartford, Conn. 26th June, 1899.
At a special meeting of the Stockholders of the Hartford City Gas
Light Company, legally warned and held at the office of the said Company,
on June 26th, 1899, for the purpose of taking action on the acceptance of
amendments to its charter, passed by the General Assembly of the State of
Connecticut, and approved March 30 and April 19, 1899, the following
resolution was unanimously adopted:
"Voted, that the amendment to the charter of the Company allowing it
to extend its mains, pipes, etc., to include the towns of
Wethersfield, West Hartford and Windsor, passed by the General
Assembly of the State of Connecticut, and approved March 30, 1899;
and
the amendment to said charter increasing the capital stock of said
Company to a sum not exceeding in the whole $1 million, passed by the
General Assembly of the State of Connecticut, and approved April 19,
1899 are hereby accepted."
And I hereby certify that the foregoing is a true copy of the
original vote accepting said amendments by the Stockholders of said
Company.
Attest:
Thomas Evans, Secretary
Filed July 3, 1899.
<PAGE>
Exhibit 3(i)
Page 14 of 184
ACT AUTHORIZING THE HARTFORD CITY GAS LIGHT COMPANY TO ISSUE BONDS
Approved May 11, 1905
Resolved by this Assembly: That The Hartford City Gas Light Company
is hereby authorized to issue bonds to an amount not exceeding one million
dollars, the proceeds thereof to be used exclusively for the purpose of
funding the present indebtedness of said company and improving and
extending its plant; provided, that at no time shall the amount of the
bonds outstanding exceed the amount of the outstanding capital stock; and
provided further, that bonds issued for purposes other than for the purpose
of funding present indebtedness shall not exceed in amount eighty per
centum of the actual cost of the improvements and extensions for which they
may be issued; and to secure said bonds by a mortgage of any or all of its
franchises and other property, whether real, personal, or mixed, including
after-acquired property.
<PAGE>
Exhibit 3(i)
Page 15 of 184
THE HARTFORD CITY GAS LIGHT COMPANY
------------------------------------
Acceptance of Amendment to Charter
------------------------------------
At a meeting of the stockholders of The Hartford City Gas Light
Company legally warned for the purpose and held at Hartford, Connecticut,
on the 22nd day of May, A.D. 1905, the following vote was duly passed;
VOTED, That the amendment to the charter of the Hartford City Gas Light
Company contained in the resolution of the General Assembly of the State of
Connecticut, entitled, "Resolution Authorizing The Hartford City Gas Light
Company to issue Bonds" and approved May 11, 1905, be and the same is
hereby accepted by this corporation.
AND VOTED FURTHER, That an attested copy of this acceptance be
forthwith filed in the office of the Secretary of the State by the
Secretary of this corporation.
Attest:
John A. McArthur Secretary -
Hartford City Gas Light Company
(Co's seal)
Received and filed May 23, 1905.
--------------------------------
<PAGE>
Exhibit 3(i)
Page 16 of 184
ACT AMENDING THE CHARTER OF THE HARTFORD CITY GAS LIGHT COMPANY
Approved July 27, 1907
Resolved by this Assembly: That The Hartford City Gas Light Company
is
hereby authorized to increase its capital stock, from time to time, to an
amount not exceeding in the whole two million dollars; provided, that no
shares shall be issued except for cash and that no shares shall be issued
for less than their par value.
<PAGE>
Exhibit 3(i)
Page 17 of 184
THE HARTFORD CITY GAS LIGHT CO.,
---------------------------------
CERTIFICATE OF ACCEPTANCE OF AMENDMENT TO THE CHARTER OF
----------------------------------------------------------
THE HARTFORD CITY GAS LIGHT CO.,
----------------------------------
THIS IS TO CERTIFY, That at a meeting of the Stockholders of The
Hartford City Gas Light Co., legally warned and held for the purpose on the
9th day of October, 1907, the resolution amending the Charter of said
Corporation, passed at the January Session of the General Assembly, 1907,
and approved July 27, 1907 was accepted by a unanimous vote of the
Stockholders present.
Dated at Hartford, Conn. this 9th day of October 1907.
Attest,
George Bullock, Vice-President.
J. A. McArthur, Secretary.
(Company's Seal)
Received and filed October 11, 1907
<PAGE>
Exhibit 3(i)
Page 18 of 184
THE HARTFORD CITY GAS LIGHT COMPANY
------------------------------------
CERTIFICATE OF INCREASE OF CAPITAL STOCK
------------------------------------------
WE, THE UNDERSIGNED, a majority of the directors of The Hartford City
Gas Light Company a corporation organized under a special charter granted
by the General Assembly of the State of Connecticut, and located in the
town of Hartford, in said State,
HEREBY CERTIFY, that at a meeting of the stockholders of said
corporation duly called and held for that purpose at Hartford in said
State, on the 26th day of January 1910, it was resolved by a vote of at
least two-thirds of each class of stock to increase the capital stock of
said corporation by issuing Thirty Thousand shares of the par value of
Twenty five dollars each, making the whole number of shares issued Sixty
Thousand, and the whole amount of capital stock One Million five hundred
thousand dollars.
Dated at Hartford, this 26 day of February 1910.
Edward B. Bennett
Francis R. Cooley A Majority
James H. Knight of the
John R. Hills Directors
George Roberts
State of Connecticut, )
(SS. Hartford February 26 1910
County of Hartford )
<PAGE>
Exhibit 3(i)
Page 19 of 184
Personally appeared Edward B. Bennett, Francis R. Cooley, James H.
Knight, John R. Hills and George Roberts, a majority of the directors of
The Hartford City Gas Light Company and made oath to the truth of the
foregoing certificate, by them signed, before me.
William A. Kneeland
Notary Public
(Seal)
Approved, Feb. 28, 1910
Increased Capital Stock Tax
$750, Paid, Feb. 28, 1910.
<PAGE>
Exhibit 3(i)
Page 20 of 184
ACT AMENDING THE CHARTER OF THE HARTFORD CITY GAS LIGHT COMPANY
Approved March 30, 1911
Resolved by this Assembly: SECTION 1. That The Hartford City Gas
Light Company is hereby authorized to increase its capital stock, from time
to time, to an amount not exceeding, in the aggregate, five million
dollars: provided, that no shares of such additional stock shall be issued
except for cash, nor for less than their par value.
SEC. 2. This resolution shall become operative as an amendment to the
charter of said corporation if, at any time not later than the date for the
annual meeting of said corporation in 1911, it shall be accepted at a
meeting of the stockholders of said corporation legally warned and held for
that purpose, and an attested copy of such acceptance filed in the office
of the secretary of the state.
<PAGE>
Exhibit 3(i)
Page 21 of 184
ACT AMENDING A RESOLUTION AMENDING THE CHARTER OF THE
HARTFORD CITY GAS LIGHT COMPANY
Approved June 13, 1911
Resolved by this Assembly: That section two of the resolution
amending the charter of The Hartford City Gas Light Company, approved March
30, 1911, is hereby amended by striking out the figures "1911" and
inserting in lieu thereof the figures "1912".
<PAGE>
Exhibit 3(i)
Page 22 of 184
THE HARTFORD CITY GAS LIGHT COMPANY
-------------------------------------
CERTIFICATE OF INCREASE OF CAPITAL STOCK
------------------------------------------
We, the undersigned, a majority of the directors of The Hartford City
Gas Light Company, a corporation organized under a special charter granted
by the General Assembly of the State of Connecticut and located in the town
of Hartford in said State, do certify that at a meeting of the stockholders
of said corporation duly called and held for that purpose at Hartford in
said State on the 31st day of January, 1911, it was resolved by a vote of
at least two-thirds of each class of stock to increase the capital stock of
said corporation by issuing twenty thousand shares of common stock of the
par value of Twenty-five Dollars each, making the whole number of shares of
the capital stock of said corporation issued eighty thousand shares,
consisting of thirty thousand shares of preferred and fifty thousand shares
of common stock, and the whole amount of capital stock Two Million Dollars,
by a resolution of which the following is a copy:
Resolved that the directors of this company be and
they are hereby authorized and empowered to issue twenty
thousand shares of the authorized unissued stock of the
par value of Twenty-five Dollars a share and to be offered
at par to all stockholders, preferred and common, in
proportion to their stockholding, to wit, one share of new
stock for each three shares of stock outstanding, both
preferred and common, subscriptions
<PAGE>
Exhibit 3(i)
Page 23 of 184
to be payable in cash in two installments, fifty per cent
on or before April 1, 1911, and fifty per cent on or
before July 1, 1911, said stock to be issued as of July 2,
1911, and to participate in all dividends subsequently
declared, the company to allow interest upon all payments
made in advance of July 1, 1911 from date of payment to
July 1, 1911, at the rate of five per cent per annum.
Edward B. Bennett
Francis B. Cooley A Majority
John R. Hills of the
John T. Robinson Directors.
James H. Knight
State of Connecticut, )
) Hartford, July 19, 1911.
County of Hartford )
Personally appeared Edward B. Bennett, Francis R. Cooley, John R.
Hills, John T. Robinson and James H. Knight, a majority of the directors of
The Hartford City Gas Light Company, and made oath to the truth of the
foregoing certificate by them signed, before me.
Albion B. Wilson,
(Seal) Notary Public.
Approved July 19, 1911.
Charter Fee $500 Paid
July 19, 1911.
-2-
<PAGE>
Exhibit 3(i)
Page 24 of 184
THE HARTFORD CITY GAS LIGHT COMPANY
------------------------------------
Certificate of Acceptance of Amendment
---------------------------------------
to the Charter of
-----------------
The Hartford City Gas Light Company
------------------------------------
This is to certify that at a meeting of the stockholders of The
Hartford City Gas Light Company legally warned and held for the purpose on
the 16th day of January, 1912, such time being not later than the date for
the annual meeting of said corporation in 1912, the amendment to the
charter of said corporation contained in resolution of the Genneral
Assembly of the State of Connecticut passed at its January session, 1911,
and approved March 30th, 1911, as amended by resolution of the General
Assembly passed at said session and approved June 13th, 1911, was accepted
by an unanimous vote of the stockholders present, of which vote the
following is a copy:
Resolved
That the amendment to the charter of
The Hartford City Gas Light Company contained
in resolution of the General Assembly of the
State of Connecticut passed at its January
session, 1911, and approved March 30th, 1911,
as amended by resolution of the General
Assembly of the State of Connecticut passed at
its said session and approved June 13th, 1911,
be and it hereby is accepted.
Dated at Hartford this 16th day of January 1912.
Attest:
E. B. Bennett, President
J. A. McArthur, Secretary
Received and filed
Jan. 16, 1912. <PAGE>
Exhibit 3(i)
Page 25 of 184
THE HARTFORD CITY GAS LIGHT COMPANY
------------------------------------
CERTIFICATE OF INCREASE OF CAPITAL STOCK.
-----------------------------------------
WE, THE UNDERSIGNED, a majority of the Directors of The Hartford City
Gas Light Company, a corporation organized under a special charter granted
by the General Assembly of the State of Connecticut, and located in the
town of Hartford, in said State,
HEREBY CERTIFY, that at a meeting of the stockholders of said
corporation duly called and held for that purpose at Hartford in said
State, on the 26th day of January, 1910, it was resolved by a vote of
stockholders holding not less than two-thirds of the stock of such
corporation, all of said stock being common stock, that said corporation
increase its capital stock from Seven Hundred Fifty Thousand Dollars
($750,000) to One Million Five Hundred Thousand Dollars ($1,500,000.) by
the issue of thirty thousand (30,000) additional shares of preferred stock
of the par value of Twenty-five Dollars ($25.) a share, said preferred
stock to be entitled to cumulative dividends at the rate of eight per cent.
(8%) per annum, quarterly dividends of two per cent (2%) to be paid thereon
before any dividends are payable upon the common stock of the company, the
first quarterly dividend of two per cent (2%) to be paid April 1st, 1910,
said preferred stock in the event of liquidation of the Corporation or
distribution of its assets to be preferred as to the entire assets to the
amount of Fifty Dollars ($50) a share, all shares whether of preferred or
<PAGE>
Exhibit 3(i)
Page 26 of 184
common stock, to have equal voting rights and equal right to participate in
subscriptions to any future increase or capital stock; making the whole
number of shares issued sixty thousand (60,000), to-wit: thirty thousand
(30,000) shares of common stock and thirty thousand (30,000) shares of
preferred stock all of the par value of Twenty-five Dollars ($25.) each,
and the whole amount of capital stock One Million Five Hundred Thousand
Dollars ($1,500,000); and this certificate is made pursuant to Section 51
of Chapter 194 of the Public Acts of 1903 and is in addition to the
certificate of even date herewith filed pursuant to the provision of
Section 47 of said Act in relation to the increase of capital stock
aforesaid.
Dated at Hartford, this 26th day of February 1910.
Edward B. Bennett
John T. Robinson A Majority
James H. Knight of the
Francis R. Cooley Directors.
George Roberts
(U.S. Int. Rev. Stamp for)
(10/100 dollars )
(affixed and cancelled. )
-2-
<PAGE>
Exhibit 3(i)
Page 27 of 184
STATE OF CONNECTICUT )
ss. Hartford, June 2nd, 1915.
COUNTY OF HARTFORD )
Personally appeared Edward B. Bennett, John T. Robinson, James H.
Knight, Francis R. Cooley and George Roberts a majority of the directors of
The Hartford City Gas Light Company, and made oath to the truth of the
foregoing certificate, by them signed before me.
Francis E. Jones,
Notary Public.
(Seal) My commission expires Feb. 1, 1917.
Received and filed
Jun 2, 1915.
-3-
<PAGE>
Exhibit 3(i)
Page 28 of 184
AN ACT AMENDING THE CHARTER OF THE HARTFORD CITY GAS
LIGHT COMPANY
Approved April 26, 1917
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
SECTION 1. The Hartford City Gas Light Company is authorized to
purchase the franchise of The South Manchester Light, Power and Tramway
Company to manufacture, make and sell gas within the limits of the town
of Manchester, with the rights and powers incidental to the right to
manufacture, make and sell gas within the limits of the said town, and to
hold, use and enjoy said franchise, rights and powers, and to contract with
said company for the purchase, acquiring, holding and enjoyment of said
franchise, rights and powers, subject to the conditions and limitations in
such contract contained. For the purpose of carrying on its business under
said franchise, rights and powers in said town, The Hartford City Gas Light
Company is authorized to use as a trade name the name The Manchester Gas
Company.
SEC. 2. The Hartford City Gas Light Company is authorized to
construct, lay and maintain a supply gas main from its plant in the city of
Hartford across the town of East Hartford in Pitkin, Main and Silver
streets or on lands contiguous to or abutting said streets to the boundary
of the Town of Manchester and in the streets and highways of the town of
Manchester, to connect with the gas plant and system of The South
Manchester Light, Power and Tramway Company.
<PAGE>
Exhibit 3(i)
Page 29 of 184
THE HARTFORD CITY GAS LIGHT COMPANY.
_____________________________________
CERTIFICATE OF ACCEPTANCE OF AMENDMENT
_______________________________________
TO CHARTER OF THE HARTFORD CITY GAS LIGHT COMPANY
____________________________________________________
This is to certify at a meeting of the stockholders of The Hartford
City Gas Light Company, legally warned and held for the purpose, on the
22nd day of June 1917, the act amending the charter of said corporation,
passed at January session of the General Assembly 1917 and approved April
26th, 1917, and approved April 26th, 1917, was accepted by a unanimous vote
of the stockholders present, the record of which action is as follows:
On a motion duly made and seconded, the amendment was accepted by a
stock vote of 2643 in the affirmative.
Dated at Hartford, Connecticut, the 8 day of August, 1917.
E. B. Bennett, President
Attest:
J. A. McArthur, Secretary
R eceived and filed
Aug 10, 1917.
<PAGE>
Exhibit 3(i)
Page 30 of 184
THE HARTFORD CITY GAS LIGHT COMPANY.
_____________________________________
CERTIFICATE OF INCREASE OF CAPITAL STOCK OF
____________________________________________
HARTFORD CITY GAS LIGHT COMPANY
_________________________________
We, the undersigned, a majority of the Directors of the Hartford City
Gas Light Company, a corporation organized under a special charter granted
by the General Assembly of the State of Connecticut and located in the Town
of Hartford in said State, hereby certify, that at a meeting of the
stockholders of said corporation duly called and held for that purpose at
Hartford in said State on the 15th day of January, 1918, it was resolved by
a vote of at least two-thirds of each class of stock to increase the
capital stock of said corporation by issuing twenty thousand (20,000)
shares of the authorized unissued stock of the Company of the par value of
Twenty-five Dollars ($25) each, such additional stock to be common stock,
making the whole number of shares issued seventy thousand (70,000) shares
of common stock and thirty thousand (30,000) shares of preferred stock or a
total of one hundred thousand (100,000) shares of both classes of stock and
the whole amount of capital stock one million seven hundred fifty thousand
(1,750,000) dollars of common stock and seven hundred fifty thousand
(750,000) dollars of preferred stock or a total of two million five hundred
thousand (2,500,000) dollars.
Dated at Hartford this 1st day of October, A.D. 1919.
<PAGE>
Exhibit 3(i)
Page 31 of 184
Edward B. Bennett
Francis H. Cooley A majority
John T. Robinson of the
James H. Knight Directors
Frank C. Sumner
STATE OF CONNECTICUT )
) ss. Hartford, November 3, 1919
COUNTY OF HARTFORD )
Personally appeared Edward B. Bennett, Francis R. Cooley, John T.
Robinson, James H. Knight and Frank C. Susner, a majority of the Directors
of The Hartford City Gas Light Company and made oath to the truth of the
foregoing certificate by them signed, before me.
William A. Kneeland
______________________________
Notary Public
(SEAL)
Charter Fee Paid $500. Nov. 3, 1919.
Approved Nov. 3, 1919.
-2-
<PAGE>
Exhibit 3(i)
Page 32 of 184
THE HARTFORD CITY GAS LIGHT COMPANY.
_____________________________________
CERTIFICATE OF INCREASE OF CAPITAL STOCK
__________________________________________
WE, THE UNDERSIGNED, a majority of the directors of The Hartford City
Gas Light Company a corporation organized under a special charter granted
by
the General Assembly of the State of Connecticut, and located in the town
of
Hartford, in said State,
HEREBY CERTIFY that at a meeting of the stockholders of said
corporation duly called and held for that purpose at Hartford in said
State, on the 15th day of January 1924, it was resolved by a vote of at
least two- thirds of each class of stock to increase the capital stock of
said corporation by issuing Twenty Thousand (20,000) shares of the par
value of Twenty-five ($25.00) dollars each, making the whole number of
shares issued One Hundred Twenty Thousand (120,000) and the whole amount of
capital stock Three Million ($3,000.000) dollars.
Dated at Hartford, Conn. this 17th day of March 1924.
Edward B. Bennett )
)
M. G. Bulkeley, Jr. ) A majority
)
Elijah C. Johnson ) of the
)
Francis R. Cooley ) Directors.
)
John T. Robinson )
<PAGE>
Exhibit 3(i)
Page 33 of 184
State of Connecticut. )
) ss. Hartford, Conn., Mar. 17th, 1924.
County of Hartford )
Personally appeared Edward B. Bennett, M. G. Bulkeley, Jr., Elijah C.
Johnson, Francis H. Cooley, John T. Robinson, a majority of the directors
of The Hartford City Gas Light Company, and made oath to the truth of the
foregoing certificate, by them signed before me.
William A. Kneeland
___________________________
Notary Public
(Seal)
Approved Mar 18, 1924
$2,500,000. to $3,000.000.
Increased Capital Stock Tax.
$500.00 paid
Walter R. King
For Treasurer.
-2-
<PAGE>
Exhibit 3(i)
Page 34 of 184
AN ACT CHANGING THE NAME OF THE HARTFORD CITY
GAS LIGHT COMPANY TO THE HARTFORD GAS COMPANY
AND AMENDING ITS CHARTER
Approved June 7, 1927
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
SECTION 1. The name of The Hartford City Gas Light Company, a
corporation chartered by resolution of the general assembly passed at its
May session, 1848, is changed to The Hartford Gas Company.
SEC. 2. Said corporation is authorized to distribute and sell gas
in the towns of Bloomfield and Glastonbury and to lay gas mains and pipes
and to erect gas posts and fixtures in the streets, highways and public
grounds of said towns and to do all things necessary or convenient in order
to furnish gas for any purpose to said towns and to the inhabitants
thereof.
SEC. 3. In addition to the powers heretofore granted under its
charter and the amendments thereto, said corporation is authorized to
purchase gas for distribution and sale in any territory within which it is
or may be empowered to distribute and sell gas.
<PAGE>
Exhibit 3(i)
Page 35 of 184
THE HARTFORD CITY GAS LIGHT COMPANY.
_____________________________________
CERTIFICATE OF ACCEPTANCE OF AMENDMENT TO CHARTER
___________________________________________________
THIS IS TO CERTIFY That at a meeting of the stockholders of The
Hartford City Gas Light Company legally warned and held for the purpose on
the 7th day of July, 1927, the Act amending the charter of said corporation
passed at the January Session of the General Assembly 1927 was accepted by
a unanimous vote of the stockholders present in person and by proxy, more
than two-thirds of all outstanding stock of the Company being represented
at said meeting, of which vote the following is a copy:
"VOTED: That the Act of the General Assembly of the State of
Connecticut approved June 7, 1927, entitled `An Act Changing the Name
of The Hartford City Gas Light Company to The Hartford Gas Company
and Amending its Charter' be and the same hereby is accepted by this
corporation."
Dated at Hartford this day of July, 1927.
Attest:
E. E. Eysenbach
______________________________
President
(Corporate Seal)
J. A. McArthur
______________________________
Secretary
Received and Filed
JUL 8 1927 <PAGE>
Exhibit 3(i)
Page 36 of 184
THE HARTFORD GAS COMPANY
__________________________
CERTIFICATE OF INCREASE OF CAPITAL STOCK OF
____________________________________________
THE HARTFORD GAS COMPANY
__________________________
We, the undersigned, a majority of the Directors of The Hartford Gas
Company, a corporation organized under a special charter granted by the
General Assembly of the State of Connecticut and located in the Town of
Hartford in said State, hereby certify that at a meeting of the
stockholders of said corporation duly called and held for that purpose at
Hartford in said State on the seventh day of July, 1927 and increase of its
capital stock by the issue of twenty thousand (20,000) shares of common
stock of the par value of Twenty-five Dollars ($25) a share was authorized
by a vote of at least two-thirds of each class of stock issued and
outstanding at the time of said vote, such increase to make the number of
shares of the capital stock consist of one hundred ten thousand (110,000)
shares of common stock of the par value of Twenty-five Dollars ($25) a
share and thirty thousand (30,000) shares of preferred stock of the par
value of Twenty-five Dollars ($25) a share and the whole amount of capital
stock Three Million Five Hundred Thousand Dollars ($3,500,000).
Dated at Hartford, Connecticut this 4th day of January, 1928.
E. E. Eysenbach )
) A
Francis R. Cooley )
) Majority
John T. Robinson )
<PAGE>
Exhibit 3(i)
Page 37 of 184
) of the
Elijah C. Johnson )
) Directors
Arthur D. Johnson )
State of Connecticut )
) ss. Hartford, January 4, A.D. 1928
County of Hartford )
Personally appeared E.E. Eysenbach, Francis R. Cooley, John T.
Robinson, Elijah C. Johnson and Arthur E. Johnson, a majority of the
Directors of The Hartford Gas Company and made oath to the truth of the
foregoing certificate by them signed, before me.
Lucius F. Robinson, Jr.
________________________________
Notary Public.
(SEAL)
Received and Filed
JAN 4, 1928
$500.# Paid Jan. 4, 1928.
A.M.Desmore
For Secretary
-2-
<PAGE>
Exhibit 3(i)
Page 38 of 184
THE HARTFORD GAS COMPANY
__________________________
CERTIFICATE OF INCREASE OF CAPITAL STOCK OF
____________________________________________
THE HARTFORD GAS COMPANY
__________________________
We, the undersigned, a majority of the Directors of The Hartford Gas
Company, a corporation organized under a special charter granted by the
General Assembly of the State of Connecticut and located in the Town of
Hartford in said State, hereby certify that at a meeting of the
Stockholders of said corporation duly called and held for that purpose at
Hartford in said State on the twenty-fifth day of April, 1928 an increase
of its capital stock by the issue of twenty thousand (20,000) shares of
common stock of the par value of Twenty-five Dollars ($25) a share was
authorized by a vote of at least two-thirds of each class of stock issued
and outstanding at the time of said vote, such increase to make the number
of shares of the capital stock consist of one hundred thirty thousand
(130,000) shares of common stock of the pare value of Twenty-five Dollars
($25) a share and thirty thousand (30,000) shares of preferred stock of the
par value of Twenty-five Dollars ($25) a share and the whole amount of
capital stock Four Million Dollars ($4,000,000).
Dated at Hartford, Connecticut this fifteenth day of December, 1928.
E. E. Eysenbach )
)
Francis R. Cooley ) A majority
) of the
Elijah C. Johnson
<PAGE>
Exhibit 3(i)
Page 39 of 184
)
Clifford D. Cheney )
)
Charles D. Rice )
State of Connecticut)
) ss. Hartford, December 15th, A.D. 1928
County of Hartford )
Personally appeared E. E. Eysenbach, Francis R. Cooley, Elijah C.
Johnson, Clifford D. Cheney, and Charles D. Rice, a majority of the
Directors of The Hartford Gas Company and made oath to the truth of the
foregoing certificate by them signed, before me.
Martin J. Coughlin
____________________________
Notary Public.
(Seal)
Approved, Dec. 19, 1928.
By Elmer H. Lounabury,
Fee for Increase Capital,
$500. # Paid, Dec. 19, 1928.
A. M. Desmore, For Secretary.
-2-
<PAGE>
Exhibit 3(i)
Page 40 of 184
THE HARTFORD GAS COMPANY
__________________________
CERTIFICATE OF INCREASE OF CAPITAL STOCK OF
____________________________________________
THE HARTFORD GAS COMPANY
__________________________
We, the undersigned, a majority of the Directors of The Hartford Gas
Company, a Corporation organized under a special charter granted by the
General Assembly of the State of Connecticut and located in the Town of
Hartford in said State, hereby certify that at a meeting of the
stockholders
of said Corporation duly called and held for that purpose at Hartford in
said State on the second day of May, 1929 an increase of its capital stock
by the issue of twenty thousand (20,000) shares of Common stock of the par
value of Twenty-five dollars -($25.00) a share was authorized by a vote of
at least two-thirds of each class of stock issued and outstanding at the
time of said vote, such increase to make the number of shares of the
Capital
stock consist of one hundred fifty thousand, -(150,000) shares of Common
stock at the par value of Twenty-five dollars, ($25.00) a share, and thirty
thousand, -(30,000) shares of Preferred stock of the par value of Twenty-
five dollars, ($25.00) a share, and the whole amount of Capital stock Four
million five hundred thousand dollars, -($4,500,000).
Dated at Hartford, Connecticut, this sixteenth day of December, 1929.
<PAGE>
Exhibit 3(i)
Page 41 of 184
John T. Robinson
Elijah C. Johnson A
Charles L. Taylor Majority
M.S. Little of the
E.E. Eysenbach Directors
State of Connecticut )
) ss. Hartford, December 16th, A.D. 1929.
County of Hartford )
Personally appeared E.E.Eysenbach, John T. Robinson, Elijah C.
Johnson, Charles L. Taylor and Mitchell S. Little, a majority of the
Directors of The Hartford Gas Company, and made oath to the truth of the
foregoing certificate by them signed, before me.
(Seal) Martin J. Coughlin
Notary Public.
Approved, Dec. 18, 1929
$500.# Paid, Dec. 18, 1929.
<PAGE>
Exhibit 3(i)
Page 42 of 184
(Senate Bill No. 27.)
(101)
AN ACT AMENDING THE CHARTER OF THE HARTFORD GAS COMPANY
Be it enacted by the Senate and House of Representatives in General
Assembly
concerned:
Section five of the resolution of the general assembly passed at its
May session, 1848, incorporating The Hartford City Gas Light Company, the
name of said corporation having been changed by the general assembly to The
Hartford Gas Company, is amended to read as follows: The government and
direction of the affairs of the company shall be vested in a board of
directors consisting of not less than seven and not more than twelve, who
shall be chosen by the stockholders of said company, in the manner
herinafter provided and shall hold their office until others shall be
elected and shall have qualified to take their places as directors. Said
directors, a majority of whom shall be quorum for the transaction of
business, shall elect one of their number to be president of the board, who
shall also be president of said company. They shall also choose a
treasurer who shall give bonds with security to said company in such sum as
said directors may require for the faithful discharge of his trust and
shall also choose a secretary.
Approved April 14, 1937.
Form 61-58
State of Connecticut )
) ss. Hartford
OFFICE OF THE SECRETARY OF STATE )
I hereby certify that the foregoing is a true copy of record in this office
In Testimony Whereof I have hereunto set my
hand and of said at
Hartford, this 9th day
of June A.D. 1978
/s/ Deputy Secretary of the State
<PAGE>
Exhibit 3(i)
Page 43 of 184
THE HARTFORD GAS COMPANY
__________________________
CERTIFICATE OF ACCEPTANCE OF AMENDMENT TO CHARTER OF
____________________________________________
THE HARTFORD GAS COMPANY
__________________________
THIS IS TO CERTIFY That at a meeting of the stockholders of THE
HARTFORD GAS COMPANY, legally warned and held for the purpose on the 16th
day of June, 1937, the Act amending the charter of said Corporation passed
at the January Session of the General Assembly 1937 and approved on the
14th day of April 1937, was accepted by a unanimous vote of the
stockholders present, of which the following is a copy:
VOTED: That the Act of the General Assembly of the State of
Connecticut entitled "An Act amending the charter of The Hartford Gas
Company" be and the same hereby is accepted by this Corporation.
Dated at Hartford, Connecticut, this 16th day of July, 1937.
N. B. Berlotte
President.
Attest:
M. J. Coughlin
Secretary.
(Corporate Seal)
RECEIVED AND FILED
JULY 20, 1937
<PAGE>
Exhibit 3(i)
Page 44 of 184
AN ACT AMENDING THE CHARTER OF THE HARTFORD
GAS COMPANY
Approved March 12, 1943
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
SECTION 1. Subject to the approval of the public utilities
commission, The Hartford Gas Company is authorized to increase its capital
stock from time to time to an amount not exceeding in the aggregate seven
million five hundred thousand dollars.
SEC. 2. Subject to the approval of the public utilities commission,
said company is authorized to issue, from time to time, notes, bonds or
other evidences of indebtedness payable at periods of more than one year
after the date thereof (a) to provide funds for the acquisition of property
or for the construction, completion, extension or improvement of its
services, or (b) to reimburse its treasury for moneys expended for such
acquisition or for such construction, completion, extension or improvement
which were not obtained through the issue of stock, notes, bonds or other
evidences of indebtedness, or (c) for the discharge, funding or refunding
of its obligations; provided the aggregate principal amount of such notes,
bonds or other evidences of indebtedness outstanding shall at no time
exceed the amount of its outstanding capital stock.
SEC. 3. This act shall become operative as an amendment to the
charter of said corporation if, within one year after its passage, (a) it
shall be accepted by vote of a majority of the stock of said corporation
present in person or by proxy at a meeting legally warned and held for such
purpose, and (b) an attested copy of such acceptance shall be filed in the
office of the secretary of the state.
<PAGE>
Exhibit 3(i)
Page 45 of 184
THE HARTFORD GAS COMPANY
THIS IS TO CERTIFY That at a meeting of the stockholders of The
Hartford Gas Company, legally warned and held for the purpose on the 17th
day of March, 1943, the Act amending the charter of said corporation passed
at the January Session of the General Assembly of 1943 and approved March
12, 1943 was accepted by a unanimous vote of the stockholders present in
person and by proxy, of which the following is a copy:
RESOLVED: That the Act amending the Charter of The Hartford Gas
Company passed at the January Session of the General Assembly of 1943 and
approved March 12, 1943 be and it hereby is accepted.
Dated at Hartford this 20th day of March, 1943.
N. B. Bertolette
_________________________________
President
Martin J. Coughlin
__________________________________
Secretary
<PAGE>
Exhibit 3(i)
Page 46 of 184
STATE OF CONNECTICUT )
) ss. Hartford, March 12, 1943
COUNTY OF HARTFORD )
Personally appeared, NORMAN B. BERTOLETTE, President and MARTIN J.
COUGHLIN, Secretary of The Hartford Gas Company, signers of the foregoing
certificate, and made oath to the truth of the same, before me.
____________________________
Notary Public
(SEAL)
RECEIVED AND FILED
MAR 26, 1943
<PAGE>
Exhibit 3(i)
Page 47 of 184
AN ACT AMENDING THE CHARTER OF THE HARTFORD
GAS COMPANY
Approved June 27, 1951
SECTION 1. For the purpose of obtaining a supply of natural gas, The
Hartford Gas Company, chartered as The Hartford City Gas Light Company by
resolution of the general assembly passed at its May Session, 1848, is
authorized to construct, lay and maintain, within the streets, highways and
public grounds of the territory in which it is or may be empowered to
distribute and sell gas, such pipes, mains and other local distribution
facilities, including mains connecting with natural gas pipelines, as may
be necessary for such distribution and sale and, with the approval of the
public utilities commission, such facilities may be constructed, laid and
maintained in other territories within this state for said purpose.
SEC. 2. Subject to the approval of the public utilities commission,
said company is authorized to issue, from time to time, notes, bonds or
other evidences of indebtedness payable at periods of more than one year
after the date thereof in such amount as said commission may approve (a)
to provide funds for the acquisition of property or for the construction,
completion, extension or improvement of its system, or (b) to reimburse its
treasury for moneys expended for such acquisition or for such construction,
completion, extension or improvement which were not obtained through the
issue of stock, notes, bonds or other evidences of indebtedness, or (c) for
the discharge, funding or refunding of its obligations. The aggregate
principal amount of such notes, bonds or other evidences of indebtedness
payable at periods of more than one year after the date thereof shall not
at the time of issue thereof exceed one and one-half times the amount of
the outstanding capital stock and surplus of the company.
SEC. 3. Subject to the approval of the public utilities commission,
said company may enter into a merger of consolidation with one or more
other public service companies of this state or acquire the assets and
franchises thereof by issuance of shares of its stock or otherwise, whether
or note the charter of such other company expressly so provides. Any such
merger, consolidation or acquisition shall be carried out in conformity
with the provisions of the general statutes relating thereto and the
corporation resulting from any such merger or consolidation shall have an
authorized capital equal to the combined authorized capital of the
constituent corporations.
<PAGE>
Exhibit 3(i)
Page 48 of 184
SEC. 4. This act shall become operative as an amendment to the
charter of said corporation if, within one year after its passage, (a) it
shall be accepted by vote of a majority of the stock of said corporation
present in person or by proxy at a meeting legally warned and held for such
purpose, and (b) an attested copy of such acceptance shall be filed in the
office of the secretary of the state.
<PAGE>
Exhibit 3(i)
Page 49 of 184
THE HARTFORD GAS COMPANY
Certificate of Acceptance of Amendment
to Charter
______________________________________
THIS IS TO CERTIFY That at a meeting of the stockholders of The
Hartford Gas Company legally warned and held for that purpose in Hartford,
Connecticut, on March 19, 1952 the Act amending the charter of said
corporation passed at the January session of the General Assembly of 1951
was accepted by a vote of a majority of the stockholders present in person
or by proxy of which the following is a copy:
RESOLVED: That the amendment of the charter of this corporation
enacted by the 1951 Session of the Connecticut Legislature (Special
Acts of 1951 No. 478) be and the same is hereby accepted.
Dated at Hartford, Connecticut, this 19th day of March, 1952.
Attest:
___________________________________
N. B. Bertolette
President, The Hartford Gas Company
___________________________________
M. J. Coughlin
Secretary, The Hartford Gas Company
<PAGE>
Exhibit 3(i)
Page 50 of 184
AN ACT CONCERNING ENLARGING THE FRANCHISE
AREA OF THE HARTFORD GAS COMPANY AND
PROVIDING FOR CERTAIN ADDITIONAL POWERS
Approved May 24, 1957
SECTION 1. The Hartford Gas Company is authorized to distribute
and sell gas of any type in the towns of Simsbury, Rocky Hill, Farmington
and Avon and to lay gas mains and pipes and to erect such other fixtures
as are necessary in and on the streets, highways and public grounds of
said towns and to do all things necessary or convenient in order to
furnish gas for any purpose to said towns and to the inhabitants thereof.
SEC. 2. Section 3 of number 478 of the special acts of 1951 is
amended by adding thereto the following: In addition to the powers
elsewhere granted to The Hartford Gas Company by its charter and any
amendments thereto, said company is hereby authorized to acquire by
lease, purchase or otherwise, upon such terms and conditions as may be
agreed upon, and to hold, own, use, exercise, enjoy and dispose of the
whole or any part of the gas property, rights, securities and franchises
of any corporation authorized to manufacture, sell or dispose of gas in
any town in the counties of Hartford, Middlesex and Tolland and, upon the
acquisition of such property and franchises, is authorized to manufacture,
buy, sell and distribute gas and gas appliances for any and all purposes
within the towns named in such franchises or within such area of the towns
as may be agreed upon and to hold, own, use, extend, exercise, enjoy and
dispose of the same to the same extent as though said rights, franchises
and immunities had been originally granted to it. In the exercise of its
corporate powers, said company shall have the right to enter upon and open
the streets, avenues and highways within the towns named in such
franchises, for the purpose of installing and maintaining conduits, pipes
and all necessary or convenient fixtures and apparatus, all subject to any
rules, regulations, by-laws or ordinances of such towns. Said company
shall have power from time to time to assume or guarantee the contracts,
bonds and other obligations and the payment of dividends upon the capital
stock of any gas company of this state. Any corporation authorized to
engage in or carry on the business of manufacturing, selling or
distributing gas shall be authorized to consolidate or merge with said
corporation and to sell, lease and convey to it the whole or any part of
its rights, privileges, franchises, property, securities and assets.
<PAGE>
Exhibit 3(i)
Page 51 of 184
SEC. 3. The Hartford Gas Company shall have and enjoy all the
powers and privileges possessed by corporations organized under the
provisions of chapter 249 of the general statutes, and any amendments
thereof, except so far as they are inconsistent with the provisions of
the charter of the company, as from time to time amended.
SEC. 4. The Hartford Gas Company is hereby authorized, upon
compliance with the provisions of sections 5 to 7, inclusive, of this
act, to acquire by condemnation and to enter upon, acquire, take and use
such lands, rights of way, easements or other interests in land,
hereinafter called such property, as shall be necessary or convenient in
the exercise of any of its rights, powers and privileges; provided said
company shall be held to pay all damages to any person or persons which
may arise from any such entry or taking.
SEC. 5. No such property shall be taken under the provisions of
this act in any public street or highway, public park or reservation or
other public property, or within the location of any railroad or street
railway company or other public utility company; provided such pipeline
or pipelines may be constructed under or through any public highway or
street, public park or reservation or other public property if the method
of such construction and the plans and specifications therefor have been
approved by the authority having jurisdiction over the maintenance of
such public highway or street, public park or reservation or other public
property; and provided further such pipeline or pipelines may be
constructed over or across the location of any railroad or street railway
company or other public utility company by agreement with such railroad of
street railway company or other public utility company or, in the event of
failure so to agree, then with the approval of the public utilities
commission and in such manner as may be determined by said commission.
SEC. 6. If said company and the person or persons to whom damages
may arise from any taking under the provisions of this act of any such
property shall be unable to effect an agreement on the amount of such
damages, said company may prefer a petition to the superior court in the
county in which such property lies or to a judge of said court if said
court is not in session praying that such compensation may be
determined, which petition shall describe such property to be taken and
the use to which it is to be devoted and shall be accompanied by a
summons signed by competent authority and served as process in civil
actions before said court, notifying the owner or owners of said property
and all persons interested in such property to appear before said court
or such judge, and thereupon said court or judge shall appoint a
committee of three disinterested persons who shall be duly sworn before
commencing their duties. Such committee, after giving reasonable notice
to the parties, shall view the property in question, hear the evidence,
ascertain the value, assess just damages to the owner or owners of such
-2-
<PAGE>
Exhibit 3(i)
Page 52 of 184
property, and report its doings to said court or judge. Said court or
judge may accept such report or may reject it for irregular or improper
conduct by such committee in the performance of its duties. If the
report is rejected, said court or judge shall appoint another committee
which shall proceed in the same manner as the first committee was
required to proceed. If the report is accepted, such acceptance shall
have the effect of a judgment in favor of the owner of the property
against said company for the amount of the assessment made by such
committee and, except as otherwise provided by law, execution may issue
therefor. Said court or such judge shall make any order necessary to
protect the rights of all the parties interested. Except as provided in
section 7 of this act, such property shall not be entered upon and used
by said company until the amount of such damages shall be paid to the
party or parties to whom such damages are due, or deposited for his or
their use with said court, and upon such payment or deposit such property
shall become the property of said company. The expenses or costs of any
such hearing shall be taxed by such court or judge and paid by said
company. If the amount of the damages awarded to any such property owner
shall exceed the amount offered to such property owner by said company for
such property prior to the preferring of such petition to such court or
judge, such court or judge may award to such property owner such attorney
and appraisal fees as the court may determine to be reasonable.
SEC. 7. When at any stage of condemnation proceedings brought
under this act it shall appear to the court or judge before whom such
proceedings are pending that the public interest will be prejudiced by
delay, said court or judge may direct that said company be permitted to
enter immediately upon the property to be taken and devote it to the
public use specified in said petition upon the deposit with said court
of a sum to be fixed by said court or judge, upon notice to the parties
of not less than ten days, and such sum when so fixed and paid shall be
applied so far as it may be necessary for the purpose of the payment of
any award of damages which may be made, with interest thereon from the
date of such entry upon said property and the remainder if any returned
to said company. In case the proceedings should be abandoned by said
company, said court or judge shall direct that the money so deposited,
so far as it may be necessary, shall be applied to the payment of any
damages that the owner of such property or other parties in interest may
have sustained by such entry upon and use of such property, and the costs
and expenses of such proceedings, such damages to be ascertained by said
court or judge or a committee to be appointed for that purpose, and if
the sum so deposited shall be insufficient to pay such damages and all
costs and expenses so awarded, judgment shall be entered against said
company for the deficiency, which may be enforced and collected in the
same manner as a judgment in the superior court; and the possession of
such property shall be restored to the owner or owners thereof.
-3- <PAGE>
Exhibit 3(i)
Page 53 of 184
SEC. 8. Number 104 of the special acts of 1937 is amended to read
as follows: The government and direction of the affairs of the company
shall be vested in a board of directors consisting of not less than seven
and not more than twelve, who shall be chosen by the stockholders of said
company in the manner hereinafter provided and shall hold their offices
until others are elected and have qualified to take their places as
directors. Said directors, a majority of whom shall be a quorum for the
transaction of business, shall elect one of their number to be president
of said company. They shall also choose a treasurer who shall give bond
with security to said company in such sum as said directors may require
for the faithful discharge of his trust, and shall also choose a
secretary.
SEC. 9. This act shall become operative as an amendment to the
charter of said company if, within eighteen months after its passage, it
shall be accepted by vote of a majority of the stock of said company
present in person or by proxy at a meeting legally warned and held for
such purpose, and an attested copy of such acceptance shall be filed in
the office of the secretary of the state.
-4-
<PAGE>
Exhibit 3(i)
Page 54 of 184
CERTIFICATE OF ACCEPTANCE OF
AMENDMENT TO CHARTER
THIS IS TO CERTIFY, that at a meeting of the stockholders of THE
HARTFORD GAS COMPANY legally warned and held for the purpose on the 19th
day of March, 1958, the Act amending the Charter of said corporation
passed at the January Session of the General Assembly of 1957 was
accepted by a unanimous vote of the stockholders present, of which the
following is a copy:
"RESOLVED: That the amendment to the Charter of The Hartford
Gas Company enacted by the 1957 session of the Connecticut
Legislature (Special Acts of 1957 - No. 387) be and it hereby is
accepted."
Dated at Hartford, Connecticut this 21st day of April, 1958.
Attest: W. T. Jebb
_____________________________
President
M. J. Coughlin
_____________________________
Secretary
<PAGE>
Exhibit 3(i)
Page 55 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
BY ACTION OF BOARD OF DIRECTORS AND SHAREHOLDERS
(Stock Corporation)
1. The name of the corporation is The Hartford Gas Company
233 Pearl Street, Hartford, Connecticut
2. The Certificate of Incorporation (check one only)
___X___(a) is amended only
_______(b) is amended and restated
_______(c) is restated only
by the following resolution of directors and shareholders:
RESOLVED: That the Charter of The Hartford Gas Company be and it hereby is
amended so as to specifically include among its powers the following: The
Hartford Gas Company shall have power, through the agency of one or more
wholly-owned subsidiary corporations and call as itself to engage in the
business of furnishing, from one or more plants, heat or air conditioning,
or both, by means of steam, heated or chilled water or other medium, in
the cities and towns in the State of Connecticut wherein it now is or
hereafter may be authorized to sell gas or electricity or both.
3. (Omit if Par. 2(a) is checked)
(a) The above resolution merely restates and does not change
the provisions of the original Certificate of Incorporation
as supplemented and amended to date except as follows:
(indicate amendments made, if say: if none so indicate)
(b) Other than as indicated in Par 3(a), there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented and amended to date, and the
provisions of this Certificate Restating the Certificate of
Incorporation.
4. The above resolution was adopted by the board of directors by
shareholders. At respective meetings held March 15, 1961.
5. Vote of Shareholders:
(a) (Use if no shares are required to be voted as a class.)
<TABLE>
<CAPTION>
Number of Shares Total Voting Power of Vote Required Total Favoring
Entitled to Vote Shares Entitled to Vote for Adoption Adoption
______________________ _______________________ ____________ _____________
<C> <C> <C> <C>
236,264 236,264 157,510 189,705
</TABLE>
(b) (Use if any shares to be voted as a class.)
Describe clearly the vote required for adoption and state the actual
vote favoring adoption: include the designation and number of shares
of each class entitled to vote on the resolution as a class, the
voting power of each such class and the actual vote of each such
class.
(SEAL) Dated at Hartford, Conn this 11th day of April, 1961
/s/ William T. Jebb
President
/s/ W.A. MacDonald
Secretary <PAGE>
Exhibit 3(i)
Page 56 of 184
STATE OF CONNECTICUT)
) SS. April 11 1961
COUNTY OF HARTFORD )
Formally appeared William T. Jebb and W.A. MacDonald and made
oath to the truth of the foregoing certification by them signed, before me.
/s/ Fred. S. Pickford
Notary Public
STATE OF CONNECTICUT
Secretary of the State
CERTIFICATE AMENDING OR
RESTATING CERTIFICATE OF
INCORPORATION BY ACTION
OF BOARD OF DIRECTORS
AND SHAREHOLDERS
(Stock Corporation)
______________________
FILED State of Connecticut
April 12, 1961 3:16PM
<PAGE>
Exhibit 3(i)
Page 57 of 184
AN ACT AMENDING THE CHARTER OF THE HARTFORD GAS COMPANY,
CONCERNING ACQUISITION OF OTHER GAS PROPERTIES AND FURNISHING
OF HEAT OR AIR CONDITIONING
Approved May 31, 1961
SECTION 1. The first sentence of section 2 of number 387 of the
special acts of 1957 is amended to read as follows: Section 3 of number
478 of the special acts of 1951 is amended by adding thereto the
following: In addition to the powers elsewhere granted to The Hartford
Gas Company by its charter and any amendments purchase or otherwise, upon
such terms and conditions as may be agreed upon, and to hold, own, use,
exercise, enjoy and dispose of the whole or any part of the gas property,
rights, securities and franchises of any corporation authorized to
manufacture, sell or dispose of gas in any town in the state of
Connecticut, and upon the acquisition of such property and franchises, is
authorized to manufacture, buy, sell and distribute gas and gas
appliances for any and all purposes within the towns named in such
franchises or within such area of the town as may be agreed upon and to
hold, own, use, extend, exercise, enjoy and dispose of the same to the
same extent as though said rights, franchises and immunities had been
originally granted to it.
SEC. 2. The Hartford Gas Company is hereby authorized and
empowered, through the agency of one or more wholly owned subsidiary
corporations, whether incorporated by special act of the general assembly
or under the general statutes of the state of Connecticut, as well as by
itself, to engage in the business of furnishing, from one or more plants,
heat or air conditioning, or both, by means of steam, heated or chilled
water or other medium, in the cities and towns in the state of Connecticut
wherein it now is or hereafter may be authorized to sell gas or
electricity, or both, and through such agency as well as itself, to
lay and maintain mains, pipes or other conduits and to erect such other
fixtures as are or may be necessary or convenient in and on the streets,
highways and public grounds of said cities and towns, for the purpose of
carrying such medium from any and each such plant to the location of
customers to be served and returning the same, or other medium into which
it may have been changed, to such central plant.
SEC. 3. This amendment to the charter of The Hartford Gas Company
shall not require acceptance by the corporation.
<PAGE>
Exhibit 3(i)
Page 58 of 184
CERTIFICATE OF ISSUE AND STATEMENT REQUIRED
BY G.S. REV. 1958, SEC. 33-394, AS AMENDED
____________________________________________
1. The name of the corporation is The Hartford Gas Company. It is
a corporation specially chartered by the General Assembly of the State of
Connecticut.
2. By its special charter, Special Act 1943 No. 69 (page 46), it
is authorized to issue its "capital stock from time to time to an amount
not exceeding the in the aggregate seven million five hundred thousand
dollars."
3. Prior to January 1, 1957, there were issued and outstanding
$750,000 in the aggregate of non-callable preferred stock, consisting of
30,000 shares, having a par value of $25 per share, and $3,750,000 in the
aggregate of common stock, consisting of 150,000 shares, having a par
value of $25 per share.
4. On March 24, 1955, the shareholders of The Hartford Gas Company
authorized the issue of $1,500,000 additional common stock (60,000 shares
at $25 a share) to be issued in satisfaction of the conversion rights of
$1,500,000 in aggregate principal amount of the convertible debentures
which were authorized at the same time.
<PAGE>
Exhibit 3(i)
Page 59 of 184
5. The privilege contained in such convertible debentures, issued
under the name of 3 1/4% Ten Year Convertible Debentures, came into
existence January 1, 1957 and terminated on November 1, 1962, the date as
of which all uncoverted debentures were called for redemption. In the
interim there has been issued, from time to time, in satisfaction of such
conversion privilege, all except 140 of such 60,000 shares. The issuance
of the unissued 140 shares has been since authorized.
6. Of said 60,000 shares, 56,250 shares of the par value of
$1,406,250 were issued prior to January 1, 1961.
7. The balance thereof, viz. 3,750 shares, of the par value of
$93,750 have been issued since January 1, 1961 or are now being issued.
Dated at Hartford, Connecticut, this 13th day of December 1962.
W.T. Jebb
__________________________________
W.A. MacDonald
__________________________________
STATE OF CONNECTICUT )
) ss.: December 13, 1962
COUNTY OF HARTFORD )
Personally appeared W. T. Jebb and W.A. MacDonald respectively the
President and Secretary of The Hartford Gas Company, and made oath to the
truth of the foregoing certificate by them signed, before me,
____________________________________
Notary Public
<PAGE>
Exhibit 3(i)
Page 60 of 184
CERTIFICATE AMENDING CERTIFICATE OF INCORPORATION
BY ACTION OF BOARD OF DIRECTORS AND SHAREHOLDERS
(Stock Corporation)
1. The name of the corporation is THE HARTFORD GAS COMPANY.
2. The Certificate of Incorporation is amended only by the
following resolutions of directors and shareholders:
RESOLVED: That the charter of The Hartford Gas Company be
amended to provide: As at April 19, 1963, of the Seven Million
Five Hundred Thousand Dollars ($7,500,000) of authorized capital
stock of the Company, the 210,000 common shares, of the par value
of $25 each, issued and outstanding shall be split (2 for 1) into
420,000 shares of common stock of the par value of $12.50 each;
RESOLVED: That the charter of The Hartford Gas Company be
amended to provide: As at April 19, 1963, of the Seven Million
Five Hundred Thousand Dollars ($7,500,000) of authorized capital
stock of the Company, the 30,000 preferred shares, of the par value
of $25 each, issued and outstanding, shall be split (2 for 1) into
60,000 shares of preferred stock, of the par value of $12.50 each,
said preferred stock to be entitled to receive out of the net
profits of the corporation cumulative dividends at the rate of 8%
per annum, quarterly dividends of 2% to be paid thereon before any
dividends are payable upon the common stock of the Company, the
first quarterly dividend of 2% to be payable, on or before, July
1st, 1963, said preferred stock in the event of liquidation of the
corporation or distribution of its assets, to be preferred as to
the entire assets to the amount of $25 a share; all shares, whether
of preferred or common stock, to have equal voting rights and equal
right to participate in subscriptions to any future increase of
capital stock;
RESOLVED: That the charter of The Hartford Gas Company be
amended to provide: As at April 19, 1963, of the Seven Million
Five Hundred Thousand Dollars ($7,500,000) of authorized capital
stock of the Company, One Million Dollars ($1,000,000) of
authorized but unissued stock shall consist of 80,000 shares of
common stock, of the par value of $12.50 per share.
<PAGE>
Exhibit 3(i)
Page 61 of 184
3. The above resolutions were adopted by the Board of Directors
and shareholders at the Annual Meeting of the corporation held at its
office, 233 Pearl Street, Hartford, on March 20, 1963.
4. Vote of shareholders:
The Hartford Gas Company has outstanding 210,000 shares of $25 par
common stock and 30,000 shares of $25 par preferred stock. In order to
adopt the foregoing resolutions, a two-thirds' vote of each class, voting
separately as a class, was required. The vote was as follows:
<TABLE>
<CAPTION>
For Against
___ ________
<S> <C> <C>
Preferred: All resolutions 24,533 50
Common: First resolution 175,636 562
Second resolution 175,140 1,058
Third resolution 175,044 1,154
</TABLE>
constituting, in each instance, more than two-thirds of all stock
outstanding in favor.
Dated at Hartford, this 1st day of April, 1963.
Fred S. Pickford
_________________________
Vice President
W.A. MacDonald
_________________________
Secretary
-2-
<PAGE>
Exhibit 3(i)
Page 62 of 184
STATE OF CONNECTICUT )
) ss. Hartford April 1, 1693
COUNTY OF HARTFORD )
Personally appeared Fred S. Pickford, Vice President, and
W. A. MacDonald, Secretary, and made oath to the truth of the foregoing
certificate by them signed, before me.
___________________________
Notary Public
-3-
<PAGE>
Exhibit 3(i)
Page 63 of 184
AN ACT CONCERNING THE AREA TO BE SERVED BY
THE HARTFORD GAS COMPANY
Approved July 7, 1965
SECTION 1. The Hartford Gas Company is authorized to distribute
and sell gas of any type in the towns of Portland, East Hampton,
Marlborough, Hebron, Bolton, East Granby, Granby, Canton and Burlington
and to lay gas mains and pipes and to erect such other fixtures as are
necessary in and on the streets, highways and public grounds of said
towns and to do all things necessary or convenient in order to furnish
gas for any purpose to said towns and to the inhabitants thereof.
Sec. 2. This amendment to the charter of The Hartford Gas Company
shall not require acceptance by the corporation.
<PAGE>
Exhibit 3(i)
Page 64 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
BY ACTION OF BOARD OF DIRECTORS AND SHAREHOLDERS
(Stock Corporation)
I. The name of the corporation is The Hartford Gas Company.
II. The Certificate of Incorporation is amended only by the following
resolutions of directors and shareholders:
(1) RESOLVED: That the charter of The Hartford Gas Company
be and hereby is amended so as to include, without limitation,
the following powers: to manufacture, create, generate,
transform, store, sell and distribute all types of energy and
all types of fuels; to manufacture, sell, install, maintain
and service any and all apparatus and appliances utilizing any
type of energy or fuel; to engage in and conduct any business
incidental, necessary or useful in connection with any of the
foregoing or with any other business in which the Company, or
any of its subsidiaries is engaged; to own the stock, bonds,
debentures or other securities or obligations of other
corporations, whether or not they be engaged in any of the
aforementioned businesses, and to guaranty their obligations.
(2) RESOLVED: That the charter of The Hartford Gas Company
be and hereby is amended so as to provide that the authorized
capital stock of the Company consist of the following:
500,000 shares of common stock having a par value of $12.50
per share, all of which are now outstanding; 60,000 shares of
preferred stock having a par value of $12.50 per share, to be
hereafter known as the "$12.50 Par Preferred Stock", all of
which are now outstanding; 100,000 shares of preferred stock
having a par value of $100 per share, to be known and
designated as the Company's "$100 Par Serial Preferred Stock",
such stock to be on a parity with respect to dividends and
liquidation with the $12.50 Par Preferred Stock and such stock
neither to have nor to be subject to any preemptive rights and
that the Board of Directors is authorized to issue, from time
to time, all such shares of $100 Par Serial Preferred Stock,
and, to the extent permitted by law, to fix and determine the
terms, limitations and (except that no amount payable on
liquidation shall exceed the then applicable call price)
relative rights and preferences of such stock, including,
without limitation, the conditions under which they shall be
entitled to voting rights and the extent thereof, to divide
such shares into series and, to the extent permitted by law,
to fix and determine <PAGE>
Exhibit 3(i)
Page 65 of 184
The above resolutions were adopted by the board of directors
and by shareholders.
Vote of Shareholders:
(a) As to Resolution #1 above:
<TABLE>
<CAPTION>
Number of Shares Total Voting Power of Vote Required Vote Favoring
Entitled to Vote Shares Entitled to Vote for adoption Adoption
================= ======================= ============== =============
<C> <C> <C> <C>
560,000 560,000 2/3 of all stock 422,885
(75.5%)
</TABLE>
(b) As to Resolution #2 above:
<TABLE>
<CAPTION>
Number of Shares Total Voting Power of Vote Required Vote Favoring
Entitled to Vote Shares Entitled to Vote for adoption Adoption
================= ======================= ============== =============
<S> <C> <C> <C>
1. $12.50 Par
Preferred Stock
60,000 60,000 2/3 of this class 41,907
(69.8%)
2. Common
500,000 500,000 2/3 of all other
classes 374,591
(2/3 of this class) (74.9%)
</TABLE>
Dated at Hartford this 26th day of April, 1967.
Robert H. Willis
____________________________________
President
W. A. MacDonald
____________________________________
Secretary
-2-
<PAGE>
Exhibit 3(i)
Page 66 of 184
STATE OF CONNECTICUT )
) ss.: April 26, 1967
COUNTY OF HARTFORD )
Personally appeared Robert H. Willis and W. A. MacDonald and made
oath to the truth of the foregoing certificate by them signed, before me.
____________________________________
Notary Public
My Commission expires:
-3-
<PAGE>
Exhibit 3(i)
Page 67 of 184
AN ACT CONCERNING THE AREA TO BE SERVED BY
THE HARTFORD GAS COMPANY
Approved June 20, 1967
SECTION 1. The Hartford Gas Company is authorized to distribute
and sell gas of any type in the towns of Andover, Columbia, Coventry and
Mansfield and to lay gas mains and pipes and to erect such other fixtures
as are necessary in and on the streets, highways and public grounds of
said towns and to do all things necessary or convenient in order to
furnish gas for any purpose to said towns and to the inhabitants thereof.
SEC. 2. This amendment to the charter of The Hartford Gas Company
shall not require acceptance by the corporation.
<PAGE>
Exhibit 3(i)
Page 68 of 184
CERTIFICATE OF MERGER
The New Britain Gas Light Company (New Britain)
into
The Hartford Gas Company (Hartford)
name of surviving corporation shall be
CONNECTICUT NATURAL GAS CORPORATION
<PAGE>
Exhibit 3(i)
Page 69 of 184
CERTIFICATE OF MERGER
A. The name of the surviving corporation in the merger is
CONNECTICUT NATURAL GAS CORPORATION (Surviving Corporation), a
Connecticut corporation.
B. The Plan of Merger is as follows:
1. Merger and Name of Surviving Corporation. The New Britain
Gas Light Company (New Britain), a Connecticut corporation, shall
merge into The Hartford Gas Company (Hartford), a Connecticut
corporation, upon the effective date of the merger which shall be
at the close of business on the last day of the month in which this
certificate is filed in the office of the Secretary of State of
Connecticut. Hartford shall be the surviving corporation and shall
continue under the name CONNECTICUT NATURAL GAS CORPORATION.
2. Charter and By-Laws of the Surviving Corporation. The
charter of Hartford, as enacted by the General Assembly of the
State of Connecticut and amended by it and by action of Hartford's
stockholders up to the effective date of the merger, and as further
amended as set forth herein, and by operation of law as a result of
the merger of New Britain into Hartford, shall be the charter of
the Surviving Corporation until further amended as provided by
law. The Surviving Corporation shall have in addition to the
powers conferred on it by the General Statutes of the State of
Connecticut, all of the special rights, powers and franchises
possessed by Hartford and New Britain, including all such special
rights, powers and franchises to which either has succeeded by
merger, consolidation, purchase or otherwise. The By-Laws set
forth in Exhibit I hereto shall be the By-Laws of the Surviving
Corporation.
3. Directors and Officers of the Surviving Corporation. The
Board of Directors of the Surviving Corporation shall initially
consist of sixteen directors whose names are set forth in Exhibit
II hereto or of such of them as are able and willing to serve. The
names of certain principal officers of the Surviving Corporation
are also set forth in Exhibit II.
4. Succession of Surviving Corporation. Upon the effective
date of the merger the separate the separate existence of New
Britain shall cease and Hartford shall continue to exist as the
Surviving Corporation and shall thereupon succeed to all the
rights, privileges, immunities, franchises, property,
<PAGE>
Exhibit 3(i)
Page 70 of 184
choses in action and all and every other interest of, or belonging
to, each of the merging corporations in the manner and to the extent
provided by law.
5. Merger's Effect on Securities. (a) Upon the effective
date of the merger, the authorized capital stock of the Surviving
Corporation shall consist of 685,582 shares of common stock having
a par value of $12.50 per share, 60,000 shares of $12.50 Par
Preferred Stock and 100,000 shares of $100 Par Serial Preferred
Stock of which there shall be a 5.75% Series of 9,600 shares;
(b) Upon the effective date of the merger:
(i) Each issued and outstanding share of Hartford common
stock of the par value of $12.50 Par Preferred Stock shall
remain unchanged but certificates representing such shares
shall be exchangeable for certificates for the same number of
shares bearing the new name of the Surviving Corporation;
(ii) Each issued and outstanding share of New Britain
common stock of the par value of $25 per share shall be
converted into two shares of the Surviving Corporation common
stock of the par value of $12.50 per share;
(iii) Each issued and outstanding share of New Britain
Preferred Stock, 4.75% Series, of the par value of $100 per
share shall be converted into one share of the Surviving
Corporation $100 Par Serial Preferred Stock, 5.75% Series,
with the preferences, voting powers, restrictions and
qualifications set forth herein; and
(iv) New Britain shares acquired by the Surviving
Corporation from holders thereof who shall have objected to
the merger and exercised their statutory appraisal rights and
been paid therefor in the manner provided by law shall be
retired and no shares of any class of stock of the Surviving
Corporation shall be issued in respect thereof.
(c) After the effective date of the merger, each holder of an
outstanding certificate or certificates theretofore representing
Hartford common stock, Hartford preferred stock, New Britain common
stock, or New Britain preferred stock may surrender such
certificate or certificates and receive in exchange a certificate or
certificates representing the number of shares of the Surviving
Corporation common stock or preferred stock into which the shares of
such Hartford common stock, Hartford preferred
-2-
<PAGE>
Exhibit 3(i)
Page 71 of 184
stock, New Britain common stock or New Britain preferred stock, as
the case may be, shall have been converted or for which they shall
have become exchangeable. Until so surrendered, each outstanding
certificate which, prior to the effective date of the merger,
represented shares of the Hartford or New Britain stock shall be
deemed for all purposes to evidence ownership of the shares of the
stock of the Surviving Corporation into which such stock shall have
been converted or for which it shall have become exchangeable.
6. Amendments to Charter of Surviving Corporation. The
Charter of the Surviving Corporations shall be amended as follows:
(i) The name of the corporation is Connecticut Natural
Gas Corporation;
(ii) The government and direction of the affairs of the
Company shall be vested in a board of directors consisting of
not less than ten and not more than sixteen, who shall be
chosen by the stockholders of said Company in the manner
hereinafter provided and shall hold their offices until others
are elected and have qualified to take their places as
directors. Said directors, a majority of whom shall be a quorum
for the transaction of business, shall appoint such officers as
said directors consider desirable.
(iii) The authorized capital stock of the Company shall
consist of the following: 685,582 shares of common stock
having a par value of $12.50 per share; 60,000 shares of
preferred stock having a par value of $12.50 per share, to be
hereafter known as the "$12.50 Par Preferred Stock", all of
which are now outstanding; 100,000 shares of preferred stock
having a par value of $100 per share, to be known and
designated as the Company's "$100 Par Serial Preferred Stock",
such stock to be on a parity with respect to dividends and
liquidation with the $12.50 Par Preferred Stock and such stock
neither to have nor to be subject to any preemptive rights;
and that the Board of Directors is authorized to issue, from
time to time, all such shares of $100 Par Serial Preferred
Stock, and, to the extent permitted by law and not fixed by
the charter, to fix and determine the terms, limitations and
(except that no amount payable on liquidation shall exceed the
then applicable call price) relative rights and preferences of
such stock, including, without limitation, the conditions under
which they shall be entitled to voting rights and the extent
thereof, to divide such shares into series and, to the extent
permitted by law, to fix and determine the variations among
series;
-3-
<PAGE>
Exhibit 3(i)
Page 72 of 184
(iv) The terms, limitations and relative rights and
preferences of the Company's $100 Par Serial Preferred Stock,
of which 100,000 shares are authorized, shall be as follows:
I. Dividends
The holders of any series of the $100 Par Serial
Preferred Stock shall receive, when declared by the Board of
Directors, preferential dividends at the rate provided for
such series and payable on such dividend payment dates in each
year as shall be established for such series, such dividends
to be payable to stockholders of record on such dates as may
be fixed by said Board but a record date shall not be more
than 45 days before any dividend date.
Dividends on each share of the $100 Par Serial Preferred
Stock shall be cumulative from the date of issue thereof or
from such date as the Board of Directors may determine.
Unless full cumulative dividends to the last preceding
dividend date shall have been paid or set apart for payment on
all outstanding shares of $100 Par Serial Preferred Stock and
unless all sinking fund redemptions or payments provided for
each series of $100 Par Serial Preferred Stock have been made
or provided for, no dividend (other than a dividend in shares
of junior stock) shall be paid on any junior stock nor any sum
applied to the purchase, redemption or retirement of any junior
stock. The term "junior stock" as used herein means Common
Stock or any other stock of the Company subordinate to the $100
Par Serial Preferred Stock in respect of dividends or payments
in liquidation.
So long as any shares of the $100 Par Serial Preferred
Stock shall be outstanding the Company shall not apply any sum
to the redemption, retirement or purchase of any share of any
junior stock nor to the payment of any dividend thereon
(exclusive of dividends payable in junior stock), if, after
such application shall have been made, the Company's retained
earnings plus the cash proceeds of the sale of additional
shares of junior stock since July 31, 1968 would be less than
$941,000, provided, however that nothing herein contained
shall be construed so as to prevent the Company from retiring
any shares of junior stock in exchange for the issue of
additional shares of junior stock.
-4-
Exhibit 3(i)
Page 73 of 184
II. Redemption or Purchase of $100 Par Serial Preferred Stock.
Subject to any restrictions contained in the terms of the
particular series of $100 Par Serial Preferred Stock, all or
any part of any series of the $100 Par Serial Preferred Stock
at any time outstanding may be called for redemption at any
time by vote of the Board of Directors or the operation of a
sinking fund, at the redemption price provided for such series
and in the manner hereinbelow provided. All or any part of
any series of the $100 Par Serial Preferred Stock may be
called for redemption without calling any part or all of any
other series of the $100 Par Serial Preferred Stock. If less
than all of any series of the $100 Par Serial Preferred is so
called, the Transfer Agent shall determine by lot or in some
other proper manner approved by the Board of Directors the
shares of such series of $100 Par Serial Preferred Stock to
be called.
Except for redemption effected by the operation of a
sinking fund, no call of less than all of the $100 Par Serial
Preferred Stock outstanding shall be made without setting
aside an amount equal to the dividends accumulated to the
redemption date fixed in such call and making or providing for
all sinking fund payments or redemptions then due on all of
the $100 Par Serial Preferred Stock then outstanding and not
called.
The sums payable in respect of any $100 Par Serial
Preferred Stock so called shall be payable at the office of an
incorporated bank or trust company; in good standing. Notice
of such call, stating the redemption date and the place where
the redemption price of the stock so called is payable, shall
be mailed not less than 30 days before the redemption date to
each holder of stock so called at his address as it appears
upon the books of the Company.
The Company shall, before the redemption date, deposit
with said bank or trust company all sums payable with respect
to the $100 Par Serial Preferred Stock so called. After such
mailing and deposit the holders of the $100 Par Serial Preferred
Stock so called for redemption shall cease to have any right
to future dividends or other rights or privileges as
stockholders in respect of such stock and shall be entitled to
look for payment on and after the redemption date only to the
sums so deposited with said bank or trust company for their
respective accounts. Stock so redeemed may be reissued but only
subject to the limitations imposed hereby upon the issue of $100
Par Serial Preferred Stock.
-5-
<PAGE>
Exhibit 3(i)
Page 74 of 184
At any time when there is no default in the payment of
any dividend on or in the making or providing for any sinking
fund payment on or redemption of any of the $100 Par Serial
Preferred Stock and there is no event of default as defined in
IV hereof, the Company may purchase all or any of the then
outstanding shares of the $100 Par Serial Preferred Stock of
any series upon the best terms reasonably obtainable but not
exceeding the then current redemption price of such shares.
III. Amounts Payable on Liquidation
The holders of any series of the $100 Par Serial
Preferred Stock shall receive upon any voluntary liquidation,
dissolution or winding up of the Company the then current
price at which shares of such series may be redeemed at the
option of the Company and if such action is involuntary $100
per share, plus in each case all dividends accrued and unpaid
to the date of such payment, before any payment in liquidation
is made on any junior stock.
If the net assets of the Company available for
distribution on liquidation shall be insufficient to pay in
full to the holders of the $100 Par Serial Preferred Stock the
preferential amounts to which they shall be entitled and to
the holders of the Company's $12.50 Par Preferred Stock the
$25 per share to which they are entitled, then such net assets
shall be distributed among the holders of the $100 Par Serial
Preferred Stock and of the Company's $12.50 Par Preferred Stock,
who shall receive a common percentage of the full respective
preferential amounts.
IV. Voting Powers
Except as provided herein and as provided by law, the
holders of the $100 Par Serial Preferred Stock shall have no
voting power or right to notice of any meeting.
Whenever dividends on any shares of the $100 Par Serial
Preferred Stock shall be in arrears in an amount equal to or
exceeding four quarterly dividend payments; or whenever there
shall have occurred some default in the observance of any of
the provisions hereof or of the provisions of any series of
$100 Par Serial Preferred Stock, or some default on which
action has been taken by debentureholders, bondholders,
holders of shares of any class of capital stock of the Company
ranking prior to the $100 Par Serial Preferred Stock in
respect of dividends or payments in liquidation or the
-6-
<PAGE>
Exhibit 3(i)
Page 75 of 184
trustee of any deed of trust or mortgage of the Company, or
whenever the Company shall have been declared bankrupt or a
receiver of its property shall have been appointed (any of said
conditions before herein called an "event of default"), then the
holders of the $100 Par Serial Preferred Stock shall be given
notice of notice of all stockholders' meetings and shall have
the right, voting as a class, to elect the largest number of
directors constituting a minority of the Board of Directors of
the Company. When all arrears of dividends shall have been paid
and such event of default shall have terminated, all the rights
and powers of the holders of the $100 Par Serial Preferred Stock
to receive notice and to vote shall cease, subject to being
again revived or any subsequent event of default.
When the holders of the $100 Par Serial Preferred Stock
shall have acquired the right to elect a minority of the Board
of Directors, or such right shall cease, the Company shall
promptly after the first delivery to the Company of a written
request therefor by any stockholder, cause a meeting of the
stockholders to be held within 45 days from the delivery of
such request for the purpose of electing a new Board of
Directors. Forthwith, upon the election and qualification of
the new Board of Directors, the terms of office of the existing
directors shall terminate.
V. Action Requiring Certain Consent of $100 Par Serial
Preferred Stockholders
So long as any of the $100 Par Serial Preferred Stock is
outstanding, the Company shall not, without the affirmative vote
of the holders of at least two-thirds of the shares of the $100
Par Preferred Stock then outstanding, change the provisions
hereof or issue any shares of capital stock of the Company
ranking prior to the $100 Par Serial Preferred Stock in respect
of dividends or payments in liquidation, provided that in no
event shall any reduction of the dividend rate or of the amounts
payable upon redemption or liquidation with respect to any share
of the $100 Par Serial Preferred Stock be made without the
consent of the holder thereof.
So long as any of the $100 Par Serial Preferred Stock is
outstanding, the Company shall not, without the consent of the
holders of at least a majority of the shares of the $100 Par
Serial Preferred Stock then outstanding, issue any additional
shares, or reissue any reacquired shares, of the $100 Par
-7-
<PAGE>
Exhibit 3(i)
Page 76 of 184
Serial Preferred Stock or any other stock ranking on a parity
with the $100 Par Serial Preferred Stock in respect of dividends
or payments in liquidation, unless:
1. the net earnings of the Company available for the
payment of interest for 12 consecutive calendar months
ending not more than 90 days before the date of such
issuance are equal to at least one and three-quarters times
the aggregate of the annual interest charges on all
outstanding long-term indebtedness of the Company (excluding
interest charges on such indebtedness to be retired by the
application of the proceeds from the issuance of such
shares) and the annual dividend requirements on all $100 Par
Serial Preferred Stock and all $12.50 Par Preferred Stock and
all other stock if any, ranking on a parity with or having
priority over the $100 Par Serial Preferred Stock in respect
of dividends or payments in liquidation which will be
outstanding immediately after the issuance of such shares;
and
2. immediately after the issuance of such shares the
aggregate of (i) the par value of the Company's $100 Par
Serial Preferred Stock, $12.50 Par Preferred Stock and any
other stock ranking on a parity with or having a priority over
the $100 Par Serial Preferred Stock in respect of dividends or
payments in liquidation and (ii) the principal amount of all
long-term indebtedness is not more than seventy per cent (70%)
of the aggregate of (a) the principal amount of all long-term
indebtedness, (b) the par value of, or stated capital
represented by the Company's outstanding capital stock of all
classes and (c) the amount of the Comppany's surplus (both
capital and earned) as then stated on the Company's books.
VI. Merger, Consolidation or Sale of All Assets
With the approval of the holders of such number of shares of
the $100 Par Serial Preferred Stock as may be required by law,
the Company may merge or consolidate with or be merged into any
other corporation, or sell substantially all of its assets
subject to any applicable law.
VII. No Pre-emptive Right
The holders of the $100 Par Serial Preferred Stock shall
have no pre-emptive right to subscribe to any future issue of
additional shares of
-8-
<PAGE>
Exhibit 3(i)
Page 77 of 184
the $100 Par Serial Preferred Stock or of any other class of
stock of the Company now or hereafter authorized or to any
security convertible into such stock.
The holders of $12.50 Par Preferred Stock and Common Stock
shall have no pre-emptive right to subscribe to any issue of
shares of the $100 Par Serial Preferred Stock or to any security
convertible into shares of the $100 Par Serial Preferred Stock.
VIII. Immunity of Directors, Officers and Agents
No director, officer or agent of the Company shall be held
personally responsible for any action taken in good faith
through subsequently adjudged to be in violation hereof.
IX. Transfer Agent
The Company shall always have at least one Transfer Agent
for the $100 Par Serial Preferred Stock, which may be the
Company or a Connecticut incorporated bank or trust company of
good standing;
(v) There shall be and hereby is established a series of $100
Par Serial Preferred Stock and the designation of such series, the
authorized number of shares thereof and the terms thereof are as
follows:
1. The series of $100 Par Preferred Stock established
hereby shall be designated "$100 Par Serial Preferred
Stock, 5.75% Series" (hereinafter referred to as the "5.75%
Series") and the authorized number of shares of such series
shall be 9,600.
2. Dividends on said 5.75% Series shall be at the
rate of 5.75% of the par value thereof per annum and no
more and shall be cumulative from the date of issue
thereof. Said dividends, when declared, shall be payable
on the first day of January, April, July and October in
each year.
3. The shares of the 5.75% series shall be redeemable
upon the terms and conditions provided in said foregoing
resolution at the following redemption prices:
(a) if redeemed through operation of sinking
fund hereinafter provided for, at the redemption price
of $100 per share, and
(b) if redeemed otherwise than through operation
of said sinking fund,
-9-
<PAGE>
Exhibit 3(i)
Page 78 of 184
at $104.75 per share if redeemed on or before
January 1, 1971,
at $103.75 per share if redeemed thereafter and
on or before January 1, 1974,
at $102.75 per share if redeemed thereafter and
on or before January 1, 1977,
on at $101.75 per share if redeemed thereafter
and or before January 1, 1980,
and
thereafter at $101.00 per share,
plus, in all cases, that portion of the quarterly dividend
accrued thereon to the redemption date and all unpaid
dividends thereon, if any; provided, however, that prior to
January 1, 1971, no such redemption shall be made (other
than through operation of said sinking fund) directly or
indirectly from the proceeds, or in anticipation of the
sale of any stock or the issuance of any indebtedness for
money borrowed, having an effective dividend rate or an
effective interest cost (calculated in accordance with
accepted financial practices) as the case may be, of less
than 4.75%.
4. The sinking fund for the redemption of the
5.75% Series shall be as follows:
On January 1, 1969, and on each January 1
thereafter and for so long as any of the 5.75% Series
remains outstanding, the Company shall, to the extent
of any funds of the Company legally available
therefor, redeem 200 shares (or such lesser number of
shares as remain outstanding) of the 5.75% Series,
provided, however, that if in any year the Company
does not redeem such 200 shares, the deficiency shall
be made good on the first succeeding January 1 on
which the Company has funds legally available for the
redemption of shares pursuant to this sinking fund.
If the Company shall issue another series of
$100 Par Serial Preferred Stock for which there
-10-
Exhibit 3(i)
Page 79 of 184
is provided annual sinking fund redemptions or payments
in excess of two per cent (2%) of the originally issued
shares of such series, the sinking fund redemption of
the 5.75% Series shall be increased from 200 shares to
an amount equal to 10,000 shares multiplied by the
percentage provided for such other series; provided,
however, that the sinking fund redemption of the 5.75%
Series shall in no event be increased to an amount
greater than 300 shares per annum.
5. No change in the provisions of the 5.75% Series, as
set forth herein, shall be made except to the extent and in
the manner provided in Item B, paragraph 6, section (iv),
part V hereof nor without the consent of the holders of at
least two-thirds of the outstanding shares of the 5.75%
Series.
C. The Plan of Merger was adopted by the merging corporations
in the following manner:
1. The Plan was approved by the Board of Directors of each
merging corporation.
2. The Plan was approved by vote of the shareholders of
Hartford and as to that corporation:
(i) The shareholder vote required to adopt the Plan
was 333,334 votes by the holders of its common stock and
40,000 votes by the holders of its $12.50 Par Preferred
Stock, the only classes of its stock.
(ii) The number of shares of common stock outstanding
and entitled to vote thereon was 500,000 shares and the
number of shares of $12.50 Par Preferred Stock outstanding
and entitled to vote thereon was 60,000 shares.
(iii) The voting power of such common stock and of
such preferred stock was one vote per share.
(iv) The vote in favor of the Plan was 419,571
affirmative votes of the holders of common stock and 51,785
affirmative votes of the holders of $12.50 Par Preferred
Stock.
3.The Plan was approved by vote of the shareholders of New
Britain and as to that corporation:
-11-
<PAGE>
Exhibit 3(i)
Page 80 of 184
(i) The shareholder vote required to adopt the Plan was a
61,961 votes by the holders of its common stock and 6,400
votes by the holders of its Preferred Stock, 4.75% Series,
$100 par value, the only classes of its stock.
(ii) The number of shares of common stock outstanding and
entitled to vote thereon was 92,791 shares and the number
of shares of Preferred Stock, 4.75% Series, $100 par value,
outstanding and entitled to vote thereon was 9,600.
(iii) The voting power of such common stock and of such
preferred stock was one vote per share.
(iv) The vote in favor of the Plan was 77,960 affirmative
votes of the holders of common stock and 9,600 affirmative
votes of the holders of Preferred Stock, 4.75% Series,
$100 par value.
Dated at Hartford, Connecticut, this 30th day of August, 1968.
We hereby declare under the penalties of perjury that the
statements made in the foregoing certificate, insofar as they
pertain to The Hartford Gas Company, are true.
THE HARTFORD GAS COMPANY
R.H. Willis
By ______________________
President
W.A. MacDonald
__________________________
Secretary
We hereby declare under the penalties of perjury, that the
statements made in the foregoing certificate, insofar as they pertain
to The New Britain Gas Light Company, are true.
THE NEW BRITAIN GAS LIGHT
COMPANY
Edgar Rhodes
By ______________________
President
John S. Filbert
_________________________
Secretary
-12-
<PAGE>
Exhibit 3(i)
Page 81 of 184
EXHIBIT I
BY-LAWS OF CONNECTICUT NATURAL GAS CORPORATION
ARTICLE I
Directors
Sec. 1 The Board of Directors shall consist of not less than ten and
not more than sixteen persons who shall be stockholders of the Company and
who shall be elected annually by the stockholders by ballot in the manner
prescribed by law.
Sec. 2 The Board meetings shall be held in each calendar month
(excepting August) on dates in said months to be ordered by the Board.
Special meetings of the Board may be called at any time by the Chairman
or by the President, and shall be called on the written request of any
three members of the Board addressed to the chairman or the President.
Notice of Directors meetings shall be given by the Secretary who shall
mail written notice thereof to each Director at least two days before the
time appointed for each such meeting provided that no notice shall be
required other than that contained in this section of the By-Laws for the
stated meeting of the Board to be held immediately following the annual
meeting of the stockholders.
Sec. 3 At any meeting of the Board of Directors a majority shall be
a quorum for the transaction of business, but any meeting may be adjourned
from time to time by the vote of the Directors present.
ARTICLE II
Indemnity
Sec. 1 Each director of the Corporation shall be indemnified and
reimbursed by the Corporation for expenses necessarily incurred by him in
connection with the defense or reasonable settlement of any action, suit or
proceeding in which he is made a party by reason of his being or having
been a director of the Corporation except in relation to matters as to
which he is finally adjudged to be liable for negligence or misconduct in
the performance of his duties as such director. Such right of
indemnification and reimbursement shall not be exclusive of any other
rights to which he may be entitled. The rights herein provided for shall
inure to each director whether or not he is acting as such at the time such
expenses are incurred and in the event of his death such rights shall
extend to his legal representatives. Such indemnity and
<PAGE>
Exhibit 3(i)
Page 82 of 184
reimbursement shall be fixed by the Board of Directors, and if no quorum is
available, by a committee of stockholders who are not directors appointed
by the stockholders at a meeting called for the purpose.
ARTICLE III
Officers
Sec. 1 The officers of the Company shall be a President, a
Secretary, a Treasurer and, at the discretion of the Board of Directors, a
Chairman and one or more Vice Presidents. The Board of Directors may also
appoint one or more Assistant Secretaries, one or more Assistant Treasurers
and such other officers as the Board of Directors may deem advisable. The
chief executive officer shall be a Director. One person may hold any two
offices except that one person shall not hold more than one of the
following offices: Chairman, President, Secretary. All officers shall be
elected or appointed annually by the Board of Directors.
Sec. 2 The Board of Directors by a two-thirds vote of their number
shall have power to and may at any time remove from office any of the
persons elected or appointed by them.
Sec. 3 In case of death, removal or resignation of any of the
directors of officers of the Company, the remaining directors may supply
the vacancy thus created until the next election.
ARTICLE IV
Duties of the Chairman and President
Sec. 1 The Chairman, if such office shall be filled by the Board of
Directors, shall, when present, preside at all meetings of said Board and
of the Stockholders. He shall be an executive officer of the Company,
shall be the representative of the Board of Directors and, if the Board so
determines, shall be the chief executive officer of the Company, and, while
chief executive officer, his title shall be Chairman and Chief Executive
Officer. He shall perform such additional duties as may be assigned to him
from time to time by said Board.
Sec. 2 The President shall be an executive officer of the Company
and, if the Directors so determine or do not fill the office of the
Chairman, shall be the chief executive officer of the Company. If the
President be not the chief executive officer of the company, he shall
perform such duties as shall be assigned to him by the Chairman or by the
Board of Directors.
-2-
<PAGE>
Exhibit 3(i)
Page 83 of 184
Sec. 3 The chief executive officer of the Company shall have direct
and active supervision and control of the business and affairs of the
Company.
ARTICLE V
Duties of the Vice President
Sec. 1 The Vice President or Vice Presidents shall perform such
duties as may be assigned by the chief executive officer or the Board of
Directors.
ARTICLE VI
Duties of the Secretary and Assistant Secretary
Sec. 1 The Secretary shall record all the votes of the Corporation
and the minutes of its transactions in a book to be kept for that purpose.
He shall under the direction of the chief executive officer be present at
all meetings of the Board and keep a record of proceedings in a minute
book. He shall notify the stockholders of the annual and any special
meetings, and shall notify the members of the Board of Directors of all
regular and special meetings of the Board. He shall have charge of the
transfer of stock and the registry of any bonds of the Company and shall
keep records thereof in such manner as the Board of Directors shall from
time to time direct. He shall perform all the duties which are customary
and incident to the office of Secretary in like companies.
Sec. 2 The Assistant Secretary shall perform the duties of the
Secretary in case of the absence or disability of the Secretary.
ARTICLE VII
Duties of the Treasurer and Assistant Treasurer
Sec. 1 The Treasurer and Assistant Treasurer shall give bond for the
faithful discharge of their duties in such sum and with such surety or
sureties as the Board of Directors may require. The Treasurer shall keep
full and accurate accounts of receipts and disbursements and shall deposit
the Company's funds in the name and to the credit of the Company is such
depositories as may be determined by the Board of Directors. He shall
disburse the funds of the Company as may be ordered by the Board, taking
proper vouchers for such disbursements.
-3-
<PAGE>
Exhibit 3(i)
Page 84 of 184
He shall have charge of the money, notes, bills and checks of the
Company, and may accept and endorse the same. He shall make such reports
of the receipts and disbursements in such form and detail and at such time
as the Board may direct.
Sec. 2 The Assistant Treasurer shall perform the duties of the
Treasurer in case of the absence or disability of the Treasurer and shall
at times render such assistance as the Treasurer may require.
Sec. 3 Checks on the funds of the Company, except in payment of
dividends, shall be signed by any one of the following: the Chairman, the
President, a Vice President, the Treasurer, and Assistant Treasurer.
ARTICLE VIII
Committees
Sec. 1 There shall be an Executive Committee consisting of such
directors as may be chosen by the Board of Directors. The Executive
Committee shall have charge of all matters which may be referred to it by
the Board of Directors and generally have oversight and authority with
regard to all business of the Company when the Board of Directors is not in
session.
Sec. 2 There shall be a Finance Committee consisting of such
directors as may be chosen by the Board of Directors. The Finance
Committee shall have such powers and duties relating to the financial
aspects of the business of the Company as the Board may designate.
Sec. 3 The Board of Directors may from time to time appoint such
other committees with such powers as the Board may determine.
Sec. 4 All committees shall report their actions and recommendations
to the Board of Directors at the next ensuing meeting of the Board. A
majority of each committee shall constitute a quorum for the transaction of
business. The Board of Directors shall fix the remuneration of the members
of committees.
-4-
<PAGE>
Exhibit 3(i)
Page 85 of 184
ARTICLE IX
Meeting of Stockholders
Sec. 1 The annual meeting of the stockholders of the Company for the
election of Directors and the transaction of such other business as may
properly come before the meeting shall be held in the City of Hartford, on
the third Wednesday of March in each year, at such hour as shall be
determined by resolution of the Board of Directors, or on such other day
thereafter in said month as the Board of Directors, or on such other day
thereafter in said notice stating the time and place of holding such
meeting shall be mailed by the Secretary to each stockholder of record at
his last known post office address, not less than seven days nor more than
fifty days before the date of said meeting.
Sec. 2 A special meeting of the stockholders shall be called at any
time by the Secretary in conformity with the vote of the Board of
Directors, or on the written request of a majority of the Directors
addressed to the chief executive officer of the Company, or on the written
request of the stockholders holding at least one-tenth of the issued and
outstanding capital stock of the Company. A printed notice of special
meetings shall be given by the Secretary stating the time and place for
holding such meeting and the object and purpose thereof. This notice shall
be mailed to each stockholder of record at his last known post office
address not less than seven days nor more than fifty days before the date
of said meeting.
Sec. 3 At the annual or any special meeting of the stockholders, the
stockholders present or represented by proxy shall constitute a quorum for
the transaction of business.
Sec. 4 Stockholders may vote at any meeting either in person or by
proxy, but all proxies shall be in writing. Partnerships may sign the firm
name and the signature of any member thereof shall be sufficient.
Corporations may execute their proxies by the signature of the President,
attested by that of the Secretary and the corporate seal of the Company.
ARTICLE X
Certificates of Stock
Sec. 1 Certificates of stock shall be issued to the stockholders and
transfers of them made by the Secretary when required. The certificates
shall be signed by the Chairman, the President or Vice President and by the
Secretary or Assistant Secretary, the signature of whom may be facsimiles,
countersigned by the Transfer Agent, and sealed
-5-
<PAGE>
Exhibit 3(i)
Page 86 of 184
with the common seal of the Corporation or a facsimile thereof. A Transfer
Agent and a registrar of the stock may be appointed by the Board of
Directors. Transfers of stock shall be made upon the books of the Company
by the stockholder in person or by attorney duly authorized upon surrender
of the certificates.
Sec. 2 The Board of Directors may close the transfer books in its
discretion for a period not exceeding ten days preceding any meeting of the
stockholders or preceding the day appointed for the payment of a dividend
and the Board may in its discretion fix a record date for the determination
of stockholders entitled to vote at any meeting or to receive the payment
of
a dividend.
ARTICLE XI
Amendments
Sec. 1 Amendments to the By-Laws may be made at any special or
stated meeting of the Board of Directors by vote or consent of at least
two-thirds of the entire number of directors, provided that no amendment
shall be made unless the notice of the meeting shall specify the amendment
as the purpose or one of the purposes of the meeting.
-6-
<PAGE>
Exhibit 3(i)
Page 87 of 184
EXHIBIT II
CONNECTICUT NATURAL GAS CORPORATION
DIRECTORS
Franklin S. Atwater Edgar G. Rhodes
Norman B. Bertolette Lester E. Shippoe
Charles E. Brainard Wilbur C. Stooble
Pomeroy Day Angelo Tomasso, Jr.
William W. Fisher Robert D. Twohig
Wilson C. Johnson Roger Wilkins
William T. Jebb Robert H. Willis
Roger J. Lennon Charles J. Zimmerman
OFFICERS
Robert H. Willis............. President and Chief Executive Officer
Herbert H. Johnson........... Vice President--Engineering and Planning
John S. Filbert.............. Vice President--Operations
Wallace A. MacDonald......... Secretary and Assistant Treasurer
Albert C. Dudley............. Treasurer
Victor H. Frauenhofer........ Controller and Assistant Secretary
Carl Thomson................. Assistant Treasurer and Assistant Secretary
<PAGE>
Exhibit 3(i)
Page 88 of 184
CONNECTICUT NATURAL GAS CORPORATION
Certificate Amending Charter
by Action of Board of Directors
(Stock Corporation)
I. The name of the corporation is CONNECTICUT NATURAL GAS
CORPORATION.
II. The charter is amended only by the following resolution of the
Board of Directors acting alone:
VOTED: There shall be and hereby is established a series of
$100 Par Serial Preferred Stock; the designation of such series, the
authorized number of shares thereof and the terms thereof to be as
follows:
1. The Series of $100 Par Serial Preferred Stock established
hereby shall be designated "$100 Par Serial Preferred Stock, 7.75%
Series" (hereinafter referred to as the "7.75% Series") and the
authorized number of shares of such series shall be 60,000.
2. Dividends on said 7.75% Series shall be at the rate of
7.75% of the par value thereof per annum and no more and shall be
cumulative from the date of issue thereof. Said dividends, when
declared shall be payable on the first day of January, April, July
and October in each year.
3. The shares of the 7.75% Series shall be redeemable at the
following redemption prices:
(a) if redeemed through the operation of the sinking fund
provision for which is hereinafter made, at the redemption
price of $100 per share, and:
(b) if redeemed otherwise than through operation of said
sinking fund,
at $107.75 per share if redeemed on or before July 1, 1977
at $105.83 per share if redeemed thereafter and on or before
July 1, 1981
at $103.91 per share if redeemed thereafter and on or before
July 1, 1985
and
thereafter at $102.00 per share,
<PAGE>
Exhibit 3(i)
Page 89 of 184
plus, in all cases, that portion of the quarterly dividend
accrued thereon to the redemption date and all unpaid dividends
thereon, if any; provided, however, that prior to July 1, 1979,
no such redemption shall be made (other than through operation
of said sinking fund) directly or indirectly from the proceeds,
or in anticipation, of the sale of preferred stock or the
issuance of any indebtedness for money borrowed, having an
effective dividend rate or an effective interest cost
(calculated in accordance with accepted financial practice) as
the case may be, of less than 7.75%.
4. The sinking fund for the redemption of the 7.75%
Series shall be as follows:
On July 1, 1970, and on each July 1 thereafter and for so
long as any of the 7.75% Series remains outstanding, the
Company shall, to the extent of any funds of the Company
legally available therefor, redeem 2400 shares (or such lesser
number of shares as remain outstanding) of the 7.75% Series;
provided, however, that if in any year the company does not
redeem such 2400 shares, the deficiency shall be made good on
the first succeeding July 1 on which the Company has funds
legally available for the redemption of shares pursuant to this
sinking fund.
5. No change in the provisions of the 7.75% Series, as set
forth herein, shall be made except to the extent and in the
manner provided in part V of the terms, limitations and relative
rights and preferences of the Company's $100 Par Serial
Preferred Stock nor without the consent of the holders of at
least two-thirds of the outstanding shares of the 7.75% Series.
III. The above resolution was adopted by the Board of Directors
acting alone, the Board of Directors being so authorized pursuant to
Section 33-341, Connecticut General Statutes, revision of 1958, as amended.
IV. The number of affirmative votes required to adopt such
resolution was eight (8).
V. The number of directors' votes in favor of the resolution
was twelve (12).
Dated at Hartford, Connecticut this 26th day of June, 1969.
<PAGE>
Exhibit 3(i)
Page 90 of 184
We hereby declare, under the penalties of perjury, that the
statements made in the foregoing certificate are true.
V. H. Frauenhofer, Vice President
_________________________________
W. A. MacDonald, Secretary
_________________________________
<PAGE>
Exhibit 3(i)
Page 91 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
BY ACTION OF ( ) INCORPORATION ( ) BOARD OF (X) BOARD OF DIRECTORS
DIRECTORS AND SHAREHOLDERS
61-38
VOL 24 133
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
--------------------------------------------------------------------------
1. Name of Corporation | DATE
Connecticut Natural Gas Corporation | February 18, 1970
--------------------------------------------------------------------------
2. The Certificate of Incorporation is:
|X| A. AMENDED ONLY | | B. AMENDED AND RESTATED | | C. RESTATED ONLY by the
following resolution
RESOLVED: That the charter of Connecticut Natural Gas Corporation be
and hereby is amended so as to provide that the authorized capital stock of
the Company consist of the following: 705,582 shares of common stock
having a par value of $12.50 per share, of which 685,582 shares are now
outstanding; 60,000 shares of preferred stock having a par value of $12.50
per share, known and designated as the "$12.50 Par Preferred Stock", all of
which are now outstanding; 100,000 shares of preferred stock having a par
value of $100 per share, known and designated as the Company's "$100 Par
Serial Preferred Stock: of which 9,400 shares are now outstanding, such
stock to be on a parity with respect to dividends and liquidation with the
$12.50 Par Preferred Stock and such stock neither to have nor to be subject
to any preemptive rights; and that the Board of Directors is authorized to
issue, from time to time, all such shares of $100 Par Serial Preferred
Stock, and, to the extent permitted by law, to fix and determine the terms,
limitations and (except that no amount payable on liquidation shall exceed
the then applicable call price) relative rights and preferences of such
stock, including, without limitation, the conditions under which they shall
be entitled to voting rights and the extent thereof, to divide such shares
into series and, to the extent permitted by law, to fix and determine the
variations among series.
[N.B. Since adoption of above, 60,000 additional shares of authorized
$100 Par Serial Preferred were issued and the then outstanding 9,400
shares were reduced to 9,100.]
3. (Omit if 2A is checked)
(a) The above resolution merely restates and does not change the
provisions of the original certificate of Incorporation as
supplemented and amended to date, except as follows: (Indicate
amendments made if any, if none, so indicate)
by increasing the number of common shares by 20,000 shares from
685,582 to 705,582.
(b) Other than as indicated in Par. 3(a), there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented to date, and the provisions of
this Certificate Relating the Certificate of Incorporation.
------------------------------------------------------------------------
| |4. (Check, if true)
The above resolution was adopted by vote of at least two-thirds of
the incorporators before the organization meeting of the corporation,
and approved in writing by all subscribers (if any) for shares of the
corporation, (or if nonstock corporation, by all applicants for
membership entitled to vote, if any)
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of perjury, that the statements made in the foregoing are true.
<TABLE>
<C> <C> <C> <C>
------------------------------------------------------------------------------------- SIGNED
|SIGNED |SIGNED
-------------------------------------------------------------------------------------
APPROVED
------------------------------------------------------------------------------------- SIGNED
|SIGNED |SIGNED
</TABLE>
<PAGE>
Exhibit 3(i)
Page 92 of 184
134
(Omit if 2C is checked.)
The above resolution was adopted by the board of directors acting alone,
there being no shareholders or subscribers. | | the board of directors
being so authorized pursuant to Section 33-341, Conn. G.S. as amended
| | the corporation being a nonstock corporation and having no members
and no applicants for membership entitled to vote on such resolution
<TABLE>
<C> <C>
-------------------------------------------------------------------
5. The number of affirmative votes |6. The number of directors' votes
required to adopt such resolution is: | in favor of the resolution was:
------------------------------------------------------------------------------------
</TABLE>
We hereby declare, under penalties of perjury, that the statements made in
the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
------------------------------------------------------------------------------------
SIGNED PRESIDENT OR VICE PRESIDENT |SIGNED SECRETARY OF ASSISTANT SECRETARY
------------------------------------------------------------------------------------
</TABLE>
|X| 4. The above resolution was adopted by the board of directors and by
shareholders. on February 1, 1969 and March 27, 1969 respectively.
number of shares required to be voted as a class
<TABLE>
<C> <C> <C> <C>
------------------------------------------------------------------------------------
NUMBER OF SHARES |TOTAL VOTING POWER |VOTE REQUIRED FOR |VOTE FAVORING
ENTITLED TO VOTE | |ADOPTION |ADOPTION
------------------------------------------------------------------------------------
</TABLE>
(If the shares are entitled to vote as a class, indicate the designation
and number of outstanding shares of each such class, the voting power
thereof, and the vote of each class for the amendment resolution.
Shares outstanding: 60,000 Preferred and 685,592 Common
(one vote per share of each class of stock)
<TABLE>
<CAPTION>
For Against
--- -------
<S> <C> <C>
Preferred 43,272 931
Common 510,084 19,838
</TABLE>
We hereby declare under the penalties of perjury that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
Robert H. Willis, President | Robert H. Dixon, Secretary
/s/ Robert H. Willis | /s/ Robert A. Dixon
------------------------------------------------------------------------------------
</TABLE>
| | 4. The above resolution was adopted by the board of directors and by
members
5. Vote of members:
(a) (Use if no members are required to vote as a class.)
<TABLE>
<C> <C> <C> <C>
------------------------------------------------------------------------------------
NUMBER OF MEMBERS |TOTAL VOTING | VOTE REQUIRED FOR |VOTE FAVORING
VOTING |POWER | ADOPTION |ADOPTION
------------------------------------------------------------------------------------
</TABLE>
(b) (If the members of any class are entitled to vote as a class, indicate
the designation and number of members of each such class, the voting power
thereof, and the vote of each such class for the amendment resolution.)
We hereby declare under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
------------------------------------------------------------------------------------
SIGNED PRESIDENT OR VICE PRESIDENT |SIGNED SECRETARY OF ASSISTANT SECRETARY
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FILED Filing Fee |Tax Certification Fee| Total Fees
<S> <C> <C> <C> <C>
STATE OF CONNECTICUT $ 20 200 $ 2 $227
FEB 27 1970 2:30P.M.
Ella T. Grasso
SECRETARY OF THE STATE
</TABLE> <PAGE>
Exhibit 3(i)
Page 93 of 184
Vol 24 149
CERTIFICATE Amending Certificate of Incorporation
by action of Board of Directors and Shareholders
(Stock Corporation)
For office use only
STATE OF CONNECTICUT -------------------
Account No.
SECRETARY OF THE STATE
Initials
-------------------
1. Name of Corporation
CONNECTICUT NATURAL GAS CORPORATION April 16, 1970
2. (A) The Certificate of Incorporation is amended only by the
following resolutions:
RESOLVED: That the charter of Connecticut Natural Gas
Corporation be and hereby is amended so as to provide that the
authorized capital stock of the Company consist of the
following: 2,705,582 shares of common stock having a par value
of $12.50 per share, of which 685,582 shares are now
outstanding; 60,000 shares of preferred stock having a par value
of $12.50 per share, known as the "$12.50 Par Preferred Stock",
all of which are now outstanding; 100,000 shares of preferred
stock having a par value of $100 per share, known and designated
as the Company's "$100 Par Serial Preferred Stock" of which
69,100 shares are now outstanding, such stock to be on a parity
with respect to dividends and liquidation with the $12.50 Par
Preferred Stock and such stock neither to have nor to be subject
to any preemptive rights; and that the Board of Directors is
authorized to issue, from time to time, all such shares of $100
Par Serial Preferred Stock, and, to the extent permitted by law,
to fix and determine the terms, limitation and (except that no
amount payable on liquidation shall exceed the then applicable
call price) relative rights and preferences of such stock,
including, without limitation the conditions under which they
shall be entitled to voting rights and the extent thereof, to
divide such shares into series and, to the extent permitted by
law, to fix and determine the variations among series.
RESOLVED: That the charter of Connecticut Natural Gas
Corporation be and hereby is amended so as to provide that the
holders of any capital stock of the Company shall have no
preemptive right to subscribe to any future issue of any shares
of capital stock of the Company, now or hereafter authorized, or
of any security convertible into any shares of such capital
stock.
<PAGE>
Exhibit 3(i)
Page 94 of 184
150
RESOLVED: That the charter of Connecticut Natural Gas
Corporation be and hereby is amended by amending 2 of V of the
"terms, limitations and relative rights and preferences of the
Company's $100 Par Serial Preferred Stock", by substituting the
words and figures seventy-five per cent. (75%) for the words and
figures seventy per cent. (70%) so that the same shall read:
"2. immediately after the issuance of such shares the
aggregate of (i) the par value of the Company's $100 Par
Serial Preferred Stock, $12.50 Par Preferred Stock and any
other stock ranking on a parity with or having priority
over the $100 Par Serial Preferred Stock in respect of
dividends or payments in liquidation and (ii) the principal
amount of all long-term indebtedness, is not more than
seventy-five per cent. (75%) of the aggregate of (a) the
principal amount of all long-term indebtedness, (b) the par
value of, or stated capital represented by, the Company's
outstanding capital stock of all classes and (c) the amount
of the Company's surplus (both capital and earned) as then
stated on the Company's books."
3. Not applicable.
4. The above resolutions were adopted by the board of directors
and by the shareholders on March 23, 1970.
5. Vote of shareholders:
(a) Not applicable.
(b) Designation, number of outstanding shares of such class,
voting power thereof, and vote of each class for each amendment
resolution:
As to first resolution:
Shares outstanding: 60,000 $12.50 Par Preferred Stock;
685,582 Common Stock (one vote per share of each class of
stock):
<TABLE>
<CAPTION>
For Against
--- -------
<S> <C> <C>
$12.50 Par Preferred Stock 45,626 1,694
Common Stock 487,238 17,195
</TABLE>
<PAGE>
Exhibit 3(i)
Page 95 of 184
151
As to the second resolution:
Shares outstanding: 60,000 $12.50 Par Preferred Stock;
685,582 Common Stock (one vote per share of each class of
stock):
<TABLE>
<CAPTION>
For Against
--- -------
<S> <C> <C>
$12.50 Par Preferred Stock 40,405 5,915
Common Stock 467,052 36,548
</TABLE>
As to the third resolution:
Shares outstanding: 69,100 $12.50 $100 Par Serial Preferred Stock;
60,000 $12.50 Par Preferred Stock; 685,582 Common Stock (one vote per share
of each class of stock):
<TABLE>
<CAPTION>
For Against
--- -------
<S> <C> <C>
$100 Par Serial Preferred Stock 62,600 0
$12.50 Par Preferred Stock 45,924 1,396
Common Stock 483,072 21,384
</TABLE>
We hereby declare, under the penalties of perjury, that the
statements made in the foregoing certificate are true.
Robert H. Willis, President Robert A. Dixon, Secretary
--------------------------- --------------------------
President Secretary
Filed State of Connecticut April 20, 1970 3:15 p.m.
<PAGE>
Exhibit 3(i)
Page 96 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
BY ACTION OF ( ) INCORPORATION ( ) BOARD OF (X) BOARD OF DIRECTORS
DIRECTORS AND SHAREHOLDERS
(Stock Corporation) (Non-Stock Corporation)
61-38
VOL 24 635
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
---------------------------------------------------------------------------
1. Name of Corporation | DATE
Connecticut Natural Gas Corporation | April 7, 1972
---------------------------------------------------------------------------
2. The Certificate of Incorporation is:
|X| A. AMENDED ONLY | | B. AMENDED AND RESTATED | | C. RESTATED ONLY by the
following resolution
RESOLVED: That the charter of the Connecticut Natural Gas
Corporation be and hereby is amended so as to provide that the authorized
capital stock of the Company consist of the following: 2,705,582 shares of
common stock having a par value of $12.50 per share, of which 685,782
shares are now outstanding; 60,000 shares of preferred stock having a par
value of $12.50 per share, known as the "$12.50 Par Preferred Stock", all
of which are now outstanding; 400,000 shares of preferred stock having a
par value of $100 per share, known and designated as the Company's "$100
Par Serial Preferred Stock" of which 63,700 shares are now outstanding,
such stock to be on a parity with respect to dividends and liquidation with
the $12.50 Par Preferred Stock and such stock neither to have nor to be
subject to any preemptive rights; and that the Board of Directors is
authorized to issue, from time to time, all such shares of $100 Par Serial
Preferred Stock, and, to the extent permitted by law, to fix and determine
the terms, limitations and (except that no amount payable on liquidation
shall exceed the then applicable call price) relative rights and
preferences of such stock, including, without limitation, the conditions
under which they shall be entitled to voting rights and the extent thereof,
to divide such shares into series and, to the extent permitted by law, to
fix and determine the variations among series.
3. (Omit if 2A is checked)
(a) The above resolution merely restates and does not change the
provisions of the original certificate of Incorporation as
supplemented and amended to date, except as follows: (Indicate
amendments made if any, if none, so indicate)
by increasing the number of shares of $100 Par Preferred Stock
by 300,000 shares from 100,000 to 400,000.
(b) Other than as indicated in Par. 3(a), there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented to date, and the provisions of
this Certificate Relating to the Certificate of Incorporation.
---------------------------------------------------------------------------
| |4. (Check, if true)
The above resolution was adopted by vote of at least two-thirds of
the incorporators before the organization meeting of the corporation,
and approved in writing by all subscribers (if any) for shares of the
corporation, (or if nonstock corporation, by all applicants for
membership entitled to vote, if any)
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of perjury, that the statements made in the foregoing are true.
<TABLE>
<C> <C> <C>
------------------------------------------------------------------------------------- SIGNED
|SIGNED |SIGNED
-------------------------------------------------------------------------------------
APPROVED
------------------------------------------------------------------------------------- SIGNED
|SIGNED |SIGNED
</TABLE>
<PAGE>
Exhibit 3(i)
Page 97 of 184
(Omit if 2C is checked.)
The above resolution was adopted by the board of directors acting alone,
there being no shareholders or subscribers. | | the board of directors
being so authorized pursuant to Section 33-341, Conn. G.S. as amended
| | the corporation being a nonstock corporation and having no members
and no applicants for membership entitled to vote on such resolution
<TABLE>
<C> <C>
---------------------------------------------------------------------------
5. The number of affirmative votes |6. The number of directors' votes
required to adopt such resolution is: | in favor of the resolution was:
------------------------------------------------------------------------------------
</TABLE>
We hereby declare, under penalties of perjury, that the statements made in
the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
------------------------------------------------------------------------------------
SIGNED PRESIDENT OR VICE PRESIDENT |SIGNED SECRETARY OF ASSISTANT SECRETARY
------------------------------------------------------------------------------------
</TABLE>
|X| 4. The above resolution was adopted by the board of directors and by
shareholders. on February 28, 1972 March 23, 1972 respectively.
number of shares required to be voted as a class
<TABLE>
<C> <C> <C> <C>
------------------------------------------------------------------------------------
NUMBER OF SHARES |TOTAL VOTING POWER |VOTE REQUIRED FOR |VOTE FAVORING
ENTITLED TO VOTE | |ADOPTION |ADOPTION
------------------------------------------------------------------------------------
</TABLE>
(If the shares are entitled to vote as a class, indicate the designation
and number of outstanding shares of each such class, the voting power
thereof, and the vote of each class for the amendment resolution.
<TABLE>
<CAPTION>
Class Shares Outstanding Voting Power favoring
----- ----------------- ----------- Adoption
<S> <C> <C> <C>
Common 685,782 685,782 484,919
$12.50 Par Preferred Stock 60,000 60,000 45,725
$100 Par Serial Preferred Stock 63,700 63,700 47,300
</TABLE>
We hereby declare under the penalties of perjury that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
Robert H. Willis, President | Robert A. Dixon, Secretary
/s/ Robert H. Willis | /s/ Robert A. Dixon
------------------------------------------------------------------------------------
</TABLE>
| | 4. The above resolution was adopted by the board of directors and by
members
5. Vote of members:
(a) (Use if no members are required to vote as a class.)
<TABLE>
<C> <C> <C> <C>
------------------------------------------------------------------------------------
NUMBER OF MEMBERS |TOTAL VOTING | VOTE REQUIRED FOR |VOTE FAVORING
VOTING |POWER | ADOPTION |ADOPTION
------------------------------------------------------------------------------------
</TABLE>
(b) (If the members of any class are entitled to vote as a class, indicate
the designation and number of members of each such class, the voting power
thereof, and the vote of each such class for the amendment resolution.)
We hereby declare under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY<PAGE>
------------------------------------------------------------------------------------
SIGNED PRESIDENT OR VICE PRESIDENT |SIGNED SECRETARY OF ASSISTANT SECRETARY
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FILED Filing Fee Tax Certification Fee| Total Fees
<S> <C> <C> <C> <C>
STATE OF CONNECTICUT $ 20 750 $ $770
APR 18 1972 2:15P.M. Certified Copy
______________ 5-15-72
SECRETARY OF THE STATE TO: Robinson, Robinson and Cole
799 Main St., Hartford 06103 Mrs. Betty Pacey
</TABLE>
<PAGE>
Exhibit 3(i)
Page 98 of 184
Vol 25 73
CONNECTICUT NATURAL GAS CORPORATION
Certificate Amending Charter
by Action of Board of Directors
(Stock Corporation)
I. The name of the corporation is CONNECTICUT NATURAL GAS
CORPORATION.
II. The charter is amended only by the following resolution of the
Board of Directors acting alone:
VOTED: There shall be and hereby is established a series of
$100
Par Serial Preferred Stock; the designation of such series, the
authorized number of shares thereof and the terms thereof to be as
follows:
1. The Series of $100 Par Serial Preferred Stock established
hereby shall be designated "$100 Par Serial Preferred Stock, 8.25%
Series" (hereinafter referred to as the "8.25% Series") and the
authorized number of shares of such series shall be 55,000.
2. Dividends on said 8.25% Series shall be at the rate of 8.25%
of the par value thereof per annum and no more shall be cumulative
from the date of issue thereof. Said dividends, when declared, shall
be payable on the first day of February, May, August and November in
each year.
3. The shares of the 8.25% Series shall be redeemable at the
following redemption prices:
(a) if redeemed through the operation of the sinking fund
provision for which is hereinafter made, at the redemption price
of $100 per share, and
(b) if redeemed otherwise than through operation of said
sinking fund,
at $108.25 per share if redeemed on or before August 1, 1976;
at $105.75 per share if redeemed thereafter and on or before
August 1, 1979;
at $103.25 per share if redeemed thereafter and on or before
August 1, 1982;
and thereafter at $101.00 per share.
plus, in all cases, that portion of the quarterly dividend
accrued thereon to the redemption date and all unpaid dividends
thereon, if any; provided, however, that prior to August 1,
1981, no such redemption shall be made (other than through
operation of said sinking fund) directly or indirectly from the
proceeds, or in anticipation, of the sale of preferred stock or
the issuance of any indebtedness for money borrowed, having an
<PAGE>
Exhibit 3(i)
Page 99 of 184
74
effective dividend rate or an effective interest cost
(calculated in accordance with accepted financial practices) as
the case may be, of less than 8.25% and that, in the event a
redemption be made on or after August 1, 1981 but prior to
August 1, 1983 by means of such a refunding (at a lower
dividend rate or interest cost), the redemption price shall be
$108.50 per share.
4. The sinking fund for the redemption of the 8.25% Series
shall be as follows:
On August 1 in each of the years 1974-1987, both inclusive, the
Company shall, to the extent of any funds of the Company legallyavailable
therefor, redeem 3,437 of such shares (or such lesser number of shares as
remain outstanding) and, on August 1, 1988 (to the extent of such funds
legally available therefor), redeem the balance (if any) of such shares;
provided, however, that, if in any year the Company does not redeem the
shares required to be redeemed as above provided, the deficiency shall be
made good on the first succeeding August 1 on which the Company has funds
legally available for the redemption of shares pursuant to this sinking
fund.
