<PAGE> 1
File Number 70-7641
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Post-Effective Amendment No. 14 To
FORM U-1
APPLICATION-DECLARATION UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
By
CNG TRANSMISSION CORPORATION
CNG IROQUOIS, INC.
445 West Main Street
Clarksburg, West Virginia 26301
CONSOLIDATED NATURAL GAS COMPANY
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
(a Registered Holding Company
Parent of the Applicant-Declarants)
Names and addresses of agents for service:
H. E. BROWN, General Counsel
CNG Transmission Corporation
CNG Iroquois, Inc.
445 West Main Street
Clarksburg, West Virginia 26301
J. M. HOSTETLER, Attorney
Consolidated Natural Gas
Service Company, Inc.
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
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File Number 70-7641
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 14 To
FORM U-1
APPLICATION-DECLARATION UNDER THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
Item 1. Description of Proposed Transaction
___________________________________
I. INTRODUCTION
CNG Transmission Corporation ("Transmission") is a wholly-owned
subsidiary of Consolidated Natural Gas Company ("Consolidated"); CNG Iroquois,
Inc. ("CNGI") is a wholly-owned subsidiary of Transmission. Consolidated is a
public utility holding company registered under the Public Utility Holding
Company Act of 1935 ("Act") and engaged solely in the business of owning and
holding all of the outstanding securities, with the exception of certain minor
long-term debt, of seventeen subsidiary companies. The subsidiary companies
are principally engaged in natural gas exploration, production, purchasing,
gathering, transmission, storage, distribution, marketing and by-product
operations.
By Order dated January 9, 1991 (HCAR No. 25239) and Supplemental
Orders dated February 28, 1991, May 7, 1991 and July 6, 1993 (HCAR Nos. 25263,
25308 and 25845, respectively) (collectively referred to as "Prior Orders"),
the Securities and Exchange Commission ("Commission") authorized (1) CNGI's
acquisition of an aggregate 9.4% general partnership interest in Iroquois Gas
Transmission System L.P. ("Iroquois") -- which was formed to construct and
<PAGE> 3
own an interstate natural gas pipeline extending from the Canadian border to
Long Island, New York; (2) CNGI's equity contributions to Iroquois up to an
aggregate amount of $55 million*; (3) funding by Transmission of CNGI's
investment in Iroquois through the issue and sale to Transmission of CNGI
common stock, $10,000 par value ("Common Stock") -- which CNGI can buy back
at par from Transmission, hold as treasury shares and resell at par to
Transmission -- and/or the making of open account advances to CNGI, through
June 30, 1996, in such amounts that the aggregate outstanding equity
contributions made by Transmission does not at any one time exceed $55 million;
(4) guarantees and indemnities by CNGI on Iroquois' behalf in amounts not to
exceed $20 million at any one time; (5) guarantees and indemnities by
Transmission on CNGI's behalf not to exceed $20 million at any one time; (6)
CNGI to obtain letters of credit and/or enter into related reimbursement
agreements necessary to fulfill its obligations as a partner up to $20 million
at any one time; and (7) Transmission to obtain letters of credit and/or enter
into related reimbursement agreements to support CNGI's obligations up to $20
million at any one time.
Iroquois completed construction of its natural gas pipeline system in
1992 and commenced deliveries during the winter of 1991-1992. Iroquois has
also completed its construction financing and has its long-term or permanent
financing in place under a credit facility agreement with several institutional
lenders.
_________________
* The July 6, 1993 Order authorized an additional $20 million for future
construction in addition to the $35 million previously authorized. Thus, the
current authorization is an aggregate investment of up to $55 million.
<PAGE> 4
Transmission and CNGI now propose that certain authorizations --
not covered by the Commission's revised Rule 52 -- be extended through June
30, 2001, and Transmission and CNGI be authorized to increase ownership in the
Iroquois partnership from 9.4 to 16 percent.
