-----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, VzwYCBlPmOaoDPJid0oUdTHt/PpPH9NOyvk+nDn78FZTUzHcZxMfVipaZHP0CEF0 QRwzXIBVLwG9YIuFlY0u5w== 0000910647-97-000037.txt : 19970221 0000910647-97-000037.hdr.sgml : 19970221 ACCESSION NUMBER: 0000910647-97-000037 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970211 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERKSHIRE GAS CO /MA/ CENTRAL INDEX KEY: 0000317406 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 041731220 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01857 FILM NUMBER: 97523782 BUSINESS ADDRESS: STREET 1: 115 CHESHIRE RD CITY: PITTSFIELD STATE: MA ZIP: 01201-1388 BUSINESS PHONE: 4134421511 10-Q 1 BODY OF 10-Q FOR 2ND QUARTER SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended December 31, 1996 Commission File No. 0-1857-3 THE BERKSHIRE GAS COMPANY Massachusetts 04-1731220 115 Cheshire Road, Pittsfield, Massachusetts 01201-1879 Registrant's telephone number, including Area Code 413:442-1511 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 [ ] At December 31, 1996, the Registrant had issued and outstanding 2,177,377 shares of Common Stock, par value $2.50. THE BERKSHIRE GAS COMPANY STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited (In Thousands)
Three Months Three Months Ended 12/31/96 Ended 12/31/95 -------------- -------------- Operating Revenues $ 12,109 $ 11,952 Cost of Gas Sold 5,650 5,298 ------------------------- Operating Margin 6,459 6,654 ------------------------- Other Operating Expenses 2,905 2,975 Depreciation 1,003 982 ------------------------- Total 3,908 3,957 ------------------------- Utility Operating Income 2,551 2,697 Other Income - Net 747 466 ------------------------- Operating and Other Income 3,298 3,163 Interest Expense 1,034 912 Other Taxes 438 402 ------------------------- Pre-Tax Income 1,826 1,849 Income Taxes 702 711 ------------------------- NET INCOME 1,124 1,138 Retained Earnings at Beginning of Period 6,396 5,389 ------------------------- Total 7,520 6,527 ------------------------- Dividends Declared: Preferred Stock 88 173 Common Stock 609 584 ------------------------- Total Dividends 697 757 ------------------------- Retained Earnings at End of Period $ 6,823 $ 5,770 ========================= Earnings Available for Common Stock $ 1,036 $ 965 ------------------------- Average Shares of Common Stock Outstanding 2,177.4 2,125.0 ------------------------- Earnings Per Share of Common Stock $ 0.48 $ 0.45 =========================
See Independent Accountants' Review Report and Notes to Financial Statements. THE BERKSHIRE GAS COMPANY STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited (In Thousands)
Six Months Six Months Ended 12/31/96 Ended 12/31/95 -------------- -------------- Operating Revenues $ 16,226 $ 16,105 Cost of Gas Sold 7,282 7,017 ------------------------- Operating Margin 8,944 9,088 ------------------------- Other Operating Expenses 5,635 5,257 Depreciation 1,339 1,317 ------------------------- Total 6,974 6,574 ------------------------- Utility Operating Income 1,970 2,514 Other Income - Net 1,163 782 ------------------------- Operating and Other Income 3,133 3,296 Interest Expense 1,824 1,779 Other Taxes 626 593 ------------------------- Pre-Tax Income 683 924 Income Taxes 267 360 ------------------------- NET INCOME 416 564 Retained Earnings at Beginning of Period 7,883 6,718 ------------------------- Total 8,299 7,282 ------------------------- Dividends Declared: Preferred Stock 261 346 Common Stock 1,215 1,166 ------------------------- Total Dividends 1,476 1,512 ------------------------- Retained Earnings at End of Period $ 6,823 $ 5,770 ========================= Earnings Available for Common Stock $ 155 $ 218 ------------------------- Average Shares of Common Stock Outstanding 2,169.0 2,119.0 ------------------------- Earnings Per Share of Common Stock $ 0.07 $ 0.10 =========================
See Independent Accountants' Review Report and Notes to Financial Statements. THE BERKSHIRE GAS COMPANY STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited (In Thousands)
Twelve Months Twelve Months Ended 12/31/96 Ended 12/31/95 -------------- -------------- Operating Revenues $ 46,170 $ 47,121 Cost of Gas Sold 20,480 23,079 ------------------------- Operating Margin 25,690 24,042 ------------------------- Other Operating Expenses 11,860 11,310 Depreciation 3,868 3,719 ------------------------- Total 15,728 15,029 ------------------------- Utility Operating Income 9,962 9,013 Other Income - Net 1,916 1,447 ------------------------- Operating and Other Income 11,878 10,460 Interest Expense 3,516 3,355 Other Taxes 1,748 1,905 ------------------------- Pre-Tax Income 6,614 5,200 Income Taxes 2,548 1,997 ------------------------- NET INCOME 4,066 3,203 Retained Earnings at Beginning of Period 5,770 5,580 ------------------------- Total 9,836 8,783 ------------------------- Dividends Declared: Preferred Stock 607 693 Common Stock 2,406 2,320 ------------------------- Total Dividends 3,013 3,013 ------------------------- Retained Earnings at End of Period $ 6,823 $ 5,770 ========================= Earnings Available for Common Stock $ 3,459 $ 2,510 ------------------------- Average Shares of Common Stock Outstanding 2,153.9 2,105.5 ------------------------- Earnings Per Share of Common Stock $ 1.61 $ 1.19 =========================
See Independent Accountants' Review Report and Notes to Financial Statements. THE BERKSHIRE GAS COMPANY BALANCE SHEETS (In Thousands)
December 31, June 30, 1996 1996 (Unaudited) (Audited) ------------ --------- ASSETS: Utility Plant: Utility Plant - at original cost $ 99,296 $ 96,571 Less: Accumulated Depreciation 26,207 25,356 ---------------------- Utility Plant - Net 73,089 71,215 ---------------------- Other Property: Other Property - at original cost 11,621 11,229 Less: Accumulated Depreciation 5,618 5,280 ---------------------- Other Property - Net 6,003 5,949 ---------------------- Current Assets: Cash 402 196 Accounts Receivable Utility Service (less allowance: Dec. 1996-$569; June 1996-$720) 7,036 5,781 Merchandise & Other (less allowance: Dec. 1996-$118; June 1996-$96) 1,153 685 Other Receivables 173 347 Inventories (at the lower of average cost or market): Natural Gas 2,806 1,330 Liquefied Petroleum 454 248 Materials and Supplies 1,481 1,492 Prepayments and Other 586 307 Prepaid and Current Deferred Taxes 1,934 249 Recoverable(Refundable) Gas Costs 3,784 (831) ---------------------- Total Current Assets 19,809 9,804 ---------------------- Deferred Debits: Unamortized Debt Expense 2,240 729 Capital Stock Expense 454 508 Environmental Cleanup Costs 1,048 973 Other 1,674 1,192 ---------------------- Total Deferred Debits 5,416 3,402 ---------------------- Recoverable Environmental Cleanup Costs 3,290 3,290 ---------------------- TOTAL ASSETS $ 107,607 $ 93,660 ======================
See Independent Accountants' Review Report and Notes to Financial Statements. THE BERKSHIRE GAS COMPANY BALANCE SHEETS (In Thousands)
December 31, June 30, 1996 1996 (Unaudited) (Audited) ------------ --------- CAPITALIZATION AND LIABILITIES Common Shareholders' Equity: Common Stock $ 5,443 $ 5,382 Premium on Common Stock 16,652 16,330 Retained Earnings 6,823 7,883 ---------------------- Total Common Shareholders' Equity 28,918 29,595 ---------------------- Redeemable Cumulative Preferred Stock 363 8,406 ---------------------- Long-Term Debt 40,000 31,999 ---------------------- Current Liabilities: Notes Payable to Banks 14,965 3,636 Accounts Payable 4,727 3,176 Other Current Liabilities 2,246 2,453 ---------------------- Total Current Liabilities 21,938 9,265 ---------------------- Other Liabilities 1,391 1,159 ---------------------- Unamortized Investment Tax Credit 1,244 1,280 ---------------------- Deferred Income Taxes 10,463 8,666 ---------------------- Reserve for Recoverable Environmental Cleanup Costs 3,290 3,290 ---------------------- TOTAL CAPITALIZATION AND LIABILITIES $ 107,607 $ 93,660 ======================
See Independent Accountants' Review Report and Notes to Financial Statements. THE BERKSHIRE GAS COMPANY STATEMENTS OF CASH FLOWS - Unaudited (In Thousands)
Six Months Six Months Ended 12/31/96 Ended 12/31/95 -------------- -------------- Cash Flows from Operating Activities: Net Income $ 416 $ 564 Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities: Depreciation and Amortization 1,817 1,780 Provision for Losses on Accounts Receivable 351 448 Refundable Gas Costs (4,615) (2,593) Deferred Income Taxes 1,797 1,016 Changes in Assets and Liabilities Which Provided (Used) Cash: Accounts Receivable (2,074) (2,235) Other Receivables 174 130 Inventories (1,671) 78 Accounts Payable 1,551 863 Prepaid and Current Deferred Taxes (1,685) (971) Other (983) (1,019) -------------------------- Total Adjustments (5,338) (2,503) -------------------------- Net Cash Used in Operating Activities (4,922) (1,939) -------------------------- Cash Flows from Investing Activities: Construction Expenditures (3,705) (3,970) -------------------------- Cash Flows from Financing Activities: Dividends Paid (1,477) (1,512) Proceeds from Issuance of Long-Term Debt 16,000 0 Proceeds from Note Payable Borrowings 3,330 7,015 Redemption of Preferred Stock (9,360) 0 Proceeds from Other Stock Transactions 340 278 -------------------------- Net Cash Provided by Financing Activities 8,833 5,781 -------------------------- Net Increase (Decrease) in Cash 206 (128) Cash at Beginning of Period 196 492 -------------------------- Cash at End of Period $ 402 $ 364 ==========================
See Independent Accountants' Review Report and Notes to Financial Statements. The Berkshire Gas Company Notes to Financial Statements December 31,1996 - ------------------------------------------------------------------------------- (Dollars in Thousands Except Share Amounts) NOTES: OTHER FINANCIAL INFORMATION: The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. All adjustments, which in the opinion of management are necessary for a fair presentation of the operations for the interim periods presented, have been made. These adjustments are of a normal recurring nature. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the summary of accounting policies and notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended June 30, 1996. CONTINGENCIES: ENVIRONMENTAL: Like other companies in the natural gas industry, the Company is a party to governmental actions associated with former gas manufacturing sites. Management estimates that expenditures to remediate and monitor known environmental sites will range from $3,290 to $12,302. In accordance with SFAS No. 5, the Company has recorded the most likely cost of $3,290. The Company's unamortized costs at December 31, 1996 were $1,048 and should be recovered over a seven-year period through the Cost of Gas Adjustment Clause ("CGAC"). Management's Discussion and Analysis of Financial Condition and Results of Operations - -------------------------------------------------------------------------------- Results of Operations - Second Quarter Ended December 31, 1996 versus Second Quarter Ended December 31, 1995 - -------------------------------------------------------------------------------- Berkshire Gas considers Operating Margin (Operating Margin or Gross Profit = Operating Revenues Net of Cost of Gas Sold) to be a more pertinent measure of operating results than Operating Revenues. This is due primarily to the fact that revenues include changes in the cost of natural gas which must be recovered or returned to customers through the Cost of Gas Adjustment Clause. Consequently, changes in the cost of gas will affect revenue levels, but does not have a corresponding affect on income. Additionally, margins earned on interruptible gas sold and transported are flowed back to firm customers and therefore are not included in income. Accordingly, the discussion below pertains to Operating Margin. Operating Margin decreased $195,000 or 2.9% from the three months ended December 31, 1995. Operating Margin is primarily affected by the change in the level of firm gas sold and transported. The decrease from 1995 is primarily due to lower volumes of firm residential and commercial gas sold resulting from warmer than normal weather, partially offset by higher transportation revenues and an increase in the number of customers.
1996 1995 ----------- ------------ 3 Month Firm MCF Sold & Transported 1,651,000 1,662,000 3 Month Operating Margin $ 6,459,000 $ 6,654,000 3 Month Average Operating Margin Per Firm MCF $ 3.91 $ 4.00
Other Operating Expenses decreased $70,000 or 2.4% from the three months ended December 31, 1996. The decrease is primarily due to lower Administrative and General Costs reflecting lower costs of employee benefits and a decrease in customer accounts expense due to reduced bad debt expense. Depreciation Expense increased $21,000 due to an increase in the amount of depreciable assets. Other Income increased $281,000 or 60.3% from 1995. The increase was primarily due to higher interest income from the over/under collection of gas costs from customers through the CGAC, increase in propane net revenues due to greater margins, and to a lesser extent, an increased customer base. Higher jobbing revenues was due to higher levels of service activity. Interest Expense increased $122,000 due to higher levels of borrowings caused by increased gas costs and to a debt restructuring which replaced $8,000,000 of the 8.4% Preferred Stock with a 7.8% Senior Note. Dividends on Preferred Stock decreased $85,000 due to the retirement of the 8.4% Preferred series. Dividends on Common Stock increased $25,000 due to an increase in the dividend rate of 1/2 cent per share quarterly and an increase in the number of shares reflecting shareholder participation in the Dividend Reinvestment Program. The Allowance for Doubtful Accounts on Utility Service Accounts Receivable was reduced by $151,000 since June 30, 1996 due to additional accounts being written off. Management's Discussion and Analysis of Financial Condition and Results of Operations - -------------------------------------------------------------------------------- Results of Operations - Six Months Ended December 31, 1996 versus Six Months Ended December 31, 1995 - -------------------------------------------------------------------------------- Operating Margin decreased $144,000 or 1.6% as compared with the six months ended December 31, 1995. The decrease is due to 6% warmer than normal weather, partially offset by higher transportation revenues and increased customer base.
1996 1995 ----------- ----------- 6 Month Firm MCF Sold & Transported 2,347,000 2,363,000 6 Month Operating Margin $ 8,944,000 $ 9,088,000 6 Month Average Operating Margin Per Firm MCF $ 3.81 $ 3.85
Other Operating Expenses increased $378,000 or 7.2% from the six months ended December 31, 1995. The increase is due primarily to higher Administrative and General Expenses of $239,000 due to the implementation of an early retirement program to lower payroll costs, higher Transmission and Distribution expense of $112,000 due to increased customer service costs and vehicle leasing costs, and higher Marketing expenses, partially offset by lower costs of uncollectible accounts expense. Depreciation expense increased $22,000 due to an increase in the amount of depreciable assets. Other Income increased $381,000 or 48.7%, Interest Expense increased $45,000 or 2.5%, Dividends on Preferred Stock decreased $85,000, and Dividends on Common Stock increased $49,000 from the six months ended December 31, 1995 for the same reasons as discussed in the Results of Operations - Second Quarter. Income Taxes decreased $93,000 or 25.8% due to a decrease in Pre-Tax Income. Management's Discussion and Analysis of Financial Condition and Results of Operations - -------------------------------------------------------------------------------- Results of Operations - Twelve Months Ended December 31, 1996 versus Twelve Months Ended December 31, 1995 - -------------------------------------------------------------------------------- Earnings available for Common Stock were $3,459,000 for the twelve months ended December 31, 1996 as compared to $2,510,000 for 1995. The increase is due primarily to a return to colder weather during the 1996 heating season. Operating Margin increased $1,648,000 or 6.9% from the twelve months ended December 31, 1995. Operating Margin is primarily affected by the change in the level of firm gas sold and transported. The Company's sales are affected by weather as the majority of its firm customers use natural gas for heating. The increase from 1995 is primarily due to higher volumes of firm gas sold due to 13.0% colder weather for the winter period of January - March as compared with 1995.
1996 1995 ------------ ------------ 12 Month Firm MCF Sold & Transported 6,498,000 6,122,000 12 Month Operating Margin $ 25,690,000 $ 24,042,000 12 Month Average Operating Margin Per Firm MCF $ 3.95 $ 3.93
Other Operating Expenses increased $550,000 or 4.9% over the twelve months ended December 31, 1995. The increase is primarily the result of higher Customer Accounts expenses of $255,000 due to higher levels of uncollectible accounts and increased data processing costs, higher Transmission and Distribution expenses of $256,000 and net increase in all other expenses of $39,000. Depreciation increased $149,000 over the twelve months ended December 31, 1995, due to an increase in the level of depreciable assets. Other Income increased $469,000 or 32.4% from 1995. The increase was primarily due to higher interest on the undercollection of prior period gas costs through the CGAC, higher Propane revenues due to colder weather, partially offset by lower Appliance Rental revenues. Interest expense increased $161,000 due to the increase in long-term debt used to retire the $8,000,000, 8.4% Preferred Stock series. Income Taxes increased $551,000 due to higher earnings in 1996. Dividends on Preferred Stock decreased $86,000 due to the retirement of the 8.4% Preferred Stock in the fourth quarter of 1996. Dividends declared on Common Stock increased $86,000 due to additional shares outstanding through the Company's DRIP and to a lesser extent, an increase in quarterly dividends to $.28 per share from $.275, effective the fourth quarter of 1996. Liquidity and Capital Resources - December 31, 1996 The Company added approximately $3,705,000 to Plant assets during the six months ended December 31, 1996. These construction expenditures primarily represent investments in new and replacement mains and services, and the continued conversion to automated meter reading. The capital structure of the Company at December 31, 1996 was 41.7% Common Equity, .5% Preferred Stock and 57.8% Long-Term Debt. The Company initially finances construction expenditures and other funding needs primarily with short-term bank borrowings, and to a lesser extent with the reinvestment of dividends. The Company continually evaluates its short-term borrowing position and based on prevailing interest rates, market conditions, etc., makes determinations regarding conversion of short-term borrowings to long-term debt or equity. As part of this process and in keeping with its cost containment program, the Company called for redemption the First Mortgage Bonds, Series K, 7.875%, $540,000 and Series M, 9.375%, $720,000 and the 9.125% Debentures, $6,543,000 during the third quarter of fiscal 1996. During the second quarter of fiscal 1997, the Company repurchased the 80,000 shares of the 8.4% Preferred Stock at $117 per share. To finance these redemptions, the Company sold a $16,000,000 Senior Note at 7.8% due 2021. As of June 30, 1996, in accordance with SFAS No. 6, the Company had classified $7,999,000 of Notes Payable to Banks as Long-Term Debt in anticipation of the Senior Note transaction. Funds for environmental clean-up costs are initially financed through short-term borrowings and all such costs will be recovered over a seven year period under a ruling issued by the MDPU. Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those contemplated by such statements. Such statements reflect management's current views, are based on many assumptions and are subject to risks and uncertainties. Certain important factors which could cause such results to differ include risks associated with the Company's maintaining contracts with specific customers, government regulation, the increasingly competitive nature of the markets in which the Company is engaged, and dependence on key personnel. These factors are not intended to represent a complete list of the general or specific risks that may affect the Company. PART II - OTHER INFORMATION Item 1. Legal Proceedings - --------------------------- No developments during the quarter. Item 2. Changes in Securities - ------------------------------- During November, 1996, the Company repurchased all 80,000 shares of the 8.4% Preferred Stock series at $117 per share. The redemptions were financed through the sale of a $16,000,000, 7.8% Senior Note due 2021. Item 3. Defaults Upon Senior Securities - ----------------------------------------- Not Applicable Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------- On November 13, 1996, the Annual Meeting of the shareholders of the Berkshire Gas Company was held at the Berkshire Hilton Inn, Pittsfield, Massachusetts at 10:00 a.m. Proxies for said annual meeting were solicited pursuant to Regulation 14A. There was no solicitation in opposition to Management's nominees, as listed in the Proxy statement, for the election of Directors. All nominees were duly elected. Item 5. Other Information - --------------------------- Not Applicable Item 6. Exhibits and Reports on Form 8 - K - -------------------------------------------- (a) List of Exhibits 3(i) - Articles of Incorporation including an Amendment to the Company's Charter dated September 10, 1996, and attached herewith. 4 - A copy of the Senior Note Agreement dated November 1, 1996, and attached herewith. 27 - Financial Data Schedule The balance sheet as of December 31, 1996, the related statements of operations and retained earnings for the three month, six month and twelve month periods ended December 31, 1996 and 1995, and the statements of cash flows for the six month periods ended December 31, 1996 and 1995 have been reviewed, prior to filing, by the Registrant's independent public accountants, Deloitte & Touche LLP, whose report covering their review of the financial statements is presented below. Deloitte & Touche LLP - ------------- -------------------------------------------------------------- City Place Telephone: (860) 280-3000 185 Asylum Street Facsimile: (860) 280-3051 Hartford, Connecticut 06103-3402 INDEPENDENT ACCOUNTANTS' REPORT The Berkshire Gas Company: We have reviewed the accompanying balance sheet of The Berkshire Gas Company as of December 31, 1996, the related statements of operations and retained earnings for the three month, six month and twelve month periods ended December 31, 1996 and 1995, and the statements of cash flows for the six month periods ended December 31, 1996 and 1995. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to such financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the balance sheet of The Berkshire Gas Company as of June 30, 1996, and the related statements of income and retained earnings and of cash flows for the year then ended (not presented herein); and in our report dated August 19, 1996, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of June 30, 1996 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived. /s/ DELOITTE & TOUCHE LLP Deloitte & Touche LLP February 10, 1997 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE BERKSHIRE GAS COMPANY Registrant /s/ MICHAEL J. MARRONE ---------------------------------------- Michael J. Marrone Vice President, Treasurer & Chief Financial Officer Dated: February 11, 1997 EX-3 2 EXHIBIT 3(I) ARTICLES OF INCORPORATION COMMONWEALTH OF MASSACHUSETTS IN THE YEAR ONE THOUSAND EIGHT HUNDRED AND FIFTY-THREE. AN ACT to incorporate the Pittsfield Coal Gas Company. Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows,-Section 1. George S. Willis, Henry Colt and Thomas F. Plunkett, their associates and successors, are hereby made a corporation, by the name of the Pittsfield Coal Gas Company; for the purpose of erecting gas works and manufacturing gas, in the town of Pittsfield, in the county of Berkshire, and supplying the said town and the inhabitants thereof with the same: with all the rights and privileges and subject to all the duties, liabilities and restrictions, set forth in the thirty-eighth and forty-fourth chapters of the Revised Ltatlio.-Section 2. Said corporation may take and hold such real and personal estate, as may be necessary for the purpose aforesaid; but the capital stock of said company shall not exceed one hundred thousand dollars and no shares in the capital stock shall be issued for a less sum or amount, to be paid in on each, than the par value of the shares first issued.- Section 3. The said corporation, with the consent of the selectman of the said town, shall have power and authority to open the ground in any part of the streets, lanes and highways of the said town, for the purpose of sinking and repairing such pipes and conductors as it may be necessary to sink for the purpose aforesaid; and the said corporation after opening the ground in such streets, lanes and highways, shall be held to put the same in repair again, under the penalty of being prosecuted for a nuisance: provided that the said selectman for the time being, shall at all times have the power to regulate, restrict and control the acts and doings of the said corporation, which may in any manner affect the health, safety or convenience of the inhabitants of the said town.-Section 4. This act shall take affect from and after its passage. House of Representatives, February 22, 1853. Passed to be enacted. R. /s/ Speaker ---------------- In Senate, February, 23, 1853. Passed to be enacted. C. H. Warren, President February 23, 1853 Approved. John H. Clifford Robert W. Adam President, William R. Plunkett Treasurer, and Robert W. Adam Thomas F. Plunkett John R. Warriner George G. Willis being a majority of the Directors of The Berkshire Coal Gas Company in compliance with the provisions of the thirty-fourth section of chapter two hundred and twenty-four of the Acts of the year eighteen hundred and seventy, do hereby certify, that the capital stock of said Corporation has been increased by the amount of twelve thousand five hundred ($12,500) dollars, and that the same has been paid in. IN WITNESS WHEREOF, we have hereunto signed our names, this fifth day of February in the year eighteen hundred and seventy four. Robert W. Adam Thomas F. Plunkett J. R. Warriner George G. Willis W. R. Plunkett COMMONWEALTH OF MASSACHUSETTS Berkshire ss. February 5, 1874. Then personally appeared the above-named Robert W. Adam W. R. Plunkett Thomas F. Plunkett John R. Warriner George S. Willis and severally made oath that the foregoing certificate, by them subscribed, is true to the best of their knowledge and belief. Before me, /s/ Henry N. Newton ------------------------------- Henry N. Newton Justice of the Peace Pittsfield Coal Gas Company Fee $6.26 paid. CERTIFICATE OF INCREASE OF CAPITAL ACTS OF 1870, CHAP. 224, SECT. 34. Filed in the office of the Secretary of the Commonwealth, February 9, 1874. I hereby approve the within writing Certificate, this Seventh day of February, A. D. Eighteen hundred and seventy-four. Dan A. Eleasen Commissioner of Corporations. Recorded. J.S.C. 2:161. Robert W. Adam President, William R. Plunkett Treasurer, and Robert W. Adam, William R. Plunkett Jackus, Jas W. Hull, and Geo H. Tucker, being a majority of the Directors of The Pittsfield Coal Gas Company in compliance with the provisions of the fifty-fourth section of chapter one hundred and ten of the Revised Laws, do hereby certify, that the capital stock of said Corporation has been increased by the amount of Sixty Two Thousand Five Hundred dollars, and that the same has been paid in. IN WITNESS WHEREOF, we have hereto signed our names, this Sixth day of September in the year nineteen hundred and two. Rob W. Adam, President. William R. Plunkett, Treasurer. W. G. Backus Rob W. Adam Jac W. Hull W. R. Plunkett Geo H. Tucker COMMONWEALTH OF MASSACHUSETTS Berkshire ss. Pittsfield Sept 6th 1902. Then personally appeared the above-named Robert W. Adam, William R. Plunkett, W. G. Backus, Jas W. Hull, and Geo H. Tucker and severally made oath that the foregoing certificate, by them subscribed, is true, to the best of their knowledge and belief. Before me, /s/ Human C. Nloms ------------------------------- Human C. Nloms Justice of the Peace. Pittsfield Coal Gas Company In $31.25 paid CERTIFICATE OF INCREASE OF CAPITAL REVISED LAWS, CHAP. 110, SECT. 54 Filed in the office of the Secretary of the Commonwealth, September 9, 1902. I hereby approve the within certificate, this Ninth day of September A. D. Nineteen hundred and two. William D.T. Trefry Commissioner of Corporations. Recorded Vol. 140, fr. ebo. RECEIVED SEP 9 - 1902 CORPORATION DIVISION SECRETARY'S OFFICE COMMISSIONER OF SEP 9 1902 CORPORATIONS THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATION AND TAXATION We, William L. Adam, President, Thomas F. Plunkett, Treasurer and William L. Adam, Thomas F. Plunkett, George H. Tucker, and Norman C. Hull, being a majority of the Directors of Pittsfield Coal Gas Company, in compliance with the provisions of section thirty-nine of chapter on hundred and fifty-eight as amended (Chapter 164 Section 10) of the General Laws, and all other pertinent provisions of law, do hereby certify that at a meeting of the stockholders called for the purpose and held on October 26, 1906 the capital stock of said corporation was increased by the amount of fifty thousand dollars, and that the same had been paid in on May 12, 1907. The total amount of capital stock then already authorized was twenty-five hundred {shares common. The amount of full paid capital stock then already issued for cash was twenty-five hundred {shares common. The amount of full paid capital stock then already issued for property was {shares preferred. none {shares common. The amount of additional capital stock authorized as aforesaid was {shares preferred. five hundred {shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 29th day of July in the year 1932. William L. Adam, President. Thomas F. Plunkett, Treasurer. William L. Adam ) Majority Thomas F. Plunkett ) of George H. Tucker ) Directors Norman C. Hull ) Pittsfield Coal Gas Company [Including Fee $40.00 pd Validation fee $15 paid] CERTIFICATE OF INCREASE OF CAPITAL. GENERAL LAWS, CHAP. 164, SEC. 10 AND CHAP.. 158, SECTS 39 AND 41. Filed in the office of the Secretary of the Commonwealth August 1, 1932. I hereby approve the within certificate, this first day of August, A.D. 1932. Henry T. Long Commissioner of Corporations and Taxation. RECEIVED AUG 1 - 1932 CORPORATION DIVISION SECRETARY'S OFFICE DEPARTMENT OF A. M. AUG 1 - 1932 CORPORATIONS AND TAXATION DEPARTMENT OF CORPORATIONS AND TAXATION A W AUG 1 - 1932 M WITH FEE OF $40(87.50)CK THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION We, William L. Adam, President, Thomas F. Plunkett, Treasurer and William L. Adam Thomas F. Plunkett, George H. Tucker, and Norman C. Hull being a majority of the Directors of Pittsfield Coal Gas Company, in compliance with the provision of section thirty-nine of chapter one hundred and fifty- eight as amended (Chapter 164 Section 10) of the General Laws, and all other pertinent provisions of law, do hereby certify that at a meeting of the stockholders called for the purpose and held on April 15, 1904 the capital stock of said corporation was increased by the amount of sixty thousand dollars, and that the same had all been paid in on May 10, 1906. The total amount of capital stock then already authorized was nineteen hundred {shares common. The amount of full paid capital stock then already issued for cash was nineteen hundred {shares common. The amount of full paid capital stock then already issued for property was {shares preferred. none {shares common. The amount of additional capital stock authorized as aforesaid was six hundred {shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 29th day of July in the year 1932. /s/ William L. Adam ------------------------------- William L. Adam, President. /s/ Thomas F. Plunkett ------------------------------- Thomas F. Plunkett, Treasurer. William L. Adam ) Majority Thomas F. Plunkett ) of George H. Tucker ) Directors Norman C. Hull ) Pittsfield Coal Gas Company [Including Fee $45.00 pd Validation Fee $15 paid CERTIFICATE OF INCREASE OF CAPITAL GENERAL LAWS, CHAP. 164, SEC. 10 AND CHAP. 158, SECTS. 39 AND 41. Filed in the office of the Secretary of the Commonwealth Aug. 1, 1932. I hereby approve the within certificate, this first day of August A.D. 1932. /s/ Henry T. Long ------------------------------- Henry T. Long Commissioner of Corporations and Taxation. RECEIVED AUG 1 - 1932 CORPORATION DIVISION SECRETARY'S OFFICE DEPARTMENT OF CORPORATIONS AND TAXATION A W AUG 1 - 1932 M WITH FEE OF $45(87.50CK)($15 VAL) DEPARTMENT OF A. M. Aug 1 - 1932 CORPORATIONS AND TAXATION THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATION AND TAXATION We, William L. Adam, President, Thomas F. Plunkett, Treasurer and William L. Adam, Thomas F. Plunkett, George H. Tucker, and Norman C. Hull, being a majority of the Directors of Pittsfield Coal Gas Company, in compliance with the provisions of section thirty-nine of chapter one hundred and fifty-eight as amended (Chapter 164 Section 10) of the General Laws, and all other pertinent provisions of law, do hereby certify that at a meeting of the stockholders called for the purpose and held on May 12, 1903 the capital stock of said corporation was increased by the amount of sixty-five thousand dollars, and that the same had all been paid in on August 15, 1903. The total amount of capital stock then already authorized was twelve hundred and fifty {shares common. The amount of full paid capital stock then already issued for cash was twelve hundred and fifty {shares common. The amount of full paid capital stock then already issued for property was {shares preferred none {shares common. The amount of additional capital stock authorized as aforesaid was six hundred and fifty {shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 29th day of July in the year 1932. William L. Adam, President. Thomas F. Plunkett, Treasurer. William L. Adam ) Majority George H. Tucker ) of Thomas F. Plunkett ) Directors Norman C. Hull ) Pittsfield Coal Gas Company [Including Fee $47.50 pd Validation fee $15 paid] CERTIFICATE OF INCREASE OF CAPITAL GENERAL LAWS, CHAP. 164, SEC. 10 AND CHAP. 158, SECTS. 39 AND 41. Filed in the office of the Secretary of the Commonwealth. August 1, 1932. I hereby approve the within certificate, this first day of August A.D. 1932. Henry T. Long Commissioner of Corporations and Taxation. RECEIVED AUG 1 - 1932 CORPORATION DIVISION SECRETARY'S OFFICE DEPARTMENT OF A. M. AUG 1 - 1932 CORPORATIONS AND TAXATION DEPARTMENT OF CORPORATIONS AND TAXATION A W AUG 1 - 1932 M WITH FEE OF $47.50 CK CHAPTER 159 COMMONWEALTH OF MASSACHUSETTS IN THE YEAR ONE THOUSAND NINE HUNDRED AND THREE AN ACT To Authorize the Pittsfield Coal Gas Company, under certain conditions to furnish Garand Electricity in the Town of Dalton. BE IT ENACTED BY THE SENATE AND HOUSE OF REPRESENTATIVES IN GENERAL COURT ASSEMBLED, AND BY THE AUTHORITY OF THE SAME, AS FOLLOWS: SECTION 1. The Pittsfield Coal Gas Company is hereby authorized, upon the approval of the board of gas and electric light commissioners, and with the consent of the selectman of the town of Dalton to furnish gas and electricity for heat, light and power in the town of Dalton, with all the rights, powers and privileges and subject to all the duties, restrictions and liabilities set forth in all general laws now on hereafter in force applicable to such corporations. SECTION 2. This act shall take effect upon its passage. House of Representatives, March 12, 1903. Passed to be enacted. James J. Myren Speaker In Senate, March 13, 1903. Passed to be enacted. George R. Jones President March 17, 1903 Approved. /s/ John L. Batio ------------------------------- John L. Batio We, Robert W. Adam President, Harry A. Dunbar, Treasurer, and Robert W. Adam, James N. Hall, William G. Backus, Thomas F. Plunkett, being a majority of the Directors of The Pittsfield Coal Gas Company in compliance with the provisions of the fifty-fourth section of chapter one hundred and ten of the Revised Laws of the Commonwealth of Massachusetts, do hereby certify that at a legal meeting of the stockholders called for the purpose the capital stock of said Corporation has been increased by the amount of Thirty Thousand dollars, and that the same has all been paid in, on May 20th, 1909. IN WITNESS WHEREOF, we have hereto signed our names, this twenty-seventh day of August in the year nineteen hundred and nine. Rob W. Adam, President. H. A. Dunbar, Treasurer. Rob W. Adam James W. Hall Thomas F. Plunkett W. G. Backus COMMONWEALTH OF MASSACHUSETTS Berkshire ss. August 27, 1909. Then personally appeared the above-named Robert W. Adam, President and Harry A. Dunbar, Treasurer and Robert W. Adam, James W. Hall, William G. Backus, and Thomas F. Plunkett, Directors and severally made oath that the foregoing certificate, by them subscribed, is true, to the best of their knowledge and belief. Before me, /s/ William L. Adam ------------------------------- William L. Adam, Justice of the Peace. Pittsfield Coal Gas Company Fee $15.00 paid CERTIFICATE OF INCREASE OF CAPITAL REVISED LAWS, CHAP. 110 SECT. 54. Filed in the office of the Secretary of the Commonwealth, September 3, 1909. I hereby approve the within certificate, this 3rd day of September A.D. nineteen hundred and nine. William D.T. Trefry Commissioner of Corporations. Recorded volume 14.0 Page 486 RECEIVED SEP 3 - 1909 CORPORATION DIVISION SECRETARY'S OFFICE COMMISSIONER OF SEP 1 - 1909 CORPORATIONS. We, William L. Adam, President and Henry A. Dunbar Treasurer, and Norman C. Hull, William L. Adam, George H. Tucker and W.G. Backus being a majority of the Directors of the Pittsfield Coal Gas Company in compliance with the provisions of section sixty-eight of chapter seven hundred and forty-two of the Acts of the year 1914, do hereby certify that the capital stock of said Corporation has been increased by the amount of Two Hundred and Four Thousand Dollars, and that the same has all been paid in, on February 1, 1919. IN WITNESS WHEREOF, we have hereto signed our names, this 19th day of August in the year nineteen hundred and nineteen. William L. Adam, President. Harry A. Dunbar, Treasurer. Norman C. Hull William L. Adam George H. Tucker W.G. Backus THE COMMONWEALTH OF MASSACHUSETTS. Berkshire ss. August 9, 1919. Then personally appeared the above-named William L. Adam, Pres., Harry A. Dunbar, Treas., and Norman C. Hull, William L. Adam, George. H. Tucker, and W.G. Backus and severally made oath that the foregoing certificate, by them subscribed, is true, to the best of their knowledge and belief. Before me, /s/ Leroy F. Kelley ------------------------------- Leroy F. Kelley Notary Public. GAS AND ELECTRIC COMPANIES Pittsfield Coal Gas Company Fee $102.00 pd. CERTIFICATE OF INCREASE OF CAPITAL STOCK ACTS OF 1914, CHAPTER 742. Filed in the office of the Secretary of the Commonwealth, AUG. 18, 1919. I hereby approve the within certificate, this 18th day of August A.D. nineteen hundred and nineteen. William T. Trefry Commissioner of Corporations. Recorded Vol. 314 p. 275 RECEIVED AUG 18 - 1919 CORPORATION DIVISION SECRETARY'S OFFICE COMMISSIONER OF CORPORATIONS AUG 18 - 1919 WITH FEE OF $102.00 COMMISSIONER OF AUG 18 - 1919 CORPORATIONS COMMISSIONER OF AUG 11 - 1919 CORPORATIONS We, Robert W. Adam, President, Harry A. Dunbar, Treasurer, and Robert W. Adam, James W. Hull, W. G. Backus, Geo. H. Tucker and Thomas F. Plunkett being a majority of the Directors of the Pittsfield Coal Gas Company, in compliance with the provisions of the fifty-fourth section of chapter one hundred and ten of the Revised Laws of the Commonwealth of Massachusetts, do hereby certify that at a legal meeting of the stockholders called for the purpose the capital stock of said Corporation has been increased by the amount of Sixty-Six Thousand dollars, and that the same has all been paid in, on March 25th., 1910. IN WITNESS WHEREOF, we have hereto signed our names, this twenty- seventh day of September in the year nineteen hundred and ten. Rob. W. Adam, President. Harry A. Dunbar, Treasurer. Rob W. Adam James W. Hull W. G. Backus Geo. H. Tucker Thomas F. Plunkett THE COMMONWEALTH OF MASSACHUSETTS. Berkshire ss. September 27, 1910. Then personally appeared the above-named Robert W. Adam, President, Harry A. Dunbar, Treasurer, and Robert W. Adam, James W. Hull, W. G. Backus, George H. Tucker, and Thomas F. Plunkett, majority of the Board of Directors and severally made oath that the foregoing certificate, by them subscribed, is true, to the best of their knowledge and belief. Before me, William G. Adam Justice of the Peace. Pittsfield Coal Gas Company Fee $33.00 paid CERTIFICATE OF INCREASE OF CAPITAL REVISED LAWS, CHAP. 110, SECT. 54. Filed in the office of the Secretary of the Commonwealth Oct. 1, 1910 I hereby approve the within certificate, this first day of October A.D. nineteen hundred ten. William D.J. Trefry Commissioner of Corporations. Recorded Col. 140, p. 507. COMMISSIONER OF OCT 1 - 1910 CORPORATIONS RECEIVED OCT 1 - 1910 CORPORATION DIVISION SECRETARY'S OFFICE COMMISSIONER OF CORPORATIONS OCT 1 - 1910 WITH FEE OF $33.00 CK THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION We, William L. Adam President, Harry A. Dunbar Treasurer and Williams L. Adam, W. G. Backus, Geo H. Tucker and Norman C. Hull, Directors being a majority of the Directors of the Pittsfield Coal Gas Company in compliance with the provisions of the thirty-ninth section of chapter one hundred and fifty-eight of the General Laws and of all acts in amendment thereof and in addition thereto, do hereby certify that at a meeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of Two Hundred and Fifty Thousand dollars, and that the same has all been paid in on December third 1925. IN WITNESS WHEREOF, we have hereto signed our names, this 17th day of December in the year nineteen hundred and twenty-five. /s/ William L. Adam ------------------------------- William L. Adam, President /s/ Harry A. Dunbar ------------------------------- Harry A. Dunbar, Treasurer William L. Adam W. G. Backus Geo H. Tucker Norman C. Hull THE COMMONWEALTH OF MASSACHUSETTS Berkshire ss. December 17, 1925. Then personally appeared the above-named William L. Adam, Pres., Harry A. Dunbar, Treas., and William L. Adam, W. G. Backus, Geo H. Tucker and Norman C. Hull, Directors and severally made oath that the foregoing certificate, by them subscribed, is true, to the best of their knowledge and belief. Before me, /s/ Leroy F. Kelley ------------------------------- Leroy F. Kelley Notary Public. My Commission expires Pittsfield Coal Gas Company Fee $125.00 pd. CERTIFICATE OF INCREASE OF CAPITALl. GENERAL LAWS, CHAP 164, SECT. 10 AND CHAP. 158, SECT. 39 AND 41. Filed in the office of the Secretary of the Commonwealth. December 21, 1925. I hereby approve the within certificate, this 21st day of December A.D. 1925. /s/ Henry T. Long ------------------------------- Henry T. Long Commissioner of Corporations and Taxation. DEPARTMENT OF G. L. DEC. 21 - 1925 CORPORATIONS AND TAXATION DEPARTMENT OF CORPORATIONS AND TAXATION DEC 21 - 1925 WITH FEE OF $125.00 We, William L. Adam President, and Harry A. Dunbar Treasurer, and William L. Adam, Arthur H. Rice, I. D. Ferrey, Thomas F. Plunkett and W.G. Backus being a majority of the Directors of the Pittsfield Coal Gas Company in