-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VwWI7+jV5jOAkZENDaZW2GXoFHhGXaNOmO0bFSGDDpcMu8R6QK8rrFDBzzMK3isV kYOql4D0OccJuHdGNjUCBQ== 0000898822-97-000933.txt : 19971023 0000898822-97-000933.hdr.sgml : 19971023 ACCESSION NUMBER: 0000898822-97-000933 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19971022 SROS: NYSE GROUP MEMBERS: BROOKLYN UNION GAS CO GROUP MEMBERS: KEYSPAN ENERGY CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LONG ISLAND LIGHTING CO CENTRAL INDEX KEY: 0000060251 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 111019782 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-35975 FILM NUMBER: 97699303 BUSINESS ADDRESS: STREET 1: 175 E OLD COUNTRY RD CITY: HICKSVILLE STATE: NY ZIP: 11801 BUSINESS PHONE: 5165455184 MAIL ADDRESS: STREET 1: 175 E. OLD COUNTRY RD CITY: HICKSVILLE STATE: NY ZIP: 11801 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BROOKLYN UNION GAS CO CENTRAL INDEX KEY: 0000014525 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 110584613 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: ONE METROTEC CENTER CITY: BROOKLYN STATE: NY ZIP: 11201 BUSINESS PHONE: 7184032000 MAIL ADDRESS: STREET 1: ONE METROTEC CENTER CITY: BROOKLYN STATE: NY ZIP: 11201 SC 13D/A 1 SCHEDULE 13D AMENDMENT NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D* UNDER THE SECURITIES EXCHANGE ACT OF 1934 LONG ISLAND LIGHTING COMPANY (Name of Issuer) COMMON STOCK, PAR VALUE $5 PER SHARE (Title of Class of Securities) 542671102 (CUSIP Number) VINCENT D. ENRIGHT, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER KEYSPAN ENERGY CORPORATION AND THE BROOKLYN UNION GAS COMPANY ONE METROTECH CENTER BROOKLYN, NY 11201-3850 (718) 403-1000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: SETH A. KAPLAN, ESQ. WACHTELL, LIPTON, ROSEN & KATZ 51 WEST 52ND STREET NEW YORK, NEW YORK 10019 (212) 403-1000 OCTOBER 17, 1997 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Sched- ule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d- 1(b)(3) or (4), check the following box / /. * This statement on Schedule 13D is an original statement of KeySpan Energy Corporation and Amendment No. 1 to the statement on Schedule 13D of The Brooklyn Union Gas Company. Page 1 of 11 Pages CUSIP NO. 542671102 Page 2 of 11 Pages SCHEDULE 13D 1. NAME OF REPORTING PERSON SS OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Brooklyn Union Gas Company 11-0584613 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) / / 3. SEC USE ONLY 4. SOURCE OF FUNDS N/A 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / 6. CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF 7. SOLE VOTING POWER SHARES 0 BENEFICIALLY OWNED BY 8. SHARED VOTING POWER EACH 0 REPORTING PERSON 9. SOLE DISPOSITIVE POWER WITH 0 10. SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON None. 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CER- TAIN SHARES / / 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14. TYPE OF REPORTING PERSON CO CUSIP NO. 542671102 Page 3 of 11 Pages SCHEDULE 13D 1. NAME OF REPORTING PERSON SS OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON KeySpan Energy Corporation 11-3344628 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) / / 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / 6. CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF 7. SOLE VOTING POWER SHARES 0 BENEFICIALLY OWNED BY 8. SHARED VOTING POWER EACH 0 REPORTING PERSON 9. SOLE DISPOSITIVE POWER WITH 0 10. SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 23,981,964 shares of Common Stock. 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CER- TAIN SHARES / / 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.6%. Based upon 120,780,792 shares of Common Stock outstanding as of December 27, 1996, as represented by Issuer, calculated pursuant to Rule 13d-3(d)(1) and assuming, solely for pur- poses of such calculation, that the option to purchase such shares has been exercised. 