5. No change in the provision of the 8.25% Series, as set forth
herein, shall be made except to the extend and in the manner provided
in part V of the terms, limitations and relative rights and preferences of
the Company's $100 Par Serial Preferred Stock nor without the consent of
the holders of at least two-thirds of the outstanding shares of the 8.25%
Series.
III. The above resolution was adopted by the Board of Directors
acting alone, the Board of Directors being so authorized pursuant to
Section 33-341, Connecticut General Statutes, revision of 1958, as amended.
IV. The number of affirmative votes required to adopt such
resolution was seven (7).
V. The number of directors' votes in favor of the resolution was ten
(10).
Dated at Hartford, Connecticut this 23 day of July, 1973.
We hereby declare, under the penalties of perjury, that the
statements
made in the foregoing certificate are true.
Filed State of Connecticut Robert H. Willis
July 24, 1973 2:10 p.m. President
Secretary of State R. A. Dixon
Secretary
-2-
<PAGE>
Exhibit 3(i)
Page 100 of 184
Vol 25 363
CERTIFICATE OF MERGER
OF
THE GREENWICH GAS COMPANY
WITH AND INTO
CONNECTICUT NATURAL GAS CORPORATION
1. The name of the surviving corporation is
THE CONNECTICUT NATURAL GAS CORPORATION
2. The Plan of Merger is as follows:
ARTICLE I
Parties and Effective Date
(a) The Greenwich Gas Company, a Connecticut corporation,
("Greenwich") shall be merged with and into Connecticut Natural Gas
Corporation, a Connecticut corporation ("CNG" or the "Surviving
Corporation"), both such corporations being sometimes referred to as the
"Constituent Corporations", in accordance with the applicable statutes of
the State of Connecticut.
(b) The effective date and hour of the statutory merger described
herein (the "Effective Date") shall be the day and the hour on which a
Certificate of Merger under Sections 33-367 and 33-285 of the Connecticut
Stock Corporation Act shall be filed in the office of the Secretary of the
State of Connecticut in accordance with the terms and conditions of the
Agreement and Plan of Merger between CNG and Greenwich.
ARTICLE II
Effect of Merger
Upon the Effective Date, the separate existence of Greenwich shall
cease and Greenwich shall be merged with and into the Surviving
Corporation. The Surviving Corporation shall, from and after the Effective
Date, possess all the rights, privileges, immunities and franchises of
whatsoever nature and description of a public as well as of a private
nature, and be subject to all the restrictions, disabilities and duties of
each of the Constituent Corporations; and all property, real, personal and
mixed, and all debts due to either of the Constituent Corporations on
whatever account, and all and
<PAGE>
Exhibit 3(i)
Page 101 of 184
364
every other interest of or belonging to or due to each of the Constituent
Corporations, and every devise or bequest which either of the Constituent
Corporations would have been capable of taking shall be vested in the
Surviving Corporation without further act or deed; and all property,
rights, privileges, immunities and franchises, and all and every other
interest shall be thereafter as effectually the property of the Surviving
Corporation as they were of the respective Constituent Corporations; and
the title to any real estate vested by deed or otherwise, in any of the
Constituent Corporations, shall not revert or be in any way impaired by
reason of such merger. All rights of creditors and all liens upon the
property of the Constituent Corporations shall be preserved and unimpaired,
and the respective Constituent Corporations may be deemed to continue in
existence in order to preserve the same, and all debts, liabilities and
duties of the Constituent Corporations shall thenceforth attach to the
Surviving Corporation, and may be enforced against it to the same extent as
if said debts, liabilities and duties had been incurred or contracted by
it. Any existing claim or action or proceeding, whether civil, criminal or
administrative, pending or by or against either Constituent Corporation may
be prosecuted to judgment or decree as if such merger had not taken place,
or the Surviving Corporation may be substituted in such action or
proceeding.
ARTICLE III
Charter and Bylaws
(a) The Charter of CNG in effect immediately prior to the Effective
Date, amended to effectuate this Plan of Merger, shall be the Charter of
the Surviving Corporation.
(b) The Bylaws of CNG in effect immediately prior to the Effective
Date shall be the Bylaws of the Surviving Corporation.
ARTICLE IV
Conversion of Shares
(a) COMMON STOCK OF GREENWICH. Each share of common stock of
Greenwich which is issued and outstanding on the Effective Date (other than
shares of Greenwich common stock then owned by shareholders who have duly
given objections to the merger and demands for purchase in accordance with
the provisions of Section 33-374 of the Stock Corporation Act of the State
of Connecticut and with respect to which such demands shall not have been
withdrawn
-2-
<PAGE>
Exhibit 3(i)
Page 102 of 184
365
with the consent of Greenwich and CNG, such shares being hereinafter
referred to in this paragraph as "Dissenting Shares") shall, by virtue of
the merger, and without any action on the part of the holder thereof, be
converted into two-thirds (2/3) of a share of common stock, par value
$12.50, of CNG. As promptly as practicable after the Effective Date, each
holder of an outstanding certificate or certificates theretofore
representing shares of Greenwich common stock (other than certificates
representing Dissenting Shares) shall surrender the same to Hartford
National Bank and Trust Company as Transfer Agent of CNG. Such holder
shall be entitled on such surrender to receive in exchange therefor a
certificate or certificates representing the number of full shares of CNG
common stock into which the shares of Greenwich common stock theretofore
represented by the certificate or certificates so surrendered shall have
been converted as aforesaid. Fractional shares of CNG common stock shall
not be issued; but in lieu thereof, CNG shall pay for each share of
Greenwich common stock which is not convertible into whole shares of CNG
common stock an amount equal to two-thirds (2/3) of the mean between the
last preceding published high and low bid prices of CNG's common stock in
the over-the-counter market on or before the date of mailing the notice and
proxy statement for the Greenwich shareholders' meeting to approve this
Agreement, such prices to be those obtained from National Quotation Bureau,
Inc., representing inter-dealer quotations which do not include retail
mark-up, mark-down or commissions.
Until so surrendered, each outstanding certificate which, prior to
the Effective Date, represented Greenwich common stock (other than
certificates representing Dissenting Shares) shall be deemed for all
purposes, other than the payment of dividends or other distributions, to
evidence ownership of the whole number of shares of CNG common stock into
which the shares of Greenwich common stock (which, prior to the Effective
Date, were represented thereby) have been so converted; and no dividend or
other distribution, if any, payable to holders of record of the shares of
CNG common stock as of any date subsequent to the Effective Date shall be
paid to the holders of outstanding certificates theretofore representing
shares of Greenwich common stock; provided, however, that, upon surrender
and exchange of such outstanding certificates (other than certificates
representing Dissenting Shares) theretofore representing shares of
Greenwich common stock, there shall be paid to the record holders of the
certificates issued in exchange therefore the amount, without interest
thereon, of dividends and other distributions, if any, which would have
theretofore become payable with respect to the shares of CNG common stock
represented thereby.
-3-
<PAGE>
Exhibit 3(i)
Page 103 of 184
366
(b) GREENWICH 6% CUMULATIVE PREFERRED STOCK. Each share of issued
and outstanding Greenwich 6% Cumulative Prior Preferred Stock $25 par
value, shall be exchanged for one-fourth (1/4) of a share of CNG $100 Par
Serial Preferred Stock, 6% Series A, with cumulative dividends at 6% of the
par value thereof per annum, having the terms, limitations and relative
rights and preferences as set forth in the Charter of CNG, as amended to
authorize the issuance of such shares.
(c) GREENWICH 6 1/4% CUMULATIVE PRIOR PREFERRED STOCK. Each share
of issued and outstanding Greenwich 6 1/4% Cumulative Prior Preferred
Stock, $25 par value, shall be exchanged for one-fourth (1/4) of a share of
CNG $100 Par Serial Preferred Stock, 6.25% Series, with cumulative
dividends at 6.25% of the par value thereof per annum, having the terms,
limitations and relative rights and preferences as set forth in the Charter
of CNG, as amended to authorize the issuance of such shares.
(d) GREENWICH $1.50 PREFERRED SHARES. Each share of Greenwich $1.50
Preferred Shares no par value, 6% Series, issued and outstanding on the
Effective Date (other than shares of such stock then owned by shareholders
who have duly given objections to the merger and demands for purchase in
accordance with the provisions of Section 33-374 of the Stock Corporation
Act of the State of Connecticut and with respect to which such demands
shall not have been withdrawn with the consent of Greenwich and CNG, such
shares being hereinafter referred to in this paragraph (d) as "Dissenting
Shares") shall, by virtue of the merger and without any action on the part
of the holder thereof, be converted into one-quarter (1/4) share of CNG
$100 Par Serial Preferred Stock, 6% Series B, with cumulative dividends at
6% of the par value thereof per annum, having the terms, limitations and
relative rights and preferences as set forth in the Charter of CNG, as
amended to authorize the issuance of such shares. Fractional shares of CNG
$100 Par Serial Preferred Stock 6%, Series B shall not be issued; but, in
lieu thereof, CNG shall pay for each share of Greenwich $1.50 Preferred
Shares which is not convertible into whole shares of CNG $100 Par Serial
Preferred Stock 6%, Series B, an amount equal to the mean between the last
preceding published high and low bid prices of Greenwich $1.50 Preferred
Shares in the over-the-counter market on or before the date of mailing the
notice and proxy statement for the Greenwich Shareholders Meeting to
approve this Agreement, such prices to be those obtained from National
Quotation Bureau, Inc. representing inter-dealer quotations which do not
include retail markup, markdown, or commissions.
Until so surrendered, each outstanding certificate which, prior to
the Effective Date, represented Greenwich $1.50 Preferred
-4-
<PAGE>
Exhibit 3(i)
Page 104 of 184
367
Shares (other than certificates representing Dissenting Shares) shall be
deemed for all purposes, other than the payment of dividends or other
distributions to evidence ownership of the whole number of shares of CNG
$100 Par Serial Preferred Stock, 6% Series B, into which the shares of
Greenwich $1.50 Preferred Shares (which, prior to the Effective Date, were
represented thereby) have been so converted; and no dividend or other
distribution, if any, payable to the holders of record of the shares of CNG
$100 Par Serial Preferred Stock 6% Series B, as of any date subsequent to
the Effective Date shall be paid to the holders of outstanding certificates
theretofore representing shares of Greenwich $1.50 Preferred Shares;
provided however, that upon surrender and exchange of such outstanding
certificates (other than certificates representing Dissenting Shares)
theretofore representing shares of Greenwich $1.50 Preferred Shares, there
shall be paid to the record holders of the certificates issued in exchange
therefor the amount, without interest thereon, of dividends and other
distributions, if any, which would have theretofore become payable with
respect to the shares of CNG $100 Par Serial Preferred Stock 6% Series B
represented thereby.
(e) CNG COMMON AND PREFERRED SHARES. Each share of CNG common and
preferred stock issued and outstanding on the Effective Date shall continue
without change as a like share of stock in the Surviving Corporation.
ARTICLE V
Board of Directors and Officers
-------------------------------
(a) Initially, and until the election and qualification of their
respective successors, the members of the Board of Directors of the
Surviving Corporation shall be as follows: Franklin S. Atwater, Dr. Arthur
C. Banks, Jr., James F. English, Jr., William W. Fisher, Dr. Dorothy C.
Goodwin, Roger J. Larson, Denis F. Mullane, Dr. Eli Shapiro, Everett Smith,
Jr., Angelo Tomasso, Jr., Bruce N. Torell, Robert D. Twohig, Roger C.
Wilkins, Robert H. Willis, Richard A. Winslow.
(b) The officers of the Surviving Corporation shall be the officers
of CNG immediately prior to the Effective Date, together with Richard A.
Winslow as Senior Vice President and John P. Brennan as Vice President.
ARTICLE VI
Approval of Shareholders
There shall be required for the approval of the merger described
herein the affirmative vote of the holders of a majority of CNG common
stock and CNG $12.50 Par Preferred Stock, voting as one class, issued and
outstanding upon the date of record for voting upon such merger at the
special meeting of such classes to be called pursuant to said Agreement and
Plan of Merger. The approval of such merger by shareholders of Greenwich
-5-
<PAGE>
Exhibit 3(i)
Page 105 of 184
368
shall require the affirmative vote of the holders of at least two-thirds
(2/3) of the issued and outstanding shares of each class of capital stock
of Greenwich as of the record date of the special meeting thereof called
pursuant to such Agreement.
3. The Plan of Merger was approved by resolution of the Board of
Directors of The Greenwich Gas Company and has been approved and adopted by
votes representing more than two-thirds of the issued and outstanding
shares of each class of its capital stock. The shareholder vote was as
follows:
<TABLE>
<CAPTION>
Shares of Shares Shares Shares Shares
Common Stock Required to Voted On Voted in Voted
Outstanding Adopt Plan Plan Favor of Plan Against Plan
------------ ----------- -------- ------------- ------------
<C> <C> <C> <C> <C>
250,536 166,857 193,298 191,745 1,553
<CAPTION>
Shares of 6%
Cumulative
Prior Preferred Shares Shares Shares Shares
Stock Required to Voted On Voted in Voted
Outstanding Adopt Plan Plan Favor of Plan Against Plan
------------ ----------- -------- ------------- ------------
<C> <C> <C> <C> <C>
12,000 7,922 12,000 12,000 0
<CAPTION>
Shares of 6 1/4%
Cumulative
Prior Preferred Shares Shares Shares Shares
Stock Required to Voted On Voted in Voted
Outstanding Adopt Plan Plan Favor of Plan Against Plan
------------ ----------- -------- ------------- ------------
<C> <C> <C> <C> <C>
16,400 10,922 16,400 16,400 0
<CAPTION>
Shares of $1.50 Shares Shares Shares Shares
Preferred Stock Required to Voted On Voted in Voted
Outstanding Adopt Plan Plan Favor of Plan Against Plan
------------ ----------- -------- ------------- ------------
<C> <C> <C> <C> <C>
26,553 17,684 22,607 19,432 3,175
</TABLE>
-6-
<PAGE>
Exhibit 3(i)
Page 106 of 184
369
4. The Plan of Merger was approved by resolution of the Board of
Directors of Connecticut Natural Gas Corporation and has been approved and
adopted by votes representing a majority of the issued and outstanding
shares of its Common Stock and $12.50 Par Preferred Stock, voting as one
class. The shareholder vote was as follows:
<TABLE>
<CAPTION>
Shares of Common
and $12.50
Par Preferred Shares Shares Shares Shares
Stock Required to Voted On Voted in Voted
Outstanding Adopt Plan Plan Favor of Plan Against Plan
------------ ----------- -------- ------------- ------------
<C> <C> <C> <C> <C>
746,177 373,089 464,183.913 451,982.921 12,200.992
</TABLE>
Dated at Hartford, Connecticut, this 30th day of August, 1974.
We hereby declare under the penalties of false statement, that the
statements made in the forgoing certificate, insofar as they pertain to The
Greenwich Gas Company, are true.
THE GREENWICH GAS COMPANY
By________________________________
Richard A. Winslow, President
________________________________
Frank J. Coyle, Secretary
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate, insofar as they pertain to
Connecticut Natural Gas Corporation, are true.
CONNECTICUT NATURAL GAS CORPORATION
By ________________________________
V. Frauenhofer
Senior Vice President
_______________________________
Carl Thomsen
Assistant Secretary
FILED State of Connecticut
August 30 1974 3:50 p.m.
<PAGE>
Exhibit 3(i)
Page 107 of 184
VOL 25 377
CONNECTICUT NATURAL GAS CORPORATION
Certificate Amending Charter
by Action of Board of Directors
(Stock Corporation)
I. The name of the corporation is CONNECTICUT NATURAL GAS
CORPORATION.
II. The charter is amended only by the following resolutions of the
Board of Directors acting alone:
VOTED: There shall be and hereby is established a series of
$100 Par Serial Preferred Stock; the designation of such series, the
authorized number of shares thereof and the terms thereof to be as
follows:
1. The Series of $100 Par Preferred Stock established hereby
shall be designated "$100 Par Serial Stock, 6% Series A" (hereinafter
referred to as the "6% Series A") and the authorized number of shares
of such series shall be 3,000.
2. Dividends on said 6% Series A shall be at the rate of 6% of
the par value thereof per annum and no more shall be cumulative from
the date of issue thereof. Said dividends, when declared, shall be
payable on the first day of January, April, July and October in each
year.
3. The shares of the 6% Series A shall be redeemable at the
following redemption prices:
(a) if redeemed through the operation of the sinking fund
provision for which is hereinafter made, at the redemption price
of $100 per share, and
(b) if redeemed otherwise than through operation of said
sinking fund,
at $102.00 per share if redeemed on or before
December 31, 1974;
at $101.50 per share if redeemed thereafter
and on or before December 31, 1975;
at $101.00 per share if redeemed thereafter
and on or before December 31, 1976;
at $100.50 per share if redeemed thereafter
and on or before December 31, 1977;
and thereafter at $100 per share;
plus, in all cases, that portion of the quarterly dividend
accrued thereon to the redemption date and all unpaid dividends
thereof, if any.
4. The sinking fund for the redemption of the 6% Series A
shall be as follows:
On October 1 in each of the years 1974-1981, both inclusive, the
Company shall, to the extent of any funds of the Company legally
available therefor,
<PAGE>
Exhibit 3(i)
Page 108 of 184
378
-2-
redeem 375 of such shares (or such lesser number of shares as remain
outstanding); provided, however, that, if in any year the Company
does not redeem the shares required to be redeemed as above provided,
the deficiency shall be made good on the first succeeding October 1
on which the Company has funds legally available for the redemption
of shares pursuant to this sinking fund.
5. In the case of all redemptions, if less than all of the
outstanding shares of the $100 Par Serial Preferred Stock, 6% Series A, are
to be called for redemption:
(i) so long as the initial owner of the stock of such series
originally issued is a holder of record, a pro rata portion of
the shares held by such initial owner (to the nearest full
share) shall be called for redemption;
(ii) if there are less than twenty (20) holders of record of the
shares of such series, a proportionate part of the shares of
such series of each holder of record shall be called for
redemption;
provided, however, that such adjustments may be made among the shares to be
redeemed as are necessary to avoid fractional parts of shares.
6. No change in the provisions of the 6% Series A, as set forth
herein, shall be made except to the extent and in the manner provided in
part V of the terms, limitations and relative rights and preferences of the
Company's $100 Par Serial Preferred Stock nor without the consent of the
holders of at least two-thirds of the outstanding shares of the 6% Series
A.
VOTED: There shall be and hereby is established a series of $100 Par
Preferred Stock; the designation of such series, the authorized number of
shares thereof and the terms thereof to be as follows:
1. The Series of $100 Par Serial Preferred Stock established hereby
shall be designated "$100 Par Serial Preferred Stock, 6% Series B"
(hereinafter referred to as the "6% Series B") and the authorized number of
shares of such series shall be 6,638.
2. Dividends on said 6% Series B shall be at the rate of 6% of the
par value thereof per annum and no more shall be cumulative from the date
of issue therof. Said dividends, when declared, shall be payable on the
first day of January, April, July and October in each year.
3. The shares of the 6% Series B shall be redeemable for all
purposes at $110 per share plus, in all cases, that portion of the
quarterly dividend accrued thereon to the redemption date and all unpaid
dividends thereon, if any.
<PAGE>
Exhibit 3(i)
Page 109 of 184
379
-3-
4. No change in the provisions of the 6% Series B, as set forth
herein, shall be made except to the extent and in the manner provided in
part V of the terms, limitations and relative rights and preferences of the
Company's $100 Par Serial Preferred Stock nor without the consent of the
holders of at least two-thirds of the outstanding shares of the 6% Series
B.
VOTED: There shall be and hereby is established a series of $100
Par Preferred Stock; the designation of such series, the authorized number
of shares thereof and the terms thereof to be as follows:
1. The Series of $100 Par Serial Preferred Stock established hereby
shall be designated $100 Par Serial Preferred Stock, 6.25% Series"
(hereinafter referred to as the "6.25% Series") and the authorized number
of shares of such series shall be 4,100.
2. Dividends on said 6.25% Series shall be at the rate of 6.25% of
the par value thereof per annum and no more shall be cumulative from the
date of issue thereof. Said dividends, when declared, shall be payable on
the first day of January, April, July and October in each year.
3. The shares of the 6.25% Series shall be redeemable at the
following redemption prices:
(a) if redeemed through the operation of the sinking fund
provision for which is hereinafter made, at the redemption price
of $100 per share, and
(b) if redeemed otherwise than through operation of said
sinking fund,
at $105.725 per share if redeemed on or before
December 31, 1974;
at $105.200 per share if redeemed thereafter
and on or before December 31, 1975;
at $104.725 per share if redeemed thereafter
and on or before December 31, 1976;
at $104.150 per share if redeemed thereafter
and on or before December 31, 1977;
at $103.625 per share if redeemed thereafter
and on or before December 31, 1978;
at $103.100 per share if redeemed thereafter
and on or before December 31, 1979;
at $102.575 per share if redeemed thereafter
and on or before December 31, 1980;
at $102.050 per share if redeemed thereafter
and on or before December 31, 1981;
at $101.525 per share if redeemed thereafter
and on or before December 31, 1982;
and thereafter at $101 per share;
plus, in all cases, that portion of the quarterly dividend
accrued thereon to the redemption date and all unpaid dividends
thereon, if any; provided,
<PAGE>
Exhibit 3(i)
Page 110 of 184
380
-4-
however, that, if prior to January 1, 1978, any such redemption
shall be by the application of funds secured through the
issuance of securities (including, without limitation, shares of
capital stock of any class or securities, convertible into or
evidencing a right to subscribe for or purchase shares of
capital stock, or bonds, debentures, notes, or other evidences
of indebtedness) or by application of moneys borrowed in
anticipation of the issuance of any securities, the redemption
price shall be $110. In all cases of redemption of shares of
6.25% Series prior to January 1, 1978, the Board of Directors
shall first adopt a resolution stating the sources of moneys to
be used by the corporation in effecting the proposed redemption
and finding and declaring that such redemption does not violate
the foregoing provisions of this paragraph.
4. The sinking fund for the redemption of the 6.25% Series shall be
as follows:
On January 1 in each year so long as any shares of the 6.25%
Series remain outstanding, the Company shall, to the extent of any
funds of the Company legally available therefor, prior to 1979 redeem
150 and thereafter 250 of such shares (or such lesser number of
shares as remain outstanding); provided, however, that, if in any
year the Company does not redeem the shares required to be redeemed
as above provided, the deficiency shall be made good on the first
succeeding January 1 on which the Company has funds legally available
for the redemption of shares pursuant to this sinking fund.
5. In the case of all redemptions, if less than all of the
outstanding shares of the $100 Par Serial Preferred Stock, 6.25% Series,
are to be called for redemption:
(i) so long as the initial owner of the stock of such series
originally issued is a holder of record, a pro rata portion of the
shares held by such initial owner (to the nearest full share) shall
be called for redemption;
(ii) if there are less than twenty (20) holders of record of the
shares of such series, a proportionate part of the shares of such
series of each holder of record shall be called for redemption;
provided, however, that such adjustments may be made among the shares to be
redeemed as are necessary to avoid fractional parts of shares.
6. No change in the provisions of the 6.25% Series, as set forth
herein, shall be made except to the extent and in the manner provided in
part V of the
<PAGE>
Exhibit 3(i)
Page 111 of 184
terms, limitations and relative rights and preferences of the Company's
$100 Par Serial Preferred Stock nor without the consent of the holders of
at least two-thirds of the outstanding shares of the 6.25% Series.
III. The above resolutions were adopted by the Board of Directors
acting alone at a meeting held May 23, 1974, the Board of Directors being
so authorized pursuant to Section 23-341, Connecticut General Statutes,
revision 1958, as amended.
IV. The number of affirmative votes required to adopt each such
resolution was seven (7).
V. The number of directors' votes in favor of each such resolution
was twelve (12).
Dated at Hartford, Connecticut, this 31, day of July, 1974.
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true.
R.H. Willis
_______________________________________
Chairman and President
R.A. Dixon
_______________________________________
Secretary
Filed State of Connecticut
August 30 1974 3:40 p.m.
<PAGE>
Exhibit 3(i)
Page 112 of 184
CERTIFICATE AMENDING CERTIFICATE OF INCORPORATION
BY ACTION OF BOARD OF DIRECTORS AND SHAREHOLDERS
1. The name of the corporation is
CONNECTICUT NATURAL GAS CORPORATION.
2. The Charter of Connecticut Natural Gas Corporation is amended only by
the following resolution:
RESOLVED: That the Charter of Connecticut Natural Gas Corporation be
and hereby is amended so as to provide that the authorized capital
stock of the Corporation consists of the following:
(a) 5,411,164 shares of common stock having a par value of $6.25 per
share.
(b) 120,000 shares of preferred stock having a par value of $6.25
per share, known and designated as the "$6.25 Par Preferred
Stock",
(i) said preferred stock to be entitled to receive out of the
net profits of the Corporation cumulative dividends at the
rate of eight percent (8%) per annum, payable in quarterly
installments of two percent (2%) to be paid thereon before
any dividends are payable upon the Common Stock of the
Corporation;
(ii) said preferred stock in the event of liquidation of the
Corporation or distribution of its assets to be preferred
as to the entire assets to the amount of $12.50 a share;
and
(iii) all shares of common stock and $6.25 Par Preferred Stock
shall have equal voting rights.
(c) 400,000 shares of preferred stock having a par value of $100
per share, known and designated as the Corporation's "$100 Par
Serial Preferred Stock",
(i) said $100 Par Serial Preferred Stock to be on a parity with
respect to dividends and liquidation with the $6.25 Par
Preferred Stock;
(ii) the Board of Directors is authorized to issue, from time
to time, all such shares of $100 Par Serial Preferred
Stock and, to the extent permitted by law, to fix and
determine the terms, limitations and (except that no
amount payable on liquidation shall exceed the then
applicable call price) relative
<PAGE>
Exhibit 3(i)
Page 113 of 184
rights and preferences of such stock, including, without limitation,
the conditions under which they shall be entitled to voting rights
and the extent thereof, to divide such shares into series and, to the
extent permitted by law, to fix and determine the variations among
series.
3. The foregoing charter amendment shall be effective as of 4:30 P.M.,
Eastern Standard Time, on January 5, 1978.
Upon the effectiveness of the foregoing charter amendment, each
share of the outstanding common stock of the Corporation of the par value
of the $12.50 per share shall be divided into two shares of common stock of
the par value of $6.25 per share, and each share of $12.50 Par Preferred
Stock of the Corporation shall be divided into two shares of $6.25 Par
Preferred Stock. All outstanding certificates representing shares of
common stock and $12.50 Par Preferred Stock immediately prior to the
effectiveness of such amendment, shall continue to represent the same
number of shares following the effectiveness of such amendment, but, in
each case, such shares shall be deemed to be of the par value of $6.25 per
share. New stock certificates representing additional shares of common
stock or $6.25 Par Preferred Stock to which shareholders of the Corporation
shall be entitled by reason of the foregoing charter amendment and
concurrent stock splits shall be issued and delivered to such holders as
soon as reasonably possible.
4. The above resolution was adopted by the Board of Directors and
by shareholders.
5. Vote of shareholders:
Common Stock and $12.50 Par Preferred Stock, voting as a single
class in accordance with the voting rights of such classes contained in the
charter of the Corporation:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
914,197 914,197 609,465 702,009
</TABLE>
Common Stock, $12.50 par value, as to matters upon which the
holders of Common Stock are entitled to vote as a separate class
pursuant to Section 33-361 of the Connecticut General Statutes:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
854,197 854,197 569,465 654,232
</TABLE>
-2-
<PAGE>
Exhibit 3(i)
Page 114 of 184
$12.50 Par Preferred Stock, as to matter upon which the holders
of $12.50 Par Preferred Stock are entitled to vote as a separate
class pursuant to Section 33-361 of the Connecticut General
Statutes:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
60,000 60,000 40,000 50,224
</TABLE>
Dated at Hartford, Connecticut this 29th day of December, 1977.
We hereby declare, under the penalties of false statement that the
statements made in the foregoing certificate are true.
__________________________________
President, Robert H. Willis
___________________________________
Assistant Secretary, Carl Thomsen
State of Connecticut :
: ss. Hartford December 29, 1977
County of Hartford :
Personally appeared ROBERT H. WILLIS and Carl Thomsen, President and
Assistant Secretary, respectively, of CONNECTICUT NATURAL GAS CORPORATION,
who swore to the truth of the foregoing certificate before them signed,
before me.
___________________________________
Notary Public
My Commission Expires March 31, 1981
FILED
STATE OF CONNECTICUT
January 4, 1978
Secretary of State
-3-
<PAGE>
Exhibit 3(i)
Page 115 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd. 7.75% $100 60,000 - 60,000
Pfd. 6%, Ser.A $100 3,000 - 3,000
Pfd. 6%, Ser.B $100 6,638 - 6,638
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd. 7.75% $100 26,400 - 26,400
Pfd. 6%, Ser.A $100 2,250 - 2,250
Pfd. 6%, Ser.B $100 587 - 587
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd. 7.75% $100 33,600 - 33,600
Pfd. 6%, Ser.A $100 750 - 750
Pfd. 6%, Ser.B $100 6,051 - 6,051
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford, Connecticut this 18 day of August, 1980.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
-----------------------------------------------------------------------------------
Name of President or Vice President | Name of Secretary or Assistant Secretary
V.H. Frauenhofer, Executive Vice President| R.A. Dixon, Secretary & Vice President
------------------------------------ ---------------------------------
/s/ V.H. Frauenhofer /s/ R.A. Dixon
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <C> <C> <C>
Filing Fee Tax Certification Fee| Total Fees
</TABLE>
Certified Copy
TO:
<PAGE>
Exhibit 3(i)
Page 116 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd. 6.25% $100 4,100 - 4,100
Pfd. 8.25% $100 55,000 - 55,000
Pfd. 5.75% $100 9,600 - 9,600
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd. 6.25% $100 1,100 - 1,100
Pfd. 8.25% $100 20,622 - 20,622
Pfd. 5.75% $100 3,500 - 3,500
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd. 6.25% $100 3,000 - 3,000
Pfd. 8.25% $100 34,378 - 34,378
Pfd. 5.75% $100 6,100 - 6,100
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford, Connecticut this 18 day of August, 1980.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
-----------------------------------------------------------------------------------
Name of President or Vice President | Name of Secretary or Assistant Secretary
V.H. Frauenhofer, Executive Vice President| R.A. Dixon, Secretary & Vice President
------------------------------------ ---------------------------------
/s/ V.H. Frauenhofer /s/ R.A. Dixon
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <C> <C> <C>
Filing Fee Tax Certification Fee| Total Fees
Certified Copy
TO:
</TABLE>
<PAGE>
Exhibit 3(i)
Page 117 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser. A $100 750 - 750
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser. A $100 375 - 375
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser. A $100 375 - 375
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford this 24 day of February, 1981.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
-----------------------------------------------------------------------------------
Name of ------------ Vice President | Name of ------------ Assistant Secretary
Robert A. Dixon | Carl Thomsen
------------------------------------ ---------------------------------
/s/ R.A. Dixon | /s/ Carl Thomsen
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <C> <C> <C>
Filing Fee Tax Certification Fee| Total Fees
Certified Copy
TO:
</TABLE>
<PAGE>
Exhibit 3(i)
Page 118 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6.25% $100 3,000 - 3,000
PFD 8.25% $100 34,378 - 34,378
PFD 5.75% $100 6,100 - 6,100
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6.25% $100 250 - 250
PFD 8.25% $100 3,437 - 3,437
PFD 5.75% $100 300 - 300
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6.25% $100 2,750 - 2,750
PFD 8.25% $100 30,941 - 30,941
PFD 5.75% $100 5,800 - 5,800
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford this 24 day of February 1981.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
-----------------------------------------------------------------------------------
Name of ------------ Vice President | Name of ------------ Assistant Secretary
Robert A. Dixon | Carl Thomsen
------------------------------------ ---------------------------------
/s/ R.A. Dixon | /s/ Carl Thomsen
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <C> <C> <C>
Filing Fee Tax Certification Fee| Total Fees
Certified Copy
TO:
</TABLE>
<PAGE>
Exhibit 3(i)
Page 119 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
BY ACTION OF ( ) INCORPORATION ( ) BOARD OF (X) BOARD OF DIRECTORS
DIRECTORS AND SHAREHOLDERS
61-38
VOL 24 133
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
---------------------------------------------------------------------------
1. Name of Corporation | DATE
Connecticut Natural Gas Corporation | April 30, 1981
---------------------------------------------------------------------------
2. The Certificate of Incorporation is:
|X| A. AMENDED ONLY | | B. AMENDED AND RESTATED | | C. RESTATED ONLY by the
following resolution
"RESOLVED: That the Charter of this corporation be, and it hereby
is, amended by deleting therefrom in its entirety Sec. 2 of Special
Act 478 of the 1951 Connecticut General Assembly entitled `An Act
Amending the Charter of The Hartford Gas Company', approved June 27,
1951, and substituting the following paragraph in lieu thereof:
Subject to the approval of the Department of Public Utility
Control, but otherwise without limitation as to amount, said
company is authorized to issue, from time to time, notes, bonds
or other evidences of indebtedness payable at periods of more
than one year after the date thereof (a) to provide funds for
the acquisition of property or the construction, completion,
extension or improvement of its system, or (b) to reimburse its
treasury for moneys expended for such acquisition or for such
construction, completion, extension or improvement which were
not obtained through the issue of stock, notes, bonds or other
evidences of indebtedness, or (c) for the discharge, funding or
refunding of its obligations."
3. (Omit if 2A is checked)
(a) The above resolution merely restates and does not change the
provisions of the original certificate of Incorporation as
supplemented and amended to date, except as follows: (Indicate
amendments made if any, if none, so indicate)
(b) Other than as indicated in Par. 3(a), there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented to date, and the provisions of
this Certificate Relating to the Certificate of Incorporation.
---------------------------------------------------------------------------
| |4. (Check, if true)
The above resolution was adopted by vote of at least two-thirds of
the incorporators before the organization meeting of the corporation,
and approved in writing by all subscribers (if any) for shares of the
corporation, (or if nonstock corporation, by all applicants for
membership entitled to vote, if any)
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement that the statements made in the foregoing are
true.
<TABLE>
<C> <C> <C> <C>
------------------------------------------------------------------------------------- SIGNED
|SIGNED |SIGNED
-------------------------------------------------------------------------------------
APPROVED
------------------------------------------------------------------------------------- SIGNED
|SIGNED |SIGNED
</TABLE>
<PAGE>
Exhibit 3(i)
Page 120 of 184
(Omit if 2C is checked.)
The above resolution was adopted by the board of directors acting alone,
there being no shareholders or subscribers. | | the board of directors
being so authorized pursuant to Section 33-341, Conn. G.S. as amended
| | the corporation being a nonstock corporation and having no members
and no applicants for membership entitled to vote on such resolution
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
5. The number of affirmative votes |6. The number of directors' votes
required to adopt such resolution is: | in favor of the resolution was:
------------------------------------------------------------------------------------
</TABLE>
We hereby declare, under penalties of false statement that the statements
made in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
------------------------------------------------------------------------------------
SIGNED PRESIDENT OR VICE PRESIDENT |SIGNED SECRETARY OF ASSISTANT SECRETARY
------------------------------------------------------------------------------------
</TABLE>
|X| 4.The above resolution was adopted by the board of directors and by
shareholders.
5. Vote of Shareholders:
(a) (Use if no shares are required to be voted as a class.)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
NUMBER OF SHARES |TOTAL VOTING POWER |VOTE REQUIRED FOR |VOTE FAVORING
ENTITLED TO VOTE | |ADOPTION |ADOPTION
<C> <C> <C> <C>
1,852,529 | 1,852,529 | 1,235,020 | 1,298,220
------------------------------------------------------------------------------------
</TABLE>
(b) (If the shares of any class are entitled to vote as a class, indicate
the designation and number of outstanding shares of each such class, the
voting power thereof, and the vote of each class for the amendment
resolution.)
We hereby declare under the penalties of false statement that the
statements made in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
Robert H. Willis, President | Robert A. Dixon, Secretary
/s/ Robert H. Willis | /s/ Robert A. Dixon
------------------------------------------------------------------------------------
</TABLE>
| | 4. The above resolution was adopted by the board of directors and by
members
5. Vote of members:
(a) (Use if no members are required to vote as a class.)
<TABLE>
<C> <C> <C> <C>
------------------------------------------------------------------------------------
NUMBER OF MEMBERS |TOTAL VOTING | VOTE REQUIRED FOR |VOTE FAVORING
VOTING |POWER | ADOPTION |ADOPTION
------------------------------------------------------------------------------------
</TABLE>
(b) (If the members of any class are entitled to vote as a class, indicate
the designation and number of members of each such class, the voting power
thereof, and the vote of each such class for the amendment resolution.)
We hereby declare under the penalties of false statement that the
statements made in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
------------------------------------------------------------------------------------
SIGNED PRESIDENT OR VICE PRESIDENT |SIGNED SECRETARY OF ASSISTANT SECRETARY
------------------------------------------------------------------------------------
/TABLE
<PAGE>
<TABLE>
<CAPTION>
STATE OF CONNECTICUT Filing Fee Tax Certification Fee| Total Fees
<C> <C> <C> <C> <C>
FILED $ 30 $ 9 $39
</TABLE>
APR 30 1981 Certified Copy
/s/ Barbara B. Kennelly Murtha Cullina
SECRETARY OF THE STATE P.O. Box 3192
BY L. M. _____________ Htfd CT 06103 <PAGE>
Exhibit 3(i)
Page 121 of 184
(FORM)
State of Connecticut )
) ss. HARTFORD
OFFICE OF SECRETARY OF THE STATE )
I hereby certify that the foregoing is a true copy of record in this office
IN TESTIMONY WHEREOF, I have hereunto set my
hand, and affixed the Seal of said State, at
Hartford, this 30th day of April, A.D., 1981
Barbara B. Kennelly
Secretary of the State
<PAGE>
Exhibit 3(i)
Page 122 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 33,600 - 33,600
PFD 8.25% $100 30,941 - 30,941
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 2,400 - 2,400
PFD 8.25% $100 3,437 - 3,437
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 31,200 - 31,200
PFD 8.25% $100 27,504 - 27,504
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford this 10 day of August 1981.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF --------- OR VICE PRESIDENT |NAME OF --------- OR ASSISTANT SECRETARY
Robert A. Dixon | Carl Thomsen
/s/ Robert A. Dixon | /s/ Carl Thomsen
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Filing Fee Certification Fee| Total Fees
<C> <C> <C>
$ $ $
</TABLE>
<PAGE>
Exhibit 3(i)
Page 123 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 5,800 - 5,800
PFD 6.25% $100 2,750 - 2,750
PFD 6%, Ser A $100 375 - 375
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 300 - 300
PFD 6.25% $100 250 - 250
PFD 6%, Ser A $100 375 - 375
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 5,500 - 5,500
PFD 6.25% $100 2,500 - 2,500
PFD 6%, Ser A $100 00 - 00
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford this 9 day of February, 1982.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF --------- OR VICE PRESIDENT |NAME OF --------- OR ASSISTANT SECRETARY
Robert A. Dixon | Carl Thomsen
/s/ Robert A. Dixon | /s/ Carl Thomsen
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FILED Filing Fee Certification Fee| Total Fees
<S> <C> <C> <C>
STATE OF CONNECTICUT $ 6 $ 6 $12
FEB 16 1982
</TABLE>
______________
SECRETARY OF THE STATE
<PAGE>
Exhibit 3(i)
Page 124 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 5,899 - 5,899
PFD 7.75% $100 31,200 - 31,200
PFD 8.25% $100 27,504 - 27,504
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 18 - 18
PFD 7.75% $100 2,400 - 2,400
PFD 8.25% $100 3,437 - 3,437
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 5,881 - 5,881
PFD 7.75% $100 28,800 - 28,800
PFD 8.25% $100 24,067 - 24,067
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford Connecticut this 9 day of August 1982.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF --------- OR VICE PRESIDENT |NAME OF SECRETARY OR --------------------------
--------------------------------------------------------------------------
V. H. Frauenhofer |Robert A. Dixon
--------------------------------------------------------------------------
/s/ V.H. Frauenhofer |/s/ Robert A. Dixon
--------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FILED Filing Fee Certification Fee| Total Fees
<S> <C> <C> <C>
STATE OF CONNECTICUT $ 6 $ $6
AUG 9 1982
SECRETARY OF THE STATE
</TABLE>
<PAGE>
Exhibit 3(i)
Page 125 of 184
VOL 100
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 5,580 - 5,580
PFD 6.25% $100 2,500 - 2,500
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 300 - 300
PFD 6.25% $100 250 - 250
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 5,200 - 5,200
PFD 6.25% $100 2,250 - 2,250
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford Connecticut this 11 day of January 1983.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF ---EXECUTIVE VICE PRESIDENT |NAME OF SECRETARY OR --------------------------
--------------------------------------------------------------------------
V. H. Frauenhofer |Robert A. Dixon
--------------------------------------------------------------------------
/s/ V.H. Frauenhofer |/s/ Robert A. Dixon
--------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FILED Filing Fee Certification Fee| Total Fees
<S> <C> <C> <C>
STATE OF CONNECTICUT $ 6 $ $6
</TABLE>
MAR 21 1983 Certified Copy
Julia Tashjian To: Connecticut Natural Gas Corp
SECRETARY OF THE STATE P.O. Box 1500, Hartford, CT 06144
<PAGE>
Exhibit 3(i)
Page 126 of 184
VOL 100 1752
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 28,800 - 28,800
PFD 8.25% $100 24,067 - 24,067
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 2,400 - 2,400
PFD 8.25% $100 3,437 - 3,437
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 26,400 - 26,400
PFD 8.25% $100 20,630 - 20,630
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford Connecticut this 15th day of August 1983.
We hereby declare, under the penalties of perjury, that the statements made
in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF ------------ VICE PRESIDENT |NAME OF --------- OR ASSISTANT SECRETARY
--------------------------------------------------------------------------
Robert A. Dixon |Reginald L. Babcock
--------------------------------------------------------------------------
/s/ Robert A. Dixon |/s/ R. L. Babcock
--------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FILED Filing Fee Certification Fee| Total Fees
<S> <C> <C> <C>
STATE OF CONNECTICUT $ 6 $ $6
</TABLE>
AUG 15 1983 Certified Copy
Julia Tashjian To: Connecticut Natural Gas Corp
SECRETARY OF THE STATE P.O. Box 1500, Hartford, CT 06144
<PAGE>
Exhibit 3(i)
Page 127 of 184
CERTIFICATE
AMENDING OR RESTATING CERTIFICATE OF INCORPORATION BY ACTION OF
( )INCORPORATORS ( )BOARD OF (X)BOARD OF DIRECTORS ( )BOARD OF DIRECTORS
DIRECTORS AND SHAREHOLDERS AND MEMBERS
(Stock Corporation) (Nonstock Corporation)
61-38
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
<TABLE>
<C> <C>
---------------------------------------------------------------------------
1. NAME OF CORPORATION | DATE
Connecticut Natural Gas Corporation | April 27, 1984
---------------------------------------------------------------------------
</TABLE>
2. The Certificate of Incorporation is:
|X| A. AMENDED ONLY | | B. AMENDED AND RESTATED | | C. RESTATED ONLY by
the following
resolution
"RESOLVED: That the Certificate of Incorporation of Connecticut
Natural Gas Corporation be, and it hereby is, amended by the addition
thereto of the provisions set forth in Exhibit A to the Proxy
Statement of the Corporation dated March 28, 1984."
A copy of Exhibit A to the Proxy Statement of the Corporation dated
March 28, 1984 is attached hereto as Exhibit A.
3. (Omit if 2A is checked)
(a) The above resolution merely restates and does not change the
provisions of the original certificate of Incorporation as
supplemented and amended to date, except as follows: (Indicate
amendments made if any, if none, so indicate)
(b) Other than as indicated in Par. 3(a), there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented to date, and the provisions of
this Certificate Restating the Certificate of Incorporation.
---------------------------------------------------------------------------
| |4. The above resolution was adopted by vote of at least two-thirds of
the incorporators before the organization meeting of the corporation,
and approved in writing by all subscribers (if any) for shares of the
corporation, (or if nonstock corporation, by all applicants for
membership entitled to vote, if any)
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement that the statements made in the foregoing are
true.
<TABLE>
<C> <C> <C>
------------------------------------------------------------------------------------- SIGNED
|SIGNED |SIGNED
-------------------------------------------------------------------------------------
APPROVED
------------------------------------------------------------------------------------- SIGNED
|SIGNED |SIGNED
</TABLE>
<PAGE>
Exhibit 3(i)
Page 128 of 184
4. (Omit if 2C is checked.)
The above resolution was adopted by the board of directors acting alone,
there being no shareholders or subscribers. | | the board of directors
being so authorized pursuant to Section 33-341, Conn. G.S. as amended
| | the corporation being a nonstock corporation and having no members
and no applicants for membership entitled to vote on such resolution
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
5. The number of affirmative votes |6. The number of directors' votes
required to adopt such resolution is: | in favor of the resolution was:
------------------------------------------------------------------------------------
</TABLE>
We hereby declare, under penalties of false statement that the statements
made in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
------------------------------------------------------------------------------------
SIGNED PRESIDENT OR VICE PRESIDENT |SIGNED SECRETARY OF ASSISTANT SECRETARY
------------------------------------------------------------------------------------
</TABLE>
|X| 4. The above resolution was adopted by the board of directors and by
shareholders.
5. Vote of shareholders:
(a) (Use if no shares are required to be voted as a class.)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
NUMBER OF SHARES |TOTAL VOTING POWER |VOTE REQUIRED FOR |VOTE FAVORING
ENTITLED TO VOTE | |ADOPTION |ADOPTION
<C> <C> <C> <C>
3,270,515 | 3,270,515 | 1,635,258 | 2,207,104
------------------------------------------------------------------------------------
</TABLE>
(b) (If the shares are entitled to vote as a class, indicate the
designation and number of outstanding shares of each such class, the voting
power thereof, and the vote of each class for the amendment resolution.
The Corporation has at least one hundred (100) recordholders.
We hereby declare under the penalties of false statement that the
statements made in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT ----------------- |NAME OF SECRETARY OR ----------
Victor H. Frauenhofer | Robert A. Dixon, Secretary
/s/ Victor H. Frauenhofer | /s/ Robert A. Dixon
------------------------------------------------------------------------------------
</TABLE>
| | 4. The above resolution was adopted by the board of directors and by
members
5. Vote of members:
(a) (Use if no members are required to vote as a class.)
<TABLE>
<C> <C> <C> <C>
------------------------------------------------------------------------------------
NUMBER OF MEMBERS |TOTAL VOTING | VOTE REQUIRED FOR |VOTE FAVORING
VOTING |POWER | ADOPTION |ADOPTION
------------------------------------------------------------------------------------
</TABLE>
(b) (If the members of any class are entitled to vote as a class, indicate
the designation and number of members of each such class, the voting power
thereof, and the vote of each such class for the amendment resolution.)
We hereby declare under the penalties of false statement that the
statements made in the foregoing certificate are true.
<TABLE>
<C> <C>
------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT |NAME OF SECRETARY OR ASSISTANT SECRETARY
------------------------------------------------------------------------------------
SIGNED PRESIDENT OR VICE PRESIDENT |SIGNED SECRETARY OF ASSISTANT SECRETARY
------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FILED Filing Fee Certification Fee| Total Fees
<S> <C> <C> <C>
STATE OF CONNECTICUT $ 30 $ 15.50 $45.50
</TABLE>
APR 27 1984
Julia M. Tashjian
SECRETARY OF THE STATE
<PAGE>
Exhibit 3(i)
Page 129 of 184
Exhibit A
FAIR PRICE AMENDMENT
VOTE REQUIRED FOR CERTAIN TRANSACTIONS ("FAIR PRICE AMENDMENT")
SECTION 1. In addition to the requirements of the provisions of the
certificate of incorporation of the Company and whether or not a vote of
the stockholders is otherwise required, the affirmative vote of the holders
of not less than seventy-five percent (75%) of the Voting Stock (as defined
below) shall be required for the approval of authorization of any Business
Transaction (as defined below) with a Related Person (as defined below) or
any business transaction in which a Related Person has an interest (except
proportionately as a stockholder); provided, however, that such
seventy-five percent (75%) voting requirement shall not be applicable if
(i) the Disinterested Directors (as defined below) who at the time
constitute at least one-third of the total number of directorships of the
Corporation, have expressly approved the Business Transaction by at least a
two-thirds vote of such Disinterested Directors or (ii) all of the
following conditions are satisfied:
(A) The Business Transaction is a merger or consolidation and
the cash or fair market value (as determined by two-thirds of the
Disinterested Directors) of the property, securities or other
consideration to be received per share by holders of Common Stock of
the Corporation (other than such Related Person) in the Business
Transaction is at least equal in value to such Related Person's
Highest Purchase Price (as defined below):
(B) After such Related Person has become the Beneficial Owner
(as defined below) of not less than ten percent (10%) of the Voting
Stock of the Corporation and prior to the consummation of such
Business Transaction, such Related Person shall not have become the
Beneficial Owner of any additional shares of Voting Stock or
securities convertible into Voting Stock, except (i) as part of the
transaction which resulted in such Related Person becoming the
Beneficial Owner of not less than ten percent (10%) of the Voting
Stock or (ii) as a result of a pro rata stock dividend or stock split
and,
(C) Prior to the consummation of such Business Transaction,
such Related Person shall not have, directly or indirectly, (i)
received the benefit (except proportionately as a stockholder) of any
loans, advances, guarantees, pledges or other financial assistance or
tax credits provided by the Corporation or any of its Subsidiaries
(as defined below), or (ii) caused any material change in the
Corporation's business or equity capital structure, including the
issuance of shares of capital stock of the Corporation to any third
party.
Section 2. For the purpose of Fair Price Amendment
(i) The term Business Transaction shall mean (a) any merger or
consolidation involving the Corporation or a Subsidiary (as defined
below) of the Corporation, (b) any sale, lease, exchange, transfer or
other disposition (in one transaction or a series of transactions)
including without limitation a mortgage of any
A-1
<PAGE>
Exhibit 3(i)
Page 130 of 184
other security device, of all or any Substantial Part (as defined
below) of the assets either of the Corporation of of a Subsidiary of
the Corporation, (c) any sale, lease, exchange, transfer or other
disposition of all or any assets of any entity to the Corporation or
a Subsidiary of the Corporation if such assets have a fair market
value equal to or greater than twenty percent (20%) of the fair
market value of the total assets of the Corporation and its
Subsidiaries, (d) the issuance, sale, exchange, transfer or other
disposition by the Corporation or a Subsidiary of the Corporation of
any securities of the Corporation or any Subsidiary of the
Corporation, (e) any recapitalization or reclassification of the
Corporation's securities (including, without limitation, any reverse
stock split) or other transaction that would have the effect of
either increasing the proportionate share of the outstanding shares
of any class of equity or convertible securities of the Corporation
or its Subsidiaries Beneficially Owned (as defined below) by a
Related Person or increasing the voting power of a Related Person
with respect to the Corporation of any of its Subsidiaries, (f) any
liquidation, spinoff, splitoff, splitup or dissolution of the
Corporation and (g) any agreement, contract or other arrangement
providing for any of the transactions described in this definition of
Business Transaction.
(ii) The term "Related Person" shall mean and include (a) any
individual, corporation, partnership, group, association or other
person or entity which, together with its Affiliates (as defined
below) and Associations (as defined below), is the Beneficial Owner
of not less than ten percent (10%) of the Voting Stock of the
Corporation at the time the definitive agreement providing for the
Business Tranaction (including any amendment thereof) was entered
into, or at the time a resolution approving the Business Transaction
was adopted by the Board of Directors of the Corporation, or as of
the record date for the determination of stockholders entitled to
notice of and to vote on, or consent to, the Business Transaction,
and (b) any Affiliate or Associate of any such individual,
corporation, partnership, group, association or other person or
entity, provided, however, and notwithstanding anything in thre
foregoing to the contrary the term "Related Person" shall not include
ther Corporation, a corporation in which the Corporation owns,
directly or indirectly, a majority of each class of equity security,
any employee stock ownership or other employee benefit plan of the
Corporation or any Subsidiary of the Corporation, or any trustee of,
or fiduciary with respect to, any such plan when acting in such
capacity.
(iii) Shares shall be "Beneficially Owned" and a person shall
be a "Beneficial Owner" of any shares of Voting Stock (whether or not
owned of record).
(a) With respect to which such person or any Affiliate or
Associate of such person directly or indirectly has or shares voting
power, including the power to vote or to direct the voting power,
including the power to vote or to direct the voting of such shares of
stock and/or investment power, including the power to dispose of or
to direct the disposition of such shares of stock:
(b) Which such person or any Affiliate or Associate of such
person has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights,
warrants or options, or otherwise, and/or the right to vote pursuant
to any agreement, arrangement of understanding (whether such right is
exercisable immediately or only after the passage of time); or
<PAGE>
Exhibit 3(i)
Page 131 of 184
(c) Which are Beneficially Owned within the meaning of (a) or (b) above
by any other person with which such first mentioned person or any if its
Affiliates or Associates has any agreement arrangement or understanding,
written or oral, with respect to acquiring, holding, voting or disposing of
any shares of stock of the Corporation or any Subsidiary of the Corporation
or acquiring, holding or disposing of all or substantially all, or any
Substantial Part, of the assets or business of the Corporation or a
Subsidiary of the Corporation.
For the purpose only of determining whether a person is the
Beneficial Owner of a percentage specified in this Fair Price amendment of
the outstanding Voting Shares, such shares shall be deemed to include any
Voting Shares which may be issuable pursuantto any agreement, arrangement
or understanding or upon the exercise of conversion rights, exchange
rights, warrants, options or otherwise and which are deemed to be
benefically owned by such person pursuant to the foregoing provisions of
this Fair Price amendment.
(iv) The term "Highest Purchase Price" shall mean the highest amount
of consideration paid by such Related Person for a share of Common Stock of
the Corporation within two years prior to the date such Related Person
became a Related Person or in the transaction which resulted in such
Related Person becoming the Beneficial Owner of not less than ten percent
(10%) of the Voting Stock, provided, however that the Highest Purchase
Price shall be appropriately adjusted to reflect the occurence of any
reclassification, recapitalization, stock split, reverse stock split or
other readjustment in the number of outstanding shares of Common Stock of
the Corporation, or the declaration of a stock dividend thereon, between
the last date upon which such Related Person paid the Highest Purchase
Price to the effective date of the merger or consolidation.
(v) The term "Substantial Part" shall mean more than twenty percent
(20%) of the fair market value of the total assets of the entity in
question, as reflected on the most recent consolidated balance sheet of
such entity existing at the time the stockholders of the Corporation would
be required to approve or authorize the Business Transaction involving the
assets constituting any such Substantial Part.
(vi) In the event of a merger in which the Corporation is the
surviving Corporation, for the purpose of subparagraph (a) of Section 1 of
the Fair Price amendment, the phrase "property, securities or other
consideration to be received" shall include without limitation, Common
Stock of the Corporation retained by its existing stockholders.
(vii) The term "Voting Stock" shall mean all outstanding shares of
capital stock of the Corporation entitled to vote generally in the election
of directors, considered for the purpose of this Fair Price amendment as
one class; provided however, that if the Corporation has shares of Voting
Stock entitled to more or less than one vote for any such share, each
reference in this Fair Price amendment to a proportion of shares of voting
stock shall be deemed to refer to such proportion of the votes entitled to
be cast by such shares.
(viii) The term "Disinterested Director" shall mean any member of the
Board who is not affiliated with a Related Person and who was a director of
the Corporation prior to the time the Related Person became a Related
Person, any any successor to such Disinterested Director who is not
affiliated with a Related Person and was recommended before being elected
by a majority of the then Disinterested Director or was elected by a
majority of the Disinterested Directors. Officers of the Corporation who
are also members of its Board of Directors may qualify as Disinterested
Directors, even though they may have a personal stake in the outcome of a
proposed Business Transaction because of their employment by the
Corporation.
<PAGE>
Exhibit 3(i)
Page 132 of 184
(ix) The term "Affiliate" used to indicate a relationship to a
specified person, shall mean a person that directly, or indirectly through
one or more intermediatess, controls, or is controlled by, or is under
common control with such specified person.
(x) The term "Associate", used to indicate a relationship with a
specified person, shall mean (i) any person of which such specified person
is an officer, director or partner or is, directly or indirectly, the
beneficial owner of 5% or more of any class of equity securities, (ii) any
person that is an officer, director or partner of the specified person or
that, directly or indirectly, beneficially ownes 5% or more of any class of
equity security of the specified person, (iii) any trust or estate in which
such specfied person nas a substantial beneficial intereset or as to which
such specfied person serves aas a trustee or in a similar fiduciary
capacity, (iv) any relative or spouse of a specfied person or any person
describved in clause (ii), or any relative of such spouse, except relatives
more remote than first cousin, or *v) any other member or partner in a
partnership, limited partnership, syndicate or other group of which the
specified person is a member or partner and which is acting together for
the purpose of acquiring, holding or disposing of any interest in the
Corporation, provided that nothing in this subsection (x) shall result in
the Corporation or a corporation in which the Corporatin owns, directly or
indirectly, a majority of each class of equity security being an Associate.
(xi) The terms "Subsidiary" or "Subsidiaries" shall mean a
corporation or corporations in which a majority of any class of equity
security is owned, directly or indirectly, by the Corporation.
SECTION 3. For the purpose of this Fair Price amendment, if the
Disinterested Directors constitute at least one-third of the entire Board
of Directors, then two-thirds of such Disinterested Directors shall have
the power to make a good faith determination, on the basis of information
known to them, of : (i) the number of shares of voting Stock of which any
person is the Beneficial Owner, (ii) whether a person is an Affiliate or
Associate of another, (iii) whether a person has an agreement, arrangement
or understanding with another as to the matters referred to in the
definition of Beneficial Owner herein, (iv) whether the assets subject to
any Business Transaction constitute a Substantial Part, (v) whether any
Business Transaction is one in which a Related Person has an interest
(except proportionately as a stockholder), (vi) whether a Related Person
has, directly or indirectly received the benefits or caused any of the
changes referred to in sub paragraph (c) of Section 1 of this Fair Price
amendment and (vii) such other matters with respect to which a
determination is required under this Fair Price amendment.
SECTION 4. Nothing contained in this Fair Price amendment shall be
construed to relieve any Related Person from any fiduciary obligation
imposed by law.
SECTION 5. Notwithstanding any other provisions of this Certificate of
Incorporation of the By-Laws of the Corporation (and notwithstanding that a
lesser percentage may be specified by law, this Certificate of
Incorporation or the By-Laws of the Corporation), the provisions of this
Fair Price amendment may not be repealed or amended in any respect, nor may
any provision be adopted inconsistent with this Fair Price amendment,
unless such action is approved by the affirmative vote of the holders of
not less than seventy-five (75%) of the Voting Stock.
<PAGE>
Exhibit 3 (i)
Page 133 of 184
CLASSIFIED BOARD AMENDMENT
CLASSIFICATION OF BOARD OF DIRECTORS ("CLASSIFIED BOARD AMENDMENTS")
SECTION 1. The directors of the corporation shall be divided into
three classes: Class I, Class II and Class III. Such classes shall be as
nearly equal in number as possible. The term of office of the initial
Class I directors shall expire at the Annual Meeting of Shareholders in
1985; the term of the initial Class II directors shall expire at the Annual
Meeting of Shareholders in 1986; and the term of office of the initial
Class III directors shall expire at the Annual Meeting of Shareholders in
1987; or in each case thereafter when their respective successors are
elected and have qualified or upon their earlier death, resignation or
removal. At each annual election held after the initial election of
directors according to classes, the directors chosen to succeed and shall
be elected for a term expiring at the third succeeding Annual Meeting of
Sharedhoplders or in each case thereafter when their respective successors
are elected and have qualified or upon their earlier death, resignation or
removal. If the number of directorships is changed, any increase or
decrease in directors shall be apportioned among the classes so as to
maintain all classes as nearly equal in number as possible. No decrease in
the number of directorships shall shorten the term of any director. Any
director elected to fill a vacancy not resulting from an increase in the
number of directorhsips shall have the same remaining term as that of his
predecessor. No qualification for the office of director shall apply to
any director in office at the time such qualification was adopted or to any
successor director elected by the directors to fill the unexpired term of a
director.
SECTION 2. No director shall be removed except by the affirmative
vote of seventy-five percent (75%) or more of the oustanding shares of
capital stock of the Corporation entitled to vote generally in the election
of directors considered for the purpose of this Classified Board Amendment
as one class (the "Voting Stock").
SECTION 3. Notwithstanding any other provisions of this Certificate
of Incorporation or the By-Laws of the Corporation (and notwithstanding
that a lesser percentage may be specified by law, this Certificate of
Incorporation or the By-Laws of the Corporation), neither the provisions of
this Classified Board amendment nor the provisions of the Certificate
fixing the range of directorships on the Board of Directors or empowering
the Board of Directors to fill vacancies in their own number may be
repealed or amended in any respect, nor may any provision be adopted
inconsistent with such provisions, unless such action is approved by the
affirmative vote of the holders of not less than seventy-five percent (75%)
of the Voting Stock.
<PAGE>
Exhibit 3(i)
Page 134 of 184
State of Connecticut )
) SS: Hartford
Office of the Secretary of State)
I hereby certify that this is a true copy of record in this Office in
Testimony whereof, I have hereunto set my hand, and affixed the Seal of
said State, at Hartford, this 27th day of April, A.D. 1984
Julia H. Tashjian
Secretary of the State
<PAGE>
Exhibit 3(i)
Page 135 of 184
VOL 101
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 26,400 - 26,400
PFD 8.25% $100 20,630 - 20,630
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 2,400 - 2,400
PFD 8.25% $100 3,437 - 3,437
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 24,000 - 24,000
PFD 8.25% $100 17,193 - 17,193
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford Connecticut this 7th day of February 1985.
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true.
--------------------------------- --------------------------------------
Robert A. Dixon Reginald L. Babcock
Vice President Assistant Secretary
<TABLE>
<CAPTION>
FILED Filing Fee Certification Fee| Total Fees
<S> <C> <C> <C>
STATE OF CONNECTICUT $ 6 $ $6
</TABLE>
FEB 14, 1985 Certified Copy Sent
Julia M. Tashjian P.O. Box 1500
SECRETARY OF THE STATE Htfd. CT 06144
<PAGE>
Exhibit 3(i)
Page 136 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 5,881 - 5,881
PFD 5.75% $100 5,200 - 5,200
PFD 6.25% $100 2,250 - 2,250
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 87 - 87
PFD 5.75% $100 300 - 300
PFD 6.25% $100 2,000 - 2,000
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 5,794 - 5,794
PFD 5.75% $100 4,900 - 4,900
PFD 6.25% $100 250 - 250
----------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 3(i)
Page 137 of 184
VOL 101
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 24,000 - 24,000
PFD 8.25% $100 17,193 - 17,193
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 24,000 - 24,000
PFD 8.25% $100 17,193 - 17,193
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 0 - 0
PFD 8.25% $100 0 - 0
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford Connecticut this 9th day of July, 1985.
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true.
--------------------------------- --------------------------------------
Robert A. Dixon Reginald L. Babcock
Vice President Assistant Secretary
<TABLE>
<CAPTION>
FILED Filing Fee Certification Fee| Total Fees
<S> <C> <C> <C>
STATE OF CONNECTICUT $ 6 $ $6
</TABLE>
JUL 10, 1985 Certified Copy Sent
Julia M. Tashjian c/o Reginald Babcock
SECRETARY OF THE STATE P.O. Box 1500
Hartford, CT 06144
<PAGE>
Exhibit 3(i)
Page 138 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 4,900 - 4,900
PFD 6.25% $100 250 - 250
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 4,900 - 4,900
PFD 6.25% $100 250 - 250
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 5.75% $100 0 - 0
PFD 6.25% $100 0 - 0
----------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 3(i)
Page 139 of 184
VOL 101
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 24,000 - 24,000
PFD 8.25% $100 17,193 - 17,193
PFD 8.00% $6.25 120,000 - 120,000
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 24,000 - 24,000
PFD 8.25% $100 17,193 - 17,193
PFD 8.00% $6.25 6,048 - 6,048
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 7.75% $100 0 - 0
PFD 8.25% $100 0 - 0
PFD 8.00% $6.25 113,952 - 113,952
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford Connecticut this 31st day of December, 1985.
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true.
--------------------------------- --------------------------------------
Alexander J. Kennedy Reginald L. Babcock
Vice President Secretary
<PAGE>
Exhibit 3(i)
Page 140 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 5,794 - 5,794
PFD 5.75% $100 4,900 - 4,900
PFD 6.25% $100 250 - 250
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 183 - 183
PFD 5.75% $100 4,900 - 4,900
PFD 6.25% $100 250 - 250
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser B $100 5,611 - 5,611
PFD 5.75% $100 0 - 0
PFD 6.25% $100 0 - 0
----------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 3(i)
Page 141 of 184
CERTIFICATE AMENDING CERTIFICATE OF INCORPORATION
BY ACTION OF BOARD OF DIRECTORS AND SHAREHOLDERS
1. The name of the corporation is CONNECTICUT NATURAL GAS
CORPORATION.
2. The Charter of CONNECTICUT NATURAL GAS CORPORATION is amended
only by the following resolution:
RESOLVED: That the Charter of Connecticut Natural Gas Corporation be
and hereby is amended so as to provide that the authorized capital
stock of the Corporation consists of the following:
(a) 10,822,328 shares of common stock having a par value of $3.125
per share.
(b) 227,904 shares of preferred stock having a par value of $3.125
per share, known and designated as the "$3.125 Par Preferred
Stock,"
(i) said preferred stock to be entitled to receive out
of the net profits of the Corporation cumulative dividends at
the rate of eight percent (8%) per annum, payable in quarterly
installments of two percent (2%) to be paid thereon before any
dividends are payable upon the common stock of the Corporation,
(ii) said preferred stock in the event of liquidation of
the Corporation or distribution of its assets to be preferred
as to the entire assets to the amount of $6.25 per share, and
(iii) all shares of common stock and $3.125 Par
Preferred Stock shall have equal voting rights.
(c) 400,000 shares of preferred stock having a par value of $100
per share, known and designated as the Corporation's "$100 Par
Serial Preferred Stock,"
(i) said $100 Par Serial Preferred Stock to be on a
parity with respect to dividends and liquidation with the
$3.125 Par Preferred Stock,
<PAGE>
Exhibit 3(i)
Page 142 of 184
(ii) the Board of Directors is authorized to issue, from
time to time, all such shares of $100 Par Serial Preferred
Stock and, to the extent permitted by law, to fix and determine
the terms, limitations and (except that no amount payable on
liquidation shall exceed the then applicable call price)
relative rights and preferences of such stock, including,
without limitation, the conditions under which they shall be
entitled to voting rights and the extent thereof, to divide
such shares into series and, to the extent permitted by law, to
fix and determine the variations among series.
3. The foregoing charter amendment shall be completely effective
according to its terms as of 5:00 p.m. on May 19, 1986.
Upon the effectiveness fo the foregoing charter amendment, each share
of the outstanding common stock of the Corporation of the par value of
$6.25 per share shall be divided into two shares of common stock of the par
value of $3.125 per share, and each share of $6.25 Par Preferred Stock of
the Corporation shall be divided into two shares of $3.125 Par Preferred
Stock. All outstanding certificates representing shares of common stock
and $6.25 Par Preferred Stock immediately prior to the effectiveness of
such amendment, shall continue to represent the same number of shares
following the effectiveness of such amendment, but, in each case, such
shares shall be deemed to be of the par value of $3.125 per share. New
stock certificates representing additional shares of common stock of $3.125
Par Preferred Stock to which shareholders of the Corporation shall be
entitled by reason of the foregoing charter amendment and concurrent stock
splits shall be issued and delivered to such holders as soon as reasonably
possible.
4. The above resolution was adopted by the Board of Directors and by
shareholders.
5. On the date the above resolution was adopted by the Corporation's
shareholders, the Corporation had at least one hundred recordholders, as
defined in subsection (a) of Section 33-311a of the Connecticut General
Statutes.
-2-
<PAGE>
Exhibit 3(i)
Page 143 of 184
6. Vote of shareholders:
Common Stock and $6.25 Par Preferred Stock, voting as a single class
in accordance with the voting rights of such classes contained in the
charter of the Corporation:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
3,502,943 3,502,943 1,751,472 2,473,998
</TABLE>
Common Stock, $6.125 par value, as to matters upon which the holders
of Common Stock are entitled to vote as a separate class pursuant to
Section 33-361 of the Connecticut General Statutes:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
3,388,991 3,388,991 1,694,496 2,412,799
</TABLE>
$6.25 Par Preferred Stock, as to matters upon which the holders of
$6.25 Par Preferred Stock are entitled to vote as a separate class
pursuant to Section 33-361 of the Connecticut General Statutes:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
113,952 113,952 56,977 61,199
</TABLE>
Dated at Hartford, Connecticut this 14th day of May, 1986.
We hereby declare, under the penalty of false statement that the
statements made in the foregoing certificate are true.
______________________________
Victor H. Frauenhofer
President
______________________________
Reginald L. Babcock
Secretary
Filed State of Connecticut May 16, 1986, Secretary of State
-3-
<PAGE>
Exhibit 3(i)
Page 144 of 184
VOL 101 858
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 8.00% $3.125 227,904 -0- -0-
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 8.00% $3.125 3,244 -0- -0-
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 8.00% $3.125 224,660 -0- -0-
----------------------------------------------------------------------------
</TABLE>
See Page 2 for continuation of listings.
Dated at Hartford Connecticut this 31st day of December, 1986.
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true.
--------------------------------- --------------------------------------
Alexander J. Kennedy Reginald L. Babcock
Vice President Secretary
Filed State of Connecticut March 5, 1987, Secretary of State.
<PAGE>
Exhibit 3(i)
Page 145 of 184
859
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
but unissued
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser A $100 375 -0- -0-
PFD 6% Ser B $100 5,611 -0- -0-
PFD undesignated $100 -0- -0- 394,014
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
but unissued
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser A $100 375 -0- -0-
PFD 6% Ser B $100 366 -0- -0-
PFD undesignated $100 -0- -0- 132,352
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 6% Ser A $100 -0- -0- -0-
PFD 6% Ser B $100 5,245 -0- -0-
PFD undesignated $100 -0- -0- 261,662
----------------------------------------------------------------------------
</TABLE>
NOTE: The 400,000 shares of $100 Par Series Preferred Stock referenced in
the amendment to the Company's Certificate of Incorporation filed with the
Office of the Secretary of the State on May 16, 1986 consisted of 375
shares of the 6.00% Series A Preferred Stock, 5,611 shares of 6.00% Series
B Preferred Stock and 394,014 shares of authorized but undesignated and
unissued shares.
<PAGE>
Exhibit 3(i)
Page 146 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
but unissued
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 8% $3.125 224,660 -0- -0-
PFD 6% Ser B $100 5,245 -0- -0-
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
but unissued
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 8% $3.125 132 -0- -0-
PFD 6% Ser B $100 19 -0- -0-
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 8% $3.125 224,528 -0- -0-
PFD 6% Ser B $100 5,226 -0- -0-
----------------------------------------------------------------------------
</TABLE>
Dated at Hartford, Connecticut this 19th day of April, 1988. We hereby
declare, under the penalties of false statement that the statements made in
the foregoing certificate are true.
--------------------------------- --------------------------------------
Frank H. Livingston Reginald L. Babcock
Vice President Assistant Secretary
FILED Certified Copy to
STATE OF CONNECTICUT Murtha Cullina et al
May 12, 1988 CityPlace
Julia H. Tashjian Hartford, Ct. 06103
<PAGE>
Exhibit 3(i)
Page 147 of 184
CERTIFICATE AMENDING CERTIFICATE OF INCORPORATION
BY ACTION OF BOARD OF DIRECTORS AND SHAREHOLDERS
1. The name of the corporation is CONNECTICUT NATURAL GAS
CORPORATION.
2. The following amendment resolutions were adopted by the Board of
Directors and the Shareholders of Connecticut Natural Gas Corporation in
the manner prescribed by subsection (b) of Section 33-360 of the
Connecticut General Statutes:
(a) RESOLVED: That the Charter of Connecticut Natural Gas
Corporation be amended to provide that the authorized common stock of the
Corporation shall consist of the following:
20,000,000 shares of common stock having a par value of $3.125
per share, known and designated as the "Common Stock".
(b) RESOLVED: That the Charter of Connecticut Natural Gas
Corporation be amended to provide that the authorized $3.125 Par Preferred
Stock of the Corporation shall consist of the following:
1,000,000 shares of preferred stock having a par value of
$3.125 per share, known and designated as the "$3.125 Par
Preferred Stock",
(i) said $3.125 Par Preferred Stock to be entitled to receive
out of the net profits of the Corporation cumulative dividends at the
rate of eight percent (8%) per annum, payable in quarterly
installments of two percent (2%), to be paid thereon before any
dividends are payable upon the Common Stock of the Corporation,
(ii) said $3.125 Par Preferred Stock in the event of
liquidation of the Corporation or distribution of its assets to be
preferred as to the entire assets to the amount of $6.25 per share,
and
(iii) all shares of Common Stock and $3.125 Par Preferred
Stock shall have equal voting rights.
(c) RESOLVED: That the Charter of Connecticut Natural Gas
Corporation be amended to provide that the authorized $100 Par Serial
Preferred Stock shall consist of the following:
10,000,000 shares of preferred stock having a par value of $100
per share, known and designated as the "$100 Par Serial Preferred
Stock",
<PAGE>
Exhibit 3(i)
Page 148 of 184
(i) said $100 Par Serial Preferred Stock to be on a parity
with respect to dividends and liquidation with the $3.125 Par
Preferred Stock,
(ii) the Board of Directors is authorized to issue, from time
to time, all such shares of $100 Par Serial Preferred Stock and, to
the extent permitted by law, to fix and determine the terms,
limitations and (except that no amount payable on liquidation shall
exceed the then applicable call price) relative rights and
preferences of such stock, including, without limitation, the
conditions under which they shall be entitled to voting rights and
the extent thereof, to divide such shares into series and, to the
extent permitted by law, to fix and determine the variations among
series.
3. The foregoing charter amendments shall be completely effective
according to their terms upon the filing of this Certificate with the
office of the Secretary of State.
4. The above resolutions were adopted by the Board of Directors and
by shareholders.
5. On the date the above resolutions were adopted by the
Corporation's shareholders, the Corporation had at least one hundred
recordholders as defined in subsection (a) of Section 33-311a of the
Connecticut General Statutes.
6. Vote of shareholders:
(a) As to the amendment set forth in Paragraph 2(a), above:
Common Stock and $3.125 Par Preferred Stock, voting as a single
class in accordance with the voting rights of such classes contained
in the charter of the Corporation:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
7,786,696 7,786,696 3,893,349 5,261,034
</TABLE>
Common Stock, $3.125 par value, as to matters upon which the holdres
of Common Stock are entitled to vote as a separate class pursuant to
Section 33-361 of the Connecticut General Statutes:
-2-
<PAGE>
Exhibit 3(i)
Page 149 of 184
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
7,562,168 7,562,168 3,781,085 5,109,007
</TABLE>
(b) As to the amendment set forth in Paragraph 2(b), above:
Common Stock and $3.125 Par Preferred Stock, voting as a single class
in accordance with the voting rights of such classes contained in the
charter of the corporation:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
7,786,696 7,786,696 3,893,349 4,562,001
</TABLE>
$3.125 Par Preferred Stock, as to matters upon which the holders of
$3.125 Par Preferred Stock are entitled to vote as a separate class
pursuant to Section 33-361 of the Connecticut General Statutes:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
224,528 224,528 112,265 152,027
</TABLE>
(c) As to the amendment set forth in Paragraph 2(c), above:
Common Stock and $3.125 Par Preferred Stock, voting as a single class
in accordance with the voting rights of such classes contained in the
charter of the Corporation:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
7,786,696 7,786,696 3,893,349 4,471,732
</TABLE>
$100 Par Serial Preferred Stock, as to matters upon which the holders
of $100 Par Serial Preferred Stock are entitled to vote as a separate
class pursuant to Section 33-361 of the Connecticut General Statutes:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Vote Favoring
Entitled to Vote Power for Adoption Adoption
---------------- ------------ ------------- -------------
<C> <C> <C> <C>
5,145 5,145 2,573 2,793
</TABLE>
-3- <PAGE>
Exhibit 3(i)
Page 150 of 184
Dated at Hartford, Connecticut this 26th day of April, 1988.
We hereby declare, under the penalties of false statement that the
statements made in the foregoing certificate are true.
s/Victor H. Frauenhofer
______________________________
Victor H. Frauenhofer
President
s/Reginald L. Babcock
______________________________
Reginald L. Babcock
Secretary
-4-
<PAGE>
Exhibit 3(i)
Page 151 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
but unissued
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd. 8.00% $3.125 224,528 -0- 775,472
Pfd. 6.00% $100 5,226 -0- 9,994,774
series B
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
but unissued
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd. 8.00% $3.125 1,392 -0- 1,392
Pfd. 6.00% $100 131 -0- 131
series B
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized for
Class Series Par Outstanding Treasury cancellation on
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PFD 8.00% $3.125 223,136 -0- 774,080
PFD 6.00% $100 5,095 -0- 9,994,643
series B
----------------------------------------------------------------------------
</TABLE>
Note: Authorized at 4/26/88 Annual Meeting:
Pfd. 8.00% $3.125 1,000,000
Pfd. 6.00% $100 10,000,000
Dated at Hartford, Connecticut this 28th day of February, 1989. We hereby
declare, under the penalties of false statement that the statements made in
the foregoing certificate are true.
/s/ A.J. Kennedy /s/ R.L. Babcock
--------------------------------- --------------------------------------
Alexander J. Kennedy Reginald L. Babcock
Vice President Assistant Secretary
<TABLE>
<CAPTION>
Filing Fee Certification Fee Total Fees
<C> <C> <C>
$9, 25 exp | $ 12, 25 exp |$71
</TABLE>
FILED Certified Copy to
STATE OF CONNECTICUT Recd/cc
AUG 16, 3:00PM '89 Lynn C. Blackwell, Esq.
Julia H. Tashjian Hartford, Ct. 06103
SECRETARY OF THE STATE P.O. Box 1500, Htfd CT 06144-1500
<PAGE>
Exhibit 3(i)
Page 152 of 184
STATE OF CONNECTICUT )
) SS: HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this office.
In testimony whereof, I have hereunto set my hand, and affixed the Seal of
said State, at Hartford, this 17th day of August A.D. 1989
_________________________________________
Julia J. Tashjian
SECRETARY OF THE STATE
<PAGE>
Exhibit 3(i)
Page 153 of 184
(FORM)
CERTIFICATE OF STOCK CORPORATION CANCELLATION OF SHARES
STATE OF CONNECTICUT
SECRETARY OF THE STATE
1. The name of the corporation is CONNECTICUT NATURAL GAS CORPORATION
2. CANCELLATION OF SHARES
---------------------------------------------------------------------------
a. before cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized (For
Class Series Par Outstanding Treasury cancellation only)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd 8.00% $3.125 223,136 0 * 775,472
Pfd 6.00% $100 5,095 0 *9,994,774
series B
----------------------------------------------------------------------------
</TABLE>
b. Shares being cancelled
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized (For
Class Series Par Outstanding Treasury cancellation only)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd 8.00% $3.125 58,827 0 0
Pfd 6.00% $100 0 0 0
series B
----------------------------------------------------------------------------
</TABLE>
c. after cancellation
<TABLE>
<CAPTION>
DESIGNATION OF SHARES NUMBER OF SHARES
Issued and Authorized (For
Class Series Par Outstanding Treasury cancellation only)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pfd 8.00% $3.125 164,309 -0- 775,472
Pfd 6.00% $100 5,095 -0- 9,994,774
series B
----------------------------------------------------------------------------
</TABLE>
*Authorized shares after cancellation on 2/28/89 Certificate were
erroneously reduced by the number of shares cancelled. This certificate
shows the correct number of Authorized shares for both classes.
Dated at Hartford, Connecticut this 19th day of March, 1990. We hereby
declare, under the penalties of false statement that the statements made in
the foregoing certificate are true.
<TABLE>
<C> <C>
----------------------------------------------------------------------------
Vice President Secretary
Alexander J. Kennedy Reginald L. Babcock
----------------------------------------------------------------------------
/s/ Alexander J. Kennedy /s/ R.L. Babcock
----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Filing Fee Certification Fee Total Fees
C> <C> <C
<PAGE>
$9 | $ 12, |$71
</TABLE>
FILED 50exp.
STATE OF CONNECTICUT Recd/cc
MAR 23, 3:00PM '90 Lynn C. Blackwell c/o CNG
Julia H. Tashjian P.O. Box 1500, Htfd, CT 06144-1500
SECRETARY OF THE STATE
<PAGE>
Exhibit 3(i)
Page 154 of 184
STATE OF CONNECTICUT )
) SS. HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this office.
In testimony whereof, I have hereunto set my hand, and affixed the Seal of
said State, at Hartford, this 26th day of March A.D. 1990
_________________________________________
Julia J. Tashjian
SECRETARY OF THE STATE
<PAGE>
Exhibit 3(i)
Page 155 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
61-38 REV. 4/89
Stock Corporation
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
---------------------------------------------------------------------------
1. Name of Corporation
Connecticut Natural Gas Corporation
---------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check one)
|X| A. Amended only, pursuant to Conn. Gen. Stat. section 33-360.
| | B. Amended and restated, pursuant to Conn. Gen. Stat. section 33-
362(c).
| | C. Restated only, pursuant to Conn. Gen. Stat. section 33-362(d).
(set forth here the resolution of amendment and/or restatement. Use
a 8 1/2 X 11 attached sheet if more space if needed)
A copy of the resolution of amendment is attached hereto as Exhibit
A.
See Attached Resolution.
| | D. Restated and superseded pursuant to Conn. Gen. Stat. section 33-
362(d).
(set forth here the resolution of amendment and/or restatement. Use
a 8 1/2 X 11 attached sheet if more space if needed).
(If 2A is checked, go to 5 to complete this certificate. If 2B or 2C is
checked, complete 3A or 3B. If 2D is checked, complete 4.)
3. (Check one)
| | A. This certificate purports merely to restate but not to change
the provisions of the original Certificate of Incorporation as
supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented and amended to date, and the
provisions of this Restated Certificate of Incorporation. (If
3A is checked, go to 5 to complete this certificate).
| | B. This Restated Certificate of Incorporation shall give effect to
the amendment(s) and purports to restate all those provisions
now in effect not being amended by such amendment(s). (If 3B
is checked, check 4, if true, and go to 5 to complete this
Certificate.)
4. (Check, if true)
| | This restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
<PAGE>
Exhibit 3(i)
Page 156 of 184
5. The manner of adopting the resolution was as follows: (Check one A, or
B, or C)
|X| A. By the board of directors and shareholders, pursuant to Conn.
Gen. Stat. section 33-360. Vote of Shareholders: (Check (i) or
(ii), and check (iii) if applicable.)
(i) |X| No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption 4,254,228 Vote Favoring Adoption
5,997,420
(ii) | | There are shares of more than one class entitled to vote
as a class. The designation of each class required for
adoption of the resolution and the vote of each class in
favor of adoption were as follows:
(Use an 8 1/2 X 11 attached sheet if more space is
needed).
(iii) |X| Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat. section 33-
311a(a).
| | B. By the board of directors acting alone, pursuant to Conn. Gen.
Stat. section 33-360(b)(2).
The number of affirmative votes required to adopt such resolution is:
________
The number of directors' votes in favor of the resolution was:
_______________
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true:
<TABLE>
<CAPTION>
(Print or Type) Signature Print or Type Signature
<C> <C> <C> <C>
---------------------------------------------------------------------------------------
Name of Pres. | |Name of Sec. |
Victor H. Frauenhofer |/s/Victor H. Frauenhofer |Reginald L. Babcock|/s/R. L. Babcock
---------------------------------------------------------------------------------------
</TABLE>
| | C. The corporation does not have any shareholders. The resolution
was adopted by vote of at least two-thirds of the incorporators
before the organization meeting of the corporation, and
approved in writing by all subscribers (if any) for shares of
the corporation.
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
<TABLE>
<C> <C> <C>
---------------------------------------------------------------------------------------
Signed |Signed |Signed
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Signed |Signed |Signed
---------------------------------------------------------------------------------------
</TABLE>
Dated at Hartford, Connecticut this 26th day of April, 1990
Approved by all subscribers, if none, so state: _____
(Use an 8 1/2 X 11 attached sheet if more space is needed)
Rec, CC, GS: (Type or Print
D.S. Shimkus
Murtha, Cullina, Richter & Pinney
CityPlace P.O. Box 3197
Hartford, CT 06103
----------------------------
Please provide filer's name and complete
address for mailing receipt
<PAGE>
Exhibit 3(i)
Page 157 of 184
EXHIBIT A
RESOLVED: That the Charter of Connecticut Natural Gas Corporation be
amended by the addition thereto of the following Director Liability
Limitation Amendment, subject to the approval of the Company's shareholders
entitled to vote thereon:
"DIRECTOR LIABILITY LIMITATION AMENDMENT
The personal liability of a director to the Company or its
shareholders for monetary damages for breach of duty as a director
shall be limited to an amount equal to the amount of compensation
received by the director for serving the Company during the calendar
year in which the violation occurred (and if the director received no
such compensation from the Company during the calendar year of the
violation, such director shall have no liability to the Company or
its shareholders for breach of duty) if such breach did not:
(A) involve a knowing and culpable violation of law by the
director;
(B) enable the director or an Associate, as defined in
subdivision (3) of Section 33-374d of the Connecticut Stock
Corporation Act as in effect at the time of the violation, to receive
an improper personal economic gain;
(C) show a lack of good faith and a conscious disregard for
the duty of the director to the Company under circumstances in which
the director was aware that his conduct or omission created an
unjustifiable risk of serious injury to the Company;
(D) constitute a sustained and unexcused pattern of
inattention that amounted to an abdication of the director's duty to
the Company; or
(E) create liability under Section 33-321 of the Connecticut
Stock Corporation Act as in effect at the time of the violation.
<PAGE>
Exhibit 3(i)
Page 158 of 184
Any repeal or modification of this Director Liability
Limitation Amendment shall not adversely affect any right or
protection of a director of the Company existing at the time of such
repeal or modification.
The effective date of the provisions of this Director Liability
Limitation Amendment shall be the date of filing with the Secretary
of State of the State of Connecticut of the Certificate of Amendment
which contains this Director Liability Limitation Amendment.
Nothing contained in this Director Liability Limitation
Amendment shall be construed to deny to the directors of the Company
any of the benefits provided by subsection (e) of Section 33-313 of
the Connecticut Stock Corporation Act, as in effect at the time of
the violation."
RESOLVED: That the preceding Director Liability Limitation Amendment
be submitted for approval, as required by statute, to the shareholders of
the Company entitled to vote thereon at the 1990 Annual Meeting of
Shareholders.
RESOLVED: That the proper officers of the Company be, and each of
them hereby is, authorized, empowered and directed to cause an appropriate
discussion concerning said Director Liability Limitation Amendment to be
prepared and included as part of the proxy material for said Annual
Meeting.
RESOLVED: That the proper officers of the Company be, and each of
them hereby is, authorized and empowered to prepare, execute, and file all
such documents as they shall deem necessary or appropriate in order to
effectuate the foregoing amendment of the Charter of the Company, in
accordance with the provisions or intent of the foregoing pesolutions.
-2-
<PAGE>
Exhibit 3(i)
Page 159 of 184
(FORM)
CONFIRMATION OF FILING
AND RECEIPT OF FEES
STATE OF CONNECTICUT
OFFICE OF THE SECRETARY OF THE STATE
30 TRINITY STREET, HARTFORD, CONNECTICUT 06106
---------------------------------------------------------------------------
Name of Corporation
CONNECTICUT NATURAL GAS CORPORATION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Document Filed Filing Date Total Fees Paid
<S> <C> <C>
AMENDING CERTIFICATE OF INCORPORATION 20/JUN/1990 $70.00
---------------------------------------------------------------------------
</TABLE>
The information shown above pertains to documents filed in this office on
account of the corporation indicated. The filing date is the date endorsed
on the document pursuant to Section 33-285 or 33-422 of the Connecticut
General Statutes.
Any questions regarding the filing should be addressed to:
CORPORATIONS DIVISION, SECRETARY OF STATE'S OFFICE, 30 TRINITY STREET,
HARTFORD, CONNECTICUT 06106
(Mail Label)
MURTHA, CULLINA, RICHTER & PINNEY
DANA SHIMKUS
185 ASYLUM STREET
HARTFORD, CT 06103
<PAGE>
Exhibit 3(i)
Page 160 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
61-38 REV. 9/90 052903A003 10/02/91R#37010
Stock Corporation 052903A003 10/02/91R#37100
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
---------------------------------------------------------------------------
1. Name of Corporation (Please enter name within lines)
Connecticut Natural Gas Corporation
---------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check one)
| | A. Amended only, pursuant to Conn. Gen. Stat. section 33-360.
|X| B. Amended only, to cancel authorized shares (state number of shares
to be cancelled, the class, the series, if any, and the par value,
P.A. 90-107.)
| | C. Restated only, pursuant to Conn. Gen. Stat. section 33-362(a).
| | D. Amended and restated, pursuant to Conn. Gen. Stat. section 33-
362(c).
| | E. Restated and superseded pursuant to Conn. Gen. Stat. section 33-
362(d).
Set forth here the resolution of amendment and/or restatement. Use an 8
1/2 X 11 attached sheet if more space if needed. Conn. Gen. Stat. section
1-9.
(see attached)
Cerfification: Resolution of Amendment Attachment I
Statement of Authorized Shares Attachment II
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate. If 2C
or 2D is
checked, complete 3A or 3B. If 2E is checked, complete 4.)
3. (Check one)
| | A. This certificate purports merely to restate but not to change
the provisions of the original Certificate of Incorporation as
supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented and amended to date, and the
provisions of this Restated Certificate of Incorporation. (If
3A is checked, go to 5 & 6 to complete this certificate.).
| | B. This Restated Certificate of Incorporation shall give effect to
the amendment(s) and purports to restate all those provisions
now in effect not being amended by such amendment(s). (If 3B
is checked, check 4, if true, and go to 5 & 6 to complete this
Certificate.)
4. (Check, if true)
| | This restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
<PAGE>
Exhibit 3(i)
Page 161 of 184
5. The manner of adopting the resolution was as follows: (Check one A, or
B, or C)
| | A. By the board of directors and shareholders, pursuant to Conn.
Gen. Stat. section 33-360. Vote of Shareholders: (Check (i) or
(ii), and check (iii) if applicable.)
(i) | | No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption ________ Vote Favoring Adoption ________
(ii) | | There are shares of more than one class entitled to vote
as a class. The designation of each class required for
adoption of the resolution and the vote of each class in
favor of adoption were as follows:
(Use an 8 1/2 X 11 attached sheet if more space is
needed. Conn. Gen. Stat. section 1-9.)
(iii) | | Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat. section 33-
311a(a).
|X| B. By the board of directors acting alone, pursuant to Conn. Gen.
Stat. section 33-360(b)(2) or 33-362(a).
The number of affirmative votes required to adopt such resolution is:
___9____
The number of directors's votes in favor of the resolution was:
_______13______
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true:
<TABLE>
<CAPTION>
(Print or Type) Signature Print or Type Signature
<C> <C> <C> <C>
---------------------------------------------------------------------------------------
Name of Pres. | | Name of Assn't Sec.|
Victor H. Frauenhofer |/s/ Victor H. Frauenhofer| Lynn C. Blackwell |/s/Lynn C.Blackwell
-------------------------------------------------------------------------------------------
</TABLE>
| | C. The corporation does not have any shareholders. The resolution
was adopted by vote of at least two-thirds of the incorporators
before the organization meeting of the corporation, and
approved in writing by all subscribers for shares of the
corporation. If there are no subscribers, state NONE below.
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
<TABLE>
<C> <C> <C>
-------------------------------------------------------------------------------------------
Signed Incorporator |Signed Incorporator |Signed Incorporator
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Signed Subscriber |Signed Subscriber |Signed Subscriber
-------------------------------------------------------------------------------------------
</TABLE>
(Use an 8 1/2 X 11 attached sheet if more space is needed. Conn. Gen.
Stat. section 1-9)
6. Dated at Hartford, Connecticut this 1st day of October, 1991
FILED Lynn Blackwell
STATE OF CONNECTICUT Connecticut Natural Gas Corporation
OCT 2 1991 P.O. Box 1500
Pauline R. Kezer Hartford, CT 06144-1500
SECRETARY OF THE STATE ----------------------------
By __10___Time 12P.M. Please provide filer's name and complete
address for mailing receipt
<PAGE>
Exhibit 3(i)
Page 162 of 184
Attachment I to Certificate
Amending Certificate of
Incorporation to Cancel Shares
pursuant to P.A. 90-107
CERTIFICATION
I, Lynn C. Blackwell, Assistant Secretary of Connecticut Natural Gas
Corporation, hereby certify that the Resolution set forth below is a full,
true and correct copy of a Resolution duly adopted by the Board of
Directors of Connecticut Natural Gas Corporation at a duly constituted
meeting on September 24, 1991, that said resolution appears in the minutes
of said meeting, and that the same has not been rescinded or modified and
is now in full force and effect.
RESOLVED: That the cancellation from time to time of those shares of the
Corporation's $3.125 Par Preferred Stock and shares of $100 Par
Serial Preferred Stock which were redeemed, repurchased or
otherwise reacquired by the Corporation on or before December
31, 1989 be and it hereby is approved, ratified and confirmed;
and that the filing from time to time by officers of the
Company of certificates for the cancellation of said shares
with the Office of the Secretary of State be and hereby is
approved, ratified and confirmed; and that the proper officers
of the Corporation be, and they hereby are, authorized and
directed to prepare and file with the Office of the Secretary
of the State an amendment to the certificate of incorporation
to reduce the authorized shares of the Corporation in
connection with such cancellations.
RESOLVED: That those shares of the Corporation;s $3.125 Par Preferred
Stock and $100 Par Serial Preferred Stock which have been
redeemed, repurchased or otherwise reacquired by the
Corporation after December 31, 1989 through December 31, 1990
be and they hereby are cancelled; and that the certificate of
incorporation of the Corporation be amended to reflect that the
total number of shares of the Corporation's $3.125 Par
Preferred Stock and $100 Par Serial Preferred Stock, after
giving effect to all cancellations of such shares, is as
follows:
$3.125 Par Preferred Stock - 937,443 shares
$100 Par Serial Preferred Stock - 9,999,867 shares
<PAGE>
Exhibit 3(i)
Page 163 of 184
CERTIFICATION
September 26, 1991
Page Two
and that the officers of the Corporation be and they hereby are
authorized to file with the Office of the Secretary of State a
certificate of amendment to the certificate of incorporation of
the Corporation reflecting that such redeemed, repurchased or
otherwise reacquired shares have been cancelled and indicating
the total number of shares which remain authorized to be issued
following such cancellation, as set forth above.
DATED this 26th day of September 1991,
__________________________________
Lynn C. Blackwell
Assistant Secretary
(SEAL)
<PAGE>
Exhibit 3(i)
Page 164 of 184
ATTACHMENT 2 TO CERTIFICATE
AMENDING CERTIFICATE OF
INCORPORATION
TO CANCEL SHARES PURSUANT
TO P.A. 90-107
CONNECTICUT NATURAL GAS CORPORATION
STATEMENT OF AUTHORIZED SHARES
I. NUMBER OF SHARES AUTHORIZED AFTER ALL CANCELLATION CERTIFICATES FILED
<TABLE>
<CAPTION>
Class Series Par Authorized
________________________________________________________________
<S> <C> <C> <C>
Preferred 8.00% $3.125 939,781
Preferred 6.00% $100 9,999,869
</TABLE>
*Number of Shares Authorized After Giving
Effect to All Cancellations Made Effective by
the Filing of One or More Certificates of
Cancellation Prior to the Effective Date of
P.A. 90-107:
II. AUTHORIZED SHARES CANCELLED
From December 31, 1989 through December 31, 1990
<TABLE>
<CAPTION>
Class Series Par Cancelled Authorized
________________________________________________________________
<S> <C> <C> <C> <C>
Preferred 8.00% $3.125 2,338 937,443
Preferred 6.00% $100 2 9,999,867
</TABLE>
<PAGE>
Exhibit 3(i)
Page 165 of 184
STATE OF CONNECTICUT )
) SS. HARTFORD
OFFICE OF THE SECRETARY OF THE STATE)
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand and affixed the seal of
said State, at Hartford this 3rd day of October, A.D. 1991
Pauline R. Kezer
______________________
Secretary of the State
<PAGE>
Exhibit 3(i)
Page 166 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
61-38 REV. 9/90 052903A003 10/02/91R#37010
Stock Corporation 052903A003 10/02/91R#37100
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
---------------------------------------------------------------------------
1. Name of Corporation (Please enter name within lines)
Connecticut Natural Gas Corporation
---------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check one)
| | A. Amended only, pursuant to Conn. Gen. Stat. section 33-360.
|X| B. Amended only, to cancel authorized shares (state number of shares
to be cancelled, the class, the series, if any, and the par value,
P.A. 90-107.)
| | C. Restated only, pursuant to Conn. Gen. Stat. section 33-362(a).
| | D. Amended and restated, pursuant to Conn. Gen. Stat. section 33-
362(c).
| | E. Restated and superseded pursuant to Conn. Gen. Stat. section 33-
362(d).
Set forth here the resolution of amendment and/or restatement. Use
an 8 1/2 X 11 attached sheet if more space if needed. Conn. Gen.
Stat. section 1-9.
(SEE ATTACHED RESOLUTION)
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate. If 2C
or 2D is checked, complete 3A or 3B. If 2E is checked, complete 4.)
3. (Check one)
| | A. This certificate purports merely to restate but not to change
the provisions of the original Certificate of Incorporation as
supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented and amended to date, and the
provisions of this Restated Certificate of Incorporation. (If
3A is checked, go to 5 & 6 to complete this certificate.).
| | B. This Restated Certificate of Incorporation shall give effect to
the amendment(s) and purports to restate all those provisions
now in effect not being amended by such amendment(s). (If 3B
is checked, check 4, if true, and go to 5 & 6 to complete this
Certificate.)
4. (Check, if true)
| | This restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
<PAGE>
Exhibit 3(i)
Page 167 of 184
5. The manner of adopting the resolution was as follows: (Check one A, or
B, or C)
| | A. By the board of directors and shareholders, pursuant to Conn.
Gen. Stat. section 33-360. Vote of Shareholders: (Check (i) or
(ii), and check (iii) if applicable.)
(i) | | No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption ________ Vote Favoring Adoption ________
(ii) | | There are shares of more than one class entitled to vote
as a class. The designation of each class required for
adoption of the resolution and the vote of each class in
favor of adoption were as follows:
(Use an 8 1/2 X 11 attached sheet if more space is
needed. Conn. Gen. Stat. section 1-9.)
(iii) | | Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat. section 33-
311a(a).
|X| B. By the board of directors acting alone, pursuant to Conn. Gen.
Stat. section 33-360(b)(2) or 33-362(a).
The number of affirmative votes required to adopt such resolution is:
___9____
The number of directors's votes in favor of the resolution was:
_______13______
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true:
<TABLE>
<CAPTION>
(Print or Type) Signature Print or Type Signature
<C> <C> <C> <C>
---------------------------------------------------------------------------------------
Name of V. Pres. | | Name of Assn't Sec.|
Reginald L. Babcock |/s/ R. L. Babcock | Lynn C. Blackwell |/s/Lynn C.Blackwell
-------------------------------------------------------------------------------------------
</TABLE>
| | C. The corporation does not have any shareholders. The resolution
was adopted by vote of at least two-thirds of the incorporators
before the organization meeting of the corporation, and
approved in writing by all subscribers for shares of the
corporation. If there are no subscribers, state NONE below.
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
<TABLE>
<C> <C> <C>
-------------------------------------------------------------------------------------------
Signed Incorporator |Signed Incorporator |Signed Incorporator
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Signed Subscriber |Signed Subscriber |Signed Subscriber
-------------------------------------------------------------------------------------------
</TABLE>
(Use an 8 1/2 X 11 attached sheet if more space is needed. Conn. Gen.
Stat. section 1-9)
6. Dated at Hartford, Connecticut this 26th day of November, 1991
FILED Lynn C. Blackwell
STATE OF CONNECTICUT Connecticut Natural Gas Corporation
NOV 27 1991 P.O. Box 1500
Pauline R. Kezer Hartford, CT 06144-1500
SECRETARY OF THE STATE ----------------------------
Please provide filer's name and complete
address for mailing receipt
<PAGE>
Exhibit 3(i)
Page 168 of 184
CERTIFICATION
I, Lynn C. Blackwell, Assistant Secretary of Connecticut Natural Gas
Corporation, hereby certify that the Resolution set forth below is a full,
true and correct copy of a Resolution duly adopted by the Board of
Directors of Connecticut Natural Gas Corporation at a duly constituted
meeting on November 26, 1991, that said resolution appears in the minutes
of said meeting, and that the same has not been rescinded or modified and
is now in full force and effect.
PREFERRED STOCK
---------------
RESOLVED: That those shares of the Corporation's $3.125 Par Preferred
Stock and $100 Par Serial Preferred Stock which have been
redeemed, repurchased or otherwise reacquired by the
Corporation after December 31, 1990 through September 30, 1991
be and they hereby are cancelled; and that the certificate of
incorporation of the Corporation be amended to reflect that the
total number of shares of the Corporation's $3.125 Par
Preferred Stock and $100 Par Serial Preferred Stock, after
giving effect to all cancellations of such shares, is as
follows:
<TABLE>
<CAPTION>
Class Series Par Cancelled Authorized
-------- -------- ------- --------- ------------
<S> <C> <C> <C> <C>
Preferred 8.00 % $3.125 900 936,543
Preferred 6.00 % $100 65 9,999,802
</TABLE>
and that the officers of the Corporation be and they hereby are authorized
to file with the Office of the Secretary of State a certificate of
amendment to the certificate of incorporation of the Corporation reflecting
that such redeemed, repurchased or otherwise reacquired shares have been
cancelled and indicating the total number of shares which remain authorized
to be issued following such cancellation, as set forth above.
DATED this 26th day of November 1991,
__________________________________
Lynn C. Blackwell
Assistant Secretary
(SEAL)
<PAGE>
Exhibit 3(i)
Page 169 of 184
STATE OF CONNECTICUT )
) SS. HARTFORD
OFFICE OF THE SECRETARY OF THE STATE)
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand and affixed the seal of
said State, at Hartford this 29th day of November, A.D. 1991
Pauline R. Kezer
______________________
Secretary of the State
<PAGE>
Exhibit 3(i)
Page 170 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
61-38 REV. 9/90 206461A004 10/30/92R#37010 75.00
Stock Corporation 206461A004 10/30/92R#37100 50.00
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
---------------------------------------------------------------------------
1. Name of Corporation (Please enter name within lines)
Connecticut Natural Gas Corporation
---------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check one)
| | A. Amended only, pursuant to Conn. Gen. Stat. section 33-360.
|X| B. Amended only, to cancel authorized shares (state number of shares
to be cancelled, the class, the series, if any, and the par value,
P.A. 90-107.)
| | C. Restated only, pursuant to Conn. Gen. Stat. section 33-362(a).
| | D. Amended and restated, pursuant to Conn. Gen. Stat. section 33-
362(c).
| | E. Restated and superseded pursuant to Conn. Gen. Stat. section 33-
362(d).
Set forth here the resolution of amendment and/or restatement. Use an 8
1/2 X 11 attached sheet if more space if needed. Conn. Gen. Stat. section
1-9.
See Attached Resolution.
(SEAL OF THE STATE OF CONNECTICUT)
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate. If 2C
or 2D is checked, complete 3A or 3B. If 2E is checked, complete 4.)
3. (Check one)
| | A. This certificate purports merely to restate but not to change the
provisions of the original Certificate of Incorporation as
supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of Incorporation
as supplemented and amended to date, and the provisions of this
Restated Certificate of Incorporation. (If 3A is checked, go to 5 &
6 to complete this certificate.).
| | B. This Restated Certificate of Incorporation shall give effect to the
amendment(s) and purports to restate all those provisions now in
effect not being amended by such amendment(s). (If 3B is checked,
check 4, if true, and go to 5 & 6 to complete this Certificate.)
4. (Check, if true)
| | This restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
<PAGE>
Exhibit 3(i)
Page 171 of 184
5. The manner of adopting the resolution was as follows: (Check one A, or
B, or C)
---
| | A. By the board of directors and shareholders, pursuant to Conn. Gen.
Stat. section 33-360. Vote of Shareholders: (Check (i) or (ii), and
check (iii) if applicable.)
(i) | | No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption ________ Vote Favoring Adoption ________
(ii) | | There are shares of more than one class entitled to vote
as a class. The designation of each class required for
adoption of the resolution and the vote of each class in
favor of adoption were as follows:
(Use an 8 1/2 X 11 attached sheet if more space is
needed. Conn. Gen. Stat. section 1-9.)
(iii) | | Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat. section 33-
311a(a).
|X| B. By the board of directors acting alone, pursuant to Conn. Gen. Stat.
section 33-360(b)(2) or 33-362(a).
The number of affirmative votes required to adopt such resolution is:
___8____
The number of directors' votes in favor of the resolution was:
_______10______
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true:
<TABLE>
<CAPTION>
(Print or Type) Signature (Print or Type) Signature
<C> <C> <C> <C>
-------------------------------------------------------------------------------------------
Name of V. Pres. | | Name of Assn't Sec. |
Reginald L. Babcock | /s/ R. L. Babcock | Lynn C. Blackwell |/s/Lynn C. Blackwell
-------------------------------------------------------------------------------------------
</TABLE>
| | C. The corporation does not have any shareholders. The resolution was
adopted by vote of at least two-thirds of the incorporators before
the organization meeting of the corporation, and approved in writing
by all subscribers for shares of the corporation. If there are no
subscribers, state NONE below.
----
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
<TABLE>
<C> <C> <C>
-------------------------------------------------------------------------------------------
Signed Incorporator |Signed Incorporator |Signed Incorporator
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Signed Subscriber |Signed Subscriber |Signed Subscriber
-------------------------------------------------------------------------------------------
</TABLE>
(Use an 8 1/2 X 11 attached sheet if more space is needed. Conn. Gen.
Stat. section 1-9)
6. Dated at Hartford, Connecticut this 29th day of October, 1992
FILED Lynn C. Blackwell, Esq.
STATE OF CONNECTICUT Connecticut Natural Gas Corporation
OCT 30 1992 P.O. Box 1500
Pauline R. Kezer Hartford, CT 06144-1500
SECRETARY OF THE STATE ----------------------------
By __10___Time _3_P.M. Please provide filer's name and complete
address for mailing receipt
<PAGE>
Exhibit 3(i)
Page 172 of 184
CONFIRMATION OF FILING STATE OF CONNECTICUT
AND RECEIPT OF FEES Office of the Secretary of the State
61-304 REV. 2/89 Commercial Recording Division
30 TRINITY STREET, HARTFORD, CONNECTICUT 06106
---------------------------------------------------------------------------
---------------------------------------------------------------------------
NAME OF CORPORATION
CONNECTICUT NATURAL GAS CORPORATION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
DOCUMENT FILED | FILING DATE |
TOTAL FEES PAID
---------------------------------------------------------------------------
<S> <C>
AMEND CERTIFICATE OF INCORPORATION | 30/OCT/1992 |
$125.00
---------------------------------------------------------------------------
</TABLE>
The information shown above pertains to documents filed in this office on
account of the corporation indicated. The filing date endorsed on the
document pursuant to Section 33-285 or 33-422 of the Connecticut General
Statutes. Any questions regarding this filing should be addressed to :
THE ABOVE ADDRESS
_ _
| |
LYNN C BLACKWELL ESQ
CT NATURAL GAS CORP
PO BOX 1500
HARTFORD CT 06144
|_ _|
<PAGE>
Exhibit 3(i)
Page 173 of 184
CERTIFICATION
I, Lynn C. Blackwell, Assistant Secretary of Connecticut Natural Gas
Corporation, hereby certify that the Resolution set forth below is a full,
true and correct copy of a Resolution duly adopted by the Board of
Directors of Connecticut Natural Gas Corporation at a duly constituted
meeting on October 27, 1992, that said resolution appears in the minutes of
said meeting, and that the same has not been rescinded or modified and is
now in full force and effect.
PREFERRED STOCK
---------------
RESOLVED: That those shares of the Corporation's $3.125 Par Preferred
Stock and $100 Par Serial Preferred Stock which have been
redeemed, repurchased or otherwise reacquired by the Corporation
after September 30, 1991 through September 30, 1992 be and they
hereby are cancelled; and that the certificate of incorporation
of the Corporation be amended to reflect that the total number
of shares of the Corporation's $3.125 Par Preferred Stock and
$100 Par Serial Preferred Stock, after giving effect to all
cancellations of such shares, is as follows:
<TABLE>
<CAPTION>
Class Series Par Cancelled Authorized
----- ------ --- --------- ----------
<S> <C> <C> <C> <C>
Preferred 8.00% $3.125 2,804 933,739
Preferred 6.00% $100 158 9,999,644
</TABLE>
(SEAL OF THE STATE OF CONNECTICUT)
and that the officers of the corporation be and they hereby are
authorized to file with the Office of the Secretary of State a
certificate of amendment to the certificate of incorporation of
the Corporation reflecting that such redeemed, repurchased or
otherwise reacquired shares have been cancelled and indicating
the total number of shares which remain authorized to be issued
following such cancellation, as set forth above.
DATED this 29th day of October, 1992,
/s/Lynn C. Blackwell
---------------------------------
Lynn C. Blackwell
Assistant Secretary
<PAGE>
Exhibit 3(i)
Page 174 of 184
STATE OF CONNECTICUT )
) SS. HARTFORD
OFFICE OF THE SECRETARY OF THE STATE)
I hereby certify that this is a true copy of record
in this Office
In Testimony whereof, I have hereunto set my hand,
and affixed the Seal of said State, at Hartford,
this 2nd day of Nov A.D. 1992
Pauline R. Kezer
---------------------------------
SECRETARY OF THE STATE
<PAGE>
Exhibit 3(i)
Page 175 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
61-38 REV. 9/90 160330A002 10/27/93R#37010 75.00
Stock Corporation 160330A002 10/27/93R#37100 50.00
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
---------------------------------------------------------------------------
1. Name of Corporation (Please enter name within lines)
Connecticut Natural Gas Corporation
---------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check one)
| | A. Amended only, pursuant to Conn. Gen. Stat. section 33-360.
|X| B. Amended only, to cancel authorized shares (state number of shares
to be cancelled, the class, the series, if any, and the par value,
P.A. 90-107.)
| | C. Restated only, pursuant to Conn. Gen. Stat. section 33-362(a).
| | D. Amended and restated, pursuant to Conn. Gen. Stat. section 33-
362(c).
| | E. Restated and superseded pursuant to Conn. Gen. Stat. section 33-
362(d).
Set forth here the resolution of amendment and/or restatement. Use an 8
1/2 X 11 attached sheet if more space if needed. Conn. Gen. Stat. section
1-9.
See Attached Resolution.
(SEAL OF THE STATE OF CONNECTICUT)
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate. If 2C
or 2D is checked, complete 3A or 3B. If 2E is checked, complete 4.)
3. (Check one)
| | A. This certificate purports merely to restate but not to change the
provisions of the original Certificate of Incorporation as
supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of Incorporation
as supplemented and amended to date, and the provisions of this
Restated Certificate of Incorporation. (If 3A is checked, go to 5 &
6 to complete this certificate.).
| | B. This Restated Certificate of Incorporation shall give effect to the
amendment(s) and purports to restate all those provisions now in
effect not being amended by such amendment(s). (If 3B is checked,
check 4, if true, and go to 5 & 6 to complete this Certificate.)
4. (Check, if true)
| | This restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
<PAGE>
Exhibit 3(i)
Page 176 of 184
5. The manner of adopting the resolution was as follows: (Check one A, or
B, or C)
---
| | A. By the board of directors and shareholders, pursuant to Conn. Gen.
Stat. section 33-360. Vote of Shareholders: (Check (i) or (ii), and
check (iii) if applicable.)
(i) | | No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption ________ Vote Favoring Adoption ________
(ii) | | There are shares of more than one class entitled to vote
as a class. The designation of each class required for
adoption of the resolution and the vote of each class in
favor of adoption were as follows:
(Use an 8 1/2 X 11 attached sheet if more space is
needed. Conn. Gen. Stat. section 1-9.)
(iii) | | Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat. section 33-
311a(a).
|X| B. By the board of directors acting alone, pursuant to Conn. Gen. Stat.
section 33-360(b)(2) or 33-362(a).
The number of affirmative votes required to adopt such resolution is:
___8____
The number of directors' votes in favor of the resolution was:
_______12______
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true:
<TABLE>
<CAPTION>
(Print or Type) Signature (Print or Type) Signature
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------
Name of V. Pres. | | Name of Assn't Sec. |
Reginald L. Babcock | /s/ R. L. Babcock | Lynn C. Blackwell |/s/Lynn C. Blackwell
-------------------------------------------------------------------------------------------
</TABLE>
| | C. The corporation does not have any shareholders. The resolution was
adopted by vote of at least two-thirds of the incorporators before
the organization meeting of the corporation, and approved in writing
by all subscribers for shares of the corporation. If there are no
subscribers, state NONE below.
----
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
<TABLE>
-------------------------------------------------------------------------------------------
<S> <C> <C>
Signed Incorporator |Signed Incorporator |Signed Incorporator
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Signed Subscriber |Signed Subscriber |Signed Subscriber
-------------------------------------------------------------------------------------------
</TABLE>
(Use an 8 1/2 X 11 attached sheet if more space is needed. Conn. Gen.
Stat. section 1-9)
6. Dated at Hartford, Connecticut this 27th day of October, 1993
FILED Lynn C. Blackwell, Esq.
STATE OF CONNECTICUT FF 50 Connecticut Natural Gas Corporation
OCT 27 1993 1cc 25 P.O. Box 1500
Pauline R. Kezer Exp 50 Hartford, CT 06144-1500
SECRETARY OF THE STATE ------ ----------------------------
By _M.S.__Time _3_P.M. $125.00 Please provide filer's name and complete
address for mailing receipt
<PAGE>
Exhibit 3(i)
Page 177 of 184
CERTIFICATION
I, Lynn C. Blackwell, Assistant Secretary of Connecticut Natural Gas
Corporation, hereby certify that the Resolution set forth below is a full,
true and correct copy of a Resolution duly adopted by the Board of
Directors of Connecticut Natural Gas Corporation at a duly constituted
meeting on October 26, 1993, that said resolution appears in the minutes of
said meeting, and that the same has not been rescinded or modified and is
now in full force and effect.