compliance with the provisions of chapter one hundred and sixty-four of the General Laws of the Commonwealth of Massachusetts, do hereby certify that the capital stock of said Corporation has been increased by the amount of 150,000 dollars, and that the same has been paid in, December 31, 1924. IN WITNESS WHEREOF, we have hereto signed our names, this 27th day of January in the year nineteen hundred and twenty five. William L. Adam, President Harry A. Dunbar, Treasurer William L. Adam ) A. H. Rice ) I. D. Ferrey ) Directors Thomas F. Plunkett ) W.G. Backus ) THE COMMONWEALTH OF MASSACHUSETTS Berkshire ss. Jan. 27, 1925. Then personally appeared the above-named William L. Adam, Arthur H. Rice, I. D. Ferrey, Thomas F. Plunkett and W.G. Backus and severally made oath that the following certificate, by them subscribed, is true, to the best of their knowledge and belief. Before me, /s/ Norman C. Hull ------------------------------- Norman C. Hull Justice of the Peace CERTIFICATE OF INCREASE OF CAPITAL GENERAL LAWS, CHAP 164. Filed in the office of the Secretary of the Commonwealth, Feb. 12, 1925. I hereby approve the within certificate, this 12th day of February A.D. 1925. /s/ Henry T. Long ------------------------------- Henry T. Long Commissioner of Corporations and Taxation. RECEIVED FEB 12 - 1925 CORPORATION DIVISION SECRETARY'S OFFICE DEPARTMENT OF CORPORATIONS AND TAXATION FEB 12 - 1925 WITH FEE OF $75.00 ARTICLES OF AMENDMENT. This filing fee to accompany this blank is $10.00. Checks should be made payable to The Commonwealth of Massachusetts. This certificate must be submitted to the Commissioner within thirty days of the date of the vote of the stockholders. (Sect. 2, Chapter 354 of the Acts of 1922.) We, ROBERT W. McCRACKEN, President, LEROY F. KELLEY, Treasurer and ROBERT W. McCRACKEN, LEROY F. KELLEY, THOMAS F. PLUNKETT, FRANK A. WOODHEAD, and GEORGE M. SHIPTON, being a majority of the Directors of the PITTSFIELD COAL GAS COMPANY, located at No. 31 South St. Pittsfield, Massachusetts, in compliance with the provisions of chapter 354 of the Acts of 1922 and of all Acts in amendment thereof and in addition thereto, do hereby certify that at a meeting of the stockholders of the said corporation, duly called for the purpose, held July 20, 1951, and by the affirmative vote of No shares of the preferred stock and of 8,078 shares of the common stock of said corporation, being the unanimous vote of all shares represented in person or by proxy at said meeting, and being at least eighty and 78/100ths per cent (80.78%) of all the stock outstanding and entitled to vote, the following amendment or alteration in the agreement of Association and Articles of Organization of said corporation was duly adopted, namely: p. 121A VOTED, that the Agreement of Association and Articles of Organization, if any of the Pittsfield Coal Gas Company, and the purposes and businesses for which said corporation was formed be and the same hereby are amended by adding thereto all of the following; if, and to the extent that said corporation does not now have the power, right and authority to do or transact such business: 1. The power, right and authority to distribute and sell manufactured gas in the city of Pittsfield, and towns of Dalton, Lenox, Lee, Stockbridge and Lanesboro, all in the County of Berkshire and Commonwealth of Massachusetts, and in which city and towns the corporation is now, and has heretofore been engaged in said business of distributing and selling manufactured gas; 2. The power, right and authority to purchase, distribute and sell natural gas in the city of Pittsfield, and the towns of Dalton, Lenox, Lee, Stockbridge and Lanesboro, all in the County of Berkshire and Commonwealth of Massachusetts, and in which city and towns the corporation is now, and has heretofore been engaged in the business of distributing and selling manufactured gas; and 3. The power, right and authority to purchase, sell and install gas burning appliances and equipment of every type, nature and description. The passage of this vote shall not operate or construed as an admission that the corporation does not already have the power or authority to do or transact any of the business described above; but shall be in confirmation thereof as to any such power or authority if the corporation is now vested therewith. IN WITNESS WHEREOF, we have hereunto signed our names, this twentieth day of July, in the year 1951. George M. Shipton, Director Robert W. McCracken, President and Director Frank A. Woodhead, Vice-President and Director Leroy F. Kelley, Treasurer and Director Thomas F. Plunkett, Clerk and Director THE COMMONWEALTH OF MASSACHUSETTS Berkshire: ss. July 20, 1951. Then personally appeared the above-named Robert W. McCracken, Leroy F. Kelley, Thomas F. Plunkett, Frank A. Woodhead, and George M. Shipton and severally made oath that the foregoing certificate, by them subscribed, is true to the best of their knowledge and belief. Before me, Francis J. Giniro Notary Public. CERTIFICATE RECEIVED AUG 13 - 1951 BY SECRETARY'S OFFICE FROM DEPARTMENT OF CORPORATIONS AND TAXATION RECEIVED $10 CASH JUL 23 - 1951 CORPORATION DIVISION SECRETARY'S OFFICE DEPARTMENT OF B A JUL 23 - 1951 H CORPORATIONS AND TAXATION CERTIFICATE RECEIVED JUL 23 - 1951 BY SECRETARY'S OFFICE DEPARTMENT OF CORPORATIONS AND TAXATION GAS OR ELECTRIC COMPANY Pittsfield Coal Gas Company FEE $10.00 PAID ARTICLES OF AMENDMENT (GENERAL LAWS, CHAP. 164, AS AMENDED BY SECT.2 OF CHAP. 354 OF ACTS OF 1922.) Amendment to Purpose Filed in the office of the Secretary of the Commonwealth, July 23, 1951. I hereby approve the within certificate, this 23rd day of July, A.D. 1951. /s/ Henry T. Long ------------------------------- Henry T. Long Commissioner of Corporations and Taxation. THE COMMONWEALTH OF MASSACHUSETTS Be it known that whereas Pittsfield Coal Gas Company, a corporation organized under the laws of this Commonwealth, at a meeting duly called for the purpose, has complied with the provisions of section ten of chapter one hundred and fifty-five of the General Laws, Tercentenary Edition, as amended, as appears from articles of amendment, duly executed by the proper officers of said corporation, authorizing said corporation to change and adopt the name of The Pittsfield Gas Company, duly approved and filed in this office, and the officers of said corporation having given public notice of such change of name by publication two times in the Berkshire Eagle, a newspaper published in the city of Pittsfield and County of Berkshire in said Commonwealth: NOW, THEREFORE, I, EDWARD J. CRONIN, Secretary of The Commonwealth of Massachusetts, do hereby certify, that the name which said corporation shall bear is The Berkshire Gas Company, which shall hereafter be its legal name. Stamp Witness my official signature hereunto subscribed, and the Great Seal of The Commonwealth of Massachusetts hereunto affixed, this sixteenth day of September in the year of our Lord one thousand nine hundred and fifty- four. Edward J. Cronin SECRETARY OF THE COMMONWEALTH /s/ LEO W. HARLOW Leo W. Harlow DEPUTY SECRETARY THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION William A. Schan COMMISSIONER 236 STATE HOUSE, BOSTON 33 ARTICLES OF AMENDMENT This certificate must be submitted to the Commissioner of Corporations and Taxation within thirty days after the date of the vote of the stockholders, in accordance with General Laws, Chapter 156, Section 43. FEE for filing certificate providing for a change of shares with par value to shares without par value, whether or not the capital is changed thereby, one cent for each share without par value resulting from such change, less an amount equal to one twentieth of one per cent of the total par value of the shares so changed; but not in any case less than $25.00. The fee for filing all other amendments is $10.00. Make check payable to THE COMMONWEALTH OF MASSACHUSETTS WE, KENNETH D. KNOBLOCK, President, FRANK A. O'NEILL, Treasurer and KENNETH D. KNOBLOCK, FRANK A. O'NEILL, J. T. KELLY, LEONARD MILANO, GEORGE H. MARCHANT, and ROBERT W. McCRACKEN, being a majority of the Directors of the PITTSFIELD COAL GAS COMPANY, a corporation duly organized by law, and whose principal place of business is located at 31 South Street, Pittsfield, Massachusetts, in compliance with the provisions of General Laws, Chapter 156, do hereby certify that at a meeting of the stockholders of the corporation, duly called for the purpose, held August 2, 1954, by the affirmative vote of No shares of the preferred stock and of 70,840 shares of the common stock of the corporation, being at least two-thirds of all the stock outstanding and entitled to vote, the following amendment or alteration in the Agreement of Association and Articles of Organization of the corporation was duly adopted, namely: RESOLVED, that the Charter Agreement of Association and Articles of Organization of the Pittsfield Coal Gas Company be and hereby are amended by adding thereto the following: The power, right and authority to purchase, manufacture, distribute and sell gas, natural gas, or mixed gas and to purchase, sell and install gas burning appliances and equipment of every type, nature and description, in the municipalities of Adams, Clarksburg, North Adams, Williamstown and Cheshire, all in the Count of Berkshire and Commonwealth of Massachusetts. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this second day of August, in the year 1954. /s/ KENETH D. KNOBLOCK President: Majority of Directors: Kenneth D. Knoblock 1. Kenneth D. Knoblock /s/ FRANK A. O'NEILL 2. J. T. Kelley Treasurer: 3. Leonard Milano Frank A. O'Neill 4. George H. Marchant 5. Robert W. McCracken 6. Frank A. O'Neill RECEIVED $15 CK AUG 4 - 1954 CORPORATION DIVISION SECRETARY'S OFFICE DEPARTMENT OF E AUG 4 - 1954 A CORPORATIONS AND TAXATION CERTIFICATE RECEIVED AUG 4 - 1954 BY SECRETARY'S OFFICE FROM DEPARTMENT OF CORPORATIONS AND TAXATION THE COMMONWEALTH OF MASSACHUSETTS Pittsfield Coal Gas Company FEE $15.00 PAID ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 156, SECTION 42 Amendment to Purpose Filed in the office of the Secretary of the Commonwealth, August 4, 1954 I hereby approve the within certificate, this 4th day of August, 1954. William A. Schan Commissioner of Corporations and Taxation. THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION William A. Schan COMMISSIONER 236 STATE HOUSE, BOSTON 33 INCREASE OF CAPITAL This certificate must be submitted to the Commissioner and Taxation within thirty days after the date of the vote of the stockholders, General Laws, Chapter 156, Section 43. FEE must accompany this certificate: 1/20 of 1% of the amount by which the capital stock with par value is increased, and one cent for each additional share without par value, but not in any case less than $25. Make checks payable to THE COMMONWEALTH OF MASSACHUSETTS. We, KENNETH D. KNOBLOCK, President, FRANK A. O'NEILL, Treasurer, and KENNETH D. KNOBLOCK, FRANK A. O'NEILL, J. T. KELLEY, LEONARD MILANO, GEORGE H. MARCHANT and ROBERT W. McCRACKEN, of the PITTSFIELD COAL GAS COMPANY, a corporation duly organized by law, and those principal place of business is located at 31 South Street, Pittsfield, Massachusetts, in compliance with the provisions of General Laws, Chapter 156, hereby certify that at a meeting of the stockholders of the corporation, duly called for the purpose, held August 2, 1954, of 73,840 shares of the common stock of the corporation, being at least a majority of each class of stock outstanding and entitled to vote, the following amendment authorizing and increase in the capital stock of the corporation was duly adopted, namely: RESOLVED, that the Charter, Agreement of Association and Articles of Organization of Pittsfield Coal Gas Company be and they hereby are amended by adding thereto the following provisions creating and authorizing an issue of 6,435 shares of 5% Cumulative Preferred Stock: (Statement relative to Stock in Drawer 337) IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we hereto sign our names, this second day of August, 1954. President: Majority of Directors: Kenneth D. Knoblock 1. Kenneth D. Knoblock 2. J. T. Kelley Treasurer: 3. Leonard Milano Frank A. O'Neill 4. George H. Marchant 5. Robert W. McCracken 6. Frank A. O'Neill RECEIVED $321.75 AUG 4 - 1954 CORPORATION DIVISION SECRETARY'S OFFICE DEPARTMENT OF E AUG 4 - 1954 A CORPORATIONS AND TAXATION CERTIFICATE RECEIVED AUG 4 - 1954 BY SECRETARY'S OFFICE FROM DEPARTMENT OF CORPORATIONS AND TAXATION THE COMMONWEALTH OF MASSACHUSETTS Pittsfield Coal Gas Company Fee $321.75 paid ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 156, SECTION 44 INCREASE OF CAPITAL Establishment of 5% Cumulative Preferred Stock at a Par Value of $100 per share. Filed in the office of the Secretary of the Commonwealth August 4, 1954 I hereby approve the within certificate this 4th day of August, 1954. William A. Schan Commissioner of Corporations and Taxation PITTSFIELD COAL GAS COMPANY 31 South Street Pittsfield, Massachusetts June 18, 1954 CERTIFICATE OF VOTE FOR REDUCTION OF PAR VALUE OF COMMON STOCK I, JOSEPH T. KELLEY, of Pittsfield, Massachusetts, hereby upon oath, declare and certify as follows: 1. That I am the duly elected and qualified clerk of the PITTSFIELD COAL GAS COMPANY, a gas company duly incorporated under the laws of the Commonwealth of Massachusetts: 2. That the following is a true copy of a vote adopted by the stockholders of said corporations at a meeting of stockholders held on March 23, 1954, which meeting was duly called for such purpose: RESOLVED, That the Stockholders of the Pittsfield Coal Gas Company hereby authorize a change of the par value of the Company's present common capital stock from the present par value of One Hundred Dollars ($100.00) per share to a new par value of Ten Dollars ($10.00) per share; and that, subject to the approval by the Department of Public Utilities of the Commonwealth of Massachusetts, and upon its becoming effective pursuant to General Laws (Ter. Ed.), Chapter 164, new certificates evidencing the new Ten Dollars ($10.00) par value stock of the Company be issued in exchange for and upon surrender of certificates for the present One Hundred Dollars ($100.00) par value stock of the Company, said new stock to be issued in the ratio of Ten (10) shares of new stock for each share of the present One Hundred Dollars ($100.00) par value stock represented by the certificates so surrendered, but without any capitalization or impairment of any existing surplus or accumulated and undistributed profits. 3. That the total number of shares of common stock of said corporation issued and outstanding on the date of said meeting was 10,000. 4. That the total amount of shares of common stock of said corporation represented in person or by proxy at said meeting, and entitled to vote on the above quoted vote, was 8,373; and that the vote thereon was a follows: (a) Number of shares voted in favor: 8,370 (b) Number of shares voted against: 3 T O T A L 8,373 5. That said corporation did not on the date of said meeting, nor at any other time prior thereto have any class of stock except said common stock. 6. That on March 24, 1954, said corporation filed with the Massachusetts Department of Public Utilities an application for the approval of said reduction in the par value of its common stock, such application being required by General Laws (Ter. Ed.), Chapter 164, Section 8; and that on June 16, 1954, said Department of Public Utilities approved of such reduction in the par value of the corporation's common stock by an Order issued in case bearing docket number 10871, such order reading as follows: "ORDERED: That the Department hereby approves and authorizes the change in the par value of the shares of capital stock of Pittsfield Coal Gas Company from one hundred dollars ($100) to ten dollars ($10) a share, provided, however, that the aggregate par value of the outstanding shares of the Company shall not be increased by the change in the par value of the shares thereof." (Affix Seal of Corporation) Joseph T. Kelley Joseph T. Kelley Pittsfield Coal Gas Company COMMONWEALTH OF MASSACHUSETTS BERKSHIRE: ss. June 18, 1954 Subscribed and sworn to, before me Francis J. Guirico Francis J. Guirico, Notary Public My commission expires on: August 27, 1954 THE COMMONWEALTH OF MASSACHUSETTS Department of Corporations and Taxation William A. Schan Commissioner 237 State House, Boston. ARTICLES OF AMENDMENT The filing fee to accompany this certificate is $10.00. Checks should be made payable to The Commonwealth of Massachusetts. This certificate must be submitted to the Commissioner of Corporations and Taxation within thirty days after the date of the approval by the Department of Public Utilities. (Section 8, Chapter 164, General Laws as amended.) I, Clerk of located at No. St., in compliance with the provisions of Section 8 of chapter 164 of the General Laws as amended, do hereby state that at a meeting of the stockholders of the said corporation, duly called for the purpose, held 19 , and by the affirmative vote of shares of the preferred stock and of shares of the common stock of said corporation, being at least of all the stock outstanding and entitled to vote, the following amendment or alteration in the agreement of association and articles of organization of said corporation was duly adopted, namely: IN WITNESS WHEREOF, and under the penalties of perjury, I have hereto signed my name, this day of in the year 19 . RECEIVED $15 CK. JUL 1 - 1954 CORPORATION DIVISION SECRETARY'S OFFICE CERTIFICATE RECEIVED JUL 1 - 1954 BY SECRETARY'S OFFICE FROM DEPARTMENT OF CORPORATIONS AND TAXATION DEPARTMENT OF JUL 1 - 1954 CORPORATIONS AND TAXATION GAS OR ELECTRIC COMPANY Pittsfield Coal Gas Company FEE $15.00 PAID Articles of Amendment. CHANGE OF PAR VALUE (GENERAL LAWS, SEC 8, CHAP. 164, AS AMENDED.) Filed in the office of the Secretary of the Commonwealth, July 1, 1954 I hereby approve the within certificate, this 1st day of July A. D. 1954. William A. Schan Commissioner of Corporations and Taxation. THE COMMONWEALTH OF MASSACHUSETTS Be it known that whereas Pittsfield Coal Gas Company, a corporation organized under the laws of this Commonwealth, at a meeting duly called for the purpose, has complied with the provisions of section ten of chapter one hundred and fifty-five of the General Laws, Tercentenary Edition, as amended, as appears from articles of amendment, duly executed by the proper officers of said corporation, authorizing said corporation to change its name and adopt the name of The Berkshire Gas Company, duly approved and filed in this office, and the officers of said corporation having given public notice of such change of name by publication two times in the Berkshire Eagle, a newspaper published in the City of Pittsfield and County of Berkshire in said Commonwealth: NOW, THEREFORE, I, EDWARD J. CRONIN, Secretary of The Commonwealth of Massachusetts, Do hereby certify, that the name which said corporation shall bear is The Berkshire Gas Company, which shall hereafter be its legal name. Stamp Witness my official signature hereunto subscribed, and the Great Seal of The Commonwealth of Massachusetts hereunto affixed, this sixteenth day of September in the year of our Lord one thousand nine hundred and fifty- four. Edward J. Cronin SECRETARY OF THE COMMONWEALTH Leo W. Harlow DEPUTY SECRETARY THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION JOHN DANE, JR. COMMISSIONER 236 STATE HOUSE, BOSTON 33 ARTICLES OF AMENDMENT This certificate must be submitted to the Commissioner of Corporations and Taxation within thirty days after the date of the vote of the stockholders, in accordance with General Laws, Chapter 156, Section 43. FEE for filing certificate providing for a change of shares with par value to shares without par value, whether or not the capital is changed thereby, one cent for each share without par value resulting from such change, less an amount equal to one twentieth of one per cent of the total par value of the shares so changed; but not in any case less than $25.00. The fee for filing all other amendments is $15.00. Make check payable to THE COMMONWEALTH OF MASSACHUSETTS. WE, KENNETH D. KNOBLOCK, President, FRANK O'NEILL, Treasurer Kenneth D. Knoblock, Director Frank A. O'Neill, Director J.C. Donnelly, Director Robert W. McCracken, Director Joseph T. Kelley, Director being a majority of the Directors of THE BERKSHIRE GAS COMPANY, located at 31 South Street, in Pittsfield, Massachusetts, in compliance with the provisions of General laws, Chapter 156, do hereby certify that at a meeting of the stockholders of the corporation, duly called for the purpose, held on January 13, 1956, by the affirmative vote of SIX THOUSAND NINETY-SEVEN (6,097) shares of the preferred stock and of 68, 532 shares of the common stock of the corporation, being at least TWO-THIRDS of all the stock outstanding and entitled to vote, the following amendment or alteration in the Agreement of Association and Articles of Organization of the corporation was duly adopted, namely; "RESOLVED", That the Charter, Agreement of Association and Articles of Organization, if any, of The Berkshire Gas Company be and hereby is amended by elimination of Paragraph (j) (A) (d) of the Statement of the designations, terms, relative rights, privileges, limitations, etc., of the 5% Cumulative Preferred Stock, which reads as follows: '(d) create, assume or suffer to exist any mortgage, pledge, encumbrance, lien or charge of any kind (including the charge upon property purchased under conditional sales or other title retention agreements) upon any of its property or assets whether now owned or hereafter acquired, except permitted liens. Permitted liens as used herein shall mean (I) the lien of the First Mortgage Indenture and Deed of Trust, dated as of July 1, 1954, from the Company to Chemical Bank & Trust Company, as Trustee, securing an issue of $1,330,000 principal amount of the Company's First Mortgage Bonds, Series A, 4% due 1979, and any indentures supplemental thereto which may be entered into with respect to additional series of First Mortgage Bonds, as contemplated in said Indenture and Deed of Trust, (ii) liens for taxes not yet due or which are being contested in good faith by appropriate proceedings and (iii) other liens, charges and encumbrances incidental to the conduct of the business or the ownership of the property and assets which were not incurred in connection with the borrowing of money and which do not secure indebtedness or extensions of credit aggregating at any one time in excess of $100,000 and which do not in the aggregate materially detract from the value of the property of the Company or materially impair the use thereof in the operation of the business of the Company; or' "FURTHER RESOLVED, That the Charter, Agreement of Association and Articles of Organization, if any, of The Berkshire Gas Company be and hereby is amended by elimination of the last paragraph of (j) (B) of the Statement of the designations, terms, relative rights, privileges, limitations, etc., of the 5% Cumulative Preferred Stock, which reads as follows: 'The term 'minimum provision for depreciation' shall mean, for any twelve months' period, an amount equal to the amount of depreciation and/or obsolescence recorded on the books of the Company or claimed as a deduction for Federal Income Tax purposes, whichever is larger, but in no event less than an amount equal to 1-1/2% of the average gross plant property account of the Company during such period.' Inserting in lieu thereof: 'The term 'minimum provision for depreciation' shall mean, for any twelve months' period, an amount equal to 2% of the average gross depreciable plant property accounts of the Company during such period.' "FURTHER RESOLVED, That if the Stockholders approve the proposed amendment, the President or a Vice President and the Clerk of this Company be and they hereby are authorized and directed to prepare and file any necessary documents with the Secretary of Sate and with any other person as may be required by law." THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION We, K.D. Knoblock, F.A. O'Neill, J.C. Donnelly, J.T. Kelley and R.W. McCracken, being a majority of Directors of the Berkshire Gas Company, in compliance with the provisions of section thirty-nine of chapter one hundred and fifty-eight (Chapter 164 Section 10) of the General Laws, Ter. Ed., do hereby certify that a meeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of One Hundred Eighty-Seven Thousand dollars, and that the same has all been paid in on June 10, 1957. The Total amount of capital stock already authorized is 6,049 (shares preferred. 100,000 (shares common. The amount of fully paid capital stock already issued for cash is 6,049 (shares preferred. 100,000 (shares common. The amount of fully paid capital stock already issued for property is None (shares preferred. None (shares common. The amount of additional capital stock authorized is None (shares preferred. 18,000 (shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 8th day of June in the year 1957. Berkshire Gas Company, The CERTIFICATE OF INCREASE OF CAPITAL General Laws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections 39 and 41 Filed in the office of the Secretary of the Commonwealth. July 8, 1957 I hereby approve the within certificate this 8th day of July 1957 /s/ -------------------------------- Commissioner of Corporations and Taxation Berkshire Gas Company, The Received 51.00 Dec. 08, 1958 CERTIFICATE OF INCREASE OF CAPITAL General Laws, chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections 39 and 41 Filed in the office of the Secretary of the Commonwealth I hereby approve the within certificate, this 8th day of 1958. /s/ ------------------------------- Commissioner of Corporations and Taxation THE COMMONWEALTH OF MASSACHUSETTS Department of Corporation and Taxation We J.T. Kelley, Vice President, J.R. Cottrell, Assistant Treasurer and F.A. ONEILL LEONARD MILANO J.C. DONNELLY J.T. KELLEY W. BARTON CUMMINGS being a majority of the Directors of The Berkshire Gas Company in compliance with the provisions of section thirty-nine of chapter one hundred and fifty- eight (Chapter 164 Section 10) of the General Laws, Ter. Ed., do hereby certify that a meeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of $184,610.00 dollars, and that the same has all been paid in on September 29, 1958. The total amount of capital stock already authorized is 6,435* (Shares preferred. 118,700 (Shares common. The amount of fully paid capital stock already issued for cash is 6,435* (Shares preferred. 118,700 (Shares common. *772 shares Pfd. Have been redeemed in accordance with the sinking fund provision. The amount of fully paid capital stock already issued for property is -0- (Shares preferred. -0- (Shares common. The amount of additional capital stock authorized is -0- (Shares preferred 18,461 (Shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have signed our names, this 29th day of October in the year 1958. /s/ -------------------------------- CERTIFICATE OF INCREASE OF CAPITAL General Laws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed. Sections 39 and 41. Filed in the office of the Secretary of the Commonwealth October 31, 1958 /s/ -------------------------------- Commissioner of Corporations and Taxation Berkshire Gas Company, The Received 51.00 Dec. 08, 1958 CERTIFICATE OF INCREASE OF CAPITAL General Laws, chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections 39 and 41 Filed in the office of the Secretary of the Commonwealth I hereby approve the within certificate, this 8th day of December 1958. /s/ ------------------------------- Commissioner of Corporations and Taxation THE COMMONWEALTH OF MASSACHUSETTS Department of Corporation and Taxation We J.T. Kelley, Vice President, J.R. Cottrell, Assistant Treasurer and F.A. ONEILL K.D. KNOBLOCK J.C. DONNELLY J.T. KELLEY ROBERT MCCRACKEN being a majority of the Directors of The Berkshire Gas Company in compliance with the provisions of section thirty-nine of chapter one hundred and fifty- eight (Chapter 164 Section 10) of the General Laws, Ter. Ed., do hereby certify that a meeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of $100,000.00 dollars, and that the same has all been paid in on November 7, 1958. The total amount of capital stock already authorized is 6,435* (Shares preferred. 137,161 (Shares common. The amount of fully paid capital stock already issued for cash is 6,435* (Shares preferred. 137,161 (Shares common. *772 shares Pfd. Have been redeemed in accordance with the sinking fund provision. The amount of fully paid capital stock already issued for property is -0- (Shares preferred. -0- (Shares common. The amount of additional capital stock authorized is -0- (Shares preferred 5,000 (Shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have signed our names, this 25th day of November in the year 1958. /s/ -------------------------------- CERTIFICATE OF INCREASE OF CAPITAL General Laws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed. Sections 39 and 41. Filed in the office of the Secretary of the Commonwealth October 31, 1958 /s/ -------------------------------- Commissioner of Corporations and Taxation RECEIVED $25 CK. MAY 28 - 1959 CORPORATION DIVISION SECRETARY'S OFFICE Berkshire Gas Company, The CERTIFICATE OF INCREASE OF CAPITAL GENERAL LAWS, CHAPTER 164, TER. ED., SECTION 10 AND CHAPTER 158, TER. ED., SECTIONS 39 AND 41 Filed in the office of the Secretary of the Commonwealth. May 28, 1959 I hereby approve the within certificate, this 27 th day of May, 1959 /s/ ROBERT T. CAPELESS Robert T. Capeless Commissioner of Corporations and Taxation DEPARTMENT OF T J MAY 27 - 1959 R CORPORATIONS AND TAXATION RECEIVED $25.00 CK MAY 28 - 1959 CORPORATION DIVISION SECRETARY'S OFFICE THE COMMONWEALTH OF MASSACHUSETTS Berkshire Gas Company, The ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 156, SECTION 42 Substitution of statement of terms relating to stock; Filed in the office of the Secretary of the Commonwealth, May 28, 1959 I hereby approve the within certificate, this 27th day of May 1959. Robert T. Capeless Commissioner of Corporations and Taxation. DEPARTMENT OF T J MAY 15 - 1959 R CORPORATIONS AND TAXATION DEPARTMENT OF T J MAY 27 - 1959 R CORPORATIONS AND TAXATION IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this twentieth day of May in the year 1959. /s/ J. C. Donnelly K. R. Knoblock F. A. O'Neill Robert W. McCracken Joseph T. Kelley J. Richard Cottrell THE BERKSHIRE GAS COMPANY STATEMENT OF THE DESIGNATIONS, PREFERENCES AND VOTING POWERS OR RESTRICTIONS OR QUALIFICATIONS OF THE CAPITAL STOCK OF THE COMPANY The authorized capital stock of the Company shall include, in addition to the common capital stock heretofore authorized, 7,935 shares of Cumulative Preferred Stock, of the par value of $100 per share, with the following designations, preferences, voting powers, restrictions and qualifications: SECTION 1. Provisions Applicable to All Shares of Cumulative Preferred Stock. (a) All shares of Cumulative Preferred Stock shall be of equal rank with each other, regardless of class, and shall be identical with each other in all respects except as otherwise provided in Section II hereof with respect to the 5% Cumulative Preferred Stock and in Section III hereof with respect to the 6% Cumulative Preferred Stock; and the shares of Cumulative Preferred Stock of any one class shall be identical with each in all respects. (b) In case the stated dividends on each class of Cumulative Preferred Stock are not paid in full, the shares of each class of Cumulative Preferred Stock shall share ratably in the payment of dividends, including accumulations thereof, if any, in accordance with the sums which would be payable on such shares if all dividends were declared and paid in full. (c) The Cumulative Preferred Stock of each class shall be preferred as to assets over the Common Stock, so that the holders of each class of Cumulative Preferred Stock shall be entitled to have set apart for them or to be paid out of the assets of the Company, before any distribution is made to or set apart for the holders of Common Stock, an amount in cash equal to and in no event more than (1) in the event of any voluntary liquidation, dissolution or windings up of the Company, the redemption price of such class of the Cumulative Preferred Stock which would have been in effect at the time of the distribution or payment date if there had been no such liquidation, dissolution or winding up of the Company, or (2) in the event of involuntary liquidation, dissolution or winding up of the Company, the sum of $100 per share, plus in each case an amount equal to all dividends accrued and unpaid to the date of such liquidation, dissolution or winding up, whether or not earned or declared. If upon any liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its stockholders shall be insufficient to permit the distribution in full of the amount receivable as aforesaid by the holders of each class of the Cumulative Preferred Stock, then all such assets of the Company shall be distributed ratably among the holders of each class of the Cumulative Preferred Stock in proportion to the amounts which they would be entitled to receive if such assets were sufficient to permit distribution in full as aforesaid. In the event of any liquidation, dissolution or winding up of the Company, all assets and funds of the Company remaining after paying or providing for the payment of all creditors of the Company and after paying or providing for the payment to the holders of shares of each class of the Cumulative Preferred Stock of the full distributive amounts to which they are respectively entitled, as herein provided, shall be divided among and paid to the holders of the Common Stock according to their respective shares. Neither the consolidation nor the merger of the Company with or into any other corporation or corporations, nor the sale or transfer by the Company of all or any part of its assets shall be deemed to be a liquidation, dissolution or winding up of the Company for the purpose of this paragraph (c). (d) No holder of shares or Cumulative Preferred Stock of any cash sale be entitled as such as a matter of right to subscribe for or purchased any part of any new or additional issue of any stock of any class, series or kind whatsoever, or securities convertible into stock or any class, series or kind whatsoever, whether now or here after authorized, and whether issued for cash, property, services, by way of dividends, or otherwise. (e) (A) At all meetings of the stockholders of the Company, the holders of shares of Cumulative Preferred Stock of any class shall have no right to vote and shall not be entitled to notice of any meetings of the stockholders of the Company nor to participate in any such meeting except as herein otherwise expressly provided and except for those purposes, if any, for which said rights can not be denied or waived under some mandatory provision of law which shall be controlled. (B) If and when dividends payable on any shares of Cumulative Preferred Stock of any class shall be in default, in whole or in part, for four (4) full quarterly dividend periods (whether consecutive or not), or the Company shall be in default in making any sinking fund payment required by paragraph (e) or Section II hereof in respect of the 5% Cumulative Preferred Stock or by paragraph (e) of Section III hereof in respect of the 6% Cumulative Preferred Stock the holders of the shares of all classes of the Cumulative Preferred Stock, voting separately as a class, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors, in holders of the shares of the Common Stock, voting separately as a class, shall be entitled to elect the remaining directors of the Company, anything herein or in the by-laws to the contrary notwithstanding. The terms of office of all persons who may be directors of the Company at the time shall terminate upon the election of one or more holders of the shares of the Common Stock shall then have elected the remaining directors of the Company. (C) If and when all dividends then in default on the shares of the Cumulative Preferred Stock of all classes then outstanding shall be paid (and such dividends shall be declared and paid out of any funds legally available therefor as soon as reasonably practicable) and the full dividends as each class of the Cumulative Preferred Stock for the then current quarterly dividend period shall have been declared and paid or set apart for payment, and if and when all sinking fund payments under paragraph (e) of Section II hereof in respect of the 5% Cumulative Preferred Stock, and under paragraph (e) of Section III hereof in respect of the 6% Cumulative Preferred Stock, then in default shall have been made, and holders of the shares of all classes of the Cumulative Preferred Stock shall be divested of all voting rights with respect to the election of directors provided in sub-paragraph (B) of this paragraph (e), and the voting power of the holders of the shares of all classes of Cumulative Preferred Stock and holders of the shares of the Common Stock shall revert to the status existing before the first dividend payment on which dividends on the shares of all classes of Cumulative Preferred Stock were not paid in full; but always subject to the same prevision vesting such voting rights in the holders of the shares of all classes of Cumulative Preferred Stock in case of further like default or defaults on dividends thereon or in sinking fund payments, as provided in subparagraph (B) of this paragraph (e). Upon the termination of any such voting rights as hereinabove provided, the terms of office of all persons who may have been elected directors of the Company by vote of the holders of the shares of all classes of Cumulative Preferred Stock as a class, pursuant to such voting rights, shall forthwith terminate and the resulting vacancies shall be filled by the vote of a majority of the remaining directors. Any director who shall have been elected by the holders of all classes of Cumulative Preferred Stock or by any directors so elected as herein provided may be removed during his aforesaid term of office, either for or without cause, by, and only by, the affirmative votes of the holders of record of a majority of the outstanding shares of all classes of Cumulative Preferred Stock given at a special meeting of such stock holders called for the purpose, and any vacancy thereby created may be filled by the holders of such stock presented at such meeting. (D) In the case of any vacancy in the office of a director occurring among the directors elected buy the holders of the shares of all classes of Cumulative Preferred Stock, as a class, pursuant to the foregoing prevision of subparagraph (B) of this paragraph (e), the remaining directors elected by the holders of the shares of all classes of Cumulative Preferred Stock by affirmative vote of a majority thereof, or the remaining director so elected if there but not one, may, subject to the provisions of subparagraph (c) of this paragraph (e) elect a successor or successors to hold office for the unexpired terms of the director or the directors whose place or places shall be vacant. Likewise, in case of any vacancy in the office of a director occurring among the directors elected by the holders of the shares of Cumulative Preferred Stock pursuant to the foregoing provisions of subparagraph (B) of this paragraph (e), the remaining directors elected by the holders of Common Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, they elect a successor or successors to hold office for unexpired term of the director or directors whose place or places shall be vacant. (E) Whenever under the provisions of subparagraph (B) of this paragraph (e), the right shall have occurred to be the holders of the shares of all classes of Cumulative Preferred Stock to elect directors, the Board of Directors shall be, within ten (10) days after the delivery of the Company at its principle office of a request to such elect by any holders of shares of any class Cumulative Preferred Stock entitled to vote, call a special meeting of the stockholders, to be held on 20 days' notice. If such meeting shall not be called within such ten-day period, the holders of record of at least 10% in amount of any class of Cumulative Preferred Stock then outstanding, may designate in writing one of there number to call such meeting and the same may be called at the expense of the Company by such person so designated upon 20 days' notice. Any holder of any class of Cumulative Preferred Stock so designated shall have access to the stock books of the Company for the purpose of causing a meeting of stockholders to be pursuant to these provisions. At all meetings of stockholders held for the purpose of electing directors during such time as the holders of the shares of all classes of Cumulative Preferred Stock shall have the special right, voting separately as a class, to elect directors pursuant to subparagraph (B) of this paragraph (e), the presence in person or by proxy, of the holders of a majority of the outstanding shares of each class of stock (i.e. Cumulative Preferred Stock and Common Stock ) shall be required to constitute a quorum of such class for the election of directors; provided, however, that the absence of a quorum of the holders of stock of either such class shall not prevent the election at any such meeting or adjournment thereof of directors by the other such class if the necessary quorum of the holders of such stock is present in person or by proxy at such meeting; and provided further that in the event such a quorum of the holders of the shares of the Common Stock if present but such a quorum of the holders of the shares of all classes of Cumulative Preferred Stock is not present then the election of the directors elected by the holders of the shares of the Common Stock shall not be effective in the directors so elected by the holders of the shares of the Common Stock shall not assume there offices and duties until the holders of the shares of all classes of Cumulative Preferred Stock, with such a quorum present, shall have elected the directors they shall be entitled to elect; and provide further, however, that in the absence of a quorum of the holders of stock of either such class, a majority of those holders of the stock of such class who are present in person or by proxy shall have power to adjourn the election of the directors to be elected by such class from time to time without notice other than announcement at the meeting until the requisite amount of holders of such class shall be present in person or by proxy, but such adjournment shall not be made to a date beyond the date for the mailing of notice for the next annual meeting or the Company or the special meeting in lieu thereof. (F) Except as otherwise required by the laws applicable to the Company and subject to the right of the Cumulative Preferred Stock of all classes (i) to vote in certain events as hereinbefore set forth in this paragraph (e); and (ii) not to have certain corporate action taken without the consent of the holders thereof as required by the provisions of paragraph h of Section II hereof and paragraph h of Section III hereof, the Common Stock shall have the exclusive voting rights for the election of directors and for all other purposes. SECTION II. Provisions applicable to all shares of 5% Cumulative Preferred Stock. (a) 6,435 shares of the Cumulative Preferred Stock shall be designated as "5% Cumulative Preferred Stock". (b) The annual dividend rate shall be 5% per annum of the par value of $100 per share, of $5.00 per share per annum, payable quarterly on the 15th days of October, January, April, and July. (c) The aforesaid dividends shall accrue from the date of original issue and shall be cumulative so that if dividends in respect of any quarterly dividend period