14. TYPE OF REPORTING PERSON CO This Report on Schedule 13D (the "Schedule 13D") relates to the common stock, par value $5.00 per share ("LILCO Common Stock"), of Long Island Lighting Company, a New York corporation ("LILCO"). The Report on Schedule 13D originally filed by The Brooklyn Union Gas Company, a New York corporation ("Brooklyn Union"), on January 8, 1997 (the "Brooklyn Union Schedule 13D"), is hereby amended and supplemented to include the information contained herein, and this Report constitutes Amendment No. 1 to the Brooklyn Union Schedule 13D. This Report on Schedule 13D also constitutes the Original Report (the "KeySpan Schedule 13D") of KeySpan Energy Corporation, a New York corporation ("KeySpan"). Brooklyn Union and KeySpan (each, a "Reporting Person") constitute a "group" for purposes of Rule 13d-5 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with respect to their respective beneficial ownership of the Common Stock and are collectively referred to as the "Reporting Group." Capitalized terms not defined herein have the meanings provided in the prior Report on Schedule 13D referred to in this paragraph. The summary descriptions contained in this Report of certain agreements and documents are qualified in their entirety by reference to the complete texts of such agreements and documents, filed as Exhibits hereto and incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. The information contained in Item 2 of the Brooklyn Union Schedule 13D is hereby amended and supplemented by adding the following information: The business address of KeySpan is One MetroTech Center, Brooklyn, New York 11201-3850. Prior to September 29, 1997, KeySpan was a wholly owned subsidiary of Brooklyn Union. On September 29, 1997, KeySpan and Brooklyn Union consummated a transaction (the "Restructuring") pursuant to which KeySpan acquired all the outstanding shares of common stock, par value $0.33 1/3 per share ("Brooklyn Union Common Stock"), of Brooklyn Union in a binding share exchange under Section 913 of the New York Business Corporation Law and each share of Brooklyn Union Common Stock was exchanged for one share of common stock of KeySpan, par value $0.33 1/3 per share ("KeySpan Common Stock"), with the result that Brooklyn Union became a wholly owned subsidiary of KeySpan. The principal business of KeySpan is as a holding company of Brooklyn Union, which will continue to operate its present utility business as a subsidiary of KeySpan. Brooklyn Union currently distributes natural gas at retail in the Boroughs of Brooklyn and Staten Island and two-thirds of the Borough of Queens in New York City. It is anticipated that KeySpan will also become the parent holding company of any future non-utility subsidiaries and certain of Brooklyn Union's existing principal non-utility subsidiaries. Page 4 of 11 Pages Each executive officer and each director of KeySpan is a citizen of the United States. The name, business address and present principal occupation of each executive officer and direc- tor of KeySpan are set forth in Annex I to this Schedule 13D which is incorporated herein by this reference. During the last five years, neither KeySpan nor, to the best of KeySpan's knowledge, any of its executive officers or directors has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of compe- tent jurisdiction as a result of which KeySpan or such person was or is subject to a judgment, decree or final order enjoining fu- ture violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws, and which judgment, decree or final order was not subsequently vacated. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The information contained in Item 3 of the Brooklyn Union Schedule 13D is hereby amended and supplemented by adding the following information: Pursuant to an Amendment, Assignment and Assumption Agreement, signed on October 17, 1997 (the "Amendment"), by and among Brooklyn Union, LILCO and KeySpan, the Amended and Restated LILCO Stock Option Agreement, dated as of June 26, 1997, between Brooklyn Union and LILCO (the "Amended LILCO Stock Option Agreement"), was amended effective as of September 29, 1997 to provide for the assignment to KeySpan of all rights and obligations of Brooklyn Union thereunder and to substitute KeySpan for Brooklyn Union therein. As a result of the Amendment, KeySpan (and not Brooklyn Union) has the right, under certain circumstances, to acquire up to 19.9% of the outstanding shares of LILCO Common Stock before giving effect to the exercise of the LILCO Option (or 16.6% of the outstanding shares of LILCO Common Stock after giving effect to the exercise of the LILCO Option). Under certain circumstances, KeySpan may require LILCO to, or LILCO may be permitted to, repurchase for cash the LILCO