PREFERRED STOCK
---------------
RESOLVED: That those shares of the Corporation's $3.125 Par
Preferred Stock and $100 Par Serial Preferred Stock which
have been redeemed, repurchased or otherwise reacquired
by the Corporation after September 30, 1992 through
September 30, 1993 be and they hereby are cancelled; and
that the certificate of incorporation of the Corporation
be amended to reflect that the total number of shares of
the Corporation's $3.125 Par Preferred Stock and $100 Par
Serial Preferred Stock, after giving effect to all
cancellations of such shares, is as follows:
<TABLE>
<CAPTION>
Class Series Par Cancelled Authorized
----- ------ --- --------- ----------
<C> <C> <C> <C> <C>
Preferred 8.00% $3.125 6,052 927,687
Preferred 6.00% $100 -0- 9,999,644
</TABLE>
(SEAL OF THE STATE OF CONNECTICUT)
and that the officers of the corporation be and they hereby are
authorized to file with the Office of the Secretary of State a
certificate of amendment to the certificate of incorporation of the
Corporation reflecting that such redeemed, repurchased or otherwise
reacquired shares have been cancelled and indicating the total number
of shares which remain authorized to be issued following such
cancellation, as set forth above.
DATED this 27th day of October, 1993,
/s/Lynn C. Blackwell
---------------------------------
Lynn C. Blackwell
Assistant Secretary
(SEAL)
<PAGE>
Exhibit 3(i)
Page 178 of 184
STATE OF CONNECTICUT )
) SS. HARTFORD
OFFICE OF THE SECRETARY OF THE STATE)
I hereby certify that this is a true copy of record
in this Office
In Testimony whereof, I have hereunto set my hand,
and affixed the Seal of said State, at Hartford,
this 28th day of October A.D. 1993
Pauline R. Kezer
---------------------------------
SECRETARY OF THE STATE
<PAGE>
Exhibit 3(i)
Page 179 of 184
CONFIRMATION OF FILING STATE OF CONNECTICUT
AND RECEIPT OF FEES Office of the Secretary of the State
61-304 REV. 2/89 Commercial Recording Division
30 TRINITY STREET, HARTFORD, CONNECTICUT 06106
---------------------------------------------------------------------------
NAME OF CORPORATION
CONNECTICUT NATURAL GAS CORPORATION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
DOCUMENT FILED | FILING DATE | TOTAL FEES PAID
---------------------------------------------------------------------------
<S> <C> <C>
SHARES AMENDMENTS | 27/OCT/1993 | $125.00
---------------------------------------------------------------------------
</TABLE>
The information shown above pertains to documents filed in this office on
account of the corporation indicated. The filing date endorsed on the
document pursuant to Section 33-285 or 33-422 of the Connecticut General
Statutes. Any questions regarding this filing should be addressed to :
THE ABOVE ADDRESS
_ _
| |
LYNN C BLACKWELL ESQ
CT NATURAL GAS CORP
PO BOX 1500
HARTFORD CT 06144
|_ _|
<PAGE>
Exhibit 3(i)
Page 180 of 184
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
61-38 REV. 9/90
Stock Corporation
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
---------------------------------------------------------------------------
1. Name of Corporation (Please enter name within lines)
CONNECTICUT NATURAL GAS CORPORATION
---------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check one)
| | A. Amended only, pursuant to Conn. Gen. Stat. section 33-360.
|X| B. Amended only, to cancel authorized shares (state number of shares
to be cancelled, the class, the series, if any, and the par value,
P.A. 90-107.)
| | C. Restated only, pursuant to Conn. Gen. Stat. section 33-362(a).
| | D. Amended and restated, pursuant to Conn. Gen. Stat. section 33-
362(c).
| | E. Restated and superseded pursuant to Conn. Gen. Stat. section 33-
362(d).
Set forth here the resolution of amendment and/or restatement. Use an 8
1/2 X 11 attached sheet if more space if needed. Conn. Gen. Stat. section
1-9.
See Attached
(SEAL OF THE STATE OF CONNECTICUT)
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate. If 2C
or 2D is checked, complete 3A or 3B. If 2E is checked, complete 4.)
3. (Check one)
| | A. This certificate purports merely to restate but not to change the
provisions of the original Certificate of Incorporation as
supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of Incorporation
as supplemented and amended to date, and the provisions of this
Restated Certificate of Incorporation. (If 3A is checked, go to 5 &
6 to complete this certificate.).
| | B. This Restated Certificate of Incorporation shall give effect to the
amendment(s) and purports to restate all those provisions now in
effect not being amended by such amendment(s). (If 3B is checked,
check 4, if true, and go to 5 & 6 to complete this Certificate.)
4. (Check, if true)
| | This restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
<PAGE>
Exhibit 3(i)
Page 181 of 184
5. The manner of adopting the resolution was as follows: (Check one A, or
B, or C)
---
| | A. By the board of directors and shareholders, pursuant to Conn. Gen.
Stat. section 33-360. Vote of Shareholders: (Check (i) or (ii), and
check (iii) if applicable.)
(i) | | No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption ________ Vote Favoring Adoption ________
(ii) | | There are shares of more than one class entitled to vote
as a class. The designation of each class required for
adoption of the resolution and the vote of each class in
favor of adoption were as follows:
(Use an 8 1/2 X 11 attached sheet if more space is
needed. Conn. Gen. Stat. section 1-9.)
(iii) | | Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat. section 33-
311a(a).
|X| B. By the board of directors acting alone, pursuant to Conn. Gen. Stat.
section 33-360(b)(2) or 33-362(a).
The number of affirmative votes required to adopt such resolution is:
___8____
The number of directors' votes in favor of the resolution was:
_______11______
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true:
<TABLE>
<CAPTION>
(Print or Type) Signature (Print or Type) Signature
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------
Name of V. Pres. | | Name of Assn't Sec. |
Reginald L. Babcock | /s/ R. L. Babcock | Lynn C. Blackwell |/s/Lynn C. Blackwell
-------------------------------------------------------------------------------------------
</TABLE>
| | C. The corporation does not have any shareholders. The resolution was
adopted by vote of at least two-thirds of the incorporators before
the organization meeting of the corporation, and approved in writing
by all subscribers for shares of the corporation. If there are no
subscribers, state NONE below.
----
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
<TABLE>
<S> <C> <C>
-------------------------------------------------------------------------------------------
Signed Incorporator |Signed Incorporator |Signed Incorporator
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Signed Subscriber |Signed Subscriber |Signed Subscriber
-------------------------------------------------------------------------------------------
</TABLE>
(Use an 8 1/2 X 11 attached sheet if more space is needed. Conn. Gen.
Stat. section 1-9)
6. Dated at Hartford, Connecticut this 4th day of November, 1994
FILED LYNN C. BLACKWELL
STATE OF CONNECTICUT 25 cc CONNECTICUT NATURAL GAS CORPORATION
NOV 14 1994 50 FF P.O. BOX 1500
Pauline R. Kezer 50 EXP HARTFORD, CT 06144-1500
SECRETARY OF THE STATE ------ ----------------------------
By SML__Time _9_A.M. $125.00 Please provide filer's name and complete
address for mailing receipt
<PAGE>
Exhibit 3(i)
Page 182 of 184
CERTIFICATION
I, Reginald L. Babcock, Secretary of Connecticut Natural Gas Corporation,
hereby certify that the Resolution set forth below is a full, true and
correct copy of a Resolution duly adopted by the Board of Directors of
Connecticut Natural Gas Corporation at a duty constituted meeting on
October 25, 1994, that said Resolution appears in the minutes of said
meeting, and that the same has not rescinded or modified and is now in full
force and effect.
PREFERRED STOCK
---------------
RESOLVED: That those shares of the Corporation's $3.125 Par
Preferred Stock and $100 Par Serial Preferred Stock which
have been redeemed, repurchased or otherwise reacquired
by the Corporation after September 30, 1993 through
September 30, 1994 be and they hereby are cancelled; and
that the certificate of incorporation of the Corporation
be amended to reflect that the total number of shares of
the Corporation's $3.125 Par Preferred Stock and $100 Par
Serial Preferred Stock, after giving effect to all
cancellations of such shares, is as follows:
<TABLE>
<CAPTION>
Class Series Par Cancelled Authorized
----- ------ --- --------- ----------
<S> <C> <C> <C> <C>
Preferred 8.00% $3.125 10,735 916,952
Preferred 6.00% $100 9 9,999,635
</TABLE>
and that the officers of the corporation be and they hereby are
authorized to file with the Office of the Secretary of State a
certificate of amendment to the certificate of incorporation of the
Corporation reflecting that such redeemed, repurchased or otherwise
reacquired shares have been cancelled and indicating the total number
of shares which remain authorized to be issued following such
cancellation, as set forth above.
DATED this 25th day of October, 1994,
(SEAL OF STATE OF CONNECTICUT)
/s/Reginald L. Babcock
---------------------------------
Reginald L. Babcock
Secretary
(SEAL)
(CNG SEAL)
<PAGE>
Exhibit 3(i)
Page 183 of 184
(Back side of Certification)
STATE OF CONNECTICUT )
) SS. HARTFORD
OFFICE OF THE SECRETARY OF THE STATE)
I hereby certify that this is a true copy of record
in this Office
In Testimony whereof, I have hereunto set my hand,
and affixed the Seal of said State, at Hartford,
this 14th day of November A.D. 1994
Pauline R. Kezer
---------------------------------
SECRETARY OF THE STATE
<PAGE>
Exhibit 3(i)
Page 184 of 184
CONFIRMATION OF FILING STATE OF CONNECTICUT
AND RECEIPT OF FEES Office of the Secretary of the State
61-304 REV. 2/89 Commercial Recording Division
30 TRINITY STREET, HARTFORD, CONNECTICUT 06106
---------------------------------------------------------------------------
NAME OF CORPORATION
CONNECTICUT NATURAL GAS CORPORATION
<TABLE>
<S> <C> <C>
---------------------------------------------------------------------------
DOCUMENT FILED | FILING DATE | TOTAL FEES PAID
---------------------------------------------------------------------------
SHARES AMENDMENTS | 14/NOV/1994 | $125.00
---------------------------------------------------------------------------
</TABLE>
The information shown above pertains to documents filed in this office on
account of the corporation indicated. The filing date endorsed on the
document pursuant to Section 33-285 or 33-422 of the Connecticut General
Statutes. Any questions regarding this filing should be addressed to :
THE ABOVE ADDRESS
_ _
| |
LYNN C BLACKWELL ESQ
CT NATURAL GAS CORP
PO BOX 1500
HARTFORD CT 06144
|_ _|
<PAGE>
BY-LAWS OF CONNECTICUT NATURAL GAS CORPORATION
Adopted August 31, 1968 and amended
October 28, 1968 and
November 29, 1973 and
June 26, 1978 and
November 29, 1988 and
October 22, 1991 and
January 28, 1992 and
April 27, 1993 and
September 27, 1994
ARTICLE I
---------
DIRECTORS
Sec. 1. The Board of Directors shall consist of not less
than ten and not more than sixteen persons who shall be
stockholders of the Company and who shall, except as provided in
section 5 of this Article 1, be elected by the stockholders by
ballot in the manner prescribed by law and according to the
provisions of the Charter of the Company pertaining to
classification of the Board of Directors.
Sec. 2. The directors of the Company shall be divided into
three classes: Class I, Class II, and Class III. Such classes
shall be as nearly equal in number as possible. At each annual
election held after the initial election of directors according
to classes, the directors chosen to succeed those whose terms<PAGE>
then expire shall be identified as being of the same class as the
directors they succeed and shall be elected for a term expiring
at the third succeeding annual meeting of stockholders or in each
case thereafter when their respective successors are elected and
have qualified or upon their earlier death, resignation or
removal. If the number of directorships is changed, any increase
or decrease in directors shall be apportioned among the classes
so as to maintain all classes as nearly equal in number as
possible. No decrease in the number of directorships shall
shorten the term of any director. Any director elected to fill a
vacancy not resulting from an increase in the number of
directorships shall have the same remaining term as that of his
predecessor. No qualification for the office of director shall
apply to any director in office at the time such qualification
was adopted or to any successor director elected by the directors
to fill the unexpired term of a director.
Sec. 3. A regular meeting of the Board of Directors shall
be held without notice other than this By-law, immediately after,
and at the same place as, each annual meeting of stockholders.
Additional regular meetings of the Board of Directors may be held
without notice at such time and such place as shall from time to
time be determined by the Board of Directors, provided, however,
that the Board of Directors shall meet at least quarterly.
Special meetings of the Board may be called at any time by the
-2-<PAGE>
Chairman or by the President, and also shall be called on the
written request of a majority of the Board addressed to the
Chairman or the President.
Notice of any special meeting shall be given to each
director at his business or residence in writing or by
telegram or by telephone communication. If mailed, such no-
tice shall be deemed adequately delivered when deposited in
the United States mails so addressed, with postage thereon
prepaid, at least five days before such meeting. If by tele-
gram, such notice shall be deemed adequately delivered when
the telegram is delivered to the telegraph company at least
twenty-four hours before such meeting. If by facsimile tran-
smission, such notice shall be transmitted at least twenty-
four hours before such meeting. If by telephone, the notice
shall be given at least twelve hours prior to the time set for
the meeting. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of
Directors need be specified in the notice of such meeting,
except for amendments to these By-laws as provided under
Section 1 of Article XI hereof. A meeting may be held at any
time without notice if all the directors are present or if
those not present waive notice of the meeting in writing,
either before or after such meeting.
-3-<PAGE>
Sec. 4. At any meeting of the Board of Directors, a
majority shall be a quorum for the transaction of business,
but any meeting may be adjourned from time to time by the vote
of the directors present.
Sec. 5. A vacancy in the Board of Directors caused by a
director's death, resignation, removal from office, or order
of a court, or caused by an increase in the number of
directorships within the range established by the Charter of
the Company may be filled for the applicable term by action of
the sole remaining director in office or at a meeting of the
Board of Directors by the concurring vote of a majority of the
remaining directors in office, though such remaining directors
are less than a quorum, though the number of directors at the
meeting is less than a quorum and though such majority is less
than a quorum.
Sec. 6. No director shall be removed except by the
affirmative vote of seventy-five percent (75%) or more of the
outstanding shares of capital stock of the Company entitled to
vote generally in the election of directors, considered as one
class for the purpose of the Charter article entitled
Classification of Board of Directors.
-4-<PAGE>
ARTICLE II
----------
INDEMNITY
Sec. 1. The Company shall indemnify each director of the
Company to the full extent allowed by the laws of the State of
Connecticut, as they may change from time to time.
ARTICLE III
-----------
OFFICERS
Sec. 1. The officers of the Company shall be a
President, a Secretary, a Treasurer and, at the discretion of
the Board of Directors, a Chairman and one or more Executive
Vice Presidents, Senior Vice Presidents, Vice Presidents,
Assistant Vice Presidents, Assistant Secretaries, Assistant
Treasurers and such other officers as the Board of Directors
may deem advisable. The chief executive officer shall be a
director. One person may hold any two offices except that one
person shall not hold more than one of the following offices:
President, Secretary. All officers shall be elected or
appointed annually by the Board of Directors.
Sec. 2. The Board of Directors by a two-thirds vote of
their number shall have power to and may at any time remove
from office any of the officers elected or appointed by them.
-5-<PAGE>
Sec. 3. In case of death, removal or resignation of any
of the officers of the Company, the directors may supply the
vacancy thus created until the next election.
ARTICLE IV
----------
DUTIES OF THE CHAIRMAN AND PRESIDENT
Sec. 1. The Chairman, if such office shall be filled by
the Board of Directors, shall, when present, preside at all
meetings of the Board and of the stockholders. He shall be an
executive officer of the Company, shall be the representative
of the Board of Directors and, if the Board so determines,
shall be the chief executive officer of the Company, and,
while chief executive officer, his title shall be Chairman and
Chief Executive Officer. He shall perform such additional
duties as may be assigned to him from time to time by the
Board.
Sec. 2. The President shall be an executive officer of
the Company and, if the Board of Directors so determines or
does not fill the office of Chairman, shall be the chief
executive officer of the Company. If the President be not the
chief executive officer of the Company, he shall perform such
duties as shall be assigned to him by the Chairman or by the
Board of Directors.
-6-<PAGE>
Sec. 3. The chief executive officer of the Company shall
have direct and active supervision and control of the business
and affairs of the Company.
ARTICLE V
---------
DUTIES OF THE VICE PRESIDENT
Sec. 1. The Executive Vice President, Senior Vice
Presidents, Vice Presidents, and Assistant Vice Presidents
shall perform such duties as may be assigned by the chief
executive officer of the Board of Directors.
ARTICLE VI
----------
DUTIES OF THE SECRETARY AND ASSISTANT SECRETARY
Sec. 1. The Secretary shall record all the votes of the
Company and the minutes of its transactions in a book to be
kept for that purpose. He shall under the direction of the
chief executive officer be present at all meetings of the
Board and keep a record of proceedings in a minute book. He
shall notify the stockholders of the annual and any special
meetings, and shall notify the members of the Board of
Directors of all regular and special meetings of the Board.
He shall have charge of the transfer of stock and the registry
-7-<PAGE>
of any bonds of the Company and shall keep records thereof in
such manner as the Board of Directors shall from time to time
direct. He shall perform all the duties that are customary
and incident to the office of Secretary in like companies.
Sec. 2. The Assistant Secretary shall perform the duties
of the Secretary in case of the absence or disability of the
Secretary, and shall at all times render such assistance as
the Secretary may require.
ARTICLE VII
-----------
DUTIES OF THE TREASURER AND ASSISTANT TREASURERS
Sec. 1. The Treasurer shall keep full and accurate
accounts of receipts and disbursements and shall deposit the
Company's funds in the name and to the credit of the Company
in such depositories as may be determined by the Board of
Directors. He shall disburse the funds of the Company as may
be ordered by the Board, taking proper vouchers for such
disbursements. He shall have charge of the money, notes,
bills and checks of the Company, and may accept and endorse
the same. He shall make such reports of the receipts and
disbursements in such form and detail and at such time as the
Board may direct.
Sec. 2. The Assistant Treasurer shall perform the duties
of the Treasurer in case of the absence or disability of the
-8-<PAGE>
Treasurer, and shall at all times render such assistance as
the Treasurer may require.
Sec. 3. Checks on funds of the Company, except in
payment of dividends, shall be signed by any one of the
following: the Chairman, the President, a Vice President
whose duties relate primarily to responsibility for the
financial aspects of the business of the Company, the
Treasurer, an Assistant Treasurer, the Controller and such
other person or persons as the Board of Directors may
determine from time to time.
ARTICLE VIII
------------
COMMITTEES
Sec. 1. There shall be an Executive Committee consisting
of such directors as may be chosen by the Board of Directors.
The Executive Committee shall have charge of all matters which
may be referred to it by the Board of Directors and generally
have oversight and authority with regard to all business of
the Company when the Board of Directors is not in session.
Sec. 2. There shall be an Audit Committee consisting of
such directors as may be chosen by the Board of Directors.
The Audit Committee shall recommend to the Board of Directors
a firm of independent public accountants to audit the books
and accounts of the Company. The Committee also shall review
-9-<PAGE>
the reports prepared by the independent public accountants and
recommend to the directors any actions deemed appropriate in
connection with the reports. The Committee shall have such
other powers and duties as the Board may designate.
Sec. 3. There shall be a Compensation Committee
consisting of such directors as may be chosen by the Board of
Directors. The Compensation Committee shall establish
salaries and benefits for all officers, subject to approval by
the directors. The Committee shall approve all organizational
matters pertaining to officers and employees, review all
Company compensation and benefit programs, and oversee
management of the pension plan, subject also to approval. The
Committee shall have such other powers and duties as the Board
may designate.
Sec. 4. There shall be a Committee on Directors
consisting of such directors as may be chosen by the Board of
Directors. The Committee on Directors shall consider
candidates for vacancies among directors, including written
stockholder recommendations, and recommend nominees when the
need arises. The Committee also shall recommend assignments
of directors to the various committees of the Board of
Directors. The Committee shall have such other powers and
duties as the Board may designate.
-10-<PAGE>
Sec. 5. The Board of Directors may from time to time
appoint such other committees with such powers as the Board
may determine.
Sec. 6. All committees shall report their actions and
recommendations to the Board of Directors at the next ensuing
meeting of the Board. A majority of each committee shall
constitute a quorum for the transaction of business. The
Board of Directors shall fix the remuneration of directors and
for membership on committees.
ARTICLE IX
---------
MEETING OF STOCKHOLDERS
Sec. 1. The annual meeting of the stockholders of the
Company for the election of directors and the transaction of
such other business as may properly come before the meeting
shall be held on such day and at such hour as shall be
determined by resolution of the Board of Directors.
A special meeting of the stockholders shall be called at
any time by the Chairman of the Board, by the Secretary in
conformity with the vote of the Board of Directors, on the
written request of a majority of the directors addressed to
the chief executive officer of the Company or by the president
-11-<PAGE>
on the written request of stockholders holding at least
thirty-five percent of the voting power of all shares entitled
to vote at the meeting.
Sec. 2. Written or printed notice, stating the place,
day and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be prepared and delivered
by the Company not less than ten days nor more than fifty days
before the date of the meeting, either personally, or by mail,
to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail with post-
age thereon prepaid, addressed to the stockholder at his ad-
dress as it appears on the stock transfer books of the
Company. Such further notice shall be given as may be re-
quired by law. Meetings may be held without notice if all
stockholders entitled to vote are present, or if notice is
waived by those not present. Any previously scheduled meeting
of the stockholders may be postponed by resolution of the
Board of Directors upon public notice given prior to the time
previously scheduled for such meeting of stockholders.
Sec. 3. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the
voting power of the outstanding shares of the Company entitled
to vote generally in the election of directors (the "Voting
-12-<PAGE>
Stock"), represented in person or by proxy, shall constitute a
quorum at a meeting of stockholders, except that when
specified business is to be voted on by a class or series
voting as a class, the holders of a majority of the shares of
such class or series shall constitute a quorum for the
transaction of such business. The chairman of the meeting or
the holders of a majority of the voting power of the shares of
Voting Stock so represented may adjourn the meeting from time
to time, whether or not there is such a quorum (or in the case
of specified business to be voted on by a class or series, the
chairman or, the holders of a majority of the shares of such
class or series so represented may adjourn the meeting with
respect to such specified business). No notice of the time and
place of adjourned meetings need be given except as required
by law. The stockholders present at a duly organized meeting
may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave
less than a quorum.
Sec. 4. Stockholders may vote at any meeting either in
person or by proxy, but all proxies shall be in writing.
Partnerships may sign the firm name and the signature of any
general partner thereof shall be sufficient. Corporations may
execute their proxies by the signature of the President,
attested by that of the Secretary and the corporate seal of
the corporation.
-13-<PAGE>
Sec. 5. (A) Annual Meetings of Stockholders. (1)
Nominations of persons for election to the Board of Directors
of the Company and the proposal of business to be considered
by the stockholders may be made at an annual meeting of
stockholders (a) pursuant to the Company's notice of meeting
delivered pursuant to Section 2 of Article IX of these
By-laws, (b) by or at the direction of the Chairman or the
Board of Directors or (c) by any stockholder of the Company
who is entitled to vote at the meeting, who complied with the
notice procedures set forth in clauses (2) and (3) of this
paragraph (A) and this By-law and who was a stockholder of
record at the time such notice is delivered to the Secretary
of the Company.
(2) For nominations or other business to be properly
brought before an annual meeting by a stockholder pursuant to
clause (c) of paragraph (A)(l) of this By-law, the stockholder
must have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a stockholder's
notice shall be delivered to the Secretary at the principal
executive offices of the Company not less than seventy days
nor more than ninety days prior to the first anniversary of
the preceding year's annual meeting; provided, however, that
in the event that the date of the annual meeting is advanced
by more than twenty days, or delayed by more than seventy
-14-<PAGE>
days, from such anniversary date, notice by the stockholder to
be timely must be so delivered not earlier than the ninetieth
day prior to such annual meeting and not later than the close
of business on the later of the seventieth day prior to such
annual meeting or the tenth day following the day on which
public announcement of the date of such meeting is first made.
Such stockholder's notice shall set forth (a) as to each
person whom the stockholder proposes to nominate for election
or reelection as a director all information relating to such
person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),
including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if
elected; (b) as to any other business that the stockholder
proposes to bring before the meeting, a brief description of
the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is
made; and (c) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or
proposal is made (i) the name and address of such stockholder,
as they appear on the Company's books, and of such beneficial
-15-<PAGE>
owner and (ii) the class and number of shares of the Company
which are owned beneficially and of record by such stockholder
and such beneficial owner.
(3) Notwithstanding anything in the second sentence
of paragraph (A)(2) of this By-law to the contrary, in the
event that the number of directors to be elected to the Board
of Directors of the Company is increased and there is no
public announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors made
by the Company at least seventy days prior to the first
anniversary of the preceding year's annual meeting, a
stockholder's notice required by this By-law shall also be
considered timely, but only with respect to nominees for any
new positions created by such increase, if it shall be deliv-
ered to the Secretary at the principal executive offices of
the Company not later than the close of business on the tenth
day following the day on which such public announcement is
first made by the Company.
(B) Special Meetings of Stockholders. Only such
business shall be conducted at a special meeting of stock-
holders as shall have been brought before the meeting pursuant
to the Company's notice of meeting pursuant to Section 2 of
Article IX of these By-laws (including any such notice upon
the request of the holders of thirty-five percent of the
-16-<PAGE>
voting power of the shares entitled to vote at the meeting).
Nominations of persons for election to the Board of Directors
may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the notice of meeting
(a) by or at the direction of the Board of Directors or (b) by
any stockholder of the Company who is entitled to vote at the
meeting, who complies with the notice procedures set forth in
this By-law and who is a stockholder of record at the time
such notice is delivered to the Secretary of the Company.
Nominations by stockholders of persons for election to the
Board of Directors may be made at such a special meeting of
stockholders if the stockholder's notice as required by
paragraph (A)(2) of this By-law shall be delivered to the
Secretary at the principal executive offices of the Company
not earlier than the ninetieth day prior to such special
meeting and not later than the close of business on the later
of the seventieth day prior to such special meeting or the
tenth day following the day on which public announcement is
first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at
such meeting.
(C) General. (1) Only persons who are nominated in
accordance with the procedures set forth in this By-law shall
be eligible to serve as directors and only such business shall
be conducted at a meeting of stockholders as shall have been
-17-<PAGE>
brought before the meeting in accordance with the procedures
set forth in this By-law. Except as otherwise provided by
law, the Certificate of Incorporation or these By-laws, the
chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be
brought before the meeting was made in accordance with the
procedures set forth in this By-law and, if any proposed
nomination or business is not in compliance with this By-law,
to declare that such defective proposal or nomination shall be
disregarded.
(2) For purposes of this By-law, "public announce-
ment" shall mean disclosure in a press release reported by the
Dow Jones News Service, Associated Press or comparable
national news service or in a document publicly filed by the
Company with the Securities and Exchange Commission pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this
By-law, a stockholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this
By-law. Nothing in this By-law shall be deemed to affect any
rights of stockholders to request inclusion of proposals in
the Company's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.
-18-<PAGE>
Sec. 6. The Chairman of the meeting shall fix and
announce at the meeting the date and time of the opening and
the closing of the polls for each matter upon which the
stockholders will vote at a meeting.
ARTICLE X
---------
CERTIFICATES OF STOCK
---------------------
Sec. 1. Certificates of stock shall be issued to the
stockholders and transfer of them made by the Secretary when
required. The certificates shall be signed by the Chairman,
the President or Vice President and by the Secretary or
Assistant Secretary, the signatures of whom may be facsimiles,
countersigned by the transfer agent, and sealed with the
common seal of the Company or a facsimile thereof. A transfer
agent and a registrar of the stock may be appointed by the
Board of Directors. Transfers of stock shall be made upon the
books of the Company by the stockholder in person or by
attorney duly authorized upon surrender of the certificates.
Sec. 2. The Board of Directors may close the transfer
books in its discretion for a period not exceeding ten days
-19-<PAGE>
preceding any meeting of the stockholders or preceding the day
appointed for the payment of a dividend and the Board may in
its discretion fix a record date for the determination of
stockholders entitled to a vote at any meeting or to receive
the payment of a dividend.
ARTICLE XI
-----------
AMENDMENTS TO THE BY-LAWS
Sec. 1. Amendments to the By-laws may be made at any
special or stated meeting of the Board of Directors by vote or
consent of at least two-thirds of the entire number of
directors, provided that no amendment shall be made unless the
notice of the meeting shall specify the amendment as the
purpose or one of the purposes of the meeting.
Sec. 2. Amendments to the By-laws may be made at any
annual or special meeting of the stockholders by vote of the
holders of at least two-thirds of the voting power of shares
entitled to vote thereon, provided that no amendment shall be
made unless the notice of the meeting shall specify the
amendment as the purpose or one of the purposes of the
meeting.
-20-<PAGE>
AMENDED AND RESTATED
CNG OFFICERS' RETIREMENT PLAN
Upon the retirement of an officer from the service of the Corporation,
the following benefits will be payable by the Corporation:
1. Retirement at Normal Retirement Date.
------------------------------------
The annual amount payable by the Corporation to the officer who
retires on or after his/her normal retirement date shall be equal to the
greater of:
(i) sixty percent (60%) of his/her highest rate of annual
salary, plus one percent (1%) of her/her highest rate of annual
salary for each year of service in excess of twenty-five (25), not
to exceed five percent (5%) (65% total maximum) for officers with
thirty (30) of more years of service, reduced by (a) the full
amount of retirement benefits payable to him/her in the first year
following retirement under any defined benefit pension plan of
this Corporation; (b) the full amount of retirement benefits
payable to him/her in the first year following retirement under
all other defined benefit pension programs from which he/she is
entitled to receive benefits on account of any prior employment;
and (c) fifty percent (50%) of social security benefits payable to
each participant unless such offset would reduce the benefit
payable below what otherwise would be paid based upon salaries in
effect on December 31, 1991, such that (a), (b) and (c) are to be
calculated before the effect of any option elected by the officer
under the plans referred to in paragraphs (a) and (b); or
(ii) the excess of (A) the benefit that would have been provided
under the Pension Plan if the limits imposed by the Federal tax laws
<PAGE>
upon benefits under qualified plans (i.e., the limits under Section
415 and Section 401(a)(17) of the Internal Revenue Code) did not
apply, over (B) the benefit actually payable under the Pension Plan.
2. Retirement at or After Age Sixty. The annual amount payable by
--------------------------------
the Corporation if an officer retires early, but at or after age sixty
(60), shall be equal to the greater of:
(i) sixty percent (60%) of his/her highest rate of annual
salary, plus one percent(1%) of his/her highest rate of annual salary
for each year of service in excess of twenty-five (25), not to exceed
five percent (5%) (65% total maximum) for officers with thirty (30)
or more years of service, reduced by (a) the full amount of
retirement benefits payable to him/her in the first year following
retirement under any defined benefit pension plan of this
Corporation; (b) the full amount of retirement benefits payable to
him/her in the first year following retirement under all other
defined benefit pension programs from which he/she is entitled to
receive benefits on account of any prior employment; and (c) fifty
percent (50%) of social security benefits payable to each participant
unless such offset would reduce the benefit payable below what
otherwise would be paid based upon salaries in effect on December 3,
1991, such that (a), (b) and (c) are to be calculated before the
effect of any option he/she has elected under the plans referred to
in paragraphs (a) and (b); or
(ii) the excess of (A) the benefit that would have been provided
under the Pension Plan if the limits imposed by the Federal tax laws
<PAGE>
upon benefits under qualified plans (i.e., the limits under Section
415 and Section 401(a)(17) of the Internal Revenue Code) did not
apply, over (B) the benefit actually payable under the Pension Plan.
3. Methods of Payment
------------------
(a) Unmarried Officers. If an officer is unmarried at the time
------------------
benefits commence, then his/her benefits hereunder shall be monthly
payments payable in the form of an annuity for his/her lifetime, and if the
officer dies prior to the completion of 120 payments hereunder, then any
remaining payments shall continue to be made to his/her beneficiary or
beneficiaries. An officer shall have the right to designate a beneficiary
on such forms as the Corporation shall provide. In the event that there is
no effective beneficiary designation form on file with the Corporation at
the time of the officer's death, any remaining payments shall be paid to
his/her surviving spouse, if any; otherwise to his/her surviving issue, PER
STIRPES; and in the further event that the officer is not survived by any
issue, then any remaining payments shall be made to his/her estate for the
duration of the 120 payment period.
(b) Married Officers. If an officer is married at the time
----------------
benefits commence, then benefits hereunder shall be monthly payments
payable in the form of an annuity for his/her lifetime and, at his/her
death, remaining payments shall be made to his/her surviving spouse, if
he/she survives him/her, at a rate which is 66-2/3% of the amount of
benefit payment during his/her lifetime. However, if the officer had
completed at least 15 but less than 21 years of service, the surviving
spouse benefit otherwise payable shall be increased by an amount equal to
five percent (5%)of the surviving spouse benefit which would have been
<PAGE>
payable if benefits were payable as a joint and fifty percent (50%)
survivor annuity. If the officer had completed at least 21 but les than 31
years of service, then the surviving spouse benefit otherwise payable shall
be increased by an amount equal to 10% of the surviving spouse benefit
which would have been payable if benefits were payable as a joint and 50%
survivor annuity. If the officer had completed thirty-one (31) or more
years of service, the surviving spouse benefit otherwise payable shall be
increased by an amount equal to 15% of the surviving spouse benefit which
would have been payable if benefits were payable as a joint and fifty
percent (50%) survivor annuity.
(c) Actuarial Equivalence. The amount of benefits payable under
---------------------
this plan is expressed in the form of a life annuity with no death
benefits. Benefit payments under the alternative set forth in this Section
3 (excluding the additional surviving spouse benefits above the basic
66-2/3% amount) shall be actuarially equivalent to that form of benefit.
The determination of actuarial equivalence shall be made by actuaries hired
by the Corporation.
4. Retirement on Account of Disability. The annual amount payable
-----------------------------------
by the Corporation if an officer retires from the Corporation on account of
disability because of illness or injury of such severity that the officer
is unable to perform the usual duties of his/her employment with the
Corporation as conclusively determined by the Board of Directors, shall be
an amount equal to the greater of:
(i) sixty percent (60%) of his/her highest rate of annual
salary, plus one percent (1%) of his/her highest rate of annual
salary for each year of service in excess of twenty-five (25), not to
exceed five percent (5%) (65% total maximum) for officer with thirty
<PAGE>
(30) or more years of service, reduced by (a) the full amount
of disability or retirement benefit payable to him/her in the
first year following his/her disability retirement under any
defined benefit pension plan of this Corporation; (b) the full
amount of retirement benefits payable to him/her in the first
year following retirement under all other defined benefit
pension programs from which he/she is entitled to receive
benefits on account of prior employment; and (c) fifty percent
(50%) of social security benefits payable to each participant
unless such offset would reduce the benefit payable below what
otherwise would be paid based upon salaries in effect on
December 31, 1991, such that (a), (b) and (c) are to be
calculated before the effect of any option he/she elected under
the plans referred to in paragraphs (a) and (b); or
(ii) the excess of (A) the benefit that would have been
provided under the Pension Plan if the limits imposed by the
Federal tax laws upon benefits under qualified plans (i.e., the
limits under Section 415 and Section 401(a)(17) of the Internal
Revenue Code) did not apply, over (B) the benefit actually
payable under the Pension Plan.
5. Death of Officer
----------------
(a) Before Retirement. If the officer should die while actively
-----------------
employed by the Corporation and prior to his/her actual retirement, and if
the officer is survived by a spouse to whom he/she was married for at least
one (1) year at the time of death, then benefits under this Officers'
Retirement Plan shall be payable to such surviving spouse as follows:<PAGE>
(1) If the officer had not attained age sixty (60) at the
time of his/her death, benefits for the surviving spouse shall be equal to
forty percent (40%) of the officer's highest rate of annual salary, reduced
by (a) the full amount of preretirement survivor annuity benefits payable
to the surviving spouse in the first year following the officer's death
under any defined benefit pension plan of this Corporation; and (b) the
full amount of survivor annuity benefits payable to the surviving spouse in
the first year following the officer's death under all other defined
benefit pension programs on account of any prior employment of the officer.
Benefits shall commence as of the first day of the month following the
officer's death and shall be payable for the balance of the surviving
spouse's lifetime.
(2) If the Participant had attained age sixty (60) at the
time of his/her death, benefits for the surviving spouse shall be computed
as if the Participant had retired on the day before his/her death, and
based upon the service of the officer at that time. Benefits shall be
calculated in accordance with the applicable provisions of paragraph (b) of
Section 3, relating to remaining payments to the surviving spouse following
the death of the officer. Benefits shall commence as of the first day of
the month following the officer's death and shall be payable for the
balance of the surviving spouse's lifetime.
(3) If the officer should die prior to his/her actual
retirement, and if the officer is unmarried or if he/she was not married to
his/her spouse for at least one (1) year at the time of the officer's
death, no benefit will be paid under this Officer's Retirement Plan.
<PAGE>
(b) After Retirement. If the officer dies after actual
----------------
retirement, no benefit will be paid under the Officer's Retirement Plan,
except for any benefits payable to the surviving spouse or beneficiaries in
accordance with Section 3.
6. Maximum Retirement Benefit. No benefits shall be payable under
--------------------------
this plan if the officer's benefit under all such pension programs equal or
exceed sixty percent (60%) of his/her highest rate of annual salary, unless
the officer completed more than twenty-five (25) years of service with the
Corporation, in which case the maximum shall be increased by 1% for each
year of service greater than twenty-five (25), but not in excess of thirty
(30) years of service (65% total maximum). The preceding sentence shall
not prevent the payment of benefits to the extent provided for in Sections
1(ii), 2(ii), or 4(ii) of this Plan.
7. Officers Covered. This Plan shall apply to all current officers
----------------
of the Corporation designated as such by resolution of the Board of
Directors at its organizational meeting, and such other officers as the
Board of Directors may from time to time designate as eligible for this
Plan.
8. Retirement with Short-Term Service. The benefits payable under
----------------------------------
this Plan on account of the retirement of an officer who had been an
employee of the Corporation for less than fifteen years at the time of
his/her retirement will be reduced in the proportion that his/her years of
service, rounded to the nearest full year, are to fifteen.
9. Nonassignability. No right or interest of any participant or
----------------
beneficiary in the Plan shall be transferable or assignable or shall be
subject to alienation, anticipation or encumbrance, and no right or
<PAGE>
interest of any participant in the Plan or his beneficiary in the Plan
shall be subject to any garnishment, attachment or execution. An eligible
officer has only the Corporation's unsecured promise to pay benefits under
this Plan and has the status of an unsecured general creditor. No officer
receives any right against or security interest in any Fund used to provide
benefits hereunder, and any fund shall at all times remain subject to
claims of general creditors of the Corporation.
10. Commencement of Benefit Payments. Benefit payments hereunder
--------------------------------
shall commence as of the first day of the month following retirement.
11. Amendment and Termination. The benefits payable under this Plan
-------------------------
may be terminated by the Board of Directors of the Corporation at any time,
and all the provisions of the resolution may be amended, modified,
suspended, or terminated by the Board of Directors at any time. Upon
termination, all benefits payable or to be payable under this Plan shall
cease.
12. Salary. For purposes of this Plan, the term "salary" shall mean
------
base salary, inclusive of any base salary reductions made at the officers'
election under any qualified or non-qualified plan of deferred compensation
maintained by the Corporation or under any cafeteria plan maintained by the
Corporation, but exclusive of bonuses, incentive payments, stock options,
grants, dividends or payments in lieu of dividends, and any other
additional compensation received by the officer from the Corporation.
13. Administration.
--------------
(a) Appointment of Committee. Except as otherwise expressly
------------------------
provided herein, the Plan shall be administered by the Compensation
<PAGE>
Committee (the "Committee") of the Board of Directors of the Corporation.
Vacancies on the Committee shall be filled by the Board of Directors.
(b) Election of Chairman; Quorum; Majority Vote. The Board of
-------------------------------------------
Directors also shall elect a member of the Committee as Chairman. The
Committee shall appoint a Secretary who may, but need not, be a member of
the Committee. The Committee may authorize one or more of their number, or
the Secretary of the Committee, to execute or deliver any instrument or
give any instruction on its behalf. The majority of the members of the
Committee at the time in office shall constitute a quorum for the
transaction of business. Any determination or action of the Committee may
be make or taken by a majority of the members present at any meeting
thereof, or without a meeting, by a resolution or written memorandum signed
by all of the members then in office. No member of the Committee who is
(or was) a Participant shall participate in any Committee deliberations or
decisions relating solely to himself/herself.
(c) Duties. Subject to the provisions of this Plan, the
------
Committee shall have the discretionary authority to operate, interpret and
construe this Plan, to make all computations of benefits hereunder and to
determine all questions of eligibility, status and rights of officers and
their spouses or beneficiaries hereunder. The Committee may establish
rules for the transaction of its business and the administration of the
Plan. The Committee shall establish a claims procedure under this Plan.
Any determination or action of the Committee respecting the administration
of this Plan shall be final, conclusive and binding on all persons having
an interest herein.
<PAGE>
14. Facility of Payment. If the Committee determines after receipt
-------------------
of evidence satisfactory to it, that any officer, spouse or beneficiary, as
the case may be, to whom a payment is due hereunder is incompetent by
reason of physical or mental disability or is a minor, the Committee shall
have the power to cause the payments becoming due to such officer, spouse
or beneficiary to be made to another for the benefit of the officer, spouse
or beneficiary, without responsibility of the Corporation or the Committee
to see the application of such payment. Payments made pursuant to such
power shall operate as a complete discharge of the Corporation and the
Committee.
<PAGE>
THE CONNECTICUT NATURAL GAS CORPORATION
OFFICERS RETIREMENT PLAN
TRUST AGREEMENT
THIS AGREEMENT made this 9th day of January, 1989 by and between THE
CONNECTICUT NATURAL GAS CORPORATION (hereinafter called the "Company"),
with a principal place of business in Hartford, Connecticut, and THE
CONNECTICUT BANK AND TRUST COMPANY, N.A., a banking corporation organized
and existing under the laws of the State of Connecticut (hereinafter called
the "Trustee"),
W I T N E S S E T H :
WHEREAS, pursuant to the terms of The Connecticut Natural Gas
Corporation Officers Retirement Plan (hereinafter called the "Plan"), the
Company has incurred and expects to continue to incur certain unfunded
income liability to or with respect to certain key management employees;
and
WHEREAS, the Company desires to provide additional assurance to such
key employees that their unfunded benefits under the Plan will in the
future be met or substantially met by application of the procedures set
forth herein; and
WHEREAS, the Company wishes to establish a separate trust agreement,
The Connecticut Natural Gas Corporation Officers Retirement Plan Trust
Agreement (hereinafter referred to as the "Trust") and to transfer to the
Trust assets which shall be held therein subject to the claims of the
<PAGE>
Company's general creditors until paid in such manner as is provided under
the Plan; and
WHEREAS, it is the intention of the Company in its discretion to make
contributions to the Trust to be used by the Trustee in satisfaction of the
liabilities of the Company with respect to the participants in the Plan;
NOW, THEREFORE, in consideration of these premises and mutual and
independent promises herein, the parties hereto covenant and agree as
follows:
ARTICLE I
---------
1.1 The Company hereby establishes with the Trustee a Trust
consisting of such sums of money and other property as shall from time to
time be paid or delivered to the Trustee and the earnings and profits
thereon. All such assets, all investments made therewith and proceeds
thereof, less the payments or other distributions which at the time of
reference shall have been made by the Trustee as authorized herein, are
referred to herein as the "Fund" and shall be held by the Trustee, in
trust, in accordance with the provisions of this Agreement. The Trust is
intended to be a grantor trust within the meaning of Section 671 of the
Internal Revenue Code of 1986, as amended (the "Code"), and shall be
construed accordingly.
1.2 The Trustee shall hold, manage, invest and otherwise administer
the Fund pursuant to the terms of this Agreement. The Trustee shall be
<PAGE>
responsible only for contributions actually received by it hereunder. The
amount of each contribution by the Company to the Fund shall be determined
in the sole discretion of the Company and the Trustee shall have no duty or
responsibility with respect thereto.
1.3 The Fund shall be revalued by the Trustee at least annually as of
the last business day of each calendar year at current market values.
ARTICLE II
----------
2.1 If at any time while the Trust is still in existence the Company
becomes insolvent (as herein defined), the Trustee shall hold for the
benefit of the Company's general creditors all cash and other assets then
held in the Fund, after deduction of the Trustee's fees and expenses and
any other expenses of the Trust, including taxes accrued and unpaid at the
time. The Company shall be considered to be insolvent if it is unable to
pay its debts as they mature or if there is instituted any proceeding under
the Bankruptcy Act of the United States or the bankruptcy laws of any
state, regardless of whether such proceeding was initiated by the Company,
its creditors or any third party. It is expressly understood by the
parties hereto that this Article II is intended to subject any and all
property held by the Trustee under this Trust to the claims of general
creditors of the Company in the event the Company is considered to be
insolvent.<PAGE>
Subject to the foregoing and regardless of whether the Company is
solvent, the trust property shall at all times remain subject to the claims
of general creditors of the Company.
The Board of Directors of the Company and the Chief Executive Officer
of the Company shall each have the duty to promptly inform the Trustee in
writing of the Company's insolvency. When so informed, or when notified by
a Court of competent jurisdiction of the Company's insolvency, the Trustee
shall suspend all payments to all participants and beneficiaries and shall
hold all cash and the assets then held in the Fund for the benefit of the
Company's general creditors. Upon written notification by the Board of
Directors or the Chief Executive of the Company or by a Court of competent
jurisdiction that the Company is not insolvent, the Trustee shall resume
payments, including suspended payments, to the participants and
beneficiaries.
If the Trustee receives a written allegation from a third party of the
Company's insolvency, the Trustee shall suspend all payments to
participants and beneficiaries, shall hold for the benefit of the Company's
general creditors all cash and the assets then held in the Fund, and shall
determine within thirty (30) days whether the Company is insolvent. If the
Trustee determines that the Company is not insolvent, it shall resume
payments, including suspended benefits, to the participants and
beneficiaries.
In the case of the Trustee's actual knowledge of or determination of
the Company's insolvency, it shall deliver the trust property to satisfy
<PAGE>
the claims of the Company's general creditors. Upon written notification by
the Board of Directors, the Chief Executive of the Company or upon the
actual knowledge of the Trustee that the Company is not insolvent, the
Trustee shall resume payments, including suspended payments, to the
participants and beneficiaries.
Nothing in this Agreement shall in any way diminish any rights of a
participant or beneficiary to pursue rights as a general creditor of the
Company with respect to benefits payable under the Plan.
2.2 The Company represents and agrees that the Trust established
hereunder does not fund and is not intended to fund the Plan or any other
employee benefit plan or other program of the Company. The Trust is and is
intended to be a depository arrange arrangement with the Trustee for the
setting aside of money as and when the Company so determines in its sole
discretion for meeting part or all of its future deferred compensation
obligations under the Plan. Contributions by the Company to the Fund shall
be in amounts of money determined solely by the Company. The purpose of
the Trust is to provide a fund from which deferred compensation may be
payable under the Plan and as to which the participants and beneficiaries
may, by exercising the procedures set forth herein, have access to some or
all of their benefits as such become due without having the payment of such
benefits subject to the administrative control of the Company unless the
Company becomes insolvent. The Company further represents that the Plan is
<PAGE>
a deferred compensation plan for a select group of management or highly
compensated employees of the Company and as such is exempt from the
application of the Employee Retirement Income Security Act of 1974
("ERISA"), except for the disclosure requirements applicable to such plans.
The Company further represents that the Plan is not qualified under Section
401 of the Code and therefore is not subject to any of the Code
requirements applicable to tax qualified plans.
ARTICLE III
-----------
3.1 Except for the records dealing solely with the Fund and its
investment which shall be maintained by the Trustee, the Company shall
maintain all the participant records contemplated by the Plan. All such
records shall be made available promptly on request to the Trustee. The
Company shall also perform such other duties and responsibilities as the
Company determines are necessary or advisable to achieve the objectives of
this Agreement.
3.2 The Company shall prepare a certification to the Trustee that the
participant's benefits under the Plan have become payable. Such
certification shall include the amount of such benefits, the manner of
payment, and the name, address and Social Security number of the recipient.
Upon the receipt of such certified statement and appropriate federal tax
withholding information, the Trustee shall commence distributions from the
Fund, as of the first day of the month following termination of employment
<PAGE>
by the participant, in accordance therewith to the person or persons so
indicated and to the Company with respect to taxes required to be withheld.
The Company shall have full responsibility for the payment of all
withholding taxes to the appropriate taxing authority and shall furnish
each participant or beneficiary with the appropriate tax information form
evidencing such payment and the amount thereof.
3.3 No further benefits shall be payable from the Fund with respect
to any participant or beneficiary at any time when the Fund has been
exhausted; provided, however, that no such reduction shall eliminate the
Company's remaining liability, if any, under the Plan with respect to the
participants and their beneficiaries.
3.4 Nothing provided in this Agreement shall relieve the Company of
its liabilities to pay the benefits provided under the Plan except to the
extent such liabilities are met by application of Fund assets. It is the
intent of the Company to have the Fund established hereunder satisfy in
whole or in part the Company's legal liability under the Plan in respect of
the eligible part I participants and beneficiaries. The Company therefore
agrees that all income deductions and credits under the Agreement belong to
it as owner for income tax purposes and will be included in the Company's
income tax returns.<PAGE>
ARTICLE IV
----------
4.1 The Company shall provide the Trustee with a certified copy of
the Plan and all amendments thereto and of the resolutions of the Board of
Directors of the Company approving the Plan and all amendments thereto.
After the execution of this Agreement, the Company shall promptly file with
the Trustee a certified list of the names and specimen signatures of the
officers of the Company authorized to act for it. The Company shall
promptly notify the Trustee and the Trustee's agent of the addition or
deletion of any person's name to or from such list. Until receipt by the
Trustee of notice that any person is no longer authorized so to act, the
Trustee may continue to rely on the authority of such person. All
certifications, notices and directions by any such person or persons to the
Trustee shall be in writing signed by such person or persons. The Trustee
may rely on any certification, notice or direction of the Company that the
Trustee believes to have been signed by a duly authorized officer or agent
of the Company. The Company shall be responsible for keeping accurate
books and records with respect to the participants and their rights and
interests in the Trust and under the Plan.
4.2 The Company shall make its contributions to the Trust in
accordance with appropriate corporate action.
4.3 The Company shall indemnify and hold harmless the Trustee for any
liability or expenses including without limitation reasonable attorneys'
fees incurred by the Trustee with respect to holding, managing, investing
<PAGE>
or otherwise administering the Fund other than by its negligence or willful
misconduct.
ARTICLE V
---------
5.1 The Trustee shall not be liable in discharging its duties
hereunder, including without limitation its duty to invest and reinvest the
Fund if it acts in good faith and in accordance with the terms of the Trust
and any applicable federal or state laws, rules or regulations.
5.2 Subject to investment guidelines agreed to in writing from time
to time by the Company and the Trustee, the Trustee shall have the power in
investing and reinvesting the Fund in its sole discretion:
(a) to retain assets transferred hereunder, and invest and
reinvest in any property, real, personal or mixed, wherever situated and
whether or not productive of income or consisting of wasting assets,
including without limitation common and preferred stocks, bonds, notes,
debentures, leaseholds, mortgages, certificates of deposit or demand or
time deposits (including any such deposits with the Trustee), shares of
investment companies and mutual funds, interests in partnerships and
trusts, insurance policies and annuity contracts, and oil, mineral or gas
properties, royalties, interests or rights, without being limited to the
classes of property in which trustees are authorized to invest by any law
or any rule of court of any state and without regard to the proportion any
<PAGE>
such property may bear to the entire amount of the Fund. In no event shall
any participant or beneficiary under the Plan be the legal owner of any
part of the Fund;
(b) to invest and reinvest all or any portion of the Fund
collectively through the medium of any common, collective or commingled
trust fund that may be established and maintained by the Trustee, the
instrument or instruments establishing such trust fund or funds as amended
being made a part of this Agreement so long as any portion of the Fund
shall be invested through the medium thereof;
(c) to sell or exchange any property held by it at public or
private sale for cash or on credit, to grant and exercise options for the
purchase or exchange thereof, to exercise all conversion or subscription
rights pertaining to any such property, and to enter into any covenant or
agreement to purchase any property in the future;
(d) to participate in any plan of reorganization, consolidation,
merger, combination, liquidation or other similar plan relating to property
held by it and to consent to or oppose any such plan or any action
thereunder or any contract, lease, mortgage, purchase, sale or other action
by any person;
(e) to deposit any property held by it with any protective
reorganization or similar committee, to delegate discretionary power
thereto, and to pay part of the expenses and compensation thereof and any
assessments levied with respect to any such property so deposited;<PAGE>
(f) to extend the time of payment of any obligation held by it;
(g) to hold uninvested any moneys received by it without
liability for any interest thereon until such moneys shall be invested,
reinvested or disbursed;
(h) to exercise all voting or other rights with respect to any
property held by it and to grant proxies, discretionary or otherwise:
(i) for the purposes of this Trust, to borrow money from others,
to issue its promissory note or notes there for and to secure the payment
thereof by pledging any property held by it;
(j) to employ suitable agents and counsel, who may be counsel to
the Company or the Trustee, and to pay their reasonable expenses and
compensation from the Trust property to the extent not paid by the Company;
(k) to cause any property held by it to be registered and held in
the name of one or more nominees with or without the addition of words
indicating that such securities are held in a fiduciary capacity and to
hold securities in bearer form;
(l) to settle, compromise or submit to arbitration any claims,
debts or damages due or owing to or from the Trust respectively, to
commence or defend suits or legal proceedings to protect any interest of
the Trust, and to represent the Trust in all suits or legal proceedings in
<PAGE>
any court or before any other body or tribunal; provided, however, that the
Trustee shall not be required to take any such action unless it shall have
been indemnified by the Company to its reasonable satisfaction against
liability or expenses it might incur therefrom;
(m) generally to do all acts, whether or not expressly
authorized, that the Trustee may deem necessary or desirable for the
protection of the Fund; and,
(n) Notwithstanding the foregoing, in no event shall the Trustee
invest in shares of the Company's stock.
(o) Notwithstanding any language in this Agreement, the Trustee
shall not have the power to start, to enter into or otherwise engage in any
business enterprise, or to continue to operate as any business interest
that becomes part of the Fund, if such activity constitutes "carrying on
business" as referred to in Section 301.7701-2 of the IRS Procedures and
Administration Regulations.
5.3 No person dealing with the Trustee shall be under any obligation
to see to the proper application of any money paid or property delivered to
the Trustee or to inquire into the Trustee's authority as to any
transaction.
5.4 The Trustee shall distribute moneys from the Fund in accordance
with Article III hereof. The Trustee may make any distribution required
hereunder by mailing its check for the specified amount to the person to
whom such payment is to be made at such address as may have been last
<PAGE>
furnished to the Trustee, or if no such address shall have been so
furnished, to such person in care of the Company (or if so directed by the
Company) by crediting the account of such person or by transferring funds
to such person's account by bank or wire transfer.
5.5 If at any time there is no person authorized to act under the
Trust on behalf of the Company, the Board of Directors of the Company shall
have the authority to act hereunder.
ARTICLE VI
----------
6.1 The Company shall pay any federal, state or local taxes on the
Fund, or any part thereof and on the income therefrom. The Company shall
pay to the Trustee its reasonable expenses for the management and
administration of the Trust property, including without limitation
reasonable expenses of counsel and other agents employed by the Trustee and
reasonable compensation for its services as Trustee hereunder, the amount
of which shall be agreed upon from time to time by the Company and the
Trustee in writing, provided, however, that if the Trustee forwards an
amended fee schedule to the Company requesting its agreement thereto and
the Company fails to object within thirty (30) days of its receipt, the
amended fee schedule shall be deemed to be agreed upon by the Company and
the Trustee. Such expenses and compensation shall be a charge on the Fund
until paid by the Company.<PAGE>
ARTICLE VII
-----------
7.1 The Trustee shall keeps books of account of the administration of
the Trust and shall show all its receipts and disbursements hereunder. The
books of account of the Trustee with respect to the Trust shall be open to
inspection by the Company or its representatives at all reasonable times
during normal business hours of the Trustee and may be audited not more
frequently than once each fiscal year by an independent certified public
accountant engaged by the Company.
7.2 Within a reasonable time after the close of each fiscal year
of the Company (or in the Trustee's discretion, at more frequent
intervals), or after any termination of the duties of the Trustee
hereunder, the Trustee shall prepare and deliver to the Company an account
of its acts and transactions as Trustee during the fiscal year, a portion
thereof, or during such period from the close of the last fiscal year to
the terminating of the Trustee's duties respectively, including a statement
of the then current value of the Fund. Any such account shall be deemed
accepted and approved by the Company and the Trustee shall be relieved and
discharged if such account had been settled and allowed by a judgment or
decree of a court of competent jurisdiction unless protested by written
notice to the Trustee within sixty (60) days of receipt thereof by the
Company. The Trustee shall have the right to apply at any time to a court
of competent jurisdiction for judicial settlement of any account of the
Trustee not previously settled as herein provided, or for the determination
<PAGE>
of any question of construction or for instructions. In any such action or
proceeding, it shall be necessary to join as parties only the Trustee and
the Company (although the Trustee may also join such other parties as it
may deem appropriate), and any judgment or decree entered therein shall be
conclusive.
ARTICLE VIII
------------
8.1 The Trustee may resign at any time by delivering written notice
thereof to the Company, provided, however, that no such resignation shall
take effect until the earlier of (i) sixty (60) days from the date of
delivery of such notice to the Company, or (ii) the appointment of a
successor trustee.
8.2 The Trustee may be removed at any time by the Company pursuant to
a resolution of the Board of Directors of the Company upon delivery to the
Trustee of a certified copy of such resolution and sixty (60) days written
notice, unless such notice period is waived in whole or in part by the
Trustee of (i) such removal, and (ii) the appointment of a successor
trustee.
8.3 Upon the resignation or removal of the Trustee, a successor
trustee shall be appointed by the Company. Such successor trustee shall be
a bank or trust company established under the laws of the United States or
a state within the United States. Such appointment shall take effect upon
delivery to the Trustee of (a) a written appointment of such successor
<PAGE>
trustee duly executed by the Company, and (b) a written acceptance by such
successor trustee duly executed thereby. Any successor trustee shall have
all the rights, powers and duties granted to the Trustee hereunder.
8.4 If within sixty (60) days of the delivery of the Trustee's
written notice of resignation a successor trustee shall not have been
appointed, the Trustee may apply to any court of competent jurisdiction for
the appointment of a successor trustee.
8.5 Upon the resignation or removal of the Trustee and the
appointment of a successor trustee, and after the acceptance and approval
of its account, the Trustee shall transfer and deliver the Fund to such
successor. Under no circumstances shall the Trustee transfer or deliver
the Fund to any successor which is not a bank or trust company as
hereinabove defined.
ARTICLE IX
----------
9.1 The Trust shall not terminate until the date on which no
participant or beneficiary shall be entitled to any benefits hereunder,
unless sooner revoked in accordance with Section 11.7 hereof. Upon
termination of the Trust, any assets remaining in the Trust shall be paid
to the Company. Upon completing such distribution, the Trustee shall be
relieved and discharged. The powers of the Trustee shall continue as long
as any part of the Fund remains in its Possession.
<PAGE>
ARTICLE X
----------
10.1 This Agreement may be amended in whole or in part at any time
and from time to time by a written instrument executed by the Company and
the Trustee, except to make the Trust revocable after it has become
irrevocable in accordance with Section 11.7 hereof, or to alter Section 9.1
hereof. Notwithstanding the foregoing, no amendment shall be effective
with respect to any participant (or if the participant is dead, his
beneficiary) unless he (or his beneficiary, if the participant is dead) has
consented thereto in writing.
ARTICLE XI
----------
ll.l This Agreement shall be construed and interpreted under, and the
Trust hereby created shall be governed by, the laws of the State of
Connecticut insofar as such laws do not contravene any applicable federal
laws, rules or regulations.
11.2 Neither the gender nor the number (singular or plural) of any
word shall be construed to exclude another gender or number when a
different gender or number would be appropriate.
11.3 No right or interest of any participant or beneficiary in the
Plan or in the Fund shall be transferable or assignable or shall be subject
to alienation, anticipation or encumbrance, and no right or interest of any
participant in the Plan or his beneficiary in the Plan or in the Fund shall
<PAGE>
be subject to any garnishment, attachment or execution. A participant has
only the Company's unsecured promise to pay benefits under the Plan and has
the status of an unsecured general creditor. No participant receives any
right against or security interest in the Fund. Notwithstanding the
foregoing, the Fund shall at all times remain subject to claims of general
creditors of the Company as provided herein.
11.4 This Agreement shall be binding upon and inure to the benefit of
any successor to the Company or its business as the result of merger,
consolidation, reorganization, transfer of assets or otherwise and any
subsequent successor thereto. In the event of any such merger,
consolidation, reorganization, transfer of assets or similar transaction,
the successor to the Company or its business or any subsequent successor
thereto shall promptly notify the Trustee in writing of its successorship
and furnish the Trustee with the information specified in Section 4.1 of
this Agreement. In no event shall any such transaction described herein
suspend, accelerate or delay the rights of Plan participants or the
beneficiaries of deceased participants to receive benefits hereunder.
11.5 This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original but all of which shall
together constitute only one agreement.<PAGE>
11.6 Communications to the Trustee shall be sent to the Trustee's
principal office or to such other address as the Trustee may specify in
writing. No communication shall be binding upon the Trustee until it is
received by the Trustee. Communications to the Company shall be sent to
the Company's principal office or to such other address as the Company may
specify in writing.
11.7 The Trust hereby established shall be revocable by the Company
at any time until thirty (30) days following the issuance by the Internal
Revenue Service of tax rulings requested by the Company in connection with
the establishment of this Trust. Thereafter this Trust shall be
irrevocable. In the event of a revocation of this Trust by the Company in
accordance with this Section 11.7, the Trustee shall transfer all assets in
the Trust to the Company and any interests of participants and
beneficiaries hereunder shall thereafter be void and non-existent. Upon
such payment by the Trustee to the Company, the duties and responsibilities
of the Trustee hereunder shall be fully discharged.
ARTICLE XII
-----------
12.1 Notwithstanding anything to the contrary elsewhere in the Trust
contained with respect to each provision hereunder which shall require a
resolution of a majority of the Board of Directors of the Company, such
majority shall, for purposes of this Trust, be deemed at all times to mean
a majority of the Board of Directors other than a Director covered under
the Trust.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused the trust to be
duly executed and their respective corporate seals to hereto affixed this
9th day of January, 1989.
ATTEST: CONNECTICUT NATURAL GAS CORPORATION
Mark W. Dudzik By Frank H. Livingston
-------------------------- --------------------------------
Its Vice President Administration
ATTEST: THE CONNECTICUT BANK AND TRUST
COMPANY, N.A.
Patricia Ulias By Ronald T. Gaylord
-------------------------- ---------------------------------
Its Assistance Vice President
STATE OF CONNECTICUT :
: ss. January 9, 1989
COUNTY OF HARTFORD :
Personally appeared F. H. Livingston, Vice President, of CONNECTICUT
NATURAL GAS CORPORATION, signer and sealer of the foregoing instrument
declared the same to be his free act and deed and the free act and deed of
said corporation, before me.
Reggie Babcock
--------------------------------
Commissioner of the Superior
STATE OF CONNECTICUT :
: ss. December 30, 1988
COUNTY OF HARTFORD :
Personally appeared Ronald T. Gaylord, Assistant Vice President of THE
CONNECTICUT BANK AND TRUST COMPANY, N.A., signer and sealer of the
foregoing instrument, and declared the same to be his free act and deed and
the free act and deed of said bank, before me.
Claire C. Pare
---------------------------------
Notary Public
My Commission Expires 3/31
<PAGE>
FIRST AMENDMENT TO THE
CONNECTICUT NATURAL GAS CORPORATION
OFFICERS RETIREMENT PLAN AND
DEFERRED COMPENSATION PLAN TRUST AGREEMENT
THIS AGREEMENT made this 5th day of August, 1993 by and
between the CONNECTICUT NATURAL GAS CORPORATION (herein after called the
"Company"), a corporation having its principal place of business in
Hartford, Connecticut, and FLEET BANK, N.A. (hereinafter called the
"Trustee"), a national banking association with a place of business in
Hartford, Connecticut,
W I T N E S S E T H:
WHEREAS, by Agreement dated January 9, 1989, the Company and The
Connecticut Bank and Trust Company, N.A., entered into an Agreement
entitled The Connecticut Natural Gas Corporation Officers Retirement Plan
Trust Agreement; and
WHEREAS, the Company wishes to utilize said Trust Agreement in
connection with the Connecticut Natural Gas Corporation Deferred
Compensation Plan as well as the Officers Retirement Plan; and
WHEREAS, the Company reserved the right to amend the Trust Agreement in
Section 10.1 thereof, subject to the conditions set forth therein: and
WHEREAS, Fleet Bank, N.A. has succeeded to the trust business of The
Connecticut Bank and Trust Company, N.A., and is currently serving as
Trustee;
NOW, THEREFORE, the Company and the Trustee-hereby agree as follows:
1. The following new Section 1.4 is added to the Trust:
"1.4 This Trust Agreement is hereby renamed The Connecticut Natural
Gas Corporation Officers Retirement Plan and Deferred Compensation Plan
Trust Agreement."
2. The following new Section 1.5 is added to the Trust:
"1.5 As used herein, the term "Plans" shall mean the Connecticut
Natural Gas Corporation Officers Retirement Plan and the Connecticut
Natural Gas Corporation Deferred Compensation Plan."
<PAGE>
3. Sections 2.1, 2.2, 3.1, 3.2, 3.3, 3.4, 4.1, 5.2(a), and 11.3 are
amended by the deletion of the word "Plan" or "plan" and the
substitution of the word "Plans" or "plans" (as the case may be) in lieu
thereof.
4. The fifth and sixth sentences of Section 2.2 are amended by the
deletion of the word "is" wherever the same shall appear therein and the
substitution of the word "are" in lieu thereof; and the word "a" in the
fifth sentence of Section 2.2, immediately preceding the word "deferred",
be and it hereby is deleted.
5. Except as hereinabove modified and amended, the Trust Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be
duly executed and the respective corporate seals to be hereto affixed this
5th day of August, 1993.
ATTEST: CONNECTICUT NATURAL GAS CORPORATION
Sharon Jepson A. Mark Abramovic
--------------------------------- By --------------------------------
Its Vice President Finance & CEO
ATTEST: FLEET BANK, N.A.
Helen M. Atwood William B. Parent
--------------------------------- By --------------------------------
Its Vice President
STATE OF CONNECTICUT )
: Hartford, CT July 27, 1993
COUNTY OF HARTFORD )
Personally appeared, A. Mark Abramovic, Vice President Finance & CFO
of Connecticut Natural Gas Corporation, signer and sealer of the foregoing
instrument, and declared the same to be his free act and deed and the free
act and deed of said corporation before me.
Reginald Babcock
-------------------------------
Commissioner of the Superior Court
<PAGE>
STATE OF CONNECTICUT )
: August 5, 1993
COUNTY OF HARTFORD )
Personally appeared, William B. Parent, Vice President of Fleet Bank,
N.A., signer and sealer of the foregoing instrument, and declared the same
to be his free act and deed and the free act and deed of said corporation
before me.
Francis A. Maslona
-------------------------------------
Notary Public
<PAGE>
CONNECTICUT NATURAL GAS CORPORATION
DEFERRED COMPENSATION PLAN
ARTICLE I
PURPOSE
-------
The purpose of the Deferred Compensation Plan (the "Plan") of
CONNECTICUT NATURAL GAS CORPORATION (the "Company") is to provide
incentives to certain employees of the Company who contribute to the
profitability of the Company. This document restates, effective January 1,
1993, the Plan which was originally adopted effective January 1, 1989.
ARTICLE II
DEFINITIONS
-----------
Except as otherwise expressly provided or unless the context otherwise
requires, the terms defined in this Article II shall have the meanings
assigned to them herein, shall include the plural as well as the singular
and the masculine gender wherever used shall include the feminine:
2.1. "Account" shall mean one and/or both unfunded company memorandum
accounts established under this Plan.
2.2. "Beneficiary" shall mean the person or persons, including without
limitation trustees or the Participant's estate, designated by a
Participant (on a form provided by and filed with the Committee) to receive
payments under the Plan after the death of such Participant. Such
designation may be revoked or changed by the Participant at any time by
<PAGE>
filing a new form with the Committee. The consent of the Participant's
spouse or of any prior beneficiary or any other person shall not be
required in order to effect, revoke or change beneficiary designation. In
the absence of any such designation or in the event that such designated
person or persons shall predecease such Participant, the Participant's
Beneficiary shall be his surviving spouse, if any, or if there is no
surviving spouse, then the Participant's estate.
2.3. "Board of Directors" shall mean the Board of Directors of the
Company.
2.4. "Code" shall mean collectively the Internal Revenue Code of 1986,
as amended, and the Treasury Regulations issued thereunder.
2.5. "Committee" shall mean the Committee appointed pursuant to
Section 6.1 hereof.
2.6. "Company" shall mean Connecticut Natural Gas Corporation.
2.7. "Deferral Election" shall mean a Participant's election to defer
a portion of his Salary Base as provided in Article IV hereof.
2.8. "Effective Date" shall mean January 1, 1989 with respect to the
Matching Contribution feature of the Plan; and January 1, 1990 with respect
to the Deferral Election portion of the Plan. The effective date of this
restatement is January 1, 1993.
<PAGE>
2.9. "Participant" shall mean any employ of the Company who is
eligible to participate in the Plan.
2.10. "Plan" shall mean this Deferred Compensation Plan, as amended
from time to time.
2.11. "Salary Base" shall mean a Participant's salary from the
Company, inclusive of any elective deferrals of salary made under the
Savings Plan or any cafeteria plan (under Section 125 of the Code)
maintained by the Company, and inclusive of any deferrals made under this
Plan, but excluding bonuses or any other additional compensation.
2.12 "Savings Plan" shall mean the Connecticut Natural Gas Corporation
Employee Savings Plan.
ARTICLE III
ELIGIBILITY
-----------
3.1. Eligibility. Eligibility in this Plan shall be restricted to
-----------
those employees of the Company who are officers and who are designated by
the Board of Directors as being eligible to participate in the Plan, either
at the current time or at some future date.
3.2. Termination of participation. The Board of Directors shall have
----------------------------
the authority to remove an employee from participation in the Plan. In
addition, an employee who is otherwise eligible to participate shall cease
participation if his employment with the Company is terminated for any
reason.
<PAGE>
ARTICLE IV
DEFERRAL ELECTIONS
------------------
4.1. (a) Timing of Deferral Elections: Changes. Each Participant
-------------------------------------
who is or first becomes eligible to participate as of January 1 of any year
(commencing with 1990) and who wishes to make the deferral election (the
"Deferral Election") as set forth in this Article IV shall, no later than
the preceding December 31, execute and deliver to the Committee an election
form, which form shall be provided by the Committee. The election shall
specify an amount to be deferred, expressed as a whole percentage amount of
not less than 1% nor more than 15% of the Participant's Salary Base.
Except as otherwise provided in this Article IV, the Deferral Election by a
Participant shall be irrevocable for the year for which it is made, and
shall be deemed to apply to any salary increases occurring during that
year. The initial annual Deferral Election shall be made with respect to a
Participant's Salary Base for the first year for which he is eligible and
the following rules shall apply with respect to any such Participant for
any subsequent year:
(1) A Participant may elect not to participate in any
subsequent calendar year, or to change the amount of his Deferral
Election for any subsequent calendar year within the limits defined
in this Article IV.
(2) Any election not to participate in any subsequent
calendar year or to change the amount of a Deferral Election for a
subsequent calendar year must be filed with the Committee by December
<PAGE>
31 of the prior year in order to be effective. If no effective
election to change is made, the prior annual deferral election up to
the maximum deferral amount set forth in this Article IV shall
continue in effect for such subsequent calendar year. Any Deferral
Election for any subsequent calendar year shall also be deemed to
apply to any salary increases occurring during that year.
(b) Elections Relating to Bonus Awards. Effective for 1993
----------------------------------
and later years, a Participant may also elect to make a "Bonus Deferral
Election" no later than the preceding December 31 by executing and
delivering an appropriate election form to the Committee, which form shall
be provided by the Committee. The Bonus Deferral Election shall specify
the percentage amount of the Participant's bonus award under the Company's
Annual Executive Incentive Plan to be deferred hereunder, rather than
received as cash, and shall be in 5% increments from 0% to 100% of such
bonus. Except as otherwise provided in this Article IV, the Bonus Deferral
Election by a Participant shall be irrevocable for the year for which it is
made. The initial annual Bonus Deferral Election shall be made with
respect to the Participant's bonus award under the Annual Executive
Incentive Plan for the first year for which he is eligible (or 1993, if
later), and the following rules shall apply with respect to any such
Participant for any subsequent year:<PAGE>
(1) A Participant may elect not to participate in any
subsequent calendar year, or to change the amount of the Bonus
Deferral Election for any subsequent calendar year within the limits
defined in this Article IV.
(2) Any election not to make a Bonus Deferral Election in
any subsequent calendar year or to change the amount of a Bonus
Deferral Election for a subsequent calendar year must be filed with
the Committee by December 31 of the prior year in order to be
effective. If no effective election to change is made, the prior
annual Bonus Deferral Election shall continue in effect for the
subsequent calendar year.
(3) Any election which is in effect for any calendar year
shall apply with respect to the bonus award under the Annual
Executive Incentive Plan for that year.
4.2. Cessation Upon Termination of Employment. Any deferrals
----------------------------------------
hereunder shall automatically cease upon termination of employment for any
reason, and may not thereafter be resumed.
4.3. Cessation Upon Hardship Withdrawal. Any deferrals hereunder
----------------------------------
shall automatically be suspended upon a withdrawal of 401(k) contributions
from the Savings Plan as a result of hardship for a period of twelve (12)
months from the date of the hardship withdrawal.
4.4. Crediting of Deferrals and Assumed Interest.
-------------------------------------------
(a) Prior to January 1, 1993. Amounts deferred under
------------------------
Section 4.1(a) will be assumed to have been deferred as of the
<PAGE>
last day of each month in which the employee is a participant, based upon
one-twelfth (1/12) of his Salary Base for that year. These amounts shall be
credited with interest at the end of each year. The amount of such
interest for such year prior to 1993 shall equal the average rate of return
upon fixed fund investments under the Savings Plan for that year, rounded
up to the nearest one-tenth of one percent. This rate of return shall be
deemed to have been earned on a level basis throughout the year. Interest
shall then be compounded as of the end of each calendar quarter, or more
frequently in the discretion of the Committee.
(b) On or After January 1, 1993. Amounts deferred under
---------------------------
Section 4.1(a) will be assumed to have been deferred as of the last day of
each month in which the employee is a Participant, based upon one-twelfth
(1/12) of his Salary Base for that year; and amounts deferred under Section
4.1(b) will be assumed to have been deferred as of the last day of the
month in which the cash bonus would have been paid had it been received in
cash. These amounts shall be credited with interest at the end of each
quarter. The amount of interest for each quarter on or after 1993,
including interest on amounts deferred prior to 1993, shall be based upon
the yield on 30 year Treasury Bills as of the last business day in that
calendar quarter, as published in The Wall Street Journal, rounded to the
-----------------------
next highest full percentage point, and then prorated to reflect the
quarterly period. Interest shall then be compounded as of the end of each
calendar quarter, or more frequently in the discretion of the Committee.
<PAGE>
ARTICLE V
MATCHING CONTRIBUTIONS
----------------------
5.1. Purpose. Any Participant who is employed by the Company
-------
on December 31 of a year shall be credited with a deemed matching
contribution in accordance with the rules set forth below. Participants
need not participate in the Deferral Election portion of this Plan in order
to participate in this part of the Plan.
(a) If the Participant's Salary Base (as defined in Section 2.11)
exceeds the limit on the amount of compensation which may be taken into
account under Section 401(a)(17) of the Code, then a deemed matching
contribution shall be made equal to the Participant's rate of match under
the Savings Plan multiplied by the excess of the Participant's Salary Base
over the indexed Section 401(a)(17) limit for that year and without regard
to whether the Participant participates in the Savings Plan.
(b) If the Participant makes elective deferrals under the Savings
Plan up to the dollar limit prescribed under Section 402(g) of the Code for
the year, then a deemed matching contribution shall be made equal to (1)
the Participant's rate of match under the Savings Plan multiplied by the
Participant's Salary Base not in excess of the indexed Section 401(a)(17)
limit for that year, minus (2) the dollar limit prescribed under Section
402(g) of the Code for the year.
5.2. Timing. The deemed matching contribution shall be
------
deemed to be made on December 31 of the applicable year and shall
<PAGE>
be deemed to purchase shares of Company stock at its year-end closing
price.
5.3. Ledger. A stock account ledger shall be established for
------
each Participant indicating the amount of Company stock deemed to be
credited to his account.
5.4. Dividends. Dividends shall be credited to such shares
---------
as if they were subject to the Connecticut Natural Gas Corporation Dividend
Reinvestment Plan.
ARTICLE VI
DISTRIBUTION
------------
6.1. Separate Accounts. As indicated in Articles IV and V,
-----------------
account ledgers shall be established reflecting (a) amounts coincide red to
have been deferred under Section 4.1 and the earnings thereon ("Account A")
and (b) shares of Company stock considered to have been purchased under
Sections 5.2 and 5.4 ("Account B").
6.2. Payment Elections. At the time a Participant first
-----------------
becomes eligible to participate, he shall be required to designate a method
of payment, which shall be (1) lump sum, (2) annual installments over a 5
year period, or (3) annual installments over a 10 year period. Benefits
shall commence upon retirement or other termination of employment.
6.3. Separate Elections for Separate Accounts. Separate
----------------------------------------
elections may be made with respect to Accounts A and B.
6.4 Modifications. Any payment election shall be irrevo-
-------------
cable; provided that a Participant may revise any such election,
<PAGE>
as to future contributions only, by December 31 of the year preceding the
year for which such contributions shall be deemed to be made.
6.5. Death Benefits. In the event of a Participant's death
--------------
prior to the commencement date for benefits, amounts credited under
Accounts A and B will be paid out in annual installments over 10 years to
the Participant's Beneficiary. If the Participant dies after benefits have
commenced, any remaining annual payments shall thereafter be made to the
Participant's Beneficiary.
6.6. Crediting of Dividends and Interest. In the event any
-------------------------------------
installment payments are being made hereunder, the remaining portions of
Accounts A and B shall continue to be treated as if invested as provided
hereunder.
6.7. Amount of Installments Payments. Any annual install-
-------------------------------
ments over a 10 year period shall be paid as follows: 1/10 of the Account
in year one, 1/9 in year 2, and so forth; and annual installments over a 5
year period shall be paid as follows: 1/5 of the Account in year one; 1/4
in year 2, and so forth.
6.8. Cash Payments. All payments pursuant to this Plan
-------------
shall be paid by the Company, in cash.
ARTICLE VII
ADMINISTRATION
--------------
7.1. Appointment of Committee. Except as otherwise
------------------------
expressly provided herein, the Plan shall be administered by a
<PAGE>
Committee of three (3) persons appointed by the Board of Directors of the
Company; Provided, however, that in no event
-------- -------
shall any member of the Board of Directors who is eligible to participate
or who is participating in this Plan participate in any such appointment.
Vacancies on the Committee shall be filled by the Board of Directors.
7.2. Election of Chairman: Quorum; Majority Vote. The
-------------------------------------------
members of the Committee shall elect one of their number as Chairman, and
shall appoint a Secretary who may, but need not, be a member of the
Committee. The Committee may authorize one or more of their number, or the
Secretary of the Committee, to execute or deliver any instrument or give
any instruction on its behalf. The majority of the members of the
Committee at the time in office shall constitute a quorum for the
transaction of business. Any determination or action of the Committee may
be made or taken by a majority of the members present at any meeting
thereof, or without a meeting, by a resolution or written memorandum signed
by all of the members then in office. No member of the Committee who is
(or was) a Participant shall participate in any Committee deliberations or
decisions relating solely to himself.
7.3. Duties. Subject to the provisions of this Plan, the
------
Committee shall have the discretionary authority to operate, interpret and
construe this Plan, to make all computations of benefits hereunder and to
determine all questions of eligibility, status and rights of Participants
and their Beneficiaries hereunder. The Committee may establish rules for
<PAGE>
the transaction of its business and the administration of the Plan. The
Committee shall establish a claims procedure under this Plan. Any deter-
mination or action of the Committee respecting the administration of this
Plan shall be final, conclusive and binding on all persons having an
interest herein.
ARTICLE VIII
MISCELLANEOUS
-------------
8.1. Amendment and Termination. The Board of Directors of
-------------------------
the Company may modify or am end, in whole or in part, any or all of the
provisions of the Plan, or suspend or terminate it entirely, at any time.
In no event may any member of the Board of Directors who is eligible to
participate or who is participating in this Plan participate in any action
described in the preceding sentence. If the Plan is terminated, the
Account Balances of all Participants, valued as of the date of termination,
shall be paid to them as soon as practicable in a lump sum.
8.2. Expenses. All expenses and costs in connection with the
--------
operation of the Plan shall be borne by the Company.
8.3 Taxes. The Company shall have the right to deduct from any payment
-----
to be made pursuant to this Plan any Federal, state or local taxes required
by law to be withheld.
8.4. Applicable Law. The Plan shall be construed and its provisions
--------------
enforced and administered in accordance with the laws of the State of
<PAGE>
Connecticut, except as such laws may be superseded by any Federal law.
8.5. No Assignment of Benefits. No right or interest of any
-------------------------
Participant or Beneficiary to benefit payments under the Plan shall be
transferable or assignable or shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, garnishment or execution.
8.6. No Segregation of Assets. All payments hereunder shall be paid
------------------------
in cash from the general funds of the Company and no special or separate
fund shall be established and no other segregation of assets shall be made
to assure the payment of benefits hereunder. The Plan and the crediting of
Accounts hereunder shall not constitute a trust or security device and
shall be merely for the purpose of recording an unsecured contractual
obligation of the Company. A Participant shall have no right, title or
interest whatever in or to any investments which the Company may make to
aid it in meeting its obligations hereunder. Nothing contained in this
Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship,
between the Company, and any Participant or Beneficiary. To the extent
that a Participant or a Beneficiary acquires a right to receive payments
hereunder, such right shall be no greater than the right of an unsecured
general creditor.
8.7. No Contract of Employment. Nothing contained in the Plan shall be
-------------------------
construed as a contract of employment between the Company and any
<PAGE>
Participant, or as a right of any Participant to continue in the employ of
the Company or as a limitation of the right of the Company to discharge any
Participant, with or without cause.
8.8. Facility of Payment. If the Committee determines after receipt
-------------------
of evidence satisfactory to it, that any Participant or Beneficiary, as the
case may be, to whom a payment is due hereunder is incompetent by reason of
physical or mental disability or is a minor, the Committee shall have the
power to cause the payments becoming due to such Participant or beneficiary
to be made to another for the benefit of the Participant or Beneficiary,
without responsibility of the Company or the Committee to see to the
application of such payment. Payments made pursuant to such power shall
operate as a complete discharge of the Company and the Committee.
8.9. Notices etc. in Writing. All notices, elections, consents,
------------------------
directions and other communications require or permitted under the Plan
must be in writing.
8.10. Captions. The underlined captions in this Plan document are for
--------
convenience of reference only and shall not be deemed to define or limit
the provisions hereof or affect their construction and application.
<PAGE>
Executed at Hartford, Connecticut this 29th day of December, 1992.
CONNECTICUT NATURAL GAS CORPORATION
By Frank H. Livingston
---------------------------------
Its
<PAGE>
FIRST AMENDMENT TO THE
CONNECTICUT NATURAL GAS CORPORATION
DEFERRED COMPENSATION PLAN
THIS AMENDMENT made this 2nd day of December, 1993 by
CONNECTICUT NATURAL GAS CORPORATION (the "Company") for the purpose of
amending its Deferred Compensation Plan,
W I T N E S S E T H :
WHEREAS, by Agreement dated December 29, 1992, the Company adopted an
Amended and Restated Deferred Compensation Plan (the "Plan"); and
WHEREAS, the Company reserved the right to amend the Plan in Section
8.1 thereof; and
WHEREAS, the Company now wishes to amend the Plan in the following
particulars:
NOW, THEREFORE, the Connecticut Natural Gas Corporation Deferred
Compensation Plan is amended as follows:
1. The following new paragraph (c) is added to Section 4.4:
"(c) On or After January 1, 1994. Amounts deferred
---------------------------
under Section 4.1(a) will be assumed to have been deferred as of the
last day of each month in which the employee is a Participant, based
upon one-twelfth (1/12) of his Salary Base for that year; and amounts
deferred under Section 4.1(b) will be assumed to have been deferred as
of the last day of the month in which the cash bonus would have been
paid had it been received in cash. The Participant may instruct the
<PAGE>
Committee in writing on a form provided by the Committee concerning
how amounts deferred hereunder at his election, including without
limitation, amounts previously deferred and credited to Account A as
of December 31, 1993, shall be deemed to be invested. The deemed
investment alternatives shall include all investment options provided
to participants under the Savings Plan from time to time (other than
CNG Common Stock). Furthermore, the Participant shall have the
opportunity to change any deemed investment option with the same
frequency and subject to the same limitations set forth in the Savings
Plan, in writing on a form provided by the Committee. Notwithstanding
the foregoing, in accordance with Section 8.6, the Participant shall
have no right, title or interest whatever in and to any investments
which the Company may make to aid it in meeting its obligations
hereunder. If and to the extent that a Participant does not
affirmatively elect to direct the deemed investment of any amounts
credited to Account A, then the provisions of Section 4.4(b), relating
to crediting of interest, shall apply.
2. Except as hereinabove modified and amended, the Amended and
Restated Deferred Compensation Plan shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the Company hereby executes this First Amendment
this 2nd day of December, 1993.
CONNECTICUT NATURAL GAS CORPORATION
WITNESS:
Mark W. Dudzik By Frank H. Livingston
----------------------- -------------------------------
Its Vice President
<PAGE>
SECOND AMENDMENT TO
CONNECTICUT NATURAL GAS CORPORATION
DEFERRED COMPENSATION PLAN
THIS AMENDMENT made this 28th day of June, 1994 by
CONNECTICUT NATURAL GAS CORPORATION (the "Company") for the purpose of
amending its Deferred Compensation Plan,
W I T N E S S E T H :
WHEREAS, by Agreement dated December 29, 1992, the Company adopted an
Amended and Restated Deferred Compensation Plan (the "Plan"); and
WHEREAS, the Company reserved the right to amend the Plan in Section
8.1 thereof; and
WHEREAS, the Company now wishes to amend the Plan in the following
particulars; and
WHEREAS, the Plan was previously amended by a First Amendment thereto
dated December 2, 1993;
NOW, THEREFORE, the Connecticut Natural Gas Corporation Deferred
Compensation Plan is hereby further amended as follows:
1. Section 5.1 is amended to read as follows, effective January 1,
1994:
"5.1. Purpose. Any Participant who is employed by the
-------
Company on December 31 of a year shall be credited with a deemed
matching contribution in accordance with the rules set forth below.
(a) If the Participant's Salary Base (as defined in Section
2.11) exceeds the limit on the amount of compensation which may be
<PAGE>
<PAGE>
taken into account under Section 401(a)(17) of the Code, then a deemed
matching contribution shall be made equal to the Participant's rate of
match under the Savings Plan multiplied by the excess of the Partici-
pant's Salary Base over the indexed Section 401(a)(17) limit for that
year and without regard to whether the Participant participates in the
Savings Plan or in the Deferral Election portion of this Plan.
(b) If a Participant elects to participate in the Deferral
Election portion of this Plan, then a deemed matching contribution
shall be made hereunder equal to the Participant's rate of match under
the Savings Plan multiplied by the amount deferred under the Deferral
Election portion of this Plan, and without regard to whether the
Participant participates in the Savings Plan. In no event, however,
shall there be a duplication with respect to deemed matching
contributions under paragraph (a) above; and accordingly, no deemed
matching contribution shall be made under this paragraph (b) with
respect to that amount of the Participant's Salary Base (if any) that
exceeds the indexed Section 401(a)(17) limit.
(c) If the limitations under Section 415 of the Code
(currently $30,000 for annual additions), the limits under Section
402(g) of the Code (currently $9,240 for elective deferrals), or any
other limits imposed under the Savings Plan due to the federal tax
laws, other than the indexed Section 401(a)(17) limit which is
<PAGE>
addressed in paragraph (a) above, cause any limitation on the amount
of matching contributions on behalf of the Participant under the
Savings Plan, then a deemed matching contribution shall be made on
behalf of the Participant equal to the amount of the additional match
which would have been made under the Savings Plan but for such limit.
In order to qualify for the additional match under this paragraph
(c), however, the Participant must have made the maximum elective
deferrals under Section 402(g) of the Code to the Savings Plan or the
maximum elective contributions permitted under the terms of the
Savings Plan."
2. Except as hereinabove modified and amended, the Deferred
Compensation Plan, as amended, shall remain in full force and effect.
IN WITNESS WHEREOF, the Company hereby executes this Second Amendment
this 22nd day of August, 1994.
CONNECTICUT NATURAL GAS CORPORATION
By Frank H. Livingston
--------------------------------
Its Vice President
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
CONNECTICUT NATURAL GAS CORPORATION
EMPLOYEE BENEFIT TRUST
TABLE OF CONTENTS
Page
----
I. ESTABLISHMENT AND PURPOSE OF TRUST. DEFINITIONS 1
II. TRUSTEES AND DUTIES 3
III. PAYMENT OF PLAN BENEFITS FROM FUND 8
IV. ADMINISTRATION 9
V. FIDUCIARY RESPONSIBILITIES 11
VI. ACCOUNTING 12
VII. SPECIFIC PROVISIONS REGARDING PROVISIONS FOR POST
RETIREMENT MEDICAL AND LIFE INSURANCE BENEFITS 13
VIII. MISCELLANEOUS PROVISIONS 15
EXHIBIT A. PLAN OF BENEFITS
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
CONNECTICUT NATURAL GAS CORPORATION
EMPLOYEE BENEFIT TRUST
THIS AGREEMENT and Declaration of Trust is made and entered into this
28th day of December, 1987, by and between CONNECTICUT NATURAL GAS
CORPORATION, a Connecticut corporation with its principal office in
Hartford, Connecticut (hereinafter referred to as "Grantor") and THE
CONNECTICUT BANK AND TRUST COMPANY, N.A., a bank with trust powers having
its principal office in Hartford, Connecticut (hereinafter referred to as
the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Grantor provides certain employee group medical and
group life insurance benefits under its group insured plan; and
WHEREAS, the Grantor currently permits certain medical and life
insurance coverage under said plan to continue after retirement, under the
terms and conditions set forth in said plan and the insurance contracts
incorporated therein; and
WHEREAS, the Grantor by appropriate corporate action has duly
authorized the creation of a trust fund to receive and hold contributions
made for the purpose of funding the cost of such benefits, in whole or in
part; and
WHEREAS, the Grantor intends that the Trustee may be authorized to
receive and hold contributions under such other employee welfare benefit
program or programs as hereafter from time to time may be designated to
provide benefits through said Fund; and
WHEREAS, the Grantor intends to that this Trust, together with any
such plans or programs, will qualify as a voluntary employees' beneficiary
association under Section 501(c)(9) of the Internal Revenue Code of 1986,
as amended,
NOW, THEREFORE, in consideration of the premises, it is agreed as
follows:
I. ESTABLISHMENT AND PURPOSE OF TRUST. DEFINITIONS
-------------------------------------- -----------
1.1 Establishment and Name of Trust
-------------------------------
There is hereby established a Trust, to be known as the CONNECTICUT
NATURAL GAS CORPORATION EMPLOYEE BENEFIT TRUST, hereinafter referred to as
<PAGE>
the Trust. The corpus of the Trust shall consist of such sums of money and
other property acceptable to the Trustee as shall from time to time be paid
or delivered to the Trustee and such income and gains thereon as may be
realized from time to time, less the payments which at the time of
reference shall have been made by the Trustee as authorized herein, such
corpus being hereinafter referred to as the Fund.
1.2 Purpose of Trust
----------------
The purpose of the Trust is to provide certain benefits to employees,
former employees and/or their dependents or beneficiaries, of Participating
Employers, in the event of death, illness or expenses for various types of
medical care and treatment, in accordance with the Plan of Benefits. At no
time prior to the satisfaction of all liabilities with respect to the Plan
of Benefits shall any part of the corpus or income of the Fund be used for
or diverted to purposes other than for the exclusive benefit of such
employees, former employees and/or their dependents or beneficiaries.
1.3 Participating Employers
-----------------------
The term "Participating Employer" shall mean the Grantor and any
subsidiary or affiliated corporation of the Grantor which has adopted and
maintains one or more of the plans comprising the,Plan of Benefits.
1.4 Participating Employees
-----------------------
The term "Participating Employee" or "Employee", as used herein, shall
mean any person who is or was employed by a Participating Employer in a
classification of employees covered by the Plan of Benefits; provided, that
no such classification may be selected by a Participating Employer which
will have the effect, in operation, of restricting eligibility for
benefits, or of providing a disproportionate amount of benefits, to
officers, shareholders or to employees of such Participating Employer who
are "highly compensated" individuals within the meaning of Section 505 of
the Internal Revenue Code of 1986, as amended.
1.5 Trustee
-------
The term "Trustee" shall mean the Trustee or Trustees appointed by the
Grantor, as hereinafter provided and serving from time to time hereunder.
1.6 Plan of Benefits
----------------
The term "Plan of Benefits" shall mean the plan or plans of benefits
adopted by a Participating Employer and to be funded through the Trust, in
<PAGE>
whole or in part. The Plan of Benefits shall be established and maintained
as, and in conformity with the requirements of, the Employee Retirement
Income Security Act of 1974 for employee welfare benefit plans as defined
in Section 3(1) of that Act. The Plan of Benefits shall not include any
benefit which is not a life, sick, accident or other benefit appropriate
for provision by a voluntary employees' beneficiary association pursuant to
Section 501(c)(9) of the Internal Revenue Code and regulations thereunder.
Furthermore, the Plan of Benefits shall not have the effect, in operation,
of discriminating in favor of officers, shareholders or individuals who are
"highly compensated" employees of such Participating Employer within the
meaning of Section 505 of the Internal Revenue Code of 1986, as amended.
The Plan of Benefits at the date of establishment of this Trust is
summarized in Exhibit A.
1.7 Contributions
-------------
The term "Contributions" shall mean the money paid to the Fund by
Participating Employers, including contributions of their Employees, if
any, as required under any Plan of Benefits, and any retrospective rate
credits, dividends, or experience rate refunds from any insurance carrier
which has or may issue a policy or policies of insurance hereunder.
1.8 "ERISA"
-----
The term "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and regulations from time to time in effect
thereunder.
II. TRUSTEES AND DUTIES
------------------------
2.1 There shall be one or more persons or institutions appointed by
the Grantor as Trustee or Trustees. The Trustee (or a co-Trustee) may, but
need not be, a corporate Trustee. If there is more than one Trustee, the
Trustees may allocate specific Trustee responsibilities, obligations and
duties among themselves and may adopt such rules governing their conduct,
including action by less than unanimous vote, as they shall determine. Any
vacancy occasioned by a resignation, removal, or death shall be promptly
filled by the appointment of a successor Trustee by the Grantor.
2.2 The Trustee may be removed by the Grantor, with or without cause,
at any time. In the event the Trustee is to be removed, replaced or
succeeded by action of the Grantor, the Grantor shall notify such Trustee
in writing, and such writing shall be sufficient evidence of the action
taken. The Trustee may resign at any time, provided that no such
resignation shall take effect until the earlier of (i) sixty (60) days from
<PAGE>
the date of delivery of such notice to the Company, or (ii) the appointment
of a successor trustee. Any resignation by the Trustee shall be by
registered or certified mail addressed to the Grantor at its principal
place of business, except that the Grantor may accept a resignation
delivered to it by hand.
2.3 No successor Trustee shall be liable or responsible for any losses
or expenses resulting from or occasioned by any action or failure to act on
the part of the Trustee prior to such successor becoming a Trustee, nor
shall any successor Trustee be required to inquire into or take any notice
of the prior administration of Trust.
2.4 The Grantor may appoint an investment manager or managers to whom
discretion is given to invest any part of the assets of the Fund, and upon
so doing the Trustee shall (a) segregate each such part into a separate
account to be invested by the Trustee upon the direction of the investment
manager, or (b) the Trustee may transfer to such investment manager as
custodian that part of the Fund which is to be invested by the investment
manager. The Trustee shall have no responsibility or liability for the
investment and management of the part of the Fund so committed to
management by an investment manager, as directed by the Grantor. Any
investment manager appointed hereunder shall acknowledge in writing that it
is a fiduciary as defined in Section 3(21) of ERISA with respect to the
assets committed to it, and shall enter into such written investment
management agreement or agreements with the Grantor as the Grantor shall
deem acceptable. A signed copy of any such agreement or agreements shall
be furnished to the Trustee. The Trustee shall be under no duty to
question, or make inquiries as to, any action or direction of any
investment manager as provided herein, or any failure to give directions,
or to review the securities subject to the investment discretion of any
investment manager, or to make any suggestions to an investment manager
with respect to investment and reinvestment of, or disposing of investments
in, any part of the assets of the Trust Fund subject to the investment
discretion of an investment manager, except to the extent required by law.
2.5 The Grantor may, consistent with ERISA and subject to limitations
herein stated, direct the Trustee with respect to individual investments to
be made by it, or the type of investments to be made by the Trustee,
including the limiting of investments to shares of one or more regulated
investment companies, to the common trust fund of one bank or to investment
only, life insurance or other contracts of one or more issuer. Except to
the extent provided under ERISA, the Trustee shall not be liable for losses
occasioned by its compliance with such directions.
<PAGE>
2.6 Whether assets of the Fund are invested by an investment manager
or by the Trustee, the following provisions shall govern the investment of
the assets of the Fund:
(a) The Trustee or the investment manager shall from time to
timeinvest and reinvest the Fund and keep the same invested, in its
sole discretion, without distinction between corpus and income, in
any property, real, personal or mixed, or share or part thereof, or
part interest therein, wherever situated, and whether or not
productive of income, including but not being limited to: bank
accounts of any description; capital, common and preferred stocks;
personal, corporate and governmental obligations, secured or
unsecured; individual or group insurance or annuity or deposit
administration contracts; mortgages, leaseholds, fees and other
interests in realty; common trusts or other collective investments in
any of the above; and trust and participation Certificates, or other
evidences of ownership, part ownership, interest or part interest in
any of the above. Investments and reinvestments hereunder shall not
be restricted in character or type nor shall they be limited to any
amount or type in relation to the amount or type of the Fund as a
whole except and solely to the extent the provisions of ERISA
specifically provide otherwise.
(b) The Trustee and the investment manager may keep such
portion of the Fund in cash or cash balances as the Trustee or
investment manager may deem advisable from time to time, and without
affecting the generality of the foregoing, the investment manager
shall keep such portion of the Fund in cash or cash balances as may
be specified from time to time in a written notification from the
Trustee or Grantor to meet the contemplated cash needs of the Trust.
The Trustee or the investment manager shall not be required to pay
interest on such cash balance or on cash in its hands pending
investment.
(c) For the purpose of investment and reinvestment only, the
Trustee may commingle the assets of the Fund attributable to each
plan comprising the Plan of Benefits. In the event of such
commingling, each plan shall share in the commingled assets,
including any income and gain (or loss) attributable thereto, on a
pro rat a basis.
(d) The investment policy and objectives for the Fund shall be
established and carried out in a manner consistent with ERISA. The
Trustee and the investment manager shall review with the Grantor on a
periodic basis the investment status of the Fund and the policies and
objectives of the Trustee and the investment manager in respect
thereof.
<PAGE>
2.7 The Trustee is authorized and empowered in discretion, in
fiduciary capacity and for the sole interest and benefit of the Fund, to:
(a) sell, exchange, lend (including the lending of securities
to brokers or dealers), convey, transfer or dispose of, and also to
grant options with respect to, any property, whether real or
personal, at any time held by it, and any sale may be made by private
contract or by Public auction, and for cash or upon credit, as the
Trustee or investment manager may deem best, and no person dealing
with the Trustee or investment manager shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency or propriety of any such sale or other transaction:
(b) retain, manage, operate, repair, improve, develop,
preserve, mortgage or lease for any period any real property
interests or rights held by the Trustee or investment manager or by
any corporation organized by it pursuant to this Agreement, upon such
terms and conditions as the Trustee or investment manager deems
proper, either alone or by joining with others, using other trust
assets for any of such purposes if deemed advisable; to modify,
extend, renew or otherwise adjust any or all of the provisions of any
such mortgage or lease, including the waiver of rentals; and to make
provision for the amortization of the investment in~or depreciation
of the value of such property as it may deem advisable;
(c) compromise, compound and settle any debt or obligations due
from third persons to it or to third persons from it and to reduce the
rate of interest on, to extend or otherwise modify, or to foreclose
upon default or otherwise enforce, any such obligation;
(d) vote in person or by proxy on any stocks, bonds or other
securities held by it, and to appoint one or more individuals or
corporations as voting trustees under voting trust agreements and to
delegate to such voting trustees discretion to vote;
(e) exercise any rights appurtenant to any stocks, bonds or
other securities held by it for the conversion thereof into other
stocks, bonds or securities, or to exercise any rights or options to
subscribe for or purchase additional stocks, bonds or other
securities, and to make any and all necessary payments with respect
to any such conversion or exercise;
<PAGE>
(f) join in, dissent from, or oppose, the reorganization,
recapitalization, consolidation, sale or merger of corporations or
property in which the Trustee holds stocks, bonds or other ownership
interest upon such terms and conditions as it may deem wise; to pay
any expenses, assessments or subscriptions in connection therewith and
to accept any securities or property which may be issued upon any such
reorganization, recapitalization, consolidation, sale or merger;
(g) make, execute, acknowledge and deliver any and all deeds,
leases, mortgages, assignments, documents of transfer and conveyance
and any and all other instruments that may be necessary or appropriate
to carry out the powers herein granted:
(h) enforce any right, obligation or claim in its absolute
discretion and in general to protect in any way the interest of the
Fund, either before or after default, with respect to any such right,
obligation or claim, and to abstain from the enforcement of any right,
obligation or claim and to abandon any property in the Fund;
(i) borrow money for the purposes of the Trust in such amount
and upon such terms and conditions as it may deem advisable; and for
any sums so borrowed to issue its promissory note as Trustee or
investment manager and to secure the repayment thereof by mortgaging
or pledging all or any part of the Fund; and no person lending money
to the Trustee or to the investment manager shall be bound to see to
the application of the money lent or to inquire into the validity,
expediency or propriety of any such borrowing;
(j) cause any investment in the Fund to be registered in its
name as Trustee or investment manager, or in the name of its nominee,
or in the name of any other nominee, or to retain any such investment
unregistered or in form permitting transfer by delivery; and to
deposit any investment of the Fund in any depositary, clearing
corporation, or any central system for handling of investments, or
any nominee thereof; provided that the books and records of the
Trustee or investment manager shall at all times show that all such
investments are part of the Fund;
(k) employ suitable agents (including Custodians) and counsel
and to pay their reasonable expenses and compensation from the Fund:
(l) own any contract with an insurance company held in the Fund,
and to exercise any option, privilege or benefit in connection
therewith, including, without limitation, the right to collect and
<PAGE>
receive the proceeds and all dividends or other distributions thereon;
to surrender any such contract for cash; to change the persons to whom
and the manner in which the proceeds of any such contract shall be
paid; to convert any such contract from one form to another; to sell
or assign any such contract; to execute all necessary receipts and
releases to any insurance company; and to compromise or adjust any
claim arising out of any such contract;
(m) in the acquisition, disposition and management of
investments for or under the Trust, acquire and hold any securities
or other property even though the Trustee or investment manager in
its individual or any other fiduciary capacity shall have invested or
may thereafter invest its own or other funds in the same securities
or related property or related securities or other property the
interest, principal or other avails of which may be payable at
different rates or different times or may have different rank or
priority:
(n) lend any securities at any time held by it to brokers or
dealers upon such security as the Trustee or investment manager
determines, and during the term of any such loan to permit the lent
securities to be transferred into the name of and voted by the
borrower or others;
(o) do all acts which it may deem necessary or proper and to
exercise any and all powers under this Agreement under such terms and
conditions as it may deem to be for the best interests of the Fund:
and
(p) do all acts which it may deem necessary or proper and to
exercise any and all powers under this Agreement under such terms and
conditions as it may deem to be for the best interests of the Fund.
Notwithstanding the foregoing, the Trustee and investment manager
shall not have the power to act in a manner which would cause the
disqualification of the Trust and the Plan of Benefits as a voluntary
employees' beneficiary association under Section 501(c)(9) of the Internal
Revenue Code of 1986 as amended.
III. PAYMENT OF PLAN BENEFITS FROM FUND
---------------------------------------
3.1 It shall be the duty of the Trustee to make payments out of the
Fund to such persons, in such manner, at such time and in such amounts as
may be specified in written directions received from time to time by the
Trustee and signed by a duly authorized agent from either the Grant or any
service agent authorized to process claims for benefit payments under any
Plan. All directions of the Grantor or any such service agent shall be in
<PAGE>
writing and signed by a duly authorized agent of the Grantor or the service
agent, as the case may be, and the Trustee shall be fully protected in
making payments out of the Fund in accordance with such directions and
shall have no responsibility whatsoever respecting the application of such
payments. In the event any payments made by the Trustee out of the Fund
are unclaimed, the Trustee shall determine the dispositions of such
payments.
IV. ADMINISTRATION
-------------------
4.1 The benefits specified in the Plan of Benefits shall be provided
through a policy or policies of insurance with one or more insurance
companies or on a self-funded basis, or by a combination of such means, all
as the Grantor may from time to time determine.
4.2 The Trustee may accept assignments of, or purchase out of the
Trust Fund, and maintain a policy or Policies from an insurer or insurers,
which policy or policies may provide Employees, former employees and/or
their dependents or beneficiaries with such of the benefits of the Plan of
Benefits as are to be provided by a policy.
4.3 The Trustee may at the direction of the Grantor enter into a
contract or contracts with an insurer to provide indemnification of the
Fund
in the event of loss on account of benefits payable under the Plan of
Benefits which is in excess of a maximum loss as determined, from time to
time, by the Grantor.
4.4 The Grantor or the Trustee may enter into a contract with an
insurance, service or administrative organization, which contract shall
provide for the manner in which such organization is to receive, review,
process and pay claims for benefits to, or on behalf of, Employees, former
employees, and their dependents or beneficiaries in accordance with any
Plan of Benefits. The Trustee may pay directly any self-funded benefits
payable under the Plan of Benefits, or in lieu thereof, upon requisition
from any service or administrative organization engaged by the Grantor or
the Trustee to administer claims for benefits may advance reasonable sums
from the Fund for use by such organization in payment of future claims.
4.5 The Trustee may exercise all rights or privileges granted to a
policy holder by each policy or other insurance contract held by it or
allowed by the issuer of such policy or contract, and may agree with any
such insurance carrier to any alteration, modification, or amendment of
such policy or contract, and may take any action respecting such policy or
contract or the insurance provided thereunder, which may be necessary or
<PAGE>
advisable, and such insurance carrier shall not be required to inquire into
the authority of the Trustee with regard to any dealings in connection with
any policy or contract.
4.6 The Trustee may cancel any policy or policies or other contract
of insurance which the Trustee has caused to be issued and may purchase in
lieu thereof other like insurance from the same or another insurance
carrier.
4.7 The Trustee shall have the power to receive Participating
Employers' Contributions as agreed from time to time, and shall hold such
monies as part of the Fund for the purposes specified in this Agreement.
4.8 The Trustee, acting in conjunction with a service or
administrative organization referred to in Section 4.4 as appropriate,
shall maintain records indicating the amount contributed by each
Participating Employer and the amount and type of benefits paid to or on
behalf of Employees of a participating Employer.
4.9 In no event shall the Trustee be obliged to collect any
contribution from any Participating Employer.
4.10 The Trustee may maintain or arrange for such assistance as may
be necessary for the proper administration of the Fund, including the
employment of a fund actuary, counsel, auditor, benefits consultant,
benefits administrator, and may pay from the fund the expenses necessary
for proper administration of the Fund.
4.11 No person, firm or corporation dealing with the Trustee shall be
obliged to see to the application of any monies or properties of the Fund
or to see that the terms of this Agreement or any Plan of Benefits have
been complied with, or be obliged to inquire into the necessity or
expediency of any act of the Trustee, and with regard to every instrument
executed by the Trustee, every such person, firm, or corporation relying
thereon, shall be entitled conclusively to assume that:
(a) at the time of the delivery of said instrument, the Trust
herein created was in full force and effect; and
(b) said instrument was executed in accordance with the terms
and conditions of this Trust Agreement; and
(c) the Trustee was duly authorized and empowered to execute
such instrument or direct its execution.
4.12 Any insurance company issuing a policy or contract of insurance
to the Trustee, pursuant hereto, shall have the opportunity, at any
reasonable time, to conduct an audit of all records of the said Trustee, or
<PAGE>
its agents or employees, which pertain to such policy or contract.
4.13 Any insurance company issuing a policy or contract of insurance
hereunder, or organization with which the Trustee contracts for services or
benefits pursuant to this Trust, shall be notified in writing of the
appointment of successor Trustees, or the resignation or removal thereof,
or amendment to this Agreement.
4.14 The Trustee is empowered to construe this Agreement, and to make
rules and regulations consistent therewith dealing with the operation of
this Trust, giving notice of its actions to the Grantor and to any
Participating Employer or insurance company issuing a policy or policies or
organization with which the Trustee contracts for services or benefits
hereunder and which is affected or reasonably may be affected by such
action.
V. FIDUCIARY RESPONSIBILITIES
------------------------------
5.1 The duties and responsibilities of the Trustee shall be to (a)
safe keep and invest and reinvest the Fund (except as such duties may have
been committed to an investment manager), collect all of the income and
proceeds of sale of assets, and keep and maintain full and complete records
of all of the transactions, for the Trust; (b) make payments in accordance
with Article III; (c) perform the duties of administration applicable to
the Trustee in accordance with Article IV; and (d) amend the Agreement,
acting in conjunction with the Grantor.
5.2 The duties and responsibilities of the Grantor shall be to (a)
appoint, remove and replace the Trustee and any successors thereto; (b)
determine whether the benefits specified in the Plan of Benefits shall be
provided through a policy or policies, on a self-funded basis, or by a
combination of such means; (c) appoint an investment manager or managers to
invest any part or all of the assets of the Trust; (d) enter into a
contract with an insurance, service or administrative organization for the
processing of claims for benefits; (e) amend the Agreement, acting in
conjunction with the Trustee; and (f) terminate the Trust, subject to the
terms and conditions set forth herein.
5.3 The duties and responsibilities of each Participating Employer
shall be to (a) adopt and amend in its discretion a Plan of Benefits on
behalf of its Employees and their dependents; (b) contribute to the Fund
for its Employees and their dependents such amounts as are required under
the Plan of Benefits; and (c) terminate participation in the Plan of
Benefits for its own Employees and their dependents.
<PAGE>
5.4 Each person named herein or identified pursuant to procedures
provided in this Agreement as having any fiduciary responsibility for the
maintenance, administration or Operation of the Plan or management of the
Fund shall have sole and exclusive responsibility and authority in the area
or areas committed to him. If more than one person is designated to occupy
a particular position of authority, the persons so designated shall be
jointly responsible for the duties of such position, except that they may
in writing allocate such responsibilities among themselves and/or designate
in writing other persons to carry out such responsibilities (other than
trustee responsibilities), all to the extent permitted under ERISA.
5.5 Except as herein expressly provided to the contrary, all
fiduciary duties and responsibility hereunder shall be several only, and
there shall be no joint fiduciary responsibility or liability.
5.6 No fiduciary guarantees the Fund against investment loss nor the
sufficiency of the Fund to provide all benefits under any Plan of Benefits.
ARTICLE VI. ACCOUNTING
-----------------------
6.1. With respect to the Trust Fund and each Plan, the Trustee shall
keep accurate and detailed accounts of all investments, receipts and
disbursements and other transactions hereunder, and all accounts, books and
records relating thereto shall be open to inspection and audit at all
reasonable times by any person or persons designated by the Grantor.
Within ninety (90) days following the close of each annual accounting
period and within ninety (90) days after the removal or resignation of a
Trustee, the Trustee shall file with the Grantor a written report setting
forth all investments, receipts and disbursements, and other transactions
effected by them during such period, including a description of all
securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or received being shown
separately), and showing all cash, securities and other property held at
the end of such period.
6.2 In case of any disapproval thereof, an audit of such statement
shall be made by an independent public accountant or accountants appointed
by the Grantor (the expense of any such audit to be paid by the Grantor),
unless a corrected statement shall have been rendered to the Grantor and
approved in writing. Upon completion of such audit, the inaccuracies in
such statement so audited, if any, shall be corrected to conform to such
audit and a corrected statement shall be delivered to the Grantor. Any
such corrected statement shall stand approved as the statement of account
<PAGE>
of the Trustee as to all matters stated therein, without further approval.
An approved statement or corrected statement of account shall constitute an
account stated between the Trustee and the Grantor as to all other matters
embraced in said statement, and shall be binding upon all persons and other
entities having an interest in the Fund to the same extent as if the
account of the Trustee had been settled and allowed in a proceeding for
judicial settlement of their accounts in any court of competent
jurisdiction, to which all such persons and Corporations had been made
parties.
6.3 Anything hereinabove to the contrary notwithstanding, an approved
or corrected statement shall not be deemed to relieve the Trustee of any
liability which may be imposed on it for violation of a specific provision
of ERISA or the Internal Revenue Code of 1986, as amended, or to preclude
the Grantor from Commencing an action against the Trustee within such
period as may otherwise be permitted by law in connection with such a
Violation.
VII. SPECIFIC PROVISIONS REGARDING PROVISIONS FOR
--------------------------------------------------
POST RETIREMENT MEDICAL AND LIFE INSURANCE BENEFITS
---------------------------------------------------
7.1 The Grantor has included on Schedule A attached hereto provision
for post-retirement life insurance and medical benefits to be provided in
part pursuant to this Trust created hereunder. Accordingly, the Fund shall
be utilized to provide such benefits either through direct payment of such
benefits to retirees and/or their dependents or beneficiaries, through
payments of premiums on policies which may be utilized to provide such
benefits, or otherwise. Notwithstanding the foregoing, the Grantor and its
subsidiaries and affiliates reserve the right to amend or terminate the
Plan of Benefits at any time, in whole or in part, including without
limitation modifying, eliminating or reducing benefits for present and/or
future retirees and their dependents and/or beneficiaries.