at the rate $5.00 per annum shall not have been paid or declared and set apart for the 5% Cumulative Preferred Stock and deficiency shall be fully paid or declared and set apart any dividend shall be paid upon or declared or set apart for the Common Stock. Dividends on 5% Cumulative Preferred Stock shall be deemed to accrue from day to day. (d) The Company, by action of its Board of Directors, may redeem the whole or any part of the 5% Cumulative Preferred Stock at any time or from time to time, at the following redemption prices: $105 per share if redeemed prior to the fifth anniversary of the date of issue; $104 per share if redeemed on or after the fifth anniversary but before the tenth anniversary of the date of issue; $103 per share if redeemed on or after the tenth anniversary but before the fifteenth anniversary of the date of issue; and $102 per share if redeemed on or after the fifteenth anniversary of the date of issue. together with, in each case, an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. If less than all of the outstanding shares of 5% Cumulative Preferred Stock are to redeemed in pursuance of the foregoing provisions for voluntary redemption, the aggregate number of shares so to be redeemed shall be allocated at the Company among the registered holders of such Stock at the time outstanding, to the nearest share, in the proportion that their respective holdings bear to the aggregate number of shares of such Stock at the time outstanding, provided that if the number of such registered holders shall be more than twenty, the shares to be redeemed shall be determined by lot in such usual manner as the Board of Directors shall deem proper. If less than all the outstanding shares of 5% Cumulative Preferred Stock are to be redeemed in pursuance of the foregoing provisions for voluntary redemption, the Company shall simultaneously with such redemption redeem such proportion of the then outstanding shares of 6% Cumulative Preferred Stock as the number of shares of 5% Cumulative Preferred Stock so to be redeemed bears to the aggregate number of shares of 5% Cumulative Preferred Stock then outstanding. The 5% Cumulative Preferred Stock shall also be redeemable through the operation of the sinking fund described in paragraph (e) hereof at $100 per share, together in each case with an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether of not earned or declared. (e) So long as any of the shares of the 5% Cumulative Preferred Stock shall be outstanding, the Company covenants to apt to a bank or trust company selected for that purpose by the Board of Directors (hereinafter called the "5% Preferred Stock Sinking Fund Trustee") as and for a sinking fund for the retirement of shares of the 5% Cumulative Preferred Stock, not later than September 1 in each calendar year commencing with the year 1959, an amount of cash equal to 4% of the aggregate par value of the largest number of shares of 5% Cumulative Preferred Stock issued at any time prior to the time of such payment. Without limitation of the rights and remedies of the holders of 5% Cumulative Preferred Stock in case of the Company's default in respect of the foregoing sinking fund obligation, such annual sinking fund obligation shall be cumulative so that if for any reason the Company shall bot have satisfied its full annual sinking fund obligation in any calendar year, then any such deficiency shall be added to the sinking fund obligation for the next succeeding calendar year. Any cash paid to the 5% Preferred Stock Sinking Fund Trustee shall be held by it in trust for the equal and proportionate benefit of the holders of the 5% Cumulative Preferred Stock and shall be applied by it, subject to the provisions of paragraph (f) of this Section II, to the redemption of 5% Cumulative Preferred Stock, at $100 per share, together in each case with an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. The 5% Preferred Stock Sinking Fund Trustee shall allocate the aggregate number of shares of 5% Cumulative Preferred Stock so to be redeemed among the registered holders of such Stock at the time outstanding, to the nearest share, in the proportion that their respective holdings bear to the aggregate number of shares of such Stock at the time outstanding, provided that if the number of such registered holders shall be more than twenty, the shares to be redeemed shall be determined by lot in such usual manner as the Preferred Stock Sinking Fund Trustee shall deem proper. (f) At least 30 days prior to the date fixed for redemption (which latter date, in the case of redemption by operation of the foregoing sinking fund provisions, shall be no later than September 1 of the particular year, as heretofore provided) notice of every redemption shall be mailed to the holders of the record of the shares to be redeemed at their respective addresses as the same to be made by lot under the provisions of paragraphs (d) and (e) of this Section II, at least 30 days' previous notice of every redemption shall also be given by appropriate publication at least once in a daily newspaper printed in the English language and of general circulation in the City of Boston, Massachusetts. The notice so mailed shall state the date fixed for redemption (hereinafter called the redemption date) and shall call upon each stockholder to whom such notice shall be addressed to surrender to the Company on the redemption date, at the place designated in such notice, his certificate or certificates representing the number of shares specified in such notice of redemption. On or after the redemption date each holder of shares of 5% Cumulative Preferred Stock so called for redemption shall present and surrender his certificate or certificates for such shares to the Company at the place designated in the foregoing written notice and thereupon the redemption price of such shares shall be paid to or on the order of the person whose name appears on the certificate or certificates as the owner thereof. In case less than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares. If notice of redemption shall have been duly given as hereinbefore provided, and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Company, separate and apart from its other funds, in trust for the account of holders of the shares to be redeemed, so as to be and continue to be available therefor, then, notwithstanding that any certificate for such shares so called for redemption shall not have been surrendered for cancellation, from and after the date fixed for redemption, the shares represented thereby shall no longer be deemed to be outstanding, the right to receive dividends thereon shall cease to accrue and all rights with respect to such shares so called for redemption shall cease and terminate, except only the right of the holders thereof to receive, out of the funds so set aside in trust, the amount payable upon redemption thereof, without interest; provided, however, that the Company may, after giving notice of any such redemption as hereinbefore provided or after giving to the bank or trust company hereinafter referred to irrevocable authorization to give such notice and at any time prior to the redemption date specified in such notice, deposit in trust, for the account of the holders of the shares to be redeemed, funds necessary for such redemption with a bank or trust company in good standing, organized under the laws of the United States of America or of the Commonwealth of Massachusetts, doing business in the City of Boston, Massachusetts, having capital, surplus and undivided profits aggregating at least $5,000,000, in which case the aforesaid redemption notice to be mailed to the holders of record of the shares to be redeemed shall specify the office of such bank or trust company as the place of payment of the redemption price, and shall be redeemed at such place on or after the date fixed in such redemption notice (which shall not be later than the redemption date) against payment of the redemption price. Upon such deposit in trust, all shares with respect to which such deposit shall have been made shall no longer be deemed to be outstanding, and all rights with respect to such shares so called for redemption shall forthwith cease and terminate, except only the right of the holders thereof to receive, out of all the funds so deposited in trust, from and after the date of such deposit, the amount payable upon the funds so deposited in trust, from and after the date of such deposit, the amount payable upon the redemption thereof, without interest. In case the holder of shares of 5% Cumulative Preferred Stock which shall have been called for redemption as provided herein shall not within six years of the date of redemption thereof or the date of such deposit with a bank or trust company, whichever is earlier, claim the amount so set aside or deposited in trust, as the case may be, for the redemption of such shares, such bank or trust company shall upon demand, pay over to the Company any such unclaimed amount so deposited with it and shall thereupon be relieved of all responsibility in respect thereof and the Company shall not be required to hold the amount so paid over to it, or any amount so set aside by it for the redemption of such shares, separate and apart from its other funds, and thereafter except as may be otherwise provided by law, the holders of such shares of 5% Cumulative Preferred Stock shall look only to the Company for payment of the redemption price redeemed, purchased or acquired by the Company whether by operation of the sinking fund provisions of paragraph (e) of this Section II or pursuant to paragraph (d) of this Section II shall not under any circumstances by reissued or otherwise disposed of by the Company and each surrendered certificate for shares of 5% Cumulative Preferred Stock so redeemed shall be canceled and retired in the manner permitted by law. (g) Whenever full dividends on the shares of the 5% Cumulative Preferred Stock at the time outstanding for all past quarterly dividend periods and for the current quarterly dividend period shall have been paid or declared and set apart for payment, and provided that the Company shall be not be in default in respect of any sinking fund payment with respect to the 5% Cumulative Preferred Stock , then, and only then (subject to the provisions of subparagraph (h) (B) (b) of this Section II), such dividends as may be determined by the Board of Directors may be declared and paid on the Common Stock, but only out of funds legally available for the payment of dividends; provided, however, that so long as any shares of the 5% Cumulative Preferred Stock are outstanding, the Company shall not pay any dividends (other than dividends payable in Common Stock or in any other stock of the Company junior to the 5% Cumulative Preferred Stock as to assets and dividends) or make any distribution on, or purchase, or redeem, retire or otherwise acquire for value any of its Common Stock or other stock junior to 5% Cumulative Preferred Stock, if after giving affect to any such payment, distribution, purchase, redemption, retirement or acquisition the aggregate amount of such dividends, distribution, purchases and acquisitions, paid or made since July , 1954, including the amount then proposed to be expended for any such purpose, together with all other charges to earned surplus since July 1, 1954, exceeds the sum of the aggregate of (i) credits to earned surplus since July 1, 1954, (ii) amounts credited to capital surplus after July 1, 1954 arising from the donation to the Company of cash or securities (other than securities of the Company junior to the 5% Cumulative Preferred Stock) or transfers of amounts from earned surplus to capital surplus, and (iii) the aggregate net cash proceeds, or the fair value of any property other than cash, received by the Company from the sale of shares or any other security of the Company junior to 5% Cumulative Preferred Stock. In computing the amount available for any such dividend, distribution, purchase, redemption, retirement or acquisition, charges and credits to earned surplus shall be made in accordance with sound accounting practice. (h) (A) So long as any shares of the 5% Cumulative Preferred Stock are outstanding, the Company shall not without the consent (given at a meeting duly called and held for that purpose) of the holders at least two-thirds of the total number of shares of 5% Cumulative Preferred Stock then outstanding; (a) Create or authorize any stock ranking prior to or on a parity with the 5% Cumulative Preferred Stock or the 6% Cumulative Preferred Stock as to assets or dividends, or create or authorize any security convertible into, or evidencing the right to purchase, shares of any such stock, or increase the total authorized amount of 5% Cumulative Preferred Stock; or (b) amend, alter, change or repeal any of the rights, privileges, preferences, powers, terms and conditions of the 5% Cumulative Preferred Stock in any manner which would be prejudicial to the holders thereof; or (c) sell, lease, transfer or convey all or the greater part of the Company's property or business; or (d) become a party to any indenture, mortgage or deed of trust or other agreement or instrument which by its terms shall restrict the earned surplus or any other funds of the Company available for the payment of dividends on the 5% Cumulative Preferred Stock or at any sinking fund obligation imposed by paragraph (e) of this Section II, unless provision shall be made in such indenture, mortgage or deed of trust or other agreement or instrument permitting the payment by the Company of (i) not less than $10.00 in respect of each share of 5% Cumulative Preferred Stock then outstanding as dividends thereon pursuant to the terms of paragraph (b) of this Section II, and (ii) not less than $51,480 to satisfy the sinking fund obligation for two yearly periods imposed by paragraph (e) of this Section II; or (e) merge or consolidate with or into another corporation in such manner that the Company does not survive as a continuing entity, if hereby the rights, privileges, preferences, powers, terms or conditions of the 5% Cumulative Preferred Stock would be adversely affected, or if there would thereupon be authorized or outstanding securities which the Company, if it owned all of the properties then owned by the resulting corporation, could not create without the vote or consent of the holders of the 5% Cumulative Preferred Stock. (B) So long as any shares of the 5% Cumulative Preferred Stock are outstanding, the Company shall not, without the consent (given at a meeting duly called and held for that purpose) of the holders of the majority of the total number of shares of 5% Cumulative Preferred Stock then outstanding; (a) issue or sell addition shares of 5% Cumulative Preferred Stock, or any shares of any stock ranking prior to or on a parity with the 5% Cumulative Preferred Stock as to assets or dividends, unless, after giving affect to such proposed issue or sale, (i) the net earnings available for interest and dividends, determine an accordance with sound accounting practice after all taxes and after provision for depreciation and amortization at least equal to the "minimum provision for depreciation" as hereinafter defined, for twelve (12) consecutive calendar months out of fifteen (15) months immediately preceding shall be at least one and one-half (1-1/2) times the sum of (x) the aggregate annual interest requirements on all indebtedness of the Company then outstanding and (y) the aggregate annual dividend requirements on all shares of 5% Cumulative Preferred Stock and all shares of any stock ranking to or on a parity with 5% Cumulative Preferred Stock, to be outstanding; and (ii) the Company's net earning available for dividends determine in accordance with sound accounting practice after all taxes and after provision for depreciation and amortization at least equal to the "minimum provision for depreciation" as hereinafter defined, for twelve (12) consecutive calendar months out of the fifteen (15) months immediately proceeding shall be at least two and one-half (2-1/2) times the aggregate annual dividends requirements on all shares of 5% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with 5% Cumulative Preferred Stock, to be outstanding; and (iii) the total of the Company's capital represented by the then outstanding shares of its stock ranking junior to the 5% Cumulative Preferred Stock, plus the Company's surplus and any amounts carried as premium on capital stock, would be at least equal to the resulting aggregate par value, or in case of stock without par value, the preference on involuntary liquidation, of all shares of 5% Cumulative Preferred Stock, and all shares of any stock ranking higher to or on a parity with 5% Cumulative Preferred Stock, which would be outstanding after giving affect to such proposed issue or sale; or (b) declare or pay any dividends (other than dividends payable in stock ranking junior to the 5% Cumulative Preferred Stock as to assets and dividends) or make any distribution on, or purchase, or redeem, retire or otherwise acquire for a consideration, any shares of any kind of stock ranking junior to 5% Cumulative Preferred Stock as to assets of dividends, except out of net earnings accumulated after July 1, 1954, after all dividends paid or accrued since that date on the 5% Cumulative Preferred Stock, or on any stock ranking prior to or on a parity with the 5% Cumulative Preferred Stock as to assets or dividends, and then only if after such action the aggregate par value or, in the case of stock without par value, the preference on voluntary liquidations of all outstanding shares of 5% Cumulative Preferred Stock and all shares of any stock ranking prior to or on parity with the 5% Cumulative Preferred Stock would not exceed the sum of (i) the total capital of the Company represented by the then outstanding stock ranking junior to 5% Cumulative Preferred Stock as to assets and dividends and (ii) the surplus of the Company and any amounts carried as premium on its capital stock. (C) So long as dividends shall be in arrears on the 5% Cumulative Preferred Stock outstanding, the Company shall not, without the consent of the holders of a majority of the number of outstanding shares of such stock represented at a meeting duly called and held for such purpose (or, if at least one-third of the outstanding shares of such stock shall be voted against such action, then the affirmative vote of an absolute majority of such outstanding shares), purchase, redeem, retire or otherwise acquire for a consideration any shares of 5% Cumulative Preferred Stock or of any stock ranking on a parity with the 5% Cumulative Preferred Stock as to assets or dividends. (D) The foregoing provisions as to vote or consent shall not apply if, in connection with any of the matters mentioned in subparagraphs (A), (B) or c above, provision is to be made for the redemption or retirement of all outstanding 5% Cumulative Preferred Stock. (E) From time to time, and without limitation of other rights and powers of the Company as provided by law, the Company may reclassify its capital stock and may create or authorize one or more classes or kinds of stock ranking prior to or on a parity with or subordinate to the 5% Cumulative Preferred Stock, or may increase the authorized amount of the 5% Cumulative Preferred Stock or of the Common Stock or of any other class of stock of the Company or may amend, after, change or repeal any of the rights, privileges, terms and conditions of the shares of the 5% Cumulative Preferred Stock or of the Common Stock, or of any other class of stock of the Company upon the vote, given at a meeting called for that purpose, of the holders of a majority of the shares of stock then entitled to vote thereon or upon such other vote of the holders of the shares of stock then entitled to vote thereon as may then be provided by law; provided that the consent of the holders of the shares of the 5% Cumulative Preferred Stock, required by the provisions of subparagraphs (A), (B) and (C) of this paragraph (h), if any such consent to be so required, shall have been obtained; and provided further that the rights, privileges, terms and conditions of the share of the Common Stock shall not subject to amendment, alteration, change or repeal without a consent (given in writing or by vote at a meeting called for that purpose) of all the holders of a majority of the total number of shares of the Common Stock then outstanding. (F) For the purpose of this paragraph (h) of this Section II, outstanding shares of the 5% Cumulative Preferred Stock shall include all shares of such stock theretofore issued, except (a) shares held in the treasury of the Company, (b) shares which shall have been redeemed and (c) shares for the redemption of which moneys in the necessary amount shall have been deposited in trust with a bank or trust company in accordance with paragraphs (e) and (f) of this Section II, and which shall have been duly called for redemption. (i) The rights and remedies herein granted to holders of the 5% Cumulative Preferred Stock shall be in addition to all other rights and remedies to which they may be otherwise entitled by law. SECTION III. Provisions Applicable to All Shares of 6% Cumulative Preferred Stock. (a) 1,500 shares of the Cumulative Preferred Stock shall be designated as "6% Cumulative Preferred Stock." (b) The annual dividend rate shall be 6% per annum of the par value of $100.00 per share, or $6.00 per share, payable quarterly on the 15th days of October, January, April, and July. (c) The aforesaid dividends shall accrue from the date of original issue and shall be cumulative so that if dividends in respect of any quarterly dividend period at the rate $6.00 per annum shall not have been paid upon or declared and set apart for the 6% Cumulative Preferred Stock, the deficiency shall be fully paid or declared and set apart before any dividend shall be paid upon or declared or set apart for the Common Stock. Dividends on the 6% Cumulative Preferred Stock shall be deemed to accrue from day to day. (d) The Company, by action of its Board of Directors, may redeem the whole or any part of the 6% Cumulative Preferred Stock at any time or from time to time, at the following redemption prices: $110.00 per share if redeemed prior to the 5th anniversary of the date of issue; $105.00 per share if redeemed on and after the 5th anniversary but before the 10th anniversary of the date of issue; $103.00 per share if redeemed on or after the 10th anniversary but before the 15th anniversary of the date of issue; and $100.00 per share if redeemed on or after the 15th anniversary of the date of issue, together with, in each case, an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. If less than all of the outstanding shares of 6% Cumulative Preferred Stock are to be redeemed in pursuance of the foregoing provisions for voluntary redemption, the aggregate number of shares so to be redeemed shall be determined in the manner specified in paragraph (d) of Section II hereof. If less than all of the outstanding shares of 6% Cumulative Preferred Stock are to be redeemed in pursuance of the foregoing provisions for voluntary redemption, the Company shall simultaneously with such redemption redeem such proportion of the then outstanding shares of 5% Cumulative Preferred Stock as the number of shares of 6% Cumulative Preferred Stock so to be redeemed bears to the aggregate number of shares of 6% Cumulative Preferred Stock then outstanding. The 6% Cumulative Preferred Stock shall also be redeemable at $100 per share, together in each case with an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared through the operation of the sinking fund described in paragraph (e) of this Section III. (e) So long as any of the shares of the 6% Cumulative Preferred Stock shall be outstanding, the Company covenants to pay to a bank or trust company selected for that purpose by the Board of Directors (hereinafter called the "6% Preferred Stock Sinking Fund Trustee") as and for a sinking fund for the retirement of shares of the 6% Cumulative Preferred Stock not later than April 1 in each calendar year commencing with the year 1960, an amount of cash equal to 4% of the aggregate par value of the largest number of shares at 6% Cumulative Preferred Stock issued at any time prior to the time of such payment. Without limitation of the rights and remedies of the holders of the 6% Cumulative Preferred Stock in case of the Company's default in respect of the foregoing sinking fund obligation, such sinking fund obligation shall be cumulative so that if for any reason the Company shall not have satisfied its full annual sinking fund obligation in any calendar year with respect to the 6% Cumulative Preferred Stock, then any such deficiency shall be added to the sinking fund obligation for the next succeeding calendar year. Any cash paid to the 6% Preferred Stock Sinking Fund Trustee shall be held by it in trust for the equal and proportionate benefit of the holders of the 6% Cumulative Preferred Stock and shall be applied by it, subject to the provisions of paragraph (f) of this Section III, to the redemption of 6% Cumulative Preferred Stock, at $100.00 per share, together in each case with an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. (f) Every redemption of shares of 6% Cumulative Preferred Stock, whether by operation of the sinking fund provisions therefor or by voluntary action by the Company, shall be made in the manner, upon the notice and with the effect provided in paragraphs (e) and (f) of Section II hereof and all or any shares of the 6% Cumulative Preferred Stock at any time redeemed, purchased or acquired by the Company whether by operation of the sinking fund provisions of paragraph (e) of the is Section III or pursuant to paragraph (f) of this Section III shall not under any circumstances by reissued or otherwise disposed of by the Company and each surrendered certificate for shares of 6% Cumulative Preferred Stock so redeemed shall be canceled and retired in the manner permitted by law. (g) Whenever full dividends on the shares of the 6% Cumulative Preferred Stock at the time outstanding for all past quarterly dividends periods and for the current quarterly dividends period shall have been paid or declared and set apart for payment with respect to the 6% Cumulative Preferred Stock, then, and only then (subject to the provisions of subparagraph (h)(B)(b) of this Section III), such dividends as may be determined by the Board of Directors may be declared and paid on the Common Stock, but only out of funds legally available for the payment of dividends; provided, however, that so long as any shares of the 6% Cumulative Preferred Stock are outstanding, the Company shall not pay any dividends (other than dividends payable in Common Stock or in any other stock of the Company junior to the 6% Cumulative Preferred Stock as to assets and dividends) or make any distribution on, or purchase, or redeem, retie or otherwise acquire for value, any of its Common Stock or other stock junior to the 6% Cumulative Preferred Stock, if after giving effect to any such payment, distribution, purchase, redemption, retirement or acquisition the aggregate amount of such dividends, distributions, purchases and acquisitions, paid or made since June 30, 1958, including the amount then proposed to be expended for any such purpose, together with all other charges to earned surplus since June 30, 1958, exceeds the sum of the aggregate of (i) $50,000, (ii) credits to earned surplus since June 30, 1958, (iii) amounts credited to capital surplus after June 30, 1958 arising from the donation to the Company of cash or securities (other than securities of the Company junior to the 6% Cumulative Preferred Stock) or transfers of amounts from earned surplus to capital surplus, and (iv) the aggregate net cash proceeds, or the fair value of any property other than cash, received by the Company from the sale of shares or any other security of the Company junior to the 6% Cumulative Preferred Stock. In computing the amount available for any such dividend, distribution, purchase, redemption, retirement or acquisition, charges and credits to earned surplus shall be made in accordance with sound accounting practice. (h) (A) So long as any shares of the 6% Cumulative Preferred Stock are outstanding, the Company shall not without the consent (given at a meeting duly called and held for that purpose) of the holders of at least two-thirds of the total number of shares of 6% Cumulative Preferred Stock then outstanding; (a) create or authorize any stock ranking prior to or on a parity with the 6% Cumulative Preferred Stock or the 5% Cumulative Preferred Stock as to assets or dividends, or create or authorize any security convertible into, or evidencing the right to purchase, shares of any such stock, or increase the total authorized amount of 6% Cumulative Preferred Stock; or (b) amend, alter, change or repeal any of the rights, privileges, preferences, powers, terms and conditions of the 6% Cumulative Preferred Stock in any manner which would be prejudicial to the holders hereof; or (c) sell, lease, transfer or convey all or the greater part of the Company's property or business; or (d) create, assume, incur, have outstanding, or in any manner become liable in respect of, any unsecured indebtedness for borrowed money in excess of $1,200,000 at any one time outstanding, payable on demand or within one year from the date of borrowing and nor renewable at the option of the Company; or (e) create, assume, incur, have outstanding, or in any manner become liable in respect of, any indebtedness, direct or contingent, secured by the pledge of evidence of indebtedness executed by customers of the Company as consideration for the purchase (whether from the Company or from dealers) of standard gas appliance unless the Company shall have simultaneously therewith created and set aside a reserve at $1,500 in respect of each $100,000 principal amount, or part thereof, of evidences of customers indebtedness so pledged by the Company as security for the payment of such indebtedness of the Company; or (f) become a party to any indenture, mortgage or deed of trust or other agreement or instrument which by its terms shall restrict the earned surplus or any other funds of the Company available for the payment of dividends on the 6% Cumulative Preferred Stock or of any sinking fund obligation imposed by paragraph (e) of this Section III, unless provision shall be made in such indenture, mortgage or deed of trust or other agreement or instrument permitting the payment by the Company of (i) not less than $12.00 in respect of each share of 6% Cumulative Preferred Stock then outstanding as dividends thereon pursuant to the terms of paragraph (b) of this Section III, and (ii) not less than $12,000 to satisfy the sinking fund obligation for two yearly periods imposed by paragraph (e) of this Section III; or (g) merge or consolidate with or into any other corporation in such manner that the Company does not survive as a continuing entity, if thereby the rights, privileges, preferences, powers, terms or conditions of the 6% Cumulative Preferred Stock would be adversely affected, or if there would, thereupon, be authorized or outstanding securities which the Company, if it owned all of the properties then owned by the resulting corporation, could not create without the vote or consent of the holders of the 6% Cumulative Preferred Stock. (B) So long as any shares of the 6% Cumulative Preferred Stock are outstanding, the Company shall not, without the consent (given at a meeting duly called and held for that purpose) of the holders of a majority of the total number of shares of 6% Cumulative Preferred Stock then outstanding: (a) issue or sell any additional shares of 6% Cumulative Preferred Stock, or any shares of any stock ranking prior to or on a parity with the 6% Cumulative Preferred Stock as to assets or dividends, unless, after giving effect to such proposed issue or sale, (i) the net earnings of the Company available for interest and dividends, determined in accordance with sound accounting practice after all taxes and after provision for depreciation and amortization at least equal to the "minimum provision for depreciation" as hereinafter defined, for twelve (12) consecutive calendar months out of fifteen (15) months immediately preceding shall be at least one and one-half (1-1/2) times the sum of (x) the aggregate annual interest requirements on all indebtedness of the Company then outstanding and (y) the aggregate annual dividend requirements on all shares of 6% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 6% Cumulative Preferred Stock, to be outstanding; and (ii) the Company's net earnings available for dividends, determined in accordance with sound accounting practice after all taxes and after provision for depreciation and amortization at least equal to the "minimum provision for the fifteen (15) months immediately preceding, shall be at least two and one-half (2-1/2) times the aggregate annual dividend requirements on all shares of 6% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 6% Cumulative Preferred Stock, to be outstanding; and (iii) the total of the Company's capital represented by the then outstanding shares of its stock ranking junior to the 6% Cumulative Preferred Stock, plus the Company's surplus and any amounts carried as premium on capital stock, would be at least equal to the resulting aggregate par value, or in case of stock without par value, the preference on involuntary liquidation, of all shares of 6% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 6% Cumulative Preferred Stock, which would be outstanding after giving affect to such proposed issue or sale; or (b) declare or pay any dividends (other than dividends payable in stock ranking junior to the 6% cumulative Preferred Stock as to assets and dividends) or make any distribution on, or purchase, or redeem, retire or otherwise acquire for a consideration, any shares of any kind of stock ranking junior to the 6% Cumulative Preferred Stock as to assets or dividends, except out of net earnings accumulated after June 30, 1958 plus $50,000, after all dividends paid or accrued since that date on the 6% Cumulative Preferred Stock, or on any stock ranking prior to or on a parity with the 6% Cumulative Preferred Stock as to assets or dividends, and then only if after such action the aggregate par value or, in the case of stock without par value, the preference on involuntary liquidation of all outstanding shares of 6% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 6% Cumulative Preferred Stock would not exceed the sum of (I) the total capital of the Company represented by the then outstanding stock ranking junior to the 6% Cumulative Preferred Stock as to assets and dividends and (ii) the surplus of the Company and any amounts carried as premium on its capital stock. The term "minimum provision for depreciation" shall mean, for any 12-months' period, an amount equal to 2% of the average gross depreciable plant property account of the Company during such period. (C) So long as dividends shall be in arrears on the 6% Cumulative Preferred Stock outstanding, the Company shall not, without the consent of the holders of a majority of the number of outstanding shares of such stock represented at a meeting duly called and hold for such purpose (or, it at least one-third of the outstanding shares of such stock shall be voted against such action, then the affirmative vote of an absolute majority of such outstanding shares), purchase, redeem, retire or otherwise acquire for a consideration any shares of 6% Cumulative Preferred Stock or of any stock ranking on a parity within the 6% Cumulative Preferred Stock as to assets or dividends. (D) The foregoing provisions as to vote or consent shall not apply if, in connection with any of the matters mentioned in subparagraphs (A), (B), or (C) of this paragraph (h), provision is to be made for the redemption or retirement of all the outstanding 6% Cumulative Preferred Stock. (E) From time to time, and without limitation of other rights and powers of the Company as provided by law, the Company may reclassify its capital stock and may create or authorize one or more classes or kinds of stock ranking prior to or on a parity with or subordinate to the 6% Cumulative Preferred Stock, or may increase the authorized amount of the 6% Cumulative Preferred Stock or of the Common Stock or of any other class of stock of the Company or may amend, alter, change or repeal any of the rights, privileges, terms and conditions of the shares of the 6% Cumulative Preferred Stock or of the Common Stock, or of any other class of stock of the Company, upon the vote, given at a meeting called for that purpose, of the holders of a majority of the shares of stock then entitled to vote thereon or upon such other vote of the holders of the shares of stock then entitled to vote thereon as may then be provided by law; provided that the consent of the holders of the shares of the 6% Cumulative Preferred Stock, required by the provisions of subparagraph (A), (B), and (C) of this paragraph (h), if any such consent be so required, shall have been obtained; and provided further that the rights, privileges, terms and conditions of the shares of the Common Stock shall not be subject to amendment, alteration, change or repeal without the consent (given in writing or by vote at a meeting called for that purpose) of the holders of a majority of the total number of shares of the Common Stock then outstanding. (F) For the purpose of this paragraph (h) of this Section III, outstanding shares of the 6% Cumulative Preferred Stock shall include all shares of such stock theretofore issued, except (a) shares held in the treasury of the Company, (b) shares which shall have been redeemed and (c) shares for the redemption of which moneys in the necessary amount shall have been deposited in trust with a bank or trust company in accordance with paragraphs (e) and (f) of this Section III, and which shall have been duly called for redemption. (i) The rights and remedies herein granted to holders of the 6% Cumulative Preferred Stock shall be in addition to all other rights and remedies to which they may be otherwise entitled by law. THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION 235 STATE HOUSE, BOSTON 33 ARTICLES OF AMENDMENT This certificate must be submitted to the Commissioner of Corporations and Taxation within thirty days after the date of the vote of the stockholders, in accordance with General Laws, Chapter 156, Section 43. FEE for filing certificate providing for a change of shares with par value to shares without par value, whether or not the capital is changed thereby, one cent for each shares without par value resulting from such change, less an amount equal to one twentieth of one per cent of the total par value of the shares so changed; but not in any case less than $25.00. The fee for filing all other amendments is $15.00. Make check payable to THE COMMONWEALTH OF MASSACHUSETTS WE, Joseph T. Kelley, Vice President, J. Richard Cottrell, Assistant Treasurer, and J.C. Donnelly, K.D. Knoblock, F.Q. O'Neill, Robert McCracken and Joseph T. Kelley being a majority of the Directors of The Berkshire Gas Company located at Pittsfield, Massachusetts in compliance with the provisions of General Laws, Chapter 156, do hereby certify that at a meeting of the stockholders of the corporation, duly called for the purpose, held April 16, 1959, by the affirmative vote of 10,531 shares of the preferred stock and of 107,366 shares of the common stock of the corporation, being at least a majority of all the stock outstanding and entitled to vote, the following amendment or alteration in the Agreement of Association and Articles of Organization of the corporation was duly adopted, namely; That the Charter, Agreement of Association and Articles of Organization of The Berkshire Gas Company be and they hereby are amended by striking out the statement of the terms on which the 5% Cumulative Preferred Stock and the 6% Preferred Stock are to be created and of the method of voting thereon and by substituting therefor the following statement: THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION WE, Joseph T. Kelley, Vice President, J. Richard Cottrell, Assistant Treasurer, and J.C. Donnelly, K.D. Knoblock, F.Q. O'Neill, Robert McCracken and Joseph T. Kelley being a majority of the Directors of The Berkshire Gas Company in compliance with the provisions of section forty of chapter one hundred and fifty-eight (Chapter 164 Section 10) of the General Laws, Ter. Ed., do hereby certify that a meeting of the stockholders called for the purpose the capital stock of said corporation has been decreased by the amount of One hundred thousand dollars, The total amount of capital stock already authorized is 11,435 (shares preferred. 137,161 (shares common. The amount of fully paid capital stock already issued for cash is 11,435 (shares preferred* 137,161 (shares common. 722 shares of preferred stock have been redeemed in accordance with the sinking fund provision The amount of fully paid capital stock already issued for property is none (shares preferred. None (shares common. The amount of stock by which the capital stock is to be reduced is 5,000 (shares preferred (shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 22nd day of May in the year 1959. Berkshire Gas Company, The CERTIFICATE OF REDUCTION OF CAPITAL General Laws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Section 40. Filed in the office of the Secretary of the Commonwealth. May 26, 1959. I hereby approve the within certificate, this 26th day of May, 1959. Commissioner of Corporations and Taxation. THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION WE, Joseph T. Kelley, Vice President, J. Richard Cottrell, Assistant Treasurer, and J.C. Donnelly, K.D. Knoblock, F.Q. O'Neill, Robert McCracken and Joseph T. Kelley being a majority of the Directors of The Berkshire Gas Company in compliance with the provisions of section thirty-nine of chapter one hundred and fifty-eight (Chapter 164 Section 10) of the General Laws, Ter. Ed., do hereby certify that a meeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of One hundred fifty thousand dollars, and that the same has all been paid in on May 27, 1959. The toatal amount of capital stock already authorized is 6,435 (shares preferred. 