Option and any shares of LILCO Common Stock acquired pursuant to the exercise of the LILCO Option. As of the date hereof, the LILCO Option is not exercisable. It is anticipated that, should the LILCO Option become exercisable and should KeySpan determine to exercise the LILCO Option for cash, KeySpan would obtain the funds from working capital or by borrowing from parties whose identity is not yet known. A copy of the Amended LILCO Stock Option Agreement is included as Exhibit 2.5 to this Schedule 13D, a copy of the Amendment is included as Exhibit 2.7 to this Schedule 13D, and each is incorporated herein by this reference. The foregoing Page 5 of 11 Pages description of the Amended LILCO Stock Option Agreement and the Amendment is qualified in its entirety by reference to such exhibits. ITEM 4. PURPOSE OF TRANSACTION. The information contained in Item 4 of the Brooklyn Union Schedule 13D is hereby amended and supplemented by adding the following information: In connection with the Restructuring, Brooklyn Union, LILCO and KeySpan entered into the Amendment to provide for, among other things, the assignment by Brooklyn Union to KeySpan, and the assumption by KeySpan, of all of Brooklyn Union's rights and obligations under the Exchange Agreement, as amended as of June 26, 1997 (as amended, the "Amended Exchange Agreement"), the Amended LILCO Stock Option Agreement and the Amended and Restated Brooklyn Union Stock Option Agreement, dated as of June 26, 1997, between Brooklyn Union and LILCO (the "Amended Brooklyn Union Stock Option Agreement"), and to substitute KeySpan for Brooklyn Union thereunder, effective upon the effective time of the Restructuring. A copy of each of the Amended Exchange Agreement, the Amended LILCO Stock Option Agreement, the Amended Brooklyn Union Stock Option Agreement and the Amendment is included as Exhibit 2.4, 2.5, 2.6 and 2.7, respectively to this Schedule 13D and is incorporated herein by this reference. The foregoing description of the Amended Exchange Agreement, the Amended LILCO Stock Option Agreement, the Amended Brooklyn Union Stock Option Agreement and the Amendment is qualified in its entirety by reference to such exhibits. ITEM 5. INTEREST IN SECURITIES OF ISSUER. The information contained in Item 5 of the Brooklyn Union Schedule 13D is hereby amended and supplemented by adding the following information: In connection with the Restructuring, Brooklyn Union, LILCO and KeySpan entered into the Amendment to provide for, among other things, the assignment by Brooklyn Union to KeySpan, and the assumption by KeySpan, of all of Brooklyn Union's rights and obligations under the Amended Exchange Agreement the Amended LILCO Stock Option Agreement and the Amended Brooklyn Union Stock Option Agreement, and to substitute KeySpan for Brooklyn Union thereunder, effective upon the effective time of the Restructuring. Under the Amended LILCO Stock Option Agreement, as further amended by the Amendment, KeySpan (and not Brooklyn Union) will have the right, under certain circumstances, to exercise the LILCO Option and, although the LILCO Option does not allow KeySpan to purchase any shares of LILCO Common Stock pursuant thereto Page 6 of 11 Pages unless and until the conditions to exercise specified in the Amended LILCO Stock Option Agreement occur, if such conditions are satisfied and KeySpan becomes entitled to purchase shares of LILCO Common Stock pursuant to the LILCO Option, KeySpan would be entitled to purchase 23,981,964 shares of LILCO Common Stock, or approximately 19.9% of the currently outstanding shares of LILCO Common Stock before giving effect to the exercise of the LILCO Option (or 16.6% of the currently outstanding shares of LILCO Common Stock after giving effect to the exercise of the LILCO Option) (based upon 120,780,792 shares of LILCO Common Stock outstanding as of December 27, 1996, as represented by LILCO in the Amended Exchange Agreement). KeySpan does not have the right to acquire any shares of LILCO Common Stock under the LILCO Option unless certain events specified in the Amended LILCO Stock Option Agreement, as further amended, occur. Accordingly, KeySpan does not have sole or shared voting or dispositive power with respect to any shares of LILCO Common Stock purchasable under the LILCO Option, and KeySpan disclaims beneficial ownership of LILCO Common Stock