7.2 In funding such benefits hereunder, the Participating Employers
shall not contribute to the Fund for any year any amounts in excess of the
"qualified cost" for such year, reduced by the amount of any after-tax
income for such year. As used herein, the term "qualified cost" shall
include "qualified direct costs" and additions to a "qualified asset
account" for such year in accordance with the provisions of Section 419(c)
of the Internal Revenue Code of 1986, as amended, (the "Code"). In
accordance with Sections 419A(b) and 419A(c) of the Code, no addition to a
"qualified asset account" may be made in excess of the "account limit" for
such year, which is defined in Section 419A(c) of the Code to be the amount
reasonably and actuarially necessary to fund:
<PAGE>
(A) claims incurred but unpaid (as of the close of such year) for
benefits referred to in Section 419A(a) of the Code;
(B) administrative costs with respect to such claims; and
(C) a reserve funded over the working lives of covered employees
and actuarially determined on a level basis (using assumptions that
are reasonable in the aggregate) as necessary for (1) post-retirement
medical benefits to be provided to covered employees (determined on
the basis of current medical costs), or (2) post-retirement ate
insurance benefits to be provided to covered employees.
7.3 (a) No post-retirement medical or life insurance benefits shall
be provided to "Key Employees" under this Trust. If, however the Trust is
amended at some future date to permit post-retirement medical or life
insurance benefits to be provided from this Fund to "Key Employees", then:
(1) a separate account shall be established for any medical
benefits or life insurance benefits provided with respect to such
employee after retirement, and
(2) medical benefits and life insurance benefits provided with
respect to such employee after retirement may be paid only from such
separate account.
(b) Furthermore, any amount attributable to medical benefits
allocated to an account established under paragraph (a) shall be treated as
an annual addition to a defined contribution plan for purposes of Section
415(c)(1)(A) of the Code.
(c) The term "Key Employee" means any employee who, at any time
during the applicable Plan Year or any preceding Plan Year, is or was a Key
Employee within the meaning of Section 416(i) of the Code.
7.4 No reserve may be taken into account for post-retirement medical
or life insurance benefits unless said Plan meets the requirements of
Section 505(b) of the Code with respect to such benefits.
7.5 No post-retirement life insurance benefits may be provided under
this Agreement for any Employee in excess of Fifty Thousand Dollars
($50,000).
7.6 The Trustee shall pay any taxes which become due and owing
against the Fund, including any "unrelated business taxable income" within
the meaning of Section 512 of the Code.
<PAGE>
VIII. MISCELLANEOUS PROVISIONS
-------------------------------
8.1 The Trustee shall be paid such compensation as may be mutually
agreed upon by it and the Grantor, Provided that no officer, director,
stockholder or full-time employee of the Grantor or any Participating
Employer shall receive any compensation for services rendered a Trustee
hereunder. Any investment manager appointed by the Trustee shall be paid
such compensation as may be agreed by the Grantor. All reasonable expenses
of the establishment and administration of the Trust and the Plan of
Benefits, including any compensation payable to the Trustee or any
investment manager, shall be paid from the Trust Fund, unless paid by the
Participating Employers. Such expenses of administration shall include,
but shall not be limited to, expenses of the Trustee in performing its
duties, premiums on policies or contracts purchased or entered into
pursuant to Sections 4.2 and 4.3 herein, expenses incurred under an
administrative services contract or contracts pursuant to Section 4.4
herein, and legal fees and disbursements, whether or not in connection with
any action or suit or proceeding relating to the Trust which is brought by
or against the Trustee; provided, however, that legal fees and
disbursements of the Trustee shall not be paid from the Trust Fund if it is
adjudged in the action, suit or proceeding that the Trustee was guilty of
breach of its fiduciary obligations as prescribed by ERISA.
8.2 No Trustee shall be liable for any act or action pursuant to the
Trust, in good faith taken, performed, or omitted, nor for any act or
action taken, performed or omitted by any insurance carrier or other
concern with which the Trustee contracts for benefits hereunder, nor for
any act or action taken, performed, or omitted by an agent, employee or
attorney selected and retained with reasonable care, nor for any act or
action taken, performed, or omitted by any other Trustee, nor for failure
to act, except for cases in which the Trustee is adjudged to have been
guilty of breach of its fiduciary obligations as prescribed by ERISA.
8.3 In the exercise of its discretionary powers, the Trustee may act
solely upon its own best judgment upon the facts brought to its attention
without liability for errors in judgment, and with complete immunity of
liability for losses, damages, or liabilities sustained by the Trust, a
Participating Employer, or by any Employee or dependent, except for cases
in which the Trustee is adjudged to have been guilty of breach of its
fiduciary obligations as prescribed by ERISA.
8.4 Each fiduciary shall be bonded in an amount Sufficient to meet
the bonding requirements of ERISA. Premiums payable on any such bond may
be charged against the Trust Fund as an expense of administering the Trust.
<PAGE>
8.5 Title to the Fund and its assets shall be vested in the Trustee.
Neither the Grantor nor any Participating Employer shall have any right,
title, or interest in or to the Fund.
8.6 The Fund shall not be subject, in any manner, to anticipation,
alienation, sale, transfer, assignment, pledge, charge or encumbrance, by
any person or entity other than the Trustee or its duly authorized
representatives, and by such Trustee or representatives only to the extent
and for the purposes herein specifically provided, except that any Employee
may assign benefits to which he, or his dependents, may become entitled, to
a health care provider in consideration for services rendered or to be
rendered.
8.7 This Agreement may be amended in any respect, from time to time,
by the Grantor, provided that each amendment shall be duly executed in
writing by the Trustee, and the Grantor. Any amendment which may conflict
with the provisions of the policy or policies or other contracts issued to
or to which the Trustee is a party shall be of no effect unless consented
to in writing by the other party thereto, except that this provision shall
not apply to an amendment providing for the termination of a Policy or
contract. Whenever any amendment is adopted pursuant to this Section, the
Trustee shall provide copies thereof to all of the Participating Employers
and to any insurance company and claim payment facility whose duties,
obligations or contractual requirements are or may be affected by such
Amendment.
8.8 No amendment may be adopted which:
(a) May cause any asset of the Fund to revert to the Grantor, or
any Participating Employer, or be diverted to purposes other than the
exclusive benefit of the Employees, former Employees or their
dependents, and if it is determined that excesses or surpluses exist
as to the Trust Fund, contributions may be suspended until the surplus
has been diminished; or
(b) Shall be in conflict with ERISA.
8.9 This Agreement may be executed in one or more counterparts. The
signature of any party hereto on any counterpart shall be sufficient
evidence of its execution thereof.
8.10 In the event that any provision of this Agreement shall be held
invalid, or illegal for any reason, such invalidity or illegality shall not
affect the remaining provisions of this Agreement, and the provisions held
invalid or illegal shall be considered fully severable and the Agreement
shall be construed and enforced as if said illegal or invalid provision had
never been inserted herein.
<PAGE>
8.11 This Trust is accepted by the Trustee in Connecticut. All
questions of its validity, construction and administration shall be
determined in accordance with the laws of that State, to the extent such
laws are not preempted by any applicable federal law.
8.12 The Grantor and its subsidiaries and affiliates reserve the
right to amend or terminate the Plan of Benefits at any time, in whole or
in part, including without limitation modifying, eliminating or reducing
benefits thereunder for any class of individuals, including without
limitation present and/or future retirees, and their dependents and/or
beneficiaries, otherwise entitled to receive benefits. No provision of
this Agreement shall be construed so as to restrict the rights of the
Grantor to amend or terminate the Plan of Benefits in accordance with the
preceding sentence. In the event that the Plan of Benefits is terminated
with respect to a Participating Employer, the Trustee shall segregate and
hold as a separate fund those assets of the Fund which are attributable to
Contributions made by that Participating Employer and its Employees, and
the earnings thereon, and such funds shall be used for the continuance of
one or more of the benefits of the character herein contemplated for the
benefit of the Employees of such Participating Employer and their
dependents and for the payment of administration expenses attributable
thereto until such separate fund shall be exhausted; or, alternatively,
such separate fund shall be delivered to any successor trust, or plans,
which undertake to provide, either directly or through the purchase of
insurance, life, sickness, accident or other benefits pursuant to criteria
that do not provide for disproportionate benefits to officers, shareholders
or employees of said Participating Employer who are highly compensated
individuals within the meaning of Section 505 of the Internal Revenue Code
of 1986, as amended.
8.13 This Trust shall terminate and all duties and obligations of the
Trustee shall be ended on the earlier of:
(i) The date stated in a written notice from the Grantor to the
Trustee of the Grantor's intent to terminate this Trust, which notice
shall be given at least sixty (60) days prior to the effective date of
such termination; or
(ii) Expiration of twenty-one (21) years after the death of the
last surviving Employee, who was living on the effective date hereof;
provided, however, that if at that time this Trust may continue in
full force and effect without violation of any law, rule or regulation
of the State of Connecticut, then this Trust shall remain in effect
until otherwise terminated or discontinued as provided herein.
<PAGE>
Notwithstanding any provision herein concerning the duration and
termination of the Trust, it shall continue in existence for so long a
period as may be necessary to conclude its affairs. Upon termination of the
Trust, any and all monies or things of value, remaining in the Fund, after
the payment of the expenses of establishing and administering the Trust and
the Plan of Benefits and all benefits payable pursuant to any Plan of
Benefits, shall be used for the continuance of one or more of the benefits,
of the character herein contemplated until the Fund shall be exhausted. In
lieu of termination as herein set forth, the Trustee, upon written
direction of the Grantor, shall after all obligations of the Trust have
been satisfied, deliver over all surplus money and property in the Fund to
any successor trust, or plans, which undertake to provide (either directly
or through the purchase of insurance) life, sick, accident, or other
benefits pursuant to criteria that do not provide for disproportionate
benefits to officers, shareholders or employees of the Grantor or any
Participating Employer who are highly compensated individuals within the
meaning of Section 505 of the Internal Revenue Code of 1986, as amended.
8.14 Subject to the provisions for the termination of this Trust, the
Trust shall be irrevocable and under no circumstances shall any monies or
property properly paid into the Fund, or any part of the Fund, or the
earnings thereon be recoverable by, or payable to, the Grantor or any
Participating Employer, other than by payment of reasonable and necessary
expenses incurred on behalf of the Trust, nor shall any of the same inure
to the benefit of any private shareholder or individual or otherwise be
used for or diverted to purposes other than for the exclusive benefit of
the Employees and their dependents hereunder and payment of the expenses of
administering this Trust and the Plan of Benefits.
8.15 Wherever used herein, any words used in the masculine shall be
construed as though they were used in the feminine in all cases where they
would so apply and any words used in the singular or the plural shall be
construed as though they were used in the plural or the singular, as the
case may be, in all cases where they would so apply.
8.16 This Agreement and Declaration of Trust shall be binding on the
parties hereto, their successors and assigns.
<PAGE>
IN WITNESS WHEREOF, the Grantor and the Trustee have caused their
corporate hands and seals to be hereunto affixed as of the date first above
written.
Attest: CONNECTICUT NATURAL GAS
CORPORATION
Patricia P. Ulias By Frank H. Livingston
------------------------------- ----------------------------
Patricia P. Ulias Its Vice Pres Administration
Attest: THE CONNECTICUT BANK AND TRUST
COMPANY
Richard C. Smoragiewicz By Ronald T. Gaylord
------------------------------- ----------------------------
Richard C. Smoragiewicz Its Assistant Vice President
STATE OF CONNECTICUT )
: ss. December 28, 1987
COUNTY OF HARTFORD )
Personally appeared Frank H. Livingston of CONNECTICUT NATURAL GAS
CORPORATION, signer and sealer of the foregoing instrument and
acknowledged and the same to be his free act and deed as such officer, and
the free act and deed of said corporation, before me.
Lynn C. Blackwell
---------------------------
Notary Public
My Commission Expires Mar. 31, 1991
STATE OF CONNECTICUT )
: ss. December 28, 1987
COUNTY OF HARTFORD )
Personally appeared Ronald T. Gaylord of THE CONNECTICUT BANK AND
TRUST
-----------------
COMPANY, N. A. signer and sealer of the foregoing instrument and
acknowledged the same to be his free act and deed as such officer, and the
free act and deed of said bank, before me.
Lynn C. Blackwell
----------------------------
Notary Public
My Commission Expires Mar. 31, 1991<PAGE>
EXHIBIT A
---------
PLAN OF BENEFITS
The Participating Employers shall fund a portion of their liability
for post-retirement medical and life insurance benefits under the
Connecticut Natural Gas Corporation Group Insured Plan through the Fund
created hereunder, in accordance with such Plan and the group insurance
policies issued thereunder.
CONNECTICUT NATURAL GAS CORPORATION
By Frank H. Livingston
-------------------------------
Its Vice Pres Administration
Date: 12/28/87
<PAGE>
FIRST AMENDMENT TO
AGREEMENT AND DECLARATION OF TRUST
CONNECTICUT NATURAL GAS CORPORATION
EMPLOYEE BENEFIT TRUST
THIS AMENDMENT is made and entered into this 2nd day of
December, 1993, by and between CONNECTICUT NATURAL GAS CORPORATION, a
Connecticut corporation with its principal office in Hartford, Connecticut
(hereinafter referred to as the "Grantor") and FLEET BANK, N.A., a bank
with
trust powers having a principal place of business in Hartford, Connecticut
(hereinafter referred to as the "Trustee"),
W I T N E S S E T H :
WHEREAS, by Agreement dated December 28, 1987 (the "Agreement"), the
Grantor and the Trustee entered into a certain Agreement and Declaration of
Trust known as the Connecticut Natural Gas Corporation Employee Benefit
Trust; and
WHEREAS, the parties reserved the right to amend the Agreement in
Section 8.7 thereof; and
WHEREAS, the Grantor wishes to amend the Agreement in the particulars
set forth below;
NOW, THEREFORE, the Grantor and the Trustee agree as follows:
1. Section 1.2 of the Agreement is amended to read as follows:
"1.2 Purpose of Trust. The purpose of the Trust is to
----------------
provide certain medical and life insurance benefits to current non-
union retirees (and prospective non-union retirees, upon retirement),
and their dependents or beneficiaries, under the Connecticut Natural
Gas Corporation Group Insured Plan, in the event of death, illness, or
expenses for various types of medical care and treatment; and
accordingly, the purpose of the Trust is not to provide benefits for
active employees."
2. Section 1.4 of the Agreement is amended to read as follows:
"1.4 Participating Employees. The term "Participating
-----------------------
Employee," as used herein, shall mean any retiree previously employed
by a Participating Employer who is within a classification of
retirees covered by the Plan of Benefits; provided, that no such
classification may be selected by a Participating Employer which will
have the effect, in operation, of restricting eligibility for
<PAGE>
benefits, or of providing a disproportionate amount of benefits, to
officers, shareholders or to former employees of such Participating
Employer who are "highly compensated" individuals within the meaning
of Section 505 of the Internal Revenue Code of 1986, as amended."
3. Section 1.6 is amended to read as follows:
"1.6 Plan of Benefits. The term "Plan of Benefits"
----------------
shall mean the Connecticut Natural Gas Corporation Group Insured Plan
as it relates to non-union retirees; it being the intent of the
Grantor that this Trust shall be utilized to provide certain medical
and life insurance benefits to non-union retirees (and prospective
non-union retirees, upon retirement) and their dependents and
beneficiaries under the Connecticut Natural Gas Corporation Group
Insured Plan. The Plan of Benefits shall be established and
maintained as, and in conformity with the requirements of, the
Employee Retirement Income Security Act of 1974 for employee welfare
benefit plans as defined in Section 3(1) of that Act. The Plan of
Benefits shall not include any benefit to be provided hereunder which
is not a life, sick, accident or other benefit appropriate for
provision by a voluntary employees' beneficiary association pursuant
to Section 501(c)(9) of the Internal Revenue Code and regulations
thereunder. Furthermore, the Plan of Benefits shall not have the
effect, in operation, of discriminating in favor of officers,
shareholders or individuals who are "highly compensated" employees or
former employees of such Participating Employer within the meaning of
Section 505 of the Internal Revenue Code of 1986, as amended. The
Plan of Benefits provided hereunder is summarized in Exhibit A."
4. The following new Section 1.9 is added to the Agreement:
"1.9 "Employee". The term "Employee" shall mean any
--------
person who is or was employed by a Participating Employer."
5. Paragraph (c) of Section 2.6 is deleted.
6. Section 7.1 is amended by the deletion of the word "Schedule" and
the substitution of the word "Exhibit" in lieu thereof.
7. Exhibit A attached to the Agreement is replaced by Exhibit A
attached to this Amendment.
8. Except as hereinabove modified and amended, the Agreement shall
remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the Grantor and the Trustee have caused their
corporate hands and seals to be hereunto affixed as of the date first above
written.
Attest: CONNECTICUT NATURAL GAS CORPORATION
Mark W. Dudzik By Frank H. Livingston
--------------------------- ---------------------------------
Its Vice President
Attest: FLEET BANK, N.A.
Debbi-Sue Clark By Ronald J. Gaylord
--------------------------- ----------------------------------
Its Assistant Vice President
<PAGE>
EXHIBIT A
TO
CONNECTICUT NATURAL GAS CORPORATION EMPLOYEE BENEFIT TRUST
----------------------------------------------------------
PLAN OF BENEFITS
This is an amended version of Exhibit A to the Connecticut Natural
Gas Corporation Employee Benefit Trust originally executed December 28,
1987.
The Participating Employers shall fund a portion of their liability
for post-retirement medical and life insurance benefits for current non-
union retirees and prospective non-union retirees under the Connecticut
Natural Gas Corporation Group Insured Plan through the Fund created
hereunder, in accordance with such plan and the group insurance policies
issued thereunder.
CONNECTICUT NATURAL GAS CORPORATION
BY Frank H. Livingston
--------------------------------
Its Vice President
Date:<PAGE>
AGREEMENT AND DECLARATION OF TRUST
CONNECTICUT NATURAL GAS CORPORATION
UNION EMPLOYEE BENEFIT TRUST
TABLE OF CONTENTS
-----------------
Page
----
I. ESTABLISHMENT AND PURPOSE OF TRUST. DEFINITIONS 1
II. TRUSTEES AND DUTIES 3
III. PAYMENT OF PLAN BENEFITS FROM FUND 8
IV. ADMINISTRATION 8
V. FIDUCIARY RESPONSIBILITIES 10
VI. ACCOUNTING 12
VII. SPECIFIC PROVISIONS REGARDING PROVISION FOR POST
RETIREMENT MEDICAL AND LIFE INSURANCE BENEFITS 13
VIII. MISCELLANEOUS PROVISIONS 14
EXHIBIT A. PLAN OF BENEFITS
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
CONNECTICUT NATURAL GAS CORPORATION
UNION EMPLOYEE BENEFIT TRUST
This Agreement and Declaration of Trust is made and entered into this
2nd day of December, 1993, by and between CONNECTICUT NATURAL
GAS CORPORATION, a Connecticut corporation with its principal office in
Hartford, Connecticut (hereinafter referred to as "Grantor") and FLEET
BANK, N.A., a bank with trust powers having a principal office in Hartford,
Connecticut (hereinafter referred to as the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Grantor provides certain employee group medical and group
life insurance benefits under its group insured plan for union employees;
and
WHEREAS, the Grantor currently permits certain medical and life
insurance coverage under said plan to continue after retirement, under the
terms and conditions set forth in said plan and the insurance contracts
incorporated therein; and
WHEREAS, the Grantor by appropriate corporate action has duly
authorized the creation of a trust fund to receive and hold contributions
made for the purpose of funding the cost of such benefits for current union
retirees and prospective union retirees, in whole or in part; and
WHEREAS, the Grantor intends that this Trust, together with any such
plans or programs, will qualify as a voluntary employees' beneficiary
association under Section 501(c)(9) of the Internal Revenue Code of 1986,
as amended.
NOW, THEREFORE, in consideration of the premises, it is agreed as
follows:
ARTICLE I
ESTABLISHMENT AND PURPOSES OF TRUST. DEFINITIONS
-------------------------------------------------
1.1 Establishment and Name of Trust. There is hereby
-------------------------------
established a Trust, to be known as the CONNECTICUT NATURAL GAS CORPORATION
UNION EMPLOYEE BENEFIT TRUST, hereinafter referred to as the Trust. The
corpus of the Trust shall consist of such sums of money and other property
acceptable to the Trustee as shall from time to time be paid or delivered
to the Trustee and such income and gains thereon as may be realized from
time to time, less the payments which at the time of reference shall have
been made by the Trustee as authorized herein, such corpus being
hereinafter referred to as the Fund.
<PAGE>
1.2 Purpose of Trust. The purpose of the Trust is to
----------------
provide certain medical and life insurance benefits to current Union
Retirees (and prospective Union Retirees, upon retirement), and their
dependents or beneficiaries, under the Connecticut Natural Gas Corporation
Group Insured Plan for Union Employees, in the event of death, illness or
expenses for various types of medical care and treatment; and accordingly,
the purpose of the Trust is not to provide benefits for active employees.
1.3 Participating Employers. The term "Participating
-----------------------
Employer" shall mean the Grantor and any subsidiary or affiliated
corporation of the Grantor which has adopted and maintains one or more of
the plans comprising the Plan of Benefits.
1.4 Participating Employees. The term "Participating
-----------------------
Employee", as used herein, shall mean any Union Retiree previously employed
by a Participating Employer who is within a classification of retirees
covered by the Plan of Benefits; provided, that no such classification may
be selected by a Participating Employer which will have the effect, in
operation, of restricting eligibility for benefits, or of providing a dis-
proportionate amount of benefits, to officers, shareholders or to former
employees of such Participating Employer who are "highly compensated" indi-
viduals within the meaning of Section 505 of the Internal Revenue Code of
1986, as amended.
1.5 Trustee. The term "Trustee" shall mean the Trustee or
-------
Trustees appointed by the Grantor, as hereinafter provided and serving from
time to time hereunder.
1.6 Plan of Benefits. The term "Plan of Benefits" shall
----------------
mean the Connecticut Natural Gas Corporation Group Insured Plan for Union
Employees as it relates to Union Retirees; it being the intent of the
Grantor that this Trust shall be utilized to provide certain medical and
life insurance benefits to Union Retirees (and prospective Union Retirees,
upon retirement) and their dependents and beneficiaries under the
Connecticut Natural Gas Corporation Group Insured Plan for Union Employees.
The Plan of Benefits shall be established and maintained as, and in con-
formity with the requirements of, the Employee Retirement Income Security
Act of 1974 for employee welfare benefit plans as defined in Section 3(1)
of that Act. The Plan of Benefits shall not include any benefit to be
provided hereunder which is not a life, sick, accident or other benefit
appropriate for provision by a voluntary employees' beneficiary association
pursuant to Section 501(c)(9) of the Internal Revenue Code and regulations
thereunder. Furthermore, the Plan of Benefits shall not have the effect,
in operation, of discriminating in favor of officers, shareholders or
individuals who are "highly compensated" employees or former employees of
such Participating Employer within the meaning of Section 505 of the
Internal Revenue Code of 1986, as amended. The Plan of Benefits provided
hereunder is summarized in Exhibit A.
<PAGE>
<PAGE>
1.7 Contributions. The term "Contributions" shall mean the
-------------
money paid to the Fund by Participating Employers, including contributions
of their Employees, if any, as required under any Plan of Benefits, and any
retrospective rate credits, dividends, or experience rate refunds from any
insurance carrier which has or may issue a policy or policies of insurance
hereunder.
1.8 "ERISA". The term "ERISA" shall mean the Employee
-----
Retirement Income Security Act of 1974, as amended, and regulations from
time to time in effect thereunder.
1.9 "Employee". The term "Employee" shall mean any person
--------
who is or was employed by a Participating Employer.
1.10 Union Employee. The term "Union Employee" shall mean
--------------
an Employee whose employment with a Participating Employer is subject to
the terms and conditions of a collective bargaining agreement between the
Employer and employee representatives.
1.11 Union Retiree. The term "Union Retiree" shall mean a
-------------
former Employee who has retired from the service of a Participating
Employer whose employment with a Participating Employer was subject to the
terms and conditions of a collective bargaining agreement between the
Employer and employee representative.
ARTICLE II
TRUSTEES AND DUTIES
-------------------
2.1 There shall be one or more persons or institutions appointed by
the Grantor as Trustee or Trustees. The Trustee (or a co-Trustee) may, but
need to be, a corporate Trustee. If there is more than one Trustee, the
Trustees may allocate specific Trustee responsibilities, obligations and
duties among themselves and may adopt such rules governing their conduct,
including action by less than unanimous vote, as they shall determine. Any
vacancy occasioned by a resignation, removal or death shall be promptly
filled by the appointment of a successor Trustee by the Grantor.
2.2 The Trustee may be removed by the Grantor, with or without cause,
at any time. In the event the Trustee is to be removed, replaced or
succeeded by action of the Grantor, the Grantor shall notify such Trustee
in writing, and such writing shall be sufficient evidence of the action
taken. The Trustee may resign at any time, provided that no such
resignation shall take effect until the earlier of (i) sixty (60) days from
the date of delivery of such notice to the Company, or (ii) the appointment
of a successor trustee. Any resignation by the Trustee shall be by
registered or certified mail addressed to the Grantor at its principal
place of business, except that the Grantor may accept a resignation
delivered to it by hand.
<PAGE>
2.3 No successor Trustee shall be liable or responsible for any
losses or expenses resulting from or occasioned by any action or failure to
act on the part of the Trustee prior to such successor becoming a Trustee,
nor shall any successor Trustee be required to inquire into or take any
notice of the prior administration of the Trust.
2.4 The Grantor may appoint an investment manager or managers to whom
discretion is given to invest any part of the assets of the Fund, and upon
so doing the Trustee shall (a) segregate each such part into a separate
account to be invested by the Trustee upon the direction of the investment
manager, or (b) the Trustee may transfer to such investment manager as
custodian that part of the Fund which is to be invested by the investment
manager. The Trustee shall have no responsibility or liability for the
investment and management of the part of the Fund so committed to
management by an investment manager, as directed by the Grantor. Any
investment manager appointed hereunder shall acknowledge in writing that it
is a fiduciary as defined in Section 3(21) of ERISA with respect to the
assets committed to it, and shall enter into such written investment
management agreement or agreements with the Grantor as the Grantor shall
deem acceptable. A signed copy of any such agreement or agreements shall
be furnished to the Trustee. The Trustee shall be under no duty to
question, or make inquiries as to, any action or direction of any
investment manager as provided herein, or any failure to give directions,
or to review the securities subject to the investment discretion of any
investment manager, or to make any suggestions to an investment manager
with respect to investment and reinvestment of, or disposing of investments
in, any part of the assets of the Trust Fund subject to the investment
discretion of an investment manager, except to the extent required by law.
2.5 The Grantor may, consistent with ERISA and subject to limitations
herein stated, direct the Trustee with respect to individual investments to
be made by it, or the type of investments to be made by the Trustee,
including the limiting of investments to shares by one or more regulated
investment companies, to the common trust fund of one bank or the
investment only, life insurance or other contracts of one or more issuer.
Except to the extent provided under ERISA, the Trustee shall not be liable
for losses occasioned by its compliance with such directions.
2.6 Whether assets of the Fund are investment by an investment
manager or by the Trustee, the following provisions shall govern the
investment of the assets of the Fund:
<PAGE>
(a) The Trustee or the investment manager shall from time to
time invest and reinvest the Fund and keep the same invested, in its sole
discretion, without distinction between corpus and income, in any property,
real, personal or mixed, or share or part thereof, or part interest
therein, wherever situated, and whether or not productive of income,
including but not being limited to: bank accounts of any description;
capital, common and preferred stocks; personal, corporate and governmental
obligations, secured or unsecured; individual or group insurance or annuity
or deposit administration contracts; mortgages, leaseholds, fees and other
interests in realty; common trusts or other collective investments in any
of the above; and trust and participation certificates, or other evidences
of ownership, part ownership, interest or part interest in any of the
above. Investments and reinvestments hereunder shall not be restricted in
character or type nor shall they be limited to any amount or type in
relation to the amount or type of the Fund as a whole except and solely to
the extent the provisions of ERISA specifically provide otherwise.
(b) The Trustee and the investment manager may keep such portion
of the Fund in cash or cash balances as the Trustee or investment manager
may deem advisable from time to time, and without affecting the generality
of the foregoing, the investment manager shall keep such portion of the
Fund in cash or cash balances as may be specified from time to time in a
written notification from the Trustee or Grantor to meet the contemplated
cash needs of the Trust. The Trustee or the investment manager shall not
be required to pay interest on such cash balance or on cash in its hands
pending investment.
(c) The investment policy and objectives for the Fund shall be
established and carried out in a manner consistent with ERISA. The Trustee
and the investment manager shall review with the Grantor on a periodic
basis the investment status of the Fund and the policies and objectives of
the Trustee and the investment manager in respect thereof.
2.7 The Trustee is authorized and empowered in discretion, in
fiduciary capacity and for the sole interest and benefit of the Fund, to:
(a) sell, exchange, lend (including the lending of securities to
brokers or dealers), convey, transfer or dispose of, and also to grant
options with respect to, any property, whether real or personal, at any
time held by it, and any sale may be made by private contract or by public
auction, and for cash or upon credit, as the Trustee or investment manager
may deem best, and no person dealing with the Trustee or investment manager
shall be bound to see to the application of the purchase money or to
inquire into the validity, expediency or propriety of any such sale or
other transaction;
<PAGE>
(b) retain, manage, operate, repair, improve, develop, preserve,
mortgage or lease for any period any real property interests or rights held
by the Trustee or investment manager or by any corporation organized by it
pursuant to this Agreement, upon such terms and conditions as the Trustee
or investment manager deems proper, either alone or by joining with others,
using other trust assets for any of such purposes if deemed advisable; to
modify, extend, renew or otherwise adjust any or all of the provisions of
any such mortgage or lease, including the waiver of rentals; and to make
provision for the amortization of the investment in or depreciation of the
value of such property as it may deem advisable;
(c) compromise, compound and settle any debt or obligations due
from third persons to it or to third persons from it and to reduce the rate
of interest on, to extend or otherwise modify, or to foreclose upon default
or otherwise enforce, any such obligation;
(d) vote in person or by proxy on any stocks, bonds or other
securities held by it, and to appoint one or more individuals or
corporations as voting trustees under voting trust agreements and to
delegate to such voting trustees discretion to vote;
(e) exercise any rights appurtenant to any stocks, bonds or
other securities held by it for the conversion thereof into other stocks,
bonds or securities, or to exercise any rights or options to subscribe for
or purchase additional stocks, bonds or other securities, and to make any
and all necessary payments with respect to any such conversion or exercise;
(f) join in, dissent from, or oppose, the reorganization,
recapitalization, consolidation, sale or merger of corporations or property
in which the Trustee holds stocks, bonds or other ownership interest upon
such terms and conditions as it may deem wise; to pay any expenses,
assessments or subscriptions in connection therewith and to accept any
securities or property which may be issued upon any such reorganization,
recapitalization, consolidation, sale or merger;
(g) make, execute, acknowledge and deliver any and all deeds,
leases, mortgages, assignments, documents of transfer and conveyance and
any and all other instruments that may be necessary or appropriate to carry
out the powers herein granted;
(h) enforce any right, obligation or claim in its absolute
discretion and in general to protect in any way the interest of the Fund,
either before or after default, with respect to any such right, obligation
or claim, and to abstain from the enforcement of any right, obligation or
claim and to abandon any property in the Fund;
<PAGE>
(i) borrow money for the purposes of the Trust in such amount
and upon such terms and conditions as it may deem advisable; and for any
sums so borrowed to issue its promissory note as Trustee or investment
manager and to secure the repayment thereof by mortgaging or pledging all
or any part of the Fund; and no person lending money to the Trustee or to
the investment manager shall be bound to see to the application of the
money lent to or inquire into the validity, expediency or propriety of any
such borrowing;
(j) cause any investment in the Fund to be registered in its
name as Trustee or investment manager, or in the name of its nominee, or in
the name of any other nominee, or to retain any such investment
unregistered or in form permitting transfer by delivery; and to deposit any
investment of the Fund in any depositary, clearing corporation, or any
central system for handling of investments, or any nominee thereof;
provided that the books and records of the Trustee or investment manager
shall at all times show that all such investments are part of the Fund;
(k) employ suitable agents (including custodians) and counsel
and to pay their reasonable expenses and compensation from the Fund;
(l) own any contract with an insurance company held in the Fund,
and to exercise any option, privilege or benefit in connection therewith,
including, without limitation, the right to collect and receive the
proceeds and all dividends or other distributions thereon; to surrender any
such contract for cash; to change the persons to whom and the manner in
which the proceeds of any such contract shall be paid; to convert any such
contract from one form to another; to sell or assign any such contract; to
execute all necessary receipts and releases to any insurance company; and
to compromise or adjust any claim arising out of any such contract;
(m) in the acquisition, disposition and management of
investments for or under the Trust, acquire and hold any securities or
other property even though the Trustee or investment manager in its
individual or any other fiduciary capacity shall have invested or may
thereafter invest its own or other funds in the same securities or related
property or related securities or other property the interest, principal or
other avails of which may be payable at different rates or different times
or may have different rank or priority;
(n) lend any securities at any time held by it to brokers or
dealers upon such security as the Trustee or investment manager determines,
and during the term of any such loan to permit the lent securities to be
transferred into the name of and voted by the borrower or others; and
<PAGE>
(o) do all acts which it may deem necessary or proper and to
exercise any and all powers under this Agreement under such terms and
conditions as it may deem to be for the best interests of the Fund.
Notwithstanding the foregoing, the Trustee and investment manager
shall not have the power to act in a manner which would cause the
disqualification of the Trust and the Plan of Benefits as a voluntary
employees' beneficiary association under Section 501(c)(9) of the Internal
Revenue Code of 1986, as amended.
ARTICLE III
PAYMENT OF PLAN BENEFITS FROM FUND
----------------------------------
3.1 It shall be the duty of the Trustee to make payments out of the
Fund to such persons, in such manner, at such time and in such amounts as
may be specified in written directions received from time to time by the
Trustee and signed by a duly authorized agent from either the Grantor or
any service agent authorized to process claims for benefit payments under
any Plan. All directions of the Grantor or any such service agent shall be
in writing and signed by a duly authorized agent of the Grantor or the
service agent, as the case may be, and the Trustee shall be fully protected
in making payments out of the Fund in accordance with such directions and
shall have no responsibility whatsoever respecting the application of such
payments. In the event any payments made by the Trustee out of the Fund
are unclaimed, the Trustee shall determine the dispositions of such
payments.
ARTICLE IV
ADMINISTRATION
--------------
4.1 The benefits specified in the Plan of Benefits shall be provided
through a policy or policies of insurance with one or more insurance
companies or on a self-funded basis, or by a combination of such means, all
as the Grantor may from time to time determine.
4.2 The Trustee may accept assignments of, or purchase out of the
Trust Fund, and maintain a policy or policies from an insurer or insurers,
which policy or policies may provide Employees, former employees and/or
their dependents or beneficiaries with such of the benefits of the Plan of
Benefits as are to be provided by a policy.
4.3 The Trustee may at the direction of the Grantor enter into a
contract or contracts with an insurer to provide indemnification of the
Fund in the event of loss on account of benefits payable under the Plan of
<PAGE>
Benefits which is in excess of a maximum loss as determined, from time to
time, by the Grantor.
4.4 The Grantor or the Trustee may enter into a contract with an
insurance, service or administrative organization, which contract shall
provide for the manner in which such organization is to receive, review,
process and pay claims for benefits to, or on behalf of, Employees, former
employees, and their dependents or beneficiaries in accordance with any
Plan of Benefits. The Trustee may pay directly any self-funded benefits
payable under the Plan of Benefits, or in lieu thereof, upon requisition
from any service or administrative organization engaged by the Grantor or
the Trustee to administer claims for benefits may advance reasonable sums
from the Fund for use by such organization in payment of future claims.
4.5 The Trustee may exercise all rights or privileges granted to a
policy holder by each policy or other insurance contract held by it or
allowed by the issuer of such policy or contract, and may agree with any
such insurance carrier to any alteration, modification, or amendment of
such policy or contract, and may take any action respecting such policy or
contract or the insurance provided thereunder, which may be necessary or
advisable, and such insurance carrier shall not be required to inquire into
the authority of the Trustee with regard to any dealings in connection with
any policy or contract.
4.6 The Trustee may cancel any policy or policies or other contract
of insurance which the Trustee has caused to be issued and may purchase in
lieu thereof other like insurance from the same or another insurance
carrier.
4.7 The Trustee shall have the power to receive Participating
Employers' Contributions as agreed from time to time, and shall hold such
monies as part of the Fund for the purposes specified in this Agreement.
4.8 The Trustee, acting in conjunction with a service or
administrative organization referred to in Section 4.4 as appropriate,
shall maintain records indicating the amount contributed by each
Participating Employer and the amount and type of benefits paid to or on
behalf of Employees of a Participating Employer.
4.9 In no event shall the Trustee be obliged to collect any
contribution from any Participating Employer.
4.10 The Trustee may maintain or arrange for such assistance as may
be necessary for the proper administration of the Fund, including the
employment of a fund actuary, counsel, auditor, benefits consultant,
benefits administrator, and may pay from the Fund the expenses necessary
for proper administration of the Fund.
<PAGE>
4.11 No person, firm or corporation dealing with the Trustee shall be
obliged to see to the application of any monies or properties of the Fund
or to see that the terms of this Agreement or any Plan of Benefits have
been complied with, or be obliged to inquire into the necessity or
expediency of any act of the Trustee, and with regard to every instrument
executed by the Trustee, every such person, firm, or corporation relying
thereon, shall be entitled conclusively to assume that:
(a) at the time of the delivery of said instrument, the Trust
herein created was in full force and effect; and
(b) said instrument was executed in accordance with the terms
and conditions of this Trust Agreement; and
(c) the Trustee was duly authorized and empowered to execute
such instrument or direct its execution.
4.12 Any insurance company issuing a policy or contract of insurance
to the Trustee, pursuant hereto, shall have the opportunity, at any
reasonable time, to conduct an audit of all records of the said Trustee, or
its agents or employees, which pertain to such policy or contract.
4.13 Any insurance company issuing a policy or contract of insurance
hereunder, or organization with which the Trustee contracts for services or
benefits pursuant to this Trust, shall be notified in writing of the
appointment of successor Trustees, or the resignation or removal thereof,
or amendment to this Agreement.
4.14 The Trustee is empowered to construe this Agreement, and to make
rules and regulations consistent therewith dealing with the operation of
this Trust, giving notice of its actions to the Grantor and to any
Participating Employer or insurance company issuing a policy or policies or
organization with which the Trustee contracts for services or benefits
hereunder and which is affected or reasonably may be affected by such
action.
ARTICLE V
FIDUCIARY RESPONSIBILITY
------------------------
5.1 The duties and responsibilities of the Trustee shall be to (a)
safekeep and invest and reinvest the Fund (except as such duties may have
been committed to an investment manager), collect all of the income and
proceeds of sale of assets, and keep and maintain full and complete records
of all of the transactions for the Trust; (b) make payments in accordance
with Article III; (c) perform the duties of administration applicable to
<PAGE>
the Trustee in accordance with Article IV; and (d) amend the Agreement,
acting in conjunction with the Grantor.
5.2 The duties and responsibilities of the Grantor shall be to (a)
appoint, remove and replace the Trustee and any successors thereto; (b)
determine whether the benefits specified in the Plan of Benefits shall be
provided through a policy or policies, on a self-funded basis, or by a
combination of such means; (c) appoint an investment manager or managers to
invest any part or all of the assets of the Trust; (d) enter into a
contract with an insurance, service or administrative organization for the
processing of claims for benefits; (e) amend the Agreement, acting in
conjunction with the Trustee; and (f) terminate the Trust, subject to the
terms and conditions set forth herein.
5.3 The duties and responsibilities of each Participating Employer
shall be to (a) adopt and amend in its discretion a Plan of Benefits on
behalf of its Employees and their dependents; (b) contribute to the Fund
for its Employees and their dependents such amounts as are required under
the Plan of Benefits; and (c) terminate participation in the Plan of
Benefits for its own Employees and their dependents.
5.4 Each person named herein or identified pursuant to procedures
provided in this Agreement as having any fiduciary responsibility for the
maintenance, administration or operation of the Plan or management of the
Fund shall have sole and exclusive responsibility and authority in the area
or areas committed to him. If more than one person is designated to occupy
a particular position of authority, the persons so designated shall be
jointly responsible for the duties of such position, except that they may
in writing allocate such responsibilities among themselves and/or designate
in writing other persons to carry out such responsibilities (other than
trustee responsibilities), all to the extent permitted under ERISA.
5.5 Except as herein expressly provided to the contrary, all
fiduciary duties and responsibilities hereunder shall be several only, and
there shall be no joint fiduciary responsibility or liability.
5.6 No fiduciary guarantees to the Fund against investment loss nor
the sufficiency of the Fund to provide all benefits under any Plan of
Benefits.
ARTICLE VI
ACCOUNTING
----------
6.1 With respect to the Trust Fund and each Plan, the Trustee shall
keep accurate and detailed accounts of all investments, receipts and
<PAGE>
disbursements and other transactions hereunder, and all accounts, books and
records relating thereto shall be open to inspection and audit at all
reasonable times by any person or persons designated by the Grantor.
Within ninety (90) days following the close of each annual accounting
period and within ninety (90) days after the removal or resignation of a
Trustee, the Trustee shall file with the Grantor a written report setting
forth all investments, receipts and disbursements, and other transactions
effected by them during such period, including a description of all
securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or received being shown
separately), and showing all cash, securities and other property held at
the end of such period.
6.2 In case of any disapproval thereof, an audit of such statement
shall be made by an independent public accountant or accountants appointed
by the Grantor (the expense of any such audit to be paid by the Grantor),
unless a corrected statement shall have been rendered to the Grantor and
approved in writing. Upon completion of such audit, the inaccuracies in
such statement so audited, if any, shall be corrected to conform to such
audit and a corrected statement shall be delivered to the Grantor. Any
such corrected statement shall stand approved as the statement of account
of the Trustee as to all matters stated therein, without further approval.
An approved statement or corrected statement of account shall constitute an
account stated between the Trustee and the Grantor as to all other matters
embraced in said statement, and shall be binding upon all persons and other
entities having an interest in the Fund to the same extent as of the
account of the Trustee had been settled and allowed in a proceeding for
judicial settlement of their accounts in any court of competent
jurisdiction, to which all such persons and corporations had been made
parties.
6.3 Anything hereinabove to the contrary notwithstanding, an approved
or corrected statement shall not be deemed to relieve the Trustee of any
liability which may be imposed on it for violation of a specific provision
of ERISA or the Internal Revenue Code of 1986, as amended, or to preclude
the Grantor from commencing an action against the Trustee within such
period as may otherwise be permitted by law in connection with such a
violation.
ARTICLE VII
SPECIFIC PROVISIONS REGARDING PROVISIONS FOR
--------------------------------------------
POST RETIREMENT MEDICAL AND LIFE INSURANCE BENEFITS
---------------------------------------------------
7.1 The Grantor has included on Exhibit A attached hereto provision
for post-retirement life insurance and medical benefits for union retirees
and prospective union retirees to be provided pursuant to this Trust
<PAGE>
created hereunder. Accordingly, the Fund shall be utilized to provide such
benefits either through direct payment of such benefits to union retirees
and/or their dependents or beneficiaries, through payments of premiums on
policies which may be utilized to provide such benefits, or otherwise.
Notwithstanding the foregoing, the Grantor and its subsidiaries and
affiliates reserve the right to amend or terminate the Plan of Benefits at
any time, in whole or in part, including without limitation modifying,
eliminating or reducing benefits for present and/or future retirees and
their dependents and/or beneficiaries.
7.2 (a) No post-retirement medical or life insurance benefits shall
be provided to "Key Employees" under this Trust. If, however, the Trust is
amended at some future date to permit post-retirement medical or life
insurance benefits to be provided from this Fund to "Key Employees", then:
(1) a separate account shall be established for any medical
benefits or life insurance benefits provided with respect to such
employee after retirement, and
(2) medical benefits and life insurance benefits provided
with respect to such employee after retirement may be paid only from
such separate account.
(b) Furthermore, any amount attributable to medical benefits
allocated to an account established under paragraph (a) shall be treated as
an annual addition to a defined contribution plan for purposes of Section
415(c)(1)(A) of the Code.
(c) The term "Key Employee" means any employee who, at any time
during the applicable Plan Year or any preceding Plan Year, is or was a Key
Employee within the meaning of Section 416(i) of the Code.
7.3 The Trustee shall pay any taxes which become due and owing
against the Fund, including any "unrelated business taxable income" within
the meaning of Section 512 of the Code.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
------------------------
8.1 The Trustee shall be paid such compensation as may be mutually
agreed upon by it and the Grantor, provided that no officer, director,
stockholder or full-time employee of the Grantor or any Participating
Employer shall receive any compensation for services rendered a Trustee
hereunder. Any investment manager appointed by the Grantor shall be paid
such compensation as may be agreed by the Grantor. All reasonable expenses
of the establishment and administration of the Trust and the Plan of
<PAGE>
Benefits, including any compensation payable to the Trustee or any
investment manager, shall be paid from the Trust Fund, unless paid by the
Participating Employers. Such expenses of administration shall include,
but shall not be limited to, expenses of the Trustee in performing its
duties, premiums on policies or contracts purchased or entered into
pursuant to Sections 4.2 and 4.3 herein, expenses incurred under an
administrative services contract or contracts pursuant to Section 4.4
herein, and legal fees and disbursements, whether or not in connection with
any action or suit or proceeding relating to the Trust which is brought by
or against the Trustee; provided, however, that legal fees and
disbursements of the Trustee shall not be paid from the Trust Fund if it is
adjudged in the action, suit or proceeding that the Trustee was guilty of
breach of its fiduciary obligations as prescribed by ERISA.
8.2 No Trustee shall be liable for any act or action pursuant to the
Trust, in good faith taken, performed, or omitted, nor for any act or
action taken, performed or omitted by any insurance carrier or other
concern with which the Trustee contracts for benefits hereunder, nor for
any act or action taken, performed, or omitted by an agent, employee or
attorney selected and retained with reasonable care, nor for any act or
action taken, performed, or omitted by any other Trustee, nor for failure
to act, except for cases in which the Trustee is adjudged to have been
guilty of breach of its fiduciary obligations as prescribed by ERISA.
8.3 In the exercise of its discretionary powers, the Trustee may act
solely upon its own best judgment upon the facts brought to its attention
without liability for errors in judgment, and with complete immunity of
liability for losses, damages, or liabilities sustained by the Trust, a
Participating Employer, or by any Employee or dependent, except for cases
in which the Trustee is adjudged to have been guilty of breach of its
fiduciary obligations as prescribed by ERISA.
8.4 Each fiduciary shall be bonded in an amount sufficient to meet
the bonding requirements of ERISA. Premiums paid on any such bond may be
charged against the Trust Fund as an expense of administering the Trust.
8.5 Title to the Fund and its assets shall be vested in the Trustee.
Neither the Grantor nor any Participating Employer shall have any right,
title or interest in or to the Fund.
8.6 The Fund shall not be subject, in any manner, to anticipation,
alienation, sale, transfer, assignment, pledge, charge or encumbrance, by
any person or entity other than the Trustee or its duly authorized
representatives, and by such Trustee or representatives only to the extent
and for the purposes herein specifically provided, except that any Employer
<PAGE>
may assign benefits to which he, or his dependents, may become entitled, to
a health care provider in consideration for services rendered or to be
rendered.
8.7 This Agreement may be amended in any respect, from time to time,
by the Grantor, provided that each amendment shall be duly executed in
writing by the Trustee, and the Grantor. Any amendment which may conflict
with the provisions of the policy or policies or other contracts issued to
or to which the Trustee is a party shall be of no effect unless consented
to in writing by the other party thereto, except that this provision shall
not apply to an amendment providing for the termination of a Policy or
contract. Whenever any amendment is adopted pursuant to this Section, the
Trustee shall provide copies thereof to all of the Participating Employers
and to any insurance company and claim payment facility whose duties,
obligations or contractual requirements are or may be affected by such
Amendment.
8.8 No amendment may be adopted which:
(a) May cause any asset of the Fund to revert to the Grantor, or
any Participating Employer, or be diverted to purposes other than the
exclusive benefit of the Employees, former Employees or their dependents,
and if it is determined that excesses or surpluses exist as to the Trust
Fund, contributions may be suspended until the surplus has been diminished;
or
(b) Shall be in conflict with ERISA.
8.9 This Agreement may be executed in one or more counterparts. The
signature of any party hereto on any counterpart shall be sufficient
evidence of its execution thereof.
8.10 In the event that any provision of this Agreement shall be held
invalid, or illegal for any reason, such invalidity or illegality shall not
affect the remaining provisions of this Agreement, and the provisions held
invalid or illegal shall be considered fully severable and the Agreement
shall be construed and enforced as if said illegal or invalid provision had
never been inserted herein.
8.11 This Trust is accepted by the Trustee in Connecticut. All
questions of its validity, construction and administration shall be
determined in accordance with the laws of that State, to the extent such
laws are not preempted by any applicable federal law.
8.12 The Grantor and its subsidiaries and affiliates reserve the
right to amend or terminate the Plan of Benefits at any time, in whole or
in part, including without limitation modifying, eliminating or reducing
benefits thereunder for any class of individuals, including without
limitation present and/or future retirees, and their dependents and/or
<PAGE>
beneficiaries, otherwise entitled to receive benefits. No provision of
this Agreement shall be construed so as to restrict the rights of the
Grantor to amend or terminate the Plan of Benefits in accordance with the
preceding sentence. In the event that the Plan of Benefits is terminated
with respect to a Participating Employer, the Trustee shall segregate and
hold as a separate fund those assets of the Fund which are attributable to
Contributions made by that Participating Employer and its Employees, and
the earnings thereon, and such funds shall be used for the continuance of
one or more of the benefits of the character herein contemplated for the
benefit of the Employees of such Participating Employer and their
dependents and for the payment of administration expenses attributable
thereto until such separate fund shall be exhausted; or, alternatively,
such separate fund shall be delivered to any successor trust, or plans,
which undertake to provide, either directly or through the purchase of
insurance, life, sickness, accident or other benefits pursuant to criteria
that do not provide for disproportionate benefits to officers, shareholders
or employees of said Participating Employer who are highly compensated
individuals within the meaning of Section 505 of the Internal Revenue Code
of 1986, as amended.
8.13 This Trust shall terminate and all duties and obligations of the
Trustee shall be ended on the earlier of:
(i) The date stated in a written notice from the Grantor to
the Trustee of the Grantor's intent to terminate this Trust, which
notice shall be given at least sixty (60) days prior to the effective
date of such termination; or
(ii) Expiration of twenty-one (21) years after the death of
the last surviving Employee, who was living on the effective date
hereof; provided, however, that if at that time this Trust may
continue in full force and effect without violation of any law, rule
or regulation of the State of Connecticut, then this Trust shall
remain in effect until otherwise terminated or discontinued as
provided herein.
Notwithstanding any provision herein concerning the duration and
termination of the Trust, it shall continue in existence for so long a
period as may be necessary to conduct its affairs. Upon termination of the
Trust, any and all monies or things of value, remaining in the Fund, after
the payment of the expenses of administering the Trust and the Plan of
Benefits and all benefits payable pursuant to any Plan of Benefits, shall
be used for the continuance of one or more of the benefits, of the
character herein contemplated until the Fund shall be exhausted. In lieu
of termination as herein set forth, the Trustee, upon written direction of
the Grantor, shall after all obligations of the Trust have been satisfied,
<PAGE>
deliver over all surplus money and property in the Fund to any successor
trust, or plans, which undertake to provide (either directly or through the
purchase of insurance) life, sick, accident, or other benefits pursuant to
criteria that do not provide for disproportionate benefits to officers,
stockholders or employees of the Grantor or any Participating Employer who
are highly compensated individuals within the meaning of Section 505 of the
Internal Revenue Code of 1986, as amended.
8.14 Subject to the provisions for the termination of this Trust, the
Trust shall be irrevocable and under no circumstances shall any monies or
property properly paid into the Fund, or any part of the Fund, or the
earnings thereon be recoverable by, or payable to, the Grantor or any
Participating Employer, other than by payment of reasonable and necessary
expenses incurred on behalf of the Trust, nor shall any of the same inure
to the benefit of any private shareholder or individual or otherwise be
used for or diverted to purposes other than for the exclusive benefit of
the Employees and their dependents hereunder and payment of the expenses of
administering this Trust and the Plan of Benefits.
8.15 Wherever used herein, any words used in the masculine shall be
construed as though they were used in the feminine in all cases where they
would so apply and any words used in the singular or the plural shall be
construed as though they were used in the plural or the singular, as the
case may be, in all cases where they would so apply.
8.16 This Agreement and Declaration of Trust shall be binding on the
parties hereto, their successors and assigns.
<PAGE>
In Witness Whereof, the Grantor and the Trustee have caused their
corporate hands and seals to be hereunto affixed as of the date first
written above.
Attest: CONNECTICUT NATURAL GAS CORPORATION
Mark W. Dudzik By Frank H. Livingston
-------------------------- -----------------------------------
Its Vice President
Attest: FLEET BANK, N.A.
Debbi-Sue Clark By Ronald T. Gaylord
-------------------------- -----------------------------------
Its Assistant Vice President
STATE OF CONNECTICUT )
) ss. Hartford December 2, 1993
COUNTY OF HARTFORD )
Personally appeared, Frank H. Livingston,
_________________________ of CONNECTICUT NATURAL GAS CORPORATION, signer
and sealer of the foregoing instrument and acknowledged the same to be his
free act and deed as such officer, and the free act and deed of said
corporation, before me.
Barbara Z. Reick
------------------------------------------
Notary Public
Commissioner of the Superior Court
Barbara Z. Reick
Notary Public
My Commission Expires Mar. 31, 1994
STATE OF CONNECTICUT )
) ss. Hartford January 3, 1994
COUNTY OF HARTFORD )
Personally appeared, Ronald T. Gaylord,
Asst. Vice President of FLEET BANK, N.A., signer and sealer of the
foregoing instrument and acknowledged the same to be his free act and deed
as such officer, and the free act and deed of said bank, before me.
Frances A. Maslona
Notary Public
Frances A. Maslona
Notary Public
My Commission Expires March 31, 1994
<PAGE>
EXHIBIT A
TO
CONNECTICUT NATURAL GAS CORPORATION
UNION EMPLOYEE BENEFIT TRUST
----------------------------
PLAN OF BENEFITS
The Participating Employers shall fund a portion of their liability
for post-retirement medical and life insurance benefits for current union
retirees and prospective union retirees under the Connecticut Natural Gas
Corporation Group Insured Plan through the Fund created hereunder, in
accordance with such Plan and the group insurance policies issued
thereunder.
CONNECTICUT NATURAL GAS CORPORATION
By Frank H. Livingston
--------------------------------
Its Vice President
Date: 12/2/93
<PAGE>
CNG ANNUAL INCENTIVE PLAN
WHAT IS THE CNG ANNUAL INCENTIVE PLAN?
The Annual Incentive Plan (Plan) is a short-term (one-year) variable pay
plan that provide cash compensation awards for achieving performance under
the Plan. The Plan is an important component of a participants total
compensation program. The purpose of the Plan is to:
* Provide an opportunity to align executives' and key employees'
interest and performance with the interests and objectives of the
organization, its ratepayers and its shareholders;
* Motivate and reward plan participants for the attainment of major
business and individual performance initiatives; and,
* Assist in attracting and retaining key employees.
ELIGIBILITY
The Plan covers Officers of the Corporation and ENI and internal directors
and managers designated for participation due to the nature of their
responsibilities and the potential to significantly impact company
performance.
PLAN DESIGN AND AWARD CRITERIA
This is a Target Award Plan. Under a Target Award plan, awards are based
upon the meeting of pre-determined performance criteria. If the
performance criteria (or "targets") are satisfactorily met, the
pre-determined Target Award level will be paid.
PERFORMANCE CRITERIA/MEASURES:
The Plan is designed to motivate participants to perform as a group in
achieving corporate performance measures and to achieve individual
performance measures. Each year target performance levels are established
for a number of Corporate Objectives. Officers also negotiate Individual
Planned Achievements which are important to company success. Performance
measures which have been used are:
INDIVIDUAL
CORPORATE PLANNED
OBJECTIVES (1994) ACHIEVEMENT
------------------------------- ----------------------------
Gross Margin Department operating costs
Controllable Expenses Payroll and Staffing
Operating Effectiveness: Operating Efficiencies
-Customer Telephone Wait Individual Initiatives
-Appointment Scheduling (unplanned opportunities)
-Service Satisfaction Survey
-New Load Growth
-Cost of Gas
-New Service Installation Time
<PAGE>
Both Corporate Objectives and Individual Planned Achievements are weighted
based upon the relative importance of each objective. Non-officers
establish objectives with their supervisor.
PERFORMANCE LEVELS
Both Corporate objectives and Individual Planned Achievements will have
performance measures set at three levels:
Threshold (80%) This is the minimal level of acceptable performance.
Failing to achieve this level under the overall plan will
result in no award.
Target (100%) This is the level of performance which is expected to be
achieved under the plan. This is set at both a
challenging but achievable level.
Maximum (120%) This level is typically a stretch level of performance.
If this level is exceeded, credit is given at the 120%
level.
Performance measures for each Corporate Objective and Planned Achievement
is pre-defined at the 80%, 100%, and 120% level.
TARGET AWARD LEVELS
A participants target award will be based on their base salary times a
target award percentage based on their position, level in management, and
the degree to which they can directly impact company results. For example,
the target award level for a participant with a base salary of $100,000 at
a 15% target award percentage is:
$100,000 x 15% = $15,000
DETERMINATION OF AWARD PAYOUTS
A participants award payout is based upon a combination of Corporate
Performance and Individual Performance. First, Corporate Performance must
be achieved at the Threshold Level (80%) for any awards to be paid under
the plan. Assuming the 80% Corporate level is met, an individual must also
meet the 80% Planned Achievement level to receive an award. Assuming that
individual threshold is met, an award is determined as shown in the
following examples (assume a $15,000 target award level):
<TABLE>
<CAPTION>
Corporate Individual Overall Target Final
Result x Result = Result x Award = Payout
---------- ---------- -------- -------- ----------
<C> <C> <C> <C> <C>
100% 100% 100% $15,000 $15,000
80% 110% 88% $15,000 $13,200
120% 90% 108% $15,000 $16,200
120% 120% 144% $15,000 $21,600
80% 80% 64% $15,000 $ 9,600
</TABLE>
<PAGE>
TYPE OF PAYOUT AND TAX TREATMENT
Annual Incentive Plan awards are paid in cash and are taxable as ordinary
income in the year received. Tax withholdings will be made for Federal
Income Taxes, State Income Taxes, Social Security Taxes, and Medicare
Taxes.
PLAN YEAR
The Plan will be operated on a fiscal year basis.
PARTIAL YEARS SERVICE
A participant who is new to the plan and is in the plan for only part of
the year will have the award pro-rated. Any participant leaving the
company before the Plan year ends will not receive an award.
ADMINISTRATION ON THE PLAN
The Plan is administered by the CEO under the direction of the Compensation
Committee and the Board of Directors. Corporate Objectives and Performance
Levels will be approved by the Committee as will the approval of final
payouts based upon plan results.
OTHER CONDITIONS
The Plan shall be administered and executed in a manner that does not
compromise the Company's long-term or short-term commitment to high
customer satisfaction or system-wide safety.
DISCLAIMER
Participation in the plan does not constitute any promise of continued
employment or other rights.
<PAGE>
SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS
----------------------------------------------
SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS, hereinafter "Agreement
and Release", made as of this 29th day of November by and between
Connecticut Natural Gas Corporation (the "Company") and Donato P. Lauria
("Lauria").
WHEREAS, Lauria has been an employee of the Company since June 19,
1970, and
WHEREAS, the Company and Lauria, hereinafter referred to from time to
time as the "parties" to this Agreement and Release, wish to mutually
terminate their relationship and all prior agreements and understandings
between them, and to settle and forever resolve any and all disputes,
differences, and claims which may exist between them except as specified
herein, without either party admitting any of the claim of the other party,
or in any way admitting any liability to the other party;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties have agreed and hereby agree as follows:
1. Lauria's employment with the Company has been terminated effective
October 31, 1993.
2. The Company, in consideration of the waiver and compromise of any
and all claimed contract and other alleged rights, including without
limitation rights under the Company's benefit packages and personnel
policies, and the release of all claims except as provided herein, shall
pay salary for 72 weeks with payment being made in eighteen equal monthly
payments commencing November, 1993. Payment will go to his estate in the
event of death.
3. The Company will pay Lauria a lump sum amount of $5,800 to offset
expenses to be incurred regarding Lauria's TRASOP distribution, payment to
be made within 10 days after delivery of the fully executed agreement as
referred to in #18.
4. Any payments that might have been due under the 1994 and 1995
distributions under the Restricted Stock Plan are rescinded in accordance
with the plan document.<PAGE>
5. Effective October 31, 1993, the medical, dental and vision coverages
cease. The Company will make available, in accordance with COBRA, for 18
months, those same medical, vision, and dental benefits retroactive to
November 1, 1993 if Lauria elects coverage within the prescribed election
period. The cost for such coverage is 102% of the Company's premium cost,
payable by Lauria. However, the Company will reimburse Lauria for said
cost, on a monthly basis along with the payments made in 2 above, for the
lesser of 18 months or until Lauria accepts other employment and is
eligible for such benefits. All other life, long-term disability, savings
plan, pension plan, sickness benefits, vacation, and holiday and other
benefits and services available to active employees are not available for
continuation and will be discontinued effective October 31, 1993. This
Agreement does not affect and is not a waiver of any rights or benefits
Lauria or his heirs are currently entitled to under the pension plan,
savings plan, COBRA, LTD insurance and life insurance conversion rights, or
the rights accruing under this Agreement, or a waiver of any rights or
benefits under the pension and/or savings plans which may become available
to him at some future date as a former employee with benefits accrued under
the plan.
6. Lauria will have the right to exercise options available to an
officer at time of termination regarding the continuation of split dollar
life insurance or surrendering of the contracts under which he is covered.
Lauria will be paid his cash surrender values should he surrender the
contracts.
7. The Company shall offer two outplacement consulting firms to
Lauria, from which he may select the offered service program of one firm.
The Company will provide this service at its expense until Lauria is
offered and accepts other employment suitable to his educational
background, work experience and skills. Lauria shall have until June 1,
1994 to elect one of the programs.
8. Lauria will return his Company provided vehicle upon executing this
agreement. The Company will make available to Lauria the purchase of his
company assigned vehicle. The sales price will be the lesser of the
remaining book value or market value. Such election must be made and
payment received by January 1, 1994. Lauria will be paid a lump sum to rent
a vehicle of comparable value to the present company car for a period of
two months.
<PAGE>
9. Should any person or business with whom Lauria seeks employment
contact the Company for a reference regarding Lauria, the Company will
adhere to its existing policy of only confirming his employment and
describing his responsibilities which he performed during his period of
employment by the Company. Furthermore, Lauria agrees that he will not make
any public statement which is derogatory of the Company or any of its
officers or employees. The Company will not make reference to the
circumstances regarding his termination.
10. Lauria, on behalf of himself and his heirs, executors,
administrators and assigns, hereby remises, releases, and forever
discharges the Company, and its affiliates, including but not limited to,
Connecticut Natural Gas Corporation, their Board of Directors and any
member of former member thereof, its employees and any former employee
thereof, their agents and consultants, from any and all rights, claims,
demands, controversies, damages, actions, causes of action, suits,
judgments, promises, administrative claims or actions, sums or money,
executions and liabilities of every kind and character whatsoever, in law
or in equity, including but not limited to any and all claims or demands
arising out of Lauria's employment by the Company and any alleged
employment agreement or understanding with the Company including any rights
under Company's personnel policies, which Lauria and his heir, executors,
administrators, or assigns ever had, or now possess, or hereafter can,
shall or may have against the Company, and its affiliates, including but
not limited to Connecticut Natural Gas Corporation, their Board of
Directors and any member or former member thereof, their employee or any
former employee thereof, their agents, and consultants; and all such
rights, claims, demands, controversies, damages, actions, causes of action,
suits, judgments, promises, administrative claims or actions, sums of
money, execution and liabilities of any and every kind and character
whatsoever, in law or in equity, as aforesaid, are hereby remised released,
satisfied, terminated, and forever discharged by Lauria on behalf of
himself and his heirs, executors, administrators and assigns, including but
not limited to, any claims under Title Vll of the Civil Rights Act of 1964
,as amended, the Age Discrimination in Employment Act, S.1981 of the Civil
Rights Act of 1866, as amended, the Equal Pay Act of 1963, the
Rehabilitation Act of 1973, the Americans with Disabilities Act, as such
laws may have been amended from time to time, and any other state, local,
or federal equal employment opportunity or labor law statute, regulation,
or ordinance, including but not limited to Conn. Gen. State S.46a-60 et
seq., up to and including the date of this agreement and except as
otherwise specified in this agreement.<PAGE>
<PAGE>
11. The Company agrees to indemnify Lauria to the extent permitted or
required by Section 33-320a of the Connecticut General Statutes and the
Company's Directors and Officers Liability insurance policy.
12. Lauria represents and agrees that he will not disclose the terms,
amount and fact of this Agreement and Release and shall keep this Agreement
completely confidential except that he may discuss these matters with his
immediate family, his attorney, and financial advisors to insure compliance
with Federal or State laws (i.e. taxes, unemployment compensation or unless
required by compulsory law including but not limited to litigation or
matters pertaining to the dissolution of marriage, provided they agree to
keep these matters confidential and not disclose them to
13. This Agreement and~Release contains the whole understanding of the
parties and supersedes all prior oral and written representations and
agreements (including without limitation employee handbooks, policies,
etc.) between the parties and Lauria and any Company officer, director or
employee or former officer, director or employee, staff members, agent,
designee, or consultant as to the subject matter hereof, and may not be
varied except in writing executed by all parties.
14. All agreements, documents or instruments that are binding on
either party and are in conflict with any of the terms or provisions of
this Agreement and Release are hereby modified and amended, without the
requirement of any formal action to so modify or amend, to the same extent
as if such agreements, documents or instruments were formally modified or
amended in accordance with the requirements contained therein for making
such modifications or amendments and no further action needs to be taken to
so modify or amend them.
15. This Agreement and Release shall be construed, and all of the
rights, powers and liabilities of the parties hereunder shall be
determined, in accordance with the laws of the State of Connecticut.
16. This Agreement and Release shall be executed in at least two
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement and Release to
produce or account for more than one counterpart.
<PAGE>
17. The Company informs Lauria that he has a period of at least
twenty-one (21) days to consider this Separation Agreement and Release
before signing it. He also has a seven day period after it is signed to
revoke it.
18. When this Separation Agreement and Release is signed by both
parties, Lauria shall take possession of this original and it shall remain
in Lauria's possession and control for a period of not less than seven (7)
days. After at least seven (7) days from the signing have passed, but only
upon Lauria delivering the fully executed original of this Separation
Agreement and Release to the Company, will the provisions of this agreement
be effective.
19. Lauria agrees that he has been provided this document and has had
the opportunity to review it with counsel (if he so chooses) and enters
into this Separation Agreement and Release voluntarily, of his own free
will and without coercion or undue influence. For a period of seven days
following the execution of this agreement, Lauria may revoke this
Separation Agreement and Release. This Separation Agreement and Release
shall not become effective or enforceable until the revocation period has
expired.
PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
Date: 11/29/93
----------------------------
Accepted and Agree:
By: Donato P. Lauria
----------------------------
Date: 11/29/93
----------------------------
For the Company:
By: Frank H. Livingston
----------------------------
Its: Vice President
----------------------------
<PAGE>
<PAGE>
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
Dated as of October 14, 1994
By and Between
ENERGY NETWORKS, INC.
and
THE BANK OF NOVA SCOTIA
--------------------------------------------------------
$13,767,123
CONNECTICUT DEVELOPMENT AUTHORITY
Industrial Revenue Variable Rate Demand Bonds
Capitol District Energy Center Project
Series 1986 and Series 1988
<PAGE>
TABLE OF CONTENTS
(Not Part of Agreement)
PAGE
ARTICLE I. Definitions . . . . . . . . . . . . . . . . . . . 2
1.1. Definitions. . . . . . . . . . . . . . . . 2
1.2. Use of Defined Terms . . . . . . . . . . . 20
1.3. Cross-References . . . . . . . . . . . . . 20
1.4. Accounting and Financial Determinations . 20
1.5. General Provisions Relating to Definitions 21
ARTICLE II. Issuance of Letter of Credit; Fees . . . . . . . 21
2.1. Amount and Terms of Letter of Credit . . . 21
2.2. Drawing Fees . . . . . . . . . . . . . . . 21
2.3. Additional Payments . . . . . . . . . . . 22
2.4. Letter of Credit Fee . . . . . . . . . . . 22
ARTICLE III. Agreement to Repay Letter of Credit Drawings;
Pledge of Bonds . . . . . . . . . . . . . . . . 22
3.1. Reimbursement . . . . . . . . . . . . . . 22
3.2. Pledge of Bonds . . . . . . . . . . . . . 23
3.3. Credit For Amount Paid on Bonds . . . . . 23
3.4. Setoff . . . . . . . . . . . . . . . . 23
3.5. Computation of Interest; Place of Payment 23
ARTICLE IV. Character of Obligations . . . . . . . . . . . . 24
4.1. Company's Obligations . . . . . . . . . . 24
ARTICLE V. Covenants . . . . . . . . . . . . . . . . 25
5.1. Certain Affirmative Covenants . . . . . . . 25
5.1.1. Compliance with Agreements . . . . 25
5.1.2. Financial Statements . . . . . . . 25
5.1.3. Notice of Default, Litigation, etc. 26
5.1.4. Corporate Existence . . . . . . . . 27
5.1.5. Maintenance of Property . . . . . . 27
5.1.6. Books and Records; Inspection . . . 28
5.1.7. Compliance with Laws . . . . . . . 28
5.1.8. Payment of Taxes, etc. . . . . . . 28
5.1.9 Insurance and Condemnation . . . . 28
<PAGE>
- 2 -
5.1.10. Future Agreements . . . . . . . . . 30
5.1.11. ERISA Notices . . . . . . . . . . . 30
5.1.12. Environmental Compliance . . . . . 30
5.2. Certain Negative Covenants . . . . . . . . . 31
5.2.1. Indebtedness . . . . . . . . . . . 32
5.2.2. Liens . . . . . . . . . . . . . . . 32
5.2.3. Consolidated Tangible Net Worth . . 32
5.2.4. Investments . . . . . . . . . . . . 32
5.2.5. Restricted Payments . . . . . . . . 32
5.2.6. Mergers; Acquisitions;
Sales of Property . . . . . . . . 33
5.2.7. Modification, etc. of Certain Agreements
and Governing Documents . . . . . 34
5.2.8. Transactions with Affiliates . . . 34
5.2.9. Equity Interests . . . . . . . . . 34
5.2.10. Restrictive or Inconsistent
Agreements . . . . . . . . . . . 34
5.2.11. Leases . . . . . . . . . . . . . . 35
5.2.12. ERISA Compliance . . . . . . . . . 35
ARTICLE VI. Events of Default . . . . . . . . . . . . . . . . 35
ARTICLE VII. Indemnification . . . . . . . . . . . . . . . . . 40
7.1. Indemnification . . . . . . . . . . . . . . 40
7.2. Limitation on Indemnity Obligation . . . . . 41
ARTICLE VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . 41
8.1. Amendments . . . . . . . . . . . . . . . . 41
8.2. Expenses . . . . . . . . . . . . . . . . . 41
8.3. Set-Off . . . . . . . . . . . . . . . . . 42
8.4. Binding Effect; Assignment . . . . . . . . 42
8.5. Notices . . . . . . . . . . . . . . . . . 42
8.6. Satisfaction Requirement . . . . . . . . . 42
8.7. Survival . . . . . . . . . . . . . . . . . 43
8.8. Severability . . . . . . . . . . . . . . . 43
8.9. Headings . . . . . . . . . . . . . . . . . 43
8.10. Counterparts; Entire Agreement . . . . . . 43
8.11. CHOICE OF LAW . . . . . . . . . . . . . . 43
8.12. SERVICE OF PROCESS . . . . . . . . . . . . 43
8.13. Further Assurances . . . . . . . . . . . . 44
8.14. WAIVER OF JURY TRIAL . . . . . . . . . . . 44
- 3 -
<PAGE>
SCHEDULE I CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT AND
ISSUANCE OF LETTER OF CREDIT . . . . . . . . . . 47
1.1. Existing Letter of Credit Facility . . . 47
1.2. Loan Documents . . . . . . . . . . . . . 47
1.3. Bond Documents; Operative Documents . . 47
1.4. Default; Event of Default . . . . . . . 47
1.5. Representations and Warranties . . . . . 47
1.6. Officer's Certificate . . . . . . . . . 48
1.7. Opinions of Counsel to Company . . . . . 48
1.8. Corporate Action by Company . . . . . . 48
1.9. Corporate Actions Previously Taken
by Company, Trustee and Authority . . 48
1.10. Confirmations or Updates . . . . . . . . 48
1.11. Lien Search Reports . . . . . . . . . . 49
1.12. UCC-3 Termination Statements . . . . . . 49
1.13. Mortgage Discharges; Fixture Filings . . 49
1.14. Financials . . . . . . . . . . . . . . . 49
1.15. Costs and Expenses . . . . . . . . . . . 49
1.16. Insurance Certificates . . . . . . . . . 49
1.17. Materially Adverse Effect . . . . . . . 49
1.18. Corporate and Legal Proceedings . . . . 49
SCHEDULE II REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 50
2.1. Organization and Qualification . . . . . 50
2.2. Power, Authority . . . . . . . . . . . . 50
2.3. Validity, etc. . . . . . . . . . . . . . 50
2.4. Financial Statements . . . . . . . . . . 51
2.5. Materially Adverse Effect . . . . . . . 51
2.6. Actions Pending . . . . . . . . . . . . 51
2.7. Taxes . . . . . . . . . . . . . . . . . 51
2.8. Conflicting Agreements and Other
Matters . . . . . . . . . . . . . . . 52
2.9. Ownership of Properties, Liens . . . . 52
2.10. Other Representations and Warranties . . 52
2.11. Labor Controversies . . . . . . . . . . 52
2.12. Compliance with ERISA . . . . . . . . . 52
2.13. Environmental Matters . . . . . . . . . 53
2.14. Operative Documents . . . . . . . . . . 54
2.15. Accuracy of Information . . . . . . . . 55
<PAGE>
- 4 -
SCHEDULE III DISCLOSURE SCHEDULE
Section 2.1 Subsidiaries
Section 2.6 Litigation
Section 2.9 Real Property
Section 2.13 Environmental Matters
Section 2.14 Supply, Sale and Distribution
Contracts
Section 5.2.1 Existing Indebtedness
Section 5.2.2 Existing Liens
Section 5.2.10 Other Instruments
ANNEX I Irrevocable Letter of Credit
ANNEX II Pledge and Security Agreement
<PAGE>
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated as of October 14,
1994, between ENERGY NETWORKS, INC., a corporation organized and existing
under the laws of the State of Connecticut (the "COMPANY"), and THE BANK OF
NOVA SCOTIA (the "BANK").
WHEREAS, the Connecticut Development Authority (the "AUTHORITY")
issued its Industrial Revenue Variable Rate Demand Bonds (Capitol District
Energy Center Project - 1986 Series) (the "SERIES 1986 BONDS") in the
original aggregate principal amount of Eleven Million Dollars ($11,000,000)
pursuant to an Indenture of Trust, dated as of December 1, 1986 (the
"ORIGINAL INDENTURE"), from the Authority to The First National Bank of
Boston, as trustee (the "TRUSTEE");
WHEREAS, the Series 1986 Bonds were sold to finance the construction
and installation of approximately 20,000 linear feet of pipeline and related
equipment and materials for a local heating and cooling system (the
"PROJECT") pursuant to the provisions of a Loan Agreement, dated as of
December 1, 1986 (the "ORIGINAL LOAN AGREEMENT"), between the Authority and
the Company;
WHEREAS, the Authority issued its Industrial Revenue Variable Rate
Demand Bonds (Capitol District Energy Center Project - 1988 Series) (the
"SERIES 1988 BONDS") in the original aggregate principal amount of Five
Million Three Hundred Thousand Dollars ($5,300,000) pursuant to the Original
Indenture, as supplemented by the First Supplemental Indenture, dated as of
March 1, 1988 (the "FIRST SUPPLEMENTAL INDENTURE"), between the Authority
and the Trustee;
WHEREAS, the Series 1988 Bonds were sold to finance certain
additional costs relating to the construction of the Project;
WHEREAS, the Company has requested that the Bank issue an irrevocable
standby letter of credit in the form of ANNEX I attached hereto in favor of
the Trustee; and
WHEREAS, subject to the terms and conditions set forth below, the
Bank has agreed to issue an irrevocable standby letter of credit in the form
of ANNEX I attached hereto in favor of the Trustee;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
<PAGE>
- 2 -
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. When used in this Agreement, the
following capitalized terms shall have the following meanings, except where
the context otherwise requires:
"A DRAWING" means a drawing under the Letter of Credit in respect of
the payment of the portion of the Purchase Price corresponding to principal
of the Bonds.
"ACQUISITION" means any transaction, or any series of related
transactions, in which the Company or any of its Subsidiaries (in one
transaction or as the most recent transaction in a series of transactions)
(i) acquires any business or all or substantially all of the Property of any
Person or any division or business unit thereof, whether through purchase of
assets, merger or otherwise or (ii) directly or indirectly acquires control
of at least a majority of any class of Capital Stock of any Person.
"ADDITIONAL BONDS" means any additional bonds authorized and issued
by the Authority pursuant to the Indenture on a parity with the Series 1986
Bonds and the Series 1988 Bonds.
"ADVEST" means Advest, Inc.
"AETNA" means Aetna Life Insurance Company.
"AETNA AGREEMENTS" means, collectively, (i) the Steam and Chilled
Water Supply Agreement, dated as of July 28, 1986, between Aetna and the
Company and (ii) the Chilled Water Service Agreement, dated December 19,
1986, between Aetna and the Company.
"AETNA LEASE" means the Lease, dated October 1, 1986, between Aetna
and the Company, as amended by an Amendment of Lease dated as of January 30,
1987.
"AFFILIATE" means, with respect to any Person, (i) any other Person
which, directly or indirectly, controls or is controlled by or is under
common control with such Person or (ii) any other Person who is a Relative,
director, officer or general partner of such Person or of any Person
described in CLAUSE (i). For purposes of this definition, control of a
Person shall include the power, whether direct or indirect, (a) to vote five
percent (5%) or more of the Securities having ordinary voting power for the
election of directors or other managers of such Person or (b) to direct or
cause the direction of the management and policies of such Person, whether
by contract or otherwise.
<PAGE>
- 3 -
"AGREEMENT" means this Letter of Credit and Reimbursement Agreement,
including all schedules and exhibits hereto, which schedules and exhibits
are for all purposes incorporated herein and made a part hereof.
"ALTERNATE BASE RATE" means, at any time, the greater of (i) the
Federal Funds Rate, PLUS one-half of one percent (.5%) or (ii) the Base
Rate.
"APPLICABLE LAW" means and includes statutes and rules and
regulations thereunder and interpretations thereof by any Governmental
Authority charged with the administration or the interpretation thereof,
common law and orders, requests, directives, instructions and notices of
any Governmental Authority.
"APPROVAL" means, relative to the Company, each and every approval,
consent, filing or registration by or with any Governmental Authority, or
any creditor or shareholder of the Company, necessary to authorize or permit
the execution, delivery or performance by the Company of this Agreement or
any of the other Loan Documents, and to ensure the validity or
enforceability of any of the Loan Documents against the Company.
"AUTHORITY" is defined in the RECITALS.
"AUTHORIZED OFFICER" is defined in SECTION 1.9 of SCHEDULE I.
"B DRAWING" means a drawing under the Letter of Credit in respect of
the payment of principal of the Bonds.
"BANK" is defined in the introductory paragraph hereto.
"BANKRUPTCY OR INSOLVENCY PROCEEDING" means, with respect to any
Person, (i) any insolvency or bankruptcy proceeding, or any receivership,
liquidation, reorganization or other similar proceeding in connection
therewith, relative to such Person or its creditors, as such, or to its
Property, (ii) any proceeding for voluntary liquidation, dissolution, or
other winding up of such Person, whether or not involving insolvency or
bankruptcy and (iii) any assignment for the benefit of creditors of such
Person.
"BASE RATE" means the rate of interest announced from time to time by
the Bank at its office in Boston, Massachusetts as its "base rate".
<PAGE>
- 4 -
"BOND DOCUMENTS" means, collectively, the Loan Agreement, any
Instrument securing any of the Company's obligations under the Loan
Agreement, the Indenture, the Bond Purchase Agreements, the Official
Statements, the Bonds, the Tender Agent Agreement, the Remarketing Agent
Agreement, and the Tax Regulatory Agreement.
"BONDHOLDERS" shall have the meaning assigned thereto in the
Indenture.
"BONDS" means, collectively, the Series 1986 Bonds, the Series 1988
Bonds and any Additional Bonds.
"BOND PURCHASE AGREEMENTS" means, collectively, the Bond Purchase
Agreements among the Authority, the Company and Advest dated December 11,
1986 and March 15, 1988.
"BUSHNELL AGREEMENT" means the Hot Water and Chilled Water Service
Agreement between the Company and Bushnell Memorial Hall, signed by the
Company on March 31, 1986 and by Bushnell Memorial Hall on April 3, 1986.
"BUSINESS DAY" means any day on which the Bank, the Trustee, or the
Paying Agent are not required or authorized to remain closed.
"C DRAWING" means a drawing under the Letter of Credit in respect of
the payment of interest, or the portion of the Purchase Price corresponding
to interest, on the Bonds.
"CAPITAL STOCK" means any shares, interests, participations, rights
or other equivalents (howsoever designated) of capital stock of a
corporation (including common or preferred stock) or any equivalent
ownership interests in a Person other than a corporation.
"CASH EQUIVALENTS" means
(i) marketable obligations issued or unconditionally
guaranteed by the United States government, in each case maturing within one
hundred eighty (180) days after the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state maturing within
one hundred eighty (180) days after the date of acquisition thereof and, at
the time of acquisition, having the highest rating obtainable from either
Standard & Poor's Corporation or Moody's Investors Service, Inc.;
<PAGE>
- 5 -
(iii) commercial paper maturing no more than one hundred eighty
(180) days after the date of acquisition thereof, issued by a corporation
organized under the laws of any state of the United States or of the
District of Columbia and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Corporation or Moody's
Investors Service, Inc.;
(iv) money market funds whose investments are made solely in
securities described in clause (i) maturing within one (1) year after the
date of acquisition thereof;
(v) time deposits or certificates of deposit maturing within
ninety (90) days after the date of acquisition thereof, issued by the Bank
or any commercial bank that is a member of the Federal Reserve System; and
(vi) repurchase agreements entered into with any Lender or any
commercial bank of the nature referred to in CLAUSE (V), secured by a fully
perfected Lien in any obligation of the type described in any of CLAUSES (I)
through (V), having a fair market value at the time such repurchase
agreement is entered into of not less than one hundred percent (100%) of the
repurchase obligation thereunder of such Lender or other commercial bank.
"CDECC" Capitol District Energy Center Cogeneration Associates (a
joint venture between Independent Energy Associates and ANR Venture
Management Company).
"CDECC Agreement" means the Steam and Chilled Water Supply
Agreement, dated as of May 28, 1986, by and between CDECC and the Company.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response
Compensation Liability Information System List.
"CIBC" means Canadian Imperial Bank of Commerce, New York Agency.
"CNG" means Connecticut Natural Gas Corporation, a Connecticut
corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" is defined in the introductory paragraph hereto.
<PAGE>
- 6 -
"CONNECTICUT EDUCATION ASSOCIATION AGREEMENT" means the Hot Water
and Chilled Water Services Agreement, dated April 10, 1990, between the
Company and The Connecticut Education Association, Inc., a Connecticut
corporation.
"CONSOLIDATED TANGIBLE NET WORTH" The excess of Consolidated
Total Assets over Consolidated Total Liabilities, MINUS the sum of:
(i) the total book value of all assets of the Company and its
Subsidiaries properly classified as intangible assets under GAAP; PLUS
(ii) all amounts representing any write-up in the book value
of any assets of the Company or its Subsidiaries resulting from a
revaluation thereof in accordance with GAAP subsequent to December 31, 1993.
"CONSOLIDATED TOTAL ASSETS" All assets of the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL LIABILITIES" All liabilities of the Company
and its Subsidiaries determined on a consolidated basis in accordance with
GAAP and all Indebtedness of the Company and its Subsidiaries, whether or
not so classified.
"CONTINGENT OBLIGATION" means, in relation to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any Indebtedness, lease, dividend, letter of credit or other
obligation of another if the primary purpose or intent thereof by the Person
incurring the Contingent Obligation is to provide assurance to the obligee
of such obligation that such obligation will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders
of such obligation will be protected (in whole or in part) against loss in
respect thereof. Contingent Obligations shall include:
(i) The direct or indirect guaranty, endorsement (otherwise
than for collection or deposit in the ordinary course of business), co-
making, discounting with recourse or Sale with recourse by such Person of
the obligation of another, and
(ii) any liability of such Person for the obligations of
another through any agreement (contingent or otherwise),
<PAGE>
- 7 -
(a) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or
(b) to maintain the solvency of any balance sheet
item, level of income or financial condition of another.
The amount of any Contingent Obligation shall be equal to the stated or
determinable amount of the obligation so guaranteed or otherwise supported
and if such amount is not stated or determinable, the reasonably anticipated
liability as determined by such Person in good faith.
"CONTRACTUAL OBLIGATION" means, in relation to any Person, any
provision of any Security issued by such Person or of any Instrument or
undertaking to which any such Person is a party or by which it or any of its
Property is bound.
"DATE OF ISSUANCE" means the date of issuance and delivery of
the Letter of Credit.
"DEFAULT" means any event which with notice or lapse of time, or
both, would become an Event of Default.
"DOLLAR" and the sign "$" mean lawful money of the United
States.
"EASEMENT AGREEMENTS" means the easements listed on SECTION 2.9
of the DISCLOSURE SCHEDULE.
"ENVIRONMENTAL LAWS" means all Applicable Laws relating to
health and safety matters and protection of the environment and relating to
or imposing liability or standards of conduct concerning any hazardous,
toxic or dangerous waste, substance, material or pollutant, in each case as
in effect from time to time.
"EQUITY INTERESTS" means Capital Stock and warrants, options and
other rights to acquire Capital Stock.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
<PAGE>
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successor sections.
"ERISA AFFILIATE" means any Person (including each trade or
business (whether or not incorporated)) which, together with the Borrower or
any of its Subsidiaries would be deemed to be a "single employer" or a
member of the same "controlled group" as a "contributing sponsor" with
respect to a Plan, in each case within the meaning of Section 4001 of ERISA.
"EVENT OF DEFAULT" is defined in ARTICLE VI.
"EXPIRY DATE" means the later to occur of (i) October 16, 1995
or (ii) the date to which any Expiry Date is extended in accordance with
SECTION 2.1.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in
the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor publication, the "COMPOSITE 3:30 P.M. QUOTATIONS") for such day
under the caption "Federal Funds Effective Rate". If such rate is not
published in the Composite 3:30 p.m. Quotations for any Business Day, the
rate for such day will be the arithmetic mean of the rates for the last
transaction in overnight federal funds arranged prior to 9:00 A.M., Boston
time, on such day by each of three leading brokers of federal funds
transactions in New York City, selected by the Agent. The Federal Funds
Rate for any day which is not a Business Day shall be the rate for the
immediately preceding Business Day.
"FIRST SUPPLEMENTAL INDENTURE" is defined in the RECITALS.
"FISCAL QUARTER" means any fiscal quarter of a Fiscal Year.
"FISCAL YEAR" means any period of twelve consecutive calendar
months ending on September 30.
"F.R.S. BOARD" means the Board of Governors of the Federal
Reserve System.
"FUTURE AGREEMENTS" means all agreements entered into by the
Company with any Person after the date hereof for the supply, distribution
or sale of Product.
"GAAP" is defined in SECTION 1.4.
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"GOVERNING DOCUMENTS" means, relative to any Person, its
certificate or articles of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
Equity Interests.
"GOVERNMENTAL AUTHORITY" means any foreign, federal, state,
regional, local, municipal or other government, or any department,
commission, board, bureau, agency, public authority or instrumentality
thereof, or any court or arbitrator.
"HARTFORD STEAM" means The Hartford Steam Company, a Connecticut
corporation.
"HARTFORD STEAM AGREEMENT" means the agreement, dated as of
July 4, 1988, between Hartford Steam and the Company with respect to the
purchase and sale of chilled water for or from their respective district
heating and cooling systems.
"HARTFORD STEAM LETTER AGREEMENT" means the letter agreement
dated January 30, 1987, by the Company and Hartford Steam to CIBC and the
Trustee, as affected by the letter dated October 14, 1994 from the Company
and Hartford Steam to the Bank.
"HAZARDOUS SUBSTANCES" means any pollutants, dangerous
substances, toxic substances, hazardous wastes, hazardous materials, or
hazardous substances as defined in or pursuant to the Resource Conservation
and Recovery Act of 1976 (42 U.S.C Section 6901 et seq.), the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Section 9601 et seq.) or any other federal, state or local environmental
law, ordinance, rule or regulation.
"HISTORICAL FINANCIALS" is defined in Section 2.4 of Schedule
II.
"INDEBTEDNESS" means, in relation to any Person at any time, all
of the obligations of such Person which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of such
Person prepared as at such time, and in any event shall include:
(i) all indebtedness of such Person of any kind (including
all obligations of such Person in respect of capitalized leases) arising or
incurred under or in respect of any lease or other similar agreement or
contract (whether written or oral) pursuant to which such Person shall (as
lessee) lease or hire from any other Person or Persons any Property;
<PAGE>
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(ii) all indebtedness, obligations and liabilities secured by
or arising under or in respect of any Lien upon or in any Property owned by
such Person, even though such Person has not assumed or become liable for
the payment of such indebtedness, obligations and liabilities and all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to Property acquired by such Person, even
though recourse with respect to such indebtedness is limited to such
Property; PROVIDED, HOWEVER, that for purposes of determining the amount of
any Indebtedness of the type described in this clause, if recourse with
respect to such Indebtedness is limited to such Property, the amount that
shall be deemed to constitute such Indebtedness shall be limited to the fair
market value of such Property;
(iii) all obligations, contingent or otherwise, relative to
the face amount of all letters of credit, whether or not drawn, and bankers'
acceptances issued for the account of such Person;
(iv) net obligations under any interest rate protection
agreements of such Person;
(v) any asserted withdrawal liability of such Person (or any
other Person which together with such Person would be a "single employer" or
a member of the same "controlled group" as a "contributing sponsor" with
respect to a Plan, in each case within the meaning of Section 4001 of
ERISA);
(vi) all dividends declared but not yet paid by such Person
on any of its Capital Stock; and
(vii) any Contingent Obligation of such Person.
"INDENTURE" shall mean the Original Indenture, as amended and
supplemented by the First Supplemental Indenture.
"INDEMNIFIED LIABILITIES" is defined in SECTION 7.1.
"INDEMNIFIED PARTY" is defined in SECTION 7.1.
"INDEPENDENT PUBLIC ACCOUNTANT" means Arthur Andersen & Co., any
other "Big Six" accounting firm or any other firm of certified public
accountants of recognized national standing selected by the Company and
acceptable to the Bank.
<PAGE>
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"INSTRUMENT" means any contract, agreement, indenture, mortgage
or other document or writing (whether by formal agreement, letter or
otherwise) under which any obligation is evidenced, assumed or undertaken,
or any right to any Lien is granted or perfected.
"INSURANCE AGREEMENT" shall mean that certain Agreement, dated
as of January 27, 1987, by and among the Company, CIBC and the Trustee, as
amended by Amendment No. 1, dated as of March 1, 1988, whereby the Company
agreed to maintain insurance for a portion of a pumphouse located at the
premises described in the Aetna Lease.
"INTEREST COMPONENT" shall have the meaning specified in the
Letter of Credit.
"INVESTMENT" means, in relation to any Person:
(i) any loan, advance, or other extension of credit
made by such Person to any other Person;
(ii) the creation of any Contingent Obligation of such
Person to support the obligations of any other Person;
(iii) any capital contribution by such Person to, or
purchase of Equity Interests by such Person in, any other Person, or any
other investment evidencing an ownership or similar interest of such Person
in any other Person; and
(iv) any Sale of Property by such Person to any other
Person other than upon full payment, in cash, of not less than the agreed
sale price or the fair value of such Property, whichever is higher.
"LETTER OF CREDIT" is defined in SECTION 2.1.
"LETTER OF CREDIT FEE" is defined in SECTION 2.4.
"LICENSE AGREEMENTS" means, collectively, (i) the License
Agreement, dated January 28, 1987, by and between National Railroad
Passenger Corporation and the Company and (ii) the License Agreement for
Wire, Pipe and Cable Transverse Crossings and Longitudinal Occupations,
dated May 26, 1987, by and between Consolidated Rail Corporation and the
Company.
<PAGE>
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"LIEN" means any mortgage, security interest, pledge,
hypothecation, assignment, attachment, deposit arrangement, encumbrance,
lien (statutory, judgment or otherwise), preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention
agreement, any financing lease involving substantially the same economic
effect as any of the foregoing and the filing of any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction).
"LOAN AGREEMENT" means the Original Loan Agreement, as amended
and supplemented by the First Amendatory Loan Agreement, dated as of
March 1, 1988, between the Authority and the Company.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Letter
of Credit, the Pledge Agreement and any other Instrument executed and/or
delivered in connection therewith.
"LOB AGREEMENT" means the Legislative Office Building Hot Water
and Chilled Water Service Agreement executed by the State on March 4, 1986
and by the Company on February 24, 1986.
"MATERIALLY ADVERSE EFFECT" means, in relation to any event or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration or governmental investigation or proceeding):
(a) a materially adverse effect on the business,
Property, operations, prospects or condition, financial or otherwise, of the
Company, any of the Subsidiaries of the Company or CNG, either individually
or taken as a whole;
(b) a materially adverse effect on the ability of the
Company to perform any of its payment or other material obligations under
any Loan Document; or
(c) a material impairment of the validity or
enforceability of any Loan Document or any material impairment of the
rights, remedies or benefits available to the Bank under any Loan Document.
"MULTIEMPLOYER PLAN" means a Plan which is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
"NOTE" shall have the meaning assigned thereto in the Loan
Agreement.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Officer.
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"OFFICIAL STATEMENTS" means, collectively, (i) the Official
Statement dated December 11, 1986 issued by the Authority with respect to
the issuance of the Series 1986 Bonds and (ii) the Official Statement dated
March 15, 1988 issued by the Authority with respect to the issuance of the
Series 1988 Bonds.
"OPERATIVE DOCUMENTS" means the Aetna Agreements, the Aetna
Lease, the LOB Agreement, the Xerox Agreement, the Easement Agreements, the
Bushnell Agreement, the Underwood Agreement, the CDECC Agreement, the
Resource Agreement, the Park Improvement Agreement, the State Buildings
Agreement, the Hartford Steam Agreement, the License Agreements, the
Connecticut Education Association Agreement, the State of Connecticut
Agreement, the United Way Agreement, the Insurance Agreement, the Hartford
Steam Letter Agreement and all Future Agreements.
"ORIGINAL INDENTURE" is defined in the RECITALS.
"ORIGINAL LOAN AGREEMENT" is defined in the RECITALS.
"PAINEWEBBER" means PaineWebber, Incorporated.
"PARK IMPROVEMENT AGREEMENT" means the Park Improvement
Agreement, dated November 13, 1987, by and between the City of Hartford,
Connecticut and the Company.
"PAYING AGENT" means any paying agent for the Bonds appointed
pursuant to the Indenture.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any and all of its functions under ERISA.
"PERMITTED CAPITAL STOCK" means any Capital Stock of the Company
with respect to which the Company has no obligation to make any dividend or
other distribution in cash, whether pursuant to the terms of such Capital
Stock or Capital Stock issuable in respect of such Capital Stock or pursuant
to agreements relating to any such Capital Stock.
"PERMITTED COMBINATION" means a consolidation or merger of CNG
and/or Hartford Steam into the Company; PROVIDED, that (i) in the case of a
merger of Hartford Steam into the Company, CNG has a wholly-owned subsidiary
other than the Company or Hartford Steam, which (a) is solvent, (b) has the
statutory and legal authority to lay and maintain pipes, mains and other
conduits, through which to transmit Product in or on the streets, highways,
or public grounds within the City of Hartford, Connecticut and owned by the
City of Hartford or State of Connecticut, and (c) has agreed and is able to
undertake (on terms and conditions reasonably satisfactory to the Bank) the
obligations of the Company and Hartford Steam under the Hartford Steam
<PAGE>
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Letter Agreement (unless CNG agrees to undertake such obligations on terms
and conditions reasonably satisfactory to the Bank), (ii) the Company is the
surviving entity following such consolidation or merger, (iii) no Default or
Event of Default or default under any Loan Document, Operative Document or
Bond Document exists immediately prior to such merger or consolidation or
would result therefrom, (iv) such merger or consolidation would not, in the
judgment of the Bank, have a Materially Adverse Effect and (v) the Bank
receives a satisfactory opinion from counsel to the Company with respect to
such merger or consolidation and such other matters as the Bank may
reasonably request.
"PERMITTED DISPOSITION" means:
(i) any Sale by the Company or any of its
Subsidiaries in the ordinary course of its business of its equipment or
other tangible Property that is obsolete or no longer useful or necessary to
its business;
(ii) any Sale by the Company or any of its
Subsidiaries in the ordinary course of its business, and in a manner
consistent with its customary and usual cash management practices, of its
Cash Equivalents;
(iii) the creation or incurrence of any Liens in any
Property of the Company or any of its Subsidiaries that are described in and
permitted by SECTION 5.2.2;
(iv) any Sale or lease by the Company of the real
property and improvements thereon owned by the Company located on Old Track,
Greenwich, Connecticut; and
(v) any Sale or lease by the Company of the real
property and improvements thereon owned by the Company located at 71
Columbus Boulevard, Hartford, Connecticut.
"PERMITTED INDEBTEDNESS" means any of the following
Indebtedness:
(i) Indebtedness of the Company or any of its
Subsidiaries in respect of taxes, assessments, levies or other governmental
charges, accounts payable incurred in the ordinary course of business, and
in respect of claims against it for labor, materials, or supplies, to the
extent that (in each case) the payment thereof shall not at the time be
<PAGE>
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required to be made in accordance with the provisions of SECTION 5.1.8;
(ii) Indebtedness of the Company or any of its
Subsidiaries secured by Liens of carriers, warehousemen, mechanics,
landlords or materialmen that constitute Permitted Liens under CLAUSES (ii)
or (iv) of the definition thereof;
(iii) Indebtedness of the Company or any of its
Subsidiaries in respect of judgments or awards which have been in force for
less than the applicable appeal period so long as (a) (in each case)
execution is not levied or in respect of which such Person shall at the time
in good faith be prosecuting an appeal or proceedings for review and in
respect of which execution thereof shall have been stayed pending such
appeal or review, and (b) the aggregate amount of such Indebtedness
outstanding at any time (determined on a consolidated basis in accordance
with GAAP) does not exceed Five Hundred Thousand Dollars ($500,000);
(iv) Indebtedness of the Company in respect of a
revolving credit facility to be entered into after the date hereof between
the Company and Bank of Boston Connecticut and any refinancings, whether
with Bank of Boston Connecticut or another lender, of such Indebtedness;
provided that the aggregate amount of such Indebtedness shall not exceed
Four Million Dollars ($4,000,000) at any time outstanding;
(v) other Indebtedness of the Company or any of its
Subsidiaries existing on the date hereof and described in SECTION 5.2.1 of
the DISCLOSURE SCHEDULE and any refinancings, whether with the existing
lender or a new lender, of such Indebtedness; PROVIDED that the amount of
such Indebtedness shall not exceed at any time the amount of such
Indebtedness on the date hereto;
(vi) other Indebtedness of the Company or any of its
Subsidiaries in an aggregate amount at any time outstanding not to exceed
Five Million Dollars ($5,000,000); and
(vii) other Indebtedness of the Company or any of its
Subsidiaries incurred with the prior written consent of the Bank.
"PERMITTED INVESTMENTS" means, whether with the existing lender
or a new lender, any of the following Investments by the Company or any of
its Subsidiaries:
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(i) Investments in cash and Cash Equivalents;
(ii) Investments in the form of accounts receivable
arising from sales of goods or services in the ordinary course of business;
(iii) Investments in the form of advances or
prepayments to suppliers in the ordinary course of business; and
(iv) Investments in the form of loans or advances to
employees in the ordinary course of business for travel expenses, drawing
accounts or other similar business related expenses.
"PERMITTED LIENS" means any of the following Liens on assets of
the Company or any of its Subsidiaries:
(i) Liens to secure taxes, assessments, levies or
other governmental charges imposed upon the Company or any of its
Subsidiaries, and Liens to secure claims against the Company or any of its
Subsidiaries for labor, materials or supplies, to the extent (in each case)
that the payment thereof shall not at the time be required to be made in
accordance with the provisions of SECTION 5.1.8;
(ii) deposits or pledges made by the Company or any of
its Subsidiaries in the ordinary course of its business (a) to secure
payment of workers' compensation, unemployment insurance, or other forms of
governmental insurance or benefits, (b) to secure performance of bids,
tenders, statutory obligations, leases and contracts (other than contracts
relating to borrowed money), or (c) to secure surety, appeal, indemnity or
performance bonds, in each case in the ordinary course of business of such
Person, and in each case only to the extent that payment thereof shall not
at the time be required to be made in accordance with the provisions of
Section 5.1.8;
(iii) Liens in respect of judgments or awards, to the
extent that such judgments or awards are Permitted Indebtedness under CLAUSE
(III) of the definition thereof;
(iv) Liens of carriers, warehousemen, mechanics,
landlords or materialmen incurred in the ordinary course of the business of
the Company or any of its Subsidiaries, in each case, for sums not overdue
or being contested in good faith by appropriate proceedings, and for which<PAGE>
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appropriate reserves with respect thereto have been established and
maintained on the consolidated books of the Company and its Subsidiaries in
accordance with GAAP to the extent required under such principles;
(v) easements, right-of-way, zoning and similar
restrictions and other similar encumbrances or title defects which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the Property subject thereto or
interfere with the ordinary conduct of the business of the Company or any of
its Subsidiaries; and
(vi) other Liens existing on the date hereof on any
Property of the Company and its Subsidiaries and described in SECTION 5.2.2
of the DISCLOSURE SCHEDULE.
"PERSON" means any natural person, corporation, partnership,
joint venture, association, Governmental Authority or any other entity,
whether acting in an individual, fiduciary or other capacity.
"PLAN" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA which is subject to Title IV of ERISA, and
is maintained or contributed to by the Borrower or any of its Subsidiaries
or any ERISA Affiliate for any employees of any such Person.
"PLEDGE AGREEMENT" means the Pledge and Security Agreement,
dated as of the date hereof, executed and delivered by the Company to the
Bank in or substantially in the form attached hereto as ANNEX II.
"PLEDGED BONDS" is defined in SECTION 3.2.
"PRINCIPAL COMPONENT" shall have the meaning specified in the
Letter of Credit.
"PRODUCT" means all steam, hot or chilled water, or other
product, whether gaseous, liquid, or solid, that the Company transmits
through the pipes of the Project.
"PROJECT" is defined in the RECITALS.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"PURCHASE PRICE" shall have the meaning assigned to such term in
the Indenture.
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"RELATIVE" means, in relation to any Person, any spouse, parent,
grandparent, child, grandchild, brother or sister of such Person, or the
spouse of any of the foregoing.
"RELEASE" means a "release," as such term is defined in CERCLA.
"REMARKETING AGENT" means PaineWebber.
"REMARKETING AGENT AGREEMENT" means the Remarketing Agent
Agreement by and between the Company and PaineWebber, made and dated as of
December 1, 1986, as amended by the Remarketing Agent Agreement Amendment,
dated as of March 1, 1988.
"RESOURCE AGREEMENT" means the Letter Agreement, dated September
3, 1985, between Resource Development Associates, Inc. and the Company.
"RESTRICTED PAYMENTS" means any declaration or payment of
dividends by the Company or any of its Subsidiaries on any shares of its
Capital Stock, or any payment or other distribution by the Company or any of
its Subsidiaries on account of the purchase, redemption, retirement or other
acquisition of Capital Stock of any such Person, or the exercise by the
Company or any of its Subsidiaries of any option, warrant or other right to
purchase, redeem or acquire for cash any shares of Capital Stock of any such
Person, or the making by the Company or any of its Subsidiaries of any other
payments or distributions in respect of any shares of its Capital Stock.
"SALE" means any sale, lease, conveyance, exchange, transfer,
assignment, pledge, hypothecation or other disposition of any Property.
"SECURITIES" means any Capital Stock, partnership interests,
voting trust certificates, bonds, debentures, notes, or other evidences of
Indebtedness, secured or unsecured, convertible, subordinated or otherwise,
or in general any instruments commonly known as "securities."
"SERIES 1986 BONDS" is defined in the RECITALS.
"SERIES 1988 BONDS" is defined in the RECITALS.
"SINGLE EMPLOYER PLAN" means any Plan other than a Multiemployer
Plan.
"SINKING FUND PAYMENT" shall have the meaning specified in the
Indenture.
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"STATE" means the State of Connecticut.
"STATE BUILDINGS AGREEMENT" means the State of Connecticut
Agreement for Heating and Cooling Services, dated October 7, 1987, by and
between the Company and the State.
"STATED AMOUNT" shall have the meaning specified in the Letter
of Credit.
"STATE OF CONNECTICUT AGREEMENT" means the Installation, Sales
and Maintenance Agreement, dated November 24, 1993, between the Company and
The State of Connecticut Department of Public Works.
"SUBSIDIARY" means, in relation to any Person (in this paragraph
called the "parent") at any time, any corporation, partnership or other
Person (i) of which shares of Capital Stock, partnership interests or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other managers of such corporation, partnership or
other Person, or representing a majority of the Equity Interests in such
corporation, partnership or other Person, are at the time owned, controlled
or held, directly or indirectly, by the parent, or (ii) the management of
which is otherwise controlled, directly or indirectly, by the parent.
"TAX REGULATORY AGREEMENT" means the Tax Regulatory Agreement,
dated as of December 1, 1986, among the Authority, the Company, and the
Trustee, as amended and supplemented by the Tax Regulatory Agreement
Supplement, dated as of March 1, 1988.
"TENDER AGENT" means PaineWebber.
"TENDER AGENT AGREEMENT" means the Tender Agent Agreement by and
between the Company and the Tender Agent, made and dated as of December 1,
1986, as amended by the Tender Agent Agreement Amendment, dated as of March
1, l988.
"TERMINATION DATE" means the earlier to occur of (i) the Expiry
Date or (ii) the date the Letter of Credit terminates in accordance with its
terms.
"TRUSTEE" is defined in the RECITALS.
"UNDERWOOD" means Underwood Towers Limited Partnership.
"UNDERWOOD AGREEMENT" means the Hot Water and Chilled Water
Service Agreement between Underwood and the Company which was executed by
the Company on July 25, 1986 and by Underwood on August 6, 1986.
<PAGE>
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"UNITED WAY AGREEMENT" the Hot Water and Chilled Water Service
Agreement, dated October 1, 1986, between the Company and United Way of the
Capital Area, Inc.
"XEROX ASSOCIATES" means Xerox Hartford Associates, a general
partnership.
"XEROX AGREEMENT" means the Xerox Centre Hot Water and Chilled
Water Service Agreement executed by the Company on July 25, 1986 and Xerox
Associates on July 28, 1986.
SECTION 1.2. USE OF DEFINED TERMS. Terms for which meanings
are provided in this Agreement shall, unless otherwise defined or the
context otherwise requires, have such meanings when used in the Letter of
Credit, the DISCLOSURE SCHEDULE, each other Loan Document and each notice
and other communication delivered from time to time in connection with this
Agreement or any Instrument hereafter executed pursuant hereto.
SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified,
references in this Agreement and in each Loan Document to any ARTICLE or
SECTION are references to such ARTICLE or SECTION of this Agreement or such
Loan Document, as the case may be, and unless otherwise specified,
references in any ARTICLE, SECTION or definition to any CLAUSE are
references to such CLAUSE of such SECTION, ARTICLE or definition.
SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. Where
the character or amount of any asset or liability or item of income or
expense is required to be determined, or any accounting computation is
required to be made, for the purpose of this Agreement, such determination
or calculation shall, to the extent applicable, be made in accordance with
generally accepted accounting principles ("GAAP") applied on a basis
consistent with the consolidated financial statements of the Company for the
Fiscal Year ended September 30, 1993 (and without giving effect to any
subsequent changes to GAAP) except insofar as:
(i) the Company and its Subsidiaries shall have elected (with
the concurrence of the Independent Public Accountant and upon prior written
notification to the Bank) to adopt more recently promulgated GAAP (which
election shall continue to be effective for subsequent years); and
(b) the Bank shall have consented to such election (it being
understood that such consent may be conditioned upon the implementation of
such changes to SECTION 5.2.3 as are appropriate to reflect such adoption of
<PAGE>
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more recently promulgated GAAP, and it being further understood that such
consent shall be deemed to have been given upon the implementation of such
changes).
SECTION 1.5. GENERAL PROVISIONS RELATING TO DEFINITIONS. Terms
for which meanings are defined in this Agreement shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The term "including" means including, without limiting the
generality of any description preceding such term. Each reference herein to
any Person shall include a reference to such Person's successors and
assigns. References to any Instrument defined in this Agreement refer to
such Instrument as originally executed or, if subsequently varied, replaced
or supplemented from time to time, as so varied, replaced or supplemented
and in effect at the relevant time of reference thereto.
ARTICLE II
ISSUANCE OF LETTER OF CREDIT; FEES
Section 2.1. AMOUNT AND TERMS OF LETTER OF CREDIT. The Bank
agrees, on the terms and subject to the conditions hereinafter set forth and
subject to receipt by the Bank of a letter of credit application from the
Company on the Bank's customary form not less than three (3) Business Days
prior to the Date of Issuance, to issue an irrevocable standby letter of
credit (the "LETTER OF CREDIT") in substantially the form attached hereto as
ANNEX I for the account of the Company and for the benefit of the Trustee in
an original Stated Amount of Thirteen Million Seven Hundred Sixty-seven
Thousand One Hundred Twentythree Dollars ($13,767,123), consisting of a
Principal Component in an amount not in excess of Thirteen Million Four
Hundred Thousand Dollars ($13,400,000) and an Interest Component in an
amount not in excess of Three Hundred Sixty-seven Thousand One Hundred
Twenty-three Dollars ($367,123). The Letter of Credit will expire on the
Expiry Date, unless otherwise terminated or extended in accordance with the
terms thereof. On the Business Day immediately preceding the Expiry Date,
such Expiry Date shall be automatically extended to the next anniversary of
such Expiry Date (or, in the event such anniversary date is not a Business
Day, the Business Day immediately preceding such anniversary date) unless
the Bank notifies the Trustee in writing not less than one hundred eighty
(180) days prior to such Expiry Date of the Bank's intention not to extend
such Expiry Date.
Section 2.2. DRAWING FEES. The Company hereby agrees to pay to
the Bank upon each drawing by the Trustee under the Letter of Credit an
amount equal to the amount the Bank shall at the time be charging for
drawings on similar letters of credit.
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Section 2.3. ADDITIONAL PAYMENTS. If the Bank shall reasonably
determine that the adoption or phase in of any Applicable Law, or any change
therein or in the interpretation or administration thereof by any
Governmental Authority charged with the administration thereof, or in GAAP,
shall either (i) impose, modify or deem applicable any reserve, assessment,
capitalization (including the inclusion of letters of credit or any
obligation related thereto in any asset or liability category item in the
calculation of capital/asset ratios or any other form of capital maintenance
requirement), special deposit or similar requirement against letters of
credit issued by the Bank or (ii) impose on the Bank any other condition
relating, directly or indirectly, to this Agreement or the Letter of Credit,
and the result of any event referred to in CLAUSE (I) or (II) shall be to
increase the cost to the Bank of issuing or maintaining the Letter of Credit
or to reduce the rate of return on the Bank's capital as a result of the
Bank's obligations under the Letter of Credit, then the Company shall
thereafter pay to the Bank, on demand, from time to time as specified by the
Bank, such additional amounts as shall be sufficient to compensate the Bank
for such increased cost or reduced return, together with interest on each
such amount from the date demanded until payment in full thereof at the rate
stated in CLAUSE (II) of SECTION 3.1. A certificate setting forth in
reasonable detail such increased cost or reduced return, submitted by the
Bank to the Company, shall be conclusive, absent manifest error, as to the
amount thereof.
Section 2.4. LETTER OF CREDIT FEE. The Company shall pay to
the Bank, from the Date of Issuance through the Termination Date, a letter
of credit fee (the "LETTER OF CREDIT FEE") computed on the original Stated
Amount, reduced only by any Sinking Fund Payments actually paid pursuant to
the Indenture, at a rate per annum equal to one half of one percent (1/2%).
The Company covenants and agrees to notify the Bank promptly after obtaining
knowledge that any Sinking Fund Payments have been made or any Bonds have
otherwise been repurchased or redeemed. The Company shall pay the Letter of
Credit Fee to the Bank in arrears on the last day of each calendar quarter
and on the Termination Date. The Letter of Credit Fee shall be computed on
the basis of a three hundred sixty (360) day year for the actual number of
days elapsed.
ARTICLE III
AGREEMENT TO REPAY LETTER OF
CREDIT DRAWINGS; PLEDGE OF BONDS
Section 3.1 REIMBURSEMENT.
(i) The Company hereby agrees to pay to the Bank, by
no later than 3:00 p.m. (Boston time) on the Business Day immediately
following the day any payment is made by the Bank under the Letter of
Credit, the aggregate amount of all such payments made by the Bank under the
Letter of Credit.
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(ii) In the event any payment referred to in CLAUSE
(i) above is not paid when due, the Company hereby agrees to pay to the
Bank, on demand, interest on the overdue amount from the due date thereof
until paid in full in cash at a variable rate per annum equal to the
Alternate Base Rate, PLUS two percent (2%).