137,161 (shares common the amount of fully paid capital stock already issued for cash is 6,435 (shares preferred* 137,161 (shares common *722 shares of preferred stock have been redeemed in accordance with the sinking fund provisions. The amount of fully paid capital stock already issued for property is None (shares preferred None (shares common The amount of additional capital stock authorized is 1,500 (shares preferred (shares common IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 27th day of May in the year 1959. Berkshire Gas Company, The CERTIFICATE OF INCREASE OF CAPITAL General Laws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Section 39 and 41 Filed in the office of the Secretary of the Commonwealth. May 28, 1959. I hereby approve the within certificate, this 27th day of May, 1959. Commissioner of Corporations and Taxation. The Commonwealth of Massachusetts Berkshire Gas Company Articles of Amendment General Laws, Chapters 156, Section 42 58, Section 39 Amendment to statement of designations, preferences and voting powers or restrictions or qualifications of capital stock. Filed in the office of Secretary of the Commonwealth, August 8, 1960 I hereby approve the within certificate, this 8th day of August, 1960 /s/ Commissioner of Corporations and Taxation IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this eighth day of August in the year 1960. The term "minimum provision for depreciation" shall mean, for any 12- months' period, an amount equal to 2% of the average gross depreciable plant property account of the Company during such period. (C) So long as dividends shall be in arrears on the 5 7/8% Cumulative Preferred Stock outstanding, the Company shall not, without the consent of the holders of a majority of the number of outstanding shares of such stock represented at a meeting duly called and held for such purpose (or, if at least one-third of the outstanding shares of such stock shall be voted against such action, then the affirmative vote of the absolute majority of such outstanding shares), purchase, redeem, retire or otherwise acquire for a consideration any shares of 57/8% Cumulative Preferred Stock or of any stock ranking on a parity with the 5 7/8% Cumulative Preferred Stock or of any stock ranking on a parity with the 5 7/8% Cumulative Preferred Stock as to assets or dividends. (D) The foregoing provisions as to vote or consent shall not apply if, in connection with any of the matters mentioned in subparagraphs (A), (B) or (C) of this paragraph (h), provision is to be made for the redemption or retirement of all the outstanding 5 7/8% Cumulative Preferred Stock. (E) From time to time, and without limitation of other rights and powers of the Company as provided by law, the Company may reclassify its capital stock and may create or authorize one or more classes or kinds of stock ranking prior to or on a parity with or subordinate to the 5 7/8% Cumulative Preferred Stock, or may increase the authorized amount of the 5 7/8% Cumulative Preferred Stock or of the Company Stock or of any other class of stock of the Company or may amend, alter, change or repeal any of the Common Stock, or of any other class of stock of the Company, upon the vote, given at a meeting called for that purpose, of the holders of a majority of the shares of stock then entitled to vote thereon or upon such other vote of the holders of the shares of stock then entitled to vote thereon as may then be provided by law; provided that the consent of the holders of the shares of the 5 7/8% Cumulative Preferred Stock required by the provisions of subparagraphs (A), (B) and (C) of this paragraph (h), if any such consent be so required, shall have been obtained; and provided further that the rights, privileges, terms and conditions of the shares of the Common Stock shall not be subject to amendment, alteration, change or repeal without the consent (given in writing or by vote at a meeting called for that purpose) of the holders of a majority of the total number of shares of the Common Stock then outstanding. (F) For the purpose of the paragraph (h) of this Section IV, outstanding shares of the 5 7/8% Cumulative Preferred Stock shall include all shares of such stock theretofore issued, except (a) shares held in the treasury of the Company, (b) shares which shall have been redeemed and (c) shares for the redemption of which moneys in the necessary amount shall have been deposited in trust with a bank or trust company in accordance with paragraphs (e) and (f) of this Section IV, and which shall have been duly called for redemption. (i) The rights and remedies herein granted to holders of the 5 7/8% Cumulative Preferred Stock shall be in addition to all other rights and remedies to which they may be otherwise entitled by law. SECTION IV (a) 5,000 shares of the Cumulative Preferred Stock shall be designated as "5 7/8% Cumulative Preferred Stock" (b) The annual dividend rate shall be 5 7/8% per annum of the par value of $100.00 per shares, or $5.875 per share, payable quarterly on the 15th days of October, January, April and July. (c) The aforesaid dividends shall accrue from the date of original issue and shall be cumulative so that if dividends in respect of any quarterly dividend period at the rate of $5.875 per annum shall not have been paid upon or declared and set apart for the 5 7/8% Cumulative Preferred Stock, the deficiency shall be fully paid or declared and set apart before any dividend shall be paid upon or declared or set apart for the 5 7/8% Cumulative Preferred Stock shall be deemed to accrue from day to day. (d) The Company, by action of its Board of Directors, may redeem the whole or any part of the 5 7/8% Cumulative Preferred Stock at any time or from time to time, at the following redemption prices: $110.00 per share if redeemed prior to the 5th anniversary of the date of issue; $105.00 per share if redeemed on and after the 5th anniversary but before the 10th anniversary of the date of issue; $103.00 per share if redeemed on or after the 10th anniversary but before the 15th anniversary of the date of issue; and $100.00 per share if redeemed on or after the 15th anniversary of the date of issue. together with, in each case, an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. If less than all of the outstanding shares of 5 7/8% Cumulative Preferred Stock are to be redeemed in pursuance of the foregoing provisions for voluntary redemption, the aggregate number of shares so to be redeemed shall be allocated in the manner specified in paragraph (d) of Section II hereof. If less than all of the outstanding shares of 5 7/8% Cumulative Preferred Stock are to be redeemed in pursuance of the foregoing provisions for voluntary redemption, the Company shall simultaneously with such redemption redeem such proportion of the then outstanding shares of 5% Cumulative Preferred Stock and 6% Cumulative Preferred Stock as the number of shares of 5 7/8% Cumulative Preferred Stock so to be redeemed bears to the aggregate number of shares of 5 7/8% Cumulative Preferred Stock then outstanding. The 5 7/8% Cumulative Preferred Stock shall also be redeemable at $100 per share, together in each case with an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared, through the operation of the sinking fund described in paragraph (e) of this Section IV. (e) So long as any of the shares of the 5 7/8% Cumulative Preferred Stock shall be outstanding, the Company covenants to pay to a bank or trust company selected for that purpose by the Board of directors (hereinafter called the "5 7/8% Preferred Stock Sinking Fund Trustee") as and for a sinking fund for the retirement of shares of the 5 7/8% Cumulative Preferred Stock not later than April 1 in each calendar year commencing with the year 1962 an amount of cash equal to 4% of the aggregate par value of the largest number of shares of 5 7/8% Cumulative Preferred Stock issued at any time prior to the time of such payment. Without limitation of the rights and remedies of the holders of the 5 7/8% Cumulative Preferred Stock in case of the Company's default in respect of the foregoing sinking fund obligation, such sinking fund obligation shall be cumulative so that if for any reason the Company shall not have satisfied its full annual sinking fund obligation in any calendar year with respect to the 5 7/8% Cumulative Preferred Stock, then any such deficiency shall be added to the sinking fund obligation for the next succeeding calendar year. Any cash paid to the 5 7/8% Preferred Stock Sinking Fund Trustee shall be held by it in trust for the equal and proportionate benefit of the holders of the 5 7/8% Cumulative Preferred Stock and shall be applied by it, subject to the provisions of paragraph (f) of this Section IV, to the redemption of 5 7/8% Cumulative Preferred Stock, at $100.00 per share, together in each case with an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. (f) Every redemption of shares of 5 7/8% Cumulative Preferred Stock, whether by operation of the sinking fund provisions therefore or by voluntary action by the Company, shall be made in the manner, upon the notice and with the effect provided in paragraphs (e) and (f) of Section II hereof and all or any shares of the 5 7/8% Cumulative Preferred Stock at any time redeemed, purchased or acquired by the Company whether by operation of the sinking fund provisions of paragraph (e) of this Section IV or pursuant to paragraph (f) of this Section IV shall not under any circumstances be reissued or otherwise disposed of by the Company and each surrendered certificate for shares of 5 7/8% Cumulative preferred Stock so redeemed shall be canceled and retired in the manner permitted by law. (g) Whenever full dividends on the shares of the 5 7/8% Cumulative Preferred stock at the time outstanding for all past quarterly dividend periods and for the current quarterly dividend period shall have been paid or declared and set apart for payment, and provided that the Company shall not be in default in respect of any sinking fund payment with respect to the 5 7/8% Cumulative Preferred Stock, then and only then (subject to the provisions of subparagraph (h), (B), (b) of this Section IV, such dividends as may be determined by the Board of Directors may be declared and paid on the Common Stock, but only out of funds legally available for payment of dividends; provided, however, that so long as any shares of the 5 7/8% Cumulative Preferred Stock are outstanding, the Company shall not pay any dividends (other than dividends payable in Common Stock or in any other stock of the Company junior to the 5 7/8% Cumulative Preferred Stock as to assets and dividends)or make any distribution on, or purchase, or redeem, retire or otherwise acquire for value, any of its Common Stock or other stock junior to the 5 7/8% Cumulative Preferred Stock, if after giving effect to any such payment, distribution, purchase, redemption, retirement or acquisition the aggregate amount of such dividends, distributions, purchases and acquisitions, paid or made since June 30, 1960, including the amount then proposed to be expended for any such purpose, together with all other charges to earned surplus since June 0, 1960, exceeds the sum of the aggregate of (i) $100,000; (ii) credits to earned surplus since June 30, 1060; (iii) amounts credited to capital surplus after June 30,1960 arising from the donation to the Company of cash or securities (other than securities of the Company junior to the 5 7/8% Cumulative Preferred Stock) or transfers of amounts from earned surplus to capital surplus and (v) the aggregate net cash proceeds, or the fair value of any property other than cash, received by the Company from the sale of shares or any other security of the Company junior to the 5 7/8% Cumulative Preferred Stock. In computing the amount available for any such dividend, distribution, purchase, redemption, retirement or acquisition, charges and credits to earned surplus shall be made in accordance with sound accounting practice. (h) (A) So long as any shares of the 5 7/8% Cumulative Preferred Stock are outstanding, the Company shall not without the consent (given at a meeting duly called and held for that purpose) of the holders of at least two-thirds of the total number of shares of 5 7/8% Cumulative Preferred Stock then outstanding; (a) create or authorize any stock ranking prior to or on a parity with the 6% Cumulative Preferred Stock or the 5% Cumulative Preferred Stock or the 5 7/8% Cumulative Preferred Stock as to assets or dividends, or create or authorize any security convertible into, or evidencing the right to purchase, shares of any such stock, or increase the total authorized amount of 5 7/8% Cumulative Preferred Stock; or (b) amend, alter, change or repeal any of the rights, privileges, preferences, powers, terms and conditions of the 5 7/8% Cumulative Preferred Stock in any manner which would be prejudicial to the holders hereof; or (c) sell, lease, transfer or convey all or the greater part of the Company's property or business; or (d) merge or consolidate with or into any other corporation in such manner that the Company does not survive as a continuing entity, if thereby the rights, privileges, preferences, powers, terms or conditions of the 5 7/8% Cumulative Preferred Stock would be adversely affected, or if there would, thereupon, be authorized or outstanding securities which the Company, if it owned all of the properties then owned by the resulting corporation, could not create without the vote or consent of the holders of the 5 7/8% Cumulative Preferred Stock. (B) So long as any shares of the 5 7/8% Cumulative Preferred Stock are outstanding, the Company shall not, without the consent (given at a meeting duly called and held for that purpose) of the holders of a majority of the total number of shares of 5 7/8% Cumulative Preferred Stock then outstanding. (a) issue or sell any additional shares of 5 7/8% Cumulative Preferred Stock, or any shares of any stock ranking prior to or on a parity with the 5 7/8% Cumulative Preferred Stock as to assets or dividends, unless after giving effect to such proposed issue or sale, (i) the net earnings of the Company available for interest and dividends, determined in accordance with sound accounting practice after all taxes and after provision for depreciation and amortization at least equal to the "minimum provisions for depreciation" as hereinafter defined, for twelve (12) consecutive calendar months out of fifteen (15) months immediately preceding shall be at least one and one-half (1 1/2) times the sum of (x) the aggregate annual interest requirements on all indebtedness of the Company then outstanding and (y) the aggregate annual dividend requirements on all shares of 5 7/8% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 5 7/8% Cumulative Preferred Stock, to be outstanding; and (ii) the Company's net earnings available for dividends, determined in accordance with sound accounting practice after all taxes and after provision for depreciation and amortization at least equal to the "minimum provisions for depreciation" as hereinafter defined, for twelve (12) consecutive calendar months out of the fifteen (15) months immediately preceding, shall be at least two and one-half (2 1/2) times the aggregate annual dividend requirements on all shares of 5 7/85 Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 5 7/8% Cumulative Preferred Stock, to be outstanding; and (iii) the total of the Company's capital represented by the then outstanding shares of its stock ranking junior to the 5 7/8% Cumulative Preferred Stock, plus the Company's surplus and any amounts carried as premium on capital stock, would be at least equal to the resulting aggregate par value, or in case of stock without par value, the preference on involuntary liquidation, of all shares of 5 7/8% Cumulative Preferred Stock, which would b outstanding after giving effect to such proposed issue or sale; or (b) declare or pay any dividends (other than dividends payable in stock ranking junior to the 5 7/8% Cumulative Preferred Stock as to assets and dividends) or make any distribution on, or purchase, or redeem, retire or otherwise acquire for a consideration, any shares of any kind of stock ranking junior to the 5 7/8% Cumulative Preferred Stock as to assets or dividends, and then only if after such action the aggregate par value or, in the case of stock without par value, the preference on involuntary liquidation of all outstanding shares of 5 7/8% Cumulative Preferred Stock would not exceed the sum of (i) the total capital of the Company represented by the then outstanding stock ranking junior to the 5 7/8% Cumulative Preferred Stock as to assets and dividends and (ii) the surplus of the Company and any amounts carried as premium on its capital stock. CERTIFICATE OF INCREASE OF CAPITAL General Laws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections A39 and 41 We, Joseph T. Kelley, Vice President and J. Richard Cottrell, Assistant Treasurer and K.D. Knowblock, Robert w. McCracken, Joseph T. Kelley, J.c. Donnelly and F.A. O'Neill being a majority of the Directors of The Berkshire Gas Company in compliance with the provisions of section thirty- nine of chapter one hundred and fifty-eight (Chapter 164 Section 10) of the General Laws, Ter. Ed., do hereby certify that a meeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of five hundred thousand dollars, and that the same has all been paid in on August 8, 1960. The total amount of capital stock already authorized is 7935 (shares preferred. 137161 (shares common. The amount of fully paid capital stock already issued for cash is 7935 (Shares preferred.* 137161 (shares common. *1089 shares of preferred stock have been redeemed in accordance with sinking fund provisions. The amount of fully paid capital stock already issured for property is 0 (Shares preferred. 0 (Shares common. The amount of additional capital stock authroized is 5000 (Shares preferred** (Shares common. **5 7/8 Cumulative Preferred of a par value of $100. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,we have signed our neames, this eighth day of August in the year 1960. Filed in the office of the Secretary of the Commonwealth . August 8, 1960. I hereby approve the within certificate, this 8th day of August 1960. Commissioner or Corporations and Taxation THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF CORPORATIONS AND TAXATION 235 STATE HOUSE BOSTON 33 ARTICLES OF AMENDMENT This certificate must be submitted to the Commissioner of Corporations and Taxation within thirty days after the date of the vote of stockholders, in accordance with General Laws, Chapter 156, Section 43. FEE for filing certificate providing for a change of shares with par value to shares without par value, whether or not the capital is changed thereby, one cent for each share without par value resulting from such change, less an amount equal to one twentieth of one percent of the total par value of the shares so changed; but not in any case less than %25.00. The fee for filing all other amendments is $25.00 Make check payable to THE COMMONWEALTH OF MASSACHUSETTS WE Joseph T. Kelley, Vice President, J. Richard Cottrell, Ass't. Treasurer and K.D. Knoblock, Robert W. McCracken, Joseph T. Kelley, J. Cl Donnelly and F. A. O'Neill the Berkshire Gas Company being a majority of the Directors of located at Pittsfield, Massachusetts, in compliance with the provisions of General Laws, Chapter 156, do hereby certify that at a meeting of the stockholders of the corporation, duly called for the purpose, held on July 20, 1960 by the affirmative vote of 5642 shares of the preferred stock and of 103326 shares of the common stock of the corporation, being at least a majority of all the stock outstanding and entitled to vote, the following amendment or alteration in the Agreement of Association and Articles of Organization of the corporation was duly adopted, namely: the Charter, Agreement of Association and Articles of Organization of this Company be, and they hereby are, amended by amending the Statement of the Designations, Preferences and Voting Powers or Restrictions or Qualifications of the Capital Stock of the Company in the following manner: "(a) Introductory Paragraph. The number '7,935' is deleted and the number '12,935' is substituted in lieu thereof. "(b) Section I(a). The words 'and in Section IV hereof with respect to the 5-7/8% Cumulative Preferred Stock.' are inserted after the words '6% Cumulative Preferred Stock.' "(c) Section I(e) (B). The words 'or by paragraph (e) of Section IV hereof in respect of the 5 7/8% Cumulative Preferred Stock' are inserted after the words '6% Cumulative Preferred Stock.' "(d) Section I(e) (C). The words 'and under paragraph (e) of Section IV hereof in respect of the 5-7/8% Cumulative Preferred Stock' are inserted after the words '6% Cumulative Preferred Stock.' "(e) Section I (e) (F). The words 'and paragraph h of section IV hereof' are inserted after the words 'Section III hereof.' "(f) Section II(d). The words 'and 5-7/8% Cumulative Preferred Stock' are inserted after the words '6% Cumulative Preferred Stock' in the next to the last paragraph. "(g) Section III(d). The words 'and 5-7/8% Cumulative Preferred Stock' are inserted after the words '5% Cumulative Preferred Stock' in the next to the last paragraph. "(h) By adding Section IV which is inserted after Section III, which Section IV is hereto annexed and incorporated as a part of this resolution with the same force and effect as though herein set forth in full." We, Joseph T. Kelley, Vice-President, J. Richard Cottrell, Asst. Treasurer and Joseph T. Kelley, J.C. Donnelly, K.D. Knoblock, W. Barton Cummings, Leonard Milano, and Robert W. McCracken being a majority of the Directors of The Berkshire Gas Company in compliance with the provisions of section thirty-nine of chapter one hundred and fifty-eight (Chapter 164 Section10) of the General Laws, Ter. Ed., do hereby certify that ameeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of 274,320. dollars, and that the same has all been paid in on June 6, 1962 (give date). The total amount of capital stock already authorized is 12,935 (shares preferred. 137,161 (shares common. The amount of fully paid capital stock already issured for cash is 12,935 (shares preferred. 137,161 (shares common. 2,123 shares of preferred stock have been redemmed in accordance with the sinking fund provision The amount of fully paid capital stock already issued for property is none (shares preferred. none (shares common. The amount of additional capital stock authorized is (shares preferred. 27,432 (shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 6 day of June in the year 1962. WRITE NOTHING BELOW Berkshire Gas Company, The CERTIFICATE OF INCREASE OF CAPITAL General Lawws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections 39 and 41 Filed in the office of the Secretary of the Commonwealth June 11, 1962 I hereby approve the within certificate this 11th day of June 1962 /s/ Comminissioner of Corporations and Taxation THE COMMONWEALTH OF MASSACHUSETTS Kevin H. White, SECRETARY OF THE COMMONWEALTH STATE HOUSE, BOSTON, MASSACHUSETTS 02133 ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 156B, SECTION 43 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 156B, Section 114. Make check payable to the Commonwealth of Massachusetts. We, J.T. Kelley, Vice President, and J.R. Cottrell, Clerk of The Berkshire Gas Company located at 20 Elm Street, Pittsfield, Massachusetts do hereby certify that the following amendment to the articles of organization of the corporation was duly adopted at a meeting held on October 26, 1965, by a vote of: 122,046 shares of common stock, out of 164,593 shares outstanding, being at least two-thirds of each class outstanding and entitled to vote thereon and of each class or series of stock whose rights are adversely affected thereby. "RESOLVED, That the Charter, Agreement of Association and Articles of Organization of this Company be, and they hereby are, amended by "(a) reducing the capital stock of this Company by the redemption and cancellation of all of the 5%, 5-7/8% and 6% Cumulative Preferred Stock, par value $100, of the Company; "(b) increasing the capital stock of the Company by creating and issuing 15,000 shares of 4.80% Cumulative Preferred Stock, par value $100 per share; and "(c) deleting the Statement of the Designations, Preferences and Voting Powers or Restrictions or Qualifications of the capital stock of the Company and by substituting in lieu thereof, the following: THE BERKSHIRE GAS COMPANY STATEMENT OF THE DESIGNATIONS, PREFERENCES AND VOTING POWERS OR RESTRICTIONS OR QUALIFICATIONS OF THE CAPITAL STOCK OF THE COMPANY The authorized capital stock of the Company shall include, in addition to the common capital stock heretofore authorized, 15,000 shares of Cumulative Preferred Stock, of the par value of $100 per share, with the following designations, preferences, voting powers, restrictions and qualifications: SECTION 1. Provisions Applicable to All Shares of Cumulative Preferred Stock. (a) All shares of Cumulative Preferred Stock shall be of equal rank with each other, regardless of class, and shall be identical with each other in all respects except as otherwise provided herein; and the shares of Cumulative Preferred Stock of any one class shall be identical with each other in all respects. (b) In case of the stated dividends on each class of Cumulative Preferred Stock are not paid in full, the shares of each class of Cumulative Preferred Stock shall share ratably in the payment of dividends,including accumulations thereof, if any, in accordance with the sums which would be payable on such shares if all dividends were declared and paid in full. (c) The Cumulative Preferred Stock of each class shall be preferred as to assets over the Common Stock, so that the holders of each class of Cumulative Preferred Stock shall be entitled to have set apart for them or to be paid out of the assets of the Company, before any distribution is made to or set apart for the holders of Common Stock, an amount in cash equal to and in no event more than (1) in the event of any volntary liquidation, dissolution or winding up of the Company, the redemption price of such class of the Cumulative Preferred Stock which would have been in effect at the time of the distribution or payment date if there had been no such liquidation, dissolution or winding up of the Company, or (2) in the event of involuntary liquidation, dissolution or winding up of the Company,the sum of $100 per share, plus in each case an amount equal to all dividends accrued and unpaid to the date of such liquidation, disslution or winding up, whether or not earned or declared. If upon any liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its stockholders shall be insufficient to permit the distribution in full of the amount receivable by the holders of each class of the Cumulative Preferred Stock, then all such assets of the Company shall be distributed ratably among the holders of each class of the Cumulative Preferred Stock in proportion to the amounts which they would be entitled to receive if such assets were sufficient to permit distribution in full as aforesaid. In the event of any liquidation, dissolution or winding up of the Company, all assets and funds of the Company remaining after paying or providing for the payment of all creditors of the Company and after paying or providing for the payment to the holders of shares of each class of the Cumulative Preferred Stock of the full distributive amounts to which they are respectively entitled, as herein provided, shall be divided among and paid to the holders of the Common Stock according to their respective shares. Neither the consolidation nor merger of the Company with or into any other corporation or corporations, nor the sale or transfer by the Company of all or any part of its assets shall in and of itself be deemed to be a liquidation, dissolution or winding up of the Company for the purposes of this paragraph (c). (d) No holder of shares of Cumulative Preferred Stock of any class shall be entitled as such as a matter of right to subscribe for or purchase any part of any new or additional issues of any stock of any class, series or kind whatsoever, or securities convertible into stock of any class, series or kind whatsoever, whether now or hereafter authorized, and whether issued for cash, property, services by way of dividends, or otherwise. (e) (A) At all meetings of the stockholders of the Company, the holders of shares of Cumulative Preferred Stock of any class shall have no right to vote and shall not be entitled to notice of any meeting of the stockholders of the Company or to participate in any such meeting except as herein otherwise expressly provided and except for those purposes, if any,for which said rights cannot be denied or waived under some mandatory provisions of law which shall be controlling. (B) If and when dividends payable on any shares of Cumulative Preferred Stock of any class shall be in default in an amount equivalent to or exceeding four (4) full quarterly dividends (whether consecutive or not), the holders of the shares of all classes of the Cumulative Preferred Stock, voting separately as a class, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors, and the holders of the shares of the Common Stock, voting separately as a class, shall be entitled to elect the remaining directors of the Company, anything herein or in the By-Laws to the contrary notwithstanding. The terms of office of all persons who may be directors of the Company at the time shall terminate upon the election of one or more directors by the holders of the shares of the Cumulative Preferred Stock whether or not the holders of the shares of the Common Stock shall then have elected the remaining directors of the Company. (C) If and when all dividends then in default on the shares of the Cumulative Preferred Stock of all classes then outstanding shall be paid (and such dividends shall be declared and paid out of any funds legally available therefore as soon as reasonably practicable) and the full dividends on each class of the Cumulative Preferred Stock for the then current quarterly dividend period shall have been declared or paid or set apart for payment, the holders of the shares of all classes of Cumulative Preferred Stock shall be divested of all voting rights with respect to the election of directors provided in sub-paragraph (B) of this paragraph (e), and the voting power of the holders of the shares of all classes of Cumulative Preferred Stock and the holders of the shares of the Common Stock shall revert to the status existing before the first dividend payment on which dividends on the shares of all classes of Cumulative Preferred Stock were not paid in full; but always subject to the same provisions vesting such voting rights in the holders of the shares of all classes of Cumulative Preferred Stock in case of further like default or defaults on dividends thereon, as provided in subparagraph (B) of this paragraph (e). Upon the termination of any such voting rights as hereinabove provided, the terms of office of all persons who may have been elected directors of the Company by vote of the holders of the shares of all classes of Cumulative Preferred Stock as a class, pursuant to such voting rights, shall forthwith terminate and the resulting vacancies shall be filled by the vote of a majority of the remaining directors. Any director who shall have been elected by the holders of all classes of Cumulative Preferred Stock or by any directors so elected as herein provided may be removed during his aforesaid term of office, either for or without cause, by, and only by, the affirmative votes of the holders of record of a majority of the outstanding shares of all classes of Cumulative Preferred Stock given at a special meeting of such stockholders called for the purpose, and any vacancy thereby created may be filled by the holders of such stock represented as such meeting. (D) In the case of any vacancy in the office of a director occurring among the directors elected by the holders of the shares of all classes of Cumulative Preferred Stock, as a class, pursuant to the foregoing provisions of subparagraph (B) of this paragraph (e), the remaining directors elected by the holders of the shares of all classes of Cumulative Preferred Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there by but one, may, subject to the provisions of subparagraph (C) of this paragraph (e), elect a successor or successors to hold office for the unexpired terms of the director or directors whose place or places shall be vacant. Likewise, in case of any vacancy in the office of a director occurring among the directors elected by the holders of the shares of the Common Stock pursuant to the foregoing provisions of subparagraph (D) of this paragraph (e), the remaining directors elected by the holders of the Common Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, may elect a successor or successors to hold office for the unexpired term of the director or directors whose place or places shall be vacant. (E) Whenever under the provisions of subparagraph (B) of this paragraph (e), the right shall have accrued to the holders of the shares of all classes of Cumulative Preferred Stock to elect directors. The Board of Directors shall, within ten (10) days after the delivery to the Company at its principal office of a request to such effect by any holder of shares of any class of Cumulative Preferred Stock entitled to vote, call a special meeting of the stockholders, to be held on 20 days' notice. If such meeting shall not be so called within such ten-day period, the holders of record of at least 10% in amount of any class of Cumulative Preferred Stock then outstanding, may designate in writing one of their number to call such meeting and the same may be called at the expense of the Company by such persons so designated, upon 20 days' notice. Any holders of any class of Cumulative Preferred Stock so designated shall have access to the stock books of the Company for the purpose of causing a meeting of stockholders to be called pursuant to these provisions. At all meetings of stockholders held for the purpose of electing directors during such time as the holders of the shares of all classes of Cumulative Preferred Stock shall have the special right, voting separately as a class, to elect directors pursuant to subparagraph (B) of this paragraph (e), the presence, in person or by proxy, of the holders of a majority of the outstanding shares of each class of stock (i.e. Cumulative Preferred Stock and Common Stock) shall be required to constitute a quorum of such class for the election of directors; provided, however, that the absence of a quorum of the holders of stock of either such class shall not prevent the election at any such meeting or adjournment thereof of directors by the other such class of the necessary quorum of the holders of such stock is present in person or by proxy at such meeting; and provided further that in the event such a quorum of the holders of the shares of the Common Stock is present but such a quorum of the holders of the shares of all classes of Cumulative Preferred Stock is not present then the election of the directors elected by the holders of the shares of the Common Stock shall not be effective and the directors so elected by the holders of the shares of the Common Stock shall not assume their offices and duties until the holders of the shares of all classes of Cumulative Preferred Stock, with such a quorum present, shall have elected the directors they shall be entitled to elect; and provided further, however, that in the absence of a quorum of the holders of stock of either such class, a majority of those holders of the stock of such class who are present in person or by proxy shall have power to adjourn the election of the directors to be elected by such class from time to time without notice other than announcement at the meeting until the requisite amount of holders of such class shall be present in person or by proxy, but such adjournment shall not be made to a date beyond the date for the mailing of notice for the next annual meeting of the Company or a special meeting in lieu thereof. Notwithstanding the foregoing, to the extent permitted by law the holders of the shares of all classes of Cumulative Preferred Stock, by unanimous written consent, may elect such number of directors as they shall be entitled to elect under the provisions of subparagraph (B) of this paragraph (e), without the necessity of a meeting or the observance of the aforesaid notice provisions. (F) Except as otherwise required by the laws applicable to the Company and subject to the right of the Cumulative Preferred Stock of all classes (i) to vote in certain events as herein-before set forth in this paragraph (e) and (ii) not to have certain corporate action taken without the consent of the holders thereof as set forth herein, the Common Stock shall have the exclusive voting rights for the election of directors and for all other purposes. The Company shall have no voting rights with respect to shares of Cumulative Preferred Stock of all classes held in the treasury of the Company. SECTION II. Provisions Applicable to All Shares of 4.80% Cumulative Preferred Stock. (a) The 15,000 shares of the Cumulative Preferred Stock initially issued shall be designated as "4.80% Cumulative Preferred Stock". (b) The annual dividend rate shall be 4.80% per annum of the par value of $100 per share, or $4.80 per share per annum, payable quarterly on the 15th days of October, January, April and July. (c) The aforesaid dividends shall accrue from the date of original issue and shall be cumulative so that if dividends in respect of any quarterly dividend period at the rate of $4.80 per annum shall not have been paid upon or declared and set apart for the 4.80% Cumulative Preferred Stock, the deficiency shall be fully paid or declared and set apart before any dividend shall be paid upon or declared or set apart for the Common Stock. Dividends on the 4.80% Cumulative Preferred Stock shall be deemed to accrue from day to day. (d) The Company, by action of its Board of Directors, may redeem the whole or any part of the 4.80% Cumulative Preferred Stock at any time or from time to time, at the following redemption prices: $104.80 per share if redeemed prior to the fifth anniversary of the date of original issue; $103.60 per share if redeemed on or after the fifth anniversary but before the tenth anniversary of the date of original issue; $102.40 per share if redeemed on or after the tenth anniversary but before the fifteenth anniversary of the date of original issue; and $101.20 per share, if redeemed on or after the fifteenth anniversary, but before the twentieth anniversary of the date of original issue; and thereafter at par, together with, in each case, an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. If less than all of the outstanding share of 4.80% Cumulative Preferred Stock are to be redeemed in pursuance of the foregoing provisions for voluntary redemption, the aggregate number of share so to be redeemed shall be allocated by the Company among the registered holders of such Stock at the time outstanding, to the nearest share, in the proportion that their respective holdings bear to the aggregate number of share of such Stock at the time outstanding, provided that if the number of such registered holders shall be more than twenty, the shares to be redeemed shall be determined by lot in such usual manner as the Board of Directors shall deem proper. (e) At least 30 days prior to the date fixed for redemption, notice of every redemption shall be mailed to the holders of record of the shares to be redeemed at their respective addresses as the same shall appear on the books of the Company. If selection of the shares to be redeemed is required to be made by lot, at least 30 days' previous notice of every redemption shall also be given by appropriate publication at least once in a daily newspaper printed in the English language and of general circulation in the City of Boston, Massachusetts. The notice so mailed shall state the date fixed for redemption (hereinafter called the redemption date), shall state the applicable redemption price and amount of all accrued dividends payable on the redemption date and shall call upon each stockholder to whom such notice shall be addressed to surrender to the Company on the redemption date, at the place designated in such notice, his certificate or certificates representing the number of shares specified in such notice of redemption. On or after the redemption date each holder of shares of 4.80% Cumulative Preferred Stock so called for redemption shall present and surrender his certificate or certificates for such shares to the Company at the place designated in the foregoing written notice and thereupon the redemption price of such shares together with the amount of accrued dividends thereon payable on the redemption date shall be paid to or on the order of the person whose name appears on the certificate or certificates as the owner thereof. In case less than all the shares represented by any such certificate are redeemed a new certificate shall be issued representing the unredeemed shares. If notice of redemption shall have been duly given as hereinbefore provided, and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Company, separate and apart from its other funds, in trust for the account of the holders of the shares to be redeemed, so as to be and continue to be available therefore, then, notwithstanding that any certificate for such shares so called for redemption shall not have been surrendered for cancellation, from and after the redemption date, the shares represented thereby shall no longer be deemed to be outstanding, the right to receive dividends thereon shall cease to accrue and all rights with respect to such shares so called for redemption shall cease and terminate, except only the right of the holders thereof to receive, out of the funds so set aside in trust, the amount payable upon redemption thereof, without interest. Provided, however, that the Company may, after giving notice of any such redemption as hereinbefore provided or after giving to the bank or trust company hereinafter referred to irrevocable authorization to give such notice and at any time prior to the redemption date specified in such notice, deposit in trust, for the account of the holders of the shares to be redeemed, funds necessary for such redemption with a bank or trust company in good standing, organized under the laws of the United States of America or of the Commonwealth of Massachusetts, doing business in the City of Boston, Massachusetts, having capital, surplus and undivided profits aggregating at least $5,000,000, in which case the aforesaid redemption notice to be mailed to the holders of record of the shares to be redeemed shall specify the office of such bank or trust company as the place of payment of the redemption price, and shall call upon such holders to surrender the certificates representing the shares so to be redeemed at such place on or after the date fixed in such redemption notice (which shall not be later than the redemption date) against payment of the amount payable on the redemption thereof. Upon such deposit in trust, all shares with respect to which such deposit shall have been made shall no longer be deemed to be outstanding, and all rights with respect to such shares so called for redemption shall forthwith cease and terminate, except only the right of the holders thereof to receive, out of all the funds so deposited in trust, from and after the date of such deposit, the amount payable upon the redemption thereof, without interest. In case any holder of shares of the 4.80% Cumulative Preferred Stock which shall have been called for redemption as provided herein shall not within six years of the date of redemption thereof or the date of such deposit with a bank or trust company, whichever is earlier, claim the amount so set aside or deposited in trust, as the case may be, for the redemption of such shares, such bank or trust company shall upon demand, pay over to the Company any such unclaimed amount so deposited with it and shall thereupon be relieved of all responsibility in respect thereof and the Company shall not be required to hold the amount so paid over to it, or any amount so set aside by it for the redemption of such shares, separate and apart from its other funds, and thereafter except as may be otherwise provided by law, the holders of such shares of 4.80% Cumulative Preferred Stock shall look only to the Company for payment of the redemption price thereof, without interest. (f) Subject to the provisions of subparagraph (h)(C) below, so long as any of the shares of the 4.80% Cumulative Preferred Stock shall be outstanding, the Company shall between August 1 and August 10 in each year commencing 1970 offer to purchase o the next ensuing September 15, a total of 450 shares (or such lesser amount as may be outstanding) of 4.80% Cumulative Preferred Stock as the par value thereof plus unpaid accumulated dividends to the date of purchase from the 4.80% Cumulative Preferred stockholders of record as of the close