subject to the LILCO Option until such events occur. If the events occurred that would enable KeySpan to exercise the LILCO Option and KeySpan exercised the LILCO Option, KeySpan would have sole voting power and sole dispositive power with respect to the shares of LILCO Common Stock acquired pursuant to the LILCO Option. The foregoing description of certain terms of the Amended LILCO Stock Option Agreement is qualified in its entirety by reference to the Amended LILCO Stock Option Agreement and to the Amendment, a copy of each of which is filed as Exhibit 2.5 and 2.7, respectively, to this Schedule 13D and is incorporated herein by this reference. To the best of KeySpan's knowledge, no executive officer or director of KeySpan beneficially owns any shares of LILCO Common Stock, nor (except for the assignment by Brooklyn Union of its rights and obligations under the Amended LILCO Stock Option Agreement and the substitution of KeySpan for Brooklyn Union thereunder) have any transactions in LILCO Common Stock been effected during the past 60 days by KeySpan or, to the best knowledge of KeySpan, by any executive officer or director of KeySpan. In addition, no other person is known by KeySpan to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities covered by this Schedule 13D. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following exhibits are filed as part of this Sched- ule 13D: Exhibit 2.1 -- Exchange Agreement, filed as Exhibit 2 to the Current Report on Form 8-K of Brooklyn Union Page 7 of 11 Pages dated December 29, 1996, is hereby incorporated by reference* Exhibit 2.2 -- LILCO Stock Option Agreement* Exhibit 2.3 -- Brooklyn Union Stock Option Agreement* Exhibit 2.4 -- Amended Exchange Agreement* Exhibit 2.5 -- Amended LILCO Stock Option Agreement* Exhibit 2.6 -- Amended Brooklyn Union Stock Option Agreement* Exhibit 2.7 -- Amendment -------- * Filed previously. Page 8 of 11 Pages ANNEX I DIRECTORS AND EXECUTIVE OFFICERS Set forth below are the name and present principal oc- cupation of each director and executive officer of KeySpan Energy Corporation as of September 29, 1997. The business address of each such director and executive officer is c/o KeySpan Energy Corporation, One MetroTech Center, Brooklyn, New York 11201-3851. NAME PRINCIPAL OCCUPATION DIRECTORS OF KEYSPAN ENERGY CORPORATION: Robert B. Catell Chairman, President and Chief Executive Officer, KeySpan Energy Corporation Kenneth I. Chenault President and Chief Operating Officer, American Express Company Alan H. Fishman Managing Partner, Columbia Financial Partners, L.P. (private investment company) Craig G. Matthews Executive Vice President - Utility Division, KeySpan Energy Corporation; President and Chief Operating Officer, The Brooklyn Union Gas Company Edward D. Miller President and Chief Executive Officer, The Equitable Companies Inc. Helmut W. Peter Retired Vice Chairman, The Brooklyn Union Gas Company James Q. Riordan Retired Vice Chairman and Chief Financial Officer, Mobil Corp. Page 9 of 11 Pages EXECUTIVE OFFICERS OF KEYSPAN ENERGY CORPORATION (WHO ARE NOT DIRECTORS): Vincent D. Enright Senior Vice President, Chief Financial Officer and Chief Accounting Officer Maurice K. Shaw Senior Vice President -- Corporate Affairs David L. Phillips Senior Vice President -- Strategic Planning and Corporate Development William K. Feraudo Senior Vice President -- Energy Marketing Group Roger J. Walz Vice President and General Auditor Robert R. Wieczorek Vice President, Secretary and Treasurer Jan C. Childress Vice President -- Investor Relations Anne C. Jordan Vice President -- Financial Planning Page 10 of 11 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. THE BROOKLYN UNION GAS COMPANY By: /s/ Robert R. Wieczorek Name: Robert R. Wieczorek Title: Vice President, Secretary & Treasurer KEYSPAN ENERGY CORPORATION By: /s/ Robert R. Wieczorek Name: Robert R. Wieczorek Title: Vice President, Secretary and Treasurer Dated: October 22, 1997 Page 11 of 11 Pages EXHIBIT INDEX EXHIBIT DESCRIPTION 2.1 Agreement and Plan of Exchange, dated as of December 29, 1996, among NYECO Corp., The Brooklyn Union Gas Company and Long Island Lighting Company, filed as Exhibit 2.1 to the Current Report on Form 8-K of The Brooklyn Union Gas Company dated December 29, 1996, is incorporated herein by reference.