II. PROPOSALS
A. Rule 52 and Extension of Certain Authorizations
CNGI, as a partner in Iroquois, must fund its pro rata portion of
maintenance activities based on its partnership interest in Iroquois.
Applicants plan to finance these activities under revised Rule 52 which now
exempts certain non-utility subsidiary financing. See 17 CFR Section 250.52.
If an expansion of the existing Iroquois pipeline is approved by the
partnership, CNGI must fund its pro rata portion. Applicants plan to finance
any expansion under Rule 52. Thus, no extension of authorizations (2) and (3)
above is necessary -- except for authority for CNGI to buy back its stock at
par from Transmission.
As in the past, CNGI and Transmission may need to guarantee
performance of Iroquois' obligations, indemnify third parties, and obtain
letters of credit, as described in (4) through (7) above. Rule 52 explicitly
excludes "any guarantee and other form of assumption of liability on the
obligations of another" from its coverage. 17 CFR Section 250.52(b). Thus,
the applicants propose that authorizations (4) through (7) be extended through
June 30, 2001. The guarantees, indemnities and letters of credit entered into
by CNGI from the date of the supplemental order issued in this post-effective
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amendment proceeding until June 30, 2001, shall in no event exceed $20 million
at any one time. Likewise, Transmission's guarantees, indemnities and letters
of credit during the same period shall also be limited to $20 million at any
one time.
B. Purchase of Additional Partnership Interest
Transmission and CNGI now seek to have CNGI acquire an additional
6.6% general partnership interest in Iroquois, raising its total general
partnership interest to 16%. The additional 6.6% interest will be acquired
from ANR Iroquois, Inc. (ANR"), for approximately $15,000,000. ANR, as of June
28, 1996, purchased all of the stock of Tennessee/New England Pipeline Company
("TNEP") -- which held as its only asset a 13.2% general partnership interest
in Iroquois -- and agreed to sell half of the TNEP partnership interest to
CNGI for 50% of ANR's purchase price of the TNEP stock, which is approximately
$30,000,000. CNGI will pay interest on one half of the ANR purchase price at
the Prime Rate of Citibank, N.A. from ANR's closing date for the TNEP stock to
the closing date of CNGI's purchase from ANR.
The acquisition by CNGI of an additional 6.6% partnership interest in
Iroquois is an acquisition of an interest in a company organized to participate
in activities involving the transportation of natural gas within the meaning of
Section 2(a) of the Gas Related Activities Act of 1990 ("GRAA"). Under the
GRAA, such acquisitions are deemed, for the purpose of Section 11(b)(1) of the
Act, to be reasonably incidental or economically necessary or appropriate to
the operation of the integrated public utility system of the CNG System.
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C. Increase in Authorized Shares
CNGI is a Delaware corporation with an authorized equity
capitalization of $50,000,000, consisting of 5,000 shares of common stock,
$10,000 par value each. Only 1,494 shares representing $14,940,000 in equity
capitalize are outstanding. Applicants are not certain that the existing
capital structure will be sufficient to cover future issuances for maintenance
activities, and any expansions through June 30, 2001. Thus, CNGI requests
authorization to increase its number of authorized shares from 5,000 to 10,000,
increasing CNGI's authorized equity capital from $50,000,000 to $100,000,000.
III. SOURCE OF FUNDS
Transmission and CNGI propose to fund the purchase of additional general
partnership interest by (i) selling shares of common stock ($10,000 par value
in both cases) to their respective parents at $10,000 per share, (ii) open
account advances as described below, or (iii) long-term loans from their
respective parents, in any combination thereof. Open account advances and
long-term loans will have the same effective terms and interest rates as
related borrowings of Consolidated in the forms listed below:
Open account advances will be made under letter agreement and
pursuant to a note, and will be repaid on or before a date not more
than one year from the date of the first advance with interest at
the same effective rate of interest as Consolidated's weighted
average effective rate for commercial paper and/or revolving credit
borrowings. If no such borrowings are outstanding, the interest
rate shall be predicated on the Federal Funds' effective rate of
interest as quoted daily by the Federal Reserve Bank of New York.