Section 3.2. PLEDGE OF BONDS. As security for the payment of
the reimbursement obligations of the Company with respect to A Drawings
pursuant to SECTION 3.1, the Company will pledge to the Bank, and grant to
the Bank a security interest in, all its right, title and interest in and to
any Bonds delivered to the Bank in connection with any A Drawing (herein
called "PLEDGED BONDS"), pursuant to the Pledge Agreement. Upon receipt by
the Bank of (i) the amount owing from the Company with respect to any A
Drawing, (ii) accrued interest on the amount referred to in CLAUSE (I) to
the date of such payment as set forth in SECTION 3.1, and (iii) the amount
owing from the Company in respect of the C Drawing, if any, made in
connection with such A Drawing, the outstanding obligations of the Company
under SECTION 3.1 shall be reduced by the amount of such payment, interest
shall cease to accrue on the amount paid, and the Bank shall deliver to the
Tender Agent and release from the pledge and security interest created by
the Pledge Agreement a principal amount of Pledged Bonds equal to the amount
of the payment referred to in CLAUSE (I) above. Notwithstanding the
foregoing, no Pledged Bonds shall be delivered to the Tender Agent, and the
pledge and security interest of the Bank shall not be released, during the
period commencing two (2) Business Days prior to a regularly scheduled
interest payment date with respect to the Bonds and ending at the close of
business on such interest payment date.
Section 3.3. CREDIT FOR AMOUNT PAID ON BONDS. The Company
shall (i) receive a credit against its obligation to pay interest with
respect to A Drawings pursuant to CLAUSE (II) of SECTION 3.1 to the extent
of any amounts received by the Bank in respect of interest on any Pledged
Bonds and (ii) receive a credit against its reimbursement obligation with
respect to A Drawings pursuant to CLAUSE (I) of SECTION 3.1 to the extent of
any amounts received by the Bank in respect of principal of any Pledged
Bonds.
Section 3.4. SETOFF. The Company agrees that the Bank shall
have all rights of set-off and bankers' lien provided by Applicable Law, and
in addition thereto, the Company agrees that if at any time any amount owing
under this Agreement or any other Loan Document is then due to the Bank, the
Bank may apply to the payment of such amount any and all balances, credits,
deposits, accounts or moneys of the Company then or thereafter deposited or
held by the Bank.
Section 3.5. COMPUTATION OF INTEREST; PLACE OF PAYMENT.
Interest payable hereunder shall be computed on the basis of a three hundred
sixty (360) day year for the actual number of days elapsed. All payments by
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the Company to the Bank hereunder or under any other Loan Document shall be
made in immediately available funds, without setoff, deduction or
counterclaim to the Bank's account New York agency ABA# 0260-0253-2 for
credit to Boston Loan Servicing Account #06091-37.
ARTICLE IV
CHARACTER OF OBLIGATIONS
Section 4.1. COMPANY'S OBLIGATIONS. The Company assumes all
risks in connection with the Letter of Credit, and the Company's
reimbursement obligations hereunder shall be absolute, unconditional and
irrevocable under any and all circumstances and irrespective of:
(i) any lack of validity or enforceability of the
Company's obligations in respect of the Bond Documents;
(ii) the existence of any claim, setoff, defense or
other right which the Company or any other Person may at any time have
against the Trustee or the Bank (other than the defense of payment in
accordance with the terms of this Agreement or a defense based on the gross
negligence or willful misconduct of the Bank) or any other Person in
connection with this Agreement or any other agreement or transaction;
(iii) any draft or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; PROVIDED that payment by the Bank under the Letter of Credit
against presentation of such draft or document shall not have constituted
gross negligence or willful misconduct of the Bank; and
(iv) any other circumstance or event whatsoever,
whether or not similar to any of the foregoing; PROVIDED that such other
circumstance or event shall not have been the result of gross negligence or
willful misconduct of the Bank.
It is understood that in making any payment under the Letter of
Credit (a) the Bank's exclusive reliance as to any and all matters set forth
therein and in any draft presented or certificate delivered thereunder,
including reliance on the amount of any draft presented under the Letter of
Credit, whether or not the amount due to the Trustee equals the amount of
such draft if such document on its face appears to be in order, and whether
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or not such draft or such certificate proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any respect
whatsoever and (b) any noncompliance in any immaterial respect of the
documents presented under the Letter of Credit with the terms thereof shall,
in each case, not be deemed willful misconduct or gross negligence of the
Bank.
The Company absolutely and unconditionally agrees to hold the
Bank harmless from, and to indemnify the Bank immediately upon demand by the
Bank at any time and as often as the occasion therefor may require against,
any and all claims, demands, suits, actions, damages, losses, costs,
expenses and other liabilities whatsoever which shall at any time or times
be incurred or sustained by the Bank on account of, or in relation to, or in
any way in connection with, the Letter of Credit, EXCEPT that the Company
shall not be liable to the Bank for any claims, demands, suits, actions,
damages, losses, costs, expenses and other liabilities resulting from the
gross negligence or willful misconduct of the Bank.
ARTICLE V
COVENANTS
Section 5.1 CERTAIN AFFIRMATIVE COVENANTS. The Company
agrees that, so long as any amount is payable under this Agreement or any
other Loan Document or the Letter of Credit is outstanding, the Company
will, and will cause each of its Subsidiaries to:
Section 5.1.1. COMPLIANCE WITH AGREEMENTS. Observe and perform
all of its obligations under this Agreement, the other Loan Documents, the
Bond Documents and the Operative Documents to which it is a party.
Section 5.1.2. FINANCIAL STATEMENTS. Deliver to the Bank (i)
within forty-five (45) days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, a balance sheet as at the close of such Fiscal
Quarter, and the related statements of income, shareholders' equity and cash
flows for such Fiscal Quarter and for the portion of the Fiscal Year then
ended, certified by an Authorized Officer, (ii) within one hundred twenty
(120) days after the end of each Fiscal Year, a balance sheet as at the
close of such Fiscal Year, and the related statements of income,
shareholder's equity and cash flows for such Fiscal Year, audited by the
Independent Public Accountant, together with an audit report from the
Independent Public Accountant in form and substance satisfactory to the
Bank, and (iii) such other financial data as the Bank may reasonably
request. All financial statements specified in CLAUSES (I) and (II) above
shall be furnished in consolidated form for the Company and its
Subsidiaries, together with individual statements for the Company and its
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Subsidiaries, and shall include comparative figures for the corresponding
period in the preceding year. Together with each delivery of financial
statements required by CLAUSES (I) and (II) above, the Company will deliver
to the Bank a certificate of an Authorized Officer (y) stating that there
exists no Event of Default or Default or, if any Event of Default or Default
exists, stating the nature thereof, the period of existence thereof and what
action the Company proposes to take with respect thereto, and (z) setting
forth in reasonable detail the calculations used to determine the Company's
compliance or non-compliance with SECTION 5.2.3 as at the end of each Fiscal
Quarter or Fiscal Year, as the case may be. Together with each delivery of
financial statements required by CLAUSE (II) above, the Company will deliver
to the Bank a written statement of the Independent Public Accountant (y)
stating that in making the examination necessary to make the audit report on
such financial statements it obtained no knowledge of any default by the
Company or any of its Subsidiaries in the performance or observance of any
of the covenants contained in ARTICLE V, or, if the Independent Public
Accountant shall have obtained knowledge of any such default, specifying all
such defaults and the nature and status thereof and (z) setting forth in
reasonable detail the calculations made to determine the Company's
compliance or non-compliance with SECTION 5.2.3. Within thirty (30) days
after internal distribution to its board of directors or any committee
thereof, the Company will deliver to the Bank any long-term forecasts or
projections of the Company and/or any of its Subsidiaries.
The Bank is hereby authorized to deliver copies of any financial
statements or other financial data delivered to it pursuant to this SECTION
5.1.2 to any regulatory body having jurisdiction over the Bank.
Section 5.1.3. NOTICE OF DEFAULT, LITIGATION, ETC. Upon
obtaining knowledge thereof, give written notice (accompanied by a
reasonably detailed explanation with respect thereto) promptly to the Bank
of:
(i) the occurrence of
(a) any Default or Event of Default, and
(b) any default under any Loan Document,
Operative Document or Bond Document;
(ii) any litigation, arbitration, or governmental
investigation or proceeding not previously disclosed by the Company to the
Bank which has been instituted or, to the best knowledge of the Company
(after due inquiry), is threatened against the Company, any Subsidiaries of
the Company or CNG or to which any of their respective Property is subject
which:
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(a) if adversely determined, would have a
Materially Adverse Effect, or
(b) relates to this Agreement, any other Loan
Document, any Operative Document or any Bond Document;
(iii) any material adverse development which shall
occur in any litigation, arbitration, or governmental investigation or
proceeding previously disclosed to the Bank;
(iv) any development in the business, operations,
Property, financial condition or prospects of the Company, any Subsidiary of
the Company or CNG which would have a Materially Adverse Effect;
(v) any termination, amendment, modification or
supplement of any Governing Document of the Company or any of its
Subsidiaries, or any Bond Document, or any waiver under any Bond Document,
or any termination of any Operative Document, or any amendment,
modification, supplement or waiver of any Operative Document affecting
amounts to be received by, or the timing of amounts to be received by, the
Company thereunder or affecting the term of any Operative Document, or any
notice, document, other Instrument, financial statement or other materials
of any kind, delivered or received by the Company or any of its Subsidiaries
with respect to any Bond Document, which written notice shall include a copy
(if in writing) or a description (if not in writing) of any such
termination, amendment, modification, supplement, waiver, notice, document,
Instrument, financial statement or other materials; and
(vi) any offer to make and any notice regarding any offer or
intention to make any Restricted Payment not permitted by this Agreement.
Section 5.1.4. CORPORATE EXISTENCE. Except in the case of a
Permitted Combination, maintain its corporate existence, rights and
franchises, and continue to own and hold, legally and beneficially, free and
clear of all Liens and restrictions on transfer (except to the extent
created by the Loan Documents or the Bond Documents), all of the outstanding
shares of Capital Stock of each of its Subsidiaries.
Section 5.1.5. MAINTENANCE OF PROPERTY. Keep all of its
Property that is necessary in its business in good working order and
condition (ordinary wear and tear excepted).
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Section 5.1.6. BOOKS AND RECORDS; INSPECTION. Keep proper
books and records reflecting all of its business affairs and transactions in
accordance with GAAP and, as often as the Bank may reasonably request,
permit the Bank and/or its representatives, during normal business hours
upon twenty-four (24) hours' prior notice, to visit and inspect any Property
of the Company and/or any of its Subsidiaries, to examine the corporate
books and financial records of the Company and/or any of its Subsidiaries
and make copies thereof or extracts therefrom, and to discuss the affairs,
finances and accounts of any of such Persons with the officers of such
Persons and the Independent Public Accountant (and the Company hereby
authorizes the Independent Public Accountant to discuss its financial
matters with the Bank or any of its representatives) all at the Company's
expense for any charges imposed by such accountants or for making such
extracts or copies.
Section 5.1.7. COMPLIANCE WITH LAWS. Obtain all such Approvals
and take all such other actions with respect to any Governmental Authority
as may be required for the execution, delivery and performance of this
Agreement, the other Loan Documents, the Operative Documents and the Bond
Documents, and for the operation of the Project, and duly perform and comply
with all of the terms and conditions of all Approvals so obtained, and
comply with all Applicable Laws where the failure to comply could reasonably
be expected to have a Materially Adverse Effect.
Section 5.1.8. PAYMENT OF TAXES, etc. Pay and discharge, as
the same become due and payable, all federal, state and local taxes,
assessments and other governmental charges or levies against or on any of
its income, profits or Property, as well as all claims of any kind,
including all claims for labor, materials and supplies, which, if unpaid,
might become a Lien upon any of its Property, and pay before they become
delinquent all other material obligations and liabilities.
Section 5.1.9. INSURANCE AND CONDEMNATION.
(i) Maintain insurance on the Project of the following
character:
(a) insurance against fire (other than with respect to
underground pipes) and other risks from time to time included under extended
coverage policies, including an all risk endorsement in an amount sufficient
to prevent the Company or the Bank from becoming a co-insurer of any loss,
but in any event in an amount not less than the full insurable value of the
Project; the term "full insurable value", as used herein, means actual
replacement cost (exclusive of the cost of underground pipes) determined by
the Bank not more often than once every twelve (12) months;
<PAGE>
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(b) general public liability insurance against claims for
bodily injury, death or property damage occurring on or about the Project
and adjoining streets, sidewalks and passageways, such insurance to afford
protection of not less than $5,000,000 with respect to bodily injury or
death to any one person, not less than $5,000,000 with respect to one
occurrence, and not less than $5,000,000 with respect to property damage;
(c) worker's compensation insurance; and
(d) such other insurance (including boiler insurance) in
such amounts and against such other insurable hazards which at the time are
commonly obtained in the case of property similar to the Project.
All such insurance shall be written by companies of recognized
financial standing organized and existing under the laws of a state of the
United States. Insurance claims under any insurance required hereunder
shall be adjusted by the Company. The proceeds of any of the aforesaid
insurance policies shall be used and applied in the manner set forth in the
Loan Agreement; PROVIDED, HOWEVER, that if the Company has an option under
the Loan Agreement as to the manner in which such insurance proceeds shall
be used or applied, the Company shall exercise such option as directed in
writing by the Bank; PROVIDED, FURTHER, that, notwithstanding the foregoing,
after all of the Bonds have been redeemed and/or repaid in full, if any
amounts shall be due to the Bank hereunder or under any other Loan
Documents, all insurance proceeds shall be paid to the Bank and applied to
such amounts in such order of preference as the Bank may determine. The
Bank shall return any excess insurance proceeds to the Company.
The Company shall, within thirty (30) days prior to the
expiration of any insurance which is required to be maintained by the
Company hereunder, deliver to the Bank other original or duplicate policies
or other certificates of the insurers evidencing the renewal of such
insurance.
The Company shall not carry separate insurance unless the Bank
is included therein as a named insured, with loss payable as provided
herein. The Company shall immediately notify the Bank whenever any such
separate insurance is obtained and shall deliver to the Bank the policy or
policies or certificates evidencing the same.
(ii) The proceeds of any condemnation award shall be used
and applied in the manner set forth in the Loan Agreement; PROVIDED,
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HOWEVER, that if the Company has an option under the Loan Agreement as to
the manner in which such condemnation proceeds shall be used or applied, the
Company shall exercise such option as directed in writing by the Bank;
PROVIDED, FURTHER, that, notwithstanding the foregoing, after all of the
Bonds have been redeemed and/or repaid in full, if any amounts shall be due
to the Bank hereunder or under any other Loan Documents, all condemnation
proceeds shall be paid to the Bank and applied to such amounts in such order
of preference as the Bank may determine. The Bank shall return any excess
condemnation proceeds to the Company.
Section 5.1.10. FUTURE AGREEMENTS. Ensure that only the
Company enters into Future Agreements, and deliver to the Bank, promptly
upon execution thereof, any Future Agreements.
Section 5.1.11. ERISA NOTICES.
(i) Upon the request of the Agent, furnish or cause
to be furnished to the Agent a copy of the most recent actuarial statement
required to be submitted under Section 103(d) of ERISA and Annual Reports,
Form 5500, with all required attachments, in respect of each Single Employer
Plan; and
(ii) Promptly upon receipt or dispatch, furnish to the
Agent any notice, report or demand sent or received in respect of any Single
Employer Plan under Section 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068
of ERISA, or in respect of any Multiemployer Plan under Section 4041A, 4202,
4219, 4242 or 4245 of ERISA.
Section 5.1.12. ENVIRONMENTAL COMPLIANCE.
(i) Use and operate all of its Properties in
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and
handle all Hazardous Substances in compliance with all applicable
Environmental Laws, except where the failure to so comply could not
reasonably be expected to have a Materially Adverse Effect;
(ii) Provide written notice to the Bank of (a) any
violation of any Environmental Law regarding any of its Property or any of
its business operations which could reasonably be expected to have a
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Materially Adverse Effect, (b) any known Release, or threat of Release, of
any Hazardous Substance at, from or into any of its Property which it is
required to report in writing to any Governmental Authority or which could
reasonably be expected to have a Materially Adverse Effect, (c) any written
notice of violation of any Environmental Law or of any Release or threatened
Release of any Hazardous Substance, including any notice or claim of
liability or potential responsibility from any third party (including any
Governmental Authority), and including notice of any formal inquiry,
proceeding, demand, investigation or other action with regard to (1) the
operation of any of its Property, (2) contamination on, from or into any of
its Property or (3) investigation or remediation of offsite locations at
which it or any of its predecessors are alleged to have disposed of
Hazardous Substance, or (4) any expense or loss incurred by any Governmental
Authority in connection with the assessment, containment, removal or
remediation of any Hazardous Substance with respect to which it may be
liable or for which a Lien may be imposed on any of its Property, in each
case, which could reasonably be expected to have a Materially Adverse
Effect;
(iii) Cause the prompt containment and removal of any
Hazardous Substance Released or disposed of on any of its Property, which
Release or disposition could reasonably be expected to have a Materially
Adverse Effect; and
(iv) Permit the Bank, in its reasonable discretion for
the purpose of assessing the environmental condition of any Property of the
Company or any of its Subsidiaries, to obtain, at the expense of the Company
(subject to the proviso set forth below), one or more environmental
assessments or audits of any such Property prepared by a hydrologist or
other qualified independent engineer, consultant or expert selected by the
Bank to confirm (a) whether any Hazardous Substance is present in the soil
or water at such Property and (b) whether the use and operation of the
Property complies with all Environmental Laws PROVIDED; that only one such
environmental assessment or audit during any six (6) month period shall be
at the expense of the Company.
Section 5.2. CERTAIN NEGATIVE COVENANTS. The Company agrees
that, so long as any amount is payable under this Agreement or any other
Loan Document or the Letter of Credit is outstanding, the Company will not,
and will not cause or permit any of its Subsidiaries to:
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Section 5.2.1. INDEBTEDNESS. Create, incur, assume, or suffer
to exist or otherwise become or be liable in respect of any Indebtedness,
EXCEPT:
(i) Indebtedness of the Company under this Agreement
and the other Loan Documents;
(ii) Indebtedness of the Company under the Note and
the Loan Agreement; and
(iii) Permitted Indebtedness.
Section 5.2.2. LIENS. Create, incur, assume, or suffer to
exist any Lien upon any of its Property (including Equity Interests of any
of its Subsidiaries), whether now owned or hereafter acquired, EXCEPT:
(i) Liens in favor of the Bank pursuant to the Pledge
Agreement;
(ii) Liens in favor of the Trustee securing the
Company's obligations in respect of the Note and the Loan Agreement; and
(iii) Permitted Liens.
Section 5.2.3. CONSOLIDATED TANGIBLE NET WORTH. Consolidated
Tangible Net Worth of the Company to be less than Twelve Million Dollars
($12,000,000) at any time.
Section. 5.2.4. INVESTMENTS. During the continuance of an
Event of Default or in the event a Default or an Event of Default would
result therefrom, make, incur or assume any Investment in any other Person,
EXCEPT Permitted Investments.
Section 5.2.5. RESTRICTED PAYMENTS. Make or make any offer to
make any Restricted Payments, EXCEPT (i) the declaration and payment of
dividends by the Company to CNG or the making of other distributions by the
Company to CNG; PROVIDED, that no Default or Event of Default is existing
immediately prior to such dividend or distribution or would result
therefrom, and (ii) the declaration and payment of cash dividends by any of
the Subsidiaries of the Company to the Company.
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Section 5.2.6. MERGERS; ACQUISITIONS; SALES OF PROPERTY.
Consolidate or merge with any Person, EXCEPT any Permitted Combination, or
engage in any Sale of all or any substantial part of its Property (either in
a single transaction or a series of related transactions) to any Person,
EXCEPT any Permitted Disposition, or engage in any Acquisition or sell and
thereafter lease back all or any part of its Property.
Section 5.2.7. MODIFICATION, ETC. OF CERTAIN AGREEMENTS AND
GOVERNING DOCUMENTS. Consent to or enter into or permit any amendment,
supplement or other modification of, or any termination of, any:
(i) Bond Document;
(ii) Operative Document; PROVIDED, HOWEVER, that the Company
may:
(a) amend, modify or supplement any Operative Document as
long as such amendment, supplement or other modification would not decrease
or delay any amounts to be received by, or increase or accelerate any
amounts to be paid by, the Company thereunder (other than ordinary course
revisions to rates which revisions would not have a Materially Adverse
Effect), or shorten the duration thereof;
(b) permit the termination (other than on the stated
maturity date thereof) of any Operative Document relating to the purchase of
Product from the Project as long as such Operative Document, together with
all other such Operative Documents that have terminated (other than on the
stated maturity date thereof) after the date hereof and have not been
replaced in accordance with CLAUSE (C) below, accounted for less than ten
percent (10%) of the total gross revenue of Company attributable to the
Project during the most recent Fiscal Year of the Company ended prior to the
termination of the first such Operating Document; and
(c) permit the termination (other than on the stated
maturity date thereof) of any Operative Document relating to the purchase of
Product from the Project as long as (1) such Operative Document, together
with all other such Operative Documents that have terminated (other than on
the stated maturity date thereof) after the date hereof and have not been
replaced in accordance with this CLAUSE (C), accounted for less than twenty
percent (20%) of the total gross revenue of Company attributable to the
Project during the most recent Fiscal Year of the Company ended prior to the
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termination of the first such Operative Document and (2) within ninety (90)
days after the date of termination of such Operative Document, the Company
replaces such Operative Document with a new agreement providing revenue to
the Company at least equal to the amount of revenue provided by such
Operative Document; or
(ii) Governing Document of the Company or any of its
Subsidiaries, EXCEPT for any amendment, supplement or other modification
that would not have a Materially Adverse Effect.
Section 5.2.8. TRANSACTIONS WITH AFFILIATES. Enter into any
transaction or agreement with any Affiliate, EXCEPT:
(i) employment agreements entered into in the
ordinary course of business by the Company or any of its Subsidiaries and
loans or advances to employees of the Company or any of its Subsidiaries in
the ordinary course of business for travel expenses, drawing accounts or
other similar business related expenses; and
(ii) any transaction or agreement having terms not
less favorable to the Company and its Subsidiaries than would be the case if
such transaction or agreement had been entered into with a Person that is
not an Affiliate.
Section 5.2.9. EQUITY INTERESTS. Issue, sell, transfer,
pledge, mortgage, assign or dispose of any Equity Interests of the Company
or any of its Subsidiaries, EXCEPT the issuance by the Company of shares of
its Permitted Capital Stock (or options or warrants to purchase Permitted
Capital Stock), PROVIDED that no Default or Event of Default is continuing
at the time of such issuance.
Section 5.2.10. RESTRICTIVE OR INCONSISTENT AGREEMENTS. Enter
into or become bound by or permit to exist any Contractual Obligation:
(i) (other than any Loan Document, the Indenture, the Loan
Agreement and the other Instruments (copies of which Instruments have been
delivered to the Bank) described on SCHEDULE 5.2.10 of the DISCLOSURE
SCHEDULE), which, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or otherwise imposes any materially
adverse or burdensome condition upon, the declaration or payment of
dividends or distributions, the incurrence of Indebtedness, the granting of
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Liens, the making of loans or advances among the Company and its
Subsidiaries, or the amendment or modification of any of the Loan Documents;
or
(ii) containing any provision that would be violated
or breached by the execution or delivery by the Company of this Agreement or
any other Loan Document, or by the performance by the Company of its
obligations hereunder, under any other Loan Document, under any Bond
Document or under any Operative Document.
Section 5.2.11. LEASES. Enter into or permit to exist any
ground leases, space lease, sublease, or any other leasehold interest with
respect to any portion of the Project, except a lease by the Company to an
Affiliate of the Company where such lease is necessary for the operation of
the Project.
Section 5.2.12 ERISA COMPLIANCE.
(i) Permit any Single Employer Plan to incur an
"accumulated funding deficiency", as such term is defined in Section 302 of
ERISA, whether or not such deficiency is or may be waived;
(ii) Fail to contribute to any Single Employer Plan to
an extent which, or terminate any Single Employer Plan in a manner which,
could result in the imposition of a Lien on any Property of the Borrower or
any of its Subsidiaries.
(iii) Permit or take any action which would result in
the aggregate benefit liabilities (within the meaning of Section 4001 of
ERISA) of any Single Employer Plan exceeding the value of the current assets
of such Plan.
ARTICLE VI
EVENTS OF DEFAULT
Upon the occurrence of any of the following events (herein
referred to as an "EVENT OF DEFAULT"):
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(i) an "event of default" as described and defined in
the Indenture shall occur; or
(ii) the Company shall fail to pay any amount referred
to in CLAUSE (I) of SECTION 3.1 when due under the terms of this Agreement;
or
(iii) the Company shall fail to pay any amount (other
than an amount referred to in CLAUSE (II) above) when due under the terms of
this Agreement or any other Loan Document and such failure shall remain
unremedied for a period of five (5) days; or
(iv) the Company or any Subsidiary of the Company
shall fail to perform or observe any term, covenant or agreement contained
in ARTICLE V; or
(v) the Company shall fail to perform or observe any
term, covenant or agreement contained in this Agreement (other than terms,
covenants, or agreements referred to in CLAUSES (I), (II), (III) and (IV)
above) and such failure shall remain unremedied for a period of thirty (30)
days; or
(vi) the Company shall fail to perform or observe any
material term, covenant, or agreement contained in any Loan Document (other
than terms, covenants or agreements referred to in CLAUSES (I), (II), (III),
(IV) and (V) above), any Operative Document or any Bond Document and such
failure shall remain unremedied after any applicable grace period specified
in such Loan Document, Operative Document or Bond Document; or
(vii) any warranty, representation or other written
statement made by or on behalf of the Company, any of the Subsidiaries of
the Company or CNG in this Agreement, any other Loan Document, any Bond
Document, any Operative Document, or any other document furnished in
connection with this Agreement shall be false or misleading in any material
respect on the date as of which made; or
(viii) the Company or any of its Subsidiaries or CNG
shall default in the payment when due (subject to any applicable grace
period), whether upon acceleration or otherwise, of any Indebtedness of such
Person, or the Company or any of its Subsidiaries or CNG shall default in
the performance or observance of any obligation or condition with respect to
<PAGE>
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any such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or to permit the holder or holders
thereof, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its stated maturity, or any
such Indebtedness shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled required prepayment) prior to
its stated maturity, or any Lien on any Property of the Company or any of
its Subsidiaries or CNG securing any Indebtedness shall be foreclosed on; or
(ix) the Company, any of its Subsidiaries or CNG shall
(a) apply for, consent to or acquiesce in, the appointment of a receiver,
trustee, liquidator or custodian or the like of itself or any of its
Property, (b) admit in writing its inability to, or fail to, pay its debts
generally as they become due, (c) be adjudicated a bankrupt or insolvent,
(d) voluntarily commence any Bankruptcy or Insolvency Proceeding, (e) permit
or suffer to exist (1) the involuntary commencement of any Bankruptcy or
Insolvency Proceeding against it or (2) the commencement of any case,
proceeding or other action seeking the issuance of a warrant of attachment,
execution, distraint or similar process against all or any material part of
its Property (except for any such attachment or similar process that would
constitute a Permitted Lien), and such proceeding shall (A) not be contested
in good faith by the Company, such Subsidiary or CNG, (B) result in the
entry of an order for relief or any such adjudication or appointment or (C)
continue undismissed, or pending and unstayed, for a period of sixty (60)
days after commencement thereof, or (f) take any corporate action
authorizing, or in furtherance of, any of the foregoing; or
(x) any Single Employer Plan shall fail to maintain
the minimum funding standard required by Section 412 of the Code for any
plan year, or a waiver of such standard or the extension of any amortization
period is sought or granted under Section 412(d) or (e) of the Code; or any
Plan is or shall have been terminated or the subject of termination
proceedings under ERISA, or an event shall have occurred entitling the PBGC
to terminate a Plan under Section 4042(a) of ERISA; or the Company or any of
its Subsidiaries or any ERISA Affiliate shall have incurred or become likely
to incur liability to or on account of a termination of or a withdrawal from
a Plan under Section 4062, 4063, 4064, 4201, 4204 or 515 of ERISA; and there
shall result from any such event or events either (1) the provision of
security to induce the issuance of a waiver or extension of any funding
requirement under Section 412 of ERISA, or (2) liability, or a material risk
of incurring liability, to the PBGC or a Plan or a trustee appointed under
Section 4042 or 4049 of ERISA in excess of Two Hundred Thousand Dollars
<PAGE>
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($200,000); or
(xi) a final judgment which, together with any other
outstanding final judgments against the Company, any of its Subsidiaries or
CNG, exceeds an aggregate of Five Hundred Thousand Dollars ($500,000) (net
of actual insurance coverage with respect thereto) shall be rendered against
the Company, any of the Subsidiaries of the Company or CNG and, within
thirty (30) days after entry thereof, such judgment shall not have been
discharged or execution thereof stayed pending appeal, or if, within thirty
(30) days after the expiration of any such stay, such judgment shall not
have been discharged; or
(xii) any Loan Document or Bond Document, or any Lien
granted thereunder, shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective, or cease to be the legally valid,
binding and enforceable obligation of any party thereto; or any party
thereto shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or any Lien
granted thereunder shall, in whole or in part, cease to be a perfected first
priority Lien, subject only to those exceptions permitted by the Loans
Documents or the Bond Documents, as the case may be; or
(xiii) any Operative Document shall terminate (except as
permitted by SECTION 5.2.7 hereof), or any material provision in any
Operative Document shall cease to be effective, or cease to be the legally
valid, binding and enforceable obligation of any party thereto; or any event
described in any of SUBSECTIONS (A) through (E) of CLAUSE (IX) above shall
occur with respect to any party to any Operative Document; or
(xiiv) any party shall default in the performance of any
material obligation under any Operative Document or any Bond Document and
such default shall not be cured within thirty (30) days; or
(xv) any warranty, representation or other written
statement made by or on behalf of any party (other than the Company) in any
Operative Document or Bond Document or in any document furnished in
compliance therewith shall be false or misleading in any material respect on
the date as of which made; or
(xvi) a material portion of the Project shall be
permanently condemned or seized or title thereto shall be permanently
requisitioned or taken by any Governmental Authority under power of eminent
<PAGE>
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domain or otherwise; or a material portion of the Project shall be
temporarily condemned or seized or title thereto shall be temporarily
requisitioned or taken by any Governmental Authority under power of eminent
domain or otherwise; or any loss, destruction or damage shall have occurred
with respect to a material portion of the Project; in each case, if such
condemnation, seizure, loss, destruction or damage would have a Materially
Adverse Effect; or
(xvii) the Company shall cease to be wholly-owned by CNG
other than as a result of a Permitted Combination; or
(xviii) if Bonds in an aggregate outstanding principal
amount equal to the total amount specified in the Trustee's certificate
delivered to the Bank pursuant to any A Drawing shall not be delivered to
the Bank within three (3) Business Days following the delivery of such
certificate to the Bank;
then, and in any such event, the Bank may, in its sole discretion, but shall
not be obligated to, (a) by notice to the Company, declare all amounts
payable by the Company hereunder (including amounts payable pursuant to
SECTION 3.1) and under the other Loan Documents to be forthwith due and
payable, and the same shall thereupon become due and payable without further
notice, demand, presentment, protest or other action of any kind, all of
which are hereby expressly waived, and/or (b) exercise any or all of its
rights and remedies under the Loan Documents and/or (c) by notice to the
Trustee, require the Trustee to accelerate payment of all Bonds and interest
accrued thereon as provided in the Indenture; PROVIDED that in the event of
an Event of Default described in CLAUSE (IX) above, all amounts payable by
the Company hereunder and under the other Loan Documents shall automatically
be and become due and payable, without notice, demand, presentment, protest
or other action of any kind.
No remedy herein conferred or reserved is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy
given under this Agreement, any other Loan Document or any Bond Document or
now or hereafter existing at law or in equity. No delay or omission to
exercise any right or power hereunder shall impair any such right or power
or shall be construed to be a waiver thereof, but any such right or power
may be exercised from time to time and as often as may be deemed expedient.
In order to exercise any remedy given to the Bank in this Agreement, any
<PAGE>
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other Loan Document or any Bond Document, it shall not be necessary to give
any notice, other than such notice as may be herein expressly required. In
the event any provision contained in this Agreement shall be breached by any
party and thereafter duly waived by the other party so empowered to act,
such waiver shall be limited to the particular breach so waived and shall
not be deemed to waive any other breach or any future breach hereunder. No
waiver, amendment, release or modification of this Agreement shall be
established by conduct, custom or course of dealing, but solely by an
instrument in writing duly executed by the parties thereunto duly authorized
by this Agreement.
ARTICLE VII
INDEMNIFICATION
Section 7.1. INDEMNIFICATION. In addition to amounts payable
under ARTICLES II, III and VIII, the Company hereby agrees to protect,
indemnify, pay and save the Bank and its shareholders, officers, directors,
employees, agents, Subsidiaries and Affiliates (collectively, the
"INDEMNIFIED PARTIES") harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys fees and expenses and amounts paid in
settlement and court costs) (the "INDEMNIFIED LIABILITIES") which any
Indemnified Party may incur or be subject to as a consequence, direct or
indirect, of (i) any of the transactions contemplated hereby, including the
issuance of the Letter of Credit, (ii) any breach by the Company or the
Authority of any warranty, covenant, term or condition in, or the
occurrence of any default under, this Agreement, any other Loan Document,
any Operative Document or any Bond Document, (iii) defense against any legal
action commenced to challenge the validity of this Agreement, any other Loan
Document, any Operative Document or any Bond Document and (iv) the presence
on or under, or the escape, seepage, leakage, spillage, discharge, emission,
discharging or release from, any real property owned or operated by the
Company or any of its Subsidiaries of any Hazardous Substance, (including
any losses, liabilities, damages, injuries, costs, expenses or claims
asserted or arising under Environmental Law), regardless of whether or not
caused by, or within the control of, the Company or any of its Subsidiaries.
If and to the extent that the foregoing undertaking may be unenforceable for
any reason, each of the Company and its Subsidiaries hereby agrees to make
<PAGE>
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the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities that is permissible under Applicable Law, subject to
the limitations set forth in SECTION 7.2.
Section 7.2. LIMITATION ON INDEMNITY OBLIGATION.
Notwithstanding anything to the contrary contained in ARTICLE VII, the
Company shall have no obligation to indemnify any Indemnified Party to the
extent any Indemnified Liability incurred by such Indemnified Party arose
solely out of the gross negligence or willful misconduct of such Indemnified
Party, as determined by a court of competent jurisdiction.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. AMENDMENTS. This Agreement may not be amended,
and the Company may not take any action herein prohibited, or omit to
perform any act herein required to be performed by it, unless and until the
Company shall obtain the written consent of the Bank. No course of dealing
between the Company and the Bank, nor any delay in exercising any rights
hereunder shall operate as a waiver of any rights of the Bank hereunder.
Section 8.2. EXPENSES. The Company agrees to pay on demand all
costs and expenses incurred by the Bank in connection with the review,
preparation, issuance, delivery and administration of the Letter of Credit,
this Agreement, the other Loan Documents, the Operative Documents, the Bond
Documents and any other documents which may be delivered in connection with
this Agreement, any amendments, consents or waivers to any of the foregoing
as may from time to time be required or requested, including all rating
agency fees, if any, incurred by the Bank in connection with the
transactions contemplated hereby, the reasonable fees and expenses of
counsel for the Bank, and the reasonable fees and expenses of any local
counsel who may be retained by the Bank with respect to the transactions
contemplated by this Agreement (whether or not such transactions are
consummated), and all costs and expenses (including reasonable counsel fees
and expenses) in connection with (i) the transfer, drawing upon, change in
terms, maintenance, renewal or cancellation of the Letter of Credit, (ii)
the Bank's curing of any Default or Event of Default resulting from the acts
or omissions of the Company under this Agreement, any other Loan Document,
any Operative Document, or any Bond Document, (iii) the enforcement of this
Agreement, any other Loan Document, any Bond Document or any Operative
Document and the consideration and/or conduct of any restructuring or
"workout" of any obligations of the Company under any of the foregoing, or
(iv) any action or proceeding relating to a court order, injunction, or
other process or decree restraining or seeking to restrain the Bank from
paying any amount under the Letter of Credit. In addition, the Company
shall pay any and all stamp and other taxes and fees payable or determined
<PAGE>
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to be payable in connection with the execution and delivery of the Letter of
Credit, this Agreement, the other Loan Agreements, the Operative Documents
or the Bond Documents, or any other document which may be delivered in
connection with any of the foregoing, and agrees to save the Bank harmless
from and against any and all liabilities with respect to or resulting from
any delay in paying or omission to pay such taxes and fees. Notwithstanding
the foregoing, no payment shall be required under this SECTION 8.2 in
respect of any cost or expense which the Bank has incurred because of its
gross negligence or willful misconduct.
Section 8.3. SET-OFF. The Bank hereby waives any right of set-
off it may have with respect to any moneys the Company has on deposit with
the Bank as long as any bankruptcy, reorganization, insolvency, or similar
proceeding involving the Company is pending.
Section 8.4. BINDING EFFECT; ASSIGNMENT. This Agreement is a
continuing obligation and shall (i) be binding upon the Company and its
successors and assigns and (ii) inure to the benefit of and be enforceable
by the Bank and its successors, transferees and assigns, PROVIDED, that the
Company may not assign all or any part of its rights under or delegate any
of its duties under this Agreement without the prior written consent of the
Bank. The Bank may assign, negotiate, pledge or otherwise hypothecate all
or any portion of this Agreement or the other Loan Documents, or grant
participations herein or therein, or in any of its rights or security
hereunder or thereunder, including the Instruments securing the Company's
obligations hereunder. The Company agrees that each participant shall be
entitled to the benefit of SECTION 2.3 and ARTICLE VII with respect to its
participating interest. No such assignment or participation by the Bank,
however, will relieve the Bank of its obligation under the Letter of Credit
unless the Letter of Credit is replaced by an Alternative Letter of Credit
Facility (as defined in the Indenture). In connection with any such
assignment or participation, the Bank may disclose to the proposed assignee
or participant any information that the Company to delivers to the Bank
pursuant to this Agreement.
Section 8.5. NOTICES. All communications provided for
hereunder shall be in writing and sent by first class mail or overnight
courier, postage prepaid, addressed, if to the Bank, to it at 101 Federal
Street, 16th Floor, Boston, Massachusetts 02110, Attention: Ms. Carolyn A.
Lopez and, if to the Company, to it at 60 Columbus Blvd., P.O. Box 1500,
Hartford, Connecticut 06144, Attention: Ms. Julie P. Lou, or to such other
address with respect to either party as such party shall notify the other in
writing. Any notice, if mailed or sent by overnight courier and properly
addressed with postage prepaid, shall be deemed given when received.
Section 8.6. SATISFACTION REQUIREMENT. If any agreement,
certificate or other writing, or any action taken or to be taken, is by the
terms of this Agreement required to be satisfactory to the Bank, the
determination of such satisfaction shall be made by the Bank in its sole and
exclusive judgment exercised in good faith.
<PAGE>
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Section 8.7. SURVIVAL. The obligations of the Company and its
Subsidiaries under SECTIONS 7.1 and 8.4 shall survive the payment by the
Company of all amounts owing to the Bank hereunder and under the other Loan
Documents and any termination of this Agreement, the Letter of Credit or the
Bonds. The representations and warranties made by the Company and its
Subsidiaries in this Agreement and in each other Loan Document, and in any
document, certificate or statement delivered pursuant hereto or thereto or
in connection herewith or therewith, shall survive the execution and
delivery of this Agreement and each other Loan Document and the issuance of
the Letter of Credit.
Section 8.8. SEVERABILITY. Any provision of this Agreement or
any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such other Loan Document or the
enforceability of any such provision in any other jurisdiction.
Section 8.9. HEADINGS. The various headings of this Agreement
and of each Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such Loan Document
or any provisions hereof or thereof.
Section 8.10. COUNTERPARTS; ENTIRE AGREEMENT. This Agreement
may be executed by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall constitute together
but one and the same agreement. This Agreement and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and supersede any prior agreements, written or
oral, with respect thereto.
Section 8.11. CHOICE OF LAW. THIS AGREEMENT HAS BEEN EXECUTED
AND DELIVERED IN THE COMMONWEALTH OF MASSACHUSETTS AND SHALL IN ALL RESPECTS
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF SUCH
COMMONWEALTH APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN
SUCH COMMONWEALTH AND, IN THE CASE OF PROVISIONS RELATING TO INTEREST RATES,
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
Section 8.12. SERVICE OF PROCESS. THE COMPANY BY ITS EXECUTION
HEREOF (I) HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE STATE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
<PAGE>
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DISTRICT OF MASSACHUSETTS FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF, AND (II) HEREBY WAIVES, TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY
WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH PROCEEDING, ANY CLAIM
THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED
COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION,
THAT ANY SUCH PROCEEDING BROUGHT IN ONE OF THE ABOVE-NAMED COURTS IS
IMPROPER, OR THAT THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE SUBJECT
MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT. THE
COMPANY HEREBY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH PROCEEDING IN ANY
MANNER PERMITTED BY CHAPTER 223A OF THE GENERAL LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, AND AGREES THAT SERVICE OF PROCESS BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED IN OR PURSUANT TO
SECTION 8.5 IS REASONABLY CALCULATED TO GIVE ACTUAL NOTICE.
Section 8.13. FURTHER ASSURANCES. The Company hereby agrees
that it will, and will cause each of its Subsidiaries, from time to time at
the Company's expense, promptly execute and deliver all further Instruments,
and take all further action, that may be necessary or appropriate, or that
the Bank may reasonably request, in order to perfect or protect any Lien
granted or purported to be granted under the Loan Documents, to enable the
Bank to exercise and enforce their rights under this Agreement and the other
Loan Documents and otherwise to carry out the intent of this Agreement and
the other Loan Documents.
Section 8.14. WAIVER OF JURY TRIAL. TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE BANK AND
THE COMPANY HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM
IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
SUBJECT MATTER HEREOF OR THEREOF OR ANY OBLIGATION IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE BANK OR THE COMPANY IN
CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. THE COMPANY
ACKNOWLEDGES THAT THE PROVISIONS OF THIS SECTION 8.14 CONSTITUTE A MATERIAL
INDUCEMENT UPON WHICH THE BANK IS RELYING AND WILL RELY IN ENTERING INTO
THIS AGREEMENT AND ANY OTHER PRESENT OR FUTURE LOAN DOCUMENT. EITHER THE
BANK OR THE COMPANY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 8.14 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE BANK
<PAGE>
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AND THE COMPANY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly
authorized officers as of the day and year first above written.
ENERGY NETWORKS, INC.
By:
---------------------------
Title:
THE BANK OF NOVA SCOTIA
By:
---------------------------
Title:<PAGE>
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SCHEDULE I
CONDITIONS PRECEDENT TO EFFECTIVENESS OF
AGREEMENT AND ISSUANCE OF LETTER OF CREDIT
The effectiveness of this Agreement and the obligation of the
Bank to issue the Letter of Credit shall be subject to satisfaction of each
of the following conditions precedent prior to or simultaneously with the
issuance of the Letter of Credit:
Section 1.1. EXISTING LETTER OF CREDIT FACILITY. Each of (i)
the Irrevocable Letter of Credit No. 35-8819006 dated March 1, 1988 issued
by CIBC in favor of the Trustee for the account of the Company, (ii) the
Restated and Amended Letter of Credit and Reimbursement Agreement dated as
of March 1, 1988 (the "CIBC REIMBURSEMENT AGREEMENT") between the Company
and CIBC, and (iii) the Security Documents (as defined in the CIBC
Reimbursement Agreement) shall have been terminated, and all obligations and
liabilities of the Company under each of the foregoing shall have been
discharged and satisfied in full. The Bank shall have received from CIBC
such documents evidencing such termination and discharge as the Bank may
request.
Section 1.2. LOAN DOCUMENTS. The Bank shall have received a
counterpart of this Agreement and each of the other Loan Documents (other
than the Letter of Credit), each duly executed and delivered by each party
thereto and each in form and substance satisfactory to the Bank, and such
agreements shall be in full force and effect on the Date of Issuance.
Section 1.3. BOND DOCUMENTS; OPERATIVE DOCUMENTS. The Bank
shall have received and reviewed an executed copy of each of the Bond
Documents and the Operative Documents, certified as true and correct copies
by an Authorized Officer of the Company, and each of such agreements shall
be in full force and effect on the Date of Issuance.
Section 1.4. DEFAULT; EVENT OF DEFAULT. On the Date of
Issuance, after giving effect to the issuance of the Letter of Credit, there
shall exist no Default or Event of Default.
Section 1.5. REPRESENTATIONS AND WARRANTIES. On the Date of
Issuance, after giving effect to the issuance of the Letter of Credit, all
representations and warranties of the Company and each of its Subsidiaries
contained herein, in the other Loan Documents, in the Operative Documents,
in the Bond Documents or otherwise made in writing in connection herewith or
therewith shall be true and correct in all material respects with the same
force and effect as though such representations and warranties had been made
on and as of such date.
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Section 1.6. OFFICER'S CERTIFICATE. There shall have been
delivered to the Bank an Officer's Certificate, dated the Date of Issuance,
to the effect that all of the conditions specified in SECTIONS 1.4, 1.5 and
1.17 of this SCHEDULE I are satisfied as of such date.
Section 1.7. OPINIONS OF COUNSEL TO COMPANY. There shall have
been delivered to the Bank an opinion of Murtha, Cullina, Richter and
Pinney, counsel to the Company, dated the Date of Issuance and in form and
substance satisfactory to the Bank, covering such matters as the Bank may
reasonably request.
Section 1.8. CORPORATE ACTION BY COMPANY. The Bank shall have
received (i) copies of all corporate (including stockholder, if required)
action taken by the Company to authorize the execution, delivery and
performance in accordance with their respective terms of this Agreement and
the other Loan Documents to which it is a party and any other documents
required or contemplated hereunder or thereunder, certified as true and
correct copies by the Secretary or Assistant Secretary of the Company; (ii)
a certificate of incumbency with respect to the officers of the Company
authorized to execute and deliver this Agreement, the other Loan Documents
and any other documents required or contemplated hereunder or thereunder
(each, an "AUTHORIZED OFFICER") executed by the Secretary or Assistant
Secretary of the Company; (iii) copies of the Governing Documents of the
Company, as restated or amended to the Date of Issuance, certified as true
and correct copies by the Secretary or Assistant Secretary of the Company
and, in the case of the articles of incorporation of the Company, certified
as of a recent date by the Secretary of State of the State; and (iv)
certificates of good standing and legal existence for the Company from the
Secretary of State of the State and the Secretary of State of each other
state in which the Company is qualified to do business.
Section 1.9. CORPORATE ACTIONS PREVIOUSLY TAKEN BY COMPANY,
TRUSTEE AND AUTHORITY. The Bank shall have received (i) copies of all
corporate actions previously taken by the Company to authorize the Company
to execute, deliver and perform the Bond Documents, certified by an
authorized officer of the Company; (ii) copies of all corporate action
previously taken by the Trustee to authorize the Trustee to execute, deliver
and perform the Indenture and the other Bond Documents to which it is a
party, certified by an authorized officer of the Trustee; and (iii) copies
of all action previously taken to authorize the Authority to execute,
deliver and perform the Loan Agreement, the Bond Purchase Agreement and the
Indenture, certified by an authorized officer of the Authority.
Section 1.10. CONFIRMATIONS OR UPDATES. The Bank shall have
received confirmations or updates as to the continuing validity and
effectiveness, as of the date hereof, of the Hartford Steam Letter
Agreement.
<PAGE>
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Section 1.11. LIEN SEARCH REPORTS. The Bank shall have
received satisfactory Lien search reports from each jurisdiction in which
Property of the Company or its Subsidiaries is located.
Section 1.12. UCC-3 TERMINATION STATEMENTS. The Bank shall
have received acknowledgment copies or other satisfactory evidence that
appropriate UCC-3 termination statements have been duly filed with respect
to any UCC financing statements on record against the Company or any of its
Subsidiaries (other than UCC financing statements with respect to Permitted
Liens).
Section 1.13. MORTGAGE DISCHARGES; FIXTURE FILINGS. The Bank
shall have received satisfactory evidence that appropriate mortgage
discharges and fixture filings have been duly filed with respect to any
mortgages or fixture filings on record against the Company or any of its
Subsidiaries (other than mortgages or fixture filings with respect to
Permitted Liens).
Section 1.14. FINANCIALS. The Bank shall have received the
Historical Financials.
Section 1.15. COSTS AND EXPENSES. The Company shall have paid
all costs and expenses (including counsel fees and disbursements) payable in
accordance with SECTION 8.2 through the Date of Issuance.
Section 1.16. INSURANCE CERTIFICATES. The Bank shall have
received satisfactory evidence that all insurance policies, coverages,
riders and endorsements required hereunder are in full force and effect.
Section 1.17. MATERIALLY ADVERSE EFFECT. No event or events
shall have occurred since June 30, 1994 which, individually or in the
aggregate, have had or would have a Materially Adverse Effect.
Section 1.18. CORPORATE AND LEGAL PROCEEDINGS. All corporate
and legal proceedings and all documents and Instruments in connection with
the transactions contemplated by this Agreement and the other Loan
Documents, and all prior corporate proceedings in connection with the
transactions contemplated by the Operative Documents and the Bond Documents,
shall be satisfactory in form and substance to the Bank and its counsel and
the Bank shall have received all information and copies of all documents and
Instruments, including records of corporate proceedings, Approvals and
incumbency certificates which it may have reasonably requested in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, and copies of all prior corporate proceedings in connection with
the transactions contemplated by the Operative Documents and the Bond
Documents, such documents and Instruments where appropriate to be certified
by Authorized Officers.
<PAGE>
- 50 -
SCHEDULE II
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and the
other Loan Documents and to issue the Letter of Credit, the Company makes
the following representations and warranties which shall survive the
execution and delivery of this Agreement, the other Loan Documents and the
other documents to be delivered pursuant hereto or thereto or in connection
herewith or therewith.
Section 2.1. ORGANIZATION AND QUALIFICATION. Each of the
Company, the Subsidiaries of the Company and CNG is a corporation duly
organized, validly existing and in good standing under the laws of its state
of incorporation, and each of the Company, the Subsidiaries of the Company
and CNG is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the failure to so qualify
would have a Materially Adverse Effect, and each of the Company, the
Subsidiaries of the Company and CNG has the corporate power and holds all
necessary governmental licenses, permits and other Approvals to own its
respective Property and to carry on its respective business as it is now
being conducted. SECTION 2.1 of the DISCLOSURE SCHEDULE lists each of the
Subsidiaries of the Company and, except as set forth therein, the Company
owns all of the issued and outstanding Capital Stock of each such Subsidiary
and there are no outstanding Liens or restrictions on transfer on any
Capital Stock of any such Subsidiary. CNG owns all of the issued and
outstanding Capital Stock of the Company and there are no Liens or
restrictions on transfer on any Capital Stock of the Company.
Section 2.2. POWER, AUTHORITY. Each of the Company and its
Subsidiaries has taken all necessary action, corporate or otherwise, to
authorize the execution, delivery and performance of the Loan Documents,
Bond Documents and Operative Documents to which it is a party. The
execution, delivery and performance of each of the Loan Documents, the Bond
Documents and the Operative Documents to which the Company or any of its
Subsidiaries is a party will not (except for Approvals which have already
been obtained) require any Approval, will not conflict with, result in any
violation of, or constitute any default under (i) any Governing Document of
the Company or any of its Subsidiaries, (ii) any Contractual Obligation of
the Company or any of its Subsidiaries or (iii) any Applicable Law, and will
not result in or require the creation or imposition of any Lien (other than
Liens created by the Pledge Agreement and the Bond Documents) on any
Property of the Company or any of its Subsidiaries. The Company and each of
its Subsidiaries is in compliance in all material respects with all
Applicable Laws.
Section 2.3. VALIDITY, ETC. This Agreement has been duly
executed and delivered by the Company, and constitutes the legal, valid, and
binding obligation of the Company, enforceable in accordance with its terms.
<PAGE>
- 51 -
Each of the Loan Documents to which the Company or any of its Subsidiaries
is a party constitutes the legal, valid and binding obligation of such
Person, enforceable in accordance with its terms. The enforceability of
this Agreement and the other Loan Documents against the Company and its
Subsidiaries is subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws at the time in effect affecting the
enforceability of the rights of creditors generally.
Section 2.4. FINANCIAL STATEMENTS. All balance sheets and
statements of income, stockholders' equity and cash flows, and all other
financial statements which have been furnished by or on behalf of the
Company, or any of its Subsidiaries to the Bank for the purposes of or in
connection with this Agreement or any transactions contemplated hereby
(collectively, the "HISTORICAL FINANCIALS") have been prepared in accordance
with GAAP consistently applied throughout the periods involved (except as
disclosed therein) and present fairly the consolidated financial condition
of the corporations covered thereby as at the dates thereof and the results
of their operations for the periods then ended. Neither the Company nor any
of its Subsidiaries has any material contingent liability or liabilities for
taxes, long-term leases or unusual forward or long-term commitments which
are not reflected in the Historical Financials or in the notes thereto.
Section 2.5. MATERIALLY ADVERSE EFFECT. No event or events
have occurred since June 30, 1994 which, individually or in the aggregate,
have had or would have, a Materially Adverse Effect.
Section 2.6. ACTIONS PENDING. Except as disclosed in SECTION
2.6 of the DISCLOSURE SCHEDULE, there is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company (after due inquiry)
threatened against the Company, any of the Subsidiaries of the Company or
CNG, or any of their respective Property, which (i) if adversely determined,
would have a Materially Adverse Effect or (ii) relates to this Agreement,
any other Loan Document, any Bond Document, any Operative Document or the
transactions contemplated hereby or thereby.
Section 2.7. TAXES. The Company and each of its Subsidiaries
have filed all tax returns required by Applicable Law and the Company and
each of its Subsidiaries have paid all taxes as shown on said returns and on
all assessments received by it to the extent that such taxes have become
due. No tax Liens have been filed with respect to the Company or any of
its Subsidiaries and, to the best knowledge of the Company (after due
inquiry), no claims are being asserted with respect to any such taxes or
charges (and no basis exists for any such claims), which Liens and claims,
individually or in the aggregate, would have a Materially Adverse Effect.
All tax liabilities are adequately provided for on the books of the Company
and its Subsidiaries.
<PAGE>
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Section 2.8. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither
the Company nor any of its Subsidiaries is subject to any Applicable Law,
Governing Document or Contractual Obligation which would have a Materially
Adverse Effect.
Section 2.9. OWNERSHIP OF PROPERTIES, LIENS. SECTION 2.9 of the
DISCLOSURE SCHEDULE sets forth a true, correct and complete description of
all real Property owned or leased (including easements) by the Company or
any of its Subsidiaries that is material to the operation of the Project.
The Company or the applicable Subsidiary of the Company has valid fee or
leasehold interests in all of the real Property described in SECTION 2.9 of
the DISCLOSURE SCHEDULE and good and marketable title to all of its owned
personal Property material to the operation of the Project (other than
equipment leased from Aetna under the Aetna Lease), and none of such
Property is subject to any Lien (except Liens permitted by SECTION 5.2.2).
Section 2.10. OTHER REPRESENTATIONS AND WARRANTIES. Each of
the representations and warranties made by the Company or any of its
Subsidiaries in the Bond Documents and the Operative Documents is hereby
incorporated herein by reference as if fully set forth herein, and the
Company and its Subsidiaries hereby remake each of such representations and
warranties, to and for the benefit of the Bank, with the same force and
effect as though made on and as of the date hereof.
Section 2.11. LABOR CONTROVERSIES. There are no labor
controversies pending or, to the best knowledge of the Company (after due
inquiry), threatened against the Company or any of its Subsidiaries, which,
if adversely determined, would have a Materially Adverse Effect.
Section 2.12. COMPLIANCE WITH ERISA. All Single Employer Plans
are in substantial compliance with ERISA; no Multiemployer Plan is insolvent
or in reorganization (each such term as defined for purposes of Title IV of
ERISA) or has notified the Company or any of its Subsidiaries or any ERISA
Affiliate that it intends to terminate or has been terminated; no Single
Employer Plan has an accumulated or waived funding deficiency or has applied
for an extension of any amortization period within the meaning of Section
412 of the Code; neither the Company nor any of its Subsidiaries nor any
ERISA Affiliate has incurred any liability to or on account of a Single
Employer Plan pursuant to Section 4062, 4063, 4064 or a Multiemployer Plan
pursuant to Sections 515, 4201 or 4204 of ERISA; no proceedings have been
instituted to terminate any Plan; and no condition exists which presents a
material risk to the Company or any of its Subsidiaries of incurring a
liability to or on account of a Plan pursuant to any of the foregoing
Sections of ERISA or the Code. The aggregate present value of all benefit
liabilities (within the meaning of Section 4001 of ERISA) of each Single
Employer Plan does not exceed the aggregate current value of all assets of
<PAGE>
- 53 -
such Plan based upon the most recent estimated actuarial data that has been
provided to the Company and its Subsidiaries by the consulting actuaries of
such Plan, and there is no withdrawal liability (and would be no withdrawal
liability assuming a complete withdrawal from all such Plans) to any
Multiemployer Plan. Each employee welfare benefit plan (within the meaning
of Section 3(a) or 3(2)(B) of ERISA) maintained or contributed to by the
Company or any of its Subsidiaries requires that no benefits are due unless
the event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Part 6 of ERISA or applicable
state insurance laws). The Company and its Subsidiaries may terminate each
such employee welfare benefit plan at any time (or at any time subsequent to
the expiration of any applicable bargaining agreement) in the discretion of
such Person, without liability to any Person.
Section 2.13. ENVIRONMENTAL MATTERS. Except as described in
SECTION 2.13 of the DISCLOSURE SCHEDULE:
(i) all Property (including underlying groundwater)
owned or leased by the Company or any of its Subsidiaries has been, and
continues to be, owned or leased by such Person in compliance with all
Environmental Laws;
(ii) there have been no past, and there are no pending
or, to the knowledge of the Company, threatened
(a) claims, complaints, notices or requests for
information received by the Company or any of its Subsidiaries from any
Governmental Authority with respect to any alleged violation of any
Environmental Laws, or
(b) complaints, notices or inquiries to the
Company or any of its Subsidiaries from any Governmental Authority alleging
liability under any Environmental Laws;
(iii) there have been no Releases of Hazardous
Substances at, on or under Property now or (to the best knowledge of the
Company) previously owned or leased by the Company or any of its
Subsidiaries, the costs to address which would reasonably be expected,
individually or in the aggregate, to have a Materially Adverse Effect;
<PAGE>
- 54 -
(iv) the Company and each of its Subsidiaries has been
issued and is in material compliance with all permits, certificates,
approvals, licenses and other authorizations relating to environmental
matters and required under Environmental Laws for their businesses;
(v) no Property now or, to the knowledge of the
Company, previously owned or leased by the Company or any of its
Subsidiaries, is listed or proposed for listing (with respect to owned
Property only) on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list of sites requiring investigation or
clean-up;
(vi) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any Property now
owned or leased by the Company or any of its Subsidiaries;
(vii) neither the Company nor any of its Subsidiaries
has transported or arranged for the transportation of any Hazardous
Substance to any location (a) which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or (b) which is the subject of federal, state or local
enforcement actions or other investigations which would reasonably be
expected to lead to material claims against the Company or any of its
Subsidiaries for any remedial work, damage to natural resources or personal
injury, including claims under CERCLA;
(viii) there are no polychlorinated biphenyls or
asbestos (except to the extent such asbestos complies with all Applicable
Laws, including all Environmental Laws) present at any Property now owned or
leased by the Company or any of its Subsidiaries; and
(ix) no conditions exist at, on or under any Property
now or previously owned or leased by the Company or any of its Subsidiaries,
which, with the passage of time, or the giving of notice, or both, could
reasonably be expected to give rise to liability under any Environmental
Laws, and have, individually or in the aggregate, a Materially Adverse
Effect.
Section 2.14. OPERATIVE DOCUMENTS. Except for the Operative
Documents and as otherwise disclosed on SCHEDULE 2.14 of the Disclosure
Statement, there are no agreements, written or otherwise, with respect to
(i) the supply, sale or distribution to Persons (other than the Company) of
<PAGE>
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Product produced by the Project or (ii) the supply or sale to the Company or
any of its Subsidiaries of Product, or energy, fuel or materials utilized in
producing Product, to the Project.
Section 2.15. ACCURACY OF INFORMATION. All information
heretofore or contemporaneously furnished by or on behalf of the Company and
its Subsidiaries in writing to the Bank for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all other
information hereafter furnished by or on behalf of the Company or any of its
Subsidiaries to the Bank will be, true and accurate in every material
respect on the date as of which such information is furnished, and not
incomplete by omitting to state any material fact necessary to make such
information not misleading.
<PAGE>
IRREVOCABLE STANDBY LETTER OF CREDIT
THE BANK OF NOVA SCOTIA
101 Federal Street
Boston, Massachusetts 02208
October 14, 1994
IRREVOCABLE STANDBY LETTER OF CREDIT NO. S008/94/82875
The First National Bank of Boston,
as Trustee
150 Royall Street
Canton, Massachusetts 02021
Attention: Corporate Trust Department
Dear Sirs:
At the request and on the instructions of our customer Energy
Networks, Inc. (the "COMPANY"), we hereby establish this Irrevocable Standby
Letter of Credit (this "LETTER OF CREDIT") in your favor, as Trustee under
the Indenture of Trust, dated as of December 1, 1986, as amended and
supplemented by the First Supplemental Indenture, dated as of March 1, 1988
(as so amended and supplemented, the "INDENTURE"), between the Connecticut
Development Authority (the "AUTHORITY") and you, pursuant to which Sixteen
Million Three Hundred Thousand Dollars ($16,300,000) in aggregate principal
amount of the Authority's Industrial Revenue Variable Rate Demand Bonds
(Capitol District Energy Center Project - 1986 Series) and the Authority's
Industrial Revenue Variable Rate Demand Bonds (Capitol District Energy
Center Project - 1988 Series) (collectively, the "BONDS") have been issued.
Upon the terms and conditions hereinafter set forth, this Letter of Credit
authorizes you to draw on us an amount not exceeding Thirteen Million Seven
Hundred Sixty-seven Thousand One Hundred Twenty-three Dollars ($13,767,123)
(hereinafter, as reduced or reinstated from time to time in accordance with
the provisions hereof, the "STATED AMOUNT"), of which an amount not
exceeding Thirteen Million Four Hundred Thousand Dollars ($13,400,000) (as
reduced or reinstated from time to time in accordance with the terms hereof,
the "PRINCIPAL COMPONENT") may be drawn with respect to payment of the
unpaid principal amount of, or the portion of the Purchase Price
corresponding to principal of, the Bonds, and of which an amount not
exceeding Three Hundred Sixty-seven Thousand One Hundred Twenty-three
Dollars ($367,123) (as reduced or reinstated from time to time in accordance
with the terms hereof, the "INTEREST COMPONENT") may be drawn with respect
to payment of interest accrued on, or the portion of the Purchase Price
corresponding to interest accrued on, the Bonds on or prior to their stated
<PAGE>
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maturity date. This Letter of Credit shall be effective immediately and
shall expire (unless otherwise terminated or extended in accordance with the
provisions hereof) on the earlier to occur of (i) the making by you of the
final drawing available to be made hereunder, (ii) our receipt of a
certificate signed by an Authorized Officer stating that: "(a) the
conditions precedent to the acceptance of an Alternative Credit Facility
have been satisfied, (b) the Trustee has accepted an Alternative Credit
Facility and (c) on the effective date of such Alternative Credit Facility,
and after receipt by The Bank of Nova Scotia of this certificate,
Irrevocable Standby Letter of Credit No. S008/94/82875 shall terminate";
(iii) our receipt of a certificate signed by an Authorized Officer stating
that no Bonds remain Outstanding; (iv) fifteen (15) days after the
Conversion Date; or (v) October 16, 1995 (the "EXPIRY DATE"); provided, that
on the Business Day immediately preceding the Expiry Date, such Expiry Date
shall be automatically extended to the next anniversary of such Expiry Date
(or, in the event such anniversary date is not a Business Day, the Business
Day immediately preceding such anniversary date) unless the Bank notifies
the Trustee in writing not less than one hundred eighty (180) days prior to
such Expiry Date of the Bank's intention not to extend such Expiry Date.
Subject to the terms and conditions hereof, funds will be made
available to you under this Letter of Credit against receipt by us of the
following items by the time required below: (i) your sight draft or drafts
drawn on The Bank of Nova Scotia, Boston, Massachusetts; and (ii)(a) if the
drawing is being made with respect to payment of the portion of the Purchase
Price corresponding to principal of the Bonds (an "A DRAWING"), receipt by
us of your written certificate in the form of EXHIBIT A attached hereto
appropriately completed and signed by an Authorized Officer, (b) if the
drawing is being made with respect to principal of the Bonds other than as a
portion of the Purchase Price of the Bonds (a "B DRAWING"), receipt by us of
your written certificate in the form of EXHIBIT B attached hereto
appropriately completed and signed by an Authorized Officer, and (c) if the
drawing is being made with respect to the payment of interest, or the
portion of Purchase Price corresponding to interest, on the Bonds (a "C
DRAWING"), receipt by us of your written certificate in the form of EXHIBIT
C attached hereto appropriately completed and signed by an Authorized
Officer. Presentation of such draft(s) and such certificate(s) shall be
made in person or by tested telex at our office located at 101 Federal
Street, Boston, Massachusetts.
If a drawing is made by you hereunder (i) after 11:00 a.m., Boston
time, but at or prior to 1:00 p.m., Boston time, on a Business Day, payment
out of our own funds shall be made to you or your designee of the amount
specified, in immediately available funds, not later than 10:00 a.m., Boston
time, on the next Business Day or (ii) after 1:00 p.m. Boston time, on a
Business Day but at or prior to 11:00 a.m. Boston time, on the next Business
Day, payment out of our own funds shall be made to you of the amount
specified, in immediately available funds, not later than 3:00 p.m., Boston
time, on such next Business Day; PROVIDED, HOWEVER, that payment shall not
BOS-ADM:11007.1-J<PAGE>
- 3 -
be made to you or your designee unless the drawing and the documents and
other items presented in connection therewith conform to the terms and
conditions hereof. If a demand for payment made by you hereunder does not,
in any instance, conform to the terms and conditions of this Letter of
Credit, we shall give you prompt notice that the demand for payment was not
effected in accordance with the terms and conditions of this Letter of
Credit, stating the reasons therefor and that we will upon your instructions
hold any documents at your disposal or return the same to you. Upon being
notified that the demand for payment was not effected in conformity with
this Letter of Credit, you may attempt to correct any such non-conforming
demand for payment to the extent that you are entitled to do so.
Demands for payment hereunder honored by us shall not, in the
aggregate, exceed the Stated Amount, as the Stated Amount may be reduced or
reinstated in accordance with the terms hereof. Demands for payment
hereunder honored by us with respect to A Drawings and B Drawings shall not,
in the aggregate, exceed the Principal Component, as the principal component
may be reduced or reinstated in accordance with the terms hereof. Demands
for payment hereunder honored by us with respect to C Drawings shall not, in
the aggregate, exceed the Interest Component, as the Interest Component may
be reduced or reinstated in accordance with the terms hereof.
Each A Drawing and each B Drawing honored by us hereunder shall
reduce the Principal Component by an amount equal to the amount of such
drawing. Each C Drawing honored by us hereunder shall reduce the Interest
Component by an amount equal to the amount of such drawing. Without
duplication for any reductions made pursuant to the immediately preceding
two sentences, upon the payment or redemption (or deemed payment or
redemption) of any Bonds, the Principal Component shall be reduced by the
principal amount of the Bonds so paid or redeemed (or deemed paid or
redeemed) and the Interest Component shall be reduced by an amount equal to
interest on the principal amount of the Bonds so paid or redeemed (or deemed
paid or redeemed) for fifty (50) days (computed at the rate of twenty
percent (20%) per annum and on the basis of a three hundred sixty-five (365)
day or three hundred sixty-six (366) day year, as applicable). Any
reduction in the Principal Component or the Interest Component pursuant to
the immediately preceding three sentences shall result in a corresponding
reduction in the Stated Amount.
Upon delivery by us to the Tender Agent, and release by us of our
security interest in, any Pledged Bonds in accordance with the terms of the
Pledge Agreement, the Principal Component shall be reinstated automatically
by an amount equal to the principal amount of such Pledged Bonds. In
addition, (i) if you shall not have received within ten (10) Business Days
after our honoring of any C Drawing (other than a C Drawing in respect of
interest due on the principal amount of any payment or redemption of the
Bonds), notice from us that an Event of Default has occurred and is
continuing under the Letter of Credit and Reimbursement Agreement, dated as
of October 14, 1994 (as amended or supplemented from time to time, the
"LETTER OF CREDIT Agreement"), between the Company and us, the Interest
Component shall be reinstated automatically, as of the close of business on
such tenth Business Day (unless the Interest Component previously has been
reinstated with respect to such C Drawing), by the amount of such C Drawing
<PAGE>
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and (ii) upon the release by us of any Pledged Bonds, the Interest Component
shall be reinstated automatically by the amount of the C Drawing made to pay
the portion of the Purchase Price corresponding to interest on such Pledged
Bonds (unless the Interest Component previously has been reinstated with
respect to such C Drawing); PROVIDED, HOWEVER, that in no event shall the
Interest Component be reinstated to an amount in excess of fifty (50) days'
interest (computed at the rate of twenty percent (20%) per annum and on the
basis of a three hundred sixty-five (365) day or three hundred sixty-six
(366) day year, as applicable, notwithstanding the actual rate borne from
time to time by the Bonds) on the aggregate principal amount of the Bonds
Outstanding at the time of any such reinstatement.
Only you or your successor as Trustee may make a drawing under this
Letter of Credit. Upon the payment to you or to your account of the amount
demanded hereunder, we shall be fully discharged of our obligation under
this Letter of Credit with respect to such demand for payment and we shall
not thereafter be obligated to make any further payments under this Letter
of Credit in respect of such demand for payment to you or any other person
who may have made to you or makes to you a demand for payment of the
principal of, the Purchase Price of, or the interest on, any Bond. By
paying to you an amount demanded in accordance herewith, we make no
representation as to the correctness of the amount demanded.
No drawing will be honored hereunder with respect to any interest
that may accrue on the Bonds, or any principal or premium which may be
payable with respect to the Bonds, after the date of termination or
expiration of this Letter of Credit.
Communications with respect to this Letter of Credit shall be in
writing, be addressed to us at 101 Federal Street, Boston, Massachusetts,
02208, Attention: Ms. Carolyn A. Lopez, and shall specifically refer to this
Letter of Credit by number.
This Letter of Credit may not be transferred or assigned, either in
whole or in part except to a successor trustee properly appointed and
qualified pursuant to the Indenture. We agree to issue a substitute letter
of credit to any such successor trustee (and to successively replace any
such substitute letter of credit) upon the return to us for cancellation of
the original of this Letter of Credit accompanied by a request which (i)
shall be in the form of EXHIBIT D attached hereto with the blanks
appropriately completed, (ii) shall be signed by an Authorized Officer,
(iii) shall refer to this Letter of Credit and (iv) shall state the name and
address of the successor trustee. Each substitute letter of credit will be
in substantially the form of this Letter of Credit except for the date and
letter of credit number.
As used herein the term "Authorized-Officer" shall mean any officer
in your Corporate Trust Department at 150 Royall Street, Canton,
Massachusetts. Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Indenture.
<PAGE>
- 5 -
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited
by reference to any document, instrument or agreement referred to herein
(including without limitation, the Bonds), except only the certificate(s)
referred to herein, and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
for such certificate(s).
This Letter of Credit is subject to the Uniform Customs and Practice
for Documentary Credits, 1993 Revision, ICC Publication No. 500 (the
"UNIFORM CUSTOMS"). This Letter of Credit shall be deemed to be a contract
made under the laws of The Commonwealth of Massachusetts and shall, as to
matters not governed by the Uniform Customs, be governed by and construed in
accordance with the internal laws of said Commonwealth.
Very truly yours,
THE BANK OF NOVA SCOTIA
By:
-----------------------------
Title:
--------------------------
<PAGE>
EXHIBIT A
CERTIFICATE FOR A DRAWING
[Date]
The Bank of Nova Scotia
101 Federal Street
Boston, Massachusetts 02208
Attention: [ ]
Re: IRREVOCABLE LETTER OF CREDIT NO. [ ]
Gentlemen:
The undersigned, a duly Authorized Officer of The First National Bank
of Boston (the "TRUSTEE"), hereby certifies to The Bank of Nova Scotia (the
"BANK") that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) The principal amount of the Bonds Outstanding (as defined in the
Indenture) on the date of this Certificate (before giving effect to
the payments contemplated hereby) is $
---------------.
(3) The Trustee is making a drawing under the above-referenced
Letter of Credit in the amount of $ with respect to
----------------
the payment of the portion of the Purchase Price of the Bonds
corresponding to the principal amount thereof, which Bonds are
required to be [or were required to be] purchased [by the Tender
Agent] [by the Paying Agent] pursuant to the Indenture.
(4) The amount demanded hereby does not exceed the amount available
on the date hereof to be drawn (after giving effect to any
contemporaneous drawings) under the above-referenced Letter of Credit
in respect of the Principal Component or the Stated Amount. The
amount demanded hereby was computed in accordance with the terms and
conditions of the Bonds.
(5) The amount demanded hereby does not include any amount in
respect of the purchase of any Pledged Bonds or any Bonds held by
Energy Networks, Inc.
<PAGE>
- 2 -
(6) Upon receipt by the undersigned of the amount demanded hereby,
(i) the undersigned will apply the same directly to the payment
when due of the principal amount owing on account of the
purchase of Bonds pursuant to the Indenture [or reimbursement of
the Tender Agent for amounts advanced by it with respect to such
payment, which amounts the Tender Agent has certified it has not
been reimbursed for], (ii) no portion of said amount shall be
applied by the undersigned for any other purpose and (iii) no
portion of said amount shall be commingled with other funds held
by the undersigned.
(7) The Letter of Credit has not been terminated prior to the time
of delivery of this Certificate. The drawing demanded hereby is
authorized by the Indenture and the Bonds, and all conditions to
the drawing demanded hereby under the Indenture and the Bonds
have been satisfied.
As used herein the terms "Authorized Officer", "Bonds", "Indenture",
"Pledged Bonds", "Principal Component", "Purchase Price" and "Stated Amount"
shall have the respective meanings assigned to such terms in the
above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and deliveredthis
Certificate as of the day of , 19 .
---- ----------- --
------------------------------,
as Trustee
By
---------------------------
Title:<PAGE>
EXHIBIT B
CERTIFICATE FOR B DRAWING
[DATE]
The Bank of Nova Scotia
101 Federal Street
Boston, Massachusetts 02208
Attention: [ ]
Re: IRREVOCABLE LETTER OF CREDIT NO. [ ]
Gentlemen:
The undersigned, a duly Authorized Officer of The First National Bank
of Boston (the "TRUSTEE"), hereby certifies to The Bank of Nova Scotia (the
"BANK") that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The principal amount of the Bonds Outstanding (as
defined in the Indenture) on the date of this Certificate (before giving
effect to the payments contemplated hereby) is $
----------------.
(3) The Trustee is making a drawing under the
above-referenced Letter of Credit in the amount of $
--------------
with respect to the payment of principal of the Bonds, which amount has, or
will, within five (5) business days, become due and payable pursuant to the
Indenture, upon stated maturity or as a result of acceleration or redemption
of the Bonds.
(4) The amount demanded hereby does not include any amount
in respect of the principal amount of any Pledged Bonds or any Bonds held by
Energy Networks, Inc.
(5) The amount demanded hereby does not exceed the amount
available on the date hereof to be drawn (after giving effect to any
contemporaneous drawings) under the above-referenced Letter of Credit in
respect of the Principal Component or the Stated Amount. The amount
demanded hereby was computed in accordance with the terms and conditions of
the Bonds.
<PAGE>
- 2 -
(6) Upon receipt by the undersigned of the amount demanded
hereby, (i) the undersigned will apply the same directly to the payment
when due of the principal amount owing on account of the Bonds pursuant to
the Indenture, (ii) no portion of said amount shall be applied by the
undersigned for any other purpose and (iii) no portion of said amount shall
be commingled with other funds held by the undersigned.
(7) The Letter of Credit has not been terminated prior to
the time of delivery of this Certificate. The drawing demanded hereby is
authorized by the Indenture and the Bonds, and all conditions to the drawing
demanded hereby under the Indenture and the Bonds have been satisfied.
As used herein, the terms "Authorized Officer", "Bonds", "Indenture",
"Business Day", "Pledged Bonds", "Principal Component" and "Stated Amount"
shall have the respective meanings assigned to such terms in the
above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered
this Certificate as of the day of 19 .
----- ----------- --
------------------------,
as Trustee
By
-----------------------
Title:
<PAGE>
EXHIBIT C
CERTIFICATE FOR C DRAWING
[Date]
The Bank of Nova Scotia
101 Federal Street
Boston, Massachusetts 02208
Attention: [ ]
Re: IRREVOCABLE LETTER OF CREDIT NO. [ ]
Gentlemen:
The undersigned, a duly Authorized Officer of The First National Bank
of Boston (the "TRUSTEE"), hereby certifies to The Bank of Nova Scotia (the
"BANK") that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The principal amount of the Bonds Outstanding (as
defined in the Indenture) on the date of this Certificate is $
-----------.
(3) The Trustee is making a drawing under the
above-referenced Letter of Credit in the amount of $
---------------
with respect to the payment of [the portion of the Purchase Price of
$ in principal amount of the Bonds corresponding to the
----------------
accrued interest thereon, which Bonds are required to be [or were required
to be] purchased [by the Tender Agent] [by the Paying Agent] pursuant to the
Indenture] [accrued interest on the Bonds which amount has, or will, within
five (5) Business Days, become due and payable pursuant to the Indenture].
(4) The amount demanded hereby does not exceed the amount
available on the date hereof to be drawn (after giving effect to any
contemporaneous drawing) under the above-referenced Letter of Credit in
respect of the Interest Component or the Stated Amount. The amount demanded
hereby was computed in accordance with the terms and conditions of the
Bonds.
(5) The amount demanded hereby does not include any amount
in respect of the interest on any Pledged Bonds or any Bonds held by Energy
Networks, Inc.
<PAGE>
- 2 -
(6) Upon receipt by the undersigned of the amount demanded
hereby (i) the undersigned will apply the same directly to the payment when
due of the [portion of the Purchase Price of Bonds corresponding to accrued
interest thereon pursuant to the Indenture] [interest owing on account of
the Bonds pursuant to the Indenture], (ii) no portion of said amount shall
be applied by the undersigned for any other purpose and (iii) no portion of
said amount shall be commingled with other funds held by the undersigned.
(7) The Letter of Credit has not been terminated prior to
the time of delivery of this Certificate. The drawing demanded hereby is
authorized by the Indenture and the Bonds, and all conditions to the drawing
demanded hereby under the Indenture and the Bonds have been satisfied.
As used herein, the terms "Authorized Officer", "Bonds", "Business
Day", "Indenture", "Interest Component", "Pledged Bonds", "Purchase Price"
and "Stated Amount" shall have the respective meanings assigned to such
terms in the above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered
this Certificate as of the day of , 19 .
---- ---------- --
-----------------------------,
as Trustee
By
---------------------------
Title:
<PAGE>
EXHIBIT D
INSTRUCTION TO ISSUE SUBSTITUTE LETTER OF CREDIT
[Date]
The Bank of Nova Scotia
101 Federal Street
Boston, Massachusetts 02208
Attention: [ ]
Re: IRREVOCABLE LETTER OF CREDIT NO. [ ]
Gentlemen:
Reference is made to (i) the above-referenced letter of credit (the
"OLD LETTER OF CREDIT") and (ii) the Indenture of Trust, dated as of
December 1, 1986, as amended and supplemented by the First Supplemental
Indenture, dated as of March 1, 1988 (as so amended and supplemented, the
"INDENTURE"), from the Connecticut Development Authority to us.
[Name and address of successor trustee] (the "SUCCESSOR TRUSTEE") has
been appointed successor trustee under the Indenture. You are hereby
requested to issue in accordance with the terms of the Old Letter of Credit,
a new letter of credit to the Successor Trustee having the same terms and
providing for the same Stated Amount (as defined in the Old Letter of
Credit) as the Old Letter of Credit.
We submit herewith for cancellation the original of the Old Letter of
Credit.
The individual signing below on our behalf hereby represents that he
or she is duly authorized to so sign on our behalf.
Very truly yours,
----------------------,
as Trustee
By
-----------------------
Title:<PAGE>
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of
October 14, 1994, made by ENERGY NETWORKS, INC., a corporation organized and
existing under the laws of the State of Connecticut (the "PLEDGOR"), to THE
BANK OF NOVA SCOTIA (the "BANK"), pursuant to the Letter of Credit and
Reimbursement Agreement, dated as of October 14, 1994, between the Pledgor
and the Bank (hereinafter, as the same may from time to time be amended or
supplemented, called the "LETTER OF CREDIT AGREEMENT").
W I T N E S S E T H
WHEREAS, the Connecticut Development Authority (the
"Authority") issued its Industrial Revenue Variable Rate Demand Bonds
(Capital District Energy Center Project - 1986 Series) (the "SERIES 1986
BONDS") under the Indenture of Trust, dated as of December 1, 1986 (the
"ORIGINAL INDENTURE"), from the Authority to The First National Bank of
Boston, as trustee (the "TRUSTEE");
WHEREAS, the Authority issued its Industrial Revenue Variable
Rate Demand Bonds (Capital District Energy Center Project - 1988 Series)
(together with the Series 1986 Bonds and any Additional Bonds (as defined
below), collectively, the "BONDS") under the Original Indenture, as
supplemented and amended by the First Supplemental Indenture, dated as of
March 1, 1988, between the Authority and the Trustee (the Original
Indenture, as so supplemented and amended, is referred to herein as the
"INDENTURE");
WHEREAS, the Indenture provides for the purchase of Bonds
from time to time from the holders thereof and the delivery of such Bonds by
the holders thereof to the Remarketing Agent (as defined below), under
certain circumstances as more fully set forth therein;
WHEREAS, the Pledgor has entered into the Letter of Credit
Agreement to induce the Bank to issue the Letter of Credit (as defined
below);
WHEREAS, the Letter of Credit Agreement and the Letter of
Credit provide that, subject to the terms and conditions thereof, drawings
under the Letter of Credit may be used, INTER ALIA, to purchase Bonds (any
Bonds purchased with amounts drawn under the Letter of Credit are
hereinafter referred to as "PLEDGED BONDS"); and
<PAGE>
- 2 -
WHEREAS, it is a condition precedent to the effectiveness of
the Letter of Credit Agreement and the issuance of the Letter of Credit by
the Bank that the Pledgor shall have executed and delivered this Agreement
to the Bank;
NOW, THEREFORE, in consideration of the premises and in order
to induce the Bank to enter into the Letter of Credit Agreement and to issue
the Letter of Credit and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Pledgor hereby
agrees with the Bank as follows:
1. DEFINED TERMS. Unless otherwise defined herein,
capitalized terms defined in the Letter of Credit Agreement shall have such
defined meanings when used herein and the rules of interpretation set forth
in SECTION 1 of the Letter of Credit Agreement shall apply hereto.
2. PLEDGE. The Pledgor hereby pledges, assigns,
hypothecates, transfers, and delivers to the Bank, and hereby grants to the
Bank a first priority Lien on, and security interest in, all the Pledgor's
right, title and interest in, to and under the Pledged Bonds, all interest
thereon, all products and proceeds thereof, and all other property from time
to time pledged to the Bank hereunder (collectively, the "COLLATERAL"), as
collateral security for the prompt and complete payment when due of all
amounts due in respect of the obligations of the Pledgor set forth in the
Letter of Credit Agreement and the other Loan Documents (all such
obligations being hereinafter called the "OBLIGATIONS"). The Pledgor hereby
agrees to deliver to, or cause to be delivered to, the Bank, within three
(3) Business Days following the delivery to the Bank of any Trustee's
certificate requesting any A Drawing, (i) Pledged Bonds in an aggregate
outstanding principal amount equal to the total amount of the drawing
specified in such certificate and (ii) instruments of assignment for such
Pledged Bonds in the form attached thereto, duly executed in blank by the
Pledgor.
3. PAYMENTS ON THE BONDS. The Pledgor shall (i)
receive a credit against its obligation to pay interest with respect to A
Drawings pursuant to CLAUSE (II) of SECTION 3.1 of the Letter of Credit
Agreement to the extent of any amounts received by the Bank in respect of
interest on any Pledged Bonds and (ii) receive a credit against its
reimbursement obligation with respect to A Drawings pursuant to CLAUSE (I)
of SECTION 3.1 of the Letter of Credit Agreement to the extent of any
amounts received by the Bank in respect of principal of any Pledged Bonds.
Any amounts received by the Bank in respect of the stated interest on any
Pledged Bonds in excess of the amounts then owing to the Bank with respect
to a C Drawing shall be held by the Bank
<PAGE>
- 3 -
for the equal and ratable benefit of the Bank and the holders of the Bonds
as additional collateral security for the payment of the Obligations.
4. RELEASE OF PLEDGED BONDS. Upon receipt by the Bank
of (i) the amount owing from the Pledgor with respect to any A Drawing, (ii)
accrued interest on the amount referred to in CLAUSE (I) above to the date
of such payment as set forth in SECTION 3.1 of the Letter of Credit
Agreement and (iii) the amount owing from the Pledgor in respect of the C
Drawing, if any, made in connection with such A Drawing, the outstanding
obligations of the Pledgor under SECTION 3.1 of the Letter of Credit
Agreement shall be reduced by the amount of such payment, interest shall
cease to accrue on the amount paid, and the Bank shall deliver to the Tender
Agent and release from the pledge and security interest created by this
Agreement a principal amount of Pledged Bonds equal to the amount of the
payment referred to in CLAUSE (I) above. Notwithstanding the foregoing, no
Pledged Bonds shall be delivered to the Tender Agent, and the pledge and
security interest of the Bank shall not be released, during the period
commencing two (2) Business Days prior to a regularly scheduled interest
payment date with respect to the Bonds and ending at the close of business
on such interest payment date.
5. RIGHTS OF THE BANK. Under no circumstances shall
the Bank be deemed to assume any responsibility of any nature or kind for or
obligation or duty of any nature or kind with respect to any part or all of
the Collateral or any matter or proceedings arising out of or relating
thereto, other than (i) to exercise reasonable care in the physical custody
of the Collateral, (ii) to account for property actually received by it and
(iii) after a Default or an Event of Default shall have occurred and be
continuing to act in a commercially reasonable manner. The Bank shall not
be required to take any action of any kind to collect, preserve or protect
its or the Pledgor's rights in the Collateral or against any other Person.
The Bank's prior recourse to any part or all of the Collateral shall not
constitute a condition of any demand, suit or proceeding for payment or
collection of any of the Obligations.
6. LIQUIDATION, RECAPITALIZATION, ETC. Any sums or
other property paid or distributed upon or with respect to the Collateral,
whether of principal thereof or interest thereon or by redemption,
repurchase or retirement or upon the liquidation or dissolution of the
Pledgor or otherwise, shall be paid over and delivered to the Bank. In the
event that, pursuant to the recapitalization or reclassification of the
capital of the Pledgor or pursuant to the reorganization of the Pledgor, any
distribution of capital shall be made on or in respect of the Collateral or
any property shall be distributed upon or with
<PAGE>
- 4 -
respect to the Collateral, the property so distributed shall be delivered to
the Bank. All sums of money and property paid or distributed in respect of
the Collateral, whether of principal thereof or interest thereon or by
redemption, repurchase or retirement or upon such a liquidation,
dissolution, recapitalization or reclassification of the Pledgor or
otherwise, that are received by the Pledgor shall, until paid or delivered
to the Bank, be held in trust for the Bank, as security for the payment and
performance in full of all the Obligations.
7. REMEDIES.
(i) If a Default or an Event of Default shall have
occurred and be continuing, the Bank shall thereafter have the following
rights and remedies (to the extent permitted by applicable law) in addition
to the rights and remedies of a secured party under the Uniform Commercial
Code of The Commonwealth of Massachusetts, all such rights and remedies
being cumulative, not exclusive, and enforceable alternatively, successively
or concurrently, at such time or times as the Bank deems expedient:
(a) the Bank, in its own name, or in the name
of the Pledgor, may do all of the things which the Pledgor is entitled to do
in respect of the Collateral and take such actions as the Bank may, in its
sole discretion, deem to be necessary or advisable to protect or enforce any
of the rights, powers, privileges or remedies of the Pledgor in respect of
the Collateral; PROVIDED, that the Bank shall have no obligation to do any
such things or take any such actions; and
(b) the Bank may cause the Pledged Bonds to
be transferred into its name or the name of its nominee or nominees.
(ii) The Bank shall apply any proceeds realized
upon the Collateral, after deducting all costs and expenses of every kind
incurred in connection therewith or with the care, safekeeping or otherwise
of any of the Pledged Bonds or in any way relating to the rights of the Bank
hereunder, including attorneys' fees and legal expenses, to the payment, in
whole or in part, of the Obligations in such order as the Bank may elect,
the Pledgor remaining liable for any deficiency remaining unpaid after such
application, and only after so applying such proceeds
<PAGE>
- 5 -
after the payment by the Bank of any other amount required to be paid by any
provision of law, including Section 9-504(l)(c) of the Uniform Commercial
Code, need the Bank account for the surplus, if any, to the Pledgor.
(iii) The Pledgor agrees that the Bank need not give
more than ten (10) days' notice of the time and place of any public sale or
of the time after which a private sale or other intended disposition of the
Collateral is to take place and that such notice is reasonable notification
of such matters.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGOR. The Pledgor represents and warrants that: (i) the Pledgor will
have good and marketable title to the Collateral subject to no Liens except
the Lien created hereby, (ii) neither the Authority, the Remarketing Agent,
the Trustee or any other Person will have any right, title or interest in,
to or under the Collateral; and (iii) the pledge and assignment of the
Collateral and the delivery of the Pledged Bonds to the Bank pursuant to
this Agreement will create a valid first priority Lien on and first priority
perfected security interest in, all right, title and interest of the Pledgor
in, to and under the Collateral, subject to no Liens except the Lien created
hereby. The Pledgor covenants and agrees that it will defend the Bank's
right, title and interest in, to and under the Collateral against the claims
and demands of all Persons whomsoever.
9. NO DISPOSITION, ETC. Without the prior written consent
of the Bank, the Pledgor will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Collateral,
nor will it create, incur or permit to exist any Lien with respect to any of
the Collateral, except for the Lien created hereby.
10. PLEDGOR'S OBLIGATIONS NOT AFFECTED. The obligations of
the Pledgor hereunder shall be absolute, unconditional and irrevocable and
shall remain in full force and effect without regard to, and shall not be
impaired or affected by (i) any exercise or failure to exercise, or any
waiver, by the Bank of any right, remedy, power or privilege under or in
respect of any of the Obligations or any security therefor (including this
<PAGE>
- 6 -
Agreement); (ii) any lack of validity or enforceability of the Letter of
Credit Agreement, the Letter of Credit or any other Loan Document; (iii) any
amendment to or modification of the Letter of Credit Agreement, the Letter
of Credit, the other Loan Documents or any of the Obligations; or (iv) the
taking of additional security for, or any other assurances of payment of,
any of the Obligations or the release or discharge or termination of any
security or other assurances of payment or performance for any of the
Obligations; or (v) any other circumstance which might otherwise constitute,
a defense available to, or a legal or equitable discharge of, the Pledgor
(other than such other circumstance resulting from the gross negligence or
willful misconduct of the Bank); whether or not the Pledgor shall have
notice or knowledge of any of the foregoing.
11. FURTHER ASSURANCES. The Pledgor agrees that at any time
and from time to time upon the written request of the Bank, the Pledgor will
execute and deliver such further documents and do such further acts and
things as the Bank may reasonably request in order to effect the purposes of
this Agreement.
12. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
13. NO WAIVER; REMEDIES CUMULATIVE. The Bank shall not by
any act, delay, omission or otherwise be deemed to have waived any of its
rights or remedies hereunder and no waiver shall be valid unless in writing,
signed by the Bank, and then only to the extent therein set forth. A waiver
by the Bank of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Bank would otherwise
have on any future occasion. No failure to exercise, nor any delay in
exercising on the part of the Bank, any right, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The Pledgor hereby waives presentment, notice of dishonor and protest of all
instruments included in or evidencing any of the Obligations or the
Collateral, and any and all other notices and demands whatsoever (except as
expressly provided herein or in the Letter
<PAGE>
- 7 -
of Credit Agreement). The rights and remedies herein provided are
cumulative and may be exercised singly or concurrently and are not exclusive
of any rights or remedies provided by the Letter of Credit Agreement, the
Indenture or any other agreements or instruments issued in connection
therewith or by applicable law.
14. AMENDMENTS; APPLICABLE LAW. None of the terms or
provisions of this Agreement may be altered, modified or amended except by
an instrument in writing, duly executed by the Bank. This Agreement and all
obligations of the Pledgor hereunder shall be binding upon the successors
and assigns of the Pledgor, and shall, together with the rights and remedies
of the Bank hereunder, inure to the benefit of the Bank and its successors
and assigns. This Agreement shall be governed by, and construed and
interpreted in accordance with, the internal laws of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to
be duly executed and delivered on the day and year first above written.
ENERGY NETWORKS, INC.
By:
--------------------------
Title:
<PAGE>
SECOND AMENDED AND RESTATED LOAN AGREEMENT
SECOND AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement"),
dated as of October 28, 1994 by and between THE HARTFORD STEAM COMPANY, a
Connecticut corporation (the "Company"), and SHAWMUT BANK CONNECTICUT, N.A.
(formerly known as The Connecticut National Bank, the "Bank"), a national
banking association.
BACKGROUND
A. The Company and the Bank entered into a Loan Agreement
dated as of March 1, 1983, as amended by Amendment Agreement dated as of
March 15, 1986, as further amended by Amendment Agreement dated as of June
15, 1986, as further amended by Amendment Agreement dated as of August 15,
1986, as further amended by Amendment Agreement dated as of August 15, 1989,
amended and as amended and restated by the Amended and Restated Loan
Agreement dated as of January 9, 1990 and as amended as of September 30,
1991 by the Sixth Amendment to Loan Agreement and as amended by the
Amendment to Amended and Restated Loan Agreement dated as of September 28,
1994 (as heretofore amended and amended and restated, the "Loan Agreement"),
pursuant to which the Bank has agreed to extend financial accommodations to
the Company.
B. The Company and the Bank desire to amend the Loan Agreement
to (i) extend the Commitment Expiration Date to September 29, 1997, (ii)
reduce the Bank's Commitment (as hereinafter defined) to $5,000,000, (iii)
reflect that the loan made by the Bank to the Company on September 30, 1983
in the original principal amount of $4,500,000 is no longer outstanding, and
(iv) make certain modifications to the Loan Agreement.
NOW THEREFORE, in consideration of the mutual covenants herein
set forth, the parties hereto agree that the Loan Agreement is hereby
amended and restated to read in its entirety as follows:
TERMS AND CONDITIONS
SECTION 1. THE LOANS
1.1 The Revolving Loan.
-------------------
Subject to the terms and conditions hereof, the Bank agrees to
advance funds to the Company (the "Revolving Loan") during the period
beginning on March 1, 1983 and ending (and including) September 29, 1997
(the "Commitment Expiration Date"), at such times and in such amounts as
the Company shall request, up to but not exceeding Five Million Dollars
$5,000,000 in aggregate principal amount outstanding at any one time (the
"Bank's Commitment"). Within such limit and subject to the terms and
<PAGE>
conditions hereof, the Company may borrow, prepay and borrow again under
this Section 1.1; PROVIDED, HOWEVER, that no Portion of the Revolving Loan
may be prepaid during any Interest Period in which a rate of interest based
upon the LIBOR Rate, the CD Rate or the Money Market Rate is in effect with
respect to such Portion, except upon the final day of the applicable
Interest Period. Each borrowing under this Section 1.1 to which the LIBOR
Rate, the CD Rate or the Money Market Rate is applicable shall be in a
principal amount of $500,000 or a multiple of $50,000 in excess thereof.
All borrowings pursuant to which the Base Rate is applicable shall be in a
principal amount of at least $50,000 or any integral multiple thereof. All
principal and interest accrued on the Revolving Loan shall be finally due
and payable on September 30, 1997. The following provisions shall apply to
the Revolving Loan:
(a) RATE OF INTEREST: NOTE. The Revolving Loan and the
other loans (collectively, the "Loans") made pursuant to this
Agreement shall be evidenced by a Promissory Note in the form set
forth in Exhibit A hereto (the "Note") payable to the order of
the Bank. Each advance under the Revolving Loan shall bear
interest at a rate per annum equal to the Revolving Loan Interest
Rate applicable to such advance determined in accordance with
Section 1.4. Interest on the outstanding principal amount of the
Revolving Loan shall be payable in arrears beginning on the final
day of the month next succeeding the date on which the first
advance under the Revolving Loan is made and on the final day of
each month thereafter, PROVIDED that, if and so long as an Event
of Default exists, all principal of and (to the extent allowed by
law) overdue interest on the Revolving Loan shall bear interest
at a rate per annum equal to two percentage points above the
interest rate which would otherwise be in effect with respect
thereto.
(b) COMMITMENT FEE. So long as the Bank is obligated to
make advances hereunder, the Company shall pay to the Bank on the
final day of each December, March, June and September (each a
"Commitment Fee Payment Date"), commencing December 31, 1994, a
commitment fee equal to the product of (a) one-fifth (1/5) of one
percent MULTIPLIED BY (b) the difference between the Bank's
Commitment and the average daily outstanding principal balance of
the Revolving Loan during the three month period immediately
preceding such Commitment Fee Payment Date (or with respect to
the December 31, 1994 Commitment Fee Payment Date for the period
beginning September 29 and ending on December 31, 1994. At any
time upon three (3) days' written notice to the Bank, the Company
may terminate any unutilized portion of the Bank's Commitment,
and the commitment fee will thereupon cease to accrue on the
amount so terminated. Any portion of the Bank's Commitment so
terminated shall not thereafter be subject to borrowing by the
Company hereunder.
(c) MANNER OF BORROWING. The Company shall give the Bank
telephonic notice (to be confirmed in writing on such date by
facsimile transmission) of each borrowing specifying the amount
of each advance, Interest Period and Interest Rate of the
Revolving Loan (i) not later than noon on the date of such
<PAGE>
borrowing if the Portion of the Revolving Loan is to bear
interest at the Base Rate and (ii) not later than noon on the
second Business Day preceding the date of such borrowing if the
Portion of the Revolving Loan is to bear interest at the CD Rate,
LIBOR Rate or Money Market Rate. Unless otherwise agreed, the
Bank shall make the proceeds of each borrowing available to the
Company in immediately available funds.
(d) PREPAYMENTS. The Company shall have the right, at any
time and from time to time, upon not less than two (2) business
days' written or telephonic notice to the Bank, to prepay any
Portion of the Revolving Loan, in whole or in part, without
penalty or premium, provided that (i) interest on the amount
prepaid, accrued to the prepayment date, shall be paid on such
prepayment date, (ii) each partial prepayment of the Revolving
Loan shall be in the amount of $50,000 or a multiple thereof or
such lesser amount as shall prepay in full such outstanding
Portion, and (iii) no prepayment of a Portion of the Revolving
Loan shall be allowed if a rate of interest based upon either of
the LIBOR Rate, the CD Rate or the Money Market Rate is in effect
with respect to such Portion, except upon the final day of the
applicable Interest Period.
1.2. 1990 Term Loan.
--------------
On January 9, 1990, the Company became indebted to the Bank in
respect of a term loan (the "1990 Term Loan") in the original principal
amount of Five Million Dollars ($5,000,000). The following provisions have
applied and shall continue to apply to the 1990 Term Loan:
(a) RATE OF INTEREST. The 1990 Term Loan has borne and
will bear interest on the unpaid principal balance thereof from
January 9, 1990 at a fixed rate per annum equal to 10.72% payable
quarterly in arrears on the final day of each March, June,
September and December, PROVIDED that if and for so long as an
Event of Default exists, all outstanding principal of and (to the
extent allowed by law) overdue interest on the 1990 Term Loan
shall bear interest at a rate equal to 12.72% per annum.
Interest shall be computed on the basis of a 360 day year of
twelve 30-day months.
(b) REQUIRED PRINCIPAL PAYMENTS: MATURITY DATE. The
principal amount of the 1990 Term Loan is payable in Thirty-Two
(32) equal quarterly installments of One Hundred Fifty-Six
Thousand Two Hundred Fifty Dollars ($156,250) each, such payments
having commenced on the final day of March, 1990, and continuing
on the final day of each of March, June, September and December
through and including the final day of December, 1997. The 1990
Term Loan will mature and all amounts in respect thereof shall be
finally due and payable on December 31,1997. The outstanding<PAGE>
principal amount of the 1990 Term Loan as of September 29, 1994
is Two Million One Hundred Eighty-Seven Thousand Five Hundred
Dollars ($2,187,500).
(c) OPTIONAL PREPAYMENT. The Company may, upon notice as
set forth in Section 1.8 hereof, prepay the 1990 Term Loan, in
whole but not in part, at any time together with (i) a prepayment
premium in an amount equal to the Make Whole Amount at such time
and (ii) interest on the principal amount then being prepaid
accrued to the prepayment date.
(d) NOTE. The Note shall evidence the 1990 Term Loan as
well as the Revolving Loan.
1.3 Selection of Applicable Interest Rate for Revolving
---------------------------------------------------
Loan.
----
Anything in this Agreement to the contrary notwithstanding, the
Company shall not have the right to select a rate of interest based upon the
LIBOR Rate or the CD Rate or request any additional advances under the
Revolving Loan at any time that a Default or an Event of Default exists.
Not less than two (2) Business Days prior to each advance under
the Revolving Loan, the Company shall select the rate of interest to be
initially applicable to such advance, which rate shall be the Base Rate, the
Money Market Rate, the LIBOR Rate or the CD Rate plus, in each case, the
Applicable Margin. Thereafter, with respect to any Portion of the Revolving
Loan, the Company shall have the right on any Determination Date relating
to such Portion to select whether the Interest Rate with respect to such
Portion (or any part thereof which is at least equal to $500,000 plus an
integral multiple of $50,000 in excess thereof with respect to any Portion
to which the Money Market Rate, the LIBOR Rate or the CD Rate is applicable,
and at least equal to $50,000 or any integral multiple thereof with respect
to any Portion to which the Base Rate is applicable) shall be determined
with reference to the Base Rate, the Money Market Rate, the LIBOR Rate or
the CD Rate, plus in such case, the Applicable Margin. All such selections
shall be made by telephonic notice (to be confirmed in writing on the same
day by facsimile transmission as hereinafter provided) by the Company to the
Bank of its selection of the applicable interest rate and the duration of
the Interest Period for which such rate shall be effective. Each such
selection shall become effective on the second Business Day following such
Determination Date.
The Company's right to select a rate of interest based upon the
LIBOR Rate, the CD Rate or the Money Market Rate and the duration of the
Interest Period therefor shall be subject to the initial paragraph of this
<PAGE>
Section 1.4 and to the availability of such rate and/or Interest Period to
the Bank, as determined by the Bank in its reasonable discretion. If at any
time the Company shall select a rate or an Interest Period which is not
available to the Bank, the Bank shall notify the Company of such fact, and
the Company shall have the option of selecting a rate and Interest Period
which is so available.
The telephonic quotation from the Bank to the Company on the
applicable Determination Date of the LIBOR Rate, the CD Rate or the Money
Market Rate, as the case may be, shall be conclusive as to the LIBOR Rate,
the CD Rate or the Money Market Rate, as the case may be, hereunder for such
Interest Period.
The Company shall, from time to time, upon demand by the Bank,
pay to the Bank additional amounts sufficient to compensate the Bank for any
increased costs incurred by the Bank in connection with the Bank's
acquisition of funds loaned hereunder at a rate based on the LIBOR Rate, the
CD Rate or the Money Market Rate, provided that such increased costs shall
have resulted from (i) the introduction of or a change (including, without
limitation, a change by way of imposition or increase of reserve
requirements) in or in the interpretation of a law or regulation, or (ii)
the compliance by the Bank with a guideline or request from a central bank
or other governmental authority (whether or not having the force of law).
The Company shall to the extent permitted by law pay such increased costs to
the Bank upon demand, together with interest thereon from the date of demand
at the Base Rate. A certificate as to the amount of any such loss, expense
and/or increased costs prepared by the Bank and submitted to the Company
shall be conclusive as to the matters therein set forth, and the Loan shall
not be deemed to have been paid and/or satisfied in full until all such
additional amounts provided for hereunder shall have been paid.
1.4 Recording of Advance and Payment.
--------------------------------
The date and amount of each advance made by the Bank pursuant to
the terms hereof shall be recorded on the Bank's internal data control
systems. Each payment of principal or interest shall be evidenced by an
entry made by the Bank in the Bank's internal data control systems showing
the date and the amount of such payment and the resulting outstanding
balance of the Loans. The aggregate unpaid principal amount of the Loans
set forth on the most recent data control systems printout of the Bank shall
be conclusive absent manifest error of the principal sum then owing and
unpaid on the Loans.
1.5 Expense; Capital Adequacy; Taxes.
--------------------------------
(a) EXPENSES. Whether or not an advance is made pursuant
to this Agreement, the Company (promptly, and in any event within
thirty (30) days of receiving any invoice or statement therefor)
<PAGE>
will pay all expenses relating to the transactions contemplated
by this Agreement, including but not limited to:
(1) the cost of reproducing this Agreement and the Note;
(2) the fees and disbursements of the Bank's special
counsel;
(3) the Bank's out-of-pocket expenses;
(4) all expenses relating to any amendments, waivers or
consents pursuant to the provisions hereof.
(b) CAPITAL ADEQUACY. If after January 9, 1990, the Bank
shall have determined that compliance with any applicable law,
governmental rule, regulation or order regarding capital adequacy
of banks or bank holding companies generally, or any change
therein (including without limitation any change according to a
prescribed schedule of increasing requirements, whether or not in
effect or known on the date hereof), or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
interpretation or administration thereof, or compliance by the
Bank with any guideline, request or directive regarding capital
adequacy of banks or bank holding companies generally (whether or
not having the force of law and whether or not failure to comply
therewith would be unlawful) of any such authority, central bank
or comparable agency, has or would have the effect of reducing
the rate of return on the Bank's capital with respect to Loans
made hereunder to a level below that which the Bank could have
achieved but for such change or compliance (taking into
consideration the Bank's polices with respect to capital adequacy
immediately before such change or compliance and assuming that
its capital was fully utilized prior to such change or
compliance) by any amount deemed by the Bank to be material,
then, within 30 days after demand, the Company shall pay to the
Bank such additional amounts as shall be sufficient to compensate
the Bank for such reduced return together with interest on each
such amount from the date demanded until payment in full thereof
at the Base Rate. A certificate of an officer of the Bank
setting forth the amount to be paid to it pursuant to this
paragraph shall, in the absence of manifest error, be conclusive,
and at the request of the Company, the Bank shall calculate the
basis for such determination. The Bank agrees that if, after the
payment by the Company of any such additional amount for the
account of the Bank, any part thereof is subsequently recovered
by the Bank, the Bank shall promptly reimburse the Company to the
extent of the amount so recovered.
The Bank will use its best efforts to inform the Company of
any events affecting capital adequacy occurring after January 9,
1990, which will require payments to be made under this Section
1.6 promptly after it becomes aware of such event, but the
failure of the Bank to inform the Company shall not affect any of
the obligations of the Company hereunder.
<PAGE>
(c) TAXES. All payments made by the Company under the
Financing Documents shall be made free and clear of, and without
reduction for or on account of, any Taxes required by law to be
withheld from any amounts payable under the Financing Documents.
In the event that the Company is prohibited by law from making
payments hereunder free of deductions or withholdings, then the
Company shall pay such additional amounts to the Bank, as may be
necessary in order that the actual amounts received by the Bank
in respect of interest and any other amounts payable hereunder or
under the Note after such deduction or withholding (and after
payment of any additional taxes or other charges due as a
consequence of the payment of such additional amounts) shall
equal the amount which would have been received if such deduction
or withholding were not required. In the event that any such
deduction or withholding can be reduced or nullified as a result
of the application of any relevant double taxation convention,
the Bank will, at the expense of the Company, cooperate with the
Company in making application to the relevant taxing authorities
seeking to obtain such reduction or nullification, provided,
however, that the Bank shall have no obligation to engage in
litigation with respect thereto. If the Company shall make any
payments under this paragraph or shall make any deductions or
withholdings from amounts paid hereunder, the Company shall
forthwith forward to the Bank original or certified copies of
official receipts or other evidence acceptable to the Bank
establishing such payment. If payments to the Bank hereunder are
or become subject to any withholding, it shall (unless otherwise
required by a Governmental Authority or as a result of any law,
rule, regulation, order or similar directive applicable to such
Bank) designate a different office or branch to which payments
are to be made under the Financing Documents from that initially
selected by the Bank, if such designation would avoid such
withholding and will not be otherwise disadvantageous to the
Bank. In the event that the Bank receives a refund or credit for
taxes paid by the Company under this paragraph, it shall promptly
notify the Company of such fact and shall remit to the Company
the amount of such refund or credit applicable to the payments
made by the Company to the Bank under this paragraph.
(d) SURVIVAL. The obligations of the Company under this
Section 1.5 shall survive the payment or prepayment of the Loan
and the termination of this Agreement.
1.6 Notice of Optional Prepayment.
-----------------------------
The Company shall give notice of any optional prepayment of the
1990 Term Loan not less than fifteen (15) nor more than thirty (30) days
before the date fixed for prepayment. Such notice shall be in writing and
shall specify the Loan or Loans being prepaid, the date of prepayment, and
the applicable Make-Whole Amount and accrued interest payable with respect
to such prepayment. Notice of prepayment having been so given, the Loan or
Loans specified in such notice, together with Make-Whole Amount and accrued
interest thereon, shall become due and payable on the specified prepayment
date. <PAGE>
SECTION 2. WARRANTIES, REPRESENTATIONS AND COVENANTS
The Company warrants, represents and covenants to the Bank that
as of October 28, 1994:
2.1 Subsidiaries.
------------
Exhibit B to this Agreement correctly and completely states (a)
the name of each of the Company's Subsidiaries and Affiliates and the nature
of the affiliation and (b) the names of all holders of any legal or
beneficial interest in the capital stock of the Company, the nature and
extent of each such interest and the number of authorized shares of capital
stock of each and every class of the Company.
2.2 Corporate Organization and Authority.
------------------------------------
The Company
(a) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Connecticut;
(b) has all requisite power and authority and all
necessary licenses and permits to own and operate its Properties
and to carry on its business as now conducted; and
(c) is not qualified or authorized to do business as a
foreign corporation in any jurisdiction inasmuch as the character
of its properties and the nature of its activities makes such
qualification and authorization unnecessary.
2.3 Business, Property, Indebtedness, Liens.
---------------------------------------
Exhibit B correctly describes the general nature of the business
and principal Properties of the Company and correctly lists all of its Debt
and all Liens (other than Permitted Liens) upon any Property of the Company.
2.4 Financial Statements.
--------------------
(a) The balance sheet of the Company as of September 30,
1993 and the related statements of income, earned surplus and
changes in financial position for the fiscal year ended on such
date and the balance sheet of the Company dated as of June 30,
1994 and the related statements of income, earned surplus and
changes in financial position for the nine (9) months then ended,
copies of which have been delivered to the Bank, have been
prepared in accordance with generally accepted accounting
<PAGE>
principles and present in an accurate, complete and fair manner
the financial position of the Company as of such dates and the
results of its operations for such periods.
(b) Since September 30, 1993, there has been no change in
the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company which individually or in
the aggregate has been materially adverse.
2.5 Full Disclosure.
---------------
The financial statements referred to in Section 2.4 do not nor
does this Agreement or any written statement furnished by or on behalf of
the Company to the Bank in connection with the negotiation of the
transactions contemplated by this Agreement contain any untrue statement of
a material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading. There is no fact which the
Company has not disclosed to the Bank in writing which materially affects
adversely nor, so far as the Company can now foresee, will materially affect
adversely the Properties, business, prospects, profits or condition
(financial or otherwise) of the Company or the ability of the Company to
perform its obligations under this Agreement.
2.6 Pending Litigation.
------------------
Except as set forth in Exhibit C, there are no proceedings
pending, or to the knowledge of the Company threatened, against or affecting
the Company in any court or before any governmental authority or arbitration
board or tribunal. None of the matters set forth on such Exhibit C either
individually or in the aggregate could reasonably be expected to have a
materially adverse impact on the financial prospects of the Company or its
properties. The Company is not in default with respect to any order of any
court, governmental authority or arbitration board or tribunal.
2.7 Title to Properties.
-------------------
The Company has good and marketable title in fee simple (or its
equivalent under applicable law) to all the real Property, and has good
title to all the other Property, it purports to own, including that
reflected in the most recent balance sheet referred to in Section 2.4, free
from all liens other than Permitted liens.
2.8 Patents, Trademarks, Franchises, Agreements. etc.
------------------------------------------------
The Company owns or possesses all the patents, trademarks,
service marks, trade names, copyrights and licenses, and rights with respect
thereto, necessary for the conduct of its business as now conducted and as
proposed to be conducted, without any known conflict with the rights or
others, in each case free of all liens other than Permitted liens.
<PAGE>
2.9 Borrowing Is Legal and Authorized.
---------------------------------
The borrowing of the principal amount of the Loans and the
execution and delivery by the Company of this Agreement and the other
Financing Documents and compliance by the Company with all of the provisions
of this Agreement and the other Financing Documents:
(a) are within the corporate powers of the Company;
(b) have been duly authorized by all necessary corporate
action; and
(c) are legal, do not and will not conflict with, result
in any breach in any of the provisions of, constitute a default
under, or, except as contemplated by the Financing Documents,
result in the creation of any Lien upon any Property of the
Company under the provisions of, any agreement, charter
instrument, bylaw or other instrument to which the Company is a
party or by which it or any of its Property may be bound.
2.10 No Defaults.
-----------
No event has occurred and no condition exists which upon the
Closing would constitute a Default or an Event of Default. The Company is
not in violation of any term of its charter or bylaws. The Company is not
in violation of any material provision of any agreement to which it is a
party or by which it or any of its Property is bound.
2.11 Government Consent.
------------------
Neither the nature of the Company or of its business or
Properties, nor any relationship between the Company and any other Person,
nor any circumstance in connection with the transactions contemplated by
this Agreement, is such as to require a consent, approval or authorization
of, or filing, registration or qualification with, any governmental
authority (including the State of Connecticut Department of Public Utility
Control) on the part of the Company or CNG as a condition to the execution
and delivery of this Agreement or any other Financing Document or the
borrowing of the principal amount of the Loans.