of business on the preceding July 31 (except that if July 31 is a Saturday, Sunday or holiday then the immediate preceding business day). The Company shall offer to purchase from each such stockholder that proportion of the total number of shares of 4.80% Cumulative Preferred Stock offered to be purchased which such stockholder's number of shares of 4.80% Cumulative Preferred Stock bears to the total number of such shares outstanding, provided that the Company shall not be obligated to offer to purchase a fraction of a share. Such offer shall state that it is made pursuant to the purchase provision of this paragraph (f) for the retirement of 4.80% Cumulative Preferred Stock, and shall contain a brief summary of the terms upon which tenders will be accepted, as herein provided, including a statement that all offers may be accepted by tenders in part. Tenders pursuant to any such offer must be made in writing received by the Company at least five business days before the next ensuing September 15. If the aggregate number of shares of 4.80% Cumulative Preferred Stock tendered for sale and purchased as aforesaid in any year is less than the number of shares offered to be purchased by the Company pursuant to the provisions of this paragraph, the Company's obligation in respect of such purchase offers for such year shall be discharged by the purchase of the shares tendered, and the fact that the remainder of the shares offered to be purchased hereunder are not tendered and purchased shall not increase the number of shares to be purchased in subsequent years. (g) Whenever full dividends on the shares of the 4.80% Cumulative Preferred Stock at the time outstanding for all past quarterly dividend periods and for the current quarterly dividend period shall have been paid or declared and set apart for payment, and provided that the Company shall have made stock purchase offers and purchases for all past years and for the current year as provided in paragraphs (f) and (h) (C) hereof with respect to the 4.80% Cumulative Preferred Stock, then, and only then (subject to the provisions of subparagraph (h) (B) (b) below), such dividends as may be determined by the Board of Directors may be declared and paid on the Common Stock, but only out of funds legally available for the payment of dividends; provided, however, that so long as any shares of the 4.80% Cumulative Preferred Stock are outstanding, the Company shall not pay any dividends (other than dividends payable in Common Stock or in any other stock of the Company junior to the 4.80% Cumulative Preferred Stock as to assets and dividends) or make any distribution on, or purchase, or redeem, retire or otherwise acquire for value, any of its Common Stock or other stock junior to the 4.80% Cumulative Preferred Stock, if after giving effect to any such payment, distribution, purchase, redemption, retirement or acquisition the aggregate amount of such dividends, distributions, purchases, redemptions, retirements and acquisitions, paid or made since June 30, 1964, including the amount then proposed to be expended for any such purpose, together with all other charges to earned surplus since June 30, 1964, would exceed the sum of the aggregate of (i) credits to earned surplus since June 30, 1964, (ii) amounts credited to capital surplus since June 30, 1964 arising from the donation to the Company of cash or securities (other than securities of the Company junior to the 4.80% Cumulative preferred Stock) or transfers of amounts from earned surplus to capital surplus, (iii) the aggregate net cash proceeds, or the net fair value of any property other than cash, received by the Company from the sale since June 30, 1964 of shares or any other securities of the Company junior to the 4.80% Cumulative Preferred Stock, and (iv) $200,000. In computing the amount available for any such dividend, distribution, purchase, redemption, retirement or acquisition, charges and credits to earned surplus shall be made in accordance with sound accounting practice. (h) (A) So long as any shares of the 4.80% Cumulative Preferred Stock are outstanding, the Company shall not without the consent (given at a meeting duly called and held for that purpose) of the holders of at least two-thirds of the total number of shares of 4.80% Cumulative Preferred Stock then outstanding; (a) create or authorize any stock ranking prior to or on a parity with the 4.80% Cumulative Preferred Stock, as to assets or dividends, or create or authorize any security or right convertible into, or evidencing the right to purchase, shares of any such stock, or increase the total authorized amount of 4.80% Cumulative Preferred Stock; or (b) amend, alter, change or repeal any of the rights, privileges, preferences, powers, terms and conditions of the 4.80% Cumulative Preferred Stock in any manner which would be prejudicial to the holders thereof; or (c) sell, lease, transfer or convey all or the greater part of the Company's property or business; or (d) merge or consolidate with or into another corporation in such manner that the Company does not survive as a continuing entity, if thereby the rights, privileges, preferences, powers, terms or conditions of the 4.80% Cumulative Preferred Stock would be adversely affected, or if there would thereupon be authorized or outstanding securities which the Company, if it owned all of the properties then owned by the resulting corporation, could not create without the vote or consent of the holders of the 4.80% Cumulative Preferred Stock. (B) So long as any shares of the 4.80% Cumulative Preferred Stock are outstanding, the Company shall not, without the consent (given at a meeting duly called and held for that purpose) of the holders of a majority of the total number of shares of 4.80% Cumulative Preferred Stock then outstanding; (a) issue or sell any additional shares of 4.80% Cumulative Preferred Stock, including shares held in the treasury of the Company, or any shares of any stock ranking prior to or on a parity with the 4.80% Cumulative Preferred Stock as to assets or dividends, or any security or right convertible into, or evidencing the right to purchase, shares of any such stock, unless, after giving effect to such proposed issue or sale, (i) the net earnings of the Company available for interest and dividends determined in accordance with sound accounting practice after all taxes and after provision for depreciation and amortization at least equal to the "minimum provision for depreciation" as hereinafter defined, for twelve (12) consecutive calendar month out of fifteen (15) months immediately preceding shall be at least one and one-half (1 1/2) times the sum of (x) the aggregate annual interest requirements on all "long-term indebtedness", as hereinafter defined, of the Company then outstanding and (y) the aggregate annual dividend requirements on all shares of 4.80% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with 4.80% Cumulative Preferred Stock, to be outstanding; and (ii) the Company's net earnings available for dividends, determined in accordance with sound accounting practice after all taxes and after provision for depreciation and amortization at least equal to the "minimum provisions for depreciation", as hereinafter defined, for twelve (12) consecutive calendar months out of the fifteen (15) months immediately preceding shall be at least two and one-half (2 1/2) times the aggregate annual dividend requirements on all shares of 4.80% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with 4.80% Cumulative Preferred Stock , to be outstanding; and (iii) the total of the Company's capital represented by the then outstanding shares of its stock ranking junior to the 4.80% Cumulative Preferred Stock, plus the company's surplus and any amounts carried as premium on capital stock, would be at least equal to the resulting aggregate par value, or in case of stock without par value, the preference on involuntary liquidation, of all shares of 4.80% Cumulative Preferred Stock, and all shares of any stock ranking prior to or on a parity with 4.80% Cumulative Preferred Stock, which would be outstanding after giving effect to such proposed issue or sale; or (b) declare or pay any dividends (other than dividends payable in stock ranking junior to 4.80% Cumulative Preferred Stock as to assets and dividends) or make any distribution on, or purchase, or redeem, retire or otherwise acquire for a consideration, any shares of any kind of stock ranking junior to the 4.80% Cumulative Preferred Stock as to assets or dividends, unless after such action an amount equal to twice the aggregate par value or in the case of stock without par value, an amount equial to twice the preference on involuntary liquidation of all outstanding share of 4.80% Cumulative Preferred Stock would not exceed the sum of (i) the total capital of the Company represented by the then outstanding stock ranking junior to 4.80% Cumulative Preferred Stock as to assets and dividends and (ii) the surplus of the Company and any amounts carried as premium on its capital stock. The term "minimum provision for depreciation" shall mean, for any twelve month's period, an amount equial to 2% of the average gross depreciable plant property account of the Company during such period. The term "long term indebtedness" shall mean all indebtedness which by its terms matures more than one year from the date as of which any calculation of long term indebtedness is made, and any indebtedness maturing within one year from such date which is renewable or extendible at the option of the obligor to a date beyond one year from such date. (C) So long as dividends shall be in arrears on the 4.80% Cumulative Preferred Stock outstanding, the Company shall not, without the consent of the holders of a majority of the total number of shares of such stock then outstanding, purchase, offer to purchase, redeem, retire or otherwise acquire for a consideration any shares of 4.80% Cumulative Preferred Stock or of any stock ranking prior to or on a parity with the 4.80% Cumulative Preferred Stock as to assets or dividends. In the event of such arrears, the obligation of the Company to offer to purchase shares of 4.80% Cumulative Preferred Stock in each year as provided in paragraph (f) above shall be cumulative and if the Company shall not purchase or offer to purchase the number of shares required by such paragraph in any year by reason of an arrearage of dividends as aforesaid, it shall make an offer to purchase such shares promptly after all dividends in arrears shall be a paid or declared or set apart for payment or the aforesaid consent shall have become effective. Such deferred offer shall state that the Company will purchase such share on a date 45 days after the date of such offer at the par value thereof plus unpaid accumulated dividends thereon to the date of purchase and shall otherwise be upon the same terms and conditions and shall contain the same statements provided in respect of other offers made pursuant to the purchase fund provisions of paragraph (f) above. (D) A consent of the character referred to in subparagraphs (A), (B) or (C) above shall also be deemed to be effective upon the consent in writing, without a meeting, of all the then outstanding shares of 4.80% Cumulative Preferred Stock. (E) The foregoing provisions as to vote or consent shall not apply if, in connection with any of the matters mentioned in subparagraphs (A), (B) or (C) above, provision is to be made for the redemption or retirement of all the outstanding 4.80% Cumulative Preferred Stock. (F) From time to time, and without limitation of other rights and powers of the Company as provided by law, the Company may reclassify its capital stock and may create or authorize one or more classes or kinds of stock ranking prior to or on a parity with or subordinate to the 4.80% Cumulative Preferred Stock, or may increase the authorized amount of the 4.80% Cumulative Preferred Stock or of the Common Stock or of any other class of stock of the Company or may amend, alter, change or repeal any of the rights, privileges, terms and conditions of the shares of the 4.80% Cumulative Preferred Stock or of the Common Stock, or of any other class of stock of the Company, upon the vote, given at a meeting called for that purpose, of the holders of a majority of the shares of stock then entitled to vote thereon or upon such other vote of the holders of a majority of the shares of stock then entitled to vote thereon or upon such other vote of the holders of the shares of stock then entitled to vote thereon as may then be provided by law; provided that the consent of the holders of the shares of the 4.80% Cumulative Preferred Stock, required by the provisions of subparagraphs (A), (B) and (C) of paragraph (h) hereof, if any such consent to be so required, shall have been obtained; and provided further that the rights, privileges, terms and conditions of the shares of the Common Stock shall not be subject to amendment, alteration, change or repeal without the consent A(given in writing or by vote at a meeting called for that purpose) of the holders of a majority of the total number of shares of the Common Stock then outstanding. (G) For the purposes of paragraph (h) of this Section II, outstanding shares of the 4.80% Cumulative Preferred Stock shall not include shares held in the treasury of the Company. (i) All or any shares of the 4.80% Cumulative Preferred Stock at any time redeemed, purchased or acquired by the Company may thereafter, in the discretion of the Board of Directors subject to subparagraph (h)B)(a) above, be reissued or otherwise disposed of at any time or from time to time to the extent and in the manner now or hereafter permitted by law, provided that any such shares acquired by operation of the purchase provisions of paragraph (f) of this Section II shall not under any circumstances be reissued or otherwise disposed of by the Company and each surrendered certificate for shares so redeemed shall be cancelled. (j) The rights and remedies herein granted to holders of the 4.80% Cumulative Preferred Stock shall be in addition to all other rights and remedies to which they may be otherwise entitled by law. We, Kenneth D. Knoblock, President, Frank A. O'Neill,Treasurer and Joseph T. Kelley John W. Bond K.D. Knoblock F.A. O'Neill Leonard Milano Robert W. McCracken being a majority of the Directors of The Berkshire Gas Company in compliance with the provisions of section thirty-nine of chapter one hundred and fifty-eight (Chapter 164 Section10) of the General Laws, Ter. Ed., do hereby certify that ameeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of $1,500,000.00 dollars, and that the same has all been paid in on October, 28, 1965 (give date). The total amount of capital stock already authorized is (shares preferred. 164,593 (shares common. The amount of fully paid capital stock already issured for cash is (shares preferred. 164,593 (shares common. The amount of fully paid capital stock already issued for property is none (shares preferred. none (shares common. The amount of additional capital stock authorized is 15000 (shares preferred. (shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 16 day of November in the year 1965. WRITE NOTHING BELOW Berkshire Gas Company, The CERTIFICATE OF INCREASE OF CAPITAL General Lawws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections 39 and 41 Filed in the office of the Secretary of the Commonwealth November 16, 1965 I hereby approve the within certificate this November 16,1965 /s/ -------------------------------- Comminissioner of Corporations and Taxation THE BERKSHIRE GAS COMPANY CERTIFICATE OF REDUCTION OF CAPITAL General Laws Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections 40 and 41 filed in the office of the Secretary of the Commonwealth . November 19, 1965. I hereby and approve the within certificate, this 19th day of November. We, Kenneth D. Knoblock, President, Frank A. O'Neill,Treasurer and J. T. Kelley John W. Bond K.D. Knoblock F.A. O'Neill Leonard Milano Robert W. McCracken being a majority of the Directors of The Berkshire Gas Company in compliance with the provisions of section forty of chapter one hundred and fifty-eight of the General Laws, Ter. Ed., do hereby certify that a meeting of the stockholders called for the purpose the capital stock of said corporation has been decreased by the amount of $1,293,500.00 dollars, The total amount of capital stock already authorized is 12,935 (shares preferred. 164,593 (shares common. The amount of fully paid capital stock already issured for cash is 12,935 (shares preferred. 164,593 (shares common. The amount of fully paid capital stock already issued for property is none (shares preferred. none (shares common. The amount by which the capital stock authorized is to be reduced is 12,935 (shares preferred. (shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names, this 16 day of November in the year 1965. WRITE NOTHING BELOW Berkshire Gas Company, The CERTIFICATE OF INCREASE OF CAPITAL General Lawws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections 39 and 41 Filed in the office of the Secretary of the Commonwealth November 16, 1965 I hereby approve the within certificate this November 16,1965 /s/ Comminissioner of Corporations and Taxation stamp John F. X. Davoren Secretary of the Commonwealth The Commonwealth of Massachusetts Office of the Secretary State House, Boston 02133 MAR 27, 1972 A true Copy Witnessed under the Great Seal of the Commonwealth of Massachusetts. /s/ John F. X. Davoren ------------------------------- John F. X. Davoren Secretary of the Commonwealth. /s/ Archie D. Dickerson ------------------------------- Archie D. Dickerson Deputy Secretary. THE COMMONWEALTH OF MASSACHUSETTS JOHN F. X. DAVOREN Secretary of the Commonwealth STATE HOUSE BOSTON, MASS. CERTIFICATE OF INCREASE OF CAPITAL General Laws, Chapter 164, Ter. Ed., Section 10 and Chapter 158, Ter. Ed., Sections 39 and 41 We, Joseph T. Kelley President, J. Richard Cottrell Treasurer and Joseph T. Kelley, Leonard Milano, George L. Nye, John W. Bond,Sidney M. Schreiber, K. D. Knoblock being a majority of the Directors of The Berkshire Gas Company in Compliance with the provisions of the General Laws, Chapter 164, Section 10 and Chapter 158, Sections 39 and 41, do hereby certify that at a meeting of the stockholders called for the purpose the capital stock of said corporation has been increased by the amount of Two hundred seventy-four thousand three hundred twenty ($274,320) dollars, and that same has all been paid in on March 9th 1972. The total amount of capital stock already authorized is Fifteen thousand (15,000) (shares preferred. One hundred sixty-four thousand five hundred ninety-three (164,593) (shares common. The total amount of fully paid capital stock already issued for cash is Fifteen thousand (15,000) (shares preferred. One hundred sixty-four thousand five hundred ninety-three (164,593) (shares common. The amount of fully paid capital stock already issued for property is None (shares preferred. None (shares common. The amount of additional capital stock authorized is (shares preferred. Twenty-seven thousand four hundred thirty-two (27,432) (shares common. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed our names, this 16th day of March in the year 1972 President Joseph T. Kelley, Treasurer J. Richard Cottrell, Director Joseph T. Kelley,Director Leonard Milano, Director George L. Nye, Director John W. Bond,Director Sidney M. Schreiber, Director K. D. Knoblock RECEIVED MAR 20, 1972 CORPORATION DIVISION SECRETARY'S OFFICE THE COMMONWEALTH OF MASSACHUSETTS CERTIFICATE OF INCREASE OF CAPITAL GENERAL LAWS, CHAPTER 164, SECTION 10 AND CHAPTER 158, SECTIONS 39 AND 41 I hereby approve the within certificate of increase of capital and, the filing fee in the amount of $137.16 having been paid, said certificate is deemed to have been filed with me this 20th day of March, 1972. John F. X. Davoren JOHN F. X. DAVOREN Secretary of the Commonwealth MAR 23, 1972 The Berkshire Gas Company P. O. Box 1388 Pittsfield, MA 01201 J. R. Cottrell, Treas. And Clerk stamp John F. X. Davoren Secretary of the Commonwealth The Commonwealth of Massachusetts Office of the Secretary State House, Boston 02133 FEB 23, 1972 A true Copy Witnessed under the Great Seal of the Commonwealth of Massachusetts. John F. X. Davoren Secretary of the Commonwealth. Milhard D. Vast Deputy Secretary THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE STATE HOUSE, BOSTON, MASSACHUSETTS 02133 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 164, SECTION 8B No. 04-1731220 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Joseph T. Kelly, President, and Scott S. Robinson, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that the following amendment to the Articles of Organization was duly adopted at a meeting held on October 17, 1978, by a vote of: 130,600 shares of Common Stock, out of 192,025 outstanding. 11,430 shares of 4.80% Cumulative Preferred Stock, out of 11,430 outstanding. being at least two-thirds of each class outstanding and entitled to vote thereon and of each class or series of stock whose rights are adversely affected thereby. SECTION III Provisions Applicable to All Shares of 9% Cumulative Preferred Stock (a) 10,000 shares of the Cumulative Preferred Stock shall be and are designated as "9% Cumulative Preferred Stock." (b) The holders of shares of 9% Cumulative Preferred Stock shall be entitled to receive cash dividends at the rate of 9% per annum of the par value of $100 per share, or $9.00 per share per annum, payable quarterly on the 15th days of January, April, July and October in each year. (c) The aforesaid dividends shall accrue from the date of original issue and shall be cumulative so that if dividends in respect of any quarterly dividend period at the rate of $9.00 per anum shall not have been paid upon or declared and set apart for the 9% Cumulative Preferred Stock, the deficiency shall be fully paid or declared and set apart before any dividend shall be paid upon or declared and set apart for the Common Stock. Dividends on the 9% Cumulative Preferred Stock shall be deemed to accrue from day to day. (d) Subject to the provisions of subparagraph (h) c of this Section iii, the Company, by action of its Board of Directors, may redeem the whole or any part of the 9% Cumulative Preferred Stock at any time or from time to time, at the following redemption prices: $109.00 per share if redeemed prior to April 1, 1983; $105.00 per share if redeemed on or after April 1, 1983 and prior to April 1, 1988; $103.00 per share if redeemed on or after April 1, 1988 and prior to April 1, 1993; and $100 per share if redeemed on or after April 1, 1993, together with, in each case, an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared; provided, however, that prior to April 1, 1988 the Company may not redeem pursuant to the provisions of this paragraph (d) any shares of 9% Cumulative Preferred Stock directly or indirectly from or in anticipation of funds borrowed, or obtained through the sale of capital stock, by or for the amount of the Company at an effective interest or dividend cost (as the case may be), calculated in accordance with generally accepted financial practice, to the Company of less than 9% per annum. Prior to the date fixed for redemption pursuant to this paragraph (d), the Company shall deposit with a bank or trust company in good standing, organized under the laws of the United States or of the Commonwealth of Massachusetts, doing business in the City of Boston, Massachusetts, having capital, surplus and undivided profits (as shown by its latest published statement) aggregating at least $25,000,000 (a "Qualified Trustee"), or shall set aside, in each case separate and apart from the Company's other funds and in trust for the account of the holders of the shares to be redeemed so as to be and continue to be available therefor, the funds necessary for such redemption. If fewer than all of the outstanding shares of 9% Cumulative Preferred Stock are to be redeemed in pursuance of the foregoing provisions for voluntary redemption, the aggregate number of shares so to be redeemed shall be allocated by the Company among the registered holders of such Stock at the time outstanding, to the nearest share, in the proportion that their respective holdings bear to the aggregate number of shares of such Stock at the time outstanding, provided that if the number of such registered holders shall be more than twenty, the shares to be redeemed shall be determined by lot in such equitable manner as the Board of Directors shall deep proper. (e) (A) Subject to the provisions of subparagraph (h) (c) of this Section III, so long as any of the shares of the 9% Cumulative Preferred Stock shall be outstanding, the Company covenants to pay, at least one day prior to November 15 in each calendar year commencing with the year 1983 (each such November 15 being the "mandatory sinking fund redemption date"), to a Qualified Trustee selected for that purpose by the board of Directors (the "9% Preferred Stock Sinking Fund Trustee") as and for a sinking fund for the retirement of shares of the 9% Cumulative Preferred Stock, an amount of cash sufficient to retire 500 shares (or such lesser number of shares as may then be outstanding) of 9% Cumulative Preferred Stock at $100 per share plus all accrued and unpaid dividends thereon to the mandatory sinking fund redemption date, whether or not earned or declared (the "Sinking Fund Redemption Price"). The foregoing annual obligation (the "annual sinking fund obligation") shall be cumulative (but without interest), so that if for any reason the Company shall not have satisfied its full annual sinking fund obligation in any calendar year, then any deficiency shall be added to the annual sinking fund obligation for the next succeeding calendar year. The holders of 9% Cumulative Preferred Stock shall not have the right to compel the Company to make any sinking fund payment in the event that the Company shall not have funds legally available therefore; provided, however, that in such case the obligation to make such payment shall be fulfilled by the Company as soon as practicable after such funds become legally available. Until every deficiency in the annual sinking fund obligation shall have been paid in full, the holders of the 9% Cumulative Preferred stock shall share ratably with the holders of any other stock ranking on a parity with the 9% Cumulative Preferred Stock as to liquidation rights or dividends in the payment of funds in satisfaction of any required redemption or other obligation with respect to such stock. (B) Subject to the provisions of subparagraph (h) (c) of this Section III, and provided that the Company (I) shall have made stock purchase offers (and purchases of stock tendered) for all past years and for the current year as provided in paragraphs (f) and (h) (c) of Section II with respect to the 4.80% Cumulative Preferred Stock, (ii) shall have satisfied the annual sinking fund obligation for all past years and for the current year and, (iii) shall not be in default with respect to any other obligation involving any voluntary or optional redemption of the 9% Cumulative Preferred Stock, the Company may, at its option, on November 15 (or such earlier date on or after the date on which the Company shall pay to the 9% Preferred Stock Sinking Funds Trustee the amount required in satisfaction of its current annual sinking fund obligation) in each calendar year commencing with the year 1983, pay to the 9% Preferred Stock Sinking Fund Trustee an amount of cash sufficient to retire, at the Sinking Fund Redemption Price, an additional number, not to exceed 500, of shares of 9% Cumulative Preferred Stock. Notwithstanding the foregoing, the Company may not at any time redeem pursuant to the provisions of this subparagraph (e) (B), more than an aggregate of 3,000 shares of 9% Cumulative Preferred Stock. Such annual redemption option shall be non- cumulative, so that the failure of the Company, for any reason, to redeem 500 shares of 9% Cumulative Preferred Stock pursuant to this subparagraph (e) (B) in any year shall not increase the number of shares redeemable pursuant to this subparagraph (e) (B) in any subsequent year. (c) Any cash paid to the 9% Preferred Stock Sinking Fund Trustee pursuant to subparagraphs (e) (A) and (B) of this Section III shall be held by it in trust for the equal and proportionate benefit of the holders of the 9% Cumulative Preferred Stock and shall be applied by it in trust for the equal and proportionate benefit of the holders of the 9% Cumulative Preferred Stock and shall be applied by it (subject to the provisions of paragraph (f) of this Section III regarding failure of any holder to claim the amount set aside for redemption of such shares) to the redemption of 9% Cumulative Preferred Stock at the Sinking Fund Redemption Price. The 9% Preferred Stock Sinking Fund Trustee shall allocate the aggregate number of shares of 9% Cumulative Preferred Stock so to be redeemed among the registered holders of shares of 9% Cumulative Preferred Stock at the time outstanding, to the nearest share, in the proportion that their respective holdings bear to the aggregate number of shares of 9% Cumulative Preferred Stock at the time outstanding, provided that if the number of such registered holders shall be more than twenty, the shares to be redeemed shall be determined by lot in such equitable manner as the 9% Preferred Stock Sinking Fund Trustee shall deem proper. (f) Not more than 60 nor less than 30 days prior to the date fixed for redemption pursuant to paragraphs (d) or (e) of this Section III, notice of every redemption shall be mailed, certified mail, return receipt requested, to the holders of record of the shares to be redeemed at their respective addresses as the same shall appear on the books of the Company. If selection of the shares to be redeemed is required to be made by lot, not more than 60 nor less than 30 days' previous notice of every redemption shall also be given by appropriate publication at least once in a daily newspaper printed in the English language and of general circulation in the City of Boston, Massachusetts. The notice so mailed shall state the date fixed for redemption (hereinafter called the "redemption date:"), the applicable redemption price and amount of all accrued dividends payable on the redemption date, and the number of shares to be redeemed. Such notice shall call upon each shareholder to whom such notice shall be addressed to surrender to the Company on the redemption date, at the place designated in such notice, the certificate or certificates representing the shares to be redeemed. On or after the redemption date each holder of shares of 9% Cumulative Preferred Stock so called for redemption shall present and surrender his certificate or certificates for such shares to the Company at the place designated in the foregoing written notice and thereupon the redemption price of such shares together with the amount of accrued dividends thereupon payable on the redemption date shall be paid to or on the order of the person whose name appears on the certificate or certificates as the owner thereof. In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares. The Company may, after giving notice of any such redemption as hereinbefore provided or after giving to a Qualified Trustee irrevocable authorization to give such notice and at any time prior to the redemption date specified or to be specified in such notice, deposit with a Qualified Trustee (in the case of redemption pursuant to paragraph (e), the 9% Cumulative Preferred Stock Sinking Fund Trustee), separate and apart from its other funds, in trust for the account of the holders of the shares to be redeemed, the funds necessary for such redemption. In such case the redemption notice to be mailed to the holders of record of the shares to be redeemed shall specify the office of such Qualified Trustee as the place of payment of the redemption price, and shall call upon such holders to surrender at such place on the redemption date the certificates representing the shares so to be redeemed against payment of the amount payable on the redemption thereof. Upon such deposit in trust, all shares with respect to which such deposit shall have been made shall no longer be deemed to be outstanding, and all rights with respect to such shares so called for redemption shall forthwith cease and terminate, except only the right of the holders thereof to receive, out of all the funds so deposited in trust, from and after the redemption date, the amount payable upon the redemption thereof, without interest. In case any holder of shares of the 9% Cumulative Preferred Stock which shall have been called for redemption as provided herein shall not within six year of the date of redemption thereof or the date of deposit of the funds necessary for such redemption with the Qualified Trustee, whichever is earlier, claim the amount so set aside or deposited in trust, as the case may be, for the redemption of such shares, the Qualified Trustee shall upon demand, pay over to the Company any such unclaimed amount and shall thereupon be relieved of all responsibility in respect thereof and the Company shall not be required to hold the amount so paid over to the Company, or any amount so set aside by the Company for the redemption of such shares separate and apart from its other funds, and thereafter except as may be otherwise provided by law, the holders of such shares of 9% Cumulative Preferred Stock shall look only to the Company for payment of the redemption price thereof, without interest. (g) So long as any shares of the 9% Cumulative Preferred Stock are outstanding, the Company shall not pay or declare and set apart for payment any dividend (other than dividends payable in stock junior to the 9% Cumulative Preferred Stock with respect to liquidation rights and dividends), or make any other distribution on, or purchase, redeem, retire, or otherwise acquire for consideration, or set aside any funds for any such acquisition of, any such shares of capital stock ranking junior to the 9% Cumulative Preferred Stock unless and until: (A) full dividends on the shares of the 9% Cumulative Preferred Stock at the time outstanding for all past quarterly dividend periods and for the current quarterly dividend period shall have been paid or declared and set apart for payment, (B) the Company shall not be in default in respect of the annual sinking fund obligation or any other obligation with respect to any voluntary or optional redemption of the 9% Cumulative Preferred Stock, and (c) after such action the amount of capital of the Company represented by (I) the then outstanding capital stock of the Company ranking junior to the 9% Cumulative Preferred Stock as to liquidation rights and dividends, (ii) the premium on the Company's capital stock and (iii) the Company's surplus (including retained earnings), would be equal to or greater than twice the aggregate par value or preference on involuntary liquidation (whichever, in the case of each share, is greater) of all outstanding shares of 9% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 9% Cumulative Preferred Stock as to liquidation rights or dividends. Unless otherwise indicated, the terms "capital", "surplus" and "premium on capital stock", as used in this Section III, shall have the meanings ascribed to them in accordance with generally accepted accounting principles. Subject to the foregoing, this Section III shall not otherwise prevent the Company form declaring or paying out of funds legally available therefor such dividends on the Common Stock as may be determined by the Board of Directors. (h) ( A) So long as any shares of the 9% Cumulative Preferred Stock are outstanding, the Company shall not without the consent (given in person or by proxy at a meeting duly called and held for that purpose) of the holders of at least two-thirds of the total number of shares of 9% Cumulative Preferred Stock then outstanding: (a) create, authorize or increase the total authorized amount of any class or series of stock ranking prior to or on a parity with the 9% Cumulative Preferred Stock as to liquidation rights or dividends, or increase the total authorized amount of 9% Cumulative Preferred Stock, or create, authorize or increase the total authorized amount of any security or right convertible into, or evidencing the right to purchase, shares of any such stock; or (b) amend, alter, change or repeal any of the rights, privileges, preferences, powers, terms and conditions of the 9% Cumulative Preferred Stock in any manner which would adversely affect any of the rights of the holders thereof; or (c) sell, lease, transfer, convey, pledge, assign, mortgage or otherwise encumber all or the greater part of the Company's property or business (provided, however, that this subparagraph (h) (A) (c) shall not be construed to require the consent of the holders of 9% Cumulative Preferred Stock for the issuance of additional bonds under the Company's First Mortgage Indenture and Deed of Trust dated as of July 1, 1954, as amended); or (d) merge or consolidate with or into another corporation, whether or not the Company survives as a continuing entity, if thereby any of the rights, privileges, preferences, powers, terms or conditions of the 9% Cumulative Preferred Stock would be adversely affected, or in the event that the Company does not survive as a continuing entity, there would thereupon be authorized or outstanding securities which the Company, of it owned all of the properties then owned by the resulting corporation, could not create without the vote or consent of the holders of the 9% Cumulative Preferred Stock. (B) So long as any shares of the 9% Cumulative Preferred Stock are outstanding, the Company shall not, without the consent (given in person or by proxy at a meeting duly called and held for that purpose) of the holders of a majority of the total number of shares of 9% Cumulative Preferred Stock then outstanding, voting separately as a class, issue or sell any additional (but previously authorized shares of 9% Cumulative Preferred Stock, including shares held in the treasury of the Company, or any shares of any stock ranking prior to or on a parity with the 9% Cumulative Preferred Stock as to liquidation rights or dividends, or any security or right convertible into, or evidencing the right to purchase, shares of any such stock, unless, after giving effect to such proposed issue or sale, (I) the net earnings of the Company available for interest and dividends, determined in accordance with generally accepted accounting principles after all taxes and after provision for depreciation and amortization at least equal to the "minimum provision for depreciation" as hereinafter defined, for twelve (12) consecutive calendar months out of the fifteen (15) months immediately preceding shall be at least one and one-half (1 1/2) times the sum of (x) the aggregate annual interest requirements on all "long-term indebtedness," as hereinafter defined, of the Company then outstanding and (y) the aggregate annual dividend requirements on all shares of 9% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 9% Cumulative Preferred Stock, to be outstanding; and (ii) the Company's net earnings available for dividends, determined in accordance with generally accepted accounting principles after all taxes and after provisions for depreciation and amortization," as hereinafter defined, for twelve (12) consecutive calendar months out of the fifteen (15) months immediately preceding shall be at least two and one-half (2 1/2) times the aggregate annual dividend requirements on all shares of 9% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 9% Cumulative Preferred Stock, to be outstanding; and (iii) the Company's capital represented by the then outstanding shares of its stock ranking junior to the 9% Cumulative Preferred Stock, plus the company's surplus (including retained earnings) and any amounts carried as premium on capital stock, would be at least equal to the resulting aggregate par value or preference on involuntary liquidation (whichever, in the case of each share, is greater) of all shares of 9% Cumulative Preferred Stock and all shares of any stock ranking prior to or on a parity with the 9% Cumulative Preferred Stock , which would be outstanding after giving effect to such proposed issue or sale. The term "minimum provision for depreciation" shall mean, for any twelve months' period, an amount equal to 2% of the average gross depreciable plant property account of the Company during such period,. The term "long term indebtedness" shall mean all "indebtedness" which by its terms matures more than one year from the date as of which any calculation of long term indebtedness is made, and " indebtedness" maturing within one year from such date which is renewable or extendible at the option of the obligor to a date beyond one year from such date. The term "indebtedness" of the Company shall mean all liability of the Company for the repayment of borrowed money as of the date on which indebtedness is to be determined, including without limitation, (a) all indebtedness secured by any mortgage, pledge, lien, security agreement, conditional sale or other title retention agreement or other charge or encumbrance existing on any property or asset owned or held by the Company subject thereto, whether or not the indebtedness secured thereby shall have been assumed, and (b) all indebtedness of others which the Company has directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business), discounted with recourse or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire, or in respect of which the Company has agreed to supply or advance funds (whether by way of loan, stock, purchase, capital contribution or otherwise) or otherwise to become directly or indirectly liable. (C) So long as full dividends on the shares of 9% Cumulative Preferred Stock outstanding for all past quarterly dividend periods and for the current quarterly dividend period shall be in arrears, or the Company shall be in default with respect to any sinking fund payment or obligation provided for in subparagraph (e) (A) of this Section III or any other obligation with respect to any voluntary or optional redemption of the 9% Cumulative Preferred Stock, the Company shall not, without the consent (given in person or by proxy at a meeting duly called and held for that purpose) of the holders of a majority of the total number of shares of such Stock then outstanding, purchase, offer to purchase, redeem, retire or otherwise acquire for a consideration, or set aside any funds for any such acquisition of, any shares of 9% Cumulative Preferred Stock or of any stock ranking prior to or on a parity with the 9% Cumulative Preferred Stock as to liquidation rights or dividends; provided, however, that any funds deposited in trust for the purchase or redemption of any stock of the Company in accordance with the terms thereof prior to any such arrearage or default may thereafter be applied to such purchase or redemption in accordance with such terms, whether or not at the time of such application such arrearage or default is continuing under the provisions hereof. (D) A consent of the character referred to in subparagraph (A), (B) OR (C) of this paragraph (h) shall also be deemed to be effective upon the consent in writing, without a meeting, of all the then outstanding shares of 9% Cumulative Preferred Stock. (E) The foregoing provisions as to vote or consent shall not apply if, in connection with connection with any of the matters mentioned in subparagraph (A), (B) or (C) above, provision is to be made for the redemption or retirement of all outstanding 9% Cumulative Preferred Stock in accordance with paragraph (d) hereof. (F) From time to time, and without limitation of other rights and powers of