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Loans shall be evidenced by long-term non-negotiable notes
(documented by book entry only) maturing over a period of time (not
in excess of 30 years) to be determined by the officers of
Consolidated, with the interest predicated on and equal to
Consolidated's cost of funds for comparable borrowings. In the
event Consolidated has not had recent comparable borrowings, the
rates will be tied to the Salomon Brothers indicative rate for
comparable debt issuances published in Salomon Brothers Inc. Bond
Market Roundup or similar publication on the date nearest to the
time of takedown. All loans may be prepaid at any time without
premium or penalty.
Consolidated will obtain the funds required for the purchase of the
additional general partnership interest in Iroquois through internal cash
generation, issuance of long-term debt securities, borrowings under credit
agreements or through other authorizations approved by the Commission
subsequent to the effective date of this Application-Declaration.
IV. SUMMARY OF REQUESTED AUTHORIZATIONS
Applicants request
(i) extension of authorization for CNGI to buy back its stock at par
from Transmission, as described above in authorization (3), through June 30,
2001;
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(ii) extension of authorizations (4) through (7) above, contained in
the Prior Orders, through June 30, 2001;
(iii) authorization for CNGI to increase its partnership interest in
Iroquois from 9.4% to 16%, as described above; and
(iv) authorization to increase CNGI's authorized common stock from
5,000 to 10,000 shares.
V. RULE 53 SATISFIED
Rule 54 promulgated under the Act states that in determining whether to
approve the issue or sale of a security by a registered holding company for
purposes other than the acquisition of an EWG or a FUCO, or other transactions
by such registered holding company or its subsidiaries other than with respect
to EWGs or FUCOs, the Commission shall not consider the effect of the
capitalization or earnings of any subsidiary which is an EWG or a FUCO upon the
registered holding company system if Rules 53(a), (b) or (c) are satisfied.
Currently Consolidated owns indirectly, through CNG Power Services Corporation,
an EWG, a 1% general partnership and a 34% limited partnership interest in
Lakewood Cogeneration, L.P. ("Lakewood"), also an EWG. Consolidated does not
own any interests in a FUCO. Consolidated believes that Rule 53(a), (b) and
(c) are satisfied in its case as follows.
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Fifty percent of Consolidated's retained earnings as of March 31, 1996
was $722,442,000; Consolidated's aggregate investment (as defined in Rule
53(a)(l)(i)) in Lakewood on such date and in both its EWGs as of the date of
filing of this Application-Declaration is estimated to be approximately
$18,000,000, thereby satisfying Rule 53(a)(l). Consolidated and its
subsidiaries maintain books and records to identify the investments in and
earnings from its EWGs in which they directly or indirectly hold an interest,
thereby satisfying Rule 53(a)(2). In addition, the books and records of each
such entity are kept in conformity with United States generally accepted
accounting principles ("GAAP"), the financial statements are prepared according
to GAAP, and Consolidated undertakes to provide the SEC access to such books
and records and financial statements as it may request. Employees of
Consolidated's domestic public-utility companies at this time do not render
services, directly or indirectly, to the EWGs in the Consolidated System,
thereby satisfying Rule 53(a)(3). Copies of the Form U-1 filings have been
sent to the state regulators pursuant to Rule 53(2)(4) in connection with
Consolidated's only filing for EWG and FUCO financing, File No. 70-8759. An
order was issued in such proceeding on May 30, 1996 (Release No. 35-26523).
None of the conditions described in Rule 53(b) exist with respect to
Consolidated, thereby satisfying Rule 53(b) and making Rule 53(c) inapplicable.
VI. RULE 24 CERTIFICATES
Financing under Rule 52 will be reported in accordance with that rule.