2.12 Taxes.
-----
(a) RETURNS FILED: TAXES PAID. All tax returns required
to be filed by the Company in any jurisdiction have in fact been
filed, and all Taxes upon the Company, or upon any of its
Properties, income or franchises, which are due and payable have
been paid. The Company knows of no proposed additional tax
assessment against it.
<PAGE>
(b) BOOK PROVISIONS ADEQUATE. The provisions for taxes
on the books of the Company are adequate for all open years, and
for its current fiscal period. The amount of the reserve for
federal income taxes reflected in the balance sheet of the
Company as of September 30, 1993 is adequate for such federal
income taxes, if any, as may be payable by the Company for all
fiscal years through September 30, 1993.
2.13 Use of Proceeds.
---------------
The Company will apply the proceeds of the Loans (less expenses
relating thereto) to the repayment of outstanding Debt, to capital
expenditures and to working capital. None of the transactions contemplated
by this Agreement (including, without limitation, the use of the proceeds
from the Loans) will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued
pursuant thereto, including, without limitation, Regulations U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter ll.
The Company does not own or intend to carry or purchase any "margin
security" within the meaning of said Regulation U, including margin
securities originally issued by it. None of the proceeds of the Loans will
be used to purchase or carry (or refinance any borrowing the proceeds of
which were used to purchase or carry) any "security" within the meaning of
the Securities Exchange Act of 1934, as amended.
2.14 Compliance with Law.
-------------------
The Company
(a) is not in violation of any law, ordinance,
governmental rule or regulation to which it is subject, and
(b) has not failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of its Property or to the conduct of its business,
which violation or failure to obtain could reasonably be
expected, either individually or in the aggregate, to materially
and adversely affect the business, prospects, profits, Properties
or condition (financial or otherwise) of the Company.
2.15 Restrictions on Company
-----------------------
The Company is not a party to any contract or agreement, or
subject to any charter or other corporate restriction, which materially and
adversely does or could affect the business of the Company. The Company is
<PAGE>
not a party to any contract or agreement which restricts its right or
ability to incur Debt, other than this Agreement. The Company has not
agreed or consented to cause or permit in the future (upon the happening of
a contingency or otherwise) any of its Property, whether now owned or
hereafter acquired, to be subject to a Lien not permitted by Section 5.5.
2.16 ERISA.
-----
(a) RELATIONSHIP OF VESTED BENEFITS TO PENSION PLAN ASSETS.
The present value of all benefits vested under all "employee
pension benefit plans" (as such term is defined in Section 3 of
ERISA) from time to time maintained by the Company (individually,
a "Pension Plan" and collectively, the "Pension Plans"), did not,
as of September 30, 1993, exceed the value of the assets of the
Pension Plans allocable to such vested benefits.
(b) PROHIBITED TRANSACTIONS. No "employee benefit plan"
(as such term is defined in Section 3 of ERISA) from time to time
maintained by the Company (individually, a "Plan" and
collectively, the "Plans") or trust created thereunder, or any
trustee or administrator thereof, has engaged in a "prohibited
transaction" (as such term is defined in Section 406 or Section
2003(a) of ERISA) which could subject such Plan or any other
Plan, any trust created thereunder, or any trustee or
administrator thereof, or any party dealing with any Plan or any
such trust to the tax or penalty on prohibited transactions
imposed by Section 502 or Section 2003(a) of ERISA.
(c) REPORTABLE EVENTS. No Pension Plan or trust created
thereunder has been terminated, and there have been no
"reportable events" (as that term is defined in Section 4043 of
ERISA) since the effective date of ERISA.
(d) ACCUMULATED FUNDING DEFICIENCY. No Pension Plan or
trust created thereunder has incurred any "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA)
whether or not waived, since the effective date of ERISA.
SECTION 3. GENERAL CLOSING CONDITIONS
The Bank's obligation to execute this Agreement on the Closing
Date shall be subject to the following conditions precedent:
3.1 Note.
----
The Company shall have executed and delivered the Note, in the
form of Exhibit A hereto, to the Bank.
<PAGE>
3.2 Opinion of Counsel.
------------------
The Bank shall have received from, Murtha, Cullina, Richter &
Pinney, counsel for the Company, a closing opinion, dated such date, in form
and substance satisfactory to the Bank and its counsel.
3.3 Warranties and Representations True: No Prohibited
--------------------------------------------------
Action.
------
(a) WARRANTIES AND REPRESENTATION TRUE. The warranties
and representations contained in Section 2 shall (except as
affected by transactions contemplated by this Agreement) be true
in all material respects on the Closing Date with the same effect
as though made on and as of that date.
(b) NO PROHIBITED ACTION. The Company shall not have
taken any action or permit any condition to exist which would
have been prohibited by Section 5.4 through Section 5.8,
inclusive, had such Sections been binding and effective at all
times during the period from January 1, 1983 to and including the
Closing Date.
3.4 Compliance with This Agreement.
------------------------------
The Company shall have performed and complied with all agreements
and conditions contained herein which are required to be performed or
complied with by the Company before or at the Closing.
3.5 Officers' Certificate.
---------------------
The Bank shall have received a certificate dated the Closing Date
and signed by the President or a Vice-President and the Chief Financial
Officer of the Company, to the effect and substantially in the form of
Exhibit D to this Agreement certifying that the conditions specified in
Sections 3.3 and 3.4 have been fulfilled; and a certificate dated the
Closing Date and signed by the Secretary or an Assistant Secretary of the
Company, to the effect and substantially in the form of Exhibit E to this
Agreement, with respect to all corporate matters.
3.6 Proceedings Satisfactory.
------------------------
All proceedings taken in connection with the transactions
contemplated by this Agreement and all documents and papers relating to the
transactions contemplated by this Agreement shall be satisfactory to the
Bank and its special counsel. The Bank and its special counsel shall have
<PAGE>
received copies of such documents and papers as the Bank or they may request
in connection therewith, all in form and substance satisfactory to the Bank
and the Bank's special counsel.
3.7 Mortgage of Real Estate: Title Insurance.
----------------------------------------
(a) MORTGAGES OF REAL ESTATE. The Company shall have
executed and delivered to the Bank a mortgage deed covering the
HSC Real Estate in form and substance satisfactory to the Bank
(together with all amendments thereto up to but not including the
date hereof, the "HSC Mortgage") and an amendment to the HSC
Mortgage (the "HSC Mortgage Amendment") to the effect and
substantially in the form set forth in Exhibit F hereto. ENI
shall have executed and delivered to the Bank a mortgage deed
covering the ENI Real Estate in form and substance satisfactory
to the Bank (together with all amendments thereto up to but not
including the date hereof, the "ENI Mortgage") and an amendment
to the ENI Mortgage (the "ENI Mortgage Amendment") to the effect
and substantially in the form set forth in Exhibit G hereto.
Each of the HSC Mortgage, the HSC Mortgage Amendment, the ENI
Mortgage and ENI Mortgage Amendment shall have been duly recorded
in all places necessary to constitute said documents as valid
first mortgage Liens on the properties purported to be subject
thereto, subject only to such exceptions, Liens and encumbrances
as are expressly permitted thereby.
(b) TITLE INSURANCE. The Company shall have delivered to
the Bank an endorsement ("Endorsement") to the Title Policy which
endorsement shall (i) amend the effective date of the Title
Policy to the date and time of recordation of the HSC Mortgage
Amendment and the ENI Mortgage Amendment, (ii) insure the Bank's
interest as mortgagee under the HSC Mortgage as so amended and
the ENI Mortgage as so amended, in the aggregate amount of
$10,000,000 (or such lesser amount as may be satisfactory to the
Bank), and (iii) list no additional items on Schedule B to the
Title Policy except as may be specifically agreed to by the Bank.
3.8 Security Agreement.
------------------
The Company shall have duly executed and delivered to the Bank
(i) a security agreement (the "Security Agreement") in form and substance
satisfactory to the Bank, (ii) a collateral assignment of service contracts
(the "Collateral Assignment") in form and substance satisfactory to the
Bank, and (iii) an amendment to security agreement and collateral assignment
(the "Amendment to Security Agreement and Collateral Assignment") to the
effect and substantially in the form set forth in Exhibit H hereto. Each of
the Security Agreement, Collateral Assignment and Amendment to Security
Agreement and Collateral Assignment shall be in full force and effect and
shall grant to the Bank security interests in the collateral covered
<PAGE>
thereby, and at the Closing the Bank shall have received evidence
satisfactory to it that such security interests are perfected, first
security interests in such collateral. All filings of Uniform Commercial
Code financing statements, subordination agreements and other filings and
actions necessary to perfect such security interests shall have been filed
or taken and confirmation thereof received.
3.9 Support Letter.
--------------
CNG shall have executed and delivered to the Bank a Support
Agreement (the "Support Agreement") to the effect and substantially in the
form set forth in Exhibit I hereto.
3.10 Assignment of Leases and Rentals.
--------------------------------
ENI shall have executed and delivered to the Bank an assignment
of leases and rentals (the "Assignment of Leases") in form and substance
satisfactory to the Bank and an amended Assignment of Leases (the "Amended
Assignment of Leases") to the effect and substantially in the form of
Exhibit J hereto. Each of the Assignment of Leases and the Amended
Assignment of Leases shall be in full force and effect and shall grant to
the Bank security interests in the collateral covered thereby, and at the
Closing the Bank shall have received evidence satisfactory to it that such
security interests are perfected, first security interests in such
collateral.
SECTION 4. CONDITIONS PRECEDENT TO FURTHER ADVANCES
The Bank's obligation to make any future advances under the
Revolving Loan shall be subject to the following conditions precedent.
4.1 Warranties and Representations True.
-----------------------------------
The warranties and representations contained in Section 2 hereof
and in any document the form of which is appended hereto as an exhibit
shall, except as affected by the transactions contemplated by this
Agreement, be true in all material respects on the date of such proposed
advance or proposed conversion, with the same effect as though made on and
as of such date.
4.2 Compliance with this Agreement.
------------------------------
The Company shall have performed and complied with all agreements
and conditions contained herein which are required to be performed or
complied with on or prior to the date of such proposed advance, and all of
the documents required by any one or more of Sections 3.7, 3.8, 3.9, 3.10 or
3.11 shall be in full force and effect.
<PAGE>
4.3 No Default or Event of Default.
------------------------------
No Default or Event of Default shall exist under this Agreement.
4.4 Officers' Certificate.
---------------------
The Bank shall have received a certificate dated the date of such
proposed future advances and signed by the President or a Vice President and
the Chief Financial Officer of the Company certifying that the conditions
specified in Sections 4.1, 4.2 and 4.3 have been fulfilled.
SECTION 5. COMPANY BUSINESS COVENANTS
The Company covenants that on and after the date of this
Agreement and for so long as (a) any part of the Loans shall remain
outstanding, or (b) any portion of the Bank's Commitment shall be in effect:
5.1 Payment of Taxes and Claims.
---------------------------
The Company and each Restricted Subsidiary will pay, before they
become delinquent,
(a) all taxes, assessments and governmental charges or
levies imposed upon it or its Property, and
(b) all claims or demands of materialmen, mechanics,
carriers warehousemen, landlords and other like Persons which, if
unpaid, might result in the creation of a Lien upon its Property,
PROVIDED that items of the foregoing description need not be paid if (i)
they are being contested in good faith and by appropriate proceedings, (ii)
adequate book reserves have been established with respect thereto, (iii) the
owning company's title to, and its right to use, its Property is not
materially adversely affected thereby, (iv) in the case of any item of the
foregoing description involving in excess of $150,0O0, the appropriateness
of the proceedings shall be supported by opinion of the independent counsel
responsible for such proceedings and the adequacy of such reserves shall be
supported by an opinion of the independent accountants of the contesting
company, and (v) in the case of any item of the foregoing description
involving in excess of $150,000, the priority of the Bank's liens upon the
assets of the contesting company is assured to the Bank's reasonable
satisfaction.
<PAGE>
5.2 Maintenance of Properties and Corporate Existence.
-------------------------------------------------
The Company and each Restricted Subsidiary will:
(a) PROPERTY - maintain its Property in good condition
and make all necessary renewals, replacements, additions,
betterments and improvements thereto;
(b) INSURANCE - maintain, with financially sound and
reputable insurers, insurance with respect to its Properties and
business against such casualties and contingencies, of such
types (including, without limitation, worker's compensation
coverage, so-called "all risk" casualty coverage and larceny,
embezzlement or other criminal misappropriation insurance) and in
such amounts as is customary in the case of corporations engaged
in the same or a similar business and similarly situated.
Without limiting the generally of the foregoing, the Company
shall maintain (i) casualty insurance with respect to each item
of Property in an amount sufficient to prevent the Company's
being deemed a coinsurer with respect to such item of Property,
(ii) casualty insurance with respect to all of its Property in an
aggregate amount not less than the outstanding principal amount
of the Loans, and (iii) public liability insurance against claims
for personal injury and death in amounts not less than
S25,000,000 per person and S25,000,000 per occurrence;
(c) FINANCIAL RECORDS - keep true books of records and
accounts in which full and correct entries will be made of all
its business transactions, and will reflect in its financial
statements adequate accruals and appropriations to reserves, all
in accordance with generally accepted accounting principles;
(d) CORPORATE EXISTENCE, RIGHT AND FRANCISES - do or
cause to be done all things necessary (i) to preserve and keep in
full force and effect its existence, rights and franchises', and
(ii) to maintain each Restricted Subsidiary as a Restricted
Subsidiary. Nothing in this Section 5.2(d) shall be deemed to
prohibit a merger or consolidation permitted by Section 5.4; and
(e) COMPLIANCE WITH LAW - not be in violation of any law,
ordinance or governmental rule and regulation to which it is
subject and will not fail to obtain and maintain in effect any
license, permit, franchise or other governmental authorization
necessary to the ownership of its Properties or to the conduct of
its business, which violation or failure to obtain and maintain
might materially adversely affect the business, prospects,
profits, Properties or condition (financial or otherwise) of the
Company and its Restricted Subsidiaries.
5.3 Payment of Loans and Maintenance of Office.
------------------------------------------
The Company will punctually pay or cause to be paid the principal
and interest (and premium, if any) to become due in respect of the Loans
according to the terms hereof and will maintain an office in the State of
Connecticut where notices, presentations and demands in respect of this<PAGE>
Agreement may be made upon it. Such office shall be maintained at the
address set forth in Section 9.1 until such time as the Company shall notify
the Bank of a change of location of such office within such State.
<PAGE>
5.4 Sale of Assets; Merger.
----------------------
(a) SALE OF ASSETS. Neither the Company nor any
Restricted Subsidiary will, except in the ordinary course of
business, sell, lease, transfer or otherwise dispose of, any of
its assets.
(b) MERGER AND CONSOLIDATION. Neither the Company nor
any Restricted Subsidiary will consolidate with or merge into any
other Person or permit any other Person to consolidate with or
merge into it (except that a Restricted Subsidiary may
consolidate with or merge into the Company or another Restricted
Subsidiary); PROVIDED that the foregoing restriction does not
apply to the merger or consolidation of the Company with another
corporation, if:
(1) the corporation which results from such merger or
consolidation (the "surviving corporation") is organized
under the laws of the United States or a jurisdiction
thereof;
(2) the due and punctual payment of the principal of and
interest on the Loans, and the due and punctual performance
and observance of all the covenants in this Agreement and
the Financing Documents to be performed or observed by the
Company, are expressly assumed in writing by the surviving
corporation;
(3) immediately after the consummation of the
transaction, and after giving effect thereto, no Default or
Event of Default would exist; and
(4) immediately after the consummation of the
transaction, and any giving effect thereto, CNG would
continue to own, directly or indirectly, 100% of the
outstanding capital stock of the surviving corporation; and
(5) CNG affirms in writing its obligations under its
Support Agreement
5.5 Liens and Encumbrances.
----------------------
Neither the Company nor any Restricted Subsidiary will
(i) cause or permit or (ii) agree or consent to cause or permit
in the future (upon the happening of a contingency or otherwise)
any of its Property, whether now owned or hereafter acquired, to
be subject to any Lien, except:
(a) Liens securing taxes, assessments or governmental
charges or levies or the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like
Persons, PROVIDED the payment thereto is not at the time required
by Section 5.1;
<PAGE>
(b) Liens incurred or deposits made in the ordinary
course of business (i) in connection with workmen's compensation,
unemployment insurance, social security and other like laws, or
(ii) to secure the performance of letters of audit, bids,
tenders, sales contracts, leases, statutory obligations, surety,
appeal and performance bonds and similar obligations, in each
case not incurred in connection with the borrowing of money, the
obtaining of advances or the payment of the deferred purchase
price of Property;
(c) attachments, judgments and other similar Liens
arising in connection with court proceedings, PROVIDED the
execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(d) reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and
other similar time exceptions or encumbrances affecting real
Property; PROVIDED, that they do not in the aggregate materially
detract from the value of said Properties or materially interfere
with their use in the ordinary conduct of the Company's business;
(e) Liens or rights of setoff by the Bank or the right of
setoff by banks which have extended credit to the Company in
compliance with Section 5.12 hereof;
(f) Liens contemplated by this Agreement; and
(g) Purchase Money Mortgages.
5.6 Net Worth.
---------
(a) MAINTENANCE. The Company shall maintain its Net Worth at
not less than $9,000,000.
(b) DEBT TO NET WORTH RATIO. At no time shall the Company permit
the ratio of Indebtedness to Net Worth to exceed 3:1 on a consolidated basis
at the end of any fiscal quarter.
5.7 Transactions with Affiliates.
----------------------------
Neither the Company nor any Restricted Subsidiary will enter into
any transaction, including, without limitation, the purchase, sale or
exchange of Property or the rendering of any service, with any Affiliate
except in the ordinary course of and pursuant to the reasonable requirements
of the Company's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Subsidiary than would obtain
in a comparable arms-length transaction with a Person not an Affiliate;
PROVIDED, HOWEVER, that nothing in this Section 5.7 shall prevent the
Company or a Restricted Subsidiary from paying its allocation of ordinary
business expenses as allocated in good faith to the Company or such
Subsidiary on an intercompany basis.
<PAGE>
<PAGE>
5.8 Intent Coverage Ratio.
---------------------
(a) COVERAGE. The Company will not permit the ratio of EBIT to
Interest Expense to be less than 2:1 on a consolidated basis for any twelve
month period ending on the final day of any fiscal quarter of the Company.
5.9 Limitations upon Restricted Subsidiaries.
----------------------------------------
(a) INDEBTEDNESS. No Restricted Subsidiary shall incur
or have outstanding any Current Debt or Adjusted Funded Debt, or
issue or have outstanding any preferred stock, except
indebtedness or preferred stock owned and held by the Company or
another Restricted Subsidiary.
(b) LEASE OBLIGATIONS. No Restricted Subsidiary will be
or become liable as lessee under any lease, except leases with
respect to which the Company or another Restricted Subsidiary is
lessor.
(c) GUARANTIES. No Restricted Subsidiary will be or
become liable in respect of any Guaranty.
5.10 Investments.
-----------
Neither the Company nor any Restricted Subsidiary will make or
authorize any Restricted Investment.
5.11 Same Line of Business.
---------------------
Neither the Company nor any Restricted Subsidiary will engage in
any business if, as a result thereof, the business of the Company and its
Restricted Subsidiaries, taken as a whole, would not be substantially the
same as the business of the Company on the date hereof. For purposes of
this Section 5.11, the business of the Company and its Restricted
Subsidiaries shall not be considered to be substantially the same as the
business of the Company on the date hereof unless at least 90% of the assets
of the Company and its Restricted Subsidiaries are assets of the type
utilized by the Company in its business on the date hereof, and at least 90%
of the gross revenues of the Company and its Restricted Subsidiaries are
derived from the distribution of steam and chilled water to customers for
heating and cooling.
5.12 Indebtedness.
------------
The Company will not create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
<PAGE>
(a) Indebtedness under the Financing Documents;
(b) unsecured Indebtedness incurred in the ordinary course of
business (including open accounts (not more than 90 days past due) extended
by suppliers on normal trade terms in connection with purchases of goods and
services, but excluding the Indebtedness incurred through the borrowing of
money or contingent liabilities);
(c) Indebtedness secured by Liens permitted under Section 5.5.
in an aggregate principal amount not to exceed $2,000,000 at any time
outstanding; and
(d) Indebtedness in an aggregate principal amount not to exceed
(i) $4,000,000 outstanding at any time owing to Bank of Boston Connecticut
or any other bank pursuant to an unsecured revolving credit agreement and
$5,000,000 to Fleet Bank or any other bank pursuant to an unsecured
revolving credit agreement to be entered into by the Borrower.
SECTION 6. INFORMATION AS TO COMPANY
6.1 Financial and Business Information.
----------------------------------
So long as any portion of the Bank's Commitment or any portion of
the Loans remains outstanding the Company will deliver to the Bank:
(a) QUARTERLY STATEMENTS - as soon as practicable after the end
of each of the first three quarterly fiscal periods in each fiscal year of
the Company, and in any event within forty-five (45) days thereafter, two
copies of:
(1) a consolidated balance sheet of the Company and its
consolidated subsidiaries and of the Company and its Restricted
Subsidiaries, as at the end of such quarter, and
(2) consolidated statements of income, retained earnings and
changes in financial position of the Company and its consolidated
subsidiaries and of the Company and its Restricted Subsidiaries,
for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such
quarter,
prepared in accordance with generally accepted accounting principles
consistently applied (or containing an explanation of the effect of any
change in accounting principles upon such statement) and setting forth in
each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail and certified as complete
and correct, subject to changes resulting from year-end adjustments, by the
Chairman, President, Chief Financial Officer or Vice President of the
Company;
(b) ANNUAL STATEMENTS - as soon as practicable after the
end of each fiscal year of the Company, and in any event within
ninety (90) days thereafter two copies of:,
<PAGE>
(1) a consolidated and consolidating balance sheet of the
Company and its consolidated subsidiaries and of the Company and
its Restricted Subsidiaries, as at the end of such year, and
(2) consolidated and consolidating statements of income,
retained earnings and changes in financial position of the
Company and its consolidated subsidiaries and of the Company and
its Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail and
accompanied by an opinion thereon of independent certified public
accountants of recognized national standing selected by the
Company, which opinion shall state that such financial statements
fairly present the financial condition of the Company, and have
been prepared in accordance with generally accepted accounting
principles consistently applied (except for changes in
application in which such accountants concur) and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and accordingly included such tests of the
accounting records and such other auditing procedures as were
considered necessary in the circumstances;
(c) OPINION OF INDEPENDENT ACCOUNTANTS AND COUNSEL - as
soon as practicable after the end of each fiscal year of the
Company, and in any event within 90 days thereafter, duplicate
copies of all opinions of independent accountants and counsel
required pursuant to this Section 6.1;
(d) SEC AND OTHER REPORTS - promptly upon their becoming
available, one copy of each financial statement, report, notice
or proxy statement sent by the Company or any Subsidiary to
stockholders generally, and of each regular or periodic report
and any registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof
filed by the Company or any Subsidiary with, or received by the
Company or any Subsidiary in connection therewith from, any
securities exchange or the Securities and Exchange Commission or
any successor agency;
(e) ERISA - within ten (10) days after becoming aware of
the occurrence of any (i) "reportable event" (as such term is
defined in Section 4043 of ERISA) or (ii) "prohibited
transaction" (as such term is defined in Section 406 or Section
2003(a) of ERISA) in connection with any Plan or any trust
created thereunder, a written notice specifying the nature
thereof, what action the Company is taking or proposes to take
with respect thereto, and, when known, any action taken by the
Internal Revenue Service or the Department of Labor, as the case
may be, with respect thereto;
<PAGE>
(f) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly
(and in any event within two (2) business days) after any Officer
of the Company becomes aware of the existence of any condition or
event which constitutes a Default or an Event of Default, a
written notice specifying the nature and period of such Default
or Event of Default and what action the Company is taking or
proposes to take with respect thereto;
(g) NOTICE OF CLAIMED DEFAULT - promptly (and in any event
within two (2) business days) after any Officer of the Company or
CNG becomes aware that the holder of any evidence of indebtedness
or other Security or liability of the Company or any Subsidiary
has given notice or taken any other action with respect to a
claimed default or event of default, a written notice specifying
the notice given or action taken by such holder and the nature of
the claimed default or Event of Default and what action the
Company is taking or proposes to take with respect thereto;
(h) CNG FINANCIAL STATEMENTS - annual audited financial
statements of CNG and its consolidated subsidiaries; and
(i) REQUESTED INFORMATION - with reasonable promptness,
such other data and information as the Bank may from time to time
reasonably request.
6.2 Officers' Certificates.
----------------------
Each set of financial statements delivered to the Bank pursuant
to Section 6.1(a) or 6.1(b) will be accompanied by a certificate signed by
the Chairman, President, Vice President or Chief Financial Officer of the
Company setting forth:
(a) COVENANT COMPLIANCE - the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Sections 5.4
through 5.11, inclusive, during the period covered by the income
statement then being furnished; and
(b) EVENT OF DEFAULT - that the signers have reviewed the
relevant terms of this Agreement and have made, or caused to be
made, under their supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning
of the accounting period covered by the income statements being
delivered therewith to the date of the certificate, and that such
review has not disclosed the existence during such period of any
condition or event which constitutes a Default or an Event of
Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what
action the Company has taken or proposes to take with respect
thereto.
<PAGE>
6.3 Accountants' Certificates.
-------------------------
Each set of annual financial statements delivered pursuant to
Section 6.1(b) will be accompanied by a certificate of the accountants who
certify such financial statements, stating that they have reviewed this
Agreement and stating further, whether, in making their and, such
accountants have become aware of any condition or event which constitutes a
Default or an Event of Default, and, if any such Condition or event then
exists, specifying the nature and period of existence thereof.
6.4 Inspection.
----------
The Company will permit the Bank, while any principal amount of
the Loans or the Bank's Commitment remains outstanding, at the Bank's
expense, to visit and inspect any of the Properties of the Company or any
Subsidiary, to examine all its books or account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss its affairs,
finances and accounts with its officers, employees and independent public
accountants (and by this provision the Company authorizes said accountants
to discuss the finances and affairs of the Company and its Subsidiaries) all
at such reasonable times and as often as may be reasonably requested.
SECTION 7. EVENTS OF DEFAULT
7.1 Nature of Events.
----------------
An "Event of Default" shall exist if any of the following
occurs and is continuing:
(a) PAYMENTS ON THE LOANS - the Company fails to make any
payment of principal, premium (including any Make-Whole Amount),
if any, or interest on any of the Loans within five (5) days of
the date such payment is due;
(b) PARTICULAR COVENANT DEFAULTS - the Company or any
Restricted Subsidiary fails to perform or observe any covenant
contained in Sections 5.2 through 5.11, inclusive, or in Section
6.1(f) or Section 6.1(g);
(c) OTHER DEFAULTS the Company or any Subsidiary fails to
comply with any other provision of this Agreement, and such
failure continues for more than thirty (30) days after such
failure shall first become known to any Officer of the Company or
CNG;
(d) WARRANTIES OR REPRESENTATIONS - any warranty,
representation or other statement by or on behalf of the Company
contained in this Agreement or in any instrument furnished in
compliance with or in reference to this Agreement proves to have
been false or misleading in any material respect when made or
furnished;
<PAGE>
(e) DEFAULT ON INDEBTEDNESS OR OTHER SECURITY - the
Company or any Restricted Subsidiary fails to make any payment
due on any indebtedness or other Security or any event shall
occur or any condition shall exist in respect of any indebtedness
or other Security of the Company or any Restricted Subsidiary, or
under any agreement securing or relating to such indebtedness or
other Security, the effect of which is (i) to cause (or permit
any holder of such indebtedness or other Security or a trustee to
cause) such indebtedness or other Security, or a portion thereof,
to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment, or (ii) to permit a trustee
or the holder of any Security (other than common stock of the
Company) to elect a majority of the directors on the Board of
Directors of the Company or any Restricted Subsidiary;
(f) INVOLUNTARY BANKRUPTCY PROCEEDINGS - a receiver,
conservator, liquidator or trustee of the Company or any
Restricted Subsidiary or of all or any of the Property of the
Company or any Restricted Subsidiary is appointed by court order
and such order remains in effect for more than sixty (60) days;
an order for relief (or an equivalent thereto) is entered with
respect to the Company or any Restricted Subsidiary; any Property
of the Company or any Restricted Subsidiary is sequestered by
court order and such order remains in effect for more than sixty
(60) days; or a petition is filed against the Company or any
Restricted Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in
effect, and is not dismissed within sixty (60) days after such
filing;
(g) VOLUNTARY PETITIONS - the Company or any Restricted
Subsidiary files a petition in voluntary bankruptcy or seeks
relief under any provision of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in
effect, or consents to the filing of any petition against it
under any such law;
(h) ASSIGNMENTS FOR BENEFIT OF CREDITORS, ETS. - the
Company or any Restricted Subsidiary makes an assignment to the
benefit of its creditors, or admits in writing its inability to
pay, or in fact does not pay its debts generally as they become
due, or consents to the appointment of a receiver, conservator,
liquidator or trustee of the Company or such Restricted
Subsidiary or of all or any part of their respective Property;
(i) CERTAIN ACTIONS - the Company shall dissolve or
liquidate or be dissolved or liquidated, or cease to exist;
(j) UNDISCHARGED FINAL JUDGMENTS - final judgment or
judgments for the payment of money aggregating in excess of
$150,000 is or are outstanding against one or more of the Company
and its Restricted Subsidiaries and any one of such judgments has
been outstanding for more than sixty (60) days from the date of
its entry and has not been discharged in full or stayed; or
<PAGE>
<PAGE>
(k) DEFAULT IN FINANCIAL DOCUMENTS - an event of default
(as therein defined) shall exist under any of the Financing
Documents.
7.2 Default Remedies.
----------------
(a) ACCELERATION. If an Event of Default exists, the
Bank may exercise any right, power or remedy permitted to the
Bank by law, and shall have, in particular, without limiting the
generality of the foregoing, the right to declare the entire
outstanding principal and all interest accrued on the Loans to
be, and such amounts together with all other amounts owing to the
Bank hereunder (specifically including, without limitation, (i)
the amount of all losses and expenses incurred by the Bank by
reason of the liquidation or reemployment of funds acquired by
the Bank to fund or maintain the Revolving Loan or any Portion
thereof, and (ii) with respect to the 1990 Term Loan, the Make-
Whole Amounts at such time), shall thereupon become, forthwith
due and payable, without any presentment, demand, protest or
other notice of any kind, all of which are hereby expressly
waived, and the Company will forthwith pay to the Bank all of
said amounts.
(b) NONWAIVER AND EXPENSES. No course of dealing on the
part of the Bank nor any delay or failure on the part of the Bank
to exercise any right shall operate as a waiver of such right or
otherwise prejudice the Bank's rights, powers and remedies. If
the Company fails to pay when due the principal of, premium, if
any, or interest on the Loans, or if the Company or any
Subsidiary fails to comply with any other provision of this
Agreement, the Company will pay to the Bank, to the extent
permitted by law, such further amounts as shall be sufficient to
cover the cost and expenses, including, but not limited to,
reasonable attorneys fees, incurred by the Bank in collecting any
sums due on the Loans or in otherwise enforcing any of its rights
hereunder or under any of the other Financing Documents.
SECTION 8. INTERPRETATION OF THIS AGREEMENT
8.1 Terms Defined.
-------------
As used in this Agreement, the following terms have the
respective meanings set forth below or set forth in the Section of this
Agreement following such term:
ADJUSTED FUNDED DEBT - with respect to any Person, means without
duplication
(1) its liabilities for borrowed money, other than Current
Debt;
(2) liabilities secured by any Lien existing on Property
owned by such Person (whether or not such liabilities have been
assumed) other than Current Debt;
<PAGE>
<PAGE>
(3) the present value of all payments due under any lease
or under any other arrangement for retention of title (discounted
at the implicit rate, if known or 8% per annum otherwise) if such
lease or other arrangement is in substance (a) a financing lease
(including any lease (i) under which the lessee has or will have
an option to purchase the Property subject thereto at a nominal
amount or an amount less than a reasonable estimate of the fair
market value of such Property at the date of such purchase, (ii)
with respect to which the lessor has filed a financing statement
signed by the Company as debtor, (iii) if the present value of
all rental and other fixed payments due under such lease is equal
to or exceeds 90% of the remainder of (x) the fair value of the
Property subject thereto minus (y) the amount of any related
investment tax audit retained by the lessor under the lease, or
(iv) the term of which approximates or exceeds 75% of the
reasonably estimated economic life of the Property subject
thereto), (b) an arrangement for the retention of title for
security purposes, or (c) an installment purchase;
(4) its liabilities under Guaranties; and
(5) any other obligations (other than deferred taxes)
which are required by generally accepted accounting principles to
be shown as liabilities on its balance sheet and which are
payable or remain unpaid more than one year from the creation
thereof.
AFFILIATE - a Person other than a Restricted Subsidiary (1) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (2) which
beneficially owns or holds 5% or more of any class of the Voting Stock of
the Company or (3) 5% or more of the Voting Stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest) of
which is beneficially owned or held by the Company or a Subsidiary. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise.
APPLICABLE MARGIN - in respect of any Portion of the Revolving
Loan bearing interest based upon (a) the Base Rate, 0%, (b) the LIBOR Rate,
0.50%, (c) the CD Rate, 0.625%, and (d) the Money Market Rate, 0.50%.
BANK'S COMMITMENT - Section 1.1.
BASE RATE - the "base rate" announced from time to time by the
Bank; interest at the Base Rate shall be computed on the basis of a 360-day
year and actual days elapsed.
BUSINESS DAY --
(a) with respect to the LIBOR Rate, means a day on which
dealings are carried on in the London interbank market and banks
are not required or authorized to close in London, England, and
<PAGE>
(b) with respect to the Base Rate or the CD Rate, means a
day dealings are carried on in the New York interbank market and
banks are not required or authorized to close in New York, New
York.
CD RATE - with respect to any Portion of the Revolving Loan,
means the consensus bid rate (rounded up to the nearest whole multiple of
1/100 of 1% per annum if such consensus bid is not such a multiple) on New
York certificate of deposit dealers of recognized standing for the purchase
in New York City at face value of certificates of deposit of the Bank in
amounts approximately equal to such Portion and with a maturity equal to the
Interest Period selected by the Company with respect to such Portion,
INCREASED to give effect to all applicable reserve requirements and amounts
payable to the Federal Deposit Insurance Corporation; such consensus bid
rate shall be determined by the Bank as of 9:00 a.m. New York City time two
business days before the first day of any applicable Interest Period.
Interest at the CD Rate shall be computed on the basis of a 360 day year and
actual days elapsed.
CLOSING - The Closing of the Revolving Loan.
CLOSING DATE - October 28, 1994 or such other date as may be
agreed upon by the Company and the Bank.
CNG - Connecticut Natural Gas Corporation, a Connecticut
corporation, or its successors.
COLLATERAL ASSIGNMENT - Section 3.8.
COLLATERAL ASSIGNMENT OF LEASES - Section 3.10.
COMMITMENT EXPIRATION DATE - Section 1.1.
COMPANY - The Hartford Steam Company, a Connecticut corporation.
CREDIT REFERENCE RATE - at any time with respect to any Loan
being prepaid as a result of (i) an optional prepayment or (ii) the
existence of an Event of Default means the rate of interest per annum equal
to the yield to maturity of the United States Treasury Security having a
constant maturity most closely approximating the Weighted Average Life to
Maturity of such Loan, PROVIDED that if there shall be more than one such
United States Treasury Security, the Credit Reference Rate shall be equal to
the average of the yields to maturity (expressed as a rate per annum) of
such United States Treasury Securities. For purposes of this definition,
<PAGE>
"United States Treasury Security" means, at any time, each of the United
States Treasury notes, bonds, three (3) month bills, six (6) month bills and
one (1) year bills having the constant maturities and yields to maturity as
set forth in the then most recently published Federal Reserve Board
Statistical Release, provided (A) if, for any particular constant maturity
set forth in such Federal Reserve Board Statistical Release, more than one
date is associated therewith for which a yield to maturity is set forth,
then the yield to maturity for the most recent date associated with such
maturity shall be used for purposes of determining the Credit Reference
Rate, and (B) if, for any particular constant maturity and the most recent
date associated therewith that is set forth in such Federal Reserve Board
Statistical Release, more than one yield to maturity is set forth therein,
then the average yield associated with such constant maturity and such date
shall be used for purposes of determining the Credit Reference Rate.
DEFAULT - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default.
DETERMINATION DATE - with respect to a Portion of the Revolving
Loan, means a date on which the Company shall have the right to select a
rate of interest based upon the Base Rate, the LIBOR Rate, the Money Market
Rate or the CD Rate as the applicable interest rate in respect thereof,
which date shall be:
(a) if at the time the Base Rate or Money Market Rate is
to be selected, any Business Day, and
(b) if at the time a rate based upon the LIBOR Rate or
the CD Rate is to be selected, a Business Day which is two
Business Days prior to the expiration of an Interest Period.
EBIT or EARNINGS BEFORE INTEREST AND TAXES - the income of the
Company for the relevant period net of all operating expenses but without
deduction for (i) interest charges or expense, (ii) amortization of
intangibles, and (iii) income taxes (whether Federal, State or local), all
as shown on the financial statements of the Company for such period and
calculated in accordance with generally accepted accounting principles
consistently applied for financial reporting purposes.
ENI - Energy Networks, Inc., a Connecticut corporation.
ENI MORTGAGE - that certain Open-End Mortgage and Security
Agreement from Energy Networks, Inc. to the Bank dated as of March 1, 1989
and recorded April 5, 1989 in the City of Hartford land records in Volume
2916 at page 24, as the same may be amended from time to time.
ENI REAL ESTATE - the real property described in Schedule A to
the ENI Mortgage.
<PAGE>
ERISA - the Employee Retirement Income Security Act of 1974, as
amended from time to time.
EVENT OF DEFAULT - Section 7.1.
FINANCING DOCUMENTS - this Agreement, the Note, the HSC Mortgage
the ENI Mortgage, the Collateral Assignment, the Collateral Assignment of
Leases, the Security Agreement, the Support Agreement, and the Subordination
Agreement, as the same has been or shall be amended, restated, modified,
extended, substituted, renewed or replaced from time to time hereafter.
GOVERNMENTAL AUTHORITY - any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator.
GUARANTY - with respect to any Person shall mean all obligations
of such Person guarantying or in effect guarantying any indebtedness,
dividend or other obligation of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, including obligations incurred
through an agreement, contingent or otherwise, by such Person:
(1) to purchase such indebtedness or obligation or any
Property or assets constituting security therefor;
(2) to advance or supply funds
(i) for the purchase or payment of such indebtedness
or obligation, or
(ii) to maintain working capital or other balance
sheet condition or any income statement condition or
otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(3) to lease Property or to purchase Securities or other
Property or services primarily for the purpose of assuring the
owner of such indebtedness or obligation of the primary obligor's
ability to make payment of the indebtedness or obligation; or
(4) otherwise to assure the owner of the indebtedness or
obligation of the primary obligor against loss in respect
thereof.
HSC MORTGAGE - that certain Open End Mortgage and Security
Agreement dated March 23, 1983, from the Company to the Bank, and recorded
in the land records of the City of Hartford in Volume 2047 at page 228, as
the same may be amended from time to time.
<PAGE>
HSC REAL ESTATE - the real property described in Schedule A to
the HSC Mortgage.
INDEBTEDNESS - for any Person, at a particular date, the sum
(without duplication) at such date of (a) indebtedness for borrowed money or
for the deferred purchase price of property or services in respect of which
such Person is liable, as obligor, guarantor or otherwise, or which is
evidenced by any bond, debenture, note or other instrument of such Person,
(b) obligations of such Person under financing leases, (c) any obligations
of such Person in respect of letters of credit, acceptances, interest rate
swap agreements, interest rate cap agreements, or similar obligations issued
or created for the account of such Person, and (d) any other obligations of
such Person which are treated as indebtedness in accordance with generally
accepted accounting principles.
INTEREST EXPENSE - interest paid or accrued during the relevant
period on or in connection with Indebtedness.
INTEREST PERIOD - with respect to a Portion of the Revolving
Loan, means a period during which a rate of interest based upon the LIBOR
Rate, the CD Rate or the Money Market Rate is in effect, PROVIDED, HOWEVER,
that (a) no such period shall be less than 30 days nor more than 360 days,
(b) each such period must be a multiple of 30 days, (c) no such period shall
extend beyond the Commitment Expiration Date, (d) each such period shall
commence (i) on the date of any advance under the Revolving Loan, or (ii)
two Business Days after the applicable Determination Date, and (e) if any
such period ends on a day other than a Business Day, such period shall be
extended to the next succeeding Business Day unless such succeeding Business
Day falls within the next calendar month, in which event such period shall
end on the immediately preceding Business Day.
LIBOR RATE - with respect to a Portion of the Revolving Loan
means the London Interbank Offering Rate (as available to the Bank for US
Dollar deposits of amounts in immediately available funds comparable to the
principal amount of such Portion and with maturities comparable to the
Interest Period selected by the Company with respect to Such Portion)
increased to give effect to all applicable reserve requirements (including,
without limitation, any marginal, emergency supplemental, special, or other
reserve) in respect of Eurocurrency or Eurodollar funding, lending or
liabilities, as such terms may be defined in any law, regulation or order
imposing such reserve requirement. Interest at the LIBOR Rate shall be
computed on the basis of a 360 day year and actual days elapsed.
LIEN - any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including, but
not limited to, the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall
<PAGE>
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purposes of this Agreement, the
Company or a Restricted Subsidiary shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale
agreement, financing lease or other arrangement pursuant to which title to
the Property has been retained by or vested in some other Person for
security purposes, and such retention or vesting shall constitute a lien.
LOANS - at any time, means the outstanding loans made to the
Company by the Bank pursuant to this Agreement.
MAKE-WHOLE AMOUNT - at any time means the greater of
(a) zero (0) or
(b) the remainder of
(i) the present value determined using a discount
rate equal to the Credit Reference Rate at such time) of the then
remaining scheduled payments of principal and interest with
respect to the Loan being paid or prepaid;
MINUS
-----
(ii) the aggregate principal amount so prepaid.
MONEY MARKET RATE - the per annum rate of interest determined
from time to time by the Bank in its sole discretion with reference to money
market rates as and if offered. Interest at the Money Market Rate shall be
computed on the basis of a 360 day year and actual days elapsed.
NET WORTH - the sum of the capital stock, capital surplus and
earned surplus of the Company and its Subsidiaries calculated on a
consolidated basis, but excluding in such calculation (i) goodwill,
contracts not to compete and all other intangible assets determined in
accordance with the generally accepted accounting principles consistently
applied; (ii) all write-ups in the book value of any asset; and (iii)
treasury stock.
1990 TERM LOAN - Section 1.2.
NOTE - Section 1.1(a).
O'BRIEN - Hartford Cogeneration Limited Partnership (formerly
known as O'Brien (Hartford) Cogeneration Limited Partnership, a Delaware
limited partnership).
<PAGE>
O'BRIEN LEASE - that certain lease between O'Brien and ENI, dated
as of March 1,1989, covering all or a portion of the ENI Real Estate.
OFFICER - shall mean (i) with respect to the Company, the
President, any Vice President, the Chief Financial Officer and the
Secretary, and (ii) with respect to Connecticut Natural Gas Corporation, the
Chairman, President and Chief Executive Officer, Senior Vice President-Chief
Financial Officer, Vice President-General Counsel and Secretary, any other
Vice President, the Treasurer and the Assistant Treasurer.
PENSION PLANS - Section 2.16.
PERMITTED LIENS - Liens permitted by Section 5.5.
PERSON - an individual, partnership, corporation, trust,
unincorporated organization, government, governmental agency or governmental
subdivision.
PLAN - Section 2.16.
PORTION - a portion of the principal amount of the Revolving Loan
with respect to which (i) a particular rate of interest and Interest Period
is applicable or (ii) the Base Rate is applicable.
PROPERTY - any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
PURCHASE MONEY MORTGAGE - a Lien held by any Person (whether or
not the Seller of such assets) on fixed assets (other than assets acquired
to replace, repair, upgrade or alter assets owned by the Company on the date
of this Agreement) acquired or constructed by the Company after the date of
this Agreement, which lien secures all or a portion of the related purchase
price or construction costs of such assets, PROVIDED THAT, in each such
case, such Lien does not extend to any other asset of the Company or any
Restricted Subsidiary.
REMAINING DOLLAR-YEARS - with respect to any indebtedness for
borrowed money means the amount obtained by
(a) multiplying the amount of each then remaining sinking
fund, serial maturity or other required repayment, or redemption,
including repayment at final maturity or final mandatory
redemption, by the number of years (calculated at the nearest
one-twelfth) which shall elapse between the date of proposed
prepayment and the date of that required repayment or redemption,
and
<PAGE>
(b) totaling all the products obtained in (a).
RESTRICTED INVESTMENTS - all investments, made in cash or by
delivery of Property to the Company and its Restricted Subsidiaries (x) in
any Person, whether by acquired of stock, indebtedness or other obligation
or Security, or by loan, advance or capital contribution, or otherwise, or
(y) in any Property (items (x) and (y) herein called "Investments"), except
the following:
(1) Property to be used in the ordinary course of business
of the Company as described in Section 2.3;
(2) current assets arising from the sale of goods and
services in the ordinary course of business of the Company and
its Restricted Subsidiaries;
(3) investments in direct obligations of the United States
of America, or any agency thereof or obligations guaranteed by
the United States of America, PROVIDED that such obligations
mature within one year from the date of acquisition thereof; and
(4) investments in one or more Restricted Subsidiaries or
any corporation which concurrently with such investment becomes a
Restricted Subsidiary.
Investments shall be valued at cost less any net return of
capital through the sale or liquidation thereof or other return
of capital thereon.
RESTRICTED SUBSIDIARY - any Subsidiary,
(1 ) organized under the laws of the United States, Puerto
Rico or Canada or a jurisdiction thereof,
(2) which conducts substantially all of its business and
has substantially all of its Property within the United States,
Puerto Rico and Canada,
(3) one hundred percent (100%) of all stock and equity
Securities of which is legally and beneficially owned by the
Company and its other Restricted Subsidiaries, and
(4) which has guarantied the Loans and has secured its
guaranty by granting and creating in the Bank's favor liens upon
and security interests in all its assets pursuant to mortgages
and security agreements in form and substance acceptable to the
Bank, except an Unrestricted Subsidiary.
<PAGE>
REVOLVING LOAN - Section 1.1.
REVOLVING LOAN INTEREST RATE - with respect to a Portion of the
Revolving Loan means, (A) during any period ending on or prior to September
30, 1989, a rate equal to (i) the Base Rate, (ii) three-quarters (3/4) of
one percentage point over the LIBOR Rate, or (iii) seven-eighths (7/8) of
one percentage point over the CD Rate, and (B) during any period commencing
on or after October 1, 1989, and prior to September 30, 1994, a rate equal
to (i) one-quarter (1/4) of one percentage point over the Base Rate, (ii)
one percentage point over the LIBOR Rate, or (iii) one and one-eighth
(1-1/8) percentage points over the CD Rate, and on or after October 1, 1994,
a rate equal to (i) the Base Rate plus the Applicable Margin, (ii) the CD
Rate plus the Applicable Margin, (iii) the LIBOR Rate plus the Applicable
Margin, or (iv) the Money Market Rate plus the Applicable Margin, in each
case as designated by the Company in the manner set forth in Section 1.4,
and such case as designation is permitted or if no such designation shall
have been made, the Base Rate plus the Applicable Margin.
SECURITY - shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
SECURITY AGREEMENT - Section 3.8.
SUBORDINATION AGREEMENT - Section 3.11.
SUBSIDIATY - a corporation of which the Company owns, directly or
indirectly, more than 50% of the Voting Stock.
SUPPORT AGREEMENT - the letter agreement of CNG to the effect and
substantially in the form of Exhibit I to this Agreement as such agreement
may be amended, substituted or replaced from time to time.
TAXES - any present or future income, stamp or other taxes,
levies, imposts, duties, fees, assessments, deductions, withholdings, or
other charges of whatever nature, now or hereafter imposed, levied,
collected, withheld, or assessed by any Governmental Authority.
TITLE POLICY - that certain Title Insurance Policy Number 82-80-
07833 issued by Lawyers Title Insurance Corporation together with all
endorsements thereto up to but not including the date hereof.
UNRESTRICTED SUBSIDIARY - means (i) any Subsidiary which does not
meet each and every requirement contained in numbered clauses (1), (2), (3)
and (4) of the definition of the term "Restricted Subsidiary" or (ii) any
<PAGE>
Subsidiary acquired after March 1, 1983 (which acquisition shall constitute
the making of a Restricted Investment) which is designated, upon
acquisition, as an Unrestricted Subsidiary. No Restricted Subsidiary may be
designated as an Unrestricted Subsidiary. No Unrestricted Subsidiary may be
designated as a Restricted Subsidiary subsequently to its first being
acquired by the Company or another Restricted Subsidiary.
VOTING STOCK - common stock of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
WEIGHTED AVERAGE LIFE TO MATURITY - with respect to any
indebtedness for borrowed money means as at the time of the determination
thereof the number of years obtained by dividing the then Remaining
Dollar-Years of such indebtedness by the then outstanding principal amount
of such indebtedness.
8.2 Accounting Principles.
---------------------
Where the character or amount of any asset or liability or item
of income or expense is required to be determined or any consolidation or
other accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with generally accepted accounting
principles at the time in effect, to the extent applicable, except where
such principles are inconsistent with the requirements of this Agreement.
8.3 Directly or Indirectly.
----------------------
Where any provision of this Agreement prohibits a Person from
taking an action such provision shall be applicable whether such action is
taken directly or indirectly by such Person, including actions taken by or
on behalf of any partnership in which such Person is a general partner.
8.4 Governing Law.
-------------
This Agreement and the Note shall be governed by, and construed and enforced
in accordance with, Connecticut law.
8.5 Section Heading and Construction.
--------------------------------
The titles of the Sections appear as a matter of convenience only
and shall not affect the construction hereof. Each covenant contained in
this Agreement shall be construed (absent an express contrary provision
therein) as being independent of each other covenant contained herein, and
compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any or all other covenants.
<PAGE>
SECTION 9. MISCELLANEOUS
9.1 Notices.
-------
(a) METHOD: ADDRESSES. All communications under or in
connection with this Agreement shall be in writing, shall be personally
delivered or deposited into the United States mail (first class, registered
or certified mail, return receipt requested), postage prepaid, and shall be
addressed,
(1) if to the Bank, to:
One Federal Street
Boston, Massachusetts 02110
Attention: Resources and Utilities Group
or to such other address as the Bank shall have furnished to the Company in
writing, or
(2) if to the Company, to:
60 Columbus Boulevard
P.O. Box 1500
Hartford, Connecticut 06144-1500
Attention: Julie Lou
Director of Accounting and
Financial Services
With a copy to:
100 Columbus Boulevard
Hartford, Connecticut 06103
Attention: James P. Bolduc, Treasurer
or to such other address as the Company shall have furnished to
the Bank in writing.
(b) WHEN GIVEN. Any notice so addressed and mailed by
registered or certified mail (return receipt requested) shall be
deemed to be given when so mailed. Any notice so addressed and
otherwise delivered shall be deemed to be given when actually
received by the addressee.
9.2 Reproduction of Documents.
-------------------------
This Agreement and all documents relating hereto, including,
without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by the Bank at the closing of
the Loans (except the Note), and (c) financial statements, certificates and
other information previously or hereafter furnished to the Bank, may be
<PAGE>
reproduced by the Bank by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process, and the Bank
may destroy any original document so reproduced. The Company agrees and
stipulates that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made
by the Bank in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
9.3 Indemnity.
---------
The Company agrees to indemnify and hold harmless the Bank
and its affiliates, directors, officers, employees, attorneys and agents
(each an "INDEMNIFIED PERSON") from and against any loss, cost, liability,
damage or expense (including the reasonable fees and out-of-pocket expenses
of counsel of such Indemnified Person, including all local counsel hired by
any such counsel) incurred by such Indemnified Person in investigating,
preparing for, defending against, or providing evidence, producing documents
or taking any other action in respect of, any commenced or threatened
litigation, administrative proceeding or investigation under any federal
securities law or any other statute of any jurisdiction, or any regulation,
or at common law or otherwise, which is alleged to arise out of or is based
upon (i) any untrue statement or alleged untrue statement of any material
fact by the Company in any document or schedule executed or filed with the
SEC or any other Governmental Authority by or on behalf of the Company; (ii)
any omission or alleged omission to state any material fact required to be
stated in such document or schedule, or necessary to make the statements
made therein, in light of the circumstances under which made, not
misleading; (iii) any acts, practices or omissions or alleged acts,
practices or omissions of the Company or its agents relating to the use of
the proceeds of any or all borrowings made by the Company which are alleged
to be in violation of Section 2.13, or in violation of any federal
securities law or of any other statute, regulation or other law of any
jurisdiction applicable thereto; or (iv) any acquisition or proposed
acquisition by the Company or any Restricted Subsidiary of all or a portion
of the stock, or all or a portion of the assets, of any Person whether or
not such Indemnified Person is a party thereto. The indemnity set forth
herein shall be in addition to any other obligations or liabilities of the
Company to each Indemnified Person hereunder or at common law or otherwise,
and shall survive any termination of this Agreement, the expiration of the
Commitment and the payment of all indebtedness of the Company hereunder and
under the other Financing Documents, provided that the Company shall have no
obligation under this Section to an Indemnified Person with respect to any
of the foregoing to the extent found in a final judgment of a court to have
resulted primarily out of the gross negligence or willful misconduct of such
Indemnified Person or arising solely from claims between one such
Indemnified Person and another such Indemnified Person.
<PAGE>
9.4 Waiver of Trial by Jury.
-----------------------
THE BANK AND THE COMPANY EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE FINANCING
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, THE COMPANY
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE BANK OR COUNSEL TO
THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT,
IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION. THE COMPANY ACKNOWLEDGES THAT THE BANK HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS
SECTION.
9.5 Set-off.
-------
In addition to any rights and remedies of the Bank provided by
law, upon the occurrence of an Event of Default and accelerat
ion of the obligations owing in connection with this Agreement, or at any
time upon the occurrence and during the continuance of an Event of Default
under Section 7.1(a), the Bank shall have the right, without prior notice to
the Company, any such notice being expressly waived by the Company to the
extent not prohibited by applicable law, to set-off and apply against any
indebtedness, whether matured or unmatured, of the Company to the Bank, any
amount owing from the Bank to the Company, at, or at any time after, the
happening of any of the above-mentioned events. To the extent not
prohibited by applicable law, the aforesaid right of set-off may be
exercised by the Bank against the Company or against any trustee in
bankruptcy, custodian, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor of the
Company, or against anyone else claiming through or against the Company or
such trustee in bankruptcy, custodian, debtor in possession, assignee for
the benefit of creditors, receivers, or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set-off shall not have
been exercised by the Bank prior to the making, filing or issuance, or
service upon the Bank of, or of notice of, any such petition, assignment for
the benefit of creditors, appointment or application for the appointment of
a receiver, or issuance of execution, subpoena, order or warrant. The Bank
agrees promptly to notify the Company after any such set-off and application
made by the Bank, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
9.6 Survival.
--------
All warranties, representation and covenants made by the Company
herein or on any certificate or other instrument delivered by it or on its
behalf under this Agreement shall be considered to have been relied upon by
the Bank and shall survive the making of the Loans, regardless of any
investigation made by the Bank or on its behalf. All statements in any such
certificate or other instrument shall constitute warranties and
representation by the Company hereunder.
<PAGE>
9.7 Successors and Assigns.
----------------------
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties. The provisions of this
Agreement are intended to be for the benefit of the holders, from time to
time, of the Note and shall be enforceable by any such holder, whether or
not an express assignment to such holder of rights under this Agreement has
been made by the Bank or its successor or assign.
9.8 Amendment and Waiver.
--------------------
(a) REQUIREMENTS. This Agreement may be amended and the
observance of any term of this Agreement may be waived with (and
only with) the written consent of the Bank.
(b) EFFECT. No such amendment or waiver shall extend to or
affect any obligation, covenant, agreement, Default or Event of
Default not expressly amended or waived, or impair any right
consequent thereon.
9.9 Duplicate Original.
------------------
Two or more duplicate originals of this Agreement may be signed
by the parties, each of which shall be an original but all of which together
shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
THE HARTFORD STEAM COMPANY
By:
Name:
Its:
SHAWMUT BANK CONNECTICUT, N.A.
By:
Name: Thomas L. Rose
Its: Vice President
Consented and Agreed to:
ENERGY NETWORKS, INC.
By:
Name:
Its:
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$ 10,000,000 Boston, MA
October 28, 1994
FOR VALUE RECEIVED, THE HARTFORD STEAM COMPANY, (the "Company")
promises to pay to Shawmut Bank Connecticut, N.A. (formerly The Connecticut
National Bank, the "Bank"), or order, the principal amount of TEN MILLION
DOLLARS ($10,000,000) or, if less, the aggregate unpaid principal amount
(the "Amount Advanced") of the loans (the "Loans") made by the Bank to the
Company pursuant to a certain Second Amended and Restated Loan Agreement
between the Bank and the Company, dated as of October 28, 1994 (as amended
from time to time, the "Loan Agreement"), and to pay interest on the Amount
Advanced at the times and at the rates per annum set forth in the Loan
Agreement.
The Company shall make all principal, interest and other payments
called for by the Loan Agreement in accordance with the Loan Agreement. All
such payments shall be made at the office of the Bank located at 777 Main
Street, Hartford, Connecticut, in such coin or currency of the United States
of America as at the time of payment is legal tender for the payment of
public and private debts. The latest final maturity date of any Loan
evidenced by this Note is December 31, 1997.
The Company also agrees to pay all costs of collection associated
with this Note, including the reasonable fees of the Bank's legal counsel,
and all other amounts owing to the Bank pursuant to the Loan Agreement.
This Note has been issued and is secured pursuant to the terms of
the Loan Agreement and is entitled to the benefits thereof. As provided in
the Loan Agreement, this Note is subject to prepayment under certain
circumstances. The Company agrees to make required principal payments in
accordance with the provisions of the Loan Agreement. Under certain
circumstances as specified in the Loan Agreement, the principal amount of
this Note together with accrued interest thereon may be declared due and
payable with the effect provided in the Loan Agreement. The Loan Agreement
further provides that the books and records of the Bank are conclusive
evidence of amounts owing to the Bank absent manifest error of the Amount
Advanced.
The Company as maker of this Note, for itself and its successors
and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of nonpayment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in
collection, and the benefit of any exemption under any homestead exemption
law or any other exemption or insolvency law, and consents that the Bank may
release, surrender, exchange or substitute any collateral security now held
<PAGE>
or which may hereafter be held as security for the payment of this Note, and
may extend the time for payment or otherwise modify the terms of payment of
any part or the whole of the debt evidenced hereby.
This Note and the Loan Agreement are governed by, and shall be
construed and enforced in accordance with, Connecticut law.
It being the intent of the Bank and the Company that the rate of
interest and all other charges payable by the Company with respect to this
Note and the Loans be lawful, it is agreed that in no contingency or event
whatsoever, whether by reason of the making of the Loans or otherwise, shall
the amount paid or agreed to be paid to the Bank with respect to this Note
or the Loans for the use, forbearance or detention of money exceed the
highest lawful rate or amount permissible under any laws which a court of
competent jurisdiction may deem applicable hereto, and if any amount in
excess of such highest lawful rate or amount shall have been paid, then such
amount shall be applied to the unpaid principal amount of the Loans, or
refunded if there does not then exist any outstanding principal amount.
MAKER AND EACH ENDORSER, GUARANTOR AND SURETY OF THIS NOTE, AND
EACH OTHER PERSON LIABLE OR WHO SHALL BECOME LIABLE FOR ALL OR ANY PART OF
THE INDEBTEDNESS EVIDENCED BY THIS NOTE, HEREBY ACKNOWLEDGE THAT THE
TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO
THE EXTENT ALLOWED UNDER CONNECTICUT GENERAL STATUTES SECTIONS 52-278a TO
52-278n, INCLUSIVE, OR BY OTHER APPLICABLE LAW, HEREBY WAIVE THEIR RIGHT TO
NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH HOLDER OR
ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.
This Note is secured by real and personal property located in
Hartford, Connecticut.
THE HARTFORD STEAM COMPANY
By:
Its
<PAGE>
EXHIBIT B
I. THE COMPANY'S AFFILIATES AND THE NATURE OF THEIR RESPECTIVE
RELATIONSHIPS WITH THE COMPANY ARE AS FOLLOWS:
Name of Jurisdiction of Nature of
Affiliate Incorporation Affiliation
--------- --------------- -----------
CNG Connecticut Owns 100% of ENI
ENI Connecticut Owns 100% of stock of
the Company, Symtec, Inc.
and Cost Containment, Inc.
CNG Realty Connecticut CNG owns 100% of stock
Corp. of CNG Realty Corp.
ENI Connecticut CNG owns 100% of stock
Transmission of CNG Transmission
Company Company
Energy Networks
Services, Inc. Connecticut To be owned 100% by ENI*
*To be formed on or before December 31, 1994
II. THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY'S CAPITAL STOCK
AND THE RESPECTIVE OWNERS THEREOF ARE AS FOLLOWS:
Number of Shares
Class Authorized Owner
----- ---------------- -----
Common 2,000 ENI
III. DESCRIPTION OF BUSINESS
The Company operates a heating and cooling plant to service the
central business district of Hartford, Connecticut. The Company presently
serves 51 buildings with steam and chilled water. Annual steam sales are
approximately 400,000 M lbs., and annual chilled water sales are 1,100,000
daily tons.
<PAGE>
EXHIBIT C
LITIGATION
<PAGE>
Exhibit D
FORM OF OFFICERS' CERTIFICATE
CERTIFICATE OF
THE HARTFORD STEAM COMPANY
We, _________________ and _______________, each hereby certify
that we are, respectively, the ________________ and the ____________ of The
Hartford Steam Company (the "Company"), a Connecticut corporation, and that,
as such, we are authorized to act and deliver this Certificate in the name
and on behalf of the Company, and that:
1. This certificate is being delivered pursuant to Section 3.5
of the Second Amended and Restated Loan Agreement dated as of October 28,
1994 between the Company and Shawmut Bank Connecticut, N.A. (formerly The
Connecticut National Bank, the "Bank") (the "Amended Agreement") amending
and restating the Company's Loan Agreement (as amended from time to time,
the "Loan Agreement") with The Connecticut National Bank, dated as of March
1, 1983. The terms used in this Certificate and not denied herein shall
have the respective meanings ascribed to them in the Amended Agreement.
2. The warranties and representations contained in Section 2
of the Amended Agreement are (except as affected by transactions
contemplated by the Amended Agreement) true in all material respects on the
date hereof with the same effect as though made on and as of the date
hereof.
3. The Company has not taken any action or permitted any
condition to exist which would have been prohibited by Section 5.4 through
Section 5.8, inclusive, of the Amended Agreement, had such Sections been
binding and effective at all time during the period from March 1, 1983 to
and including the date hereof.
4. No Default or Event of Default has occurred.
5. The Company has performed and complied with all agreements
and conditions contained in the Amended Agreement which the Company is
required to perform or comply with before or as of the date hereof.
6. Reginald L. Babcock is the duly elected, qualified and acting
Secretary of the Company, and the signature appearing on the Certificate of
Secretary dated the date hereof and delivered to the Bank contemporaneously
herewith is his/her genuine signature.
<PAGE>
IN WITNESS WHEREOF, we have executed this Certificate in the name
and on behalf of the Company and under its corporate seal this 28th day of
October, 1994.
THE HARTFORD STEAM COMPANY
[CORPORATE SEAL AFFIXED] By:
Its
<PAGE>
EXHIBIT E
FORM OF SECRETARY'S CERTIFICATE
THE HARTFORD STEAM COMPANY
CERTIFICATE OF SECRETARY
I, _____________________________, hereby certify that:
1. I am the duly elected, qualified and acting Secretary of The
Hartford Steam Company, a Connecticut corporation (the "Company"), and as
such have access to its corporate records and am familiar with the matters
herein certified.
2. Attached hereto as Attachment A is a true and correct copy of
resolutions, adopted by the Board of Directors of the Company on _______,
1994, and such resolutions were duly adopted by said Board of Directors and
are in full force and effect on and as of the date hereof, having not been
amended, altered or repealed, and such resolutions are filed with the
records of the Board of Directors.
3. Attached hereto as Attachment B is a true, correct and
complete copy of the Certificate of Incorporation of the Company as in full
force and effect on and as of the date hereof.
4. Each of the following named persons is on and as of the date
hereof, and at all times subsequent to _____________, 1994 has been, a duly
elected, qualified and acting officer of the Company holding the office or
offices set forth below opposite his name:
Name Offices Signature
---- ------- ---------
_________ President /s/__________________
_________ Vice President-Finance /s/__________________
and Treasurer
_________ Secretary /s/__________________
5. The signature appearing opposite the name of each such person
set forth above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
Corporate seal of the Company this 28th day of October, 1994.
_____________________
Secretary
<PAGE>
EXHIBIT F
SIXTH AMENDMENT TO OPEN END MORTGAGE
AND SECURITY AGREEMENT
THIS AMENDMENT TO OPEN END MORTGAGE AND SECURITY AGREEMENT (this
"Amendment") by and between THE HARTFORD STEAM COMPANY, a Connecticut
corporation (the "Mortgagor"), having a principal place of business at 60
Columbus Boulevard, Hartford, Connecticut, and SHAWMUT BANK CONNECTICUT,
N.A., a national banking association (formerly The Connecticut National
Bank, the "Mortgagee"), having a principal place of business at One Federal
Street, Boston, Massachusetts.
WHEREAS, the Mortgagor executed and delivered to the Mortgagee an
Open End Mortgage and Security Agreement (as heretofore amended, the
"Mortgage") dated March 23, 1983, with respect to certain real property
located in the City of Hartford, County of Hartford, State of Connecticut,
and recorded in the land records of the City of Hartford in Volume 2047 at
page 228; as amended by an Amendment to Open End Mortgage and Security
Agreement dated as of March 15, 1986 and recorded in said land records in
Volume 2398 at page 184; and as further amended by an Amendment to Open End
Mortgage and Security Agreement dated as of June 15, 1986 and recorded in
said land records in Volume 2433 at page 327; and as further amended by
Third Amendment to Open End Mortgage and Security Agreement dated as of
August 15, 1986, and recorded in said land records in Volume 2463 at page
272; and partially released by a Partial Release of Mortgage dated as of
March 1, 1989 and recorded on April 5, 1989 in Volume 2916 at page 15 of
said land records; and as further amended by Fourth Amendment to Open End
Mortgage and Security Agreement dated as of August 15,1989 and recorded in
said land records in Volume 2974 at page 39; and as further amended by Fifth
Amendment to Open End Mortgage and Security Agreement dated as of January 9,
1990 and recorded in said land records in Volume 3025 at page 240; and
WHEREAS, the Mortgagor and the Mortgagee have entered into an
Amended and Restated Loan Agreement, amending and restating the Loan
Agreement dated as of March 1, 1983, as most recently amended by a Second
Amended and Restated Loan Agreement dated as of October 28, 1994 between the
Mortgagor and the Mortgagee and in connection therewith the Mortgator has
delivered the related Promissory Note, as amended (the "Note"); and
WHEREAS, the Mortgagor and the Mortgagee wish to modify the
Mortgage to reflect said amendment to the Loan Agreement and to the Note
which amendment, among other things, decreases the principal amount of the
Note to $10,000,000 and extends the Bank's Commitment to make revolving
loans thereunder to September 29, 1997.
<PAGE>
NOW THEREFORE, in consideration of the foregoing and the mutual
premises and covenants herein contained, the Mortgagor and the Mortgagee
hereby agree as follows:
1. Amendment to the Mortgage.
-------------------------
(a) The first, second, third, fourth and fifth "WHEREAS" clauses
which appear on page 2 and on page 3 of the Mortgage are hereby amended to
read in full as follows:
"WHEREAS, the Mortgagor and the Mortgagee have entered into a
certain Loan Agreement dated as of March 1, 1983 (referred to herein, as it
may be from time to time amended, restated, modified or supplemented, as the
"Agreement"), and pursuant to the Agreement the Mortgagee has agreed to make
upon certain terms and conditions therein stated, one or more loans
(collectively, the "Loan") to the Mortgagor in the maximum principal amount
of Ten Million Dollars ($10,000,000) outstanding at any one time, which is
the full amount of the Loan authorized in the Agreement and in this
Mortgage; and
WHEREAS, the Agreement is a COMMERCIAL REVOLVING LOAN AGREEMENT
pursuant to which, from time to time hereafter the Mortgagee may make
revolving loan advances (the "Revolving Loan Advances") of up to $5,000,000
the Loan proceeds to the Mortgagor in varying amounts, and the Mortgagor
from time to time hereafter may make repayment of all or part of the
outstanding principal balance of the Loan, together with interest thereon as
provided in the Agreement, provided however that the aggregate outstanding
principal amount of all Revolving Loan Advances outstanding at any one time
will not in the aggregate exceed $5,000,000 and the aggregate amount of the
Loans (inclusive of the Revolving Loan Advances) outstanding at any one time
will not exceed $10,000,000; and
WHEREAS, the Mortgagor has executed and delivered to the
Mortgagee the Mortgagor's Promissory Note (as amended from time to time, the
"Note"), payable to the order of the Mortgagee, in the amount of
$10,000,000, a copy of which is attached hereto as Schedule C and made a
part hereof; and
WHEREAS, all principal of and interest accrued on
the Loan shall be finally due and payable not later than
December 31, 1997; and
WHEREAS, this is an OPEN-END MORTGAGE and the
Mortgagee shall have all the rights, powers and protect-
<PAGE>
ion authorized and allowed by statute and applicable law
for the holder of such a mortgage, subject only to such
limitations as are imposed by law; and additional
Revolving Loan Advances pursuant to the Agreement are
specifically permitted to be made under this Mortgage and
shall be secured by this Mortgage equally with, and with
the same priority over the rights and liens of others as,
the presently existing indebtedness of the Loan secured
by this Mortgage; and"
(b) Schedule C to the Mortgage is hereby amended to
read in full as set forth in Schedule C hereto.
2. Hazardous Materials.
-------------------
The following is added after Section 1.10:
1.11. HAZARDOUS MATERIALS. For purposes of this section
the following terms shall have the following meanings:
Governmental The United States, the State of
Authority(ies): Connecticut, the municipality in which
the Premises are located, and any
political subdivision of any of them,
and any agency, authority, department,
commission, board, bureau or
instrumentality of any of them having
jurisdiction over the Loan Documents,
the Premises or any construction
thereon or the use thereof.
Required Any lease, easement, restriction,
Approvals: license, perrmit, approval,
authorization, agreement, consent, or
waiver required by law, ordinance, rule
or regulation or otherwise necessary or
desirable for the acquisition,
construction, use, occupancy,
maintenance, and operation of the
Premises or Improvements whether
obtained from any Governmental
Authority or other party.
<PAGE>
Hazardous Oil, hazardous materials, hazardous
Materials: wastes and hazardous substances as
defined under the Comprehensive
Environmental Response, Compensation,
and Liability Act, 42 U.S.C. Section
9601, et seq., as amended, the Resource
Conservation and Recovery Act of 1976,
42 U.S.C. Section 6901 et. seq., as
amended, and the regulations
promulgated thereunder, and all
applicable state and local laws, rules
and regulations relating to hazardous
substances, now existing or hereafter
enacted.
Superfund and The laws, rules and regulations
Hazardous referred to in the definition of
Waste Laws: Hazardous Materials.
Mortgagor hereby represents, warrants and agrees with
Mortgagee that:
(a) There are no Hazardous Materials on the Mortgaged
Property except for contained non-friable asbestos
in the Mortgaged Property and as set forth in
Exhibit C to the Agreement and otherwise only to
the extent that the Hazardous Materials are
licensed and approved in accordance with all
applicable laws and regulations; and
(b) Mortgagor will comply in all material respects
with, and supply satisfactory evidence of
compliance with, all laws, ordinances, by-laws,
rules and regulations including zoning, subdivision
control, environmental and other land use control
laws, all applicable building, health and
sanitation laws, and all easements, restrictions,
agreements and encumbrances affecting the Mortgaged
Property. Mortgagor will obtain all Required
Approvals and fulfill in all material respects the
requirements of all Governmental Authorities.
Mortgagor will comply in all material respects with
the requirements of the Superfund and Hazardous
Waste Laws.
<PAGE>
(c) Mortgagor will not permit any occupant of the
Mortgaged Property to use any part thereof for the
use, generation, treatment, storage, or disposal of
Hazardous Materials except to the extent that the
Hazardous Materials are licensed and approved in
accordance with all applicable laws and
regulations.
(d) Mortgagor will not permit any occupant of the
Mortgaged Property to use any part thereof for the
use, generation, treatment, storage, or disposal of
Hazardous Materials except to the extent that the
Hazardous Materials are licensed and approved in
accordance with all applicable laws and
regulations.
3. Additional Defaults.
-------------------
The following is added to Article Two of the Mortgage:
(d) Any Hazardous Materials become present in or on the
Mortgaged Property other than as set forth in
Exhibit C to the Loan Agreement and those which are
licensed and approved in accordance with all
applicable laws and regulations;
(e) If at any time there is a discharge, deposit,
injection, dumping, spilling, leaking, incineration
or placing of any Hazardous Materials into or on
the Mortgaged Property in violation of the
Superfund or Hazardous Waste Laws other than as set
forth in Exhibit C to the Loan Agreement; and
(f) If at any time, the use, generation, treatment,
storage or disposal of any Hazardous Materials on
the Mortgaged Property is in violation of the
Superfund and Hazardous Waste Laws other than as
set forth in Exhibit C to the Loan Agreement.
4. Hazardous Materials Cleanup.
---------------------------
The following is added after Section 4.09 of the
Mortgage:
<PAGE>
4.10 Hazardous Materials Cleanup
---------------------------
So long as Mortgagor (a) promptly gives Mortgagee notice
of the presence of any Hazardous Materials in or on the
Mortgaged Property; (b) complies with any notice requirements
imposed by any of the Superfund and Hazardous Waste Laws; (c)
promptly commences to arrange for the cleanup of such Hazardous
Materials and the containment of Hazardous Materials where
there is a threat of release; (d) demonstrates to Mortgagee's
satisfaction that Mortgagor has the financial resources to
perform the cleanup and containment; and (e) diligently pursues
the cleanup and containment to completion by using best
efforts, Mortgagee agrees not to foreclose the Mortgage or
accelerate payment under the Note, unless in Mortgagee's sole
judgment the exercise of any such remedies is necessary to
protect the security of the loan, or to protect Mortgagee from
incurring liability under the Superfund and Hazardous Waste.
Whenever Mortgagee determines in good faith that a
violation of the Superfund and Hazardous Waste Laws may have
occurred, Mortgagee may at its election without notice and
without regard to whether Mortgagor is in default:
(a) Environmental Assessments
-------------------------
Cause not more than one environmental assessments
of the Mortgaged Property to be undertaken per
year. Environmental assessments may include
detailed visual inspections including, without
limitation, all storage areas, storage tanks,
drains, dry wells, and leaching areas, and the
taking of soil samples, surface water samples, and
ground water samples, as well as such other
investigations or analyses as are necessary or
appropriate for a complete assessment of the
compliance of the Mortgaged Property and the use
and operation thereof with all Superfund and
Hazardous Waste Laws; and
(b) Cure Environmental Defaults
Cure any failure on the part of Mortgagor or any
occupant of the Mortgaged Property to comply with
the Superfund and Hazardous Waste Laws after ten
days' notice from the Mortgagee if within such ten-
day period the Mortgagor has not cured such
<PAGE>
failure, including, without limitation the
following:
(i) arrange for the cleanup and containment of
those Hazardous Materials found in, on or near the
Mortgaged Property which violate the Superfund and
Hazardous Waste Laws, and pay for such cleanup and
containment costs and costs associated therewith;
(ii) pay on behalf of Mortgagor or any occupant of
the Mortgaged Property any fines or penalties imposed on
Mortgagor or any occupant by any Governmental Authority
in connection with such Hazardous Materials; and
(iii) make any other payment or perform any other
act which may prevent a release of Hazardous Materials,
facilitate the cleanup thereof, and prevent a lien from
attaching to the Mortgaged Property.
Any partial exercise by Mortgagee of the above remedies
or any partial undertaking on the part of Mortgagee to cure the
failure of Mortgagor or any occupant of the Mortgaged Property
to comply with the Superfund and Hazardous Waste Laws, shall
not obligate Mortgagee to complete the actions taken or require
Mortgagee to expend further sums to cure Mortgagor's or any
such occupant's noncompliance. No exercise of any such
remedies shall place upon Mortgagee any responsibility for the
operation, control, care, management or repair of the Mortgaged
Property, or make Mortgagee the "operator" of the Mortgaged
Property within the meaning of the Superfund and Hazardous
Waste Laws.
Any amounts paid or costs incurred by Mortgagee as a
result of any of the above, together with interest thereon from
the date of payment at a rate equal to two percent (2%) per
annum above the rate then accruing under the Note shall be
immediately due and payable by Mortgagor to Mortgagee, and
until paid shall be added to the Loan Amount and be secured by
the Financing Documents with the same priority as the face
amount of the Note. Mortgagee, by making any such payment or
incurring any such costs, shall be subrogated to any rights of
Mortgagor or any occupant of the Mortgaged Property to seek
reimbursement from any third parties, including, without
limitation, a predecessor in interest to Mortgagor's title or a
<PAGE>
predecessor to the occupant's use of the Mortgaged Property,
who may be a "responsible party" under the Superfund and
Hazardous Waste Laws, in connection with the presence of such
Hazardous Materials in, on or near the Mortgaged Property.
5. MORTGAGE NOT OTHERWISE AFFECTED. Except as
provided for herein, the Mortgage shall remain unchanged and in
full force and effect.
6. Defined Terms. All terms used herein and not
otherwise defined herein shall have the respective meanings
ascribed to them in the Mortgage.
IN WITNESS WHEREOF, the Mortgagor and the Mortgagee have
executed this Amendment this 28th day of October, 1994.
Signed, sealed and delivered THE HARTFORD STEAM
COMPANY
in the presence of:
___________________________ By: ____________________
Its
___________________________
SHAWMUT BANK CONNECTICUT, N.A.
___________________________ By: _______________________
Its
___________________________
<PAGE>
STATE OF CONNECTICUT ) October _, 1994
) ss. Hartford
COUNTY OF HARTFORD )
Personally appeared _________________, the ______________ of The
Hartford Steam Company, signer of the foregoing instrument, who
acknowledged the same to be his free act and deed as such officer and the
free act and deed of The Hartford Steam Company.
__________________________________
Notary Public
Commissioner of the Superior Court
STATE OF CONNECTICUT ) October _, 1994
) ss. Hartford
COUNTY OF HARTFORD )
Personally appeared _________________, the ______________ of Shawmut
Bank Connecticut, N.A., signer of the foregoing instrument, who
acknowledged the same to be his free act and deed as such officer and the
free act and deed of Shawmut Bank Connecticut, N.A.
__________________________________
Notary Public
Commissioner of the Superior Court
<PAGE>
EXHIBIT G
THIRD AMENDMENT TO OPEN END MORTGAGE
AND SECURITY AGREEMENT
THIS AMENDMENT TO OPEN END MORTGAGE AND SECURITY AGREEMENT (this
"Amendment") by and between ENERGY NETWORKS, INC., a Connecticut
corporation (the "Mortgagor"), having a principal place of business at 60
Columbus Boulevard, Hartford, Connecticut, and SHAWMUT BANK CONNECTICUT,
N.A., a national banking association (formerly The Connecticut National
Bank, the "Mortgagee"), having a principal place of business at One
Federal Street, Boston, Massachusetts.
WHEREAS, the Mortgagor executed and delivered to the Mortgagee an
Open End Mortgage and Security Agreement (the "Mortgage") dated as of
March 1, 1989, with respect to certain real property located in the City
of Hartford, County of Hartford, State of Connecticut, which was recorded
in the land records of the City of Hartford on April 5, 1989 in Volume
2916 at page 24; and executed and delivered to the Mortgagee an Amendment
to Open End Mortgage and Security Agreement dated as of August 15, 1989,
which was recorded in the land records of the City of Hartford on August
25, 1989 in Volume 2974 at page 33; and executed and delivered to the
Mortgagee a Second Amendment to Open End Mortgage and Security Agreement
dated as of January 9, 1990, which was recorded in said land records on
January 9, 1990, in Volume 3025 at Page 246; and
WHEREAS, the Mortgagee and The Hartford Steam Company have entered
into an Amended and Restated Loan Agreement, amending the Loan Agreement
dated as of March 1, 1983, as most recently amended by a Second Amended
and Restated Loan Agreement dated as of October 28, 1994 between the
Mortgagee and The Hartford Steam Company and the related Promissory Note,
as amended (the "Note"); and
WHEREAS, the Mortgagor and the Mortgagee wish to modify the Mortgage
to reflect said amendment and restatement to said Loan Agreement and to
the Note which amendment and restatement, among other things, decreases
the principal amount of said Note to $10,000,000 and extends the Bank's
Commitment to make revolving loans thereunder to September 29, 1997;
NOW THEREFORE, in consideration of the foregoing and the mutual
premises and covenants herein contained, the Mortgagor and the Mortgagee
hereby agree as follows:
<PAGE>
1. Amendment to the Mortgage.
-------------------------
(a) The first, second, fourth, fifth and sixth "WHEREAS" clauses
which appear on pages 4 through 6 of the Mortgage are hereby amended to
read in full as follows:
"WHEREAS, The Hartford Steam Company ("HSC")
and the Mortgagee have entered into a certain Loan
Agreement dated as of March 1, 1983 (referred to
herein, as it may be from time to time amended,
restated, modified or supplemented, as the
"Agreement"), and pursuant to the Agreement the
Mortgagee has agreed to make, upon certain terms
and conditions therein stated, one or more loans
(collectively, the "Loans") to HSC in the maximum
principal amount of Ten Million Dollars
($10,000,000) outstanding at any one time, which
is the full amount of the Loan authorized in the
Agreement and in this Mortgage; and
WHEREAS, the Agreement is a COMMERCIAL
REVOLVING LOAN AGREEMENT pursuant to which, from
time to time, the Mortgagee may make revolving
loan advances (the "Revolving Loan Advances") of
up to $5,000,000 of the Loan proceeds to HSC in
varying amounts, and HSC from time to time may
make repayment of all or part of the outstanding
principal balance of the Loan, together with
interest thereon as provided in the Agreement,
provided however that the aggregate outstanding
principal amount of all Revolving Loan Advances
outstanding at any one time will not in the
aggregate exceed $5,000,000 and the aggregate
amount of the Loans (inclusive of the Revolving
Loan Advances) outstanding at any one time will
not exceed $10,000,000; and
WHEREAS, HSC has executed and delivered to
the Mortgagee HSC's Promissory Note (as amended
from time to time, the "Note"), payable to the
order of the Mortgagee, in the amount
of$10,000,000 a copy of which is attached hereto
as Schedule C and made a part hereof; and
WHEREAS, all principal of and interest
accrued on the Loan shall be finally due and
payable not later than December 31, 1997; and
<PAGE>
WHEREAS, this is an OPEN-END MORTGAGE and the Mortgagee
shall have all the rights, powers and protection authorized
and allowed by statute and applicable law for the holder of
such a mortgage, and additional Revolving Loan Advances
pursuant to the Agreement are specifically permitted to be
made under this Mortgage and shall be secured by this Mortgage
equally with, and with the same priority over the rights and
liens of others as, the presently existing indebtedness of the
Loan secured by this Mortgage; and"
(b) Schedule C to the Mortgage is hereby amended to read in full
as set forth in Schedule C hereto.
2. Hazardous Materials.
-------------------
The following is added after Section 1.10:
1.11. HAZARDOUS MATERIALS. For purposes of this section the
following terms shall have the following meanings:
Governmental The United States, the State of
Authority(ies): Connecticut, the municipality in which the
Premises are located, and any political
subdivision of any of them, and any agency,
authority, department, commission, board, bureau
or instrumentality of any of them having
jurisdiction over the Loan Documents, the Premises
or any construction thereon or the use thereof.
Required Any lease, easement, restriction, license,
Approvals: permit, approval, authorization, agreement,
consent, or waiver required by law, ordinance,
rule or regulation or otherwise necessary or
desirable for the acquisition, construction, use,
occupancy, maintenance, and operation of the
Premises or Improvements whether obtained from any
Governmental Authority or other party.
Hazardous Oil, hazardous materials, hazardous wastes
Materials: and hazardous substances as defined under the
Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section
9601, et seq., as amended, the Resource
Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901 et. seq., as amended, and the
regulations promulgated thereunder, and all
applicable state and local laws, rules and
regulations relating to hazardous substances, now
existing or hereafter enacted.
<PAGE>
Superfund and The laws, rules and regulations referred
Hazardous to in the definition of Hazardous
Waste Laws: Materials.
Mortgagor hereby represents, warrants and agrees with Mortgagee
that:
(a) There are no Hazardous Materials on the Mortgaged Property
except for contained non-friable asbestos in the Mortgaged
Property and as set forth in Exhibit C to the Agreement and
otherwise only to the extent that the Hazardous Materials are
licensed and approved in accordance with all applicable laws
and regulations; and
(b) Mortgagor will comply in all material respects with, and
supply satisfactory evidence of compliance with, all laws,
ordinances, by-laws, rules and regulations including zoning,
subdivision control, environmental and other land use control
laws, all applicable building, health and sanitation laws, and
all easements, restrictions, agreements and encumbrances
affecting the Mortgaged Property. Mortgagor will obtain all
Required Approvals and fulfill in all material respects the
requirements of all Governmental Authorities. Mortgagor will
comply in all material respects with the requirements of the
Superfund and Hazardous Waste Laws.
(c) Mortgagor will not permit any occupant of the Mortgaged
Property to use any part thereof for the use, generation,
treatment, storage, or disposal of Hazardous Materials except
to the extent that the Hazardous Materials are licensed and
approved in accordance with all applicable laws and
regulations.
(d) Mortgagor will not permit any occupant of the Mortgaged
Property to use any part thereof for the use, generation,
treatment, storage, or disposal of Hazardous Materials except
to the extent that the Hazardous Materials are licensed and
approved in accordance with all applicable laws and
regulations.
3. Additional Defaults.
-------------------
The following is added to Article Two of the Mortgage:
<PAGE>
(d) Any Hazardous Materials become present in or on the Mortgaged
Property other than as set forth in Exhibit C to the Loan
Agreement and those which are licensed and approved in
accordance with all applicable laws and regulations;
(e) If at any time there is a discharge, deposit, injection,
dumping, spilling, leaking, incineration or placing of any
Hazardous Materials into or on the Mortgaged Property in
violation of the Superfund or Hazardous Waste Laws other than
as set forth in Exhibit C to the Loan Agreement; and
(f) If at any time, the use, generation, treatment, storage or
disposal of any Hazardous Materials on the Mortgaged Property
is in violation of the Superfund and Hazardous Waste Laws
other than as set forth in Exhibit C to the Loan Agreement.
4. Hazardous Materials Cleanup.
---------------------------
The following is added after Section 4.09 of the Mortgage:
4.10 Hazardous Materials Cleanup
---------------------------
So long as Mortgagor (a) promptly gives Mortgagee notice of the
presence of any Hazardous Materials in or on the Mortgaged Property; (b)
complies with any notice requirements imposed by any of the Superfund and
Hazardous Waste Laws; (c) promptly commences to arrange for the cleanup of
such Hazardous Materials and the containment of Hazardous Materials where
there is a threat of release; (d) demonstrates to Mortgagee's satisfaction
that Mortgagor has the financial resources to perform the cleanup and
containment; and (e) diligently pursues the cleanup and containment to
completion by using best efforts, Mortgagee agrees not to foreclose the
Mortgage or accelerate payment under the Note, unless in Mortgagee's sole
judgment the exercise of any such remedies is necessary to protect the
security of the loan, or to protect Mortgagee from incurring liability
under the Superfund and Hazardous Waste.
Whenever Mortgagee determines in good faith that a violation of the
Superfund and Hazardous Waste Laws may have occurred, Mortgagee may at its
election without notice and without regard to whether Mortgagor is in
default:
<PAGE>
(a) Environmental Assessments
-------------------------
Cause not more than one environmental assessments of the
Mortgaged Property to be undertaken per year. Environmental
assessments may include detailed visual inspections
including, without limitation, all storage areas, storage
tanks, drains, dry wells, and leaching areas, and the taking
of soil samples, surface water samples, and ground water
samples, as well as such other investigations or analyses as
are necessary or appropriate for a complete assessment of the
compliance of the Mortgaged Property and the use and operation
thereof with all Superfund and Hazardous Waste Laws; and
(b) Cure Environmental Defaults
Cure any failure on the part of Mortgagor or any occupant of
the Mortgaged Property to comply with the Superfund and
Hazardous Waste Laws after ten days' notice from the Mortgagee
if within such ten-day period the Mortgagor has not cured such
failure, including, without limitation the following:
(i) arrange for the cleanup and containment of those
Hazardous Materials found in, on or near the Mortgaged Property
which violate the Superfund and Hazardous Waste Laws, and pay for
such cleanup and containment costs and costs associated therewith;
(ii) pay on behalf of Mortgagor or any occupant of the
Mortgaged Property any fines or penalties imposed on Mortgagor or
any occupant by any Governmental Authority in connection with such
Hazardous Materials; and
(iii) make any other payment or perform any other act which
may prevent a release of Hazardous Materials, facilitate the cleanup
thereof, and prevent a lien from attaching to the Mortgaged
Property.
Any partial exercise by Mortgagee of the above remedies or any
partial undertaking on the part of Mortgagee to cure the failure of
Mortgagor or any occupant of the Mortgaged Property to comply with the
Superfund and Hazardous Waste Laws, shall not obligate Mortgagee to
complete the actions taken or require Mortgagee to expend further sums to
cure Mortgagor's or any such occupant's noncompliance. No exercise of any
such remedies shall place upon Mortgagee any responsibility for the
operation, control, care, management or repair of the Mortgaged Property,
or make Mortgagee the "operator" of the Mortgaged Property within the
meaning of the Superfund and Hazardous Waste Laws.
<PAGE>
Any amounts paid or costs incurred by Mortgagee as a result of any
of the above, together with interest thereon from the date of payment at a
rate equal to two percent (2%) per annum above the rate then accruing
under the Note shall be immediately due and payable by Mortgagor to
Mortgagee, and until paid shall be added to the Loan Amount and be
secured by the Financing Documents with the same priority as the face
amount of the Note. Mortgagee, by making any such payment or incurring
any such costs, shall be subrogated to any rights of Mortgagor or any
occupant of the Mortgaged Property to seek reimbursement from any third
parties, including, without limitation, a predecessor in interest to
Mortgagor's title or a predecessor to the occupant's use of the Mortgaged
Property, who may be a "responsible party" under the Superfund and
Hazardous Waste Laws, in connection with the presence of such Hazardous
Materials in, on or near the Mortgaged Property.
5. MORTGAGE NOT OTHERWISE AFFECTED. Except and to the extent
provided for herein, the Mortgage shall remain unchanged and in full force
and effect.
6. DEFINED TERMS. All terms used herein and not otherwise defined
herein shall have the respective meanings ascribed to them in the
Mortgage.
IN WITNESS WHEREOF, the Mortgagor and the Mortgagee have executed
this Amendment this __ day of October, 1994.
Signed, sealed and delivered ENERGY NETWORKS, INC.
in the presence of:
_________________________ By ________________________
Its
_________________________
SHAWMUT BANK CONNECTICUT, N.A.
_________________________ By ________________________
Its
_________________________
<PAGE>
STATE OF CONNECTICUT )
) ss: Hartford October__, 1994
COUNTY OF HARTFORD )
Personally appeared,_______________, the _______________ of Energy
Networks, Inc., signer of the foregoing instrument, who acknowledged the
same to be his free act and deed as such officer and the free act and deed
of Energy Networks, Inc.
__________________________________
Notary Public
Commissioner of the Superior Court
STATE OF CONNECTICUT )
) ss: Hartford October __, 1994
COUNTY OF HARTFORD )
Personally appeared,_______________, the _______________ of Shawmut
Bank Connecticut, N.A., signer of the foregoing instrument, who
acknowledged the same to be his free act and deed as such officer and the
free act and deed of Shawmut Bank Connecticut, N.A.
__________________________________
Notary Public
Commissioner of the Superior Court
<PAGE>
EXHIBIT H
SECOND AMENDMENT TO SECURITY AGREEMENT AND
COLLATERAL ASSIGNMENT OF SERVICE CONTRACTS
THIS AMENDMENT AGREEMENT, dated as of October, 1994, by and between
THE HARTFORD STEAM COMPANY, (the "Debtor", a Connecticut Corporation, and
SHAWMUT BANK CONNECTICUT, N.A. (formerly The Connecticut National Bank,
the "Mortgagee"), a national banking association.
WHEREAS, the Debtor and Mortgagee entered into a certain Loan
Agreement, dated as of March 1,1983 (as amended, the "Loan Agreement")
pursuant to which the Mortgagee agreed to make revolving loans to the
Debtor of up to Eighteen Million Five Hundred Thousand Dollars
($18,500,000) in aggregate principal amount; and
WHEREAS, as an inducement to enter and a condition of the Loan
Agreement, the Debtor and Mortgagee entered into that certain Collateral
Assignment of Services Contracts, dated as of March 1, 1983 (as heretofore
amended, the "Assignment") and that certain Security Agreement, dated as
of March 1, 1983, (as heretofore amended, the "Security Agreement"),as
amended by Amendment to Security Agreement and Collateral Assignment of
Service Contracts dated as of January 9, 1990, ("the Amendment to Security
Agreement and Collateral Assignment of Service Contracts")
WHEREAS, the Debtor and Mortgagee have entered into an Amended and
Restated Loan Agreement (the "Amended Loan Agreement"), amending and
restating the Loan Agreement, as amended by a Second Amended and Restated
Loan Agreement,("the Second Amended and Restated Loan Agreement") dated as
of October 28, 1994 and the Debtor issued to the Mortgagee the related
Promissory Note, as amended (the "Note") to among other things, decrease
the Revolving Loan from $9,000,000 to $5,000,000 and to extend the Bank's
Commitment Date to September 29, 1997; and
WHEREAS, the Debtor and Mortgagee wish to amend the Amendment to
Security Agreement and Collateral Assignment of Service Contracts to
reflect said Second Amended and Restated Loan Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
premises and covenants herein contained, the Debtor and the Mortgagee
hereby agree to as follows:
1. Amendment to the Assignment.
---------------------------
The first WHEREAS clause of the Assignment shall read in its
entirety as follows:
<PAGE>
"WHEREAS, Mortgagee has entered into a certain Loan Agreement (as
amended from time to time, the "Loan Agreement") of even date herewith
pursuant to which Mortgagee has agreed to lend to the Debtor up to
$10,000,000 (the "Loan"); and"
2. Amendment to the Security Agreement.
-----------------------------------
The first WHEREAS clause of the Security Agreement shall read in its
entirety as follows:
"WHEREAS, Mortgagee has agreed to lend to Debtor up to $10,000,000
(the "Loan"); and"
3. Assignment and Security Agreement Not Otherwise Affected.
--------------------------------------------------------
Except and to the extent provided for herein, the Assignment and Security
Agreement shall remain unchanged and in full force and effect.
4. Defined Terms.
-------------
All terms used herein and not otherwise defined herein shall have the
respective meanings ascribed to them in the Agreement and the Assignment.
IN WITNESS WHEREOF, the Debtor and the Mortgagee have executed this
Amendment Agreement this ____ day of October, 1994.
Signed, sealed and delivered in THE HARTFORD STEAM COMPANY
the presence of:
_____________________________ By_________________________
Its
_____________________________
SHAWMUT BANK CONNECTICUT, N.A.
______________________________ By_________________________
Its
______________________________
<PAGE>
STATE OF CONNECTICUT )
) ss: HartfordOctober__, 1994
COUNTY OF HARTFORD )
Personally appeared,_______________, the _______________ of The
Hartford Steam Company, signer of the foregoing instrument, who
acknowledged the same to be his free act and deed as such officer and the
free act and deed of The Hartford Steam Company.
__________________________________
Notary Public
Commissioner of the Superior Court
STATE OF CONNECTICUT )
) ss: HartfordOctober__, 1994
COUNTY OF HARTFORD )
Personally appeared,_______________, the _______________ of Shawmut
Bank Connecticut, N.A., signer of the foregoing instrument, who
acknowledged the same to be his free act and deed as such officer and the
free act and deed of Shawmut Bank Connecticut, N.A.
__________________________________
Notary Public
Commissioner of the Superior Court
<PAGE>
EXHIBIT I
October__, 1994
To: Shawmut Bank Connecticut, N.A.
One Federal Street
Boston, Massachusetts 02110
Gentlemen:
To induce Shawmut Bank Connecticut, N.A. (formerly The Connecticut
National Bank, the "Bank") to lend up to Ten Million Dollars ($10,000,000)
to our subsidiary, The Hartford Steam Company (the "Company"), pursuant to
a Loan Agreement with the Bank dated as of March 1, 1983, as amended by
four separate Amendment Agreements dated as of March 15, 1985, June 15,
1986, August 15, 1986, and August 15, 1989, and as amended and restated by
an Amended and Restated Loan Agreement dated as of March 1, 1983, and as
amended by the Amendment to Amended and Restated Loan Agreement dated as
of September 28, 1994, and as amended and restated on the date hereof by a
Second Amended and Restated Loan Agreement dated as of the date hereof (as
amended and restated from time to time, the "Loan Agreement"), Connecticut
Natural Gas Corporation ("CNG") hereby agrees as follows:
1. CORPORATE EXISTENCE. CNG will do or cause to be done all things
necessary to preserve and keep in full force and effect the existence,
rights and franchises necessary to maintain the business and operations of
the Company on an ongoing basis, PROVIDED, HOWEVER, that nothing herein
shall be deemed to prevent a merger or consolidation permitted by Section
5.4 of the Loan Agreement.
2. OWNERSHIP. CNG will not sell, liquidate or otherwise dispose of
all or any part of its ownership interest in the capital stock of the
Company, PROVIDED, HOWEVER, that nothing herein shall be deemed to prevent
a merger or consolidation permitted by Section 5.4 of the Loan Agreement.
3. COVENANTS. CNG will cause the Company to be in compliance with
the financial covenants set forth in the Loan Agreement. In any event,
CNG will not permit the Company's ratio of EBIT to Interest Expense to be
less than 1.20:1 on a consolidated basis for any twelve-month period
ending on the last day of any fiscal quarter of the Company. CNG will
take all action necessary in order for the Company to comply at all times
with the financial covenants set forth herein and in the Loan Agreement.
<PAGE>
4. FURTHER ASSURANCE. CNG will use its best efforts to cause the
Company to pay all indebtedness at any time owed, and perform its
obligations, to the Bank.
5. DEFINED TERMS. For purposes of this Agreement, the term
"Company" shall be deemed to include the successor corporation into which
The Hartford Steam Company may be merged pursuant to a merger or
consolidation permitted by Section 5.4 of the Loan Agreement, and the term
"CNG" shall be deemed to include any successor corporation into which
Connecticut Natural Gas Corporation may be merged or with which it may be
consolidated.
CONNECTICUT NATURAL GAS
CORPORATION
By _______________________
Its
<PAGE>
EXHIBIT J
SECOND AMENDMENT TO COLLATERAL ASSIGNMENT
OF LEASES AND RENTALS
THIS SECOND AMENDMENT AGREEMENT (this "Agreement"), dated as of
October 28, 1994, by and between ENERGY NETWORKS, INC., (the "Assignor"),
a Connecticut corporation, and SHAWMUT BANK CONNECTICUT, N.A. (formerly
The Connecticut National Bank, the "Assignee"), a national banking
association.
WHEREAS, the Assignor and Assignee entered into a certain Collateral
Assignment of Leases and Rentals, dated as of March 1, 1989, as amended by
Amendment to Collateral Assignment of Leases and Rentals, dated as of
January 9, 1990 (the "Assignment"); and
WHEREAS, the Assignment originally secured a loan in the principal
amount of $18,500,000 from the Assignee to The Hartford Steam Company (the
"Company") made pursuant to a certain Loan Agreement between the Assignee
and the Company dated as of March 1, 1983, as amended; and
WHEREAS, the Company and the Assignee have entered into a Second
Amended and Restated Loan Agreement (the "Amended Agreement"), amending
and restating said Loan Agreement, as amended, to, among other things,
decrease the amount of the loans which may be outstanding thereunder to
$10,000,000 and to extend the Bank's Commitment to make revolving loans
thereunder to September 29, 1997; and
WHEREAS, to induce Assignee to enter into the Amended Agreement,
Assignor has agreed to enter this Agreement to reflect said Amended
Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
premises and covenants herein contained, the Assignor and the Assignee
hereby agree as follows:
1. Amendment to the Assignment.
---------------------------
(a) The third paragraph of the Assignment is hereby amended to read
in its entirety as follows:
"This Assignment is made (i) as an inducement to
Assignee to consent to the transfer of a portion
of the Premises to Assignor from The Hartford
Steam Company ("HSC"), (ii) as an inducement to
Assignee to release a portion of the Premises from
the lien of an Open-End Mortgage and Security
Agreement from HSC to Assignee dated as of March
<PAGE>
23, 1983 and recorded in the Hartford Land Records
in Volume 2047, Page 228, as modified by
Amendments dated as of March 15, 1986 and recorded
in Volume 2398, Page 184, dated as of June 15,
1986 and recorded in Volume 2433, Page 327, dated
as of August 29, 1986 and recorded in Volume 2463,
Page 272, dated as of March 1, 1989 and recorded
in Volume 2916, Page 15, dated as of August 15,
1989 and recorded in Volume 2974, Page 39, dated
as of January 9, 1990 and recorded in Volume 3025,
Page 240, and dated as of the date hereof and
recorded herewith (the "HSC Mortgage"), (iii) as
an inducement to Assignee to accept in partial
substitution for the HSC Mortgage an Open-End
Mortgage and Security Agreement from Assignor
dated as of March 1, 1989 and recorded in the
Hartford Land Records in Volume 2916, Page 24, as
modified by Amendments dated as of August 15, 1989
and recorded in Volume 2974, Page 33, dated as of
January 9, 1990 and recorded in Volume 3025, Page
246, and dated as of the date hereof and recorded
herewith (the "Mortgage"), (iv) as an inducement
to the Assignee to extend the Bank's Commitment to
make revolving loans to September 29, 1997, and
(v) for the purpose of further securing the
obligations of Assignor under the Mortgage and the
obligations of HSC under the HSC Mortgage, the
Amended And Restated Loan Agreement of even date
herewith (the "Loan Agreement") and the related
Promissory Note (the "Note") of even date herewith
in the principal amount of $10,000,000.
2. Assignment Not Otherwise Affected.
---------------------------------
Except and to the extent provided for herein, the Assignment shall remain
unchanged and in full force and effect.
3. Defined Terms.
-------------
All terms used herein and not otherwise defined herein shall have the
respective meanings ascribed to them in the Assignment.
4. Other Signatories.
-----------------
By their signatures below, O'Brien (Hartford) Cogeneration Limited
Partnership, The Sumitomo Bank, Limited, Los Angeles Branch, and The
Connecticut Light and Power Company hereby consent to this amendment.
<PAGE>
IN WITNESS WHEREOF, the Assignor and the Assignee have executed
this Amendment Agreement as of the day first set forth above.
Signed, sealed and delivered ENERGY NETWORKS, INC.
in the presence of:
____________________________ By _______________________
Its
SHAWMUT BANK CONNECTICUT, N.A.
__________________________ By___________________________
Its
<PAGE>
STATE OF CONNECTICUT )
) ss: Hartford October __, 1994
COUNTY OF HARTFORD )
Personally appeared,_______________, the _______________ of ENERGY
NETWORKS, INC., signer of the foregoing instrument, who acknowledged the
same to be his/her free act and deed as such officer and the free act and
deed of Energy Networks, Inc., before me.
__________________________________
Notary Public
Commission of the Superior Court
STATE OF CONNECTICUT )
) ss: Hartford October ___, 1994
COUNTY OF HARTFORD )
Personally appeared, __________________, a Vice President of SHAWMUT
BANK CONNECTICUT, N.A., signer of the foregoing instrument, who
acknowledged the same to be his free act and deed as such officer and the
free act and deed of Shawmut Bank Connecticut, N.A., before me
__________________________________
Notary Public
Commission of the Superior Court
<PAGE>
=================================================================
MEDIUM-TERM NOTES, SERIES B
Up to U.S. $75,000,000
Maturities from One Year to Thirty Years
PLACEMENT AGENCY AGREEMENT
among
CONNECTICUT NATURAL GAS CORPORATION,
as Issuer,
and
SMITH BARNEY INC.
and
A.G. EDWARDS & SONS, INC.,
as Agents.
Dated June 14, 1994
=================================================================
<PAGE>
CONNECTICUT NATURAL GAS CORPORATION
U.S. $75,000,000
Medium-Term Notes, Series B
with Maturities from One Year
to Thirty Years from Date of Issue
Placement Agency Agreement
--------------------------
New York, New York
June 14, 1994
Smith Barney Inc.
1345 Avenue of the Americas
New York, N.Y. 10105
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, MO 63103
Dear Sirs:
Connecticut Natural Gas Corporation, a Connecticut
corporation (the "Issuer"), confirms its agreement with you, with
respect to the issue and sale by the Issuer of its Medium-Term
Notes, Series B (the "Notes"). The Notes may be sold by the
Issuer in an aggregate principal amount at any time outstanding
of up to U.S. $75,000,000. It is understood, however, that the
Issuer may from time to time authorize the issuance of additional
Notes and that such additional Notes may be sold through or to
the Agents pursuant to the terms of this Placement Agency
Agreement (the "Agreement"), all as though the issuance of such
Notes were authorized as of the date hereof. The Notes will be
offered without being registered under the Securities Act of
1933, as amended (the "Securities Act"), in reliance upon the
exemption therefrom provided by Section 4(2) of the Securities
Act and Regulation D promulgated thereunder ("Regulation D").
The Notes will be issued under an Issuing and Paying Agency
Agreement dated as of June 1, 1994 (the "Issuing and Paying
Agency Agreement"), between the Issuer and Shawmut Bank
Connecticut, National Association, as issuing and paying agent
(the "Issuing and Paying Agent"). All Notes having a common
issue date, maturity date, interest rate and otherwise identical
terms are referred to herein as a "Tranche". The Notes will be
issued, and the terms thereof established, in accordance with the
Issuing and Paying Agency Agreement and, in the case of Notes
sold pursuant to Section 2(a), the Medium-Term Notes
<PAGE>
2
Administrative Procedures attached hereto as Exhibit A (the
"Procedures"). The Procedures set forth in Exhibit A shall
remain in effect with respect to sales solicited by Agents until
changed by the Issuer and the applicable Agent or Agents and the
Issuing and Paying Agent. For the purposes of this Agreement:
the term "Agents" shall refer to any of you acting solely in the
capacity as agent for the Issuer pursuant to Section 2(a) and not
as principal; the term "Purchaser" shall refer to any of you
acting solely as principal pursuant to Section 2(b) and not as
agent; and the term "you" shall refer to any of the firms which
are addressees named above, acting in both such capacities or in
either such capacity.
1. REPRESENTATIONS AND WARRANTIES. The Issuer
represents and warrants to each of you, and shall be deemed to
represent and warrant to each of you at and as of each time the
Issuer gives a notice requesting any of you to solicit offers as
Agent, at and as of each acceptance of an offer by the Issuer, at
and as of the date of each Terms Agreement (as defined in Section
2(b)), and upon the delivery to the purchaser (or its agent)
pursuant to such offer or to any Purchaser of any Note pursuant
to such Terms Agreement, as the case may be, that:
(a) The Offering Memorandum does not contain any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that the foregoing
representations and warranties shall not apply to statements
in the "Offering Memorandum" made in reliance upon and in
conformity with information furnished to the Issuer in
writing by any of you, or on behalf of any of you which has
been furnished by a person authorized to do so, specifically
for use therein. As used in this Agreement, the term
"Offering Memorandum" means the confidential offering
memorandum dated the same date as this Agreement relating to
the Notes, as it may be amended or supplemented from time to
time, including any documents incorporated by reference
therein and any quarterly, semiannual or annual report of
the Issuer delivered to any of you for delivery together
with the Offering Memorandum, which amendment or supplement
may be in the form of a separate document that does not
state that it is a supplement to the Offering Memorandum,
and any reference to the terms "amend", "amendment" or
"supplement" with respect to the Offering Memorandum shall
refer to and include the filing with the Securities and
Exchange Commission of any documents incorporated by
reference into the Offering Memorandum after the date
hereof.
<PAGE>
3
(b) The financial statements of the Issuer included or
incorporated by reference in, or as an exhibit, attachment
or appendix to, the Offering Memorandum present fairly the
financial position of the Issuer as of the dates indicated
and the results of its operations for the periods specified,
and, except as disclosed in the Offering Memorandum, the
audited financial statements of the Issuer therein have been
prepared in accordance with generally accepted accounting
principles in the United States consistently applied and any
interim financial statements therein have been prepared on a
basis substantially consistent with that of the audited
year-end financial statements, except as otherwise required
or permitted by generally accepted accounting principles for
interim periods in the United States.
(c) Since the respective dates as of which information
is given in the Offering Memorandum, except as otherwise set
forth therein, (i) there has been no material adverse
change, or to the knowledge of the Issuer any development
involving a prospective change, in the financial condition,
earnings, business or business prospects or properties of
the Issuer and its subsidiaries considered as a single
enterprise, whether or not arising in the ordinary course of
business and (ii) no rating of any of the debt securities of
the Issuer has been lowered by Moody's Investors Service,
Inc., or Standard & Poor's Ratings Group (each a "Rating
Agency"), nor has there been any public announcement that
any Rating Agency has under surveillance or review its
rating of any such debt securities (other than an
announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of
such rating).
(d) The Issuer has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Connecticut and has full power,
authority and legal right to execute and deliver this
Agreement and the Issuing and Paying Agency Agreement, to
issue the Notes, and to perform its obligations under this
Agreement, the Issuing and Paying Agency Agreement and the
Notes; the execution and delivery of this Agreement, the
Issuing and Paying Agency Agreement and the Notes have been
duly authorized by all necessary corporate action on the
part of the Issuer; each Note, when completed, executed,
authenticated and delivered in accordance with the Issuing
and Paying Agency Agreement against payment of the
consideration therefor will constitute a legal, valid and
binding obligation of the Issuer, enforceable against the
Issuer in accordance with the terms of such Note, except as
enforcement thereof may be limited by bankruptcy,
<PAGE>
4
insolvency, reorganization, moratorium or other laws
relating to or affecting the enforcement of creditors'
rights generally or by general equity principles, and will
entitle its holder to the benefits of the Issuing and Paying
Agency Agreement; and the Issuing and Paying Agency
Agreement conforms and each Note will conform in all
material respects to the descriptions thereof in the
Offering Memorandum.
(e) The execution and delivery of this Agreement and
the Issuing and Paying Agency Agreement, the issuance of any
Note and the consummation of the transactions contemplated
hereunder or thereunder will not conflict with, constitute a
breach of, constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance
(in each case material to the Issuer and its subsidiaries
considered as a single enterprise) upon any property or
assets of the Issuer or any of the Issuer's subsidiaries
pursuant to, the charter or by-laws of the Issuer or any of
the Issuer's subsidiaries, or any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Issuer or any of the Issuer's subsidiaries is a
party or to which any of the property or assets of the
Issuer or any of the Issuer's subsidiaries is subject. No
such action will result in any violation, material to the
Issuer and its subsidiaries considered as a single
enterprise or to the power, authority or ability of the
Issuer to perform its obligations under this Agreement, the
Issuing and Paying Agency Agreement and the Notes, of the
provisions of any law, decree, regulation, order or judgment
of any court, arbitrator, government, governmental authority
or agency to which the Issuer or any of the Issuer's
subsidiaries or any of their respective properties or assets
is subject.
(f) Since the respective dates as of which information
is given in the Offering Memorandum, except as otherwise set
forth therein, (i) there are no legal or governmental
actions, suits or proceedings before or by any court or
governmental agency or body of any jurisdiction now pending
or, to the knowledge of the Issuer, threatened against the
Issuer or any of the Issuer's subsidiaries or to which any
property of the Issuer or any of the Issuer's subsidiaries
is the subject, other than such actions, suits or
proceedings which in each case will not have a material
adverse effect on the financial condition, earnings,
business or business prospects or properties of the Issuer
and its subsidiaries considered as a single enterprise or
the ability of the Issuer to perform its obligations under
this Agreement, the Issuing and Paying Agent Agreement and
<PAGE>
5
the Notes and (ii) there are no such actions, suits or
proceedings pending or, to the knowledge of the Issuer,
threatened, relating to the Notes, their offering or the
Offering Memorandum.
(g) No approval, authorization, consent or other order
of, or any filing with, any government, governmental or
other administrative agency or body is required in
connection with the execution and delivery by the Issuer of
this Agreement and the Issuing and Paying Agency Agreement,
the solicitation of offers to purchase Notes, the issuance
of any Note or the performance by the Issuer of any of its
obligations hereunder or thereunder, except such as may be
required under the blue sky laws of any jurisdiction in
connection with the issue and sale of the Notes. All neces-
sary approvals, if any, have been obtained from the
Connecticut Department of Public Utility Control to
authorize the issuance and sale of the Notes and such
approvals, if any, remain in full force and effect on the
date hereof.
(h) This Agreement and the Issuing and Paying Agency
Agreement have been duly executed and delivered by the
Issuer and constitute the legal, valid and binding
agreements of the Issuer, and are enforceable against the
Issuer in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting creditors' rights generally or by general equity
principles.
(i) The Notes satisfy the requirements set forth in
paragraph (d)(3) of Rule 144A ("Rule 144A") under the
Securities Act.
(j) Neither the Issuer nor any affiliate (which, for
purposes of this Agreement, shall have the meaning given in
Rule 501(b) of Regulation D) of the Issuer has directly or
indirectly, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any of the Notes
or any other security (as defined in the Securities Act)
which is or will be integrated with any sale of the Notes in
a manner that would require the registration of the Notes
under the Securities Act or (ii) engaged in any form of
general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offering of
the Notes.
(k) The Issuer and its subsidiaries have statutory
authority, franchises, permits, easements and consents free
<PAGE>
6
from unduly burdensome restrictions and adequate for the
conduct of the respective businesses in which they are
engaged.