* 2.2 LILCO Stock Option Agreement, dated as of December 29, 1996, between The Brooklyn Union Gas Company and Long Island Lighting Company.* 2.3 Brooklyn Union Stock Option Agreement, dated as of December 29, 1996, between The Brooklyn Union Gas Company and Long Island Lighting Company.* 2.4 Amended and Restated Agreement and Plan of Exchange and Merger between The Brooklyn Union Gas Company and Long Island Lighting Company, dated as of June 26, 1997. Incorporated herein by reference from Annex A to the Joint Proxy Statement of Brooklyn Union and LILCO and the Prospectus of BL Holding Corp. and KeySpan Energy Corporation, dated June 27, 1997, included in the Registration Statement on Form S-4 filed on June 30, 1997, as amended by Post Effective Amendment No. 1, filed on July 3, 1997. 2.5 Amended and Restated LILCO Stock Option Agreement between The Brooklyn Union Gas Company and Long Island Lighting Company, dated as of June 26, 1997. Incorporated herein by reference from Annex B to the Joint Proxy Statement of Brooklyn Union and LILCO and the Prospectus of BL Holding Corp. and KeySpan Energy Corporation, dated June 27, 1997, included in the Registration Statement on Form S-4 filed on June 30, 1997, as amended by Post Effective Amendment No. 1, filed on July 3, 1997. 2.6 Amended and Restated Brooklyn Union Stock Option Agreement between Long Island Lighting Company and The Brooklyn Union Gas Company, dated as of June 26, 1997. Incorporated herein by reference from Annex C to the Joint Proxy Statement of Brooklyn Union and LILCO and the Prospectus of BL Holding Corp. and KeySpan Energy Corporation, dated June 27, 1997, included in the Registration Statement on Form S-4 filed on June 30, 1997, as amended by Post Effective Amendment No. 1, filed on July 3, 1997. 2.4 Amendment, Assignment and Assumption Agreement, dated as of September 29, 1997, between The Brooklyn Union Gas Company, Long Island Lighting Company and KeySpan Energy Corporation. -------- * Filed previously. EX-99 2 EXHIBIT 2.4 AMENDMENT, ASSIGNMENT AND ASSUMPTION AGREEMENT This AMENDMENT, ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of September 29, 1997 (this "AMENDMENT"), by and among THE BROOKLYN UNION GAS COMPANY, a New York corporation ("BROOKLYN UNION"), LONG ISLAND LIGHTING COMPANY, a New York corporation ("LILCO"), and KEYSPAN ENERGY CORPORATION, a New York corporation and, prior to the Effective Time (as defined herein), a wholly owned subsidiary of Brooklyn Union ("KEYSPAN"), among other things amends the following agreements: A. the AMENDED AND RESTATED AGREEMENT AND PLAN OF EXCHANGE AND MERGER, dated as of June 26, 1997 (the "MERGER AGREEMENT"), by and between Brooklyn Union and LILCO; B. the AMENDED AND RESTATED BROOKLYN UNION STOCK OPTION AGREEMENT, dated as of June 26, 1997 (the "BROOKLYN UNION OPTION AGREEMENT"); and C. the AMENDED AND RESTATED LILCO STOCK OPTION AGREEMENT, dated as of June 26, 1997 (the "LILCO OPTION AGREEMENT", and together with the Merger Agreement and the Brooklyn Union Option Agreement, the "AGREEMENTS"). WHEREAS, Brooklyn Union and LILCO have determined to engage in a business combination as peer firms in a merger and a binding share exchange and to form a holding company to manage their combined businesses (the "COMPANY") and have entered into the Agreements for such purpose; and WHEREAS, contemporaneously herewith, KeySpan is acquiring all the outstanding shares of common stock, par value $0.33 1/3 per share ("BROOKLYN UNION COMMON STOCK"), of Brooklyn Union in a binding share exchange under Section 913 of the New York Business Corporation Law, in which each share of Brooklyn Union Common Stock will be exchanged for one share of common stock of KeySpan, par value $0.33 1/3 per share ("KEYSPAN COMMON STOCK"), with the result that Brooklyn Union will become a wholly owned subsidiary of KeySpan (such transaction, the "KEYSPAN RESTRUCTURING"); and WHEREAS, pursuant to Section 10.7 of the Merger Agreement the parties desire to provide for the assignment by Brooklyn Union to KeySpan, and the assumption by KeySpan, of all of Brooklyn Union's rights and obligations under the Agreements and to substitute KeySpan for Brooklyn Union thereunder, effective upon the effective time of the KeySpan Restructuring (the "EFFECTIVE TIME"). NOW THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, the parties hereto, intending to be legally bound