Certificates of notification will be filed under Consolidated's Rule 24 Master
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Certificate, File No. 70-8667, within 45 days after the end of each calendar
quarterly period. Applicants will report (i) closing on the acquisition from
ANR, (ii) issuance and sale under Rule 52 of CNGI Common Stock to Transmission,
(iii) open account advances under Rule 52 to CNGI from Transmission, (iv)
guarantees, indemnities or letters of credit by CNGI and Transmission, and (v)
any CNGI stock buy back from Transmission.
Item 2. Fees, Commissions and Expenses
______________________________
It is estimated that the expenses to be incurred in connection with
the proposed transactions, other than those previously indicated, will not
exceed $14,000, consisting of counsel fees not in excess of $10,000 payable to
Service Company for services on a cost basis (including regularly employed
counsel) for the preparation of this Application-Declaration and other
documents, and miscellaneous out-of-pocket expenses estimated at $4,000.
The charges of Service Company in connection with the preparation of
this Application-Declaration on Form U-1 and other related documents and papers
required to consummate the proposed transactions are not considered to be fees
or commissions.
Item 3. Applicable Statutory Provisions
_______________________________
Section 12(b) applies to the giving of indemnities, guarantees and
reimbursement agreements by CNGI and Transmission. Section 9(a), 10 and 12(f)
of the Act and Rule 42 may apply to the acquisition by Transmission of CNGI's
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stock for the purpose of providing up to $15,000 000 in financing to CNGI for
the latter's acquisition of an additional 6.6% general partnership interest in
Iroquois, and any CNGI stock buy back from Transmission.
CNGI's continuing participation in Iroquois will satisfy the
requirements of Rule 16 under the Act. Consequently, Iroquois and affiliates
not already subject to the jurisdiction of the Act are exempt from all
obligations, duties or liabilities that would otherwise be imposed upon them by
the Act.
Section 6(a) applies to the increase in CNGI's authorized common
stock.
To the extent that the proposed transactions are considered by the
Commission to require authorization, approval or exemption under any section of
the Act or provision of the rules or regulations other than those specifically
referred to herein, request for such authorization, approval or exemption is
hereby made.
Item 4. Regulatory Approval
___________________
Iroquois is a "natural gas company" within the meaning of Section
2(b) of the Natural Gas Act, and, as such, it is subject to the jurisdiction of
FERC. No State commission or Federal commission other than the Securities and
Exchange Commission has jurisdiction over the proposed transactions.
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Item 5. Procedure
_________
Applicants respectfully requests authorization on or before August
30, 1996. Applicants' agreements with ANR, attached as Exhibits, require
Applicants to obtain Commission approval within 120 days or lose the right to
acquire 50% of the TNEP general partnership interest in Iroquois.
Applicants submit that a recommended decision by a hearing or other
responsible officer of the Commission is not needed with respect to the
proposed transactions. The Office of Public Utility Regulation of the Division
of Investment Management may assist in the preparation of the Commission's
decision. There should be no waiting period between the issuance of the
Commission's order and the date on which it is to become effective.
Item 6. Exhibits and Financial Statements
_________________________________
The following exhibits and financial statements are filed as a part
of this statement:
(a) Exhibits
________
A CNGI Certificate of Incorporation and Bylaws.
See A-7 and A-8 of PEA No. 3, this proceeding,
filed February 7, 1991.
B Partnership Interest Purchase and Sale Agreement.
F-4 Opinions of Counsel.
(To be filed by amendment.)
O-3 Proposed notice pursuant to Rule 22(f).
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(b) Financial Statements
____________________
Financial Statements are deemed unnecessary with respect to the
authorizations sought herein due to the nature of the proposed transactions
herein. However, any financial information will be furnished which the
Commission shall request.
Item 7. Information as to Environmental Effects
_______________________________________
As more fully described in Item 1(a), the proposed transactions
subject to the jurisdiction of this Commission relate to financing proposals
and involve no major federal action significantly affecting the human
environment.