(l) The Issuer is neither a "holding company" under
the Public Utility Holding Company Act of 1935 nor a
"subsidiary company" nor an "affiliate" of a "holding
company" within the meaning of these terms as defined in
said Act. The Issuer is not subject to regulation by the
Federal Energy Regulatory Commission ("FERC") under the
Natural Gas Act, except with respect to certain interstate
sales for resale as to which the Issuer has a blanket
certificate of public convenience and authority from FERC.
(m) The Issuer has an authorized capitalization as set
forth for it in the Offering Memorandum, and all of the
issued shares of capital stock of the Issuer have been duly
and validly authorized and issued, and are fully paid and
nonassessable and all of the issued shares of capital stock
of CNG Realty Corp., ENI Transmission Company, and Energy
Networks, Inc. are owned by the Issuer free and clear of all
liens, encumbrances, equities or claims.
(n) Except as set forth or arising out of facts
disclosed in the Offering Memorandum or incorporated by
reference therein, neither the Issuer nor its subsidiaries
to the best of its knowledge (a) is in violation of any
laws, ordinances, governmental rules and regulations to
which it is subject or (b) has failed to obtain any
licenses, permits, franchises or other governmental
authorizations, necessary to the ownership of its property
or to the conduct of its business, which violation or such
failure to obtain could reasonably be expected to materially
adversely affect the business, business prospects, profits,
properties or condition (financial or otherwise) of the
Issuer and its subsidiaries considered as one enterprise.
(o) Each subsidiary of the Issuer which is a
significant subsidiary (each a "Significant Subsidiary") as
defined in Rule 405 of Regulation C of the 1933 Act
Regulations has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties and
conduct its business as described in the Offering Memorandum
and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of
business, except where the failure to so qualify and be in
<PAGE>
7
good standing would not have a material adverse effect on
the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Issuer and its
subsidiaries considered as one enterprise; and all of the
issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, except for directors'
qualifying shares, is owned by the Issuer, directly or
through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(p) The Company meets the requirements for the use of
Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act"), including the rules and regulations of
the Securities and Exchange Commission (the "Commission")
thereunder.
(q) Neither the Issuer nor any of its subsidiaries has
sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Offering Memorandum any material loss or interference with
its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering
Memorandum as amended or supplemented.
(r) Each Note will be an unconditional and direct debt
obligation of the Issuer and will rank PARI PASSU with other
unsecured and unsubordinated existing and future obligations
of the Issuer.
(s) The Issuer is not an "investment company" within
the meaning of the Investment Company Act of 1940.
2. APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS
OF OFFERS TO PURCHASE; SALES OF NOTES TO A PURCHASER.
(a) (i) Subject to the terms and conditions set forth herein,
the Issuer hereby appoints and authorizes each of the Agents to
act as its agent to solicit offers for the Purchase of Notes from
the Issuer.
(ii) On the basis of the representations and
warranties, and subject to the terms and conditions, set forth
herein, each Agent agrees, severally and not jointly, as agent of
the Issuer, to use its reasonable efforts to solicit offers to
purchase Notes from the Issuer upon the terms and conditions
described in the Offering Memorandum and in the Procedures. In
soliciting offers as agents, each Agent is acting individually,
<PAGE>
8
and not jointly, solely as agent of the Issuer and not as
principal. Each Agent shall use its reasonable efforts to assist
the Issuer in obtaining performance by each purchaser whose offer
to purchase Notes has been solicited by such Agent and accepted
by the Issuer, but such Agent shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity
of any purchaser and shall not have any liability to the Issuer
in the event any such purchase is not consummated for any reason;
PROVIDED that the foregoing shall not operate to release any
Agent from any liability it may otherwise have as a result of its
failure to perform its obligations under this Agreement. Except
as provided in Section 2(b), under no circumstances will any
Agent be obligated to purchase any Notes for its own account. It
is understood and agreed, however, that any Agent may purchase
Notes for its own account as Purchaser pursuant to Section 2(b)
or otherwise as may be agreed or permitted by the Issuer and such
Agent.
(iii) The Issuer reserves the right, in its sole
discretion, to instruct the Agents to suspend at any time, for
any period of time or permanently, the solicitation of offers to
purchase Notes. Within one business day of receipt of
instructions to that effect from the Issuer, each Agent will
forthwith suspend solicitation of offers to purchase Notes from
the Issuer until such time as the Issuer has advised it that such
solicitation may be resumed.
(iv) The Issuer agrees to pay each Agent a commission,
upon closing, with respect to each sale of Notes by the Issuer as
a result of a solicitation made by such Agent, including any sale
for the account of any affiliate of the Agent, in an amount equal
to that percentage of the aggregate principal amount of the Notes
sold by the Issuer specified on Schedule I hereto for Notes with
the relevant term. Such commission shall be payable as specified
in the Procedures.
(v) Subject to the provisions of this Section 2(a) and
to the Procedures, offers for the purchase of Notes may be
solicited by the Agents, as agents for the Issuer, at such time
and in such amounts as the Agents and the Issuer deem advisable.
The Issuer may from time to time offer Notes for sale otherwise
than through an Agent (but subject to Section 4(a)(v)); PROVIDED,
HOWEVER, that so long as this Agreement shall be in effect the
Issuer shall not solicit or accept offers to purchase Notes
through any agent other than an Agent without giving the Agents
prior notice of such appointment and appointing such agent as an
additional Agent hereunder on the same terms and conditions as
provided herein for the Agents. Each such additional Agent shall
execute this Agreement and shall become an Agent for all purposes
hereof.
<PAGE>
9
(vi) Each Agent may, in the exercise of its reasonable
discretion, reject any offer to purchase Notes received by it as
agent of the Issuer and not communicate such offer to the Issuer.
Each Agent shall communicate to the Issuer, orally or in writing,
each such offer that it does not reject and, if such Agent or any
of its affiliates shall be the offeror, shall advise the Issuer
of that fact. The Issuer shall have full discretion to reject
any offer to purchase Notes in whole or, if permitted by the
terms of such offer, in part.
(vii) If the Issuer shall default in its obligations to
deliver Notes to a purchaser whose offer it has accepted, or, in
the event that the Notes are to be issued in book-entry form, to
deliver a book-entry Note to The Depository Trust Company or such
other depository as may be mutually agreed upon by the parties
hereto, the Issuer shall hold each of you harmless against any
loss, claim or damage arising from or as a result of such default
by the Issuer (except to the extent that such default by the
Issuer shall result from the failure of you yourself to perform
your obligations hereunder).
(b) (i) Subject to the terms and conditions stated
herein, whenever the Issuer and any one (or more) of you
determine that the Issuer shall sell Notes directly to any one
(or more) of you as the Purchaser, each such sale of Notes shall
be made in accordance with the terms of this Agreement and,
unless specifically waived by the Purchaser, a supplemental
agreement relating thereto between the Issuer and the Purchaser.
Each such supplemental agreement (which shall be substantially in
the form of Exhibit B) is herein referred to as a "Terms
Agreement". A Purchaser's commitment to purchase Notes pursuant
to any Terms Agreement shall be deemed to have been made on the
basis of the representations and warranties of the Issuer
contained herein or therein (if any) and shall be subject to the
terms and conditions set forth herein and in such Terms
Agreement. Each Terms Agreement shall describe the Notes to be
purchased by the Purchaser pursuant thereto, specify the
principal amount of such Notes, the price to be paid to the
Issuer for such Notes specified by reference to the principal
amount of the Notes and the discount to the Purchaser from the
principal amount thereof, the rate at which interest will be paid
on such Notes, the date of issuance of such Notes (the "Closing
Date"), the place of delivery of the Notes and payment therefor,
the method of payment, any modification of, or addition to, the
requirements for the delivery of the opinions of counsel set
forth in Section 6(a)(ii), the certificates from the Issuer or
its officers and the letter from the Issuer's independent public
accountants, and such other terms and conditions as may be
specified therein from time to time. The discount to the
Purchaser with respect to any Notes sold pursuant to this Section
<PAGE>
10
2(b) shall be equal to that percentage of the principal amount
thereof specified in Schedule I hereto for Notes with the
relevant term, unless a higher percentage is specified in the
applicable Terms Agreement.
(ii) The settlement details for Notes sold to a
Purchaser pursuant to any Terms Agreement shall be agreed to
between the Issuer and such Purchaser in the respective Terms
Agreement. If there is no such Terms Agreement, the settlement
details specified in the Procedures shall apply with the
Purchaser filling the roles specified therein of the Agent and
the beneficial owner.
(iii) Nothing contained in this Agreement shall obligate
an Agent to enter into a Terms Agreement with the Issuer or to
otherwise agree to purchase Notes for its own account
3. OFFERING AND SALE OF NOTES. Each party hereto
agrees to perform the respective duties and obligations
specifically provided to be performed by it in the Procedures.
4. AGREEMENTS. (a) The Issuer agrees with each of
you that:
(i) If reasonably necessary to set forth information
that is material to an investment in a Note and not
otherwise contained in the Offering Memorandum, the Issuer
shall prepare a supplement to the Offering Memorandum with
respect to such Note.
(ii) The Issuer shall furnish to each of you such
information and documents relating to the business,
operations and affairs of the Issuer, the Offering Mem-
orandum and any amendments thereof or supplements thereto,
the Issuing and Paying Agency Agreement, the Notes, this
Agreement, any Terms Agreement, the Procedures and the
performance by the parties hereto of their respective
obligations hereunder and thereunder as you may from time to
time and at any time prior to the termination of this
Agreement reasonably request in connection with soliciting
offers to purchase Notes. The Issuer shall notify each of
you promptly (1) if at any time any event occurs which
constitutes (or after notice or lapse of time or both would
constitute) a default or an event of default under the
Notes, the Issuing and Paying Agency Agreement or this
Agreement or (2) of any material adverse change, or to the
knowledge of the Issuer any development involving a
prospective change, in the financial condition, earnings,
business or business prospects or properties of the Issuer
and its subsidiaries considered as a single enterprise.
<PAGE>
11
(iii) The Issuer shall, whether or not any sale of Notes
is consummated, (1) pay all expenses incident to the
performance of its obligations under this Agreement and any
Terms Agreement, including the fees and disbursements of its
accountants and counsel, the cost of printing or other
production and delivery of the Offering Memorandum, all
amendments thereof and supplements thereto, the Issuing and
Paying Agency Agreement, this Agreement, any Terms Agreement
and all other documents relating to the offering of Notes
pursuant hereto and thereto, the cost of preparing,
printing, packaging and delivering the Notes, the fees and
disbursements of the Issuing and Paying Agent and any paying
or other agents under the Issuing and Paying Agency
Agreement and the fees of any agency that rates the Notes,
(2) reimburse each of you on a quarterly basis for all
reasonable out-of-pocket expenses incurred by you in
connection with this Agreement and the transactions
contemplated hereby and (3) pay the reasonable fees and
expenses of Reid & Priest incurred in connection with this
Agreement and the transactions contemplated hereby.
(iv) Each time that the Offering Memorandum is amended
or supplemented (other than solely (1) to provide updated
financial information, (2) to specify additional or revised
terms of the Notes, (3) as a result of the incorporation by
reference of a document filed by the Issuer with the
Securities and Exchange Commission and/or (4) to revise the
plan of distribution), the Issuer shall deliver or cause to
be delivered promptly to each of you an officer's
certificate and an opinion of counsel for the Issuer, dated
the date of such amendment or of such supplement, in form
reasonably satisfactory to each of you, of the same tenor as
the certificate and opinion referred to in Sections 5(a)(ii)
and (iii) but modified to relate to the Offering Memorandum,
this Agreement and the Issuing and Paying Agency Agreement
as then in effect. At the request of either Agent, the
Issuer shall furnish to each of you an officer's certificate
and an opinion of counsel for the Issuer, each dated not
more than five days prior to the date of delivery and in a
form reasonably satisfactory to each of you, of the same
tenor as the certificate and opinion referred to in Sections
5(a)(ii) and (iii) but modified to relate to the Offering
Memorandum, this Agreement and the Issuing and Paying Agency
Agreement as then in effect. At the request of either
Agent, the Issuer shall furnish to you a letter of the
independent accountants for the Issuer of the same tenor as
the letter referred to in Section 5(a)(v), but modified to
relate to the most recent annual and quarterly financial
statements of the Issuer included in the Offering Memorandum
as then in effect pursuant to Section 4(a)(ix).
<PAGE>
12
(v) Unless otherwise specified in any Terms Agreement,
the Issuer shall not, without the prior consent of the
Purchaser thereunder, issue or announce the proposed
issuance of any of its debt securities (including Notes),
which are denominated in the same currency as, and have
similar maturities, similar interest rates and other terms
(including in respect of the method of computing interest)
substantially similar to those of, the Notes being purchased
pursuant to such Terms Agreement, during the period
commencing on the date on which the Issuer accepts an offer
to purchase any Note in accordance with such Terms Agreement
and terminating on the Closing Date for the sale of such
Note.
(vi) The Issuer shall deliver to each of you, from time
to time, as many copies of the Offering Memorandum and of
any amendment or supplement that has been prepared with
respect thereto, and as many copies of any financial
statements and other periodic reports that the Issuer may
furnish generally to holders of its debt securities, as each
of you may reasonably request.
(vii) The Issuer shall notify each of you promptly if at
any time any event occurs as a result of which the current
Offering Memorandum would contain any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and the Issuer promptly shall prepare an amendment or
supplement which will correct such statement or omission.
(viii) The Issuer shall furnish to each of you in written
form all interim financial statement information updating
the financial statement information included in, or as an
exhibit, attachment or appendix to, the Offering Memorandum
promptly upon publication of such interim information and,
within four months of the end of each such interim period,
cause the Offering Memorandum to be supplemented to include
such financial information and corresponding information for
the comparable period of the preceding fiscal year, as well
as such other information and explanations as shall be
necessary for an understanding of such financial
information, which supplement may be in the form of a
separate quarterly or semiannual report or report filed
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(ix) The Issuer shall furnish to each of you the audited
consolidated financial statements updating the audited
<PAGE>
13
consolidated financial statements and the financial
information included in the Offering Memorandum for each
corresponding fiscal year as promptly as practicable after
the publication of such financial statements but in any
event not later than four months after the end of such
fiscal year and cause the Offering Memorandum to be
supplemented to include such audited financial statements
and the accountants' report with respect thereto, as well as
such other information and explanations as shall be
necessary for an understanding of such financial statements,
which supplement may be in the form of a separate annual
report or report filed under the Exchange Act.
(x) The Issuer shall (1) furnish to each of you copies
of any proposed supplement or amendment to the Offering
Memorandum (other than any document incorporated by
reference therein) two business days in advance of using
such supplement or amendment and (2) permit each of you to
review and comment as to the form and content thereof;
PROVIDED, HOWEVER, that an amendment or supplement prepared
to set forth terms and conditions of any Notes need not be
furnished to or reviewed by those of you who are not named
therein, who shall not have solicited offers for such Notes
and who are not to be Purchasers of such Notes. Any of you
who shall have an objection to such proposed amendment or
supplement may immediately terminate this Agreement as to
such of you by notice to the Issuer. At the request of any
of you so terminating, the Issuer shall promptly amend or
supplement the Offering Memorandum to indicate those firms
that remain Agents.
(xi) The Issuer shall not offer or sell any securities
under circumstances which would require the registration of
any of the Notes under the Securities Act.
(xii) The Issuer will take appropriate steps to ensure
that the aggregate principal amount of Notes at any time
outstanding does not exceed U.S. $75,000,000, will not issue
any Notes if such issuance would cause such limit to be
exceeded, will promptly notify each of you in the event that
at any time such limit has been reached and will promptly
notify each of you if such limit is increased pursuant to
this Agreement.
(xiii) The Issuer shall not, without having given prior
written notice to each of you, consent to any amendment of
the Issuing and Paying Agency Agreement. The Issuer shall
promptly notify each of you of any resignation or removal of
the Issuing and Paying Agent and the appointment of any
successor thereto.
<PAGE>
14
(xiv) For so long as any of the Notes are outstanding,
the Issuer will provide to any holder of Notes that are
"restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act, and to any prospective purchaser
of such Notes designated by a holder thereof, upon the
request of such holder or prospective purchaser in
connection with a transfer or proposed transfer pursuant to
Rule 144A, any information required to be provided to such
holder or prospective purchaser to comply with the
conditions set forth in Rule 144A as in effect as of the
date the Notes of the corresponding Tranche shall have been
first issued (together with any such information added by an
amendment to Rule 144A after such date, to the extent such
information can be provided without unreasonable additional
expense to the Issuer).
(xv) None of you shall be liable or responsible to the
Issuer for any losses, damages or liabilities suffered or
incurred by the Issuer, including any losses, damages or
liabilities under the Securities Act, arising from or
relating to any resale or transfer of a Note by a holder in
any manner that does not comply with the applicable
restrictions on resale and transfer or the procedures
required for resale and transfer set forth herein, in the
Issuing and Paying Agency Agreement and in the Notes;
PROVIDED that each of you, severally and not jointly, shall
remain liable for the performance of your own obligations
under this Agreement.
(xvi) The Issuer will at all times ensure that all
approvals, authorizations, consents or other orders of, and
all filings with, any governmental or other administrative
agency or body will be, prior to the time required, obtained
or made (1) so that the Issuer may lawfully perform its
obligations under the Notes, this Agreement and the Issuing
and Paying Agency Agreement and (2) so that performance of
such obligations will, in all respects material to the
Issuer and its subsidiaries considered as a single
enterprise or material to the Issuer's ability to perform
its obligations under this Agreement, the Issuing and Paying
Agency Agreement or the Notes, comply with any laws,
decrees, regulations, judgments or orders of any court,
government, governmental authority or agency to which the
Issuer or any of its subsidiaries or any of their respective
properties or assets is subject.
(xvii) The Issuer will send to each of you a copy of every
notice of a meeting of the holders of the Notes (or any of
them) that is sent by the Issuer to such holders at the same
time it is sent to such holders and will promptly notify
<PAGE>
15
each of you immediately upon its becoming aware that a
meeting of the holders of the Notes (or any of them) has
been convened by any of such holders.
(xviii) The Issuer shall promptly notify each of you of any
lowering in the ratings of any of the Issuer's debt
securities by any Rating Agency, or any public announcement
that any Rating Agency has under surveillance or review its
ratings of any such debt securities (other than an
announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of
such rating).
(xix) During the six-month period following the issue
date of any Note, neither the Issuer nor any affiliate of
the Issuer will directly or indirectly, sell, offer for
sale, solicit offers to buy or otherwise negotiate in
respect of, any of the Notes or any other security (as
defined in the Securities Act) which will be integrated with
such sale of Notes in a manner that would require the
registration of the Notes under the Securities Act.
(b) The obligations of the Issuer under Sections
4(a)(i), (ii), (vi), (vii), (viii) and (ix) shall be suspended
during any period of time during which the Issuer shall have
suspended the solicitation of offers to purchase Notes by written
notice to each Agent; PROVIDED, HOWEVER, such obligations of the
Issuer shall remain in effect with respect to an Agent (i) for a
period of two years following the date of notice of such
suspension if such Agent shall own any Notes with the intention
of reselling them as contemplated by Section 2(b) or (ii) if the
Issuer has accepted an offer to purchase Notes solicited by such
Agent pursuant to this Agreement and the settlement for such sale
shall not have occurred. At least one week prior to end of any
such period during which solicitations shall have been suspended,
the Issuer shall notify each of you of any event or change
contemplated by the last sentence of Section 4(a)(ii) or by
Section 4(a)(vii) of which the Issuer would have been obligated
to notify each of you, and shall provide each of you all written
information and supplements referred to in Sections 4(a)(viii)
and (ix) that the Issuer would have been obligated to deliver to
each of you, had the Issuer not so suspended the solicitation of
offers.
5. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS.
(a) The obligations of each Agent to solicit offers to purchase
any Notes shall be subject to the accuracy of the representations
and warranties on the part of the Issuer contained herein as of
each time the Issuer gives a notice requesting any of you to
solicit offers as agents, at and as of each acceptance of an
<PAGE>
16
offer by the Issuer and upon delivery of any Note to the
purchaser (or its agent) pursuant to such offer, to the accuracy
of the statements of the Issuer made in any certificates
delivered pursuant to the provisions hereof as of the respective
dates of such certificates, to the performance and observance by
the Issuer of all covenants and agreements herein contained on
its part to be performed and observed and to the following
additional conditions precedent:
(i) The Issuer shall have obtained all authorizations,
consents and approvals of any court or governmental or other
regulatory agency or body required in connection with the
issuance and sale of the Notes and the performance of its
obligations hereunder and under the Notes and the Issuing
and Paying Agency Agreement.
(ii) The Issuer shall have furnished to each Agent a
certificate of the Issuer signed by the principal financial
or accounting officer of the Issuer, dated as of the date
hereof, to the effect that, to the best of his knowledge
after reasonable inquiry:
(1) the representations and warranties of the
Issuer in this Agreement are true and correct in all
material respects on and as of the date of the
certificate and the Issuer has performed in all
material respects all its obligations and satisfied all
the conditions on its part to be satisfied at or prior
to the date of the certificate;
(2) since the date of the most recent financial
statements included in the current Offering Memorandum,
there has been no material adverse change, or to the
knowledge of the Issuer any development involving a
prospective change, in the financial condition,
earnings, business or business prospects or properties
of the Issuer and its subsidiaries considered as a
single enterprise, except as set forth or contemplated
in the Offering Memorandum; and
(3) the Offering Memorandum (other than
statements made therein in reliance upon and in
conformity with information furnished to the Issuer in
writing by any of you, or on behalf of any of you which
has been furnished by a person authorized to do so,
specifically for use therein, as to which no
representation shall be made) does not contain any
untrue statement of a material fact or omit to state
any material fact necessary to make the statements
<PAGE>
17
therein, in light of the circumstances under which they
were made, not misleading.
(iii) The Issuer shall have furnished to each Agent the
opinion of Murtha, Cullina, Richter and Pinney, counsel to
the Issuer, substantially in the form of Exhibit C hereto.
(iv) Each Agent shall have received from Reid & Priest,
your counsel, such opinion with respect to the proposed
issue and sale of the Notes and other related matters as
such Agent may reasonably require.
(v) Arthur Andersen & Co., independent accountants for
the Issuer, shall have furnished to each Agent an executed
copy of a letter in the form heretofore agreed to by each
Agent.
(b) The documents required to be delivered by this
Section 5 shall be delivered at, or transmitted by telecopy (with
an undertaking promptly to forward the original copies thereof)
to, the offices of Reid & Priest, counsel for the Agents, at 40
West 57th Street, New York, New York, Attn: Kevin Stacey, at 9:30
A.M., New York City time, on the date hereof, and an original of
each such document will be sent to each of you.
6. CONDITIONS TO THE OBLIGATIONS OF A PURCHASER.
(a) The obligations of any Purchaser to purchase any Notes shall
be subject to the accuracy of the representations and warranties
on the part of the Issuer contained herein or in the
corresponding Terms Agreement, if any, at and as of the date of
the corresponding Terms Agreement and upon the delivery to any
Purchaser of any Note pursuant to such Terms Agreement, to the
performance and observance by the Issuer of all covenants and
agreements herein or therein contained on its part to be
performed and observed and to the following additional conditions
precedent:
(i) The Issuer shall have obtained all authorizations,
consents and approvals of any court or governmental or other
regulatory agency or body required in connection with the
issuance and sale of the Notes and the performance of its
obligations hereunder and under the Notes and the Issuing
and Paying Agency Agreement.
(ii) To the extent provided by such Terms Agreement, the
Purchaser shall have received, appropriately updated, (1) a
certificate of the Issuer dated as of the Closing Date to
the effect set forth in Section 5(a)(ii), (2) the opinion of
Murtha, Cullina, Richter and Pinney dated the Closing Date
to the effect set forth in Section 5(a)(iii), (3) the
<PAGE>
18
opinion of Reid & Priest dated the Closing Date to the
effect set forth in Section 5(a)(iv) and (4) the letter of
Arthur Andersen & Co. dated the Closing Date to the effect
set forth in Section 5(a)(v).
(iii) Prior to the Closing Date, the Issuer shall have
furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably
request.
(b) If any of the conditions specified in this Section
6 shall not have been fulfilled in all material respects when and
as provided in this Agreement and any Terms Agreement, or if any
other event occurs which permits cancellation under this
Agreement, such Terms Agreement and all obligations of the
Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such
cancellation shall be given to the Issuer in writing or by
telephone confirmed in writing, which confirmation may be made by
telex or telecopy.
7. CONDITIONS TO ALL PURCHASES. The consummation of
the sale of any Note pursuant to this Agreement shall be subject
to the further condition that, at the date of issuance thereof,
in the judgment of the Purchaser or the Agent that obtained the
offer, (a) each condition set forth in Section 5 or 6, as
applicable, shall be satisfied and (b) subsequent to the
respective dates as of which information is given in the Offering
Memorandum (current as of the date of such agreement to purchase
a Note), except as set forth therein or contemplated thereby,
there shall not have occurred any change, or to the knowledge of
the Issuer any development involving a prospective change, in or
affecting the business or business prospects or properties of the
Issuer and its subsidiaries, the effect of which makes it
impracticable or inadvisable to market the Notes or to proceed
with completion of the sale and payment for such Notes.
8. RESTRICTIONS ON OFFERS AND SALES OF THE NOTES.
Each party hereto represents, warrants and agrees, severally and
not jointly, as follows:
(a) It will solicit offers to purchase Notes only
from, and it will offer and sell Notes only to, (i)
institutional purchasers that qualify, or that it reasonably
believes qualify, as "accredited investors" as such term is
defined in paragraphs (1), (2) and (3) of Rule 501(a) under
the Securities Act ("Institutional Accredited Investors"),
(ii) institutional purchasers that are, or that it
reasonably believes are, "qualified institutional buyers" as
<PAGE>
19
such term is defined in paragraph (a)(1) of Rule 144A
("QIBs") or (iii) any of you. If it is an Agent, any
resales or transfers of Notes through, or arranged by, it
similarly will be made only to Institutional Accredited
Investors or QIBs. It will solicit such offers and offer to
sell Notes to Institutional Accredited Investors that are
not QIBs only by approaching such Institutional Accredited
Investors on an individual basis. Neither it, its
affiliates, nor any person acting on its or their behalf
(except that no representation is made with respect to any
other party to this Agreement) has engaged or will engage in
any form of general solicitation or general advertising
(within the meaning of Rule 502(c) under the Securities Act)
in the United States with respect to the Notes.
(b) It will make reasonable inquiry to determine
whether a purchaser is purchasing for such purchaser's own
account as an Institutional Accredited Investor or QIB or
for the account of others and not with a view to, or for
sale in connection with, the public distribution thereof in
any transaction that would be in violation of Federal or
state securities laws and, in the case of any purchaser
acting on behalf of one or more third parties, it shall make
reasonable inquiry to determine that each such third party
is an Institutional Accredited Investor or QIB and that the
amount being purchased on behalf of each such third party is
not less than the authorized minimum denomination of such
Notes; PROVIDED that the Issuer shall have no duty to make
any such inquiry in connection with sales to any of you or
pursuant to offers transmitted to it by any of you.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Issuer
agrees to indemnify and hold harmless each of you and each person
who controls one or more of you within the meaning of either the
Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which any
such person may become subject under the law of any jurisdiction
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 a material fact
contained in the Offering Memorandum, in any amendment thereof or
supplement thereto or in any information provided by the Issuer
and furnished to any purchaser of the Notes pursuant to Section
4(a)(xiv), or arise out of or are based upon the 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 agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred
by it in connection with investigating or defending any such
loss, claim, damage, liability or action; PROVIDED, HOWEVER, that
<PAGE>
20
(i) the Issuer 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 any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Offering
Memorandum or in any amendment thereof or supplement thereto in
reliance upon and in conformity with written information
furnished to the Issuer by the person seeking indemnification, or
on behalf of such person by another person authorized to do so,
specifically for use in connection with the preparation thereof
and (ii) the Issuer will not be liable to those of you (or any
person controlling those of you) who sold to the person asserting
any such loss, claim, damage or liability the Notes which are the
subject thereof to the extent that (1) such loss, claim, damage
or liability arises out of or is based upon the fact that such
person did not receive a copy of the Offering Memorandum, as
amended or supplemented, excluding documents incorporated by
reference therein, at or prior to the confirmation of the sale of
such Notes to such person in any case where delivery of the
Offering Memorandum by such of you is required by this Agreement,
unless such failure to deliver the Offering Memorandum was a
result of noncompliance by the Issuer with Section 4(a)(vi) of
this Agreement, and (2) such loss, claim, damage or liability
would have been avoided by delivery of the Offering Memorandum to
such person as so required. This indemnity will be in addition
to any liability which the Issuer may otherwise have.
(b) Each of you, severally and not jointly, agrees to
indemnify and hold harmless the Issuer and each person who
controls the Issuer within the meaning of either the Securities
Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Issuer, but only with reference to written
information relating to the indemnifying party furnished to the
Issuer by it, or on its behalf by another person authorized to do
so, specifically for use in the preparation of the Offering
Memorandum or any amendment thereof or supplement thereto. This
indemnity will be in addition to any liability which any of you
may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 9 of notice of 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 9,
notify the indemnifying party in writing of the 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 9. In case
any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and
to the extent that it may elect by written notice delivered to
<PAGE>
21
the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense
thereof, with counsel satisfactory to such indemnified party;
PROVIDED, HOWEVER, that if the defendants in any such action
include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available
to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and
approval by the indemnified party of counsel (which approval
shall not be unreasonably withheld), the indemnifying party will
not be liable to such indemnified party under this Section 9 for
any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance
with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in
addition to any local counsel), approved by a majority of the
indemnified parties in the case of paragraph (a) of this Section
9, representing the indemnified parties under such paragraph (a)
who are parties to such action), (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified
party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party;
and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in
such clause (i) or (iii). The indemnifying party shall not be
liable for any settlement of any action or claim effected without
its consent, which consent shall not be unreasonably withheld.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in this Section 9 is due in accordance with its
terms but if for any reason held by a court to be unavailable on
grounds of policy or otherwise, the Issuer and each of you shall
contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) to
which the Issuer and any of you may be subject in such proportion
so that each of you, severally and not jointly, is responsible
only for that portion represented by the percentage that the
<PAGE>
22
aggregate commissions received by you yourself pursuant to
Section 2 in connection with the Notes from which such losses,
claims, damages and liabilities arise (or, in the case of Notes
sold to a Purchaser, the discount to the Purchaser), bears to the
aggregate principal amount of such Notes sold and the Issuer is
responsible for the balance; PROVIDED, HOWEVER, that in no case
shall any of you be responsible for any amount in excess of the
commissions received by you yourself in connection with the Notes
from which such losses, claims, damages and liabilities arise
(or, in the case of Notes sold to a Purchaser, the discount to
the Purchaser). For purposes of this Section 9, each person who
controls any of you within the meaning of either the Securities
Act or the Exchange Act shall have the same rights to
contribution as such of you and each person who controls the
Issuer within the meaning of either the Securities Act or the
Exchange Act shall have the same rights to contribution as the
Issuer, subject in each case to the proviso to the preceding
sentence. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution hereunder from any person who was not
guilty of such fraudulent misrepresentation. Any party entitled
to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against
another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought (which
obligation to give notice shall be deemed to be satisfied by the
delivery of notice pursuant to paragraph (c) of this Section 9),
but the omission so to notify such party or parties shall not
relieve the party or parties from whom contribution may be sought
from any other obligation it or they may have hereunder or
otherwise than under this paragraph (d).
10. TERMINATION. (a) This Agreement will continue in
effect until terminated as provided in this Section 10 or
Section 4(a)(x). This Agreement may be terminated by the Issuer
as to any Agent or, in the case of any Agent, by such Agent
insofar as this Agreement relates to such Agent, by giving at
least 30 days' written notice of such termination to the other
parties hereto. Notwithstanding any such termination, the
rights and liabilities of each party under Sections 2(a)(iv) and
(vii), Sections 4(a)(iii), (xv) and (xvii), Sections 8(a) and (b)
(with respect to resales and transfers of Notes), Section 9,
Section 11 and any Terms Agreement executed prior to the date of
termination hereof shall survive any termination of this
Agreement, in whole or in part. In addition, if any termination
shall occur either (i) at a time when any Purchaser shall own any
Notes, purchased under this Agreement from the Issuer, with the
intention of reselling them or (ii) after the Issuer has accepted
an offer to purchase Notes and prior to the related settlement,
<PAGE>
23
all agreements, terms and conditions relating to the purchase and
sale of such Notes shall also remain in effect.
(b) Each agreement to purchase Notes pursuant to a
solicitation by an Agent hereunder, and each agreement by a
Purchaser to purchase Notes hereunder, shall be subject to
termination in the absolute discretion of such Agent or the
Purchaser (as the case may be), by notice given to the Issuer
prior to delivery of any payment for Notes to be purchased, if
prior to such time (i) trading in any securities issued by the
Issuer shall have been suspended or halted on any exchange
(whether U.S. or foreign), or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited
or minimum prices shall have been established on such Exchange,
(ii) a banking moratorium shall have been declared by either U.S.
Federal or New York State or Connecticut State authorities,
(iii) there shall have been a lowering in the ratings of any of
the Issuer's debt securities by any Rating Agency or any public
announcement that any Rating Agency has under surveillance or
review its rating of any such debt securities (other than an
announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating) or
(iv) there shall have occurred, in the reasonable judgment of
such Agent or Purchaser (as the case may be), a material change
in national or international political, financial or economic
conditions that makes it impracticable or inadvisable to market
the Notes or to proceed with completion of the sale of and
payment for such Notes.
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities
and other statements of the Issuer or its officers and of each of
you set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by
or on behalf of any of you or by or on behalf of the Issuer or
any of the controlling persons referred to in Section 9, and will
survive delivery of and payment for the Notes.
12. INCREASES IN THE AMOUNT OF THE NOTES. The
aggregate principal amount of Notes that may be sold by the
Issuer may be increased pursuant to an amendment to this
Agreement in the form attached hereto as Exhibit D executed by
all the parties hereto. Upon the execution and delivery of any
such amendment, to the extent agreed upon by the Issuer and you,
the Issuer shall deliver to each of you, appropriately updated,
(a) a certificate of the Issuer dated as of the date of such
amendment to the effect set forth in Section 5(a)(ii), (b) the
opinion of Murtha, Cullina, Richter and Pinney dated the date of
such amendment to the effect set forth in Section 5(a)(iii) and
(c) the letter of KPMG Peat Marwick dated the date of such
<PAGE>
24
amendment to the effect set forth in Section 5(a)(v), and the
Issuer shall furnish to each of you such further information,
certificates and documents as you may reasonably request.
13. NOTICES. All communications hereunder will be in
writing, and effective only on receipt, or (but only where
specifically provided in the Procedures) by telephone and, if
sent to you, will be mailed, delivered, telecopied and confirmed
or telexed and confirmed to you, at the address specified in
Schedule II hereto; or, if sent to the Issuer, will be mailed,
delivered, telecopied and confirmed or telexed and confirmed to
it at 100 Columbus Boulevard, Hartford, Connecticut 06144,
Attention: Chief Financial Officer (telephone: (203) 727-3000;
telecopy: (203) 727-3064).
14. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the controlling persons referred to in
Section 9, and no other person will have any right or obligation
hereunder.
15. APPLICABLE LAW.
--------------
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. COUNTERPARTS. This Agreement may be signed in
counterparts with the same effect as if the signatures thereto
and hereto were upon the same instrument.
<PAGE>
25
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement between the Issuer
and each of you.
Very truly yours,
CONNECTICUT NATURAL GAS
CORPORATION,
by: James P. Bolduc
-----------------------
Name: James P. Bolduc
Title: Senior Vice President -
Financial Services and
Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
SMITH BARNEY INC.,
by: Douglas Song
---------------------
Name: Douglas Song
Title: Associate
A.G. EDWARDS & SONS, INC.,
by: Lester H. Krone
--------------------
Name: Lester H. Krone
Title: Vice President
<PAGE>
INDEX OF DEFINITIONS
--------------------
Term Section
---- -------
Agents Introductory Paragraph
Closing Date 2(b)(i)
Exchange Act 4(a)(viii)
Institutional Accredited
Investors 8(a)
Issuer Introductory Paragraph
Issuing and Paying Agency
Agreement Introductory Paragraph
Issuing and Paying Agent Introductory Paragraph
Notes Introductory Paragraph
Offering Memorandum 1(a)
Procedures Introductory Paragraph
Purchaser Introductory Paragraph
QIBs 8(a)
Rating Agency 1(c)
Regulation D Introductory Paragraph
Rule 144A 1(i)
Securities Act Introductory Paragraph
Terms Agreement 2(b)(i)
Tranche Introductory Paragraph
you Introductory Paragraph<PAGE>
SCHEDULE I
The Issuer agrees to pay the Agents a commission equal
to the following percentage of the principal amount of each Note
sold by such Agent, and to pay the Purchasers a commission in the
form of a discount to the purchase price equal to the following
percentage of the principal amount of each Note purchased by such
Agent under Section 2(b):
<TABLE>
Term Commission Rate
---- ---------------
<S> <C>
Twelve months to less than eighteen months .150%
Eighteen months to less than two years .200%
Two years to less than three years .250%
Three years to less than four years .350%
Four years to less than five years .450%
Five years to less than six years .500%
Six years to less than seven years .550%
Seven years to less than ten years .600%
Ten years to less than fifteen years .625%
Fifteen years to less than twenty years .700%
Twenty years or longer but not more than
thirty years .750%
</TABLE>
The commission rate payable to any Agent with respect
to any Notes, and the discount with respect to Notes sold to a
Purchaser, may be increased by agreement between the Issuer and
such Agent or Purchaser, with no requirement that the other
Agents or Purchasers receive notice of, or consent to, such
higher commission rate or discount.
<PAGE>
SCHEDULE II
Smith Barney Inc.
1345 Avenue of the Americas
New York, N.Y. 10105
Telephone: (212) 698-3950
Telecopy: (212) 698-5518
Attention: Manager-Capital Transactions
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, MO 63103
Telephone: (314) 289-5800
Telecopy: (314) 289-5989
Attention: Corporate Debt Syndicate
<PAGE>
EXHIBIT A
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
June 14, 1994
The Medium-Term Notes, Series B (the "Notes") are to be
offered on a continuing basis. Smith Barney Inc. and A.G.
Edwards & Sons, Inc., as agents (the "Agents"), have agreed to
use reasonable efforts to solicit offers to purchase Notes. No
Agent will be obligated to purchase Notes for its own account.
The Notes are being sold pursuant to a Placement Agency Agreement
between Connecticut Natural Gas Corporation (the "Issuer") and
the Agents dated as of the date hereof (the "Agreement"). Shawmut
Bank Connecticut, National Association is the issuing and paying
agent (the "Issuing and Paying Agent") under the Issuing and
Paying Agency Agreement, dated as of June 14, 1994 between the
Issuer and the Issuing and Paying Agent (the "Issuing and Paying
Agency Agreement"), under which the Notes will be issued.
The procedures to be followed during, and the specific
terms of, the solicitation of offers by each Agent and the sale
as a result thereof by the Issuer are explained below.
Administrative and record-keeping responsibilities will be
handled for the Issuer by its Treasurer. The Issuer will advise
each Agent and the Issuing and Paying Agent in writing of those
persons handling administrative responsibilities with whom the
Agents and the Issuing and Paying Agent are to communicate
regarding offers to purchase Notes and the details of their
delivery and will promptly advise each Agent and the Issuing and
Paying Agent in writing if any such person shall cease to handle
such responsibilities or of the authorization of any additional
person to handle such responsibilities.
The Notes will either be issued (a) in book-entry form
and represented by one or more fully registered Notes (each, a
"Book-Entry Note") delivered to the Issuing and Paying Agent, as
agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC, or (b) in certificated
form delivered to the purchaser thereof or a person designated by
such purchaser. Except in the limited circumstances described in
the Offering Memorandum, owners of beneficial interests in Book-
Entry Notes will not be entitled to physical delivery of Notes in
certificated form equal in principal amount to their respective
beneficial interests.
General procedures relating to the issuance of all
Notes are set forth in Part I hereof. Book-Entry Notes will be
issued in accordance with the procedures set forth in Part II, as
adjusted in accordance with changes in DTC's operating
A-1<PAGE>
requirements. Notes issued in certificated form will be issued
in accordance with the procedures set forth in Part III hereof.
Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Issuing and
Paying Agency Agreement or the Notes, as the case may be. To the
extent the procedures set forth below conflict with the
provisions of the Notes, the Issuing and Paying Agency Agreement,
DTC's operating requirements or the Placement Agency Agreement,
the relevant provisions of the Notes, the Issuing and Paying
Agency Agreement, DTC's operating requirements or the Placement
Agency Agreement shall control.
A-2<PAGE>
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Maturities: Each Note will mature on a Business Day not
---------- less than one year nor more than 30 years
after the Original Issue Date (as defined
below) for such Note.
Denominations: The denomination of any Note will be in U.S.
------------- dollars and a minimum of $100,000 or any
larger amount that is an integral multiple of
$1,000.
Form: Notes will be issued only in fully registered
---- form in accordance with the Issuing and
Paying Agency Agreement.
Date of Issuance: Each Note will be dated the date of its
---------------- authentication by the Issuing and Paying
Agent. Each Note will also bear an
"Original Issue Date", which will be the date
of its original issue, or in the case of any
Note (or portion thereof) issued subsequently
upon transfer or exchange of a Note or in
lieu of a destroyed, mutilated, defaced, lost
or stolen Note, the Original Issue Date of
the predecessor Note, regardless of the date
of authentication of such subsequently issued
Note.
Procedure for Rate
------------------
Setting and Posting:
-------------------
The Issuer and the Agents will discuss from
time to time the aggregate principal amount
of, the issuance price of and the interest
rates to be borne by, Notes that may be sold
as a result of the solicitation of offers by
the Agents. If the Issuer decides to set
prices of, and rates borne by, any Notes in
respect of which the Agents are to solicit
offers (the setting of such prices and rates
to be referred to herein as "posting") or if
the Issuer decides to change prices or rates
previously posted by it, it will promptly
advise the Agents of such prices and rates to
be posted.
If the Issuer does not post prices and rates
and an Agent receives an offer to purchase
A-3<PAGE>
Notes, such Agent will promptly advise the
Issuer by telephone of any such offer other
than offers rejected by such Agent as
provided below.
Acceptance of
-------------
Offers: Any Agent may, in its reasonable discretion,
------ reject any offer to purchase Notes received
by it, in whole or, if permitted by the terms
thereof, in part. Each Agent will promptly
advise the Issuer of any offers to purchase
Notes received by such Agent, other than
offers rejected by such Agent and, if such
Agent or any of its affiliates shall be the
offeror, shall advise the Issuer of that
fact. The Issuer will have the sole right to
accept offers to purchase Notes in whole or,
if permitted by the terms thereof, in part.
The Issuer may reject any such offer in whole
or, if permitted by the terms thereof, in
part. The Issuer will forthwith advise an
Agent of the acceptance or rejection of any
offer received through such Agent (the
"Presenting Agent"), and such Agent will so
advise the offeror.
Suspension of
-------------
Solicitation: The Issuer reserves the right, in its sole
------------ discretion, to instruct the Agents to suspend
at any time, for any period of time or
permanently, the solicitation of offers to
purchase Notes. Upon receipt of such
instructions, the Agents will forthwith
suspend solicitation of offers to purchase
Notes from the Issuer until such time as the
Issuer has advised them that such
solicitation may be resumed.
In the event that at the time the Issuer
suspends solicitation of offers to purchase
there shall be any offers previously
communicated to the Issuer by any Agent and
which offers have not been accepted or
rejected at the time of such suspension, the
Issuer will accept or reject such offers in
whole or, if permitted by the terms thereof,
in part, and will promptly advise the
Presenting Agents of such acceptances or
rejections.
In the event that at the time the Issuer
suspends solicitation of offers to purchase
A-4<PAGE>
there shall be any offers that have been
accepted by the Issuer but are outstanding
for settlement, the Issuer will promptly
advise the Agents and the Issuing and Paying
Agent whether such offers may be settled and
whether copies of the Offering Memorandum as
in effect at the time of the suspension,
together with any appropriate Supplement, may
be delivered in connection with the
settlement of such offers. The Issuer will
have the sole responsibility for such
decision and for any arrangements that may be
made in the event that the Issuer determines
that such offers may not be settled or that
copies of such Offering Memorandum or
Supplement may not be so delivered. No such
suspension shall excuse any failure by the
Issuer to fulfill a contractual obligation to
deliver any Notes.
Delivery of
-----------
Offering Memorandum:
-------------------
Subject to the immediately preceding
paragraph, the Presenting Agent will deliver
to each purchaser of Notes an Offering
Memorandum (other than documents incorporated
by reference therein unless such documents
are otherwise attached to the Offering
Memorandum) and, if applicable, a Supplement
as herein described with respect to each Note
sold pursuant to an offer solicited by such
Presenting Agent. Subject to the immediately
preceding paragraph, if notice of a change in
the terms of such Notes from the terms set
forth in the Offering Memorandum, as amended
or supplemented, is received by the
Presenting Agent between the time an offer
for a Note is received and the time the
Offering Memorandum is delivered to a
purchaser, such Offering Memorandum shall be
in the form in effect when the corresponding
offer was accepted. The Issuer will make such
delivery if such Note is sold directly by the
Issuer to a purchaser (other than a
Purchaser).
Confirmation: For each offer to purchase a Note solicited
------------ by an Agent and accepted by the Issuer, such
Agent will issue a confirmation to the
purchaser, with a copy to the Issuer, setting
A-5<PAGE>
forth the details set forth below in clauses
l through 8 of the first paragraph under
"Details for Settlement" and delivery and
payment instructions.
Settlement Date: Subject to Section 6 of the Agreement, the
--------------- Settlement Date with respect to any offer to
purchase Notes accepted by the Issuer will be
the fifth Business Day next succeeding the
date of acceptance unless otherwise agreed by
the purchaser and the Issuer and shall be
specified upon acceptance of such offer.
Issuing and Paying
------------------
Agent Not to Risk Funds:
-----------------------
Nothing herein shall be deemed to require the
Issuing and Paying Agent to risk or expend
its own funds in connection with any payment
to the Issuer or the Agents or any purchaser,
it being understood by all parties that
payments made by the Issuing and Paying Agent
to the Issuer or the Agents or a purchaser
shall be made only to the extent that
immediately available funds are provided to
the Issuing and Paying Agent for such
purpose.
Authenticity of
---------------
Signatures: The Issuer will cause the Issuing and Paying
---------- Agent to furnish the Agents from time to time
with the specimen signatures of each of the
Issuing and Paying Agent's officers,
employees or agents who has been authorized
by the Issuing and Paying Agent to
authenticate Notes, but the Agents will have
no obligation or liability to the Issuer or
to the Issuing and Paying Agent in respect of
the authenticity of the signature of any
officer, employee or agent of the Issuer or
the Issuing and Paying Agent on any Note.
Payment of Expenses:
-------------------
Each Agent shall forward to the Issuer, on a
quarterly basis, a statement of the out-of-
pocket expenses incurred by such Agent during
that quarter that are reimbursable to it
pursuant to the terms of the Agency
Agreement. The Issuer will remit payment to
each Agent currently on a quarterly basis.
A-6<PAGE>
Restriction on
--------------
Transfers: No Note may be resold or transferred in any
--------- manner that does not comply with the
applicable restrictions on resale or transfer
or the procedures required for resale or
transfer set forth in the Issuing and Paying
Agency Agreement and on the Note certificate.
The Issuing and Paying Agent shall have no
obligation to monitor such restrictions,
other than as specifically provided in the
Issuing and Paying Agency Agreement.
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by DTC,
the Issuing and Paying Agent will perform the custodial, document
control and administrative functions described below, in
accordance with its respective obligations under a Letter of
Representations from the Company and the Issuing and Paying Agent
to DTC, dated , 1994, and a Medium-Term Note
Certificate Agreement, dated , 19__, between the Issuing
and Paying Agent and DTC (the "Certificate Agreement"), and its
obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement System ("SDFS").
Issuance: All Book-Entry Notes having the
-------- same Original Issue Date,
redemption provisions, interest
payment dates, interest rate, and
Stated Maturity (collectively, the
"Terms") will be represented
initially by a single Global Note
in fully registered form without
coupons.
Each Book-Entry Note will be dated
and issued as of the date of its
authentication by the Issuing and
Paying Agent. Each Book-Entry Note
will bear an original issue date,
which will be (i) with respect to
an original Book-Entry Note (or any
portion thereof), the original
issue date specified in such Book-
Entry Note and (ii) following a
consolidation of Global Notes, with
respect to the Book-Entry Note
resulting from such consolidation,
A-7<PAGE>
the most recent Interest Payment
Date to which interest has been
paid or duly provided for on the
predecessor Global Notes,
regardless of the date of
authentication of such resulting
Book-Entry Note. No Book-Entry
Note will represent any securities
in certificated form.
Identification: The Issuer has arranged with the
-------------- CUSIP Service Bureau of Standard &
Poor's Ratings Group, a division of
McGraw-Hill, (the "CUSIP Service
Bureau") for the reservation of
approximately 900 PPN numbers which
have been reserved for and relating
to Book-Entry Notes and the Company
has delivered to the Issuing and
Paying Agent and DTC a written list
of such PPN numbers. The Company
will assign PPN numbers to Book-
Entry Notes as described below
under Settlement Procedure B. DTC
will notify the CUSIP Service
Bureau periodically of the PPN
numbers that the Issuer has
assigned to Book-Entry Notes. The
Issuing and Paying Agent will
notify the Issuer at any time when
fewer than 100 of the reserved PPN
numbers remain unassigned to Book-
Entry Notes, and, if it deems
necessary, the Issuer will reserve
additional PPN numbers for
assignment to Book-Entry Notes.
Upon obtaining such additional PPN
numbers, the Issuer will deliver a
list of such additional numbers to
the Issuing and Paying Agent and
DTC.
Registration: Each Book-Entry Note will be
------------ registered in the name of Cede &
Co., as nominee for DTC, on the
register maintained by the Issuing
and Paying Agent under the Issuing
and Paying Agency Agreement. The
beneficial owner of a Note issued
in book-entry form (i.e., an owner
of a beneficial interest in a Book-
A-8<PAGE>
Entry Note) (or one or more
indirect participants in DTC
designated by such owner) will
designate one or more participants
in DTC (with respect to such Note
issued in book-entry form, the
"Participants") to act as agent or
agents for such beneficial owner in
connection with the book-entry
system maintained by DTC, and DTC
will record in book-entry form, in
accordance with instructions
provided by such Participants, a
credit balance with respect to such
Note issued in book-entry form in
the account of such Participants.
The ownership interest of such
beneficial owner in such Note
issued in book-entry form will be
recorded through the records of
such Participants or through the
separate records of such
Participants and one or more
indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will
--------- be accomplished by book entries
made by DTC and, in turn, by
Participants (and in certain cases,
one or more indirect participants
in DTC) acting on behalf of
beneficial transferors and
transferees of such Book-Entry
Note.
Exchanges: After the first Interest Payment
--------- Date on individual issues of the
Notes, the Issuing and Paying Agent
may deliver to DTC Reorganization
Department, Interactive Data
Control and the CUSIP Service
Bureau at any time a written notice
of consolidation specifying (a) the
PPN numbers of two or more Global
Notes outstanding on such date that
represent Book-Entry Notes having
the same Terms, (other than
Original Issue Dates) and for which
interest has been paid to the same
date; (b) a date, occurring at
least 30 days after such written
notice is delivered and at least 30
A-9<PAGE>
days before the next Interest
Payment Date for the related Notes
issued in book-entry form, on which
such Global Notes shall be
exchanged for a single replacement
Global Note; and (c) a new PPN
number, obtained from the Issuer,
to be assigned to such replacement
Global Note. Upon receipt of such
a notice, DTC will send to its
participants (including the Issuing
and Paying Agent) a written
reorganization notice to the effect
that such exchange will occur on
such date. Prior to the specified
exchange date, the Issuing and
Paying Agent will deliver to the
CUSIP Service Bureau written notice
setting forth such exchange date
and the new PPN number and stating
that, as of such exchange date, the
PPN numbers of the Global Notes to
be exchanged will no longer be
valid. On the specified exchange
date, the Issuing and Paying Agent
will exchange such Global Notes for
a single Global Note bearing the
new PPN number and the PPN numbers
of the exchanged Global Notes will,
in accordance with CUSIP Service
Bureau procedures, be canceled and
not immediately reassigned.
Interest Payments: GENERAL. Interest (if any) on each
----------------- Note will accrue from the Original
Issue Date of such Note, and will
be calculated and paid in the
manner described in such Note.
Unless otherwise provided in the
Issuing and Paying Agency Agreement
or the Notes, the first payment of
interest on any Note originally
issued after a Record Date and on
or before the next succeeding
Interest Payment Date will be made
no earlier than the Interest
Payment Date following the next
succeeding Record Date. Interest
payable at maturity of a Note, or
upon earlier redemption or
repayment, will be payable to the
A-10<PAGE>
person to whom the principal of
such Note is payable. DTC will
arrange for each pending deposit
message described under Settlement
Procedure C below to be transmitted
to Standard & Poor's Ratings Group,
which will use the information in
the message to include certain
terms of the related Book-Entry
Note in the appropriate daily bond
report published by Standard &
Poor's Ratings Group.
RECORD DATES. The Record Dates
with respect to the Interest
Payment Dates shall be the first
calendar day (whether or not a
Business Day) of the month of such
Interest Payment Date.
INTEREST PAYMENT DATES. Unless
otherwise specified pursuant to
Settlement Procedure "A" below,
interest payments on Book-Entry
Notes will be made semiannually on
January 15 and July 15 of each year
and at Maturity; PROVIDED, HOWEVER,
that if an Interest Payment Date
for a Book-Entry Note is not a
Business Day, the payment due on
such day shall be made on the next
succeeding Business Day and no
interest shall accrue on such
payment for the period from and
after such Interest Payment Date;
PROVIDED FURTHER, that in the case
of a Book-Entry Note issued between
a Regular Record Date and an
Interest Payment Date, the first
interest payment will be made on
the Interest Payment Date following
the next succeeding Regular Record
Date.
Payments of Principal and PAYMENTS OF INTEREST ONLY. Not
------------------------- later than five Business Days
Interest: following each Record Date, the
-------- Issuing and Paying Agent will
deliver to the Issuer and DTC a
written notice specifying by PPN
number the amount of interest to be
paid on each Book-Entry Note on the
A-11<PAGE>
following Interest Payment Date
(other than an Interest Payment
Date coinciding with a Maturity
Date) and the total of such
amounts. DTC will confirm the
amount payable on each Book-Entry
Note on such Interest Payment Date
by reference to the daily bond
reports published by Standard &
Poor's. On such Interest Payment
Date, the Issuer will pay to the
Issuing and Paying Agent, and the
Issuing and Paying Agent in turn
will pay to DTC, such total amount
of interest due (other than at
Maturity Date), at the times and in
the manner set forth below under
"Manner of Payment."
PAYMENTS AT MATURITY DATE. Prior
to the first Business Day of each
month in which principal and/or
interest is to be paid, the Issuing
and Paying Agent will deliver to
the Issuer and DTC a written list
of principal, interest and premium,
if any, to be paid on each Book-
Entry Note maturing either at
Stated Maturity or on a Redemption
Date in the following month. The
Issuing and Paying Agent, the
Issuer and DTC will confirm the
amounts of such principal and
interest payments with respect to a
Book-Entry Note on or about the
fifth Business Day preceding the
Maturity of such Book-Entry Note.
On or before Maturity Date, the
Issuer will pay to the Issuing and
Paying Agent, and the Issuing and
Paying Agent in turn will pay to
DTC, the principal amount of such
Note, together with interest and
premium, if any, due at such
Maturity Date, at the times and in
the manner set forth below under
"Manner of Payment." Promptly
after payment to DTC of the
principal and interest due at
Maturity of such Book-Entry Note,
the Issuing and Paying Agent will
cancel such Book-Entry Note in
A-12<PAGE>
accordance with the Issuing and
Paying Agency Agreement and so
advise the Issuer. If any Maturity
of a Book-Entry Note is not a
Business Day, the payment due on
such day shall be made on the next
succeeding Business Day and no
interest shall accrue on such
payment for the period from and
after such Maturity.
MANNER OF PAYMENT. The total
amount of any principal, premium,
if any, and interest due on Book-
Entry Notes on any Interest Payment
Date or at Maturity shall be
transferred by the Issuer to the
Issuing and Paying Agent to an
account designated by the Issuing
and Paying Agent in funds available
for use by the Issuing and Paying
Agent as of 12:00 noon, New York
City time, on such date. The
Issuer will confirm such
instructions in writing to the
Issuing and Paying Agent. Prior to
2:00 p.m., New York City time, on
such date or as soon as possible
thereafter, the Issuing and Paying
Agent will pay (but only from funds
withdrawn from such account) by
separate wire transfer (using
Fedwire message entry instructions
in a form previously specified by
DTC) to an account at the Federal
Reserve Bank of New York previously
specified by DTC, in funds
available for immediate use by DTC,
each payment of interest, principal
and premium, if any, due on a Book-
Entry Note on such date. Thereafter
on such date, DTC will pay, in
accordance with its SDFS operating
procedures then in effect, such
amounts in funds available for
immediate use to the respective
Participants in whose names such
Notes are recorded in the book-
entry system maintained by DTC.
Neither the Issuer nor the Issuing
and Paying Agent shall have any
responsibility or liability for the
A-13<PAGE>
payment by DTC of the principal of,
or premium, if any, or interest on,
the Book-Entry Notes to such
Participants.
WITHHOLDING TAXES. The amount of
any taxes required under applicable
law to be withheld from any
interest payment on a Note will be
determined and withheld by the
Participant, indirect participant
in DTC or other Person responsible
for forwarding payments and
materials directly to the
beneficial owner of such Note.
Settlement Procedures: Settlement Procedures with regard
--------------------- to each Book-Entry Note sold by the
Presenting Agent, as agent of the
Company, will be as follows:
A. The Presenting Agent will
advise the Issuer by telephone
(confirmed in writing) or
telecopy of the following
Settlement information:
1. Taxpayer identification
number of the purchaser.
2. Principal amount of the
Note.
3. Interest rate, and interest
payment dates.
4. Price to public of the
Note.
5. Trade date.
6. Settlement Date (Original
Issue Date).
7. Maturity.
8. Net proceeds to the
Company.
9. Agent's commission.
A-14<PAGE>
10. Redemption provisions, if
any.
B. The Issuer will advise the
Issuing and Paying Agent by
telephone (confirmed in
writing) or telecopy by 10:00
a.m. on the second Business Day
preceding the Settlement Date
of the above settlement
information received from the
Presenting Agent with respect
to the Book-Entry Note
representing such Note.
C. The Issuer will assign a PPN
number to such Note and the
Issuing and Paying Agent will
communicate to DTC through
DTC's Participant Terminal
System, a pending deposit
message specifying the
following settlement
information, which will route
such relevant information to
the Presenting Agent, Standard
& Poor's Ratings Group and
Interactive Data Corporation:
1. The information set forth
in Settlement Procedure A.
2. Identification numbers of
the participant accounts
maintained by DTC on behalf
of the Issuing and Paying
Agent and the Agent.
3. Initial Interest Payment
Date for such Note, number
of days by which such date
succeeds the related Record
Date for DTC purposes and,
if then calculable, the
amount of interest payable
on such Interest Payment
Date (which amount shall
have been confirmed by the
Issuing and Paying Agent).
A-15<PAGE>
4. PPN number of the Book-
Entry Note representing
such Note.
D. The Issuing and Paying Agent
will complete a Book-Entry Note
representing such Note in a
form that has been approved by
the Company, the Agents and the
Issuing and Paying Agent.
E. The Issuing and Paying Agent
will authenticate the Book-
Entry Note representing such
Note.
F. DTC will credit such Note to
the participant account of the
Issuing and Paying Agent
maintained by DTC.
G. The Issuing and Paying Agent
will enter an SDFS deliver
order through DTC's Participant
Terminal System instructing DTC
(i) to debit such Note to the
Issuing and Paying Agent's
participant account and credit
such Note to the participant
account of the Presenting Agent
maintained by DTC and (ii) to
debit the settlement account of
the Presenting Agent and credit
the settlement account of the
Issuing and Paying Agent
maintained by DTC, in an amount
equal to the price of such Note
less such Agent's commission.
Any entry of such a deliver
order shall be deemed to
constitute a representation and
warranty by the Issuing and
Paying Agent to DTC that (i)
the Book-Entry Note
representing such Note has been
issued and authenticated and
(ii) the Issuing and Paying
Agent is holding such Book-
Entry Note pursuant to the Note
Certificate Agreement between
the Issuing and Paying Agent
and DTC.
A-16<PAGE>
H. The Presenting Agent will enter
an SDFS deliver order through
DTC's Participant Terminal
System instructing DTC (i) to
debit such Note to the
Presenting Agent's participant
account and credit such Note to
the participant account of the
Participants maintained by DTC
and (ii) to debit the
settlement accounts of such
Participants and credit the
settlement account of the
Presenting Agent maintained by
DTC, in an amount equal to the
public offering price of such
Note.
I. Transfers of funds in
accordance with SDFS deliver
orders described in Settlement
Procedures G and H will be
settled in accordance with SDFS
operating procedures in effect
on the Settlement Date.
J. Upon receipt of such funds, the
Issuing and Paying Agent will
credit to an account of the
Company identified to the
Issuing and Paying Agent funds
available for immediate use in
the amount transferred to the
Issuing and Paying Agent in
accordance with Settlement
Procedure G.
K. The Presenting Agent will
confirm the purchase of such
Note to the purchaser either by
transmitting to the Participant
with respect to such Note a
confirmation order through
DTC's Participant Terminal
System or by mailing a written
confirmation to such purchaser.
A-17<PAGE>
Settlement Procedures For orders of Notes accepted by the
--------------------- Company, Settlement Procedures "A"
Timetable: through "K" set forth above shall
--------- be completed as soon as possible
but not later than the respective
times (New York City time) set
forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade
date
B 12:00 noon on the trade
date
C 2:00 p.m. on the trade
date
D 3:00 p.m. on the
Business Day before
Settlement Date
E 9:00 a.m. on Settlement
Date
F 10:00 a.m. on
Settlement Date
G-H 2:00 p.m. on the
Settlement Date
I 4:45 p.m. on Settlement
Date
J-K 5:00 p.m. on Settlement
Date
If a sale is to be settled more
than one Business Day after the
trade date, Settlement Procedures
A, B, and C shall be completed as
soon as practicable but in no event
later than 11:00 a.m. and 12:00
noon on the first Business Day
after such sale date but no later
than 2:00 p.m. on the Business Day
before the Settlement Date,
respectively. Settlement Procedure
I is subject to extension in
accordance with any extension of
Fedwire closing deadlines and in
the other events specified in the
SDFS operating procedures in effect
on the Settlement Date.
If settlement of a Book-Entry Note
is rescheduled or canceled, the
Issuing and Paying Agent, if
A-18<PAGE>
notified in time, will deliver to
DTC, through DTC's Participant
Terminal System, a cancellation
message to such effect by no later
than 2:00 pm., New York City time,
on the Business Day immediately
preceding the scheduled Settlement
Date.
Failure to Settle: If the Issuing and Paying Agent
----------------- fails to enter an SDFS deliver
order with respect to a Book-Entry
Note pursuant to Settlement
Procedure G, the Issuing and Paying
Agent may deliver to DTC, through
DTC's Participant Terminal System,
as soon as practicable a withdrawal
message instructing DTC to debit
such Note to the participant
account of the Issuing and Paying
Agent maintained at DTC. DTC will
process the withdrawal message,
PROVIDED that such participant
account contains a principal amount
of the Book-Entry Note representing
such Note that is at least equal to
the principal amount to be debited.
If withdrawal messages are
processed with respect to all the
Notes represented by a Book-Entry
Note, the Issuing and Paying Agent
will mark such Book-Entry Note
"canceled," make appropriate
entries in its records and send
such canceled Book-Entry Note to
the Company. The CUSIP number
assigned to such Book-Entry Note
shall, in accordance with CUSIP
Service Bureau procedures, be
canceled and not immediately
reassigned. If withdrawal messages
are processed with respect to a
portion of the Notes represented by
a Book-Entry Note, the Issuing and
Paying Agent will exchange such
Book-Entry Note for two Book-Entry
Notes, one of which shall represent
the Book-Entry Notes for which
withdrawal messages are processed
and shall be canceled immediately
after issuance, and the other of
which shall represent the other
A-19<PAGE>
Notes previously represented by the
surrendered Book-Entry Note and
shall bear the CUSIP number of the
surrendered Book-Entry Note.
If the purchase price for any Book-
Entry Note is not timely paid to
the Participants with respect to
such Note by the beneficial
purchaser thereof (or a person,
including an indirect participant
in DTC, acting on behalf of such
purchaser), such Participants and,
in turn, the related Agent may
enter SDFS deliver orders through
DTC's Participant Terminal System
reversing the orders entered
pursuant to Settlement Procedures G
and H, respectively. Thereafter,
the Issuing and Paying Agent will
deliver the withdrawal message and
take the related actions described
in the preceding paragraph. If
such failure shall have occurred
for any reason other than default
by the applicable Agent to perform
its obligations hereunder or under
the Placement Agency Agreement, the
Company will reimburse such Agent
on an equitable basis for its loss
of the use of funds during the
period when the funds were credited
to the account of the Company.
Notwithstanding the foregoing, upon
any failure to settle with respect
to a Book-Entry Note, DTC may take
any actions in accordance with its
SDFS operating Procedures then in
effect. In the event of a failure
to settle with respect to a Note
that was to have been represented
by a Book-Entry Note also
representing other Notes, the
Issuing and Paying Agent will
provide, in accordance with
Settlement Procedures D and E, for
the authentication and issuance of
a Book-Entry Note representing such
remaining Notes and will make
appropriate entries in its records.
A-20<PAGE>
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Interest Payments: Interest (if any) on each Note will
----------------- accrue from the Original Issue Date
of such Note, and will be
calculated and paid in the manner
described in such Note.
Unless otherwise provided in the
Issuing and Paying Agency Agreement
or the Notes, the first payment of
interest on any Note originally
issued after a Record Date and on
or before the next succeeding
Interest Payment Date will be made
no earlier than the Interest
Payment Date following the next
succeeding Record Date. Interest
payable at maturity of a Note, or
upon earlier redemption or
repayment, will be payable to the
person to whom the principal of
such Note is payable. All interest
payments for each Interest Payment
Date (excluding interest payments
made on the Maturity Date or upon
the acceleration thereof or on
earlier redemption) will be made by
check mailed to the person entitled
thereto as provided above, or at
the option of the registered
holder, at such other place in the
United States as the registered
holder shall designate to the
Issuing and Paying Agent in
writing, except that a holder of
the equivalent of $10,000,000 or
more in aggregate principal amount
of Notes with the same Interest
Payment Date shall be entitled to
receive such payments in
immediately available funds paid to
an account at a bank in New York,
New York (or other bank consented
to by the Issuer and the Issuing
and Paying Agent), but only if
appropriate payment instructions
have been received in writing by
the Issuing and Paying Agent not
A-21<PAGE>
less than 10 days prior to the
applicable Interest Payment Date
(provided that such bank designated
by the registered holder has
appropriate facilities therefor).
Within five Business Days following
each Record Date, the Issuing and
Paying Agent will provide to the
Issuer a list of interest payments
to be made for each Note on the
next succeeding Interest Payment
Date and the total amount of the
interest payments. The Issuing and
Paying Agent will provide monthly
to the Issuer a list of the
principal, premium, if any, and
interest to be paid on Notes
maturing or being redeemed in the
next succeeding month.
Settlement: The Issuer will instruct the
---------- Issuing and Paying Agent to effect
delivery of each Note no later than
1:00 p.m., New York City time, on
the Settlement Date to the
Presenting Agent for delivery to
the purchaser.
Details for
-----------
Settlement: For each offer to purchase a Note
---------- that is accepted by the Issuer, the
Presenting Agent will provide
(unless provided by the purchaser
directly to the Issuer) by
telephone the following information
to the Issuer:
1. The exact name of the
Registered Owner.
2. The exact address of the
Registered Owner and the
address for delivery, notices
and payments of principal and
interest.
3. The taxpayer identification
number of the Registered Owner.
4. A description of the terms and
provisions of the Notes that
includes the information
identified in Exhibit B to the
Agreement and any other
A-22<PAGE>
information required to
describe such Notes properly.
5. The Issue Price.
6. The Trade Date.
7. The Settlement Date.
8. The Presenting Agent's
commission, determined as
provided in Section 2(a) of
the Agreement.
The Issuer will advise the Issuing
and Paying Agent of the foregoing
information for each offer to
purchase a Note solicited by the
Presenting Agent and accepted by
the Issuer in time for the Issuing
and Paying Agent to prepare and
authenticate the required Note, but
not later than 10:00 a.m. New York
City time on the second Business
Day preceding the Settlement Date.
Before accepting any offer to
purchase a Note to be settled in
less than three Business Days, the
Issuer shall verify that the
Issuing and Paying Agent will have
adequate time to prepare and
authenticate such Note.
After receiving from the Presenting
Agent the details for each offer to
purchase a Note, the Issuer will,
after recording the details and any
necessary calculations, provide
appropriate documentation to the
Issuing and Paying Agent, including
the information provided by the
Presenting Agent necessary for the
preparation and authentication of
such Note. Prior to preparing the
Note for delivery (but in any case
no later than 10:00 a.m. on the
Business Day next preceding the
Settlement Date therefor), the
Issuing and Paying Agent will
confirm the details of such issue
with the Issuer, and the Issuer
will confirm such instruction to
the Presenting Agent, in each case
by telephone, telecopy or telex.
A-23<PAGE>
Deliveries and
--------------
Cash Payment: Upon receipt of appropriate
------------ documentation and instructions with
respect to the Notes constituting a
Tranche, the Issuer will cause the
Issuing and Paying Agent to prepare
and authenticate the form of Note
previously approved by the Issuer,
the Presenting Agent and the
Issuing and Paying Agent and
deliver such Note and a customer
receipt to the purchaser.
If the form of Note is not
pre-printed and four-ply, the
Issuing and Paying Agent shall
deliver a photocopy of such
authenticated Note to the
Presenting Agent and the Issuer and
shall retain one copy. Otherwise,
it shall deliver the copies in the
four-ply Note as follows:
Stub l--For the Presenting
Agent.
Stub 2--For the Issuer.
Stub 3--For the Issuing and
Paying Agent.
Each Note shall be authenticated on
the Settlement Date therefor. The
Issuing and Paying Agent will
authenticate each Note and deliver
it to the Presenting Agent (and
deliver the stubs as indicated
above), all in accordance with
written instructions (or oral
instructions confirmed in writing,
which may be given by telex or
telecopy, on the next Business Day)
from the Issuer.
Upon verification by the Presenting
Agent that a Note has been prepared
and properly authenticated by the
Issuing and Paying Agent and
registered in the name of the
purchaser in the proper principal
amount, payment will be made to the
Issuer by the Presenting Agent the
same day in immediately available
funds. Such payment shall be made
only upon prior receipt by the
A-24<PAGE>
Presenting Agent of immediately
available funds from or on behalf
of the purchaser unless the
Presenting Agent decides, at its
option, exercised in the sole
discretion of such Presenting
Agent, to advance its own funds for
such payment against subsequent
receipt of funds from the
purchaser. The Presenting Agent
shall immediately notify the Issuer
of its decision to advance its own
funds for payment against
subsequent receipt of funds from a
purchaser.
Upon delivery of a Note to the
Presenting Agent, the Presenting
Agent shall promptly deliver such
Note to the purchaser.
In the event any Note is
incorrectly prepared, the Issuing
and Paying Agent shall promptly
issue a replacement Note in
exchange for the incorrectly
prepared Note.
Failure to Settle: If the Presenting Agent, at its own
----------------- option, has advanced its own funds
for payment against subsequent
receipt of funds from a purchaser,
and if such purchaser shall fail to
make payment for the Note on the
Settlement Date therefor, the
Presenting Agent will promptly
notify the Issuing and Paying Agent
and the Issuer by telephone,
promptly confirmed in writing,
which may be given by telex or
telecopy (but no later than the
next Business Day). In such event,
the Issuer shall promptly provide
the Issuing and Paying Agent with
appropriate documentation and
instructions consistent with these
procedures for the return of the
Note to the Issuing and Paying
Agent, and the Presenting Agent
will promptly return the Note to
the Issuing and Paying Agent. Upon
(i) confirmation from the Issuing
A-25<PAGE>
and Paying Agent in writing which
may be given by telex or telecopy)
that the Issuing and Paying Agent
has received the Note and upon (ii)
confirmation from the Presenting
Agent in writing (which may be
given by telex or telecopy) that
the Presenting Agent has not
received payment from such
purchaser (the matters referred to
in clauses (i) and (ii) are
referred to hereinafter as the
("confirmations"), the Issuer will
promptly pay to the Presenting
Agent an amount in immediately
available funds equal to the amount
previously paid by the Presenting
Agent in respect of such Note.
Assuming receipt of such Note by
the Issuing and Paying Agent and of
the confirmations by the Issuer,
such payment will be made on the
Settlement Date if reasonably
practical, and in any event not
later than the Business Day
following the date of receipt of
the Note and the confirmations. If
a purchaser shall fail to make
payment for such Note for any
reason other than the failure of
the Presenting Agent to provide the
necessary information to the Issuer
as described above for settlement
or to provide a confirmation to the
purchaser within a reasonable
period of time as described above
or otherwise to satisfy its
obligations hereunder or in the
Agreement, and if the Presenting
Agent shall have otherwise complied
with its obligations hereunder and
in the Agreement, the Issuer will
reimburse the Presenting Agent for
its loss of the use of funds during
the period when they were credited
to the account of the Issuer.
Immediately upon receipt of the
Note in respect of which the
failure occurred, the Issuing and
Paying Agent will void said Note,
make appropriate entries in its
A-26<PAGE>
records and destroy such Note; and
upon such action, such Note will be
deemed not to have been issued,
authenticated or delivered.
A-27<PAGE>
EXHIBIT B
TERMS AGREEMENT
[Date]
To: CONNECTICUT NATURAL GAS CORPORATION
Subject in all respects to the
terms and conditions of the Placement Agency Agreement (the
"Agreement") dated as of June 14, 1994, among Smith Barney Inc.,
A.G. Edwards & Sons, Inc. and you, the undersigned agrees to
purchase the following Notes of Connecticut Natural Gas
Corporation:
Principal Amount:
Interest Rate:
Maturity Date:
Discount to the Purchaser: ___% of Principal Amount
Purchase Price:
Closing Date and Time:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption [Percentage Reduction]:
Requirements to deliver
the documents specified in
Section 6(a)(ii) of the
Agreement:
Certificate contemplated by
clause (1): [Required/Not
Required]
Opinion contemplated by
clause (2): [Required/Not
Required]
Opinion contemplated by
clause (3): [Required/Not
Required]
Letter contemplated by
clause (4): [Required/Not
Required]
Period during which additional
Notes may not be sold
if not period between trade
date and Closing Date
as specified in Section 4(a)(v) of
the Agreement:
B-1<PAGE>
Other Provisions:
----------------
[SMITH BARNEY
INC.]
[A.G. EDWARDS &
SONS, INC.],
as
Purchaser(s),
By: __________
Name:
Title:
Accepted:
CONNECTICUT NATURAL GAS CORPORATION,
By: ___________________________________
Name:
Title:
B-2<PAGE>
Exhibit C
June __, 1994
Smith Barney Inc.
1345 Avenue of the Americas
New York, New York 10105
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Re: Connecticut Natural Gas Corporation
U.S. $75,000,000
Medium-Term Notes, Series B
-----------------------------------
Dear Sirs:
We have acted as counsel to Connecticut Natural Gas
Corporation, a Connecticut corporation (the "Issuer"), in
connection with the issuance by the Issuer from time to time of
up to U.S. $75,000,000 aggregate principal amount of its Medium-
Term Notes, Series B (the "Notes"), due from one year to thirty
years from date of issuance to be issued pursuant to the Issuing
and Paying Agency Agreement dated as of ___________, 1994 (the
"Issuing and Paying Agency Agreement"), between the Issuer and
Shawmut Bank Connecticut, National Association.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such
documents, corporate records or other instruments as we have
deemed necessary or appropriate for the purposes of this opinion,
including: (a) the Issuing and Paying Agency Agreement; (b) the
form of the Notes; (c) the Placement Agency Agreement, including
t he Procedures annexed thereto, dated as of ___________, 1994
(the "Placement Agency Agreement"), between Smith Barney Inc. and
A.G. Edwards & Sons, Inc. (collectively, the "Placement Agents")
and the Issuer; (d) the Offering Memorandum dated ____________,
C-1<PAGE>
Smith Barney Inc.
A.G. Edwards & Sons, Inc.
June __, 1994
1994 (the "Offering Memorandum"), relating to the Notes, which
includes and incorporates by reference the Issuer's Annual Report
on Form 10-K for the 1993 fiscal year, the Issuer's definitive
proxy statement dated December 22, 1993, for its 1994 annual
meeting of stockholders, the Issuer's Reports on Form 10-Q for
the quarters ended December 31, 1993 and March 31, 1994 and the
Issuer's Current Reports on Form 8-K dated November 23, 1993 and
May 23, 1994 (collectively, the "Exchange Act Documents") as
filed under the Securities Exchange Act of 1934, as amended; (e)
the Certificate of Incorporation and By-laws of the Issuer; (f)
resolutions adopted by the Board of Directors of the Issuer at
meetings held on February 22, 1994 and May 24, 1994; and (g) the
Decision of the Connecticut Department of Public Utility Control
dated May 11, 1994 (Docket No. 94-04-10). The agreements
referred to in (a) and (c) above are herein referred to
collectively as the "Transaction Agreements."
With respect to matters stated herein to be to the best of our
knowledge, we have consulted with officers of the Issuer who, by
reason of their positions, would be expected to have knowledge of
the relevant facts and circumstances, and made such other
investigations as we have deemed necessary or appropriate.
Nothing has come to our attention in the course of such
consultations and investigations which has caused us to believe
that the statements so made herein as to the best of our
knowledge are untrue, incorrect or misleading. We have not
searched the dockets of any court or agency for litigation or
proceedings involving the Issuer.
We express no opinion as to the laws of any jurisdiction other
than the laws of Connecticut and the Federal laws of the United
States. We have made no inquiry into and express no opinion as
to the laws of other jurisdictions. As you are aware, the
Placement Agency Agreement purports to be governed by the laws of
the State of New York. For purposes of this opinion we have
assumed, without investigation, that the laws of the State of New
York applicable to that document and the transactions
contemplated thereby are the same in all respects as the
applicable laws of the State of Connecticut.
For purposes of our opinion concerning the good standing of the
Issuer in the State of Connecticut, we have relied upon a
certificate of the Secretary of the State of the State of
Connecticut. Based upon the foregoing, and subject to the
limitations and qualifications set forth herein, we are of the
opinion that:
C-2<PAGE>
Smith Barney Inc.
A.G. Edwards & Sons, Inc.
June __, 1994
1. The Issuer has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Connecticut and has full corporate power and authority to own its
properties and conduct its business as presently conducted, to
execute and deliver the Transaction Agreements and the Notes and
to perform its obligations under such agreements and the Notes.
2. The Transaction Agreements have been duly authorized,
executed and delivered by the Issuer and constitute legal, valid
and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their respective terms.
3. The Issuer has duly authorized the execution, delivery,
issuance, offering and sale of the Notes and performance of its
obligations thereunder in accordance with their respective terms
and conditions, subject to the determination of certain terms of
the Notes by officers of the Issuer authorized by the Issuer to
establish such terms. Each Note, when completed, executed,
authenticated and delivered as described in the Issuing and
Paying Agency Agreement and the Placement Agency Agreement
against payment of the consideration therefor, will constitute a
legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms and will entitle
its registered owner to the benefits of the Issuing and Paying
Agency Agreement.
4. The Issuing and Paying Agency Agreement and the form of the
Notes attached thereto conform in all material respects to the
descriptions thereof contained in the Offering Memorandum.
5. The execution, delivery and performance of the Transaction
Agreements and the execution, delivery, issuance, offering and
sale of the Notes and the performance of the obligations under
the Notes and such agreements will not conflict with, result in a
breach of, constitute a default under or result in the creation
or imposition of any lien, charge or encumbrance on any property
or assets of the Issuer or its subsidiaries pursuant to the
Issuer's Certificate of Incorporation, By-laws or, to the best of
our knowledge, any indenture, mortgage, loan agreement, note or
similar financial instrument to which the Issuer or any of its
subsidiaries is a party or to which any of its or their property
is subject or any statute, regulation or order or judgement
applicable to the Issuer of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Issuer or any of its subsidiaries.
C-3<PAGE>
Smith Barney Inc.
A.G. Edwards & Sons, Inc.
June __, 1994
6. Assuming that the Notes are offered, sold and issued in
compliance with the terms and conditions of the Issuing and
Paying Agency Agreement, the Placement Agency Agreement and the
Procedures contemplated therein, no approval, authorization,
consent or other order of, or filing with, any United States
Federal or Connecticut State governmental authority is legally
required in connection with the execution, delivery and
performance by the Issuer of the Transaction Agreements or the
issuance of the Notes, except such as may be required under
applicable state securities laws in connection with the offer and
sale of the Notes, and it is not necessary in connection with the
offering, sale and issuance of the Notes to register the Notes
under the Securities Act of 1933 or qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939;
provided, however, that the approval of the Connecticut
Department of Public Utility Control is required in connection
with the issuance of the Notes and has been obtained and is in
full force and effect with respect to the general terms and
conditions of the program for the issuance of Notes during the
period ending September 30, 1998 subject to the requirement for
further approval of said Department to proposed terms for the
specific issuances of Notes as may be filed by the Issuer with
said Department from time to time.
7. The Issuer is neither a "holding company" under the Public
Utility Holding Company Act of 1935 nor a "subsidiary company"
nor an "affiliate" of a "holding company" within the meaning of
these terms as defined in said Act. The Issuer is not subject to
regulation by the Federal Energy Regulatory Commission ("FERC")
under the Natural Gas Act except with respect to certain
interstate sales for resale as to which the Company has a blanket
certificate of public conveyance and authority from FERC.
8. Except as may be set forth or arising out of facts
disclosed in the Offering Memorandum or incorporated by reference
therein, to the best of our knowledge, there are no legal or
governmental actions, suits or proceedings before any court or
governmental or other regulatory agency or body of any
jurisdiction or any arbitrator now pending or threatened against
the Issuer, its subsidiaries or any of its or their properties,
other than such actions, suits or proceedings that, considered in
the aggregate, would not reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Issuer or the
ability of the Issuer to perform its obligations under the
Transaction Agreements and the Notes.
C-4<PAGE>
Smith Barney Inc.
A.G. Edwards & Sons, Inc.
June __, 1994
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Offering
Memorandum or the Exchange Act Documents and take no
responsibility therefor, except to the extent referred to under
Paragraph 4 above and in this paragraph. In the course of the
preparation by the Issuer of the Offering Memorandum, excluding
the Exchange Act Documents, we participated in conferences with
certain officers and employees of the Issuer and with its
accountants. We also participated in the preparation by the
Issuer of its Annual Report on Form 10-K for its fiscal year
ended 1993, its Quarterly Reports for the quarters ended December
31, 1993 and March 31, 1994, and its Proxy Statement respecting
its annual meeting of stockholders held in 1994. Based upon our
examination of the Offering Memorandum, the Exchange Act
Documents, our investigation in connection with the preparation
of the Offering Memorandum (excluding those Exchange Act
Documents referred to above as to which we did not participate in
the preparation thereof), and our participation in the
conferences referred to above, we have no reason to believe that
the Offering Memorandum (including the Exchange Act Documents)
contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading, provided, however, that we express no view
with respect to any financial statements contained in the
Offering Memorandum or the Exchange Act Documents or any
financial information derived therefrom.
The foregoing is subject to the following:
a. The enforceability of the
Transaction Agreements and the Notes is subject to procedural due
process and subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other laws
affecting creditor's rights generally from time to time in effect
and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
b. No opinion is expressed as to the
enforceability of (i) provisions related to self-help, (ii)
provisions which purport to establish evidentiary standards,
(iii) provisions related to waiver of remedies (or the delay or
omission of enforcement thereof), disclaimers, releases of legal
or equitable rights, discharge of defenses, or liquidated
damages, (iv) provisions releasing, exculpating or exempting a
C-5<PAGE>
Smith Barney Inc.
A.G. Edwards & Sons, Inc.
June __, 1994
party from, or requiring indemnification of a party for,
liability for its own action or inaction to the extent the action
or inaction involves negligence, recklessness, willful
misconduct, unlawful conduct or conduct against public policy, or
(v) any particular remedy where another remedy has been selected.
c. Provisions in the Transaction
Agreements and the Notes which permit the holders of the Notes to
make determinations or to take actions may be subject to
requirements that such determinations be made or actions be taken
on a reasonable basis and in good faith.
Each of you may rely on this opinion in connection with the
transactions contemplated by the Transaction Agreements, but it
may not be relied upon by any other person or for any other
purpose whatsoever, without in each instance obtaining our prior
written consent.
Very truly yours,
MURTHA, CULLINA,
RICHTER AND PINNEY
By: _______________
Willard F. Pinney, Jr.
A Partner of the Firm
C-6<PAGE>
EXHIBIT D
CONNECTICUT NATURAL GAS CORPORATION
U.S. $____________
Medium-Term Notes, Series B
With Maturities From One Year to
Thirty Years From Date of Issue
Amendment to Placement Agency Agreement
---------------------------------------
New York, New York
[Date]
Smith Barney Inc.
1345 Avenue of the Americas
New York, New York 10105
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, MO 63103
Dear Sirs:
The Placement Agency Agreement
dated ____________, 1994 (the "Agreement"), between Connecticut
Natural Gas Corporation, a Connecticut corporation (the
"Issuer"), and you is hereby amended to increase the aggregate
principal amount of Notes (as defined in the Agreement) at any
time outstanding to up to U.S. $_______.
[The documents referred to in the
second sentence of Section 12 of the Agreement shall be delivered
simultaneously herewith.]
In all other respects the Agreement
shall remain in full force and effect.
This amendment to the Agreement may
be executed in counterparts, and the executed counterparts shall
together constitute a single instrument.
If the foregoing is in accordance
with your understanding of our agreement, please sign and return
to us the enclosed duplicate hereof, whereupon this letter shall
D-1<PAGE>
represent a binding agreement between the Issuer and each of you.
This letter shall not constitute a binding agreement unless and
until it is executed by the Issuer and each of you.
Very truly yours,
CONNECTICUT NATURAL GAS
CORPORATION,
by: _______________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
SMITH BARNEY INC.,
by: ___________________________________
Name:
Title:
A.G. Edwards & SONS, INC.,
by: ___________________________________
Name:
Title:
D-2<PAGE>
EXECUTION COPY
ISSUING AND PAYING AGENCY AGREEMENT
-----------------------------------
This AGREEMENT is made as of June 14, 1994 between Shawmut Bank
Connecticut, National Association, a national banking association
maintaining its principal corporate office at 777 Main Street, Hartford,
Connecticut 06115 (the "Issuing and Paying Agent"), and Connecticut Natural
Gas Corporation, a corporation having its principal place of business at
100 Columbus Boulevard, Hartford, Connecticut 06103 (the "Company"). Except
as otherwise indicated, capitalized terms used herein will have the meanings
attributed to them in the form of Note attached hereto as Exhibit I.
In consideration of the mutual promises hereinafter contained, the
Issuing and Paying Agent and the Company hereby covenant and agree as
follows:
ARTICLE I
APPOINTMENT
-----------
1. The Company hereby appoints the Issuing and Paying Agent to
perform the duties with respect to the Notes hereinafter and in the Notes
set forth.
2. The Issuing and Paying Agent hereby accepts such appointment and
agrees to perform the duties hereinafter and in the Notes set forth.
ARTICLE II
ISSUANCE OF NOTES
-----------------
1. The Company has authorized and may from time to time issue its
Medium-Term Notes, Series B, in an aggregate principal amount not exceeding
U.S. $75,000,000 (the "Notes"), pursuant to this Agreement, and proposes to
sell the same from time to time directly or indirectly in accordance with a
Placement Agency Agreement dated June 14, 1994 (the "Placement Agency
Agreement") between the Company and Smith Barney Inc. and A.G. Edwards &
Sons, Inc. (each an "Agent"; collectively, the "Agents"). Although the
Company has authorized the issuance of up to $75,000,000 aggregate principal
amount of Notes, the Company may, from time to time, without the consent of
any holder of Notes, increase the amount it may issue. The Company shall
give notice, promptly, in writing to the Issuing and Paying Agent upon any
such increase in the aggregate principal amount of the Notes issuable
hereunder.<PAGE>
2. The Notes are not being registered under the Securities Act of
1933, as amended (the "Securities Act"), in reliance upon the exemption from
registration provided by Section 4(2) thereof and Regulation D promulgated
thereunder ("Regulation D"), which exempts transactions by an issuer not
involving any public offering. The Notes are being offered only to
institutions that qualify as "accredited investors," as defined in Rule
501(a)(1),(2),(3) or (7) under Regulation D ("Accredited Investors"), or
"qualified institutional buyers," as defined in Rule 144A under the
Securities Act ("Qualified Institutional Buyers") in minimum amounts of
$100,000 for any single purchase. The $100,000 minimum purchase applies to
Notes of each maturity and may not be spread among Notes of different
maturities. If the purchaser is a non-United States bank fiduciary acting
for the account of one or more investors, the amount purchased for each
investor must be at least $100,000, each such investor must be a Qualified
Institutional Buyer or an Accredited Investor, and the purchaser must have
provided the Agents or the Company with a written statement to such effect.
3. The Company may also sell Notes to an Agent as principal for its
own account at a price to be agreed upon at the time of sale. Such Notes
may be resold at prevailing market prices, or at prices related thereto, at
the time of such resale, as determined by such Agent.
4. During the period this Agreement is in effect, there will be
delivered to the Issuing and Paying Agent executed Notes (signed and sealed
manually or by facsimile on behalf of the Company), to be held in
safekeeping by the Issuing and Paying Agent for the account of the Company.
If an officer of the Company whose signature is on a Note no longer holds
such office at the time the Issuing and Paying Agent delivers the Note in
accordance with this Agreement, the Note will be valid nevertheless. In
addition, the Company will advise the Issuing and Paying Agent in writing of
those persons handling administrative responsibilities with whom the Issuing
and Paying Agent is to communicate regarding offers to purchase Notes and
the details of their delivery and will promptly advise the Issuing and
Paying Agent in writing if any such person shall cease to handle such
responsibilities or of the authorization of any additional person to handle
such responsibilities.
5. The Notes will be in registered form, substantially in the form
attached hereto as Exhibit I and which is a part hereof. The Notes will
have maturities of from one (1) year to up to thirty (30) years and each
Note will contain (subject to paragraph 3 of Article V) the legend regarding
restrictions on transfer substantially as set forth on the form of Note
attached as Exhibit I.
<PAGE>
6. When any Note is delivered to the Issuing and Paying Agent, the
Issuing and Paying Agent will acknowledge receipt by signing and returning a
receipt to the Company.
7. The Issuing and Paying Agent will authenticate Notes for original
issue in an aggregate principal amount not to exceed U.S. $75,000,000 upon
receipt of instructions therefor from officers and agents of the Company
subject to the terms of this Article II. A Note will not be valid until the
Issuing and Paying Agent manually signs the certificate of authentication on
the Note, which will be conclusive evidence that such Note has been duly
authenticated hereunder and is entitled to the benefits hereof.
8. From time to time the Company will provide issuance instructions
by telephone, telecopy or telex, promptly confirmed in writing, to the
Issuing and Paying Agent, and the Issuing and Paying Agent will withdraw the
necessary number of Notes for completion and authentication in accordance
with such instructions and will complete, countersign for authentication and
issue the Notes on or prior to the settlement dates included in the
instructions provided in the following paragraph.
9. The instructions from the Company to the Issuing and Paying Agent
will include (a) the exact name in which the Note is to be registered (the
person in whose name a Note is registered is hereinafter referred to as a
"Holder" and all such Holders as the "Holders"), (b) the exact address of
the Holder and address for delivery, notices and payments of principal and
interest, (c) the taxpayer identification number of the Holder
(collectively, subparagraphs a, b and c hereof are referred to herein as the
"Registration Instructions"), (d) the principal amount of the Note, which
will be $100,000 or an integral multiple of $1,000 in excess thereof (an
"authorized denomination") and the PPN Number, if any, of the Note, (e) the
sale date, (f) the settlement date, (g) the maturity date, (h) the interest
rate and interest payment dates, with any related information to be
indicated on the Note, (i) the proceeds net of the Agent's commission (if
any), (j) the name and address of the appropriate Agent's clearing
operation, if any, or other location where delivery is to be made (the
"Delivery Instructions") (collectively, subparagraphs d, e, f, g, h, i and j
hereof are referred to as the "Trade Instructions") and (k) such other
information as the Issuing and Paying Agent may reasonably request from time
to time (collectively, subparagraphs (a) through (k) hereof are referred to
as the "Instructions"). If delivery is to be made in Hartford, such
delivery will be at Shawmut Bank Connecticut, National Association, 777 Main
Street, Hartford, Connecticut 06115, Attention: Corporate Trust Operations.
<PAGE>
10. The Settlement Date with respect to any offer to purchase Notes
accepted by the Company will be, subject to Section 6 of the Placement
Agency Agreement, the fifth Business Day next succeeding the date of
acceptance unless otherwise agreed by the purchaser and the Company and will
be specified upon acceptance of such offer. The Company will not accept any
offer to purchase a Note that will have a Settlement Date in less than three
Business Days without verifying by telephone, telecopy or telex, promptly
confirmed in writing, that the Issuing and Paying Agent will have adequate
time to prepare and authenticate such Note. As used herein, "Business Day"
means any day, other than a Saturday or Sunday, on which banks in Hartford,
Connecticut are not required or authorized by law to close.
11. The Company will provide the Issuing and Paying Agent with Trade
and Registration Instructions for each offer to purchase a Note solicited by
an Agent in time for the Issuing and Paying Agent to prepare and
authenticate the required Note, but not later than 10:00 a.m., Hartford
time, on the second Business Day preceding the Settlement Date. The Company
will, after receiving the details for each offer from an Agent and recording
the details and any necessary calculations, provide appropriate
documentation to the Issuing and Paying Agent, including the information
provided by such Agent necessary for the preparation and authentication of
each Note. The Issuing and Paying Agent will confirm the details of each
Note prior to preparing the Note for delivery (but in any case no later than
10:00 a.m. on the Business Day next preceding the Settlement Date therefor).
The Issuing and Paying Agent will effect delivery of each Note no later than
1:00 p.m., Hartford time, on the Settlement Date to the applicable Agent for
delivery to the purchaser.
12. The Issuing and Paying Agent will provide to the Company, within
five Business Days following each Record Date, a list of interest payments
to be made for each Note on the next succeeding Interest Payment Date and
the total amount of the interest payments. The Issuing and Paying Agent
will provide monthly to the Company a list of the principal and interest to
be paid on Notes maturing or being redeemed in the next succeeding month.
13. Each instruction given to the Issuing and Paying Agent in
accordance with this Article II will constitute a representation and
warranty to the Issuing and Paying Agent by the Company that the issuance
and delivery of the Notes have been duly and validly authorized by the
Company and that when completed, authenticated and delivered pursuant hereto
and payment has been received therefor by the Company, the Notes will
constitute the valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally or by general principles
of equity.
<PAGE>
14. Whenever the Company and an Agent determine that the Company shall
sell Notes directly to the Agent, such sale will be made in accordance with
the Placement Agency Agreement and any supplemental agreement relating
thereto (the "Terms Agreement"). The Trade and Registration Instructions
for Notes sold to an Agent pursuant to any Terms Agreement will be agreed to
between the Company and the Agent in the respective Terms Agreement. Any
Terms Agreement entered into between the Company and any Agent will be
provided to the Issuing and Paying Agent as provided in paragraph 11 of this
Article II. If there is no such Terms Agreement, the Trade and Registration
Instructions specified in this Agreement shall apply. Notwithstanding the
above, the Trade and Registration Instructions and/or all time frames for
Notes sold to an Agent pursuant to a Terms Agreement shall be subject to the
limitations set forth in this Article II.
15. Notwithstanding the foregoing, the Company and the Issuing and
Paying Agent may enter into an agreement with The Depository Trust Company,
New York, New York ("DTC") or other depository as may be subsequently
designated by the Company (the "Depository") whereby Notes will be issued in
book-entry form (the "Book-Entry Notes") represented by one or more global
Notes (the "Global Notes") that will be registered in the name of a nominee
of the Depository. The Global Notes will be deposited with or on behalf of
the Depository by the Company. Global Notes will be issued in substantially
the same form as Exhibit I and will not be exchangeable for Notes in the
name of beneficial owners except as provided for in this Agreement. In the
event that Global Notes are issued, the Issuing and Paying Agent will be
responsible for performing the obligations and duties set forth in this
Agreement with respect to the Global Notes as well as complying with the
Administrative Procedures attached as Exhibit A to the Placement Agency
Agreement. To the extent the Administrative Procedures conflict with the
provisions of this Agreement, the provisions of this Agreement shall
control.
16. Any Global Note authenticated and delivered hereunder shall bear a
legend in substantially the following form:
"This Note is a Global Note within the meaning of the Issuing and
Paying Agency Agreement hereinafter referred to and is registered in the
name of the Depository or a nominee of the Depository. This Note is
exchangeable for Notes registered in the name of a person other than the
Depository or its nominee only in the limited circumstances described in the
Issuing and Paying Agency Agreement, and no transfer of this Note (other
than a transfer of this Note as a whole by the Depository to a nominee of
the Depository or by a nominee of the Depository to the Depository or to
another nominee of the Depository) may be registered except in such limited
circumstances."
<PAGE>
ARTICLE III
DEPOSIT OF FUNDS
----------------
1. On or prior to 12:00 noon, Hartford time, on each payment date,
whether an interest payment date or a date on which principal is to be paid,
the Company will deposit, or cause to be deposited, with the Issuing and
Paying Agent immediately available funds in an amount equal to the aggregate
amount to be paid by the Issuing and Paying Agent on such payment date. In
the event the amount deposited with respect to a payment date is less than
the sum of the aggregate amounts specified in the statements provided to the
Company pursuant to Article II, the Issuing and Paying Agent will promptly
notify the Company, and will effect no payments with respect to such payment
date until such discrepancy has been resolved.
2. At the Company's option, subject to the execution of a trust
agreement satisfactory to the Company and the Issuing and Paying Agent,
either (i) the Company shall be deemed to have been Discharged (as defined
below) from its obligations with respect to any Note or Notes on the 124th
day after the applicable conditions set forth below have been satisfied, or
(ii) the Company shall cease to be under any obligation to comply with any
term, provision, covenant or condition set forth in Article VII hereof or in
connection with any Event of Default at any time after the applicable
conditions set forth below have been satisfied:
(a) the Company shall have deposited or caused to be deposited
irrevocably with the Issuing and Paying Agent as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holder or Holders, (i) money in an amount, or (ii) U.S.
Government Obligations (as defined below), which through the payment of
interest, principal and premium, if any, in respect thereof in
accordance with its terms will provide (without any reinvestment of
such interest, principal or premium), not later than one day before the
due date of any payment, money in an amount, or (iii) a combination of
(i) and (ii), sufficient, in the opinion (with respect to (ii) and
(iii)) of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Issuing and Paying Agent at or prior to the time of such deposit,
to pay and discharge each installment of principal and interest on,
such Note or Notes on the dates such installments of interest or
principal are due or such Note or Notes are redeemable, if applicable,
pursuant to paragraph 2 of Article IV below;
<PAGE>
(b) in case such Note or Notes are to be redeemed on any date
prior to the date such Notes mature (the "Maturity Date"), the Company
shall have given to the Issuing and Paying Agent an irrevocable notice
requiring redemption of such Note or Notes on such date (the
"Redemption Date") and the Company shall have given to the Issuing and
Paying Agent in form satisfactory to the Issuing and Paying Agent
irrevocable instructions to provide notice of redemption of such Note
or Notes prior to said date; and in the event such Note or Notes are
not to be redeemed within the 60 days next succeeding the date of such
deposit with the Issuing and Paying Agent, the Company shall have given
the Issuing and Paying Agent in form satisfactory to it irrevocable
instructions to provide, as soon as practicable, a notice to the Holder
or Holders of such Note or Notes that the deposit required by this
paragraph 2 has been made with the Issuing and Paying Agent and stating
such Maturity Date or Redemption Date upon which moneys are to be
available for the payment of the principal of, premium, if any, and
interest on such Note or Notes;
(c) no Event of Default or event (including such deposit) which,
with notice or lapse of time, or both, would become an Event of Default
with respect to such Note or Notes shall have occurred and be
continuing on the date of such deposit;
(d) the Company shall have paid or duly provided for payment of
all amounts then due to the Issuing and Paying Agent pursuant to this
Agreement; and
(e) the Company shall deliver to the Issuing and Paying Agent an
opinion of counsel to the effect that the deposit and related Discharge
will not cause the Holders to recognize income, gain, or loss for
federal income tax purposes.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under,
the Note or Notes and to have satisfied all the obligations relating to the
Note or Notes (and the Issuing and Paying Agent, at the expense of the
Company, shall execute proper instruments acknowledging the same), except
(A) the rights of the Holder to receive, from the trust fund described in
clause (a) above, payment of the principal of and the interest on such Note
or Notes when such payments are due and (B) the Company's obligations, if
any, with respect to the Note or Notes under paragraph 3 of this Article
III.
<PAGE>
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of an entity controlled
or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America, which, in
either case under clauses (i) or (ii) are not callable or redeemable at the
option of the issuer thereof.
3. All moneys and U.S. Government Obligations deposited with the
Issuing and Paying Agent pursuant to paragraph 2 of this Article III in
respect of the Note or Notes shall be held in trust and applied by it, in
accordance with the provisions of the Note or Notes, to the payment, either
directly or through any paying agent (including the Company acting as its
own paying agent) as the Issuing and Paying Agent may determine, to the
Holder, of all sums due and to become due thereon for principal and
interest, if any, but such money need not be segregated from other funds
except to the extent required by law. The Issuing and Paying Agent shall be
under no liability for interest on any funds received by it hereunder except
as otherwise agreed with the Company. Any funds deposited with the Issuing
and Paying Agent for payment of principal, premium, if any, and interest in
respect of the Note or Notes and remaining unclaimed for two years after the
date upon which the last payment of principal or interest on any Note or
Notes to which such deposit relates shall have become due and payable (or,
if later, two years after the date of the last such deposit relating to such
Note or Notes), shall be repaid to the Company by the Issuing and Paying
Agent on demand, and the Holder to which such deposit related who is
entitled to receive payment shall thereafter look only to the Company for
the payment thereof, and all liability of the Issuing and Paying Agent with
respect to such money shall thereupon cease.
4. After the Maturity Date and payment of the principal of and
interest on the Note or Notes for which money or U.S. Government Obligations
have been deposited pursuant to paragraph 2 of this Article III, the Issuing
and Paying Agent shall promptly pay or return to the Company upon request
any money and U.S. Government obligations held by it that are not required
for the payment of the principal of and interest on the Note or Notes.
5. If the Issuing and Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with paragraph 2 of this Article
III by reason of any legal proceeding or by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under the Note or
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to paragraph 2 of this Article III until such time as the Issuing
and Paying Agent is permitted to apply all such money or U.S. Governmental
Obligations in accordance with paragraph 2 of this Article III.
<PAGE>
ARTICLE IV
PAYMENTS
--------
1. The Issuing and Paying Agent will effect payment of interest to
the Holder on the Record Date on the respective interest payment dates
provided in the Notes. Interest payments will be made semiannually on
January 15 and July 15 (each an "Interest Payment Date") in each year
commencing on the first Interest Payment Date next succeeding the date the
Note is issued (the "Original Issue Date"), unless the Original Issue Date
occurs between a Record Date, and the next succeeding Interest Payment Date,
in which case payments will commence on the Second Interest Payment Date
succeeding the Original Issue Date. Interest payments will be computed and
paid on the basis of a 360-day year comprised of twelve 30-day months. If
an Interest Payment Date falls on a day which is not a Business Day,
interest payable with respect to such Interest Payment Date will be paid on
the next succeeding Business Day with the same force and effect as if made
on such Interest Payment Date and no interest will accrue with respect to
such payment for the period from and after such Interest Payment Date. The
Issuing and Paying Agent will make such payment by mailing a check, payable
to the Holder as of the Record Date, to the address of such Holder, in
accordance with the information shown on the register maintained by the
Issuing and Paying Agent or, at the option of the Holder, at such other
place in the United States of America as the Holder will designate to the
Issuing and Paying Agent in writing. Notwithstanding the foregoing, upon
receipt of instructions from the Holder of an aggregate principal amount of
at least $10,000,000 of Notes having the same Interest Payment Date, not
less than ten days prior to such Interest Payment Date, the Issuing and
Paying Agent will make such payment of interest by the wire transfer of
immediately available funds to such account at a bank in Hartford,
Connecticut or New York, New York (or other bank consented to by the
Company) as the Holder will have designated, provided that such bank has
appropriate facilities therefor. Once such wire transfer instructions have
been received by the Issuing and Paying Agent, they shall remain in effect
unless (i) the Issuing and Paying Agent is notified of a change thereof not
less than ten days prior to an Interest Payment Date; or (ii) the Holder no
longer holds an aggregate principal amount of at least $10,000,000 of Notes
having the same Interest Payment Dates.
2. The Issuing and Paying Agent will effect payment of principal,
premium, if any, and interest due on the Redemption Date or at the Maturity
Date in immediately available funds by wire transfer to such account at a
bank in Hartford, Connecticut or New York, New York, (or such other bank
consented to by the Company) as the Holder shall have designated, except for
payment to a Holder for which appropriate instructions for payment as
<PAGE>
provided above have not been received by the Issuing and Paying Agent by not
later than ten (10) days prior to the date of payment, in which case such
payment will be made by check mailed by the Issuing and Paying Agent to the
address of the Holder appearing in the Register. In such cases where wire
transfer instructions have been received by the Issuing and Paying Agent,
they shall remain in effect unless (i) the Issuing and Paying Agent is
notified of a change thereof not less than ten days prior to an Interest
Payment Date; or (ii) the Holder no longer holds an aggregate principal
amount of at least $10,000,000 of Notes having the same Interest Payment
Dates. Payment of principal, premium, if any, and interest due on the
Redemption Date or the Maturity Date on the Note will only be made against
presentation of the Notes at the office of the Issuing and Paying Agent
maintained in accordance with paragraph 7 of this Article IV or at such
other office or agency of the Company as the Company shall designate.
3. In the case of all Global Notes, the Issuing and Paying Agent will
make all interest payments and payments of principal, premium, if any, and
interest due on the Redemption or Maturity Date by wire transfer of
immediately available funds to such account at a bank in New York City (or
other bank consented to by the Company) as the Depository shall have
designated, provided that such bank has appropriate facilities therefor.
4. Notwithstanding any provision elsewhere contained herein, payments
by the Issuing and Paying Agent will be made only out of amounts deposited
pursuant to paragraph 1 of Article III hereof with the Issuing and Paying
Agent with respect to such payment.
5. If the Company defaults: (i) on a payment of principal on any Note
when due; or (ii) on a payment of interest on any Note for 10 days after the
date such payment is due; or (iii) under any other Event of Default defined
in the Note and such default continues without having been timely cured, the
Holder may, at its option, by written notice to the Company and the Issuing
and Paying Agent, declare the Note and accrued interest thereon to be
immediately due and payable.
6. The Issuing and Paying Agent will not charge, impose, collect or
receive, from the Holder of any Note, any fee or consideration for any
services performed in connection with any payment on such Note to such
Holder or owner, and any charge including postage, will be charged to, and
promptly paid by, the Company.
7. The Issuing and Paying Agent will at all times maintain an office
or agency where Notes may be presented for payment in Hartford, Connecticut
and New York, New York.
<PAGE>
ARTICLE V
REGISTRATION, EXCHANGE AND TRANSFER
-----------------------------------
1. As registrar and authenticating agent for the Notes, the Issuing
and Paying Agent will: (i) authenticate the Notes originally issued and the
Notes substituted for those Notes originally issued; (ii) at all times
maintain an office for the registration (and, subject to the restrictions
regarding transfers, for the transfer) of the Notes in Hartford,
Connecticut; (iii) keep and maintain a current register of the names and
addresses of Holders and such other records as reasonably required for the
performance of its duties hereunder and (iv) perform such related duties as
may be necessary. Such records and register will upon request be available
for inspection by authorized officers, employees, and agents of the Company
during the normal business hours of the Issuing and Paying Agent. Upon the
termination of this Agreement, the Issuing and Paying Agent will deliver to
the Company such records in the form and manner kept by the Issuing and
Paying Agent on such date.
2. In order to preserve the exemption from registration under the
Securities Act, the Notes will be issued and sold on the condition that no
resale or other transfer of a Note or any interest therein will be made
prior to the date that is three (3) years after the later of (a) the
Original Issue Date or (b) the last date the Company or any of its
affiliates was the beneficial owner of such Note unless the Note is
transferred: (i) to an Agent or the Company; or (ii) through an Agent or by
an Agent acting as principal to an institutional investor approved as an
Accredited Investor or a Qualified Institutional Buyer by such Agent; or
(iii) directly to an institutional investor approved as an Accredited
Investor or a Qualified Institutional Buyer by the Company in a transaction
approved by the Company; or (iv) through a dealer other than the Agents to
an institutional investor approved as an Accredited Investor or a Qualified
Institutional Buyer by the Company in a transaction approved by the Company;
or (v) directly to a Qualified Institutional Buyer in a transaction that
meets the requirements of Rule 144A under the Securities Act, subject in
each case to the disposition of the purchaser's property being at all times
within its control. Approval by an Agent or the Company of a transfer of a
Note, to the extent required as described above, will be granted only if the
transfer is made to a Qualified Institutional Buyer or an Accredited
Investor and is in accordance with the other requirements applicable to an
initial sale or the requirements of Rule 144A under the Securities Act. Any
transfer described in clause (iii), (iv) or (v) above including a
transaction effectuated by or through the Depository's book-entry system
requires the submission to the Issuing and Paying Agent of the certificate
of transfer on the Note duly completed or a duly completed transfer
instrument substantially in the form attached as Exhibit II to this
<PAGE>
Agreement. Notwithstanding the preceding sentence, the Issuing and Paying
Agent shall not effect any transfer requested in such certificate of
transfer or transfer instrument unless first receiving approval from the
Company or the Company's counsel. The Issuing and Paying Agent shall
provide a copy of such certificate of transfer or transfer instrument to the
Company and to each Agent as soon as practicable following its receipt of
such certificate of transfer or transfer instrument. The Company or the
Company's counsel shall approve or disapprove (stating the reasons for any
disapproval) of such transfer within one (1) Business Day after receiving
such certificate of transfer or transfer instrument. In the event the
Issuing and Paying Agent shall not receive such approval or disapproval
within such one (1) Business Day, it shall as soon as practicable on the
next succeeding Business Day request such approval or disapproval from the
Company. In the further event that such approval or disapproval is not
received by the Issuing and Paying Agent within two (2) Business Days after
receiving such certificate of transfer or transfer instrument, then the
Issuing and Paying Agent shall return the certificate of transfer or
transfer instrument and any related Note or Notes for the reason that no
approval of the requested transfer was received and refer the person
submitting such request to the Company. If the requested transfer shall be
disapproved by the Company or its counsel, the Issuing and Paying Agent
shall return the certificate of transfer or transfer instrument and any
related Note or Notes to the person requesting such transfer for the reason
that the requested transfer has been disapproved and provide the reasons
therefor.
3. The Notes will bear legends stating that they have not been
registered under the Securities Act and are subject to the above
restrictions on transfer. By purchasing Notes, an investor shall be deemed
to have agreed to these restrictions on transfer and to have represented to
the Company and the Agents that it is an Accredited Investor or a Qualified
Institutional Buyer and that it is acquiring such Notes for its own account
(and not for the account of others) or as a fiduciary for others, for
investment, and not with a view to, or for sale in connection with, the
public distribution thereof in any transaction that would be in violation of
federal or state securities laws, subject, however, to its right to resell
or otherwise transfer such Note pursuant to the restrictions and procedures
set forth herein. Notwithstanding the foregoing, Notes no longer subject to
the restrictions on transfer set forth above may be freely resold and may be
surrendered to the Issuing and Paying Agent for new Notes not bearing the
legend setting forth the above restriction on transfer.
4. The Notes and related documentation may be amended or supplemented
from time to time by the Company and the Issuing and Paying Agent without
the consent of any Holder to modify the restrictions on and procedures for
resale and other transfers of the Notes to reflect any change in applicable
<PAGE>
law or regulation (or the interpretation thereof) or provide alternative
procedures in compliance with applicable law and practices relating to the
resale or other transfer of restricted securities generally. Each Holder
will be deemed, by the acceptance of such Note, to have agreed to any such
amendment or supplement.
5. With respect to the resale or transfer of Notes in accordance with
paragraph 2 of this Article V, the Issuing and Paying Agent hereby agrees
that it will: (i) upon presentation of a Note, with a certificate of
transfer or duly completed transfer instrument described in paragraph 2 of
this Article V which has been approved by an Agent, the Company or its
counsel, transfer the title of such Note; (ii) enter the name of the
transferee on the books kept by the Issuing and Paying Agent for purposes of
listing registered owners of the Notes; (iii) cancel and retain each Note
surrendered for a payment of principal upon its making a payment which
reduces the unpaid principal amount of such Note to zero; (iv) maintain in
safekeeping any blank Note forms delivered to the Issuing and Paying Agent
by the Company; and (v) deliver any Notes cancelled hereunder to the Company
from time to time, and following any such delivery the Company will have the
sole responsibility for any failure thereafter to produce any such Note.
6. (a) Upon surrender of any Notes for exchange at the office of the
Issuing and Paying Agent, the Issuing and Paying Agent will
authenticate, deliver and register, in the name of the Holder such new
Notes for the same aggregate principal amount of any authorized
denomination as requested by the registered owner. All such exchanges
of Notes will be free of charge, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge in
connection therewith. The Issuing and Paying Agent will not be
required to register the transfer of any Note which has been called for
redemption (or any part of a Note which has been called for redemption)
during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of such redemption and ending at the
close of business on the day of such mailing.
(b) Upon receipt of evidence and indemnity satisfactory to it and
the Company, the Issuing and Paying Agent will authenticate, deliver
and register Notes, in exchange for or in lieu of Notes that have
become mutilated, defaced, destroyed, stolen or lost. Prior to the
issuance of any such new Note, the Company may require the payment from
the registered owner thereof of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith.