hereby, agree as follows: Section 1. Definitions. Capitalized terms used herein and not otherwise defined herein have the respective meanings given in the Merger Agreement. Section 2. Assumption of Liabilities and Obligations by KeySpan. KeySpan agrees to assume, effective as of the Effective Time, all liabilities and obligations of Brooklyn Union under each of the Agreements, including, without limitation, the obligation under the Brooklyn Union Option Agreement to issue shares of KeySpan Common Stock in certain circumstances as set forth therein. Section 3. Substitution of KeySpan for Brooklyn Union. (a) Each of the Agreements is hereby amended, effective as of the Effective Time, such that KeySpan is substituted for Brooklyn Union for all purposes under the Agreements and all references to Brooklyn Union in the Agreements shall be deemed to refer to KeySpan, except as provided in paragraph (c) below and except for purposes of or references in Article IV, Section 7.2, Section 7.4, and Section 7.6 and the reference to Brooklyn Union in Section 7.1 of the Merger Agreement. (b) Each of the Agreements is hereby amended, effective as of the Effective Time, such that Subsidiaries of KeySpan are substituted for Brooklyn Union Subsidiaries for all purposes under the Agreements and all references to Brooklyn Union Subsidiaries in the Agreements shall be deemed to refer to Subsidiaries of KeySpan, except as provided in paragraph (c) below and except for purposes of or references in Article IV of the Merger Agreement. (c) Section 8.2(b) of the Merger Agreement is hereby amended and restated to read in its entirety as follows: "(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties of Brooklyn Union set forth in this Agreement and the Brooklyn Union Stock Option Agreement shall be true and correct (i) on and as of December 29, 1996 except for such failures of representations or warranties to be true and correct (without regard to any materiality qualifications contained therein) which, individually or in the ag- gregate, would not be reasonably likely to result in a Brooklyn Union Material Adverse Effect and (ii) on and as of the Closing Date with the same effect as though such representations and warranties had been made with respect to KeySpan instead of Brooklyn Union or with respect to Subsidiaries of KeySpan instead of Brooklyn Union Subsidiaries, as the case may be, on and as of the Closing Date (except for representations and warranties that expressly speak only as of a specific date or time other than December 29, 1996 or the Closing Date which need only be true and correct as of such date or time) except for such failures of representations or warranties to be true and correct (without regard to any materiality qualifications contained therein) which, individually or in the aggregate, would not be reasonably likely to result in a material adverse effect on the business, assets, financial condition, results of operations or prospects of KeySpan and its subsidiaries taken as a whole." Section 4. Substitution of KeySpan Common Stock for Brooklyn Union Common Stock. Each of the Agreements is hereby amended, effective as of the Effective Time, such that KeySpan Common Stock is substituted for Brooklyn Union Common Stock for all purposes under the Agreements and all references to Brooklyn Union Common Stock in the Agreements shall be deemed to refer to KeySpan Common Stock, except for purposes of Article IV of the Merger Agreement. Section 5. Acknowledgment of KeySpan Assumption and Substitution. LILCO hereby acknowledges and confirms that, effective as of the Effective Time, all of the liabilities, obligations, benefits and rights of Brooklyn Union under the Agreements shall inure to the benefit of KeySpan under those Agreements. 2 Section 6. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. IN WITNESS WHEREOF, Brooklyn Union, LILCO and KeySpan have caused this Amendment to be signed by their respective officers thereunto duly authorized as of the date first written above. THE BROOKLYN UNION GAS COMPANY By: /s/ Robert B. Catell Robert B. Catell Chief Executive Officer LONG ISLAND LIGHTING COMPANY By: /s/ William J. Catacosinos Dr. William J. Catacosinos Chief Executive Officer KEYSPAN ENERGY CORPORATION By: /s/ Robert B. Catell Robert B. Catell Chief Executive Officer 3 -----END PRIVACY-ENHANCED MESSAGE-----