SIGNATURES
__________
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, the undersigned Company has duly caused this statement to be
signed on its behalf by the undersigned thereunto duly authorized.
CNG TRANSMISSION CORPORATION
CNG IROQUOIS, INC.
By H. E. Brown
General Counsel
CONSOLIDATED NATURAL GAS COMPANY
By J. M. Hostetler
Attorney
Dated: July 1, 1996
Exhibit B
PARTNERSHIP INTEREST
PURCHASE AND SALE AGREEMENT
This Partnership Interest Purchase and Sale Agreement (this "Agreement"),
dated as of , 1996 is made and entered into by and among
Tennessee/New England Pipeline Company, a Delaware corporation ("Seller"), ANR
Iroquois, Inc., a Delaware corporation ("ANR Iroquois"), The Coastal
Corporation, a Delaware corporation ("Coastal"), CNG Iroquois, Inc., a Delaware
corporation ("Buyer") and CNG Transmission Corporation, a Delaware corporation
("CNG"). Seller, ANR Iroquois, Coastal, Buyer and CNG are sometimes
hereinafter referred to collectively as the "Parties" or individually as a
"Party."
WHEREAS, Seller owns a 13.2% interest (the "Partnership Interest") as a
general partner in Iroquois Gas Transmission System, L.P., a Delaware limited
partnership (the "Partnership") formed pursuant to that certain Limited
Partnership Agreement dated as of November 30, 1989, as amended (the "Limited
Partnership Agreement"), and is engaged in no other business or enterprise;
WHEREAS, each of ANR Iroquois and Buyer is a general partner in the
Partnership;
WHEREAS, ANR Iroquois has purchased the Stock of Seller upon and subject
to the terms and conditions and for the consideration set forth in that certain
Purchase Agreement, dated as of June 5, 1996 (the "Stock Purchase Agreement"),
among Tennessee Gas Pipeline Company ("Tennessee"), ANR Iroquois, and Coastal;
WHEREAS, Buyer desires to purchase, and Seller desires to sell, fifty
percent (50%) of the Partnership Interest, upon and subject to the terms and
conditions and for the consideration set forth herein;
NOW, THEREFORE, in consideration of the premises, the covenants set forth
herein and the benefits to be derived here from, the Parties hereby agree as
follows:
1. Capitalized Terms. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Limited Partnership
Agreement or the Stock Purchase Agreement, as the case may be, provided that
the terms "Affiliate," "Partnership Interest" and "Person" shall have the
meanings ascribed to them in the Stock Purchase Agreement.
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2. Purchase and Sale. Effective on the "Partnership Interest Closing
Date" (as such term is hereinafter defined), Seller hereby sells, assigns,
transfers and conveys to Buyer fifty percent (50%) of the Partnership Interest
which represents 6.6% of the total Percentage Interests in and to the
Partnership. Such sale is made "as is and where is" without representation or
warranty, express or implied, except as stated in this Section 2. Seller
represents and warrants that it is the sole legal and beneficial owner of the
Partnership Interest, free and clear of all liens, claims and encumbrances
except as specifically set forth in the Limited Partnership Agreement and the
documents relating to loans to the Partnership and that there has been no
default on the part of Seller after the "Closing Date" (as such term is defined
in Section 3.01 of the Stock Purchase Agreement for the purposes of this
Agreement) in the performance of the Limited Partnership Agreement in any
material respect. The parties acknowledge that the rights transferred by
Seller under the preceding sentence include, without limitation, the right to
participate in the Limited Partnership to the extent of the portion of the
Partnership Interest transferred hereunder (except as otherwise set forth in
the Limited Partnership Agreement). Effective as of the Partnership Interest
Closing Date, Buyer hereby fully assumes that portion of the rights, duties,
and obligations of Seller attributable to the portion of the Partnership
Interest transferred to Buyer hereby, regardless of whether any of such rights,
duties or obligations are known or unknown, fixed or contingent, and regardless
of whether any of such rights, duties or obligations are attributable to the
period of time prior to the date hereof.