<PAGE>
(c) All Notes issued in exchange for or in lieu of Notes that
have become mutilated, defaced, destroyed, stolen or lost or upon any
exchange or registration of transfer will be valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits,
and subject to the same terms and conditions, under this Agreement, as
the Notes in exchange for or in lieu of which they were issued or the
Notes surrendered upon any such exchange or registration of transfer,
as the case may be.
(d) The Company and Issuing and Paying Agent may treat the person
in whose name any Note is registered as the owner of such Note for all
purposes whatsoever, whether or not such Note will be overdue, and
neither the Company nor the Issuing and Paying Agent will be affected
by notice to the contrary.
(e) Notes outstanding at any time will be all Notes authenticated
by the Issuing and Paying Agent except for those cancelled by it and
those described in this paragraph. A Note ceases to be outstanding
when the Company or an affiliate of the Company holds the Note.
If a Note is replaced pursuant to (b) above, it ceases to be
outstanding unless the Issuing and Paying Agent and the Company receive
proof satisfactory to them that the replaced Note is held by a bona
fide purchaser.
7. Notwithstanding the foregoing and except as otherwise provided in
or pursuant to this Agreement, any Global Note shall be exchangeable for
Global Notes registered in the name of any person other than the Depository
or its nominee only if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the Global Notes or if at
any time the Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and the Company within 90 days
after receiving such notice or becoming aware that the Depository is no
longer so registered, does not appoint a successor Depository, (ii) the
Company executes and delivers a written request to the Issuing and Paying
Agent to the effect that the Global Notes shall be so exchangeable and the
transfer thereof so registrable or (iii) there shall have occurred and be
continuing an Event of Default or an event which after notice or lapse of
time would be an Event of Default. Upon the occurrence in respect of any
Global Note of any one or more of the conditions specified in clauses (i),
(ii) or (iii) of the preceding sentence (A) such Global Note may be
exchanged, in accordance with the foregoing provisions of this paragraph 7
of this Article V, for a Note which is not a Global Note and (B) in
accordance with the foregoing provisions of this paragraph 7 of this Article
V, the transfer of such Global Note may be registered in the name of such
persons (including persons other than the Depository and its nominees) as
<PAGE>
such Depository shall designate, and the new Note or Notes authenticated and
delivered upon such registration of transfer shall not bear the legend
specified in paragraph 16 of Article II. Notwithstanding any other
provision of this Agreement, except for any Note authenticated and delivered
in exchange for, or upon registration of transfer of, a Global Note pursuant
to the preceding sentence, any Note authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, any Global
Note shall also be a Global Note and shall bear the legend specified in
paragraph 16 of Article II.
8. The Issuing and Paying Agent will make all Federal and state tax
filings concerning payments hereunder as will be required of it by
applicable law, and will be responsible for the collection or withholding of
taxes due on such payments to the extent required of it by applicable law.
ARTICLE VI
REDEMPTION
----------
1. The Company may, if provided for on the Note, after the Redemption
Date redeem, at par or at a premium expressed as a percentage of par as may
be provided for in the Note (the "Redemption Price"), such Note in whole or
in part in increments of $1,000 (provided that the remaining principal will
be at least $100,000). If the Company determines to redeem any such Notes
pursuant to the provisions thereof, it will notify the Issuing and Paying
Agent of the Redemption Date and the particular Notes or portions thereof to
be redeemed not more than 60 nor less than 30 days prior to the Redemption
Date. At the time and in the manner provided in the Notes to be redeemed,
the Company will cause the Issuing and Paying Agent to notify each Holder to
be redeemed, which notice will identify the Notes, or portions thereof, to
be redeemed and will state: the Redemption Date; the Redemption Price; the
name and address of the Issuing and Paying Agent; that Notes called for
redemption must be surrendered to the Issuing and Paying Agent to collect
the Redemption Price; that interest on Notes called for redemption ceases to
accrue on and after the Redemption Date; and any other information required
by such Notes.
2. Upon surrender of a Note that is redeemed in part, the Issuing and
Paying Agent will authenticate for the Holder a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
3. In the event that the Company determines to redeem any Global
Note, the Company will cause the Issuing and Paying Agent to notify the
Depository not more than 60 nor less than 30 days prior to the Redemption
Date. The notice to the Depository will identify the Notes or portions
<PAGE>
thereof to be redeemed and will state: the Redemption Date; the Redemption
Price; that Global Notes called for redemption must be surrendered to the
Issuing and Paying Agent to collect the Redemption Price; the name and
address of the Issuing and Paying Agent; that interest on Notes called for
redemption ceases to accrue on and after the Redemption Date; and any other
information required by the Notes or by the letter of representations dated
June 14, 1994 (the "Letter of Representations") between the Company, the
Issuing and Paying Agent and the Depository.
ARTICLE VII
COVENANTS
---------
1. The Company will not consolidate or merge with or into another
corporation, or convey, transfer or lease its properties and assets
substantially as an entirety to any person unless (i) the surviving,
resulting or transferee corporation, as the case may be, is organized under
the laws of any domestic jurisdiction, (ii) if such surviving, resulting or
transferee corporation is not the Company, such corporation expressly
assumes, by an instrument in writing delivered to the Issuing and Paying
Agent prior to the effective date of such transaction, the Company's
obligations with respect to the Notes and in such instrument agrees to
perform the covenants associated therewith and (iii) after giving effect to
the transaction (and treating indebtedness which becomes an obligation of
the Company as a result of the transaction as having been incurred by the
Company at the time of the transaction and treating any Lien upon property
of the Company which arises as a result of the transaction as a Lien created
at the time of the transaction), no Event of Default and no event which
after notice or lapse of time or both would become an Event of Default shall
have occurred and be continuing.
2. The Company will not create or permit to continue in existence any
Lien or charge of any kind upon any Property or assets of the Company unless
the Notes then outstanding and the Medium-Term Notes, Series A, of the
Company then outstanding, shall be equally and ratably secured with (or
prior to) any other obligation or indebtedness so secured, except:
(a) leases or subleases of Property in the ordinary course of
business of the Company, or of Property which, in the opinion of the
Board of Directors of the Company, is not needed in the operation of
the Company's business;
(b) Liens created within 12 months after the acquisition or
construction of Property to secure or to provide for the payment of the
purchase or construction price of such Property and Liens existing on
any Property at the time of acquisition or certain pre-existing Liens
<PAGE>
and conditional sales agreements and/or title retention agreements with
respect to any subsequently acquired Property, provided that the
aggregate principal amount of the indebtedness secured by all such
Liens on any particular Property may not exceed the cost (including
improvements thereon) of such Property to the Company, and that such
Lien(s) do not extend to other Property owned prior to such acquisition
or construction;
(c) Liens securing indebtedness incurred to finance or refinance
the acquisition of the Property subject to the Lien and in respect of
which the creditor has no recourse against the Company except recourse
to such Property, or to the proceeds of any sale or lease of such
Property or both;
(d) Liens on Property of the Company in favor of the United
States or any State thereof, or any department, governmental body,
agency or instrumentality or political subdivision of any such
jurisdiction, to secure partial, progress, advance, or other payments
pursuant to any contract or statute relating thereto;
(e) deposits with or security interests given to a governmental
agency as a condition to maintain self-insurance or participate in any
fund, or in connection with workmen's compensation, unemployment
insurance, old age pensions, or other social security, or to share in
any privileges or other benefits available to corporations
participating in any such arrangements, or for any other purpose
required by law or regulation promulgated by said governmental agency
as a condition to the transaction of any business or the exercise of
any privilege or license, or the deposit of assets of the Company with
any surety company or clerk of any court or in escrow, as collateral in
connection with, or in lieu of, any bond on appeal by the Company from
any judgment or in connection with any other judicial proceedings by or
against the Company;
(f) (i) Liens for taxes, assessments or other governmental
charges or levies which are not yet due or are payable without penalty
or are being contested in good faith and against which reserves deemed
adequate by the Company have been established, provided that
foreclosure or similar proceedings have not been commenced (unless
cured by payment), (ii) Liens of any judgment and other similar Liens
arising in connection with court proceedings, provided such Lien is
discharged or the execution or other enforcement of such Lien is
effectively stayed within six months of the creation of such Lien,
(iii) undetermined Liens or charges incident to construction, (iv)
mechanics' or other like Liens arising in the ordinary course of
business in respect of obligations which are not overdue or which are
<PAGE>
being contested by the Company in good faith, or deposits to obtain the
release of such Liens, (v) immaterial encumbrances consisting of zoning
restrictions, licenses, easements and restrictions on the use of real
property and minor defects and irregularities in the title thereto;
(g) banker's liens and rights of offset in the holders of
indebtedness such as commercial paper or monies of the Company
deposited with such lender in the ordinary course of business;
(h) refundings, replacements or extensions of any permitted Liens
not exceeding the principal amount of indebtedness so refunded,
replaced, or extended at the time of such refunding, replacement, or
extension and covering the same Property theretofore securing the same;
(i) deposits or pledges as security for the performance of any
contract or undertaking in the ordinary course of business but
unrelated to the borrowing of money or to the securing of indebtedness;
(j) Liens existing on the date of this Agreement with respect to
indebtedness or other obligations of the Company on the date of this
Agreement;
(k) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company or a Subsidiary
or at the time of acquisition of the assets of a Person as an entirety,
or substantially as an entirety, by the Company or a Subsidiary; and
(l) in addition to Liens permitted under clauses (a) through (k)
above, Liens with respect to an aggregate amount of indebtedness of the
Company not in excess of an amount equal to 10% of the Total
Capitalization of the Company.
For purposes of this paragraph 2 of Article VII the following
definitions shall apply: (i) "Lien" shall mean any interest in property
securing an obligation owed to, or a claim by, a Person other than the owner
of the Property, whether such interest is based on the common law, statute
or contract, and including but not limited to the security interest or lien
arising from a mortgage, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property and, in the case of any
Security, warrants or options to acquire such Security. For the purposes of
this provision, the Company or a Subsidiary shall be deemed to be the owner
of any Property which it has acquired or holds subject to a conditional sale
<PAGE>
agreement, a Capitalized Lease or other arrangement pursuant to which title
to the Property has been retained or vested in some other Person for
security purposes; (ii) "Person" shall mean an individual, partnership,
corporation, trust, unincorporated organization, or government or agency or
political subdivision thereof; (iii) "Property" shall mean any interest in
any kind of property or asset whether real, personal or mixed, or tangible
or intangible; (iv) "Security" shall have the meaning as in Section 2(1) of
the Securities Act; (v) "Total Capitalization" shall mean the sum of Funded
Debt, Net Worth, and, as recorded in the Company's most recent consolidated
financial statements prepared in accordance with generally accepted
accounting principles, preferred and preference stock; (vi) "Capitalized
Lease" shall mean any lease of Property which in accordance with generally
accepted accounting principles (after eliminating all intercompany
obligations among the Company and its Subsidiaries) should be capitalized on
the Company's balance sheet or for which the amount of the asset and
liability thereunder, as if so capitalized, should be disclosed in a note to
such balance sheet; (vii) "Funded Debt" shall mean that portion of Total
Debt of the Company which matures more than one year after its creation,
excluding payments due on such portion of Total Debt within one year of any
date of determination; (viii) "Net Worth" shall mean consolidated
shareholder's equity of the Company as recorded in its most recent
consolidated financial statements prepared in accordance with generally
accepted accounting principals; (ix) "Subsidiary" shall mean a corporation
or other Person of which the Company owns or controls, directly or
indirectly, more than 50% of the Voting Stock or equivalent interest; (x)
"Voting Stock" shall mean securities of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions); (xi) "Total Debt" shall mean the sum
of (exclusive of Subsidiary indebtedness and after eliminating all
obligations of the Company to any Subsidiary) (a) all indebtedness of the
Company for borrowed money or indebtedness which has been incurred in
connection with the acquisition of assets, including all payments in respect
thereof that are required to be made from the date of any determination of
Total Debt, (b) all Capitalized Rentals, and (c) the amount by which the
aggregate value of all Guarantees of Total Debt of others exceeds 25% of Net
Worth; (xii) "Capitalized Rentals" shall mean, as of the date of any
determination, the amount at which the aggregate Net Rental Payments due and
to become due under all Capitalized Leases under which the Company is a
lessee would be reflected as a liability on the balance sheet of the
Company; (xiii) "Net Rental Payments" shall mean the sum of the rental and
other payments required to be paid in such period by the Company, as lessee
under any Capitalized Leases, not including, however, any amounts required
to be paid by such lessee (whether or not designated as rental or additional
<PAGE>
rental) on account of maintenance and repairs, insurance, taxes assessments,
water rates or similar charges required to be paid by such lessee thereunder
or any amounts required to be paid by such lessee thereunder contingent upon
the amount of sales, maintenance and repairs, insurance, taxes, assessments,
water rates or similar charges; (xiv) "Guarantees" shall mean all
obligations of the Company (after eliminating all intercompany obligations
among the Company and its Subsidiaries), guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other
Person (the "primary obligor") in any manner (other than an endorsement for
collection or deposit in the ordinary course of business), whether directly
or indirectly, including, with respect to any note or lease receivable or
account receivable sold with recourse, the amount for which the Company may
be liable, and obligations incurred through an agreement, contingent or
otherwise, by the Company (a) to purchase such indebtedness or obligation or
any Property or assets constituting security therefor, (b) to advance or
supply funds (1) for the purchase or payment of such indebtedness or
obligation, or (2) to maintain working capital or other balance sheet
condition or any income statement condition or otherwise to advance or make
available funds for the purchase or payment of such indebtedness or
obligation, (c) to lease Property or to purchase Securities or other
Property or services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the primary obligor to make
payment of the indebtedness or obligation, or (d) otherwise to protect the
owner of the indebtedness or obligation of the primary obligor against loss
in respect thereof. A guarantee in respect of any indebtedness for money
borrowed shall be deemed to be indebtedness equal to the principal amount of
such indebtedness for money borrowed which has been guaranteed, and a
guarantee in respect of any other obligation or liability or any dividend
shall be deemed to be indebtedness equal to the maximum aggregate amount of
such liability or dividend.
ARTICLE VIII
REPORTS
-------
1. Upon the occurrence of any Event of Default described in the Notes
or any event which with notice or lapse of time or both, would become such
an Event of Default, the Company will promptly deliver to the Issuing and
Paying Agent an officer's certificate signed by the President, any Senior
Vice President, the Secretary or the Treasurer setting forth the details
thereof and the action the Company has taken or proposed to be taken with
respect thereto.
2. Upon receipt of a certificate indicating the existence of an Event
of Default described in the Notes (or any event which, with notice or lapse
of time would become such an Event of Default) or upon receipt of a notice
<PAGE>
from a Holder or the Company that an Event of Default exists, the Issuing
and Paying Agent will promptly notify the Holders of the existence thereof
with a description thereof in reasonable detail and indicating that a list
of names and addresses of each other Holder and the principal amount of
Notes held by such Holder (to the extent the Issuing and Paying Agent has
such information) may be obtained from the Issuing and Paying Agent upon
request. Upon receiving such a request, the Issuing and Paying Agent will
promptly transmit such a list to the Holder requesting the same.
3. The Issuing and Paying Agent will render to the Company, upon a
request in writing, a statement of all money received and disbursed by the
Issuing and Paying Agent pursuant to this Agreement for payment of
principal, premium if any, and interest on the Notes. The Issuing and
Paying Agent will also provide such other information about the performance
of its duties under this Agreement as the Company may reasonably request in
writing.
4. For so long as any of the Notes are outstanding, the Company will
provide to the Issuing and Paying Agent and any Holder and to any
prospective purchaser of such Notes designated by a holder thereof, upon the
request of such Holder or prospective purchaser in connection with a
transfer or proposed transfer pursuant to Rule 144A, any information
required to be provided to such Holder or prospective purchaser to comply
with the conditions set forth in Rule 144A as in effect as of the date such
Notes shall have been first issued (together with any such information added
by an amendment to Rule 144A after such date, to the extent such information
can be provided without unreasonable additional expense to the Company).
ARTICLE IX
CONCERNING THE ISSUING AND PAYING AGENT
---------------------------------------
1. The Issuing and Paying Agent will have no duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation will
be implied in this Agreement against the Issuing and Paying Agent. Without
limiting the foregoing, the Issuing and Paying Agent shall have no
responsibility to monitor or enforce the Company's compliance with Article
VII of this Agreement.
2. The Issuing and Paying Agent makes no representations with respect
to the validity or sufficiency of the Notes, or the use or application of
the proceeds of the sale or distribution thereof, and will incur no
liability with respect to the foregoing.
<PAGE>
3. When acting under this Agreement, the Issuing and Paying Agent is
acting solely as an agent of the Company and does not assume any obligation
or relationship of agency or trust for any of the owners or Holders, except
that funds held by the Issuing and Paying Agent for payment on the Notes
will be held in trust as provided in this Agreement.
4. The Company will pay to the Issuing and Paying Agent for its
performance hereunder (i) its reasonable out-of-pocket expenses (including
counsel fees and expenses) incurred in connection with this Agreement,
including, without limitation, those described or referred to in paragraph 5
of Article IV hereof, and (ii) such compensation as may mutually be agreed
upon in writing by the Company and the Issuing and Paying Agent.
5. The Company will indemnify and hold harmless the Issuing and
Paying Agent and its duly authorized agents and each person who controls the
Issuing and Paying Agent within the meaning of either the Securities Act or
the Securities Exchange Act of 1934 from and against any and all claims,
demands, expenses (including reasonable counsel fees subject to the
restrictions below) and liabilities of any kind and every nature which the
Issuing and Paying Agent may sustain or incur or which may be asserted
against the Issuing and Paying Agent as a result of any action taken or
omitted by the Issuing and Paying Agent hereunder in connection with its
entering into this Agreement and carrying out its duties hereunder so long
as such action or omission is without negligence or willful misconduct. The
Issuing and Paying Agent shall, promptly after receipt of notice of any
claim or demand, notify the Company if a claim in respect thereof is to be
made against the Company under this paragraph 5 of Article IX. The
indemnities set forth above will survive delivery of and payment for the
Notes.
6. The Issuing and Paying Agent may resign its appointment as Issuing
and Paying Agent hereunder by providing the Company with not less than
thirty (30) days written notice, provided that the Issuing and Paying Agent
will continue to perform its duties hereunder until a successor is
appointed. The Company may remove the Issuing and Paying Agent upon not
less than thirty (30) days notice, in which case the Issuing and Paying
Agent will continue to perform its duties hereunder until a successor is
appointed.
7. If the Issuing and Paying Agent resigns or is removed or if a
vacancy exists in the office of the Issuing and Paying Agent for any reason,
then the Company will promptly appoint a successor Issuing and Paying Agent.
If a successor Issuing and Paying Agent has not been so appointed by the
Company within thirty (30) days of the delivery of a notice of resignation
or removal of the Issuing and Paying Agent, then the Issuing and Paying
Agent may petition any court of competent jurisdiction for the appointment
of a successor Issuing and Paying Agent.
<PAGE>
A successor Issuing and Paying Agent will deliver a written acceptance
of its appointment to the retiring Issuing and Paying Agent and to the
Company. Immediately thereafter, the retiring Issuing and Paying Agent will
transfer all property held by it as Issuing and Paying Agent to the
successor Issuing and Paying Agent, the resignation or removal of the
retiring Issuing and Paying Agent will then become effective, and the
successor Issuing and Paying Agent will have all the rights, powers and
duties of the Issuing and Paying Agent under this Agreement. A successor
Issuing and Paying Agent will mail notice of its succession to each Holder.
ARTICLE X
GENERAL
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1. The Company and the Issuing and Paying Agent may modify, amend or
supplement this Agreement or the Notes without the consent of any Holder,
for the purpose of (i) adding to the covenants of the Company for the
benefit of the Holders, (ii) surrendering any right or power conferred upon
the Company, (iii) securing the Notes pursuant to the requirements of the
Notes or otherwise, (iv) evidencing the succession of another corporation to
the Company and the assumption by such successor of the covenants and any
obligations of the Company contained in this Agreement and in the Notes in
accordance with the terms of this Agreement and the Notes, (v) correcting or
supplementing any defective provision contained in the Notes or in this
Agreement in a manner which does not adversely affect the interests of any
Holder or (vi) making any modification of the terms and conditions of the
Notes or any other provision of this Agreement in any manner which the
Company and the Issuing and Paying Agent may determine and which does not
adversely affect the interests of any Holder. All other modifications,
amendments or supplements of this Agreement and the terms of the Notes may
be made by the Company and the Issuing and Paying Agent, and the observance
of any of the terms of Notes may be waived, with (and only with) the written
consent of the holders of 66-2/3% in principal amount of all the Notes at
the time outstanding (exclusive of Notes then owned by the Company, any
Subsidiaries and any Affiliates) provided that no such modification or
amendment of the Notes or the Agreement, without the consent of 100% of the
Holders of the Notes then outstanding, may change the maturity of any Note
or any installment of interest thereon or reduce the principal amount
thereof or the interest thereon or reduce said percentage of the Holders of
the Notes then outstanding required for consents, amendments or waivers.
Notwithstanding the foregoing, the Company will not propose or agree to any
modification, amendment, or supplement of this Agreement without receiving
prior written consent of the Agents.
<PAGE>
2. None of the Company, the Agents, the Issuing and Paying Agent or
any other agent of the Issuing and Paying Agent or the Company will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Note
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests, and they shall be fully protected in acting
or refraining from acting on any information provided by the Depository.
3. Notwithstanding the foregoing, with respect to any Global Note,
nothing herein shall prevent the Company, the Issuing and Paying Agent, the
Agents or any agent of the Company or the Issuing and Paying Agent from
giving effect to any written certification, proxy or other authorization
furnished by a Depository or impair, as between the Depository and holders
of beneficial interests in any Global Note, the operation of customary
practices governing the exercise of the rights of the Depository (or its
nominee) as Holder of such Global Note.
4. The Holders are intended third-party beneficiaries of this
Agreement. The Holders will have the right, except as provided in Article
IX, to demand that the Issuing and Paying Agent or the Company enforce the
terms of this Agreement and, upon the failure of either party to enforce its
rights under this Agreement, the Holders may proceed directly against the
remaining party to enforce such rights.
5. Any notice, request for instructions, or other instrument in
writing authorized or required by this Agreement to be given to either party
will be in writing, and effective only on receipt, or (but only where
specifically provided) by telephone and will be mailed, delivered,
telecopied and confirmed at:
For the Company: Connecticut Natural Gas Corporation, 100 Columbus
Boulevard, P.O Box 1500, Hartford, Connecticut 06144-1500, Attention: James
P. Bolduc, Senior Vice President -Financial Services and Chief Financial
Officer, telephone (203) 727-3424.
For the Issuing and Paying Agent: Shawmut Bank Connecticut, National
Association, 777 Main Street, Hartford, Connecticut 06115, Attention:
Corporate Trust Administration, telephone (203) 986-4424; facsimile (203)
986-7920.
6. This Agreement: (a) may not be amended or modified, subject to
paragraph 1 of this Article X, in any manner except by a written agreement
executed by both parties; (b) will extend to and be binding upon the parties
hereto and their respective successors; and (c) will be governed by and
construed in accordance with the laws of the State of Connecticut.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunto duly authorized,
as of the day and the year first above written.
CONNECTICUT NATURAL GAS CORPORATION
By: _______________________________
Title: ____________________________
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
By: _______________________________
Title: ____________________________
<PAGE>
THIS MEDIUM-TERM NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND SALES OR OTHER TRANSFERS HEREOF
MAY BE MADE ONLY TO ACCREDITED INVESTORS AS DEFINED IN RULE
501(a)(1),(2),(3) or (7) UNDER THE SECURITIES ACT ("ACCREDITED INVESTORS")
OR QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT ("QUALIFIED INSTITUTIONAL BUYERS"), APPROVED BY SMITH BARNEY
INC. AND A.G. EDWARDS & SONS, INC. (EACH AN "AGENT" AND TOGETHER, THE
"AGENTS") OR BY CONNECTICUT NATURAL GAS CORPORATION (THE "COMPANY") IN
TRANSACTIONS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT. BY ITS
ACCEPTANCE OF THIS NOTE, THE PURCHASER REPRESENTS AND AGREES THAT IT IS AN
ACCREDITED INVESTOR OR A QUALIFIED INSTITUTIONAL BUYER AND THAT THIS NOTE IS
BEING ACQUIRED FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS
A FIDUCIARY FOR OTHERS FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE IN
CONNECTION WITH, THE PUBLIC DISTRIBUTION HEREOF IN ANY TRANSACTION THAT
WOULD BE IN VIOLATION OF FEDERAL OR STATE SECURITIES LAWS, AND THAT ANY
RESALE OR OTHER TRANSFER HEREOF OR ANY INTEREST HEREIN PRIOR TO THE DATE
THAT IS THREE YEARS AFTER THE LATER OF (A) ITS ORIGINAL DATE OF ISSUE OR (B)
THE LAST DATE ON WHICH THE COMPANY OR ANY OF ITS AFFILIATES WAS THE
BENEFICIAL OWNER HEREOF WILL BE MADE ONLY (1) TO AN AGENT OR THE COMPANY,
(2) THROUGH AN AGENT OR BY AN AGENT ACTING AS PRINCIPAL TO AN INSTITUTIONAL
INVESTOR APPROVED AS AN ACCREDITED INVESTOR OR QUALIFIED INSTITUTIONAL BUYER
BY SUCH AGENT, (3) DIRECTLY TO AN INSTITUTIONAL INVESTOR APPROVED AS AN
ACCREDITED INVESTOR OR A QUALIFIED INSTITUTIONAL BUYER APPROVED BY THE
COMPANY IN A TRANSACTION APPROVED BY THE COMPANY, (4) THROUGH A DEALER OTHER
THAN AN AGENT TO AN INSTITUTIONAL INVESTOR APPROVED AS AN ACCREDITED
INVESTOR OR A QUALIFIED INSTITUTIONAL BUYER BY THE COMPANY IN A TRANSACTION
APPROVED BY THE COMPANY, OR (5) DIRECTLY TO A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT, SUBJECT TO IN EACH CASE THE DISPOSITION OF THE PURCHASER'S
PROPERTY BEING AT ALL TIMES WITHIN ITS CONTROL. APPROVAL BY AN AGENT OR THE
COMPANY OF A TRANSFER OF A NOTE, TO THE EXTENT REQUIRED AS DESCRIBED ABOVE,
WILL BE GRANTED ONLY IF THE TRANSFER IS MADE TO A QUALIFIED INSTITUTIONAL
BUYER OR AN ACCREDITED INVESTOR AND IN ACCORDANCE WITH THE OTHER
REQUIREMENTS APPLICABLE TO AN INITIAL SALE OF NOTES OR THE REQUIREMENTS OF
RULE 144A UNDER THE SECURITIES ACT. ANY TRANSFER DESCRIBED IN CLAUSE (3),
(4) OR (5) ABOVE INCLUDING A TRANSACTION EFFECTUATED BY OR THROUGH THE
DEPOSITORY'S BOOK-ENTRY SYSTEM REQUIRES THE SUBMISSION TO THE ISSUING AND
PAYING AGENT (AS DEFINED HEREIN) OF THE CERTIFICATE OF TRANSFER CONTAINED
HEREIN DULY COMPLETED OR A DULY COMPLETED TRANSFER INSTRUMENT SUBSTANTIALLY
IN THE FORM OF THE CERTIFICATE OF TRANSFER. THE COMPANY SHALL NOT RECOGNIZE
ANY RESALE OR OTHER TRANSFER, OR ATTEMPTED RESALE OR OTHER TRANSFER, OF THIS
NOTE NOT MADE IN COMPLIANCE WITH THE FOREGOING PROVISIONS. THIS NOTE AND
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RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF
THIS NOTE TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE
INTERPRETATION THEREOF) OR PROVIDE ALTERNATIVE PROCEDURES IN COMPLIANCE WITH
APPLICABLE LAW AND PRACTICES RELATING TO THE RESALE OR OTHER TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS NOTE SHALL BE DEEMED,
BY THE ACCEPTANCE OF THIS NOTE, TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE ISSUING AND PAYING
AGENCY AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. THIS NOTE IS EXCHANGEABLE
FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE ISSUING AND
PAYING AGENCY AGREEMENT, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER
OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR
BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR TO ANOTHER NOMINEE OF
THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
I - 2<PAGE>
REGISTERED CONNECTICUT NATURAL GAS CORPORATION PRINCIPAL AMOUNT
No. FX- $
Medium-Term Note, Series B
ORIGINAL ISSUE DATE: INTEREST RATE: MATURITY DATE:
REDEMPTION DATE:
REDEMPTION PRICE:
OTHER TERMS:
CONNECTICUT NATURAL GAS CORPORATION, a Connecticut corporation, for
value received, hereby promises to pay to
________________________________________________________________________
________________________________________________________________________
or registered assigns, the principal sum of ___________________________
_________________________________________________________________DOLLARS
on the date the note matures (the "Maturity Date") specified above (except
to the extent redeemed prior to the Maturity Date), and to pay interest
thereon at the Interest Rate per annum specified above, until the principal
hereof is paid or duly made available for payment, semiannually on January
15 and July 15 (each an "Interest Payment Date") in each year commencing on
the first Interest Payment Date next succeeding the Original Issue Date
specified above, unless the Original Issue Date occurs between a Record
Date, as defined below, and the next succeeding Interest Payment Date, in
which case commencing on the second Interest Payment Date succeeding the
Original Issue Date, to the registered holder of this Note (the "Holder") on
the Record Date with respect to such Interest Payment Date, and on the
Maturity Date (or any Redemption Date as provided herein). Interest on this
Note will accrue from the most recent Interest Payment Date to which
interest has been paid or duly provided for or, if no interest has been
paid, from the Original Issue Date specified above, until the principal
hereof has been paid or duly made available for payment. If the Maturity
Date (or any Redemption Date) or an Interest Payment Date falls on a day
which is not a Business Day, as defined below, principal (and premium, if
any) or interest payable with respect to such Maturity Date (or Redemption
Date) or Interest Payment Date will be paid on the next succeeding Business
Day with the same force and effect as if made on such Maturity Date (or
I - 3<PAGE>
Redemption Date) or Interest Payment Date, as the case may be, and no
interest shall accrue with respect to such payment for the period from and
after such Maturity Date (or Redemption Date) or Interest Payment Date. The
interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, subject to certain exceptions, be paid to the
Holder at the close of business on the Record Date for such interest, which
shall be the first day of the month (whether or not a Business Day), of such
Interest Payment Date; provided, however, that interest payable on the
Maturity Date (or any Redemption Date) will be payable to the Person to whom
the principal hereof shall be payable. As used herein, "Business Day" means
any day, other than a Saturday or Sunday, on which banks in Hartford,
Connecticut are not required or authorized by law to close.
Payments of principal, premium, if any, and interest shall be made in
such coin or currency of the United States as at the time of payment is
legal tender for the payment of public and private debts. Payments of
interest, other than interest payable at the Maturity Date, or any earlier
Redemption Date, will be made by check mailed to the Holder at the address
shown in the Register maintained by the Issuing and Paying Agent at its
office for such purpose, or at the option of the Holder, at such other place
in the United States of America as the Holder shall designate to the Issuing
and Paying Agent in writing. Notwithstanding the foregoing, upon receipt of
written instructions by the Issuing and Paying Agent from a Holder having an
aggregate principal amount of at least $10,000,000 with the same Interest
Payment Date not later than ten (10) days prior to such Interest Payment
Date, the Issuing and Paying Agent will make such payment of interest by
wire transfer of immediately available funds to such account at a bank in
Hartford, Connecticut or New York, New York (or other bank consented to by
the Company) as such Holder shall have designated for such purpose, provided
such bank shall have appropriate facilities therefor. Once such wire
transfer instructions have been received by the Issuing and Paying Agent,
they shall remain in effect unless (i) the Issuing and Paying Agent is
notified of a change thereof not less than ten days prior to an Interest
Payment Date; or (ii) the Holder no longer holds an aggregate principal
amount of at least $10,000,000 of Notes having the same Interest Payment
Date.
The principal amount hereof, premium, if any, and interest due on the
Redemption Date or at the Maturity Date will be paid on or after the
Redemption Date or at the Maturity Date in immediately available funds by
wire transfer to such account at a bank in Hartford, Connecticut or New
York, New York (or such other bank consented to by the Company) as such
Holder shall have designated, except for the payment to a Holder for which
appropriate instructions for payment as provided above have not been
received by the Issuing and Paying Agent by not later than ten (10) days
prior to the related date of payment, in which case such payment shall be
made by check mailed by the Issuing and Paying Agent to the Person entitled
I - 4<PAGE>
thereto at such Person's address appearing in the Register. Once such wire
transfer instructions have been received by the Issuing and Paying Agent,
they shall remain in effect unless (i) the Issuing and Paying Agent is
notified of a change thereof not less than ten days prior to an Interest
Payment Date; or (ii) the Holder no longer holds an aggregate principal
amount of at least $10,000,000 of Notes having the same Interest Payment
Date. Payment of principal, premium, if any, and interest due on the
Redemption Date or the Maturity Date on the Note shall only be made against
presentation and surrender of this Note at the office of the Issuing and
Paying Agent maintained for that purpose in Hartford, Connecticut or at such
other office or agency of the Company as the Company shall designate.
In the case of all Global Notes, the Issuing and Paying Agent will make
all interest payments and payments of principal, premium, if any, and
interest due on the Redemption or Maturity Date by wire transfer of
immediately available funds to such account at a bank in New York City (or
other bank consented to by the Company) as the Depository shall have
designated, provided that such bank has appropriate facilities therefor.
I - 5<PAGE>
Medium-Term Note
This Note is one of a duly authorized issue of Medium-Term Notes having
maturities from one year to 30 years from the date of issue (the "Notes") by
the Company. The Notes are issuable under an Issuing and Paying Agency
Agreement, dated as of June 14, 1994 (the "Issuing and Paying Agency
Agreement"), between the Company and Shawmut Bank Connecticut, National
Association, as Issuing and Paying Agent (the "Issuing and Paying Agent"),
which term includes any successor Issuing and Paying Agent under the Issuing
and Paying Agency Agreement. The Issuing and Paying Agency Agreement may be
amended from time to time in accordance with the terms thereof. In acting
under the Issuing and Paying Agency Agreement, the Issuing and Paying Agent
is acting solely as agent of the Company and does not assume any obligation
or relationship of agency or trust for any of the Holders, except that any
funds held by the Issuing and Paying Agent for payment on this Note shall be
held in trust as provided in the Issuing and Paying Agency Agreement. The
terms of individual Notes may vary with respect to interest rates, issue
dates, maturity dates, redemption dates and otherwise, all as provided in
the Issuing and Paying Agency Agreement.
Copies of the Issuing and Paying Agency Agreement and other related
documents are on file with the Issuing and Paying Agent at its principal
office in Hartford, Connecticut and are available for inspection at such
office.
The Notes will not be subject to any sinking fund and, unless otherwise
provided herein in accordance with the provisions of the following
paragraph, will not be redeemable prior to maturity.
If so provided herein, this Note may be redeemed by the Company on and
after any date prior to its maturity date (the "Redemption Date"), if any,
indicated herein. If no date on or after which this Note is redeemable is
set forth herein, this Note may not be redeemed prior to maturity. On and
after the Redemption Date, if any, this Note may be redeemed in whole or in
part in increments of $1,000 (provided that any remaining principal hereof
shall be at least $100,000) at the option of the Company, at par or at a
premium expressed as a percentage of par as may be provided herein (the
"Redemption Price"), together with interest thereon payable to the
Redemption Date, on notice given not more than 60 nor less than 30 days
prior to the Redemption Date. In the event of redemption of this Note in
part only, a new Note for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the surrender hereof.
Interest payments on this Note will include interest accrued from and
including the Original Issue Date indicated herein, or from but excluding
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the most recent date to which interest has been paid or duly provided for,
to but excluding the related Interest Payment Date or the Maturity Date (or
any Redemption Date), as the case may be. Interest payments for this Note
will be computed and paid on the basis of a 360-day year comprised of twelve
30-day months.
This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, in
denominations of $100,000 and any integral multiple of $1,000 in excess
thereof. The Issuing and Paying Agent has been appointed registrar for the
Notes, and the Company will cause the Issuing and Paying Agent to maintain
at its office in Hartford, Connecticut a register for the registration and
transfer of Notes. Subject to certain restrictions set forth herein and in
the Issuing and Paying Agency Agreement,
this Note may be transferred at the aforesaid office of the Issuing and
Paying Agent by surrendering this Note for cancellation, accompanied by a
written instrument of transfer in form satisfactory to the Issuing and
Paying Agent and duly executed by the Holder hereof in person or by the
Holder's attorney duly authorized in writing, and thereupon the Issuing and
Paying Agent will issue in the name of the transferee or transferees, in
exchange herefor, a new Note or Notes having identical terms and provisions
and having a like aggregate principal amount in authorized denominations,
subject to the terms and conditions set forth herein; provided, however,
that the Issuing and Paying Agent will not be required to register the
transfer of any Note which has been called for redemption (or any part of a
Note which has been so called for redemption) during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
such redemption and ending at the close of business on the day of such
mailing. Notes are exchangeable at said office for other Notes of other
authorized denominations of equal aggregate principal amount and having
identical terms and provisions. All such exchanges of Notes will be free of
charge, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge in connection therewith. All Notes
surrendered for exchange shall be accompanied by a written instrument of
transfer in the form attached hereto to the Issuing and Paying Agent and
executed by the Holder in person or by the Holder's attorney duly authorized
in writing.
In case any Note shall at any time become mutilated, defaced,
destroyed, stolen or lost and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Issuing and Paying Agent, a new Note of like tenor will be
issued by the Company in exchange for the Note so mutilated or defaced, or
in lieu of the Note so destroyed or stolen or lost, but, in the case of any
I - 7<PAGE>
destroyed or stolen or lost Note, only upon receipt of evidence satisfactory
to the Issuing and Paying Agent and the Company that such Note was destroyed
or stolen or lost, and, if required, upon receipt also of indemnity
satisfactory to each of them. All expenses and reasonable charges
associated with procuring such indemnity and with the preparation,
authentication and delivery of a new Note shall be borne by the owner of the
Note mutilated, defaced, destroyed, stolen or lost.
On and after the date of initial issue of any of the Notes and so long
as any of the Notes are outstanding, the Company has agreed to comply with
certain financial covenants and reporting requirements for the benefit of
Holders as set forth in Article VII and Article VIII of the Issuing and
Paying Agency Agreement, a copy of which will be made available by the
Company upon the request of the Holder at the address set forth below for
notices to the Company. All capitalized terms used herein which are not
otherwise defined herein shall have the meanings ascribed to them in such
Issuing and Paying Agency Agreement.
An Event of Default shall exist if any of the following occurs and is
continuing:
(a) there shall be a failure to pay when due the principal (or premium
if any) on any Note;
(b) there shall be a failure to pay an installment of interest on any
Note for 10 days after the date such installment is due;
(c) the Company shall fail to perform or observe any other term,
covenant or agreement contained in any Note for a period of 30 days after
the earlier of the date that written notice thereof shall have been given to
the Company by the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding or such failure shall first become
known to an officer of the Company;
(d) any representations or warranties made by the Company herein or in
any instrument furnished in compliance with or in reference to the Notes is
false or misleading in any material respect and such conditions shall have a
material adverse effect on the condition, financial or otherwise, or in the
earnings of the Company;
(e) the Company shall fail to make, when due and payable, any payment
on any indebtedness for borrowed money or any event shall occur (other than
the mere passage of time) or any condition shall exist in respect of any
such indebtedness, or under any agreement securing or relating to such
indebtedness, where the aggregate amount of such indebtedness is in excess
of $5,000,000 the effect of which is to cause (or permit any Holder of such
I - 8<PAGE>
indebtedness or a trustee with respect to such indebtedness to cause) such
indebtedness or any portion thereof, to become due and payable prior to its
maturity date or prior to its regularly scheduled dates of payments;
(f) an involuntary petition is filed against the Company under the
Bankruptcy Code or any other similar applicable Federal or State law, and
such petition is not dismissed within 60 days after each filing, or a
receiver, liquidator, custodian or trustee of the Company or any of its
Property is appointed by court order and such order shall have continued
undischarged or unstayed for a period of 60 days, or a decree or order by a
court having jurisdiction shall have been entered adjudging the Company
bankrupt or insolvent, and such decree or order shall have continued
undischarged and unstayed for a period of 60 days, or any of the Property of
the Company is sequestered by decree or order of a court having jurisdiction
and such decree or order shall have continued undischarged and unstayed for
a period of 60 days;
(g) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent seeking
reorganization under the Bankruptcy Code or any other similar applicable
Federal or State law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator or trustee
or assignee in bankruptcy or insolvency of it or its property, or shall make
an assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due; or
(h) a final judgment or judgments for the payment of money aggregating
in excess of 5% of Net Worth is or are outstanding against the Company and
such judgment or judgments has or have been outstanding for more than 60
days from the date of its or their entry and has or have not been discharged
in full or stayed.
If an Event of Default shall occur and be continuing (the Event of
Default not having been cured), the Holder of this Note may, at its option,
by written notice to the Company and the Issuing and Paying Agent, declare
such Note together with accrued interest to be immediately due and payable.
Upon declaration by the Holder of this Note following the occurrence of and
during the continuance of an Event of Default, this Note together with
accrued interest shall be immediately due and payable.
All notices to the Company under this Note shall be in writing and
addressed to the Company at 100 Columbus Boulevard, P. O. Box 1500,
Hartford, Connecticut 06144-1500, Attention: Chief Financial Officer,
I - 9<PAGE>
or to such other address of the Company as the Company may notify the Holder
of this Note.
Any action by the Holder shall bind all future Holders of this Note,
and of any Note issued in exchange or substitution herefor or in place
hereof, in respect of anything done or permitted by the Company or by the
Issuing and Paying Agent in pursuance of such actions.
The Issuing and Paying Agency Agreement and the terms of the Notes may
be modified or amended by the Company and the Issuing and Paying Agent,
without the consent of any Holder, for the purpose of (i) adding to the
covenants of the Company for the benefit of the Holders, (ii) surrendering
any right or power conferred upon the Company, (iii) securing the Notes
pursuant to the requirements of the Notes or otherwise, (iv) evidencing the
succession of another corporation to the Company and the assumption by such
successor of the covenants and any obligations of the Company contained in
the Issuing and Paying Agency Agreement and in the Notes in accordance with
the terms of the Issuing and Paying Agency Agreement and the Notes, (v)
correcting or supplementing any defective provision contained in the Notes
or in the Issuing and Paying Agency Agreement in a manner which does not
adversely affect the interests of any Holder or (vi) making any modification
of the terms and conditions of the Notes or any other provision of the
Issuing and Paying Agency Agreement in any manner which the Company and the
Issuing and Paying Agent may determine and which does not adversely affect
the interests of any Holder, to all of which each Holder of this Note, by
acceptance hereof, consents. All other modifications, amendments or
supplements of the Issuing and Paying Agency Agreement and the terms of the
Notes may be made by the Company and the Issuing and Paying Agent, and the
observance of any term of this Note may be waived, with (and only with) the
written consent of the Holders of 66-2/3% in principal amount of all the
Notes at the time outstanding (exclusive of Notes then owned by the Company,
any Subsidiaries and any Affiliates) provided that no such modification or
amendment of the Notes or the Issuing and Paying Agency Agreement, without
the consent of 100% of the Holders of the Notes then outstanding, may change
the maturity of any Note or any installment of interest thereon or reduce
the principal amount thereof or the interest thereon or reduce said
percentage of the Holders of the Notes then outstanding required for
consents, amendments or waivers. Notwithstanding the foregoing, the Company
will not propose or agree to any modification, amendment, or supplement of
the Issuing and Paying Agency Agreement without receiving prior written
consent of the Agents.
Any moneys paid by the Company to the Issuing and Paying Agent for the
payment of the principal of or interest or premium, if any, on any Notes,
and remaining unclaimed at the end of two (2) years after such principal,
interest or premium shall have become due and payable (whether at
I - 10<PAGE>
maturity or upon call for redemption or otherwise), shall then be repaid to
the Company and upon such repayment all liability of the Issuing and Paying
Agent with respect to such moneys shall thereupon cease, without, however,
limiting in any way any obligations which the Company may have to pay the
principal of or interest or premium, if any, on this Note as the same shall
become due.
No provision of this Note or of the Issuing and Paying Agency Agreement
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on
this Note at the time, place, and rate, and in the coin or currency, herein
prescribed.
Prior to due presentment of this Note for registration of transfer, the
Company, the Issuing and Paying Agent and any agent of the Company or the
Issuing and Paying Agent may treat the Holder in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Issuing and Paying Agent nor any such
agent shall be affected by notice to the contrary.
The Issuing and Paying Agency Agreement and the Notes shall be governed
by and construed in accordance with the laws of the State of Connecticut
applicable to agreements made and to be performed in such State.
This Note is issued in Connecticut and is governed by the laws of the
State of Connecticut.
Unless the certificate of authentication hereon has been executed by
the Issuing and Paying Agent under the Issuing and Paying Agency Agreement
referred to herein by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Issuing
and Paying Agency Agreement or be valid or obligatory for any purpose.
I - 11<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to
be imprinted hereon.
CONNECTICUT NATURAL GAS CORPORATION
By:________________________________
Title:_____________________________
Certificate of Authentication:
This is one of the Notes issued under
the Issuing and Paying Agency Agreement
described herein.
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
as Issuing and Paying Agent
By:_______________________________
Authorized Officer
Date of Authentication: ____________________________________
I - 12<PAGE>
[Form of Certificate of Transfer]
(To be delivered with this Note to the Issuing and Paying Agent)
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto ___________________________________________
________________________________________________________________
________________________________________________________________ (please
print or typewrite name and address including postal zip code of assignee
and insert Taxpayer Identification No.) _______
________________________________________________________________ this Note
and all rights hereunder, hereby irrevocably constituting and appointing
____________________________________ attorney to transfer this Note on the
books of the Company with full power of substitution in the premises.
CERTIFICATE OF TRANSFER
(The following is not required for sales or other transfers of this
Note to or through the Company or an Agent).
In connection with any transfer of this Note occurring prior to the
date which is three years after the later of (a) the Original Issue Date of
this Note or (b) the last date the Company or any of its affiliates was the
beneficial owner of this Note, the undersigned confirms that:
[Check One]
[ ] (a) This Note is being transferred by the undersigned to a transferee
that is, or that the undersigned reasonably believes to be, a
qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933) pursuant to the exemption from
registration under the Securities Act of 1933 provided by Rule
144A thereunder.
or
[ ] (b) This Note is being transferred by the undersigned to a transferee
that is, or that the undersigned reasonably believes to be, an
"accredited investor" (as defined in Rule 501(a)(1),(2),(3) or (7)
under the Securities Act of 1933) and that the undersigned has
been advised by the prospective purchaser that it intends to hold
this Note for investment and not for distribution or resale in any
transaction that would be in violation of federal or state
securities laws.
I - 13<PAGE>
If neither of the foregoing boxes is checked, the Issuing and Paying
Agent shall not be obligated to register this Note in the name of any person
other than the Holder.
Dated: ____________________ ______________________________
NOTICE: The signature of the Holder to this assignment must correspond
with the name as written upon this Note in every particular, without
alteration or enlargement or any change whatsoever.
TO BE COMPLETED BY PURCHASER
IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of
1933 and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
Holder is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Date: ____________________ _____________________________
NOTICE: To be executed by an officer.
TO BE COMPLETED BY PURCHASER IF (b)
ABOVE IS CHECKED:
The undersigned represents and warrants that it is an "accredited
investor" (as defined in Rule 501(a)(1),(2),(3) or (7) under the Securities
Act of 1933). The undersigned undertakes to hold this Note for investment
and not for distribution or resale in any transaction that would be in
violation of federal or state securities laws.
Date: ____________________ _____________________________
NOTICE: To be executed by an officer.
I - 14<PAGE>
EXHIBIT II
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
Dear Sirs:
This is to advise you of a proposal to resell $_________ aggregate
principal amount of Medium-Term Notes (due ________; Note No(s). _______)
(the "Notes") of Connecticut Natural Gas Corp. ("CNG" or the "Company").
The Notes were originally sold through Smith Barney Inc. and A.G. Edwards &
Sons, Inc. on __________, 19__ to __________(the "Holder") pursuant to the
Medium-Term Note program established for CNG.
The Notes are presently registered in the name of:
_____________________________________.
[We have been advised that due to a change in circumstances the Holder
wishes to dispose of the Notes and that the Holder has not itself or through
any other broker, dealer or agent publicly solicited purchases of such
Notes. In this regard, we have contacted the following institutional
investor (the "Prospective Purchaser") which desires to purchase the Notes:
The Notes should be registered as follows:
Name:
Address:
Taxpayer I.D. No.:
We represent and warrant that the Prospective Purchaser is an
institutional investor and either (i) an "Accredited Investor" (as defined
in Rule 501(a)(1),(2),(3) or (7) of Regulation D of the Securities Act of
1933, as amended) or (ii) a "Qualified Institutional Buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended). We have been
advised by the Prospective Purchaser that it intends to hold the Notes for
investment and not for distribution or resale.]
[The undersigned desires to purchase the Notes from the Holder. The
Holder has advised us that the Holder has not itself or through any broker,
dealer or agent publicly solicited purchases of the Notes. Our address is
as follows:
II - 1<PAGE>
The Notes should be registered as follows:
Name:
Address:
Taxpayer I.D. No.:
The undersigned represents and warrants to you that it is an
institutional investor and either (i) an "Accredited Investor" (as defined
in Rule 501(a)(1),(2),(3) or (7) of Regulation D of the Securities Act of
1933, as amended) or (ii) a "Qualified Institutional Buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended). The undersigned
undertakes to hold the Notes for investment not for distribution or resale.]
We hereby request that the approval of CNG be obtained to consummate
the sale that is contemplated herein.
Very truly yours,
[Signature]
Consented to this _______day
of ___________, 19__
By _________________________
Authorized Signatory
II - 2<PAGE>
SERVICE AGREEMENT
(EFT Service)
AGREEMENT made this 31st day of July, 1993, by and between
NATIONAL FUEL GAS SUPPLY CORPORATION, a Pennsylvania corporation,
hereinafter called "Transporter" and CONNECTICUT NATURAL GAS CORPORATION, a
Connecticut corporation, hereinafter called "Shipper."
WHEREAS, Shipper has requested that Transporter transport
natural gas; and
WHEREAS, Transporter has agreed to provide such transportation
for Shipper subject to the terms and conditions hereof.
WITNESSETH: That, in consideration of the mutual covenants
herein contained, the parties hereto agree that Transporter will transport
for Shipper, on a firm basis, and Shipper will furnish, or cause to be
furnished, to Transporter natural gas for such transportation during the
term hereof, at the prices and on the terms and conditions hereinafter
provided.
ARTICLE I
Quantities
----------
Beginning on the date on which deliveries of gas are commenced
hereunder and thereafter for the remaining term of this Agreement, and
subject to the provisions of Transporter's EFT Rate Schedule, Transporter
agrees to transport for Shipper's account up to the following quantities of
natural gas:
Contract Maximum Daily Transportation Quantity (MDTQ) of 1,877 Dekatherms
(Dth)
ARTICLE II
Rate
----
Unless otherwise mutually agreed in a written amendment to this
Agreement, for each dekatherm of gas transported for Shipper by Transporter
<PAGE>
hereunder, Shipper shall pay Transporter the maximum rate provided under
Rate Schedule EFT set forth in Transporter's effective FERC Gas Tariff. In
the event that the Transporter places on file with the Federal Energy
Regulatory Commission ("Commission") another rate schedule which may be
applicable to transportation service rendered hereunder, then Transporter,
at its option, may from and after the effective date of such rate schedule,
utilize such rate schedule in performance of this Agreement. Such a rate
schedule(s) or superseding rate schedule(s) and any revisions thereof which
shall be filed and become effective shall apply to and be a part of this
Agreement. Transporter shall have the right to propose, file and make
effective with the Commission, or other body having jurisdiction, changes
and revisions of any effective rate schedule(s), or to propose, file, and
make effective superseding rate schedules, for the purpose of changing the
rate, charges, and other provisions thereof effective as to Shipper.
Shipper agrees to reimburse Transporter for the filing fees
associated with this service and paid to the Commission.
ARTICLE III
Term of Agreement
-----------------
This Agreement shall be effective as of August 1, 1993 and shall continue
in effect until March 31, 1996, and shall continue in effect from year to
year thereafter until terminated by either Shipper or Transporter upon
twelve (12) months written notice to the other.
ARTICLE IV
Points of Receipt and Delivery
------------------------------
The Point(s) of Receipt for all gas that may be received for
Shipper's account for transportation by Transporter, and the receipt
entitlements applicable to each point of receipt, or combinations of
receipt points, are set forth in Appendix A.
The Point(s) of Delivery for all gas to be delivered by
Transporter for Shipper's account are set forth in Appendix B.
<PAGE>
ARTICLE V
Incorporation By Reference of Tariff Provisions
-----------------------------------------------
To the extent not inconsistent with the terms and conditions of
this agreement, the provisions of Rate Schedule EFT, or any effective
superseding rate schedule or otherwise applicable rate schedule, including
any provisions of the General Terms and Conditions incorporated therein,
and any revisions thereof that may be made effective hereafter are hereby
made applicable to and a part hereof by reference.
ARTICLE VI
Cancellation of Prior Contracts
-------------------------------
If this Agreement becomes effective as an executed service agreement,
it shall supersede and cancel all prior gas sales agreements between the
parties, including but not limited to Shipper's interest in the Gas Sales
Agreement dated February 27, 1984 between Algonquin Gas Transmission
Company as Buyer and National Fuel Gas Supply Corporation as Seller.
ARTICLE VII
Miscellaneous
-------------
1. No change, modification or alteration of this Agreement
shall be or become effective until executed in writing by the parties
hereto, and no course of dealing between the parties shall be construed to
alter the terms hereof, except as expressly stated herein.
2. No waiver by any party of any one or more defaults by the
other in the performance of any provisions of this Agreement shall operate
or be construed as a waiver of any other default or defaults, whether of a
like or of a different character.
3. Any company which shall succeed by purchase, merger or
consolidation of the gas related properties, substantially as an entirety,
of Transporter or of Shipper, as the case may be, shall be entitled to the
rights and shall be subject to the obligations of its predecessor in title
under this Agreement. Either party may, without relieving itself of its
obligations under this Agreement, assign any of its rights hereunder to a
company with which it is affiliated, but otherwise, no assignment of this
Agreement or of any of the rights or obligations hereunder shall be made
<PAGE>
unless there first shall have been obtained the consent thereto in writing
of the other party. Consent shall not be unreasonably withheld.
4. Except as herein otherwise provided, any notice, request,
demand, statement or bill provided for in this Agreement, or any notice
which either party may desire to give the other, shall be in writing and
shall be considered as duly delivered when mailed by registered or
certified mail to the Post Office address of the parties hereto, as the
case may be, as follows:
Transporter: National Fuel Gas Supply Corporation
Gas Supply - Transportation
Room 1200
10 Lafayette Square
Buffalo, New York 14203
Shipper: Connecticut Natural Gas Corporation
Attn: Julia Schiavi, Energy
Affairs Analyst
100 Columbus Boulevard
P.O. Box 1500
Hartford, Connecticut 06144-1500
or at such other address as either party shall designate by formal written
notice. Routine communications, including monthly statements, shall be
considered as duly delivered when mailed by either registered, certified,
or ordinary mail, electronic communication, or telecommunication.
5. Transporter and Shipper shall proceed with due diligence
to obtain such governmental and other regulatory authorizations as may be
required for the rendition of the services contemplated herein, provided
that Transporter reserves the right to file and prosecute applications for
such authorizations, any supplements or amendments thereto and, if
necessary, any court review, in such manner as it deems to be in its best
interest, including the right to withdraw the application or to file
pleadings and motions (including motions for dismissal).
6. This Agreement and the respective obligations of the
parties hereunder are subject to all present and future valid laws, orders,
rules and regulations of constituted authorities having jurisdiction over
the parties, their functions or gas supply, this Agreement or any provision
hereof. Neither party shall be held in default for failure to perform
hereunder if such failure is due to compliance with laws, orders, rules or
regulations of any such duly constituted authorities.
<PAGE>
7. The subject headings of the articles of this Agreement
are inserted for the purpose of convenient reference and are not intended
to be a part of the Agreement nor considered in any interpretation of the
same.
8. No presumption shall operate in favor of or against
either party hereto as a result of any responsibility either party may have
had for drafting this Agreement.
9. The interpretation and performance of this Agreement
shall be in accordance with the laws of the State of Pennsylvania, without
recourse to the law regarding the conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized personnel and attested by
their respective Secretaries or Assistant Secretaries, the day and year
first above written.
NATIONAL FUEL GAS SUPPLY
CORPORATION
Transporter
Attest:
___________________ By_________________________
Secretary President
(Corporate Seal)
CONNECTICUT NATURAL GAS
CORPORATION
Shipper
Attest:
Lynn C. Blackwell By E.M. Karanian
------------------------- --------------------------
Secretary Assistant Vice President
(Corporate Seal)
<PAGE>
Appendix A to
EFT Service Agreement
Between
NATIONAL FUEL GAS SUPPLY CORPORATION
and
CONNECTICUT NATURAL GAS CORPORATION
RECEIPT POINTS AND RECEIPT ENTITLEMENTS
<PAGE>
<TABLE>
<CAPTION>
Receipt Entitlements
Conn Nat'l Gas Corp
---------------------
(all Quantities in Dth)
<S> <C>
Upstream Receipts
TGP Zone 4 Points 1,149
Zone 5 Points 766
-----
Total Upstream Receipts 1,915
Total Receipt Entitlements 1,915
=====
</TABLE>
<PAGE>
Appendix B to
EFT Service Agreement
Between
NATIONAL FUEL GAS SUPPLY CORPORATION
and
CONNECTICUT NATURAL GAS CORPORATION
DELIVERY POINTS
<PAGE>
Page 1
<TABLE>
<CAPTION>
National Fuel Gas Supply Corporation Pipeline Receipt Points
Available to Connecticut Natural Gas Corporation
Line
Meter Name Meter Number Designation Township County State
---------- ------------ ----------- -------- ------ -----
<S> <C> <C> <C> <C> <C>
Tennessee Gas Pipeline Corporation
Wharton 3261 YM7 Wharton Potter PA
</TABLE>
<PAGE>
Page 2
<TABLE>
<CAPTION>
National Fuel Gas Supply Corporation Pipeline Receipt Points
Available to Connecticut Natural Gas Corporation
Line
Meter Name Meter Number Designation Township County State
---------- ------------ ----------- -------- ------ -----
<S> <C> <C> <C> <C> <C>
Tennessee Gas Pipeline Corporation
Zone 5 points
-------------
Clarence 2-0497 XM-2 Clarence Erie NY
Colden Storage 6-0003 T Eden Erie NY
East Aurora 2-0077 X Wales Erie NY
Hamburg-E.Eden 2-0076 T,X Eden Erie NY
Lewiston 2-0092 8" Lewiston Niagara NY
Mayville 2-0088 6" Chautauqua Chautauqua NY
Nashville 2-0243 RM-32 Hanover Chautauqua NY
Storage
Peldn 2-0326 Z Lewiston Niagara NY
Sherman 2-0428 4" Sherman Chautauqua NY
<CAPTION>
Zone 4 points
-------------
<S> <C> <C> <C> <C> <C>
Cochranton 2-0314 S-M2 E. Crawford PA
Fairfield
Coudersport 2-0074 Y-M2 Hebron Potter PA
Cranberry 2-0703 H Cranberry Venango PA
Sales
Hebron Storage 6-0001 Storage Hebron Potter PA
Lamont 2-0072 K Highland Elk PA
Mercer 2-0069 N-M44 Jefferson Mercer PA
Pettis 2-0071 H-M2 Wayne Crawford PA
Rose Lake 2-0527 Y-M2 Allegany Potter PA
Russel City 2-0301 L Highland Elk PA
Sharon 2-0496 N-M51 Pulaski Lawrence PA
Townville 2-0390 4" Townville Crawford PA
Union City 2-0200 Q Union Erie PA
Wattsburg 2-0075 D-20 Wayne Erie PA<PAGE>
</TABLE>
<PAGE>
TABLE OF CONTENTS
-----------------
FIRM STANDBY GAS STORAGE CONTRACT
---------------------------------
I. ACQUISITION AND CONSTRUCTION . . . . . . . . . . . 2
II. GAS TO BE STORED AND DELIVERED . . . . . . . . . . 4
III. SCHEDULING . . . . . . . . . . . . . . . . . . . . 6
IV. POINT(S) OF DELIVERY AND REDELIVERY . . . . . . . . 8
V. TERM . . . . . . . . . . . . . . . . . . . . . . . 8
VI. RATES . . . . . . . . . . . . . . . . . . . . . . . 9
VII. NOTICES . . . . . . . . . . . . . . . . . . . . . . 13
VIII. GENERAL TERMS AND CONDITIONS . . . . . . . . . . . 14
IX. ADDITIONAL STORAGE OPTION . . . . . . . . . . . . . 15
X. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 16
Exhibit "A"
-----------
General Terms and Conditions
-----------------------------
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
II. QUALITY . . . . . . . . . . . . . . . . . . . . . . 3
III. PRESSURE . . . . . . . . . . . . . . . . . . . . . 4
IV. TITLE AND RISK OF LOSS . . . . . . . . . . . . . . 4
V. MEASUREMENT . . . . . . . . . . . . . . . . . . . . 6
VI. BILLINGS AND PAYMENTS . . . . . . . . . . . . . . . 9
VII. TAXES . . . . . . . . . . . . . . . . . . . . . . 10
VIII. REGULATORY BODIES . . . . . . . . . . . . . . . . . 12
IX. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . 13
X. DEFAULT AND TERMINATION . . . . . . . . . . . . . . 15
Exhibit "B"
-----------
Point(s) of Delivery and Redelivery
-----------------------------------
<PAGE>
GAS STORAGE CONTRACT
--------------------
THIS GAS STORAGE CONTRACT (hereinafter referred to as the
"Contract") is made and entered into as of the 16th day of
February , 1990, by and between ENDEVCO INDUSTRIAL GAS SALES
COMPANY, a Delaware corporation, (herein referred to as
"Company"), operator of the Storage Facilities (as defined below)
and managing general partner of the Hattiesburg Gas Storage
Company, the owner of the said Storage Facilities, and
CONNECTICUT NATURAL GAS CORPORATION, a Connecticut corporation
(herein referred to as "Customer").
W I T N E S S E T H:
-------------------
WHEREAS, Company and Customer are parties to a "Precedent
Agreement" dated December 29, 1989, wherein Company and Customer
agreed, upon the satisfaction of certain conditions, to enter
into this Contract; and
WHEREAS, the conditions in the Precedent Agreement have been
satisfied or waived; and
WHEREAS, subject to the terms hereof, Company will acquire
certain caverns located near Petal, Mississippi and develop such
caverns into underground natural gas storage facilities
(hereinafter referred to as the "Storage Facilities") initially
having a usable storage capacity of approximately two billion
cubic feet ("Phase I"), and which may, at Company's discretion,
subsequently be expanded to a capacity of approximately five
billion cubic feet of usable storage capacity ("Phase II"); and
<PAGE>
WHEREAS, Company will install and construct all facilities
necessary to connect the Storage Facilities with the Point(s) of
Delivery and Point(s) of Redelivery herein specified; and
WHEREAS, Customer desires that Company receive, on a firm basis,
at the Points of Delivery herein specified, certain quantities of
gas from the pipeline facilities of Transcontinental Gas Pipe
Line Corporation ("Transco") and/or Tennessee Gas Pipeline
Company ("Tennessee") for the purpose of injecting and storing
such gas for Customer or for its account in such Storage
Facilities, and that Company redeliver such gas, on a firm basis,
into the facilities of said pipeline companies, at the Points of
Redelivery herein specified; and
WHEREAS, Company desires to perform such services for
Customer, all to be provided pursuant and subject to the terms
and conditions hereof;
NOW, THEREFORE, for and in consideration of the mutual
covenants herein contained, together with other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed by both parties hereto, Company and
Customer hereby agree as follows:
ARTICLE I
ACQUISITION AND CONSTRUCTION
----------------------------
Within thirty (30) days after the execution hereof, Company
shall endeavor to close its purchase of the Storage Facilities,
on terms and conditions satisfactory to Company. Thereafter,
Company shall commence the construction and development of the
2<PAGE>
Storage Facilities and shall provide Customer written notice of
the commencement of construction and the date upon which Company
anticipates that such facilities will be operational. Upon
completion of construction, including testing, as required by all
applicable federal, state and/or applicable codes, and all other
matters required for operation, Company shall provide Customer
written notice that said facilities are fully operational and
shall state in such notice a date upon which Company will be
ready to receive gas for storage, which date shall be not less
than thirty (30) days following such notice (such date to be
hereinafter referred to as the "Commencement Date"). If the
Commencement Date does not occur on or before December 1, 1990,
or such later date as may be agreed upon, (subject to a day for
day extension for delays caused by an event(s) of "force majeure"
as herein defined and for each day after March 8, 1990 which
expires prior to the date that Company receives executed Firm
Storage Contracts covering at least 165,000 MMBtu of MDWQ, as
herein defined), for any reason, including, without limitation,
Company's inability to close its purchase of the Storage
Facilities on terms acceptable to Company, then either party
shall have the right to terminate this Contract, without further
liability or obligation to the other party hereunder, by
providing the other party thirty (30) days prior written notice.
Notwithstanding the foregoing, in the event that Customer gives
notice of termination in accordance with the above and,
thereafter, Company provides written notice to Customer stating a
3<PAGE>
Commencement Date which will occur prior to the expiration of
such thirty (30) day period, then, Customer's notice of
termination shall be void and of no further force or effect and
this Contract shall continue in accordance with its terms, unless
Company is unable to commence service on the Commencement Date
stated in its notice.
ARTICLE II
GAS TO BE STORED AND DELIVERED
------------------------------
2.1 Subject to the terms and provisions of this Contract,
Company agrees to reserve for service to Customer a portion of
the Storage Facilities. The capacities so reserved for Customer
shall be sufficient to enable Customer to inject gas into,
withdraw gas from, and store gas in the Storage Facilities, in
quantities up to the maximum quantities set forth below:
(i) a maximum daily withdrawal quantity ("MDWQ") of
10,000 MMBtu per day;
(ii) a maximum daily injection quantity ("MDIQ") of
5,000 MMBtu per day;
(iii) a maximum capacity in the Storage Facilities ("MQS")
equal to 100,000 MMBtu.
2.2 Customer shall tender or cause to be tendered to
Company at the Point(s) of Delivery any gas which Customer
desires to have injected into storage hereunder. Customer shall
also receive or cause to be received gas requested to be
withdrawn from storage at the Point(s) of Redelivery upon tender
for redelivery by Company.
4<PAGE>
2.3 Subject to the operating conditions of the pipelines
delivering or receiving gas for Customer's account, Company shall
receive gas for injection from Customer at the Point(s) of
Delivery and redeliver gas to Customer at the Point(s) of
Redelivery as scheduled by Customer from time to time; provided
that Company shall not be obligated to receive for injection any
quantity of gas if the injection of the same would cause the
quantity of gas stored in the Storage Facilities for Customer's
account ("Customer's Gas Storage Inventory") to exceed Customer's
MQS as stated above; nor shall Company be obligated at any time
to deliver more gas to Customer than Customer has in its then-
current Customer's Gas Storage Inventory.
2.4 Company shall not be obligated to receive, at any Point
of Delivery for injection, or to redeliver, at any Point of
Redelivery, any quantity of gas when the quantity of gas tendered
for delivery to Company or requested by Customer to be
redelivered, together with all other volumes of gas tendered for
delivery to Company at any such Point of Delivery, or requested
for redelivery at such Point of Redelivery, is less than
5,000 MMBtu per day in the aggregate.
2.5 In addition to the maximum daily rates of injection and
withdrawal as specified above in Section 2.1, Company shall use
its best efforts to accommodate requests of Customer to inject or
withdraw gas at greater rates of flow and, at such Point(s) of
Delivery or Point(s) or Redelivery in addition to those specified
on Exhibit "B" annexed hereto, at such times as such additional
5<PAGE>
capacities are not required for service to other firm, standby
storage customers. Any such additional services shall be
provided at the rates stated in Section 6.1(c) and 6.1(d), as may
be amended by Section 6.1(e), only as capacities are available
and on a pro-rata basis to other firm, standby storage customers,
without obligation or liability for interruption by Company as to
any withdrawals or injections in excess of the maximums reserved
for Customer. Additional withdrawals and/or injections will be
made only to the extent that Customer has gas in storage to be
withdrawn, or unfilled capacity in the Storage Facilities
reserved as part of Customer's MQS as stated herein.
ARTICLE III
SCHEDULING
----------
3.1 At any time during any day when Customer desires
Company to receive and inject gas into, or to withdraw and
deliver gas from, the Storage Facilities, Customer shall give
verbal notice in accordance with Section 3.2 of this Article to
Company's dispatcher, specifying the quantity of gas to be
injected or withdrawn and the appropriate Points of Delivery or
Points of Redelivery, as applicable. Customer shall make
available and tender any gas to be injected hereunder and receive
and accept delivery, upon tender by Company, any gas requested to
be withdrawn from storage. The quantity of gas stored in the
Storage Facilities for the account of Customer shall be increased
or decreased upon injection or withdrawal of gas from storage, as
applicable. Customer shall not (unless otherwise agreed by
6<PAGE>
Company), on an hourly basis, tender for injection nor shall
Company be obligated to receive gas for injection or to withdraw
and deliver gas from storage, at rates of flow in excess of 1/24
of Customer's MDIQ or MDWQ, respectively.
3.2 Customer shall notify Company at least eight (8) hours
in advance of any requested change in the daily or hourly rate of
flow for injections or withdrawals of gas hereunder. Company may
waive any part of the eight (8) hour notice upon request if, in
Company's reasonable judgement, operating conditions permit such
waiver. Customer shall notify Company immediately of any
circumstance which causes or will cause the deliveries to or
receipts from Company to be different from those requested.
Notices provided in this Article may be verbal, followed by a
written confirmation delivered via telecopy, overnight mail,
first class U.S. mail, or hand-delivery when such written
confirmation is requested by either party. Customer shall
provide notice of any changes in deliveries to or receipts from
Company to all applicable transporting pipelines and shall be
responsible for, and shall indemnify and hold Company harmless
from, any and all liabilities and expenses resulting from
Customer's failure to notify all applicable transporting
pipelines of any such changes.
3.3 In the event that an imbalance occurs on the pipeline
to or from which such gas is delivered or received, which
imbalance results from Company's failure to tender the quantities
of gas scheduled for delivery from storage, or accept delivery of
7<PAGE>
the quantities of gas scheduled for injection into storage and
tendered for delivery by Customer, all in accordance with and
subject to this Contract, Company shall reimburse Customer for
any imbalance penalty due and rightfully owing to the pipeline
receiving or delivering the gas at such Point(s) of Delivery or
Point(s) of Redelivery, which was caused by Company's failure to
accept or deliver gas. In the event that Company is unable to
receive or deliver gas as required by this Contract and in
accordance with the request of Customer as provided above,
Company shall notify Customer as soon as practicable following
any failure to receive or tender such gas and, Customer shall, as
soon as practicable following receipt of such notice, notify and
change nominations and scheduling with all pipelines and other
parties delivering or receiving gas to be delivered to or
withdrawn from storage for Customer and be reasonably diligent in
taking such further actions to prevent or minimize any imbalances
from occurring. Customer and Company will diligently work to
correct any imbalance so caused prior to the end of the
applicable balancing period.
ARTICLE IV
POINT(S) OF DELIVERY AND REDELIVERY
-----------------------------------
4.1 The Point(s) of Delivery for all gas to be tendered by
Customer to Company for injection into the Storage Facilities
shall be as specified on Exhibit "B" attached hereto, and the
maximum daily quantity of gas which Company is obligated to
8<PAGE>
receive from Customer at each individual Point of Delivery shall
not exceed the maximum stated thereon.
4.2 The Point(s) of Redelivery for all gas to be tendered
by Company to Customer for redelivery pursuant to the terms
hereof shall be as specified on Exhibit "B", attached hereto, and
the maximum quantities of gas which Company is obligated to
redeliver to Customer at each such Point of Redelivery shall not
exceed the maximum stated thereon.
ARTICLE V
TERM
----
5.1 This Contract shall be effective as of the date set
forth at the outset hereof and shall continue in full force and
effect for a primary term of fifteen (15) years following the
Commencement Date, as defined in Article I hereof, and year to
year thereafter unless and until terminated effective at the end
of such fifteenth (15th) year or any year thereafter by either
party upon not less than thirty-six (36) months prior written
notice.
5.2 Upon expiration hereof, Company agrees that in the
event that gas storage services are still being provided in the
Storage Facilities by Company, or any assignee of Company as
provided for herein, to other customers, then, Customer shall
have the right and option to continue to receive storage services
from Company, or such assignee of Company, pursuant to terms and
conditions, and for rates and charges substantially similar to
9<PAGE>
those being offered to said other customers by Company, or such
assignee of Company, at the time of such expiration.
ARTICLE VI
RATES
-----
6.1 During the first ten (10) years following the
Commencement Date, Customer shall pay to Company each month the
following charges:
6.1(a) A storage charge ("D1") of twenty and one-
half cents ($0.205) multiplied by Customer's MQS amount
specified in this Agreement; plus
6.1(b) A deliverability charge ("D2") of fifty-eight
cents ($0.58) multiplied by Customer's MDWQ amount; plus
6.1(c) One cent ($0.01) for each MMBtu of gas
received by Company for injection into storage hereunder and
one cent ($0.01) for each MMBtu of gas redelivered by
Company to Customer hereunder; plus
6.1(d) Customer's pro-rata share of the cost of gas
consumed in the operation of the Storage Facilities, such to
be pro rated among all Customers based upon the quantities
of gas injected and withdrawn by each Customer during each
month. It is presently estimated that the total cost of gas
to be consumed in the injection and withdrawal of gas into
and from the Storage Facilities will initially total
approximately three cents ($0.03) per MMBtu, in the
aggregate; however, the parties agree that this cost may
change from time to time and Customer shall continue to bear
10<PAGE>
its pro rata share of such cost. Company shall endeavor to
operate the Storage Facilities in an efficient manner so as
to limit the gas consumed to that quantity reasonably
required. Each month, Company shall provide Customer a
statement showing its prorata share of such quantity and the
cost of the gas consumed in the operation of Storage
Facilities, along with the necessary supporting workpapers
showing the total quantity and cost of gas so consumed and
the proration calculations. Customer shall have the option,
exercisable upon thirty (30) days prior written notice at
any time during the term hereof, to thereafter (during the
term hereof) supply its pro-rata share of gas consumed, as
opposed to reimbursing Company in accordance herewith. In
the event that Customer elects to provide its pro-rata share
of the fuel used hereunder, then, following such election,
Company shall establish and maintain an account (the "Fuel
Account") with Customer. Initially, one and one-half
percent (1 1/2%) of all gas delivered to Company at the
Points of Delivery hereunder shall be retained by Company
and credited to the Fuel Account. Customer shall not pay
any injection, withdrawal or storage fee as to any volumes
retained by Company. At the close of each month, Company
shall debit the Fuel Account with Customer's pro-rata share
of the fuel gas. From time to time during the term hereof,
Company shall have the right, upon providing Customer ten
(10) days' prior written notice, to adjust the quantity of
11<PAGE>
gas to be retained by Company and credited to the Fuel
Account in order to reflect actual quantities of gas
consumed in the operation of the Storage Facilities and, to
cause the Fuel Account to be as near to zero as is
practicable on a monthly basis. Within thirty (30) days
following the termination hereof, Company shall deliver gas
to Customer, or Customer shall deliver gas to Company, as is
necessary to cause the Fuel Account to equal zero. Company
shall report the status of the Fuel Account as of the end of
the previous month with each monthly statement. Customer
shall have the right to deliver to Company the maximum
capacities set forth in Section 2.1(iii) in addition to the
gas delivered by Customer for credit to the Fuel Account.
6.1(e) The fees payable for each MMBtu of gas
delivered to Company for injection and for each MMBtu of gas
redelivered to Customer hereunder, as provided for in
section 6.1(c), shall be subject to adjustment, upon
application to and approval by the appropriate regulatory
commission, to reflect increases or decreases in the cost of
maintenance, supplies and other variable expenses incurred
by Company in performing the services hereunder. Customer
shall have the right to contest any increase sought
hereunder before the appropriate regulatory commission. No
such adjusted fee shall exceed, however: (i) the fee herein
provided; multiplied by (ii) the sum of one (1) plus the
percentage change in the Gross National Product Implicit
12<PAGE>
Price Deflator (the "Index") for the December of the then-
current calendar year as compared to such Index for
December, 1990.
6.2 Notwithstanding the above, in the event that Company
elects to expand the Storage Facilities as referenced in
section 9.1, the rates and charges payable hereunder during the
remaining portion of the initial ten (10) years hereof shall be
redetermined such that the sum of: (a) the D1 storage charge,
as provided in section 6.1(a); and (b) the D2 deliverability
charge, as provided in section 6.1(b); will be reduced such that
the total reservation charges payable hereunder during each month
shall not exceed eighty percent (80%) of the total reservation
charges payable hereunder prior to such expansion and rate
redetermination.
6.3 The charges payable hereunder for the remainder of the
term hereof following the tenth (10th) year (after the
Commencement Date) may be redetermined by the appropriate
regulatory body in accordance with this section 6.3. Company
shall have the right, upon its election, or shall be obligated,
upon request of Customer, to submit cost-of-service information
to the appropriate regulatory authority for a review of the rates
charged hereunder and to request a determination by such
regulatory authority of a rate for the remaining term hereof.
Customer shall have the right to take part in such proceedings
and to contest the proposed rates to the full extent allowed.
Company shall provide Customer not less than thirty (30) days
13<PAGE>
prior written notice of Company's intent to file for a new rate
as herein provided. In the event that the rates resulting from
such redetermination are in excess of one hundred and ten percent
(110%) of the rates specified in Section 6.1, then Customer shall
have the right to terminate this Contract upon sixty (60) days'
prior written notice; provided, however, that during such sixty
(60) day period following the receipt of Customer's notice,
Company shall have the option, without obligation, to agree to
charge Customer rates which do not exceed one hundred and ten
percent (110%) of the rates set forth in Section 6.1 and, in such
event, this Contract shall continue for the remaining term.
Company shall provide Customer written notice of any such
election before the expiration of said sixty (60) day period and,
shall therein specify the rate to be charged hereunder.
ARTICLE VII
NOTICES
-------
7.1 Whenever any notice, request, demand, statement or
payment is required or permitted to be given under any provision
of this Contract, unless expressly provided otherwise, such shall
be in writing, signed by or on behalf of the person giving the
same, and shall be deemed to have been given and received upon
the actual receipt (including the receipt of a telecopy or
facsimile of such notice) at the address of the parties as
follows:
14<PAGE>
Company:
-------
For Notices: Endevco Industrial Gas Sales Company
8080 N. Central Expressway
Twelfth Floor, Lock Box 47
Dallas, Texas 75206
For Payments: Endevco Industrial Gas Sales Company
P. O. Box 97611
Dallas, Texas 75397
Customer: Connecticut Natural Gas Corporation
-------- P. O. Box 1500
100 Columbus Avenue
Hartford, Connecticut 06144-1500
7.2 Operating communications made by telephone or other
mutually agreeable means shall be confirmed in writing or by
telecopy within two (2) days following same if requested by
either party. To facilitate such operating communications on a
daily basis, lists of names, telephone and telecopy numbers of
appropriate operating personnel shall be exchanged by and between
Company and Customer before commencement of service under this
Contract. Such lists shall be updated from time to time if
changed.
7.3 The addresses of the parties may be revised upon
written notice given in accordance herewith, designating in such
writing the new address of the party so affected.
ARTICLE VIII
GENERAL TERMS AND CONDITIONS
----------------------------
The General Terms and Conditions attached hereto as Exhibit "A"
are hereby incorporated herein and made a part of this Contract
as if fully set forth herein. Any conflict or inconsistency,
15<PAGE>
either in construction or interpretation, between the terms
hereof and the General Terms and Conditions attached hereto shall
be resolved in favor of the terms hereof.
ARTICLE IX
ADDITIONAL STORAGE OPTION
-------------------------
9.1 Company anticipates that it may elect to expand the
Storage Facilities at some time following initial storage
operations. In the event that Company so elects to expand the
Storage Facilities, Company hereby grants Customer an option on a
pro rata portion of any increased capacities (for storage,
withdrawal or injection) developed by Company in the Storage
Facilities. Such proportionate share shall equal (i) the total
additional capacity (for storage, withdrawal or injection)
developed by Company in such Storage Facilities multiplied by
(ii) a fraction, the numerator of which shall equal Customer's
rights to such capacity hereunder (MQS, MDWQ or MDIQ) and the
denominator of which shall equal the total storage capacity (for
storage, withdrawal or injection) of the Storage Facilities
immediately preceding such increase in capacity. Customer shall
exercise its option, if at all, in accordance with section 9.2
below.
9.2 In the event that Company makes the determination to
increase any capacity (for storage, withdrawal or injection) at
the Storage Facilities, Company shall so notify Customer in
writing. Such notice shall contain the terms and conditions upon
which Company will contract with other parties for such
16<PAGE>
capacity(ies), which terms shall be similar to those provided in
this Contract. For ninety (90) days following receipt of such
notice, Customer shall have the right, without obligation, to
contract for additional storage rights in the Storage Facilities
upon the terms and conditions offered by Company and reflected in
the notice or such other terms as may be agreed to by Customer
and Company. Should Customer elect to contract for such
additional rights, and provide Company with written notice of
such election within such ninety (90) day period, Company shall
provide Customer with formal contracts for execution. The
failure of Customer to provide written notice to Company of its
election to contract for such additional capacity rights within
such ninety (90) day period, or the failure of Customer,
following such election, to execute and return to Company the
contract provided to Customer within thirty (30) days following
Customer's receipt of same, shall be deemed a waiver of
Customer's option on such capacity(ies).
ARTICLE X
MISCELLANEOUS
-------------
10.1 HEADINGS. The subject headings of the articles and
sections of this Contract are intended for the sole purpose of
convenient reference and are not intended, nor shall the same be
construed, to be a part of this Contract or considered in any
interpretation hereof.
10.2 AMENDMENT. Neither this Contract nor any provisions
hereof may ever be amended, changed, modified or supplemented
17<PAGE>
except by an agreement in writing, duly executed by the party to
be charged with the same.
10.3 WAIVER. No failure by either party to enforce the
performance of any obligation of the other party under this
Contract shall operate as a waiver of such obligation or default,
or as a waiver of any other right or default, whether of a like
or different character.
10.4 CHOICE OF LAW. As to all matters of construction and
interpretation, this Contract shall be interpreted, construed and
governed by the laws of the State of Texas.
10.5 SUCCESSION. Either party may assign its rights, titles
or interests hereunder to any individual, bank, trustee, company
or corporation as security for any note, notes, bonds or other
obligations or securities of such assignor, but not otherwise,
without the written consent of the other party hereto, which
consent shall not be unreasonably withheld. No assignment
provided for hereunder shall in any way operate to enlarge, alter
or change any obligation of the other party hereto nor shall the
assignee be relieved of its obligations hereunder without the
express written consent of the non-assigning party.
10.6 RIGHT OF EXAMINATION. Both Company and Customer shall
have the right to examine, at any reasonable time, the books,
records, charts and any operating data of the other to the extent
reasonably necessary to verify the accuracy of any statement,
chart or computation made under or pursuant to the provisions of
this Contract. All books, records and charts related to any
18<PAGE>
statement, charge or computation made hereunder shall be retained
and available for review or inspection for a period of two years.
10.7 ENTIRE AGREEMENT. This Contract contains the entire
agreement and understanding of the parties hereto and there are
no agreements, understandings or representations, either oral or
in writing, except as set forth herein. That certain Precedent
Agreement, between Customer and Company, is hereby expressly
superseded and terminated by the execution hereof.
10.8 AUTHORITY. Company and Customer each hereby represents
and warrants that it has the full right, power and authority to
enter into this Contract, and that this Contract will not violate
the provisions of any other contract or agreement to which it is
a party.
IN WITNESS WHEREOF, the parties have executed this Contract
in one or more copies or counterparts, each of which shall
constitute and be an original of this Contract effective between
the parties as of the date first-above written.
COMPANY:
ATTEST: ENDEVCO INDUSTRIAL GAS SALES
COMPANY
________________________________ By: _______________________
Its: _______________________
CUSTOMER:
ATTEST: CONNECTICUT NATURAL GAS
CORPORATION
______________________________ By: ________________________
Its: ________________________
19<PAGE>
EXHIBIT "A"
TO GAS STORAGE CONTRACT BETWEEN
ENDEVCO INDUSTRIAL GAS SALES COMPANY
AND CONNECTICUT NATURAL GAS CORPORATION
DATED ________________________
GENERAL TERMS AND CONDITIONS
----------------------------
These General Terms and Conditions ("General Terms") are
attached to and incorporated into the above-referenced GAS
STORAGE CONTRACT between ENDEVCO INDUSTRIAL GAS SALES
COMPANY (herein referred to as "Company") and CONNECTICUT
NATURAL GAS CORPORATION, a Connecticut corporation (herein
referred to as "Customer").
ARTICLE I
DEFINITIONS
-----------
For the purposes of this Contract, unless expressly stated
otherwise, the following definitions shall be applicable.
1.1 The term "Btu" shall mean British Thermal Units.
1.2 A "day" shall mean the twenty-four (24) hour period
beginning at 7:00 a.m. Jackson, Mississippi time on each calendar
day and ending at 7:00 a.m. Jackson, Mississippi time on the
following calendar day.
1.3 "Contract" shall mean the above-referenced Gas Storage
Contract together with these General Terms and all other
attachments hereto or thereto.
1.4 The term "gas" shall mean natural gas in its natural
state, produced from wells, including casinghead gas produced
with crude oil, natural gas from gas wells and residue gas
resulting from processing both casinghead gas and gas well gas.
1<PAGE>
1.5 The term "Mcf" shall mean one thousand (1,000) cubic
feet at a pressure of fifteen and twenty-five thousandths
(15.025) psia and at a temperature of sixty degrees (60 degrees)
Fahrenheit.
1.6 The term "MMBtu" shall mean 1,000,000 Btu.
1.7 A "month" shall mean that period of time beginning at
7:00 a.m. Jackson, Mississippi time on the first day of a
calendar month and ending at 7:00 a.m. Jackson, Mississippi time
on the first day of the following calendar month; provided, that,
the first month hereunder shall commence on the first day of the
calendar month in which the Commencement Date occurs, and the
last month hereunder shall end on the date that this Contract
terminates.
1.8 "Point(s) of Delivery" shall mean the point or points,
as identified on Exhibit "B" of the Contract, at which gas is
received by Company for injection into storage.
1.9 "Point(s) of Redelivery" shall mean the point or
points, as identified on Exhibit "B" of the Contract, at which
gas is tendered by Company to Customer for delivery from storage.
1.10 The term "psia" shall mean pounds per square inch
absolute.
1.11 The term "psig" shall mean pounds per square inch
gauge.
1.12 "Storage Facilities" shall be as defined in the
"WHEREAS" clauses of the Contract.
General Terms - Page 2<PAGE>
1.13 The term "year" shall mean a period of twelve (12)
consecutive months.
ARTICLE II
QUALITY
-------
The gas delivered by either party to the other hereunder
shall meet the quality specifications of the transporting
pipeline which receives or delivers such gas at the Point(s) of
Delivery or Redelivery and shall, in addition, be of such quality
that it shall meet the following specifications, if such
standards are more stringent:
a. Be commercially free of dust, gum, gum-forming
constituents, gasoline, and other solid and/or liquid
matter, including but not limited to water, gas
treating chemicals and well completion fluids and
debris, which may become separated from the gas during
transportation thereof.
b. Contain not more than one quarter (1/4) grain of
hydrogen sulphide per one hundred (100) cubic feet, as
determined by the cadmium sulfate quantitative test,
nor more than nine (9) grains of total sulfur per one
hundred (100) cubic feet.
c. The gas delivered hereunder shall not contain more than
two-tenths of one percent (0.2%) by volume of oxygen,
and shall not contain more than two percent (2%) by
General Terms - Page 3<PAGE>
volume of carbon dioxide; and shall not contain more
than two percent (2%) by volume of nitrogen.
d. Have a heating value of not less than nine hundred
eighty (980) Btu's per cubic feet.
e. Have a temperature of not more than one hundred twenty
degrees Fahrenheit (120 degrees F), nor less than forty
degrees Fahrenheit (40 degrees F).
f. Have been dehydrated by any method other than the use
of a calcium chloride as desiccant, for removal of
entrained water in excess of seven (7) pounds of water
per million (1,000,000) cubic feet of gas.
ARTICLE III
PRESSURE
--------
Company shall deliver gas to Customer from storage hereunder
at pressures sufficient to enter the transporting pipeline's
facilities at the Point(s) of Redelivery against the operating
pressures maintained in such pipeline from time to time, provided
that Company shall not be required to deliver gas at pressures in
excess of 960 psig. Customer shall deliver gas to Company for
injection at the Point(s) of Delivery at the pressures as may be
available from time to time in the transporting pipeline's
facilities at such points, but in no event shall such pressures
be less than 550 psig or greater than Company's maximum allowable
operating pressure.
General Terms - Page 4<PAGE>
ARTICLE IV
TITLE AND RISK OF LOSS
----------------------
4.1 Title to the natural gas stored by Company and to
Customer hereunder shall, at all times, be in Customer and,
except as provided in Section 4.2 Company makes no warranty of
title whatsoever. Customer warrants for itself, its and assigns,
that it will have at the time of delivery of gas storage
hereunder good title or valid right to deliver such stored
hereunder. Customer warrants for itself, its successors assigns,
that the gas it delivers hereunder shall be free and of all
liens, encumbrances, or claims whatsoever; and that it indemnify
Company and save it harmless from all claims, actions, damages,
costs and expenses arising directly or from or with respect to
the title to gas tendered to hereunder.
4.2 Company warrants that it shall neither cause nor allow
any cloud or encumbrance of any nature to arise by, through or
under Company with respect to Customer's title to any gas
tendered to Company for storage, and agrees to redeliver such gas
pursuant to this Contract free from all liens and adverse claims
arising by, through or under Company, and that it will indemnify,
defend, protect, and save Customer harmless from all claims,
suits, actions, damages, costs and expenses arising directly or
indirectly from the same.
4.3 As between Customer and Company: Customer shall be in
control and possession of the gas prior to delivery to Company
General Terms - Page 5<PAGE>
for injection at the Point(s) of Delivery and after redelivery by
Company to Customer at the Point(s) of Redelivery, and, shall
indemnify, defend and hold Company harmless from any damage or
injury caused thereby except for damages and injuries caused by
the negligence of Company; and, Company shall be in control and
possession of the gas after the receipt of the same for injection
at the Point(s) of Delivery and until redelivery by Company to
Customer at the Point(s) of Redelivery , and, shall indemnify,
defend and hold Customer harmless from any damage or injury
caused thereby, except for damages and injuries caused by the
negligence of Customer. The risk of loss for all gas injected
into, stored in and withdrawn from the Storage Facilities shall
be and remain with the party having control and possession of the
gas as herein provided.
ARTICLE V
MEASUREMENT
-----------
5.1 The unit of volume for measurement of gas delivered
hereunder shall be one (1) cubic foot of gas at a base
temperature of sixty degrees Fahrenheit (60 degrees F) and at an
absolute pressure of fifteen and twenty-five thousandths (15.025)
pounds per square inch. All fundamental constants, observations,
records, and procedures involved in determining and/or verifying
the quantity and other characteristics of gas delivered hereunder
shall, unless otherwise specified herein, be in accordance with
the standards prescribed in American Gas Association ("A.G.A.")
General Terms - Page 6<PAGE>
Gas Measurement Committee Report No. 3, as now and from time to
time amended or supplemented. All measurements of gas shall be
determined by calculation into terms of such unit. All
quantities given herein, unless expressly stated otherwise, are
in terms of such unit. Notwithstanding the foregoing, it is
agreed that, for all purposes, the Btu content of the gas
received and delivered by Company hereunder shall be measured on
an "as delivered" basis rather than a fully saturated or "wet"
basis.
5.2 Company, at its sole expense, shall install, and
operate, or cause to be installed, maintained and operated, the
measurement facilities required hereunder. Said measurement
facilities shall be so equipped with orifice meters, recording
gauges, or other types of meters of standard make and design
commonly acceptable in the industry, as to accomplish the
accurate measurement of gas delivered hereunder. The changing of
charts, calibrating and adjustment of meters shall be done by
Company or its agent.
5.3 The accuracy of Company's measuring equipment shall be
verified by Company at least once in each thirty (30) day
period. If either party desires a special test of any measuring
equipment, it will promptly notify the other party and the
parties shall then cooperate to secure a prompt verification of
the accuracy of such equipment. The expenses of any such special
test, if requested by Customer, shall be borne by Customer if the
measuring equipment tested is found to be accurate within the
General Terms - Page 7<PAGE>
limit of plus or minus two percent (2%) of error. For the
purposes of measurement and meter calibration, the atmospheric
pressure shall be assumed to be fourteen and seventy-three
hundredths (14.73) pounds per square inch, irrespective of
variations in natural atmospheric pressure from time to time.
Company and Customer, upon request, shall have the right to be
present at any test of any measuring equipment, including any
check measuring equipment installed by Customer at its sole
expense.
5.4 If upon testing, the metering equipment is found to be
inaccurate, in the aggregate, by two percent (2%) or more, either
plus or minus, registration thereof and any payment based upon
such registration shall be corrected at the rate of such
inaccuracy for any period of inaccuracy which is definitely known
or agreed upon, or if not known or agreed upon, then for a period
extending back one-half (1/2) of the time elapsed since the day
of the last calibration, not exceeding, however, forty-five (45)
days. Following any test, any metering equipment found to be
inaccurate to any degree shall be adjusted immediately to measure
accurately; however, if any inaccuracy is less than two percent
(2%), all prior readings and measurements shall be deemed to be
accurate and no adjustments to any prior reading shall be made.
If, for any reason, any meter is registering inaccurately or is
out of service or out of repair so that the quantity of gas
delivered through such meter cannot be ascertained or computed
from the readings thereof, the quantity of gas so delivered
General Terms - Page 8<PAGE>
during such period shall be estimated and agreed upon by the
parties hereto upon the basis of the best available data
determined,
a. by using the registration of any check measuring
equipment, if installed and registering accurately or
in the absence of (a);
b. by correcting the error if the percentage of error is
ascertainable by calibration, test, or mathematical
calculation, or in the absence of both (a) and (b);
c. by estimating the quantity of gas deliveries by
deliveries during preceding periods under similar
conditions when the meter was registering accurately.
5.5 The measurement hereunder shall be corrected for
deviation from Boyle's Law at the pressure and temperature under
which gas is delivered hereunder.
ARTICLE VI
BILLINGS AND PAYMENTS
---------------------
6.1 On the tenth (10th) day of each month, Company shall
render to Customer a statement for the preceding month properly
identifying the applicable Point(s) of Delivery and Point(s) of
Redelivery and showing the total quantity of gas received from
and delivered to Customer hereunder, the amount due therefor, the
amount of Customer's gas in storage as of the close of such month
and information sufficient to explain and support any adjustments
General Terms - Page 9<PAGE>
made by Company (in accordance with section 6.3 below) in
determining the amount billed.
6.2 Customer shall pay Company the full amount reflected on
the statements rendered within fifteen (15) days of its receipt
of same. If the fifteenth (15th) day shall fall upon a weekend
or legal holiday, then such payment shall be made on the first
regular business day following such fifteenth (15th) day. In the
event that Customer fails to pay such amounts when due, interest
shall accrue on all unpaid amounts from the date due until paid
at a rate of interest equal to the lesser of: (i) the rate of
interest quoted as the "prime rate" of NCNB Texas National Bank -
- Dallas, Texas to its largest and most credit-worthy commercial
customers; or (ii) the highest legal rate of interest allowed by
law.
6.3 In the event an error is discovered in the amount
billed in any statement rendered by Company, such error shall be
adjusted within thirty (30) days of the discovery of the error.
In the event a dispute arises as to the amount payable in any
statement rendered, Customer shall pay the amount shown payable
to Company in the statement which is not in dispute. Any
overcharges collected by Company pursuant to this section 6.3
shall be remitted to Customer, with interest, calculated as
provided in section 6.2, from the date such overcharges are
received by Company until repaid. Such payment shall not be
deemed to be a waiver of the right by Customer to recoup any
overpayment. All statements shall be considered final, and any
General Terms - Page 10<PAGE>
and all objections thereto be deemed waived, unless made in
writing within twenty-four (24) months of Customer's receipt
thereof.
ARTICLE VII
TAXES
-----
7.1 Subject to the provisions of Section 7.3, Customer
agrees to pay to Company, by way of reimbursement, within fifteen
(15) days of receipt of an invoice for same (pro-rated among all
customers), all new taxes enacted and levied or imposed upon
Company after the Commencement Date and, any increases in
existing taxes which may be made effective after the Commencement
Date, which arise out of the gas storage services provided
hereunder. In the event that any additional taxes or increases
in taxes are imposed with respect to the storage of gas hereunder
and, should Company elect not to challenge the same, then
Customer shall be subrogated to Company's rights to challenge
same.
7.2 The term "taxes" as used herein, shall mean all taxes
which are now in existence or which may in the future be levied
upon Company, or its facilities or the storage of gas hereunder
and and arising out of the gas storage services to be provided
hereunder including, but not limited to, street and alley rental
tax, licenses, fees and any other taxes, charges or fees of any
kind levied, assessed or made by any governmental authority on
the act, right or privilege of transporting, handling or
General Terms - Page 11<PAGE>
delivering gas or using Company's Storage Facilities, which is
measured by the volume, heating value, value of the gas, or any
fee in respect to the gas or the storage,transportation or other
handling thereof (excluding, however, real property, ad valorem,
capital stock, income or excess profit taxes, or general
franchise taxes imposed on corporations on account of their
corporate existence or on their right to do business within the
state as a foreign corporation and similar taxes).
7.3 Customer shall not be obligated to reimburse Company
pursuant to Section 7.1 in any year in an amount in excess of
five percent (5%) of the cumulative total of the monthly demand
charges paid by Customer to Company in such year. In the event
that the total of the increases in taxes and additional taxes
exceed such five percent (5%) amount, then Company shall have the
option of paying the same or of seeking a determination from the
appropriate regulatory agency that such additional taxes or
increases in taxes are prudent and appropriate for inclusion in
Company's rates. Subject to the following provisions, in the
event that such regulatory agency determines that such additional
and increased taxes including, without limitation, those in
excess of said five percent (5%) amount, are appropriate for
inclusion, Customer shall have the option of either paying such
approved rate increases or terminating this Contract, upon
providing Company sixty days' prior written notice; provided,
however, that upon receipt of Customer's notice of termination,
Company shall have the option, without obligation, to charge
General Terms - Page 12<PAGE>
Customer an increased amount which does not exceed such five
percent (5%) amount and, in such event, Customer's notice of
termination shall be of no force or effect and this Contract
shall continue in accordance with its terms. Company shall
provide Customer written notice of any such election within such
sixty (60) day period. Customer shall be given notice and shall
have the right to participate in such rate determination and
oppose the appropriateness of including the additional or
increased taxes in Company's rates.
ARTICLE VIII
REGULATORY BODIES
-----------------
This Contract is subject to all present and future valid
laws and lawful orders of all regulatory bodies now or hereafter
having jurisdiction of either or both the parties; and should
either of the parties, by force of any such law or regulation
imposed at any time during the term of this Contract, be rendered
unable, wholly or in part, to carry out its obligations under
this Contract, other than Customer's obligation to make payments
due hereunder then, this Contract shall continue nevertheless and
shall then be deemed modified to conform with the requirements of
such law or regulation. Notwithstanding the above, this Contract
shall not be deemed to be so modified if such law or regulation
substantially and materially prohibits Company from providing
services to Customer hereunder substantially in accordance with
the terms set forth in this Contract and, in such event, Company
General Terms - Page 13<PAGE>
and Customer shall negotiate in good faith to amend the terms of
this Contract such that such law or regulation may be complied
with and both Company and Customer will continue to receive the
rights and benefits herein provided. This Contract is expressly
made subject to any and all tariff and other filings made by
Company and approved by any federal or state regulatory body
provided, that Company will not, without Customer's consent, seek
to alter the firm character of the storage services herein
provided or to reduce the term of this Contract. In the event
that any regulatory body having jurisdiction over this Contract
prohibits Company from collecting rates for the services provided
hereunder which are at least equal to the rates and charges
provided for in this Contract, then Company shall have the right
to terminate this Contract. In the event that any regulatory
body having jurisdiction requires Company to collect rates for
services provided hereunder which are in excess of the rates
herein provided, then Customer shall have the right to terminate
this Contract.
ARTICLE IX
FORCE MAJEURE
-------------
9.1 In the event of either party hereto being rendered
unable, wholly or in part, by force majeure to carry out its
obligations under this Contract, other than to make payments
hereunder (except as provided in section 9.3 below), the
obligations of the party, as far as they are affected by such
General Terms - Page 14<PAGE>
force majeure, shall be suspended during the continuance of any
inability so caused, but for no longer period, and such cause
shall as far as possible be remedied with all reasonable
dispatch. The party so affected by such event of force majeure
shall give written notice, including reasonably full particulars
of such force majeure, in writing or by telegraph to the other
party as soon as possible but in no event more than ten (10) days
after the occurrence of the cause so relied upon.
9.2 The term "force majeure" as employed herein shall mean,
without limitation, acts of God, strikes, lockouts, or other
industrial disturbances, acts of the public enemy, wars,
blockades, insurrection, riots, epidemics, landslides, lightning,
earthquakes, fires, storms, floods, washouts, arrest and
restraints of governments and people, civil disturbances,
explosions, breakage and/or accidents to machinery, lines or
pipe, freezing of lines or pipe, freezing of lines of pipe,
inability to obtain or delay in obtaining rights-of-way,
material, supplies, labor or permits, or refusal by pipelines,
which are transporting on Customer's behalf, to receive or
deliver gas hereunder. It is understood and agreed that the
settlement of strikes or lockouts shall be entirely within the
discretion of the party having the difficulty, and that the above
requirements that any force majeure shall be remedied with all
reasonable dispatch shall not require the settlement of strikes
or lockouts by acceding to the demands of any opposing party when
such course is inadvisable in the discretion of the party having
General Terms - Page 15<PAGE>
the difficulty. Company shall utilize all reasonable efforts to
design, operate and maintain its facilities in a manner which
minimizes the potential for freezing of wells or lines of pipe.
9.3 In the event that Company is, due to an event of force
majeure, as herein defined, unable to provide storage services,
in whole or in part, under this Contract, then the obligation of
Customer to make payment of demand charges hereunder shall
thereafter be waived or reduced proportionately until service is
again made available hereunder.
ARTICLE X
DEFAULT AND TERMINATION
-----------------------
10.1 If either party hereto shall fail to perform any of the
covenants or obligations imposed upon it by virtue of this
Contract (except where such failure shall be excused under any of
the provisions hereof), then in such event the other party may,
at its option, terminate this Contract by proceeding as follows:
the party not in default shall cause a written notice to be
served upon the party in default, stating specifically the cause
for terminating this Contract and declaring it to be the
intention of the party giving the notice to terminate the same;
whereupon, the party in default shall have thirty (30) days after
receipt of the aforesaid notice in which to remedy or remove the
cause or causes of default stated in the notice of termination
and if, within said period of thirty (30) days, the party in
default does so remedy and remove said cause or causes, and fully
General Terms - Page 16<PAGE>
indemnifies the party not in breach, then such notice shall be
nullified and this Contract shall continue in full force and
effect. In the event the party in default does not so remedy and
remove the cause or causes of default, or does not fully
indemnify the party giving the notice for such party's actual
damages as a result of such breach within said period of thirty
(30) days, then this Contract shall become null and void from and
after the expiration of said period; provided, however, that if
such default be remedied but no indemnification therefor has been
made due to a bona fide dispute between the parties as to the
amount thereof, then this Contract shall not terminate, but the
party not in default shall have the right to seek recovery of its
actual damages as provided by law. Any termination for breach of
this Contract shall be carried out strictly in accordance with
this section. Nothing in this Section 10.1 shall be construed to
limit in any way the remedies available to either party for
breach of this Contract except for the right to terminate.
10.2 Any cancellation of this Contract pursuant to the
provisions of this Article X shall be without prejudice to the
right of the party not in default to collect any amounts then due
it and without waiver of any other remedy to which the party not
in default may be entitled.
10.3 In the event of termination, cancellation or expiration
of this Contract and, upon such occurrence, there is gas in
storage for Customer's account, this Contract shall continue in
force and effect for the sole purpose of withdrawal and delivery
General Terms - Page 17<PAGE>
of and payment for storage services of said gas for an additional
ninety (90) days.
General Terms - Page 18<PAGE>
EXHIBIT "B"
TO GAS STORAGE CONTRACT BETWEEN
ENDEVCO INDUSTRIAL GAS SALES COMPANY
AND CONNECTICUT NATURAL GAS CORPORATION
DATED ___________________________
<TABLE>
<CAPTION>
Maximum Quantity
POINT(S) OF DELIVERY (In MMBtu's)
-------------------- ----------------
<S> <C>
Interconnection between the Storage 5,000
Facilities and the pipeline facilities
of Transco in Covington County,
Mississippi
Interconnection between the Storage 5,000
Facilities and the pipeline facilities
of Tennessee in Forrest County,
Mississippi
</TABLE>
Gas may be scheduled for delivery at either or both of the Points
of Delivery, in quantities up to the maximum quantities indicated
for each such point, but the cumulative total of deliveries at
both Points of Delivery shall not exceed the MDIQ stated in the
Contract, unless otherwise agreed by Company.
<TABLE>
<CAPTION>
Maximum Quantity
POINT(S) of REDELIVERY (In MMBtu's)
---------------------- ----------------
<S> <C>
Interconnection between the Storage 10,000
Facilities and the pipeline facilities
of Transco in Covington County,
Mississippi
Interconnection between the Storage 10,000
Facilities and the pipeline faciliites
of Tennessee in Forrest County,
Mississippi
</TABLE>
Gas may be scheduled for delivery at either or both of the Points
of Redelivery, in quantities up to the maximum quantities
indicated for each such point, but the cumulative total of
deliveries at both Points of Redelivery shall not exceed the MDWQ
stated in the Contract, unless otherwise agreed by Company.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
CONNECTICUT NATURAL GAS CORPORATION AND SUBSIDIARIES
-----------------------------------------------------
COMPUTATION OF CONSOLIDATED PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
-------------------------------------------------------------------------
(Thousands of Dollars Except for Shares and Per Share Date)
Fiscal Year Ended September 30,
--------------------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net income applicable to common stock:
Continuing operations
Income $ 17,703 $ 16,855 $ 15,265 $ 12,343 $ 13,569
Less-Preferred stock dividends 66 67 68 70 72
---------- ---------- ---------- ---------- ----------
Income applicable to common stock 17,637 16,788 15,197 12,273 13,497
---------- ---------- ---------- ---------- ----------
Income/(loss) from discontinued operations - - - - (328)
Net gain on disposal of discontinued operations - - - 517 446
Cummulative effect of change in accounting (2) - - - 1,779 -
---------- ---------- ---------- ---------- ----------
Net income applicable to common stock $ 17,637 $ 16,788 $ 15,197 $ 14,569 $ 13,615
========== ========== ========== ========== ==========
Weighted average number of shares of common
stock outstanding during the year (1) 9,539,695 9,527,772 8,704,897 8,516,632 8,363,606
========== ========== ========== ========== ==========
Net income per share of common stock -
primary and fully diluted (1)
Continuing operations $1.85 $1.76 $1.75 $1.44 $1.61
Discontinued operations - - - - (.03)
Net gain on disposal of discontinued operations - - - .06 .05
Cumulative effect of change in accounting (2) - - - .21 -
----- ----- ----- ----- -----
$1.85 $1.76 $1.75 $1.71 $1.63
===== ===== ===== ===== =====
<FN>
NOTE:
(1) The Company has no common stock equivalents. Therefore, no adjustments to the weighted average number of shares of
common stock outstanding during any of the years reflected in this exhibit are necessary in order to calculate either
primary or fully diluted earnings per share. For this reason primary and fully diluted earnings per share are the
same in each year.
(2) Changes in accounting include a change in the method of accounting for municipal property taxes in 1991.
</TABLE>
<PAGE>
EXHIBIT 21
CONNECTICUT NATURAL GAS CORPORATION AND SUBSIDIARIES
----------------------------------------------------
SUBSIDIARIES OF THE REGISTRANT
------------------------------
<TABLE>
<CAPTION>
Percentage of Voting
Incorporated Under Securities Owned By
Name of Subsidiary Laws of Immediate Parent
------------------ ------------------ --------------------
<S> <C> <C>
Energy Networks, Inc. (1) Connecticut 100%
The Hartford Steam Company Connecticut 100%
DataBeam Systems Corporation (2) Connecticut 100%
CNG Realty Corp. Connecticut 100%
ENI Transmission Company Connecticut 100%
The Greenwich Gas System, Inc. (2) Connecticut 100%
<FN>
(1) The Hartford Steam Company, and DataBeam Systems Corporation are wholly owned
subsidiaries of ENI at September 30, 1994.
(2) DataBeam Systems Corporation: inactive.
The Greenwich Gas System, Inc.: inactive.
</TABLE>
<PAGE>
EXHIBIT 23
ARTHUR ANDERSEN LLP
Hartford, Connecticut
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our report dated November 21, 1994, included in this Form
10-K, into the Company's previously filed Registration Statement on Form S-
8 (Registration Statement No. 33-54643) concerning its Employee Savings
Plan, Registration Statement on Form S-8 (Registration Statement No. 33-
54653) concerning its Union Employee Savings Plan and Registration
Statement on Form S-3 (Registration Statement No.33-38087) concerning its
Automatic Dividend Reinvestment Plan.
S/ Arthur Andersen LLP
--------------------------
(ARTHUR ANDERSEN LLP)
Hartford, Connecticut
December 19, 1994
<PAGE>
Exhibit 24
Page 1 of 2
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned does
hereby appoint and constitute Reginald L. Babcock as his or her agent and
attorney-in-fact to execute in his or her name, place and stead (whether on
behalf of the undersigned individually or as a director of Connecticut
Natural Gas Corporation or otherwise) the Annual Report on Form 10-K of
Connecticut Natural Gas Corporation respecting its fiscal year ended
September 30, 1994 and any and all amendments thereto and to file such Form
10-K and any such amendments thereto with the Securities and Exchange
Commission. Said attorney shall have the power to act hereunder.
IN WITNESS WHEREOF, the undersigned have executed this instrument this
22nd day of November, 1994.
S/ Bessye W. Bennett S/ Denis F. Mullane
------------------------------------ ------------------------------------
(Bessye W. Bennett) (Denis F. Mullane)
Director Director
S/ Richard J. Shima
------------------------------------ ------------------------------------
(James F. English, Jr.) (Richard J. Shima)
Director Director
S/ Herman J. Fonteyne S/ Laurence A. Tanner
------------------------------------ ------------------------------------
(Herman J. Fonteyne) (Laurence A. Tanner)
Director Director
S/ Beverly L. Hamilton S/ DeRoy C. Thomas
------------------------------------ ------------------------------------
(Beverly L. Hamilton) (DeRoy C. Thomas)
Director Director
S/ Harvey S. Levenson S/ Angelo Tomasso, Jr.
------------------------------------ ------------------------------------
(Harvey S. Levenson) (Angelo Tomasso, Jr.)
Director Director
<PAGE>
Exhibit 24
Page 2 of 2
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned does
hereby appoint and constitute Reginald L. Babcock as his or her agent and
attorney-in-fact to execute in his or her name, place and stead (whether on
behalf of the undersigned individually or as a director of Connecticut
Natural Gas Corporation or otherwise) the Annual Report on Form 10-K of
Connecticut Natural Gas Corporation respecting its fiscal year ended
September 30, 1994 and any and all amendments thereto and to file such Form
10-K and any such amendments thereto with the Securities and Exchange
Commission. Said attorney shall have the power to act hereunder.
IN WITNESS WHEREOF, the undersigned have executed this instrument this
20th day of December, 1994.
------------------------------------ ------------------------------------
(Bessye W. Bennett) (Denis F. Mullane)
Director Director
S/ James F. English, Jr.
------------------------------------ ------------------------------------
(James F. English, Jr.) (Richard J. Shima)
Director Director
------------------------------------ ------------------------------------
(Herman J. Fonteyne) (Laurence A. Tanner)
Director Director
------------------------------------ ------------------------------------
(Beverly L. Hamilton) (DeRoy C. Thomas)
Director Director
------------------------------------ ------------------------------------
(Harvey S. Levenson) (Angelo Tomasso, Jr.)
Director Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND> THIS SCHEDULE CONTAINS
SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE
SHEETS, STATEMENTS OF
INCOME, STATEMENTS OF
CASHFLOWS AND STATEMENTS OF
CAPITALIZATION AND IS
QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 264,146
<OTHER-PROPERTY-AND-INVEST> 52,737
<TOTAL-CURRENT-ASSETS> 61,418
<TOTAL-DEFERRED-CHARGES> 80,253
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 458,554
<COMMON> 29,560
<CAPITAL-SURPLUS-PAID-IN> 66,657
<RETAINED-EARNINGS> 43,264
<TOTAL-COMMON-STOCKHOLDERS-EQ> 139,481
0
909
<LONG-TERM-DEBT-NET> 154,193
<SHORT-TERM-NOTES> 7,500
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 11,000
<LONG-TERM-DEBT-CURRENT-PORT> 3,791
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 141,680
<TOT-CAPITALIZATION-AND-LIAB> 458,554
<GROSS-OPERATING-REVENUE> 290,662
<INCOME-TAX-EXPENSE> 13,466
<OTHER-OPERATING-EXPENSES> 246,284
<TOTAL-OPERATING-EXPENSES> 259,750
<OPERATING-INCOME-LOSS> 30,912
<OTHER-INCOME-NET> (231)
<INCOME-BEFORE-INTEREST-EXPEN> 30,681
<TOTAL-INTEREST-EXPENSE> 12,978
<NET-INCOME> 17,703
66
<EARNINGS-AVAILABLE-FOR-COMM> 17,637
<COMMON-STOCK-DIVIDENDS> 14,118
<TOTAL-INTEREST-ON-BONDS> 3,293
<CASH-FLOW-OPERATIONS> 24,929
<EPS-PRIMARY> 1.85
<EPS-DILUTED> 1.85
<PAGE>
</TABLE>