the Company as provided by law, the Company may reclassify its capital stock and may create or authorize one or more classes or kinds of stock ranking prior to or on a parity with or subordinate to the 9% Cumulative Preferred Stock, or may increase the authorized amount of the 9% Cumulative Preferred Stock or of the Common Stock or of any other class of stock of the Company or may amend, alter, change, or repeal any of the rights, privileges, terms and conditions of the shares of the 9% Cumulative Preferred Stock or of the Common Stock, or of any other class of stock of the Company, upon the vote, given at a meeting called for that purpose, of the holders of a majority (or such other number of shares of stock as may then be required by law) of the shares of stock then entitled to vote thereon; provided that the consent of the holders of the shares of the 9% Cumulative Preferred Stock, required by the provisions of subparagraphs (A), (B) and c of paragraph (h) hereof, if any such consent be so required, shall have been obtained, and provided further that the rights, privileges, terms and conditions of the shares of the Common Stock shall not be subject to amendment, alteration, change or repeal without the consent (given in writing or by vote at a meeting called for that purpose) of the holders of a majority (or such other number as may then be required by law) of the total number of shares of the Common Stock then outstanding. (G) For the purposes of paragraph (h) of this Section III, outstanding shares of the 9% Cumulative Preferred Stock shall not include shares held in the treasury of the Company. (I) All or any shares of the 9% Cumulative Preferred Stock at any time redeemed, purchased or acquired by the Company may thereafter, in the discretion of the Board of Directors subject to subparagraph (h) (B) above, be reissued or otherwise disposed of at any time or from time to time to the extent and in the manner now or hereafter permitted by law, provided that any such shares acquired by operation of the redemption provisions of paragraph (e) of this Section III shall not under any circumstances be reissued or otherwise disposed of by the Company and each surrendered certificate for shares so redeemed shall be canceled. (j) The rights and remedies herein granted to holders of the 9% Cumulative Preferred Stock shall be in addition to all other rights and remedies to which they may be otherwise entitled by law. THE COMMONWEALTH OF MASSACHUSETTS SECRETARY OF THE COMMONWEALTH STATE HOUSE, BOSTON, MASSACHUSETTS 02133 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 164, SECTION 33 No. 04-1731220 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Joseph T. Kelley, President, and Scott S. Robinson, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that the following amendment to the articles of organization of the corporation was duly adopted at a meeting held on September 25, 1979, by a vote of: 141,825 shares of Common Stock, out of 192,025 outstanding. being at least a majority of each class outstanding and entitled to vote thereon: two thirds of each class outstanding and entitled to vote thereon and of each class or series of stock whose rights are adversely affected thereby. RESOLVED: That the Charter, Agreement of Association and Articles of Organization of this Company be, and the same hereby are, amended to increase the capital stock of the Company by creating an additional 20,000 shares of the Company's Common Stock, $10 par value, thereby increasing the number of authorized shares of said Common Stock from 192,025 to 212,025 shares; such additional 20,000 shares to be issued and sold from time, subject to the approval of the Massachusetts Department of Public Utilities, through the Company's Share Owner Dividend Reinvestment and Stock Purchase Plan; and it is further RESOLVED: That the Charter, Agreement of Association and Articles of Organization of the Company be, and the same hereby are, amended to provide that the By-Laws of the Company may be amended by vote of the shareholders of the Company or by vote of the Company's directors, in accordance with the provisions of such By-Laws. The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 164, Section 8B of the General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 15th day of October , in the year 19 /s/ , President /s/ , Clerk THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 164, Section 8B) I hereby approve the within articles of amendment and, the filing fee in the amount of $ having been paid, said articles are deemed to have been filed with me this 16th day of October, 1979 . Secretary of the Commonwealth State House, Boston, Mass. TO BE FILLED IN BY CORPORATION TO: Franklin M. Hundley, Esquire Rich, May, Bilodeau & Flaherty 294 Washington Street Boston, Massachusetts, 02108 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE John F. X. Davoren, SECRETARY OF THE COMMONWEALTH STATE HOUSE, BOSTON, MASSACHUSETTS ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 164, SECTION 33 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Joseph T. Kelley, President, and Scott S. Robinson, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that the following amendment to the Articles of Organization of the corporation was duly adopted at a meeting held on January 30,1980, by a vote of: 158,374 shares of Common stock, out of 192,025 outstanding. being at least a majority of each class outstanding and entitled to vote thereon. VOTED: That the Charter, Agreement of Association and Articles of Organization of this Company be and hereby are amended so that the total number of shares and the par value per share of Common Stock of the Company authorized for issuance shall be changed from 212,025 shares, $10 par value per share, to 424,050 shares, $5.00 par value per share, subject to the obtaining of requisite approval and authorization of the Department of Public Utilities of the Commonwealth of Massachusetts; and; FURTHER VOTED: That each share of Common Stock of the par value of $10.00 currently issued and outstanding or authorized for issuance but unissued shall be and, on the effective date of the aforesaid Amendment, hereby is reclassified and changed into two shares of Common Stock of the par value of $5.00 per share. The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 164, Section 8B of the General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 21st day of February, in the year 1980. /s/ , President /s/ , Clerk THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 164, Section 8B) I hereby approve the within articles of amendment and, the filing fee in the amount of $50.00 having been paid, said articles are deemed to have been filed with me this day of , 1980. John F. X. Davoren Secretary of the Commonwealth State House, Boston, Mass. TO BE FILLED IN BY CORPORATION TO: Franklin M. Hundley, Esquire Rich, May, Bilodeau & Flaherty 294 Washington Street Boston, Massachusetts, 02108 The Commonwealth of Massachusetts Michael Joseph connolly secretary of State One Ashburton Place, Boston, MA 02108 FEDERAL IDENTIFICATION NO. 04-1731220 CERTIFICATE OF CHANGE OF PRINCIPAL OFFICE General Laws, Chapter 156B, Section 14 I, Cheryl M. Clark, Clerk of The Berkshire Gas Company having its principal office at P. O. Box 1388 31 South Street., Pittsfield, MA 01201 do hereby certify that pursuant to General Laws, Chapter 156B, Section 14, the directors of said corporation have changed the principal office of the corporation to P.O. Box 1388 115 Cheshire Road, Pittsfield, MA 01201 SUBSCRIBED THIS 30TH DAY OF JULY 1982, UNDER THE PENALTIES OF PERJURY SIGNATURE /s/ CHERYL M. CLARK CHERYL M. CLARK THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE SECRETARY OF THE COMMONWEALTH STATE HOUSE, BOSTON, MASSACHUSETTS 02133 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 164, SECTION 33 No. 04-1731220 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, J.T.Kelley, President, and Cheryl M. Clark, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that the following amendment to the articles of organization of the corporation was duly adopted at a meeting held on October 1982, by a vote of: 311,037 shares of Common Stock, out of 398,421 outstanding. being at least a majority of each class outstanding and entitled to vote thereon: VOTED: That the Charter, Agreement of Association and Articles of Organization of this Company be, and hereby are, amended to increase shares of the Company's Common stock, $5. par value, thereby increasing the number of authorized shares of said Common stock from 424,050 to 440,000 shares; such additional 15,950 shares are to be issued from time to time, subject to the approval of the Massachusetts Department of Public Utilities, to a Tax Credit Employees Stock Ownership Plan and Trust. THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 164, Section 8B) I hereby approve the within articles of amendment and, the filing fee in the amount of $75.00 having been paid, said articles are deemed to have been filed with me this 9 day of November, 1982. Secretary of the Commonwealth State House, Boston, Mass. TO BE FILLED IN BY CORPORATION TO: Eric J. Krathwohl, Esq. Rich, May, Bilodeau & Flaherty 294 Washington Street Boston, Massachusetts, 02108 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE Michael Joseph Connolly, SECRETARY ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 164, SECTION 8B No. 04-1731220 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Scott S. Robinson, Vice President, and Cheryl M. Clark, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that the following amendment to the articles of organization of the corporation was duly adopted at a meeting held on July 22, 1983, by a vote of: 317,419 shares of Common Stock, out of 408,946 shares outstanding. being at least a majority of each class outstanding and entitled to vote thereon.*1 *1For the amendment adopted pursuant to Chapter 156B, Section 70. VOTED: That the Charter, Agreement of Association and Articles of Organization of this Company be, and hereby are, amended to increase the capital stock of the Company by creating an additional 60,000 shares of the Company's Common Stock, $5 par value, thereby increasing the number of authorized shares of said Common Stock from 440,000 to 500,000 shares; such additional 60,000 shares to be issued and sold to certain institutional investors, subject to the approval of the Massachusetts Department of Public Utilities. TO CHANGE the number of shares and the par value, if any, of each class of stock within the corporation fill in the following: The total presently authorized is: NO PAR VALUE WITH PAR VALUE TYPE NUMBER OF NUMBER OF PAR SHARES SHARES VALUE Common - 440,000 $5.00 Preferred CHANGE the total to: NO PAR VALUE WITH PAR VALUE TYPE NUMBER OF NUMBER OF PAR SHARES SHARES VALUE Common - 500,000 $5.00 Preferred The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 164, Section 8B of the General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this day of July , in the year 1983. /s/ , President /s/ , Clerk THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 164, Section 8B) I hereby approve the within articles of amendment and, the filing fee in the amount of $ having been paid, said articles are deemed to have been filed with me this day of , 19. /s/ MICHAEL JOSEPH CONNOLLY Michael Joseph Connolly Secretary of the Commonwealth State House, Boston, Mass. TO BE FILLED IN BY CORPORATION TO: Eric J. Krathwohl, Esquire Rich, May, Bilodeau & Flaherty 294 Washington Street Boston, Massachusetts, 02108 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL JOSEPH CONNOLLY, SECRETARY ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 164, SECTION 8B No. 04-1731220 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Scott S. Robinson, Executive Vice President, and Cheryl M. Clark, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that the following amendment to the articles of orgainzation of the corporation was duly adopted at a meeting held on October 12, 1983, by a vote of: 363,229 shares of Common Stock, out of 471,273 outstanding. being at least two-thirds of each class outstanding and entitled to vote thereon and of each class or series of stock whose rights are adversely affected thereby. VOTED: That notwithstanding any other provision thereof, the Charter, Agreement of Association and Articles of Organization of the Company be and hereby are amended to add thereto the following provision to specify as a proper corporate power of the Company: "The power, right and authority to do business, carry on its operations, and have offices and exercise powers granted by Massachusetts law in any jurisdiction within or outside the United States." TO CHANGE the number of shares and the par value, if any, of each class of stock within the corporation fill in the following: The total presently authorized is: NO PAR VALUE WITH PAR VALUE TYPE NUMBER OF NUMBER OF PAR SHARES SHARES VALUE COMMON PREFERRED CHANGE the total to: NO PAR VALUE WITH PAR VALUE TYPE NUMBER OF NUMBER OF PAR SHARES SHARES VALUE COMMON PREFERRED The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 164, Section 8B of the General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 24 day of October, in the year 1983. , Executive VicePresident /s/ , Clerk THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 164, Section 8B) I hereby approve the within articles of amendment and, the filing fee in the amount of $ having been paid, said articles are deemed to have been filed with me this day of , 19. Secretary of the Commonwealth State House, Boston, Mass. TO BE FILLED IN BY CORPORATION Eric J. Krathwohl, Esq. Rich, May, Bilodeau & Flaherty 294 Washington Street, Boston, MA 02108 THE COMMONWEALTH OF MASSACHUSETTS Secretary of the Commonwealth ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108 ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 164, SECTION 8B This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Scott S. Robinson, Exec. Vice President, and Cheryl M. Clark, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that the following amendment to the Articles of Organization of the corporation was duly adopted at a meeting held on October 16, 1984, by a vote of: 387,922 shares of Common Stock, out of 484,812 outstanding at least a majority of each class outstanding and entitled to vote thereon and of each class or series of stock whose rights are adversely affected thereby.*1 *1For amendments adopted pursuant to Chapter 164, Section 8. VOTED: that the Charter, Agreement of Association and Articles of Organization of this Company be, and the same hereby are, amended to increase the capital stock of the Company by creating an additional 50,000 shares of the Company's Common Stock, $5 par value, thereby increasing the number of authorized shares of said Common Stock from 500,000 to 550,000 shares; such additional 50,000 shares to be issued and sold from time to time, subject to the approval of the Massachusett Department of Public Utilities, through the Company's Share Owner Dividend Reinvestment and Stock Purchase Plan. TO CHANGE the number of shares and the par value, if any, of each class of stock within the corporation fill in the following: The total presently authorized is: NO PAR VALUE WITH PAR VALUE TYPE NUMBER OF NUMBER OF PAR SHARES SHARES VALUE Common 500,000 $ 5 Preferred (4.8%) 15,000 $100 (9.0%) 10,000 $100 CHANGE the total to: NO PAR VALUE WITH PAR VALUE TYPE NUMBER OF NUMBER OF PAR SHARES SHARES VALUE Common 550,000 $ 5 Preferred (4.8)% 15,000 $100 (9.08)% 10,000 $100 THE COMMONWEALTH OF MASSACHUSETTS SECRETARY OF THE COMMONWEALTH ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108 ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 164, SECTION 8B This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Scott S. Robinson, Exec. Vice President, and Cheryl M. Clark, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that the following amendment to the articles of organization of the corporation was duly adopted at a meeting held on: October 16, 1984, by a vote of: 347,361 shares ofCommon Stock, out of 484,812 outstanding being at least two-thirds of each class outstanding and entitled to vote thereon and of each class or series of stock whose rights are adversely affected thereby: VOTED: that the Charter, Agreement of Association and Articles of Organization of the Company (the "Charter") be and hereby are amended by adding the following provisions thereto: The affirmative vote or consent of the holders of seventy-five percent (75%) of the outstanding voting shares (as hereinafter defined) of the Company shall be required for the adoption or authorization of a business combination between the Company and an other entity (as hereinafter defined); provided that the aforesaid seventy-five (75%) voting requirement shall not be applicable to the approval by the Company's shareholders of a business combination authorized by a two-thirds vote of the Board of Directors. *for amendments adopted pursuant to Chapter 164, Section 8A. As used in this amendment,(a) the term 'other entity' shall include any corporation, trust, partnership, association, person or other entity, and any other entity with which it or its affiliate or associate (as defined below) has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of stock in the Company in any transaction or series of transactions not involving a public offering of the Company's stock within the meaning of the Securities Act of 1933, or which its 'affiliate' or 'associate' as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities and Exchange Act of 1934 as in effect September 1, 1984, together with the successors and assigns of such persons; (b) as other entity shall be deemed to be the beneficial owner of any voting shares which such other entity has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise; (c) the outstanding shares of any class of stock of the Company shall include shares deemed owned through application of clause (b) above but shall not include any other shares which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise; (d) the term 'business combination' shall include any merger or consolidation of the Company with or into any other entity; (e) the term 'voting shares' shall mean shares of stock of the Company regularly entitled to vote in elections of directors, otherwise than as the result of a default in dividends or the occurrence of any other contingency set forth in this Charter. A two-thirds majority of the directors shall have the power and duty to determine for the purpose of this amendment on the basis of information known to them whether (a) an other entity is an affiliate or associate (as defined above) of another, or (b) an other entity. No amendment to the Company's Charter shall amend, alter, change or repeal any of the provisions, or the effect, of this amendment, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote or consent of the holders of seventy-five (75%) of all outstanding voting shares of the Company. VOTED: that the Charter, Agreement of Association and Articles of Organization of the Company (the 'Charter') be and hereby are amended by adding the following provisions thereto: The Board of Directors shall be divided into three classes, with the term of office of one class expiring each year. At the Annual Meeting of Shareholders in 1984, three directors of the first class shall be elected to hold office for a term expiring at the 1985 Annual Meeting, three directors of the second class shall be elected to hold office for a term expiring at the 1986 Annual Meeting and three directors of the third class shall be elected to hold office for a term expiring at the 1987 Annual Meeting. Commencing with the Annual Meeting of Shareholders in 1985, each class of directors whose term shall then expire shall be elected to hold office for a three year term and until the election and qualification of their respective successors in office. In case of any increase in the number of directors, the number of directors in each class shall be as nearly equal as possible. Newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled solely by the Board of Directors, acting by not less than a two-thirds vote of the directors then in office. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director. No amendment to the Company's Charter shall amend, alter, change or repeal any of the provisions, or the effect, of this amendment, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote or consent of the holders of seventy-five percent (75%) of all outstanding voting shares of the Company. Nothing contained in this amendment shall in any way limit any other provision of the Charter of the By-Laws of the Company or of any applicable law under which any class of the Company's equity securities shall have the benefit of a higher voting standard or be entitled to a separate class vote in addition to any other vote required by this amendment. VOTED: that the Charter, Agreement of Association and Articles of Organization of the Company (the 'Charter') be and hereby are amended by adding the following provisions thereto: Nominations for the election of directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors. Such nominations shall be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to the Clerk of the Company not less than 14 days nor more than 50 days prior to any meeting of the shareholders called for the election of directors. Notice of nominations which are proposed by the Board of Directors shall be given by the Chairman of the Board. Each notice under the above paragraph shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee and (iii) the number of shares of stock of the Company which are beneficially owned by each such nominee. Notice for special meetings of shareholder must be given by the Clerk and such notice shall be mailed or delivered at least 30 days prior to the meeting. No amendment to the Company's Charter shall amend, alter, change or repeal any of the provisions, or the effect, of this amendment, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote or consent of the holders of seventy-five percent (75%) of all outstanding voting shares of the Company. Nothing contained in this amendment shall in any way limit any other provision of the Charter, or of the By-Laws of the Company or of any applicable law under which any class of the Company's equity securities shall have the benefit of a higher voting standard or be entitled to a separate class vote in addition to any other vote required by this amendment. The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 164, Section 8B of the General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this Twenty-ninth day of October, in the year 1984. Exec. Vice President /s/ Clerk THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL JOSEPH CONNOLLY, SECRETARY FEDERAL IDENTIFICATION ONE ASHBURTON PLACE, BOSTON, MASS 02108 NO. 04-1731220 ARTICLES OF AMENDMENT General Laws, Chapter 164, Section 8B This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Scott S. Robinson, President Cheryl M. Clark, Clerk of the BERKSHIRE GAS COMPANY located at 115 Cheshire Road, Pittsfield, Massachusetts 01201 do hereby certify that the following amendment to the articles of organization of the corporation was duly adopted at a meeting held on May 21, 1986, by vote of 414,864 shares of Common Stock out of 607,004 shares outstanding being at least a majority of each class outstanding and entitled to vote thereon. TO CHANGE the number of shares and the par value, if any, of each class of stock within the corporation fill in the following: The total presently authorized is: NO PAR VALUE WITH PAR VALUE PAR KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE Common 800,000 $ 5.00 Preferred 7,967 $100.00 8,500 $100.00 CHANGE the total to: NO PAR VALUE WITH PAR VALUE PAR KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE Common 1,600,000 $ 2.50 Preferred 7,967 $100.00 8,500 $100.00 THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 164, Section 8B) I hereby approve the within articles of amendment and, the filing fee in the amount of $75.00 having been paid, said articles are deemed to have been filed with me this day of ,19 . Michael J. Connolly Secretary of State To: RICH, MAY, BILODEAU & FLAHERTY, P.C. ATTN. JAMES M. AVERY, ESQUIRE 297 WASHINGTON STREET BOSTON MA 02108 (617) 482-1360 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL JOSEPH CONNOLLY, SECRETARY FEDERAL IDENTIFICATION ONE ASHBURTON PLACE, BOSTON, MASS 02108 NO. 04-1731220 ARTICLES OF AMENDMENT General Laws, Chapter 164, Section 8B This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. We, Scott S. Robinson, President Cheryl M. Clark, Clerk of the BERKSHIRE GAS COMPANY located at 115 Cheshire Road, Pittsfield, Massachusetts 01201 on this 14th day of July 1986. VOTED: That the Charter, Agreement of Association and Articles of Organization of the Company be and hereby are amended so that the total number of shares and the par value per share of Common Stock of the company authorized for issuance shall be changed from 800,000 shares, $5.00 par value per share, to 1,600,000 shares, $2.50 par value per share, subject to the obtaining of requisite approval and authorization of the Department of Public Utilities of the Commonwealth of Massachusetts; and: FURTHER VOTED: That each share of Common Stock of the par value of $5.00 currently issued and outstanding or authorized for issuance but unissued shall be and, on the effective date of the aforesaid Amendment, hereby is reclassified and changed into two shares of Common Stock of the par value of $2.50 per share; and FURTHER VOTED: That the aforesaid change of par value and the proposed two-for- one shall be effective at the close of business on August 1, 1986, or such other date as may be fixed by the Board of Directors, subject to the obtaining of all requisite regulatory authorizations, and the Board of Directors is authorized and empowered to do such things and to take such action as may be necessary or appropriate to give effect to the foregoing votes. The foregoing amendment will become effective in accordance with the vote adopting the amendment. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 14th day of July , 1986.mj /s/ THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL JOSEPH CONNOLLY, SECRETARY STATE HOUSE, BOSTON, MASSACHUSETTS 02133 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 164, SECTION 33 No. 04-1731220 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 8B. Make check payable to the Commonwealth of Massachusetts. We, Scott S. Robinson, President, and Cheryl M. Clark, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that these ARTICLES OF AMENDMENT affecting Articles NUMBERED: of the Articles of Organization were duly adopted at a meeting held on October 28, 1987, by a vote of: 908,281 * shares of Common Stock, out of 1,249,167 outstanding. 912,500 ** shares of Common Stock, out of 1,249,167 outstanding. being at least a majority of each type, class or series outstanding and entitled to vote. * Common Stock Authorization ** Elimination of Personal Liability of Directors (See page 3) TO CHANGE the number of shares and the par value, if any of each class of stock within the corporation fill in the following: The total presently authorized is: NO PAR VALUE WITH PAR VALUE TYPE NUMBER OF NUMBER OF PAR SHARES SHARES VALUE Common 1,600,000 $ 2.50 Preferred 15,000 4.8% $100.00 10,000 9.0% $100.00 CHANGE the total to: NO PAR VALUE WITH PAR VALUE TYPE NUMBER OF NUMBER OF PAR SHARES SHARES VALUE Common 2,100,000 $ 2.50 Preferred 15,000 4.8% $100.00 10,000 9.0% $100.00 VOTED: That the Charter, Agreement of Association and Articles of Organization of this Company be, and the same hereby * are, amended to increase the authorized capital stock of the Company by creating an additional 500,000 shares of the Company's Common Stock, $2.50 par value, thereby increasing the number of authorized shares of said Common stock from 1,600,000 to 2,100,000 shares, such shares to be issued as authorized by the Board of Directors for proper corporate purposes, subject to the requisite approval of the Massachusetts Department of Public Utilities; and FURTHER VOTED: That all shares of Common Stock, $2.50 par value, that were previously authorized for issuance to a Tax Credit * and Employees Stock Ownership Plan and Trust and that remain unissued be, and hereby are, authorized for issuance from time to time for any other purpose deemed appropriate by the Board of Directors, subject to the obtaining of requisite approval and authorized of the Massachusetts Department of Public Utilities; and FURTHER VOTED: That the Articles of Organization of the Company be and hereby are amended to provide that, to the fullest extent that the General Laws of the Commonwealth of ** Massachusetts as they exist on the date hereof, or as they may hereafter be amended, permit the limitation or elimination of the liability of directors, no director of this Company shall be personally liable to this Company or its shareholders for monetary damages for breach of fiduciary duty, notwithstanding any provision of the law imposing such liability. No amendment to or have any effect on the liability or alleged liability of any director of this Company for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 164, Section 8B of the General Laws. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this twenty-eighth day of October, in the year 1987 THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 164, Section 8B) I hereby approve the within articles of amendment and, the filing fee in the amount of $775.00 having been paid, said articles are deemed to have been filed with me this 16th day of November, 1987. MICHAEL JOSEPH CONNOLLY TO BE FILLED IN BY CORPORATION PHOTO COPY OF AMENDMENT TO BE SENT TO: Rich, May, Bilodeau & Flaherty, P.C. Attn.: James M. Avery, Esquire 294 Washington Street Boston, MA. 02108 Telephone 617-482-1360 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL J. CONNOLLY, Secretary ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION General Laws, Chapter 164, Section 8A NO. 04-1731220 We, Scott S. Robinson, President and Cheryl M. Clark, Clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts 01201 do hereby certify that these ARTICLES OF AMENDMENT of the Articles of Organization were duty adopted at a meeting held on June 2, 1992, by vote of: 1,151,275 shares of Common Stock out of 1,693,580 shares outstanding, 4,127 shares of 4.80% Preferred Stock out of 5,614 shares outstanding, and 5,500 shares of 9.0% Preferred Stock out of 5,500 shares outstanding, being at least two-thirds of each type, class or series outstanding and entitled to vote thereon and of each type, class or series of stock whose rights are adversely affected thereby:-2 C P M R.A. 1 For amendments adopted pursuant to Chapter 164, Section 8. 2 For amendments adopted pursuant to Chapter 184, Section 8A. Note: If the space provided under any Amendment or item on this form is insuffiecient, additions shall be set forth on separate 8 1/2 x 11 sheets of paper leaving a left-hand margin of at least 1 inch for binding. Additions to more than one Amendment may be continued on a single sheet so long as each Amendment requiring each such addition is clearly indicated. To CHANGE the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is: WITHOUT PAR VALUE STOCKS TYPE NUMBER OF SHARES COMMON: PREFERRED: WITH PAR VALUE STOCKS TYPE NUMBER OF SHARES PAR VALUE COMMON: 2,100,000 $2.50 PREFERRED: 15,000 4.80% $100.00 10,000 9.0% $100.00 CHANGE the total authorized to: WITHOUT PAR VALUE STOCKS TYPE NUMBER OF SHARES COMMON: PREFERRED: WITH PAR VALUE STOCKS TYPE NUMBER OF SHARES PAR VALUE COMMON: 2,100,000 $2.50 PREFERRED: 15,000 4.80% $100.00 10,000 9.0% $100.00 80,000 8.4% $100.00 THE BERKSHIRE GAS COMPANY STATEMENT OF THE DESIGNATIONS, PREFERENCES AND VOTING POWERS OR RESTRICTIONS OR QUALIFICATIONS OF THE CLASS B CUMULATIVE PREFERRED STOCK OF THE COMPANY The capital stock of the Company shall include, in addition to the common stock heretofore authorized, 105,000 shares of Cumulative Preferred Stock, of the par value of $100 per share, with the following designations, preferences, voting powers, restrictions and qualifications: Section I. Provisions Applicable to All Shares of Cumulative Preferred Stock (a) All shares of Cumulative Preferred Stock shall be of equal rank with each other, regardless of class or series, and shall be identical with each other in all respects except as otherwise provided herein; and the shares of Cumulative Preferred Stock of any one class or series shall be identical with each other in all respects. (b) In case the stated dividends on each class or series of Cumulative Preferred Stock are not paid in full, the shares of each class or series of Cumulative Preferred Stock shall share ratably in the payment of dividends, including accumulations thereof, if any, in accordance with the sums which would by payable on such shares if all dividends were declared and paid in full. (c) The Cumulative Preferred Stock of each class or series shall be preferred as to assets over the Common Stock, so that the holders of each class or series of Cumulative Preferred Stock shall be entitled to have set apart for them or to be paid out of the assets of the Company, before any distribution is made to or set apart for the holders of Common Stock, and amount in cash equal to and in no event more than (1) in the event of any voluntary liquidation, dissolution or winding up of the Company, the redemption price of such class or series of the Cumulative Preferred Stock which would have been in effect at the time of the distribution or payment date if there had been no such liquidation, dissolution or winding up of the Company, or (2) in the event of involuntary liquidation, dissolution or winding up of the Company, the sum of $100 per share, plus each case an amount equal to all dividends accrued and unpaid to the date of such liquidation, dissolution or winding up, whether or not earned or declared. If upon any liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its stockholders shall be insufficient to permit the distribution in full of the amount receivable by the holders of each class or series of the Cumulative Preferred Stock, then all such assets of the Company shall be distributed ratably among the holders of each class or series of the Cumulative Preferred Stock in proportion to the amounts which such holders would be entitled to receive if such assets were sufficient to permit distribution in full as aforesaid. In the event of any liquidation, dissolution or winding-up of the Company, all assets and funds of the Company remaining after paying or providing for the payment of all creditors of the Company and after paying or providing for the payment to the holders of shares of each class or series of the Cumulative Preferred Stock of the full distribution amounts to which such holders are respectively entitled, as herein provided, shall be divided amount and paid to the holders of the Common Stock according to their respective shares. Neither the consolidation nor merger of the Company with or into any other corporation or corporations, not the sale or transfer by the Company of all or any part of its assets shall in and of itself be deemed to be a liquidation, dissolution or winding up of the Company for the purposes of this paragraph (c). (d) No holder of shares of Cumulative Preferred Stock of any class or series shall be entitled as such as a matter of right to subscribe for or purchase any part of any new or additional issue of any stock of any class, series or kind whatsoever, or securities convertible into stock of any class, series or kind whatsoever, whether now or hereafter authorized, and whether issued for cash, property, services, by way of dividends, or otherwise. (e) (A) At all meetings of the stockholders of the Company, the holders of shares of Cumulative Preferred Stock of any class or series shall have no right to vote and shall not be entitled to notice of any meeting of the stockholders of the Company or to participate in any such meeting except as herein otherwise expressly provided and except for those purposes, if any, for which said rights cannot be denied or waived under some mandatory provision of law which shall be controlling. (B) If and when dividends payable on any shares of Cumulative Preferred Stock of any class or series shall be in default in an amount equivalent to or exceeding four (4) quarterly dividends (whether consecutive or not), the holders of the shares of all classes of the Cumulative Preferred Stock, voting separately as a class, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors, and the holders of the shares of the Common Stock, voting separately as a class, shall be entitled to elect the remaining directors of the Company, anything herein or in the By-Laws to the contrary notwithstanding. The terms of office of all persons who may be directors of the Company at the time shall terminate upon the election of one or more directors by the holders of the shares of the Cumulative Preferred Stock whether or not the holders of the shares of the Common Stock shall then have elected the remaining directors of the Company. (C) If and when all dividends then in default on the shares of the Cumulative Preferred Stock of all classes or series then outstanding shall be paid (and such dividends shall be declared and paid out of any funds legally available therefor as soon as reasonably practicable) and the full dividends on each class or series of the Cumulative Preferred Stock for the then current quarterly dividend period shall have been declared or paid or set apart for payment, the holders of the shares of all classes of Cumulative Preferred Stock shall be divested of all voting rights with respect to the election of directors provided in sub-paragraph (B) of this paragraph (e), and the voting power of the holders of the shares of all classes of Cumulative Preferred Stock and the holders of the shares of the Common Stock shall revert to the status existing before the first dividend payment on which dividends on the shares of all classes or series of Cumulative Preferred Stock were not paid in full; but always subject to the same provisions vesting such voting rights in the holders of the shares of all classes of Cumulative Preferred Stock in case of further like default or defaults on dividends thereon, as provided in subparagraph (B) of this paragraph (e). Upon the termination of any such may have been elected directors of the Company by vote of the holders of the shares of all classes of Cumulative Preferred Stock as a class, pursuant to such voting rights, shall forthwith terminate and the resulting vacancies shall be filled by the vote of a majority of the remaining directors. Any director who shall have been elected by the holders of all classes of Cumulative Preferred Stock or by any directors so elected as herein provided may be removed during such director's aforesaid term of office, either for or without cause, by, and only by, the affirmative votes of the holders of record of a majority of the outstanding shares of all classes of Cumulative Preferred Stock given at a special meeting of such stockholders called for the purpose, and any vacancy thereby created may be filled by the holders of such stock represented at such meeting. (D) In the case of any vacancy int he office of a director occurring among the directors elected by the holders of the shares of all classes of Cumulative Preferred Stock, as a class, pursuant to the foregoing provisions of subparagraph (B) of this paragraph (e), the remaining directors elected by the holders of the shares of all classes of Cumulative Preferred Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there by but one, may, subject to the provisions of subparagraph (c) of this paragraph (e), elect a successor or successors to hold office for the unexpired terms of the director or directors whose place or places shall be vacant. Likewise, in case of any vacancy in the office of a director occurring among the directors elected by the holders of the shares of the Common Stock pursuant to the foregoing provisions of subparagraph (D) of this paragraph (e), the remaining directors elected by the holders of the Common Stock, by affirmative vote of majority thereof or the remaining director so elected if there be but one, may elect a successor or successors to hold office for the unexpired if there be but one, may elect a successor or successors to hold office for the unexpired term of the director or directors whose place or places shall be vacant. (E) Whenever under the provisions of subparagraph (B) of this paragraph (e), the right shall have accrued to the holders of the shares of all classes of Cumulative Preferred Stock to elect directors, the Board of Directors shall, within ten (10) days after the delivery to the company at its principal office of a request to such effect by any holder of shares of any class or series of Cumulative Preferred Stock entitled to vote, call a special meeting of the stockholders, to be held on 20 days' notice. If such meeting shall not be so called within such ten-day period, the holders of record of at least 10% in amount of any class or series of Cumulative Preferred Stock then outstanding, may designate in writing one of their number to call such meeting and the same may be called at the expense of the Company by such persons so designated, upon 20 days' notice. Any holder of any class or series of Cumulative Preferred Stock so designated shall have access to the stock books of the Company for the purpose of causing a meeting of stockholders to be called pursuant to these provisions. At all meetings of stockholders held for the purpose of electing directors during such time as the holders of the shares of all classes of Cumulative Preferred Stock shall have the special right, voting separately as a class, to elect directors pursuant to subparagraph (B) of this paragraph (e), the presence, in person or by proxy, of the holders of a majority of the outstanding shares of each class of stock (i.e. Cumulative Preferred Stock and Common Stock) shall be required to constitute a quorum of such class for the election of directors; provided, however, that the absence of a quorum of the holders of stock of either such class shall not prevent the election at any such meeting or adjournment thereof of directors by the other such class if the necessary quorum of the holders of such stock is present in person or by proxy at such meeting; and provided further that in the event such a quorum of the holders of the shares of the Common Stock is present but such a quorum of the holders of the shares of all classes of Cumulative Preferred Stock is not present then the election of the directors elected by the holders of the shares of the Common Stock shall bot be effective and the directors so elected by the holders of the shares of the Common Stock shall not assume their offices and duties until the holders of the shares of all classes of Cumulative Preferred Stock, with such a quorum present, shall have elected the directors they shall be entitled to elect; and provided further, however, that in the absence of a quorum of the holders of stock of either such class, a majority of those holders of the stock of such class who are present in person or by proxy shall have power to adjourn the lection of the directors to be elected by such class from time to time without notice other than announcement at the meeting until the requisite amount of holders of such class shall be present in person or by proxy, but such adjournment shall bot be made to a date beyond the date for the mailing of notice for the next annual meeting of the Company or a special meeting in lieu thereof. Notwithstanding the foregoing, to the extent permitted by law the