3. Purchase Price. For and in consideration of the foregoing sale,
assignment, transfer, and conveyance, Buyer hereby agrees to pay to Seller on
the Partnership Interest Closing Date, in cash or other immediately available
funds, (a) an amount of ________, which represents Fifty Percent (50%) of the
"Purchase Price", as such term is defined in Section 2.02 of the Stock Purchase
Agreement (the "Payment"), together with interest on the Payment at the prime
rate per annum in effect from time to time publicly announced by Citibank, N.A.
(the "Prime Rate") for the period from and after the Closing Date through and
including the Partnership Interest Closing Date. The Payment shall be adjusted
by an amount equal to the difference between any cash Capital Contributions
paid by Seller to the Partnership and the amount of any net cash distributions
received by Seller from the Partnership pursuant to the Limited
<PAGE> 3
Partnership Agreement after the Closing Date and prior to the Partnership
Interest Closing Date with respect to the portion of the Partnership Interest
hereby transferred by Seller to Buyer, with a positive difference being an
upward adjustment and a negative difference being a downward adjustment.
4. Regulatory Approval. The performance of Buyer and CNG under this
Agreement is expressly conditioned upon Buyer and CNG receiving all necessary
approvals from the Securities and Exchange Commission under the Public Utility
Holding Company Act of 1935 (the "SEC Approvals"). Buyer and CNG represent and
warrant to Seller that Buyer and CNG have filed all material applications and
other documents necessary or appropriate with respect to the SEC Approvals and
Buyer and CNG further covenant and agree that subject to Buyer's right to
withdraw from, or be deemed to have withdrawn from, the Limited Partnership, or
to transfer its other remaining interest in the Limited Partnership to another
Person or Persons as described in Section 5 of this Agreement, each of Buyer
and CNG shall take all such further actions as may be necessary or appropriate
to obtain the SEC Approvals. Buyer and CNG shall notify Seller promptly after
the SEC Approvals are obtained.
5. Closing and Termination. At the closing of the transactions
contemplated by this Agreement, Buyer shall purchase fifty percent (50%) of the
Partnership Interest, which represents 6.6% of the total Percentage Interests
in and to the Partnership, from Seller and Seller shall sell, assign and
transfer fifty percent (50%) of the Partnership Interest, which represents 6.6%
of the total Percentage Interests in and to the Partnership, to Buyer, upon the
terms and subject to the conditions set forth in this Agreement. Such closing
shall take place at the offices of ANR Iroquois, 500 Renaissance Center,
Detroit, Michigan 48243, or at such other place as the Parties may agree. Such
closing shall occur on a mutually satisfactory date within ten days following
the receipt by Buyer and CNG of the SEC Approvals or such later date as the
Parties may otherwise agree (the "Partnership Interest Closing Date") provided,
however, that (a) if the Partnership Interest Closing Date has not occurred
within one hundred twenty (120) days after the execution of this Agreement or
(b) if prior to obtaining the SEC Approvals Buyer, pursuant to the terms of the
Limited Partnership Agreement, (i) withdraws from, or is deemed to have
withdrawn from, the Limited Partnership for any reason, or (ii) sells, assigns
or transfers its entire interest in the Limited Partnership to another Person
or Persons, then this Agreement shall automatically terminate
<PAGE> 4
without any further action on behalf of the Parties hereto whereupon no Party
shall have any remaining obligations to the other Parties hereunder.
Notwithstanding the preceding sentence, no such termination shall relieve any
Party from liability for its willful breach of this Agreement prior to such
termination. The Parties agree that the provisions of this section shall
survive any such termination of this Agreement.
6. Assumption of Rights and Obligations under the Stock Purchase
Agreement. Buyer and CNG, jointly and severally, by their respective execution
hereof, shall assume fifty percent (50%) of the joint and several rights,
obligations and liabilities of ANR Iroquois and Coastal under the Stock
Purchase Agreement, whether such rights, obligations and liabilities arose
prior to or after the date this Agreement is executed, including, without
limitation, the assumption of the indemnifications to, and from, Tennessee
and its Affiliates and the other "Tenneco Indemnified Parties" (as such term is
defined in Section 7.01 of the Stock Purchase Agreement) by, or for the benefit
of, ANR Iroquois and Coastal provided for in Sections 6.09, 7.01, 7.02, and
9.03 of the Stock Purchase Agreement, and shall assume fifty percent (50%) of
the liability and indemnification of Tennessee and its Affiliates, and ANR
Iroquois and its Affiliates for taxes and tax liabilities provided for in
Section 4 of Exhibit A to the Stock Purchase Agreement. ANR Iroquois and
Coastal, jointly and severally, by their respective execution hereof, shall
assign to Buyer a fifty percent (50%) interest in (i) the claims, rights and
causes of action assigned to ANR Iroquois and Coastal by Tennessee and its
Affiliates pursuant to Section 9.01 of the Stock Purchase Agreement, (ii) the
rights, obligations and indemnities with respect to Unaffiliated Insurance
Coverage, assigned to ANR Iroquois and Coastal by Tennessee and its Affiliates
pursuant to Section 9.03 of the Stock Purchase Agreement, and (iii) any and all
other claims, rights and causes of action of Seller which ANR and Coastal
acquire pursuant to the Stock Purchase Agreement.
7. No Representations or Warranties. Except as provided in Section 2
above, Seller, ANR and Coastal make no representations or warranties whatsoever
and disclaim all liability and responsibility for, and Buyer and CNG
acknowledge they are not relying upon, any representation, warranty, statement
or information made or communicated (orally or in writing) by Seller, ANR and
Coastal and, in particular, no
<PAGE> 5
representation is being made to Buyer by Seller, ANR and Coastal regarding the
Claims. Buyer and CNG acknowledge and affirm that they are relying on
information otherwise available to them to the extent they are relying on any
information regarding the Partnership and the Claims.
8. Miscellaneous. This Agreement shall be governed by, and interpreted
in accordance with, the law of the State of New York. This Agreement shall be
legally binding upon and shall inure to the benefit of the Parties hereto and
their respective legal representatives, successors and assigns. Any notice or
other communication required or permitted hereunder shall be given in the same
manner (and shall be deemed effective) as provided in the Limited Partnership
Agreement. This Agreement may not be amended nor may any of its terms be
waived except by written instrument signed by all of the Parties hereto. This
Agreement contains the entire agreement of the Parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
whether oral or in writing. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original but all of which
together shall constitute one instrument.
<PAGE> 6
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective duly authorized officers to be effective as of the
date first written above.
TENNESSEE/NEW ENGLAND
PIPELINE COMPANY
By:
Name:
Title:
ANR IROQUOIS, INC.
By:
Name:
Title:
THE COASTAL CORPORATION
By:
Name:
Title:
CNG IROQUOIS, INC.
By:
Name:
Title:
CNG TRANSMISSION CORPORATION
By:
Name:
Title:
<PAGE> 1 EXHIBIT O-3
Proposed Notice
Pursuant to Rule 22(f)
(Release No. )
FILINGS UNDER THE PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935
July , 1996
Notice is hereby given that the following filing(s) has/have been
made with the Commission pursuant to provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the proposed
transaction(s) summarized below. The application(s) and/or declaration(s) and
any amendments thereto is/are available for public inspection through the
Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in writing by
July , 1996 to the Secretary, Securities and Exchange Commission, Washington
DC 20549, and serve a copy of the relevant applicant(s) and/or declarant(s) at
the address(es) specified below. Proof of service (by affidavit or, in case of
any attorney at law, by certificate) should be filed with the request. Any
request for hearing shall identify specifically the issues of fact or law that
disputed. A person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in the matter.