holders of the shares of all classes of Cumulative Preferred Stock, by unanimous written consent, may elect such number of directors as they shall be entitled to elect under the provisions of subparagraph (B) of this paragraph (e), without the necessity of a meeting or the observance of the aforesaid notice provisions. (F) Except as otherwise required by the laws applicable to the Company and subject to the right of the Cumulative Preferred Stock of all classes or series (i) to vote in certain events as hereinbefore set forth in this paragraph (e) and (ii) not to have certain corporate action taken without the consent of the holders thereof as set forth herein, the Common Stock shall have the exclusive voting rights for the election of directors and for all other purposes. The Company shall have no voting rights with respect to shares of Cumulative Preferred Stock of all classes or series held in the treasury of the Company. Section II. Provisions Applicable to All Shares of Class B Cumulative Preferred Stock, Series 8.4% (a) 80,000 shares of the Cumulative Preferred Stock shall be and are designated as "Class B Cumulative Preferred Stock, Series 8.4%". (b) The holders of shares of Class B Cumulative Preferred Stock, Series 8.4% shall be entitled to receive cash dividends at the rate of 8.4% per annum of the par value of $100 per share, or $8.40 per share per annum, payable quarterly on the 15th days of January, April, July, and October in each year. (c) The aforesaid dividends shall accrue from the date of original issue and shall be cumulative so that if dividends in respect of any quarterly dividend period at the rate of $8.40 per annum shall not have been paid upon or declared and set apart for the Class B Cumulative Preferred Stock, Series 8.4%, the deficiency shall be fully paid or declared and set apart before any dividend shall be paid upon or declared or set apart for the Common Stock. Dividends on the Class B Cumulative Preferred Stock, Series 8.4% shall be deemed to accrue from day to day. (d) The Company, by action of its Board of Directors, may redeem the whole or any part of the Class B Cumulative Preferred Stock, Series 8.4% at any time or from time to time on or after May 30, 2002, at the following redemption prices: $105.10 per share if redeemed on or after May 30, 2002 but prior to May 30, 2003; $104.76 per share if redeemed on or after May 30, 2003 but prior to May 30, 2004; $104.42 per share if redeemed on or after May 30, 2004 but prior to May 30, 2005; $104.08 per share if redeemed on or after May 30, 2005 but prior to May 30, 2006; $103.74 per share if redeemed on or after May 30, 2006 but prior to May 30, 2007; $103.40 per share if redeemed on or after May 30, 2007 but prior to May 30, 2008; $103.60 per share if redeemed on or after May 30, 2008 but prior to May 30, 2009; $102.72 per share if redeemed on or after May 30, 2009 but prior to May 30, 2010; $102.38 per share if redeemed on or after May 30, 2010 but prior to May 30, 2011; $102.04 per share if redeemed on or after May 30, 2011 but prior to May 30, 2012; $101.70 per share if redeemed on or after May 30, 2012 but prior to May 30, 2013; $101.36 per share if redeemed on or after May 30, 2013 but prior to May 30, 2014; $101.02 per share if redeemed on or after May 30, 2014 but prior to May 30, 2015; $100.68 per share if redeemed on or after May 30, 2015 but prior to May 30, 2016; $100.34 per share if redeemed on or after May 30, 2016 but prior to May 30, 2017; $100.00 per share if redeemed on or after May 30, 2017 and thereafter; together with, in each case, an amount equal to all accrued and unpaid dividends thereon to the date fixed for redemption, whether or not earned or declared. If fewer than all of the outstanding shares of the Class B Cumulative Preferred Stock, Series 8.4% are to be redeemed, the aggregate number of shares so to be redeemed shall be selected by the Board of Directors on a pro rata basis, as fat as practicable, among all holders of such stock. Notice of redemption shall be given as provided in paragraph (f), below. (e) (A) The Company covenants to prepay, on May 30th in each calendar year connecting in the year 2003 (each such May 30th being a "Mandatory Prepayment Date") through and including the year 2017, 5,334 shares (or such lesser number of shares as may then be outstanding) of Class B Cumulative Preferred Stock, Series 8.4% at par value, plus all accrued and unpaid dividends thereon to the Mandatory Prepayment Date(the "Mandatory Prepayment Price"). In the event that there is more than one holder of the Class B Cumulative Preferred Stock, Series 8.4% on the Mandatory Prepayment Date in any given year, the shares to be prepaid shall be selected by the Board of Directors on a pro rata basis, as fat as practicable, among all holders of the Class B Cumulative Preferred Stock, Series 8.4%. Notice of mandatory prepayment shall be given as provided in paragraph (f), below. The foregoing annual obligation (the "Annual Prepayment Obligation") shall be cumulative (but without interest), so that if for any reason the Company shall bot have satisfied its full Annual Prepayment Obligation in any calendar year, then any deficiency shall be added to the Annual Prepayment Obligation for the next succeeding calendar year. The holders of Class B Cumulative Preferred Stock, Series 8.4% shall not have the right to compel the Company to make any mandatory prepayment in the event that the Company shall not have funds legally available therefor; provided, however, that in such case the obligation to make such mandatory prepayment shall be fulfilled by the Company as soon as practicable after such funds become legally available. Until every deficiency in the Annual Prepayment Obligation shall have been paid in full, the holders of the Class B Cumulative Preferred Stock, Series 8.4% shall share ratably with the holders of any other stock ranking on a parity with the Class B Cumulative Preferred Stock, Series 8.4% as to liquidation rights or dividends in the payment of funds in satisfaction of any required redemption, prepayment or other obligation with respect to such stock. (B) Provided that the Company shall have satisfied the Annual Prepayment Obligation for all past years and for the current year, the Company may, at its option, on May 30th in each calendar year commencing in the year 2003 (each such May 30th being an "Optional Prepayment Sate"), prepay 1,200 shares (or such lesser number of shares as may then be outstanding) of Class B Cumulative Preferred Stock, Series 8.4% at par value, plus all accrued and unpaid dividends thereon to the Optional Prepayment Date (the "Optional Prepayment Price"). In the event that there is more than one holder of the Class B Cumulative Preferred Stock, Series 8.4% on the Optional Prepayment Date in any given year, the shares to be prepaid shall be selected by the Board of Directors on a pro rata basis, as far as practicable, among all holders of the Class B Cumulative Preferred Stock, Series 8.4%. Notice of optional prepayment shall be given as provided in paragraph (f), below. Such Company, for any reason, to redeem 1,200 shares of Class B Cumulative Preferred Stock, Series 8.4% pursuant to this subparagraph (e)(B) in any year shall not increase the number of shares redeemable pursuant to this subparagraph (e)(B) in any subsequent year. (f) Not more than 60 nor less than 30 days prior to the date fixed for redemption or prepayment, notice thereof shall be mailed to the holders of record of the shares to be redeemed or prepaid at such holders' respective addresses as the same shall appear on the books of the Company. The notice shall state the date fixed for redemption or prepayment, the applicable redemption or prepayment price and amount of all accrued dividends payable to the date of redemption or prepayment, and the number of shares to be redeemed or prepaid. Such notice shall call upon each stockholder to whom such notice is addressed to surrender to the Company on the date fixed for redemption or prepayment, at the place designated in such notice, such stockholder's certificates representing the shares to be redeemed or prepaid. Notwithstanding the foregoing provisions of this paragraph (f), the Company may enter into a written agreement with any holder of shares of Class B Cumulative Preferred Stock, Series 8.4% providing for (i) special payment instructions regarding the payment by the Company to such holder with respect to any such redemption or prepayment, including the wiring of such payment as directed by such holder ,and (ii) the payment for shares being partially redeemed or prepaid without requiring the surrender bu such holder for cancellation of the certificate evidencing the shares being redeemed or prepaid; provided, that such holder agrees that it will not sell, transfer or otherwise dispose of any such certificate without making notations on the certificate as to the shares evidenced thereby which have been redeemed or prepaid, as the case may be. If the Company shall enter into any such agreement, the aforesaid notice shall be modified to reflect the provisions of such written agreement. On or after the date fixed for redemption or prepayment, each holder of shares of Class B Cumulative Preferred Stock, Series 8.4% so called for redemption or prepayment shall present and surrender such holder's certificate or certificates for such shares to the Company at the place designated in the foregoing written notice and thereupon the redemption or prepayment price of foregoing written notice and thereupon the redemption or prepayment price of such shares together with the amount of accrued dividends thereon payable on the date fixed for redemption or prepayment shall be paid to or on the order of the person whose name appears on the certificate or certificates as the owner thereof. In case fewer than all of the shares represented by any such certificate are redeemed or prepaid, a new certificate shall be issued representing the remaining shares. If notice of redemption or prepayment shall have been duly given as hereinbefore provided, and if on or before the dated fixed for redemption or prepayment all funds necessary for such redemption or prepayment shall have been set aside by the Company, separate and apart from its other funds, in trust for the amount of the holders of the shares to be redeemed or prepaid, so as to be and continue to be available therefor, then, notwithstanding that any certificate for such shares so called for redemption or prepayment shall not have been surrendered for cancellation, from and after the date fixed for redemption or prepayment, the shares represented thereby shall no longer be deemed to be outstanding, the right to receive dividends thereon shall cease to accrue and all rights with respect to such shares so called for redemption or prepayment shall cease and terminate, except only the right of the holders thereof to receive, out of the funds so set aside in trust, the amount payable upon redemption or prepayment thereof, without interest. (g) So long as any shares of the Class B Cumulative Preferred Stock, Series 8.4% are outstanding, the Company shall not pay or declare and set apart for payment any dividend (other than dividends payable in stock junior to the Class B Cumulative Preferred Stock, Series 8.4% with respect to liquidation rights and dividends), or make any other distribution on, or purchase, redeem, prepay, retire, or otherwise acquire for consideration, or set aside any funds for any such acquisition of, any such shares of capital stock ranking junior to the Class B Cumulative Preferred Stock, Series 8.4% unless and until: (A) full dividends on the shares of the Class B Cumulative Preferred Stock, Series 8.4% at the time outstanding for all past quarterly dividend periods and for the current quarterly dividend period shall have been paid or declared and set apart for payment, (B) the Company shall not be in default in respect of the Annual Prepayment Obligation or any other obligation with respect to any voluntary or optional redemption of the Class B Cumulative Preferred Stock, Series 8.4% and (c) after such action the amount of the capital of the Company represented by (i) the then outstanding capital stock of the Company ranking junior to the Class B Cumulative Preferred Stock, Series 8.4% as to liquidation rights and dividends, (ii) the premium on the Company's capital stock and (iii) the Company's surplus (including retained earnings), would be equal to or greater than twice the aggregate par value of all outstanding shares of Class B Cumulative Preferred Stock, Series 8.4% and all shares of any stock ranking prior to or on a parity with the Class B Cumulative Preferred Stock, Series 8.4% as to liquidation rights or dividends. Unless otherwise indicated, the terms "capital", "surplus" and "premium on capital stock", as used herein, shall have the meanings ascribed to them in accordance with generally accepted accounting principles. Subject to the foregoing, this paragraph (g) shall not otherwise prevent the Company from declaring or paying out of funds legally available therefor such dividends on the Common Stock as may be determined by the Board of Directors. (h) (A) So long as any shares of the Class B Cumulative Preferred Stock, Series 8.4% are outstanding, the Company shall not without the consent (given in person or by proxy at a meeting duly called and held for that purpose) of the holders of at least two-thirds of the total number of shares of Class B Cumulative Preferred Stock, Series 8.4% then outstanding: (a) amend, alter, change or repeal any of the rights, privileges, powers, terms and conditions of the Class B Cumulative Preferred Stock, Series 8.4% in any manner that would adversely affect any of the rights of the holders thereof; or (b) sell, lease, transfer or convey all or the greater part of the Company's property or business (provided, however, that his subparagraph (h)(A)(b) shall not be construed to require the consent of the holders of the Class B Cumulative Preferred Stock, Series 8.4% for the issuance of additional bonds under the Company's First Mortgage Indenture and Deed of Trust, dated as of July 1, 1954, as amended); or (c) merge or consolidate with or into another corporation in such manner that the Company does not survive as a continuing entity, if thereby the rights, privileges, preferences, powers, terms or conditions of the Class B Cumulative Preferred Stock, Series 8.4% would be adversely affected; or (d) create, authorize or increase the total authorized amount of any class or series of stock ranking prior to the Class B Cumulative Preferred Stock, Series 8.4% as to assets or dividends, or create, authorize or increase the total authorized amount of any security or right convertible into, or evidencing the right to purchase, shares of any such stock. (B) So long as any shares of the Class B Cumulative Preferred Stock, Series 8.4% are outstanding, the Company shall not, without the consent (given in person or by proxy at a meeting duly called and held for that purpose) of the holders of a majority of the total number of shares of Class B Cumulative Preferred Stock, Series 8.4% then outstanding: (a) create or authorize any stock ranking on a parity with or junior to (except for common stock) Class B Cumulative Preferred Stock, Series 8.4%, as to assets or dividends, or create or authorize any security or right convertible into, or evidencing the right to purchase, shares of any such stock; or (b) issue or sell any shares of any stock ranking on a parity with or junior to (except for common stock) the Class B Cumulative Preferred Stock, Series 8.4% as to assets or dividends, or any security or right convertible into, or evidencing the right to purchase, shares of any such stock; unless, after giving effect to such proposed issue or sale, (i) the net earnings of the Company available for interest and dividends, determined in accordance with generally accepted accounting principles after all taxes and after provision for depreciation and amortization at least equal to the "minimum provisions for depreciation" as hereinafter defined, for twelve (12) consecutive calendar months out of the eighteen (18) months immediately preceding shall be at least one and one-quarter (1-1/4) times the sum of (x) the aggregate annual interest requirements on all "long- term indebtedness", as hereinafter defined, of the Company then outstanding and (y) the aggregate annual dividend requirements on all shares of Class B Cumulative Preferred Stock, Series 8.4% and all shares of any stock ranking prior to or on a parity with the Class B Cumulative Preferred Stock, Series 8.4%, to be outstanding; and (ii) the Company's net earnings available for dividends, determined in accordance with generally accepted accounting principles after all taxes and after provision for depreciation and amortization at least equal to the "minimum provision for depreciation", as hereinafter defined, for twelve (12) consecutive calendar months out of the eighteen (18) months immediately preceding shall be at least one and three-fourths (1-3/4) times the aggregate annual dividend requirements on all shares of Class B Cumulative Preferred Stock, Series 8.4% and all shares of any stock ranking prior to or on a parity with the Class B Cumulative Preferred Stock, Series 8.4%, to be outstanding; and (iii) the Company's capital represented by the then outstanding shares of its stock ranking junior to the Class B Cumulative Preferred Stock, Series 8.4%, plus the Company's surplus (including retained earnings) and any amounts carried as premium on capital stock, would be at least equal to the resulting aggregate par value of all shares of Class B Cumulative Preferred Stock, Series 8.4%, and all shares of any stock ranking prior to or on a parity with the Class B Cumulative Preferred Stock, Series 8.4% , that would be outstanding after giving effect to such proposed issue or sale. The term "minimum provision for depreciation" as used herein shall mean, for any twelve months' period, an amount equal to 2% of the average gross depreciable plant property account of the Company during such period. The term "long term indebtedness" as used herein shall mean all indebtedness which by its terms matures more than one year from the date as of which any calculation of long term indebtedness is made, and any indebtedness maturing within one year from such date which is renewable or extendible at the option of the obligor to a date beyond one year from such date. The term "indebtedness" of the Company shall mean all liability of the Company for the repayment of borrowed money as of the date on which indebtedness is to be determined, including, without limitation, (a) all indebtedness secured by any mortgage, pledge, lien, security agreement, conditional sale or other title retention agreement or other charge or encumbrance existing on any property or asset owned or held by the Company subject thereto, whether or not the indebtedness secured thereby shall have been assumed, and (b) all indebtedness of others which the Company has directly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business), discounted with recourse or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire, or in respect of which the Company has agreed to supply or advance funds (whether by way of loan, stock, purchase, capital contribution or otherwise) or otherwise to become directly or indirectly liable. (C) So long as dividends shall be in arrears on the Class B Cumulative Preferred Stock, Series 8.4% outstanding, or the Company shall be in default with respect to any mandatory prepayment or obligation provided for in subparagraph (e)(A), above, the Company shall not, without the consent (given in person or by proxy at a meeting duly called and held for that purpose) of the holders of a majority of the total number or shares of the Class B Cumulative Preferred Stock, Series 8.4% then outstanding, purchase, offer to purchase, redeem, prepay, retire or otherwise acquire for a consideration, or set aside any funds for any such acquisition of, any shares of Class B Cumulative Preferred Stock, Series 8.4%; provided, however, that any funds deposited in trust for the purchase or redemption in accordance with such terms, whether or not at the time of such application such arrearage or default is continuing under the provisions hereof. (D) A consent of the character referred to in subparagraphs (A), (B) or (C) Of this paragraph (h) shall also be deemed to be effective upon the consent in writing, without a meeting, of all the then outstanding shares of Class B Cumulative Preferred Stock, Series 8.4%. (E) The foregoing provisions as to vote or consent shall not apply if, in connection with any of the matters mentioned in subparagraphs (A), (B) or (C) above, provision is to be made for the redemption, prepayment or retirement of all of the outstanding Class B Cumulative Preferred Stock, Series 8.4%. (F) In the event of any voluntary liquidation, dissolution or winding up of the Company, the redemption price of the Class B Cumulative Preferred Stock, Series 8.4% shall be (i) if the liquidation, dissolution or winding up occurs at any time on or after May 30, 2002, a price per share equal to the redemption price set forth in Section II(d) for an optional redemption at that time, or (ii) if the liquidation, dissolution or winding up occurs on a date which is prior to May 30, 2003, a price per share equal to the sum of (A) $105.10 plus (B) an amount equal to $0.34 multiplied by the number of full calendar years occurring during the period beginning with such date and ending on and including May 30, 2003. (G) For the purposes of paragraph (h), outstanding shares of the Class B Cumulative Preferred Stock, Series 8.4% shall not include shares held in the treasury of the Company. (i) All or any shares of the Class B Cumulative Preferred Stock, Series 8.4% at any time redeemed, prepaid, purchased or acquired by the Company shall not under any circumstances be reissued or otherwise disposed of by the Company and each surrendered certificate for shares so redeemed shall be canceled. (j) The rights and remedies herein granted to holders of the Class B Cumulative Preferred Stock, Series 8.4% shall be in addition to all other rights and remedies to which such holders may be otherwise entitled by law. 398196 THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 164, SECTION 8A I hereby approve the within articles of amendment and, the filing fee in the amount of $8,100 having been paid, said articles are deemed to have been filed with me this 18th day of June, 1992. MICHAEL J. CONNOLLY Secretary of State TO BE FILLED IN BY CORPORATION PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO: Rich, May, Bilodeau & Flaherty, P.C. Attn: Carol E. Kazmer, Esq. 294 Washington Street Boston, Massachusetts 02108 Telephone: (617) 482-1360 Telephone: THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL J. CONNOLLY, SECRETARY ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 164, SECTION 8B No. 04-1731220 We, Scott S. Robinson, President, and Cheryl M. Clark, clerk of The Berkshire Gas Company located at 115 Cheshire Road, Pittsfield, Massachusetts, 01201 do hereby certify that these ARTICLES OF AMENDMENT affecting Articles NUMBERED: 3 of the Articles of Organization were duly adopted at a meeting held on November 10, 1993, by a vote of: 1,151,323 shares of Common Stock, out of 1,741,950 outstanding. being at least a majority of each type, class or series outstanding and entitled to vote. To CHANGE the name of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is: WITHOUT PAR VALUE STOCKS TYPE NUMBER OF TYPE NUMBER OF PAR SHARES SHARES VALUE COMMON COMMON 2,100,000 $ 2.50 PREFERRED PREFERRED 15,000 4.8% $100.00 10,000 9.0% $100.00 CHANGE the total authorized to: TYPE NUMBER OF TYPE NUMBER OF PAR SHARES SHARES VALUE COMMON COMMON 2,600,000 $ 2.50 PREFERRED PREFERRED 15,000 4.8% $100.00 10,000 9.0% $100.00 80,000 8.4% $100.00 VOTED: That the Charter Agreement of Association and Articles of Organization of this Company be, and the same hereby are, amended to increase the authorized capital stock of the Company by creating an additional 500,000 shares of the Company's Common Stock, $2.50 par value, thereby increasing the number of authorized shares of said Common Stock from 2,100,000 to 2,600,000 shares, such shares to be issued as purposes, subject to the requisite approval of the Massachusetts Department of Public Utilities. The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 164, Section 8B of the General Laws. IN WITNESS WHERE OF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed our names of this day of in the year . President Clerk THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 164, SECTION 8B I hereby approve the within articles of amendment and, the filing fee in the amount of $ , having been paid, said articles are deemed to have been filed with me this day of , 19 . MICHAEL J. CONNOLLY SECRETARY OF STATE PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO: Rich, May, Bilodeau & Flaherty, P.C. Attn: Eric J. Krathwohl, Esq. 294 Washington St. Boston, MA 02108 Telephone (617) 482-1360 THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES August 20, 1996 D.P.U. 96-64 Application and Petition of The Berkshire Gas Company to the Department of Public Utilities pursuant to Sections 8 and 14 of Chapter 164 of the General Laws for approval and authorization to issue and sell on a negotiated basis a Senior Note in an aggregate principal amount of up to $16,000,000; to issue and sell not in excess of 200,000 shares of Common Stock, $2.50 par value, pursuant to the Company's Share Owner Dividend Reinvestment and Stock Purchase Plan; for an exemption from the advertising and competitive bid requirements of Section 15 of Chapter 164 of the General Laws; and for such other actions as may be deemed necessary or appropriate in connection with the foregoing. APPEARANCES: Eric J. Krathwohl, Esq. Emmett E. Lyne, Esq. Rich, May, Bilodeau & Flaherty, P.C. 294 Washington Street Boston, Massachusetts 02108 FOR: THE BERKSHIRE GAS COMPANY Petitioner I. INTRODUCTION On June 13, 1996, The Berkshire Gas Company ("Berkshire" or "Company") filed a petition with the Department of Public Utilities ("Department") pursuant to G.L. c. 164, para. 8, 14, and 15, for approval and authorization of: (1) the issuance and sale of up to $16,000,000 in a Senior Note at 7.8 percent; (2) the issuance and sale of not more than 200,000 shares of common stock, $2.50 par value, through a Share Owner Dividend Reinvestment and Stock Purchase Plan ("Plan"); and (3) an exemption from the advertising and competitive bidding requirements of G.L. c. 164, para. 15. The Company's petition was docketed as D.P.U. 96-64. Pursuant to notice duly issued, a public hearing was held at the Department's offices on July 24, 1996. In support of its petition, the Company presented the testimony of Michael J. Marrone, vice president, treasurer and chief financial officer; and Shaun E. Sprague, manager of general accounting. The evidentiary record includes five exhibits and two record requests. There were no intervenors in the case. II. DESCRIPTION OF THE PROPOSED FINANCING A. Issuance of Up To $16,000,000 in a Senior Note Berkshire Gas seeks authorization from the Department to issue and sell, up to $16,000,000 in a Senior Note, with a maturity of 25 years, at a fixed interest rate of 7.8 percent (Tr. at 5). The Company stated that the proposed issuance and sale of up to $16,000,000 in a Senior Note is to be used to finance the purchase of a portion of the Company's debt prior to its maturity (Exh. BGC-1, at 5,7).*1 The Company stated that at the time of the financing, interest rates for long term debt instruments were significantly lower than some of the Company's outstanding debt (id. at 6). The Company further stated that the issuance and sale of up to $16,000,000 in a Senior Note at the rate of 7.8 percent resulted in savings on a pro forma annual basis of approximately $288,000 per year (Tr. at 15). The Company stated that it proposes to pay for the premium associated with the redemptions by accumulating the unamortized debt issuance expense on the repurchased debt, adding to that the premium paid to call the existing debt, and amortizing the total over the life of the Senior Note (Exh. BGC-1,at 8) *1 The Company stated that it evaluated the refinancing costs associated with the following debt: Series K an M Bonds at 7.875 and 9.375 percent, respectively; an outstanding public debenture series at a rate of 9.25 percent; and preferred stock at 8.4 percent (Tr. at 12- 13). The Company stated that there were savings, though minimal, associated with the redemption of the Series K and M bonds which had no premium associated with the purchase (id. at 12). The Company stated that although there was a three percent premium associated with calling the public debenture series, the Company concluded that this redemption was also cost-justified (id.at 13). The Company stated that it realized substantial savings via an income tax deduction of 40 percent for dividends on debt issuances by converting its 8.4 percent preferred stock to debt(Exhs. BGC-1 at 7, BGC-3, Att. B at 2; Tr. at 13-14). The Company stated it negotiated to sell the Senior Note to a single purchaser, First Colony Life Insurance Company of Virginia ("First Colony"), which is also the holder of Berkshire's 8.4 percent preferred stock (id. at 8). The Company stated that the 7.8 percent rate of the proposed financing was arrived at after extensive negotiations between First Colony and First Albany Corporation ("First Albany"), the Company's investment bank (id. at 8-9). The Company further stated that the 7.8 percent rate is competitive with market rates (id. at 8). B. Issuance of Common Shares Pursuant to the Plan Berkshire Gas seeks authorization from the Department to issue and sell, from time to time, not in excess of 200,000 shares of Common Stock, $2.50 par value, through the continued operation of the Plan. The Company is currently authorized to issue and sell up to 100,000 shares of common stock through the Plan (Exh. BGC-5, at 2);*2 Berkshire Gas Company, D.P.U. 93-182 (1990). *2 The Company noted that of the 100,000 shares authorized by the Department in D.P.U. 93-182, 47,400 were outstanding on March 31, 1996 (Exh. BGC-5, at 2-3). The Company anticipates that during the calendar year 1996, an additional 46,000 shares will be purchased under the Plan which will be deplete the remaining supply of authorized shares pursuant to D.P.U. 93-182 (id. at 3). Under the Plan, participants have the option to reinvest cash dividends automatically on all or a portion of their shares of common stock or to purchase common stock at any time in any amount from a minimum of fifteen dollars in any calendar month to a maximum of five thousand dollars in any calendar month (Exh. BGC-4, at 1; Tr. at 21).*3 The Company stated that the Plan will be administered by the Plan Committee appointed by the Company's Board of Directors (Exh. BGC-4, at 4). *3 All holders of record of ten or more common shares of the Company who are not employed by the Company and all employees of the Company owning of record one or more shares are eligible to participate in the Plan (Exh. BGC-4, at 5). The Company stated that the price for the stock under the Plan would be set at 97 percent of the average of the bid and the asked price of the Company's common shares in the over-the-counter market during the period of five days preceding the purchase date (Exh. BGC-5, at 3) The Company stated that the three percent discount may be suspended at any time, at the Company's discretion, and would be required to be suspended by the terms of the Plan in the event that the discounted price of the Company's shares falls below the book value of the stock (id.). The Company stated that the Plan provides significant benefits to the Company, its shareholders, and customers as it provides funds for capital improvements at a very inexpensive cost (Exh. BGC-2, at 5; Tr. at 21). C. Use of Proceeds The Company stated that the proceeds from the proposed issue and sale of up to $16,000,000 in a Senior Note and up to 200,000 shares of common stock pursuant to the Plan will be used to repay short term borrowings that were used to call the higher interest rate bonds, debentures, and higher cost preferred stock of the Company (Exhs. BGC-1, at 6; BGC-5, at 4-5). In addition, the Company stated that proceeds will be used for financing additions to the Company's property, plant and equipment and/or repayment of short term dept incurred from time to time by the Company (Exh. BGC-2, at 5). The Company asserted that the issuance of shares and use of proceeds is consistent with the Company's traditional method of financing capital additions temporarily through short term borrowing or internally generated funds and later permanently financing such additions by the issuance of equity securities or long term indebtedness (id.). The Company stated that the Company's Board of Directors authorized the sale and issuance of the proposed financing on June 4, 1996 (Exh. BGC-3, Att. A). D. Exemption from G.L. c. 164, & 15 In addition, the Company requests exemption from the advertising and competitive bidding requirements of G.L. c. 164, par. 15. The Company stated that a negotiated, private sale rather than a public sale is more favorable as the size of the offering would not likely attract bids on the open market, and the costs of bidding, advertising, and issuance associated with a public sale are much greater (Exh. BGC-5, at 4). The Company stated that it chose First Albany as its investment banker on the basis of cost- effectiveness as well as its long-standing relationship with First Albany and First Albany's unique relationship with First Colony (Exh. BGC-1, at 9; Tr. at 23).*4 *4 The Company noted that First Albany acted as the Company's investment banker for several other sales of dept and equity capital, including the sale of the 8.4 percent preferred issuance to First Colony (Tr. at 24). III. CAPITAL STRUCTURE OF THE COMPANY The Company provided financial statements and an analysis of its capital structure as of March 31, 1996 (Exh. BGC-3, Schs. 2-6). The Company's financial statements indicate that as of March 31, 1996, Berkshire had: (1) $5,345,000 of common stock (2,137,963 shares at par value of $2.50); (2) $8,406,000 of preferred stock ($406,000 preferred stock, 4.8 Percent Series plus $8,000,000 preferred stock, 8.4 Percent Series); and (3) $16,147,000 premium on capital stock for a total of $29,898,000 of shareholder equity (id., Sch 4).*5 The Company also has long-term debt of $24,000,000 (id.). The Company indicated that total securities outstanding equalled $53,898,000 (id.). The Company's utility plant in service of $95,328,000, less accumulated depreciation of $25,057,000 equalled a net utility plant of $70,271,000 (id.). The Company determined an excess of net utility plant to total securities of $16,373,000, as of March 31,1996 (id.). After making pro forma adjustments including the redemption of the $8,000,000 preferred stock, the Company estimated that the excess of net utility plant to total securities after issuance of up to $16,000,000 in a Senior Note and the 200,000 shares of common stock pursuant to the Plan for which it is petitioning for approval equals $5,273,000 (id.). At the time of the hearing, the Company indicated that its financial statement had not changed since March 31, 1996 (Tr. at 22). *5 The Company determined total securities by adding common stock (at par), premium on common stock, preferred stock, and long-term debt excluding retained earnings (Exh. BGC-3, Sch. 4). IV. STANDARD OF REVIEW In order for the Department to approve the issuance of stocks, bonds, coupon notes, or other types of long-term indebtedness*6 by an electric or gas company, the Department must determine that the proposed issuance meets two tests. First, the Department must assess whether the proposed issuance is reasonably necessary to accomplish some legitimate purpose in meeting a company's service obligations, pursuant to G.L. c. 164 para.14. Fitchburg Gas & Electric Light Company v. Department of Public Utilities, 395 Mass. 836, 842 (1985) ("Fitchburg II"), citing Fitchburg Gas & Electric Light Company v. Department of Public Utilities, 394 Mass. 671, 678 (1985) ("Fitchburg I"). Second, the Department must determine whether the Company has met the net plant test.*7 Colonial Gas Company, D.P.U. 84-96 (1984). *6Long-term refers to periods of more than one year after the date of issuance. G.L. c. 164, para. 14. *7 The net plant test is derived from G.L. c. 164 para. 16. The Court has found that, for the purposes of G.L. c. 164, para. 14, "reasonably necessary" means "reasonably necessary for the accomplishment of some purpose having to do with the obligations of the company to the public and its ability to carry out those obligations with the greatest possible efficiency." Fitchburg II at 836, citing Lowell Gas Light Company v. Department of Public Utilities, 319 Mass. 46, 52 (1946). In cases where no issue exists about the reasonableness of management decisions regarding the requested financing, the Department limits its Section 14 review to the facial reasonableness of the purpose to which the proceeds of the proposed issuance will be put. Canal Electric Company, et al., D.P.U. 84-152, at 20 (1984); see, e.g., Colonial Gas Company, D.P.U. 90-50. at 6 (1990). The Fitchburg I and II and Lowell Gas cases also established that the burden of proving that an issuance is reasonably necessary rests with the company proposing the issuance, and that the Department's authority to review a proposed issuance "is not limited to a 'perfunctory review.'" Fitchburg I at 678; Fitchburg II at 842, citing Lowell Gas at 52. Regarding the net plant test, a company is required to present evidence that its net utility plant (original cost of capitalizable plant, less accumulated depreciation) equals or exceeds its total capitalization (the sum of its long-term debt and its preferred and common stock outstanding) and will continue to do so following the proposed issuance. Colonial Gas Company, D.P.U. 84-96, at 5 (1984). Pursuant to G.L. c. 164, para. 15, an electric or gas company offering long-term bonds or notes in excess of $1 million in face amount payable at periods of more than five years after the date thereof must invite purchase proposals through newspaper advertisements. The Department may grant an exemption from this advertising requirement if the Department finds that an exemption is in the public interest. G.L. c. 164 para. 15. The Department has found it in the public interest to grant an exemption from the advertising requirement where there has been a measure of competition in private placement. See, e.g., Western Massachusetts Electric Company, D.P.U. 88-32, at 5 (1988); Eastern Edison Company, D.P.U. 88-127, at 11-12 (1988); Berkshire Gas Company, D.P.U. 89-12, at 11 (1989). The Department also has found that it is in the public interest to grant a company an exemption from the advertising requirement when a measure of flexibility is necessary in order for a company to enter the bond market in a timely manner. See, e.g., Western Massachusetts Electric Company, D.P.U. 88-32, at 5 (1988). However, G.L. c. 164, para. 15 requires advertising as the general rule; and waiver cannot be automatic but must be justified whenever requested. Where issues concerning the prudence of the Company's capital financing have not been raised or adjudicated in a proceeding, the Department's decision in such a case does not represent a determination that any specific project is economically beneficial to a company or to its customers. In such circumstances, the Department's determination in its Order may not in any way be construed as ruling on the appropriate ratemaking treatment to be accorded any costs associated with the proposed financing. See, e.g., Boston Gas Company, D.P.U. 95-66, at 7 (1995). V. ANALYSIS AND FINDINGS Based on the foregoing, the Department finds that the proposed issuance of up to $16,000,000 in a Senior Note with a term of twenty-five years and bearing an interest rate of 7.8 percent per annum and the proposed issuance and sale of up to 200,000 shares of common stock under the Plan is reasonably necessary to repay short term borrowings that were used to call the higher interest rate bonds, debentures, and higher cost preferred stock of the Company as well as to finance additions to the Company's property, plant and equipment and repay short term borrowings incurred from time to time by the Company. As such, the Department finds that the proposed issuance and sale of up to $16,000,000 in a Senior Note and up to 200,000 shares of common stock pursuant to the Plan is reasonably necessary to accomplish some legitimate purpose in meeting the Company's service obligations in accordance with G.L. c. 164, para. 14. The Department further finds that the costs associated with the proposed financing, including costs associated with the redemption of the preferred stock and debt securities should be amortized over the life of the Senior Note. In regard to the net plant test, the Department finds that the Company's proposed financing meets the net plant test, since the Company's net utility plant equals or exceeds its total capitalization and will continue to do so following the proposed issuance. Regarding the Company's request for an exemption from the requirements of G.L. c. 164, para. 15, we find that it is appropriate to allow the Company the flexibility offered by the private placement process in order to assist the Company in responding to market conditions and to take advantage of prevailing interest rates. The record in this case further demonstrates that the Company ensured a competitive rate through the private placement process. Therefore, the Department finds that it is in the public interest to exempt the Company from the advertisement and bidding requirements of G.L. c. 164, para. 15. VI. ORDER Accordingly, after due notice, hearing, and consideration, the Department VOTES: That the issuance and sale by Berkshire Gas Company of a Senior Note in the aggregate principal amount of up to $16,000,000 is reasonably necessary for the purpose for which the Company has petitioned; and it FURTHER VOTES: That the issuance and sale, from time to time, by Berkshire Gas Company of not in excess of 200,000 shares common stock, $2.50 par value, pursuant to its Share Owner Dividend Reinvestment and Stock Purchase Plan, is reasonably necessary for the purpose for which the Company has petitioned; and it is ORDERED: That the Department hereby approves and authorizes the issue and sale of a Senior Note in the aggregate principal amount of up to $16,000,000, to bear interest at a rate of 7.8 percent, due to mature not later than 25 years from the date of issue; and it is FURTHER ORDERED: That the Department hereby approves and authorizes the issuance and sale from time to time of not in excess of an additional 200,000 shares of common stock, $2.50, par value, pursuant to its Share Owner Dividend Reinvestment and Stock Purchase Plan; and it is FURTHER ORDERED: That the costs associated with the proposed financing, including costs associated with the redemption of the preferred stock and debt securities, be amortized over the life of the Senior Note; and it is FURTHER ORDERED: That the issuance and sale by Berkshire Gas Company of a Senior Note in the aggregate principal amount of up to $16,000,000, without inviting proposals for the purchase thereof by publication in certain designated newspapers, is in the public interest, and such issue shall be exempt from the provisions of G.L. c. 164, par 15; and it is FURTHER ORDERED: That the net proceeds from such sale of all such securities shall be used for the purposes as set forth herein; and it is FURTHER ORDERED: That the Secretary of the Department shall within three days of the issuance of this Order cause a certified copy of it to be filed with the Secretary of the Commonwealth. By Order of the Department, John B. Howe, Chairman Mary Clark Webster, Commissioner A true copy Attest; Janet Gail Besser, Commissioner Mary L. Cottrell Secretary D.P.U. 96-64 Appeal as to matters of law from any final decision, order or ruling of the Commission may be taken to the Supreme Judicial Court by an aggrieved party in interest by the filing of a written petition praying that the Order of the Commission be modified or set aside in whole or in part. Such petition for appeal shall be filed with the Secretary of the Commission within twenty days after the date of service of the decision, order or ruling of the Commission, or within such further time as the Commission may allow upon request filed prior to the expiration of twenty days after the date of service of said decision, order or ruling. Within ten days after such petition has been filed, the appealing party shall enter the appeal in the Supreme Judicial Court sitting in Suffolk County by filing a copy thereof with the Clerk of said Court. (Sec. 5, Chapter 25, G.L. Ter. Ed., as most recently amended by Chapter 485 of the Acts of 1971). The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 164, Section 8B of The General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. EFFECTIVE DATE: IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed our names this 6th day of September, in the year 1996. President Clerk THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 164, Section 8B) I hereby approve the within articles of amendment and, the filing fee in the amount of $500 having been paid, said articles are deemed to have been filed with me this 10th day of September, 1996. William Francis Golvin Secretary of the Commonwealth State House, Boston, Mass. TO BE FILLED IN BY CORPORATION TO: Franklin M. Hundley, Esquire Rich, May, Bilodeau & Flaherty 294 Washington Street Boston, Massachusetts, 02108 EX-4 3 EXHIBIT 4 SENIOR NOTE AGREEMENT Draft of Thursday, November 14, 1996 =============================================================================== THE BERKSHIRE GAS COMPANY NOTE AGREEMENT Dated as of November 1, 1996 Re: $16,000,000 7.80% Senior Notes Due November 15, 2021 =============================================================================== TABLE OF CONTENTS (Not a part of the Agreement)