After said date, the application(s) and/or declaration(s), as filed or as
amended, may be granted and/or permitted to become effective.
___________________________
<PAGE> 2
CNG TRANSMISSION CORPORATION, ET AL. (70-7641)
CNG Transmission Corporation ("Transmission"), 445 West Main Street,
Clarksburg, West Virginia 26301, a wholly-owned subsidiary of Consolidated
Natural Gas Company, a registered holding company, and CNG Iroquois, Inc.
("CNGI"), a wholly-owned subsidiary of Transmission having the same address as
Transmission, have filed a post-effective amendment to their
application-declaration filed under Section 6(a), 7, 9(a), 10, 12(b) and 12(c)
of the Act. Transmission and CNGI now propose that (1) certain authorizations
not covered by the Commission's revised Rule 52 be extended through June 30,
2001, and (2) Transmission and CNGI be authorized to increase general
partnership ownership -- from 9.4 to 16 percent -- in the Iroquois Gas
Transmission System L.P. ("Iroquois").
Iroquois is an interstate natural gas pipeline extending from the
Canadian border to Long Island, New York. The pipeline commenced deliveries
during the winter of 1991-1992.
As in the past, CNGI and Transmission may need to guarantee
performance of Iroquois' obligations, indemnify third parties, and obtain
letters of credit. Rule 52 explicitly excludes "any guarantee and other form
of assumption of liability on the obligations of another" from its coverage.
17 CFR Section 250.52(b). Thus, the applicants propose that authorizations for
such be extended through June 30, 2001. The guarantees, indemnities and
letters of credit entered into by CNGI from the date of the supplemental order
issued in this post-effective amendment proceeding until June 30, 2001, shall
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in no event exceed $20 million at any one time. Likewise, Transmission's
guarantees, indemnities and letters of credit during the same period shall also
be limited to $20 million at any one time.
CNGI is a Delaware corporation with an authorized equity
capitalization of $50,000,000, consisting of 5,000 shares of common stock,
$10,000 par value each. Only 1,494 shares representing $14,940,000 in equity
capitalize are outstanding. Applicants are not certain that the existing
capital structure will be sufficient to cover issuances for maintenance
activities, any expansions through June 30, 2001, and the purchase of the
additional partnership interest in Iroquois. Thus, CNGI requests authorization
to increase its number of authorized shares from 5,000 to 10,000, increasing
CNGI's authorized equity capital from $50,000,000 to $100,000,000.
Transmission and CNGI now seek to have CNGI acquire an additional
6.6% partnership interest in Iroquois, raising its total partnership interest
in such partnership from 9.4 to 16%. The additional 6.6% interest in Iroquois
will be acquired from ANR Iroquois, Inc. (ANR"), for approximately $15,000,000.
ANR has purchased all of the stock of Tennessee/New England Pipeline Company
("TNEP") -- which held as its only asset a 13.2% partnership interest in
Iroquois -- and agreed to sell half of the TNEP partnership interest to CNGI
for 50% of ANR's purchase price of the TNEP stock, which is approximately
$30,000,000. CNGI will pay interest on the purchase price at the Prime Rate of
Manufacturers Hanover Trust Company from ANR's closing date with TNEP to the
closing date of CNGI's purchase from ANR.
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The acquisition by CNGI of an additional 6.6% partnership interest in
Iroquois is an acquisition of an interest in a company organized to participate
in activities involving the transportation of natural gas within the meaning of
Section 2(a) of the Gas Related Activities Act of 1990 ("GRAA"). Under the
GRAA, such acquisitions are deemed, for the purpose of Section 11(b)(1) of the
Act, to be reasonably incidental or economically necessary or appropriate to
the operation of the integrated public utility system of the CNG System.
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
Jonathan G. Katz
Secretary