SECTION HEADING PAGE Parties ........................................................................ 1 SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT. .......................... 1 Section 1.1. Description of Notes .......................................... 1 Section 1.2. Commitment, Closing Date ...................................... 1 Section 1.3. Redemption of 8.4% Preferred Stock ............................ 2 SECTION 2. PREPAYMENT OF NOTES. .......................................... 2 Section 2.1. Required Prepayments .......................................... 2 Section 2.2. Optional Prepayment with Premium .............................. 2 Section 2.3. Notice of Optional Prepayments ................................ 3 Section 2.4. Application of Prepayments .................................... 3 Section 2.5. Direct Payment ................................................ 3 SECTION 3. REPRESENTATIONS. .............................................. 3 Section 3.1. Representations of the Company ................................ 3 Section 3.2. Representations of the Purchaser .............................. 4 SECTION 4. CLOSING CONDITIONS ............................................ 4 Section 4.1. Conditions .................................................... 4 Section 4.2. Waiver of Conditions .......................................... 5 SECTION 5. COMPANY COVENANTS ............................................. 5 Section 5.1. Corporate Existence, Etc ...................................... 5 Section 5.2. Insurance ..................................................... 5 Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws ... 5 Section 5.4. Maintenance, Etc .............................................. 6 Section 5.5. Nature of Business ............................................ 6 Section 5.7. Limitations on Restricted Subsidiary Debt ..................... 6 Section 5.8. Fixed Charges Coverage Ratio .................................. 7 Section 5.9. Limitation on Liens ........................................... 7 Section 5.10. Restricted Payments ........................................... 8 Section 5.11. Mergers, Consolidations and Sales of Assets ................... 9 Section 5.12. Guaranties .................................................... 11 Section 5.13. Repurchase of Notes ........................................... 11 Section 5.14. Transactions with Affiliates .................................. 11 Section 5.15. Termination of Pension Plans .................................. 12 Section 5.16. Designation of Restricted Subsidiaries ........................ 12 Section 5.17. Reports and Rights of Inspection .............................. 12 SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR ....................... 15 Section 6.1. Events of Default ............................................. 15 Section 6.2. Notice to Holders ............................................. 16 Section 6.3. Acceleration of Maturities .................................... 16 Section 6.4. Rescission of Acceleration .................................... 17 SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS .............................. 17 Section 7.1. Consent Required .............................................. 17 Section 7.2. Solicitation of Holders ....................................... 18 Section 7.3. Effect of Amendment or Waiver ................................. 18 SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS ...................... 18 Section 8.1. Definitions ................................................... 18 Section 8.2. Accounting Principles ......................................... 27 Section 8.3. Directly or Indirectly ........................................ 27 SECTION 9. MISCELLANEOUS ................................................. 28 Section 9.1. Registered Notes .............................................. 28 Section 9.2. Exchange of Notes ............................................. 28 Section 9.3. Loss, Theft, Etc. of Notes .................................... 28 Section 9.4. Conversion of Notes to First Mortgage Bond .................... 28 Section 9.5. Expenses, Stamp Tax Indemnity ................................. 30 Section 9.6. Powers and Rights Not Waived; Remedies Cumulative ............. 30 Section 9.7. Notices ....................................................... 30 Section 9.8. Successors and Assigns ........................................ 31 Section 9.9. Survival of Covenants and Representations ..................... 31 Section 9.10. Severability .................................................. 31 Section 9.11. Governing Law ................................................. 31 Section 9.12. Captions ...................................................... 31 Signature Page ................................................................. 32
ATTACHMENTS TO NOTE AGREEMENT: Schedule I -- Name of Note Purchaser Schedule II -- Liens Securing Debt (including Capitalized Leases) as of the Closing Date Exhibit A -- Form of 7.80% Senior Note due November 15, 2021 Exhibit B -- Representations and Warranties of the Company Exhibit C -- Description of Special Counsel's Closing Opinion Exhibit D -- Description of Closing Opinion of Counsel to the Company THE BERKSHIRE GAS COMPANY 115 Cheshire Road Pittsfield, Massachusetts 01201 NOTE AGREEMENT Re: $16,000,000 7.80% Senior Notes Due November 15, 2021 Dated as of November 1, 1996 First Colony Life Insurance Company 700 Main Street, P.O. Box 1980 Lynchburg, Virginia 24505 The undersigned, THE BERKSHIRE GAS COMPANY, a Massachusetts corporation (the "Company"), agrees with you as follows: SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT. Section 1.1. Description of Notes. The Company will authorize the issue and sale of $16,000,000 aggregate principal amount of its 7.80% Senior Notes (the "Notes") to be dated the date of issue, to bear interest from such date at the rate of 7.80% per annum, payable quarterly on the fifteenth day of each February, May, August and November in each year commencing February 15, 1997 and at maturity and to bear interest on overdue principal (including any overdue required prepayment of principal or any overdue optional prepayment of principal pursuant to [SECTION]2.2) and premium, if any, and (to the extent legally enforceable) on any overdue installment of interest at the rate of 8.80% per annum after the date due, whether by acceleration or otherwise, until paid, to be expressed to mature on November 15, 2021, and to be substantially in the form attached hereto as Exhibit A. Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months. The Notes are not subject to prepayment at the option of the Company prior to their expressed maturity dates except on the terms and conditions and in the amounts and with the premium, if any, set forth in [SECTION]2 of this Agreement. The term "Notes" as used herein shall include each Note delivered pursuant to this Agreement. You are sometimes hereinafter referred to as the "Purchaser". Section 1.2. Commitment, Closing Date. Subject to the terms and conditions hereof and on the basis of the representations and warranties hereinafter set forth, the Company agrees to issue and sell to you and you agree to purchase from the Company the entire issue of the Notes at a price equal to the principal amount thereof on the Closing Date hereinafter mentioned. Delivery of the Notes will be made at the offices of Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, against payment therefor in Federal Reserve or other funds current and immediately available at the principal office of Fleet Bank of Massachusetts, National Association, ABA Number 011000138, Malden, Massachusetts, to the account of The Berkshire Gas Company, Account Number 00112144, in the amount of the purchase price at 10:00 A.M. Chicago, Illinois time, on November 15, 1996 or such later date (not later than November 30, 1996) as shall mutually be agreed upon by the Company and the Purchaser (the "Closing Date"). The Notes delivered to you on the Closing Date will be in the form of a single registered Note in the form attached hereto as Exhibit A for the full amount of your purchase (unless different denominations are specified by you), registered in your name or in the name of your nominee, all as may be specified in Schedule I attached hereto. Section 1.3. Redemption of 8.4% Preferred Stock. Concurrently with the issuance of the Notes by the Company on the Closing Date, the Company will redeem 80,000 shares of its Class B Cumulative Preferred Stock, Series 8.4% (the "8.4% Preferred Stock") which are held by you at a price of $117.00 per share plus the dividend accrued on such shares to the Closing Date, to be paid to you in exchange for your delivery to the Company on the Closing Date of the stock certificates representing such 8.4% Preferred Stock. SECTION 2. PREPAYMENT OF NOTES. Section 2.1. Required Prepayments. The Company agrees that on November 15 in each year, commencing November 15, 2011 and ending November 15, 2020, both inclusive, it will prepay and apply and there shall become due and payable on the principal indebtedness evidenced by the Notes an amount equal to the lesser of (i) $1,454,545.45 or (ii) the principal amount of the Notes then outstanding. The entire remaining principal amount of the Notes shall become due and payable on November 15, 2021. No premium shall be payable in connection with any required prepayment made pursuant to this [SECTION]2.1. For purposes of this [SECTION]2.1, any prepayment of less than all of the outstanding Notes pursuant to [SECTION]2.2 shall be deemed to be applied first, to the amount of principal scheduled to be paid on November 15, 2021, and then to the remaining scheduled principal payments in inverse chronological order. In the event of any purchase or other acquisition by the Company of less than all of the Notes, the amount of the payment required at maturity and each prepayment required to be made pursuant to this [SECTION]2.1 shall be reduced in the proportion that the principal amount of such purchase or other acquisition bears to the unpaid principal amount of the Notes immediately prior to such purchase or other acquisition (after giving effect to any prepayment made pursuant to this [SECTION]2.1 on the date of such purchase or other acquisition). Section 2.2. Optional Prepayment with Premium. In addition to the payments required by [SECTION]2.1, upon compliance with [SECTION]2.3 the Company shall have the privilege, at any time and from time to time, of prepaying the outstanding Notes, either in whole or in part (but if in part then in a minimum principal amount of $100,000) by payment of the principal amount of the Notes, or portion thereof to be prepaid, and accrued interest thereon to the date of such prepayment, together with a premium equal to the Make-Whole Amount, determined as of five business days prior to the date of such prepayment pursuant to this [SECTION]2.2. Section 2.3. Notice of Optional Prepayments. The Company will give notice of any prepayment of the Notes pursuant to [SECTION]2.2 to each Holder thereof not less than 30 days nor more than 60 days before the date fixed for such optional prepayment specifying (i) such date, (ii) the principal amount of the Holder's Notes to be prepaid on such date, (iii) that a premium may be payable, (iv) the date when such premium will be calculated, (v) the estimated premium, and (vi) the accrued interest applicable to the prepayment. Such notice of prepayment shall also certify all facts, if any, which are conditions precedent to any such prepayment. Notice of prepayment having been so given, the aggregate principal amount of the Notes specified in such notice, together with accrued interest thereon and the premium, if any, payable with respect thereto shall become due and payable on the prepayment date specified in said notice. Not later than two business days prior to the prepayment date specified in such notice, the Company shall provide each Holder written notice of the premium, if any, payable in connection with such prepayment and, whether or not any premium is payable, a reasonably detailed computation of the Make-Whole Amount. Section 2.4. Application of Prepayments. All partial prepayments pursuant to [SECTION]2.1 or [SECTION]2.2 shall be applied on all outstanding Notes ratably in accordance with the unpaid principal amounts thereof. Section 2.5. Direct Payment. Notwithstanding anything to the contrary contained in this Agreement or the Notes, in the case of any Note owned by any Holder that is the Purchaser or any other Institutional Holder which has given written notice to the Company requesting that the provisions of this [SECTION]2.5 shall apply, the Company will punctually pay when due the principal thereof, interest thereon and premium, if any, due with respect to said principal, without any presentment thereof, directly to such Holder at its address set forth in Schedule I hereto or such other address as such Holder may from time to time designate in writing to the Company or, if a bank account with a United States bank is so designated for such Holder, the Company will make such payments in immediately available funds to such bank account, marked for attention as indicated, or in such other manner or to such other account in any United States bank as such Holder may from time to time direct in writing. SECTION 3. REPRESENTATIONS. Section 3.1. Representations of the Company. The Company represents and warrants that all representations and warranties set forth in Exhibit B are true and correct as of the date hereof and are incorporated herein by reference with the same force and effect as though herein set forth in full. Section 3.2. Representations of the Purchaser. The Purchaser represents, and in entering into this Agreement the Company understands, that the Purchaser is acquiring the Notes for the purpose of investment and not with a view to the distribution thereof, and that the Purchaser has no present intention of selling, negotiating or otherwise disposing of the Notes; it being understood, however, that the disposition of the Purchaser's property shall at all times be and remain within its control. The Purchaser further represents that the source of funds to be used by it to purchase the Notes is an "insurance company general account" within the meaning of Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) and the purchase of the notes by the Purchaser is eligible for exemption under, and satisfies the requirements of, PTE 95-60. SECTION 4. CLOSING CONDITIONS. Section 4.1. Conditions. Your obligation to purchase the Notes on the Closing Date and present the 8.4% Preferred Stock for redemption pursuant to [SECTION]1.3 hereof shall be subject to the performance by the Company of its agreements hereunder which by the terms hereof are to be performed at or prior to the time of delivery of the Notes and to the following further conditions precedent: (a) Closing Certificate. You shall have received a certificate dated the Closing Date, signed by the President or the Chief Financial Officer of the Company, the truth and accuracy of which shall be a condition to your obligation to purchase the Notes proposed to be sold to you and to the effect that (i) the representations and warranties of the Company set forth in Exhibit B hereto are true and correct on and with respect to the Closing Date, (ii) the Company has performed all of its obligations hereunder which are to be performed on or prior to the Closing Date, and (iii) no Default or Event of Default has occurred and is continuing. (b) Legal Opinions. You shall have received from Chapman and Cutler, who are acting as your special counsel in this transaction, and from Rich, May, Bilodeau & Flaherty, P.C., counsel for the Company, their respective opinions dated the Closing Date, in form and substance satisfactory to you, and covering the matters set forth in Exhibits C and D, respectively, hereto. (c) Regulatory Approval. You shall have obtained an order issued by the Massachusetts Department of Public Utilities (the "DPU") authorizing the issue and sale of the Notes, which authorization shall not contain any conditions burdensome to the Company and which authorization shall be final and the statutory appeal period for which shall have expired. (d) Private Placement Number. A private placement number for the Notes shall have been obtained from Standard and Poor's Corporation. (e) Rating of the Notes. You shall have received satisfactory evidence that the Notes have been accorded a current rating of "2" or better from the National Association of Insurance Commissioners. (f) Payment of Fees and Disbursements of Special Counsel. The Company shall have paid the reasonable fees and disbursements of Chapman and Cutler, special counsel to the Purchaser. (g) Satisfactory Proceedings. All proceedings taken in connection with the transactions contemplated by this Agreement, and all documents necessary to the consummation thereof, shall be satisfactory in form and substance to you and your special counsel, and you shall have received a copy (executed or certified as may be appropriate) of all legal documents or proceedings taken in connection with the consummation of said transactions. Section 4.2. Waiver of Conditions. If on the Closing Date the Company fails to tender to you the Notes to be issued to you on such date or if the conditions specified in [SECTION]4.1 have not been fulfilled, you may thereupon elect to be relieved of all further obligations under this Agreement. Without limiting the foregoing, if the conditions specified in [SECTION]4.1 have not been fulfilled, you may waive compliance by the Company with any such condition to such extent as you may in your sole discretion determine. Nothing in this [SECTION]4.2 shall operate to relieve the Company of any of its obligations hereunder or to waive your rights against the Company. SECTION 5. COMPANY COVENANTS. From and after the Closing Date and continuing so long as any amount remains unpaid on any Note: Section 5.1. Corporate Existence, Etc. The Company will preserve and keep in full force and effect, and will cause each Restricted Subsidiary to preserve and keep in full force and effect, its corporate existence and all licenses and permits necessary to the proper conduct of its business; provided, however, that the foregoing shall not prevent any transaction permitted by [SECTION]5.11. Section 5.2. Insurance. The Company will maintain, and will cause each Restricted Subsidiary to maintain, insurance coverage by financially sound and reputable insurers in such forms and amounts and against such risks as are customary for corporations of established reputation engaged in the same or a similar business and owning and operating similar properties. Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws. The Company will promptly pay and discharge, and will cause each Restricted Subsidiary promptly to pay and discharge, all lawful taxes, assessments and governmental charges or levies imposed upon the Company or such Restricted Subsidiary, respectively, or upon or in respect of all or any part of the property or business of the Company or such Restricted Subsidiary, all trade accounts payable in accordance with usual and customary business terms, and all claims for work, labor or materials, which if unpaid might become a Lien upon any property of the Company or such Restricted Subsidiary; provided, however, that the Company or such Restricted Subsidiary shall not be required to pay any such tax, assessment, charge, levy, account payable or claim if (i) the validity, applicability or amount thereof is being contested in good faith by appropriate actions or proceedings which will prevent the forfeiture or sale of any property of the Company or such Restricted Subsidiary or any material interference with the use thereof by the Company or such Restricted Subsidiary, and (ii) the Company or such Restricted Subsidiary shall set aside on its books, reserves deemed by it to be adequate with respect thereto. The Company will promptly comply and will cause each Restricted Subsidiary to comply with all laws, ordinances or governmental rules and regulations to which it is subject including, without limitation, the Occupational Safety and Health Act of 1970, as amended, ERISA and all laws, ordinances, governmental rules and regulations relating to environmental protection in all applicable jurisdictions, the violation of which could materially and adversely affect the properties, business, prospects, profits or condition of the Company and its Restricted Subsidiaries or would result in any Lien not permitted under [SECTION]5.9. Section 5.4. Maintenance, Etc. The Company will maintain, preserve and keep, and will cause each Restricted Subsidiary to maintain, preserve and keep, its properties which are used or useful in the conduct of its business (whether owned in fee or a leasehold interest) in good repair and working order and from time to time will make all necessary repairs, replacements, renewals and additions so that at all times the efficiency thereof shall be maintained. Section 5.5. Nature of Business. Neither the Company nor any Restricted Subsidiary will engage in any business if, as a result, the general nature of the business, taken on a consolidated basis, which would then be engaged in by the Company and its Restricted Subsidiaries would be substantially changed from the general nature of the business engaged in by the Company and its Restricted Subsidiaries on the Closing Date. For purposes of the preceding sentence, the general nature of the business of the Company and its Restricted Subsidiaries shall not be deemed to be substantially changed from that engaged in on the Closing Date so long as not less than 80% of the net sales of the Company and its Restricted Subsidiaries for any fiscal year ending after the Closing Date shall be derived from energy operations and related businesses of the Company and its Restricted Subsidiaries. Section 5.6. Limitations on Consolidated Funded Debt. The Company will at all times maintain Consolidated Funded Debt in an aggregate amount which does not exceed 65% of Consolidated Adjusted Capitalization. Section 5.7. Limitations on Restricted Subsidiary Debt. (a) The Company will not permit any Restricted Subsidiary to create, incur or assume or in any manner become liable in any respect of any Debt, if at the time of creation, incurrence or assumption thereof or becoming liable therefor and after giving effect thereto and the application of the proceeds thereof the aggregate amount of Debt of the Company's Restricted Subsidiaries would exceed an amount equal to 15% of Consolidated Adjusted Total Capitalization. (b) Any corporation which becomes a Restricted Subsidiary after the date hereof shall for all purposes of this [SECTION]5.7 be deemed to have created, assumed or incurred at the time it becomes a Restricted Subsidiary all Debt of such corporation existing immediately after it becomes a Restricted Subsidiary. Section 5.8. Fixed Charges Coverage Ratio. The Company will keep and maintain the ratio of Net Income Available for Fixed Charges to Fixed Charges for each period of four consecutive fiscal quarters at not less than 1.50 to 1.00. Section 5.9. Limitation on Liens. The Company will not, and will not permit any Restricted Subsidiary to, create or incur, or suffer to be incurred or to exist, any Lien on its or their property or assets, whether now owned or hereafter acquired, or upon any income or profits therefrom, or transfer any property for the purpose of subjecting the same to the payment of obligations in priority to the payment of its or their general creditors, or acquire or agree to acquire, or permit any Restricted Subsidiary to acquire, any property or assets upon conditional sales agreements or other title retention devices, except: (a) Liens for property taxes and assessments or governmental charges or levies and Liens securing claims or demands of mechanics and materialmen, provided payment thereof is not at the time required by [SECTION]5.3; (b) Liens of or resulting from any judgment or award, the time for the appeal or petition for rehearing of which shall not have expired, or in respect of which the Company or a Restricted Subsidiary shall at any time in good faith be prosecuting an appeal or proceeding for a review and in respect of which a stay of execution pending such appeal or proceeding for review shall have been secured; (c) Liens incidental to the conduct of business or the ownership of properties and assets (including Liens in connection with worker's compensation, unemployment insurance and other like laws, warehousemen's and attorneys' liens and statutory landlords' liens) and Liens to secure the performance of bids, tenders or trade contracts, or to secure statutory obligations, surety or appeal bonds or other Liens of like general nature incurred in the ordinary course of business and not in connection with the borrowing of money; provided in each case, the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings; (d) minor survey exceptions or minor encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to the use of real properties, which are necessary for the conduct of the activities of the Company and its Restricted Subsidiaries or which customarily exist on properties of corporations engaged in similar activities and similarly situated and which do not in any event materially impair their use in the operation of the business of the Company and its Restricted Subsidiaries; (e) Liens securing Indebtedness of a Restricted Subsidiary to the Company or to another Wholly-owned Restricted Subsidiary; (f) Liens existing as of the Closing Date and reflected in Schedule II hereto; (g) Liens incurred after the Closing Date given to secure the payment of the purchase price incurred in connection with the acquisition of fixed assets useful and intended to be used in carrying on the business of the Company or a Restricted Subsidiary, including Liens existing on such fixed assets at the time of acquisition thereof or at the time of acquisition by the Company or a Restricted Subsidiary of any business entity then owning such fixed assets, whether or not such existing Liens were given to secure the payment of the purchase price of the fixed assets to which they attach so long as they were not incurred, extended or renewed in contemplation of such acquisition, provided that (i) the Lien shall attach solely to the fixed assets acquired or purchased, (ii) at the time of acquisition of such fixed assets, the aggregate amount remaining unpaid on all Debt secured by Liens on such fixed assets whether or not assumed by the Company or a Restricted Subsidiary shall not exceed an amount equal to 80% (or 100% in the case of Capitalized Leases) of the lesser of the total purchase price or fair market value at the time of acquisition of such fixed assets (as determined in good faith by the Board of Directors of the Company), (iii) all such Debt shall have been incurred within the applicable limitations provided in [SECTION][SECTION]5.6 and 5.7 and (iv) the aggregate Debt secured by such Liens does not exceed an amount equal to 10% of Consolidated Adjusted Total Assets; and (h) Liens other than those described in clauses (a) through (g) of this [SECTION]5.9 created or incurred after the Closing Date given to secure Debt of the Company or any Restricted Subsidiary, provided that after giving effect to such Debt and to the application of the proceeds thereof (1) all Debt of the Company and its Restricted Subsidiaries secured by Liens (other than Debt secured by Liens excepted or permitted by the foregoing clauses (a) through (g) of this [SECTION]5.9) shall not exceed 10% of Consolidated Adjusted Total Assets, and (2) all such Debt shall have been incurred within the applicable limitations provided in [SECTION][SECTION]5.6 and 5.7; provided, further that no Additional First Mortgage Bonds may be issued pursuant to this [SECTION]5.9(h) unless on or prior to the issuance of such Additional First Mortgage Bonds, all outstanding Notes shall have been converted into First Mortgage Bonds in compliance with [SECTION]9.4. Section 5.10. Restricted Payments. The Company will not except as hereinafter provided: (a) Declare or pay any dividends, either in cash or property, on any shares of its capital stock of any class (except dividends or other distributions payable solely in shares of capital stock of the Company); (b) Directly or indirectly, or through any Subsidiary, purchase, redeem or retire any shares of its capital stock of any class or any warrants, rights or options to purchase or acquire any shares of its capital stock (other than in exchange for or out of the net cash proceeds to the Company from the substantially concurrent issue or sale of other shares of capital stock of the Company or warrants, rights or options to purchase or acquire any shares of its capital stock); or (c) Make any other payment or distribution, either directly or indirectly or through any Subsidiary, in respect of its capital stock; (such declarations or payments of dividends, purchases, redemptions or retirements of capital stock and warrants, rights or options and all such other payments or distributions being herein collectively called "Restricted Payments"), if after giving effect thereto any Event of Default shall have occurred and be continuing or Consolidated Adjusted Tangible Net Worth shall be less than $23,000,000. The Company will not declare any dividend which constitutes a Restricted Payment payable more than 60 days after the date of declaration thereof. For the purposes of this [SECTION]5.10, the amount of any Restricted Payment declared, paid or distributed in property shall be deemed to be the greater of the book value or fair market value (as determined in good faith by the Board of Directors of the Company) of such property at the time of the making of the Restricted Payment in question. Section 5.11. Mergers, Consolidations and Sales of Assets. (a) The Company will not, and will not permit any Restricted Subsidiary to, (i) consolidate with or be a party to a merger with any other corporation or (ii) sell, lease or otherwise dispose of all or any substantial part (as defined in paragraph (d) of this [SECTION]5.11) of the assets of the Company and its Restricted Subsidiaries; provided, however, that: (1) any Restricted Subsidiary may merge or consolidate with or into the Company or any Wholly-owned Restricted Subsidiary so long as in any merger or consolidation involving the Company, the Company shall be the surviving or continuing corporation; (2) the Company may consolidate or merge with any other corporation so long as (i) if the Company shall be the surviving or continuing corporation, (y) at the time of such consolidation or merger and after giving effect thereto no Default or Event of Default shall have occurred and be continuing, and (z) after giving effect to such consolidation or merger a Restricted Subsidiary would be permitted to incur at least $1.00 of additional Debt under the provisions of [SECTION]5.7, and (ii) if the surviving or continuing corporation is not the Company, (v) the corporation which results from such merger or consolidation shall be incorporated under the laws of the United States or any state thereof, have substantially all of its assets and the assets of its Subsidiaries located within the United States and be engaged principally in the ownership and operation of a regulated public utility, (w) such resulting entity shall execute and deliver to the registered Holders of the Notes an agreement satisfactory in form and substance to such Holders ratifying and confirming this Agreement and the Notes and expressly assuming the due and punctual payment of the principal and premium, if any, and interest on all of the Notes, according to their tenor, and the due and punctual performance and observance of all of the covenants in the Notes and this Agreement to be performed and observed by the Company, (x) at the time of such consolidation or merger and after giving effect thereto no Default or Event of Default shall have occurred and be continuing, (y) after giving effect to such consolidation or merger the subsidiaries of such surviving corporation would be permitted to incur at least $1.00 of additional Debt pursuant to [SECTION]5.7, and (z) the surviving corporation shall deliver to the registered Holders of the Notes an opinion, satisfactory in form and substance to the registered Holders of the Notes, of counsel satisfactory to the registered Holders of the Notes, to the effect that all requirements of this [SECTION]5.11(a)(2) have been satisfied; and (3) any Restricted Subsidiary may sell, lease or otherwise dispose of all or any substantial part of its assets to the Company or any Wholly-owned Restricted Subsidiary. (b) The Company will not permit any Restricted Subsidiary to issue or sell any shares of stock of any class (including as "stock" for the purposes of this [SECTION]5.11, any warrants, rights or options to purchase or otherwise acquire stock or other Securities exchangeable for or convertible into stock) of such Restricted Subsidiary to any Person other than the Company or a Wholly-owned Restricted Subsidiary, except for the purpose of qualifying directors, or except in satisfaction of the validly pre-existing preemptive rights of minority shareholders in connection with the simultaneous issuance of stock to the Company and/or a Restricted Subsidiary whereby the Company and/or such Restricted Subsidiary maintain their same proportionate interest in such Restricted Subsidiary. (c) The Company will not sell, transfer or otherwise dispose of any shares of stock of any Restricted Subsidiary (except to qualify directors) or any Indebtedness of any Restricted Subsidiary, and will not permit any Restricted Subsidiary to sell, transfer or otherwise dispose of (except to the Company or a Wholly-owned Restricted Subsidiary) any shares of stock or any Indebtedness of any other Restricted Subsidiary, unless: (1) simultaneously with such sale, transfer, or disposition, all shares of stock and all Indebtedness of such Restricted Subsidiary at the time owned by the Company and by every other Restricted Subsidiary shall be sold, transferred or disposed of as an entirety; (2) the Board of Directors of the Company shall have determined, as evidenced by a resolution thereof, that the proposed sale, transfer or disposition of said shares of stock and Indebtedness is in the best interests of the Company; (3) said shares of stock and Indebtedness are sold, transferred or otherwise disposed of to a Person, for a cash consideration and on terms reasonably deemed by the Board of Directors to be adequate and satisfactory; (4) the Restricted Subsidiary being disposed of shall not have any continuing investment in the Company or any other Restricted Subsidiary not being simultaneously disposed of; and (5) such sale or other disposition does not involve a substantial part (as hereinafter defined) of the assets of the Company and its Restricted Subsidiaries. (d) As used in this [SECTION]5.11, a sale, lease or other disposition of assets shall be deemed to be a "substantial part" of the assets of the Company and its Restricted Subsidiaries if the book value of such assets, when added to the book value of all other assets sold, leased or otherwise disposed of by the Company and its Restricted Subsidiaries (other than in the ordinary course of business) during the 12-month period ending with the date of such sale, lease or other disposition, exceeds 10% of Consolidated Adjusted Total Assets, determined as of the end of the immediately preceding fiscal year; provided, however, that assets shall not be deemed to be sold, leased or otherwise disposed of for purposes of the computations required by the preceding provisions of this paragraph to the extent that the net proceeds therefrom remaining after satisfying any indebtedness secured by such assets shall, within 180 days from the date of such sale, lease or disposition thereof by the Company or its Restricted Subsidiary, as the case may be, either (i) be used to purchase capital assets for the Company and/or its Restricted Subsidiaries of a nature similar to and having a value at least equal to, the assets sold to obtain such proceeds, or (ii) applied to prepay the Notes or other Funded Debt of the Company or its Restricted Subsidiaries which is not subordinated to the Notes in right of payment. Section 5.12. Guaranties. The Company will not, and will not permit any Restricted Subsidiary to, become or be liable in respect of any Guaranty except Guaranties by the Company which are limited in amount to a stated maximum dollar exposure or which constitute Guaranties of obligations incurred by any Restricted Subsidiary in compliance with the provisions of this Agreement. Section 5.13. Repurchase of Notes. Neither the Company nor any Restricted Subsidiary or Affiliate, directly or indirectly, may repurchase or make any offer to repurchase any Notes unless an offer has been made to repurchase Notes, pro rata, from all Holders at the same time and upon the same terms. In case the Company repurchases or otherwise acquires any Notes, such Notes shall immediately thereafter be canceled and no Notes shall be issued in substitution therefor. Without limiting the foregoing, upon the repurchase or other acquisition of any Notes by the Company, any Restricted Subsidiary or any Affiliate (or upon the agreement of Company, any Restricted Subsidiary or any Affiliate to purchase or otherwise acquire any Notes), such Notes shall no longer be outstanding for purposes of any section of this Agreement relating to the taking by the Holders of any actions with respect hereto, including, without limitation, [SECTION]6.3, [SECTION]6.4 and [SECTION]7.1. Section 5.14. Transactions with Affiliates. The Company will not, and will not permit any Restricted Subsidiary to, enter into or be a party to any transaction or arrangement with any Affiliate (including, without limitation, the purchase from, sale to or exchange of property with, or the rendering of any service by or for, any Affiliate), except in the ordinary course of and pursuant to the reasonable requirements of the Company's or such Restricted Subsidiary's business and upon fair and reasonable terms no less favorable to the Company or such Restricted Subsidiary than would obtain in a comparable arm's-length transaction with a Person other than an Affiliate. Section 5.15. Termination of Pension Plans. The Company will not and will not permit any Subsidiary to withdraw from any Multiemployer Plan or permit any employee benefit plan maintained by it to be terminated if such withdrawal or termination could result in withdrawal liability (as described in Part 1 of Subtitle E of Title IV of ERISA) or the imposition of a Lien on any property of the Company or any Subsidiary pursuant to Section 4068 of ERISA. Section 5.16. Designation of Restricted Subsidiaries. The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary by giving written notice within 30 days after such designation to each Holder that the Board of Directors of the Company has made such designation, provided, however, that no Unrestricted Subsidiary may be designated a Restricted Subsidiary unless, at the time of such action and after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing, and (ii) the Restricted Subsidiaries would be permitted to incur at least $1.00 of additional Debt under the provisions of [SECTION]5.7(a). A Restricted Subsidiary may not be designated or otherwise become an Unrestricted Subsidiary. Section 5.17. Reports and Rights of Inspection. The Company will keep, and will cause each Restricted Subsidiary to keep, proper books of record and account in which full and correct entries will be made of all dealings or transactions of, or in relation to, the business and affairs of the Company or such Restricted Subsidiary, in accordance with GAAP consistently applied (except for changes disclosed in the financial statements furnished to the Holders pursuant to this [SECTION]5.17 and concurred in by the independent public accountants referred to in [SECTION]5.17(b) hereof), and will furnish to each Holder (in duplicate if so specified below or otherwise requested): (a) Quarterly Statements. As soon as available and in any event within 45 days after the end of each quarterly fiscal period (except the last) of each fiscal year, copies of: (1) consolidated balance sheets of the Company and its Restricted Subsidiaries as of the close of such quarterly fiscal period, setting forth in comparative form the consolidated figures for the fiscal year then most recently ended, (2) consolidated statements of income of the Company and its Restricted Subsidiaries for such quarterly fiscal period and for the portion of the fiscal year ending with such quarterly fiscal period, in each case setting forth in comparative form the consolidated figures for the corresponding periods of the preceding fiscal year, and (3) consolidated statements of cash flows of the Company and its Restricted Subsidiaries for the portion of the fiscal year ending with such quarterly fiscal period, setting forth in comparative form the consolidated figures for the corresponding period of the preceding fiscal year, all in reasonable detail and certified as complete and correct by an authorized financial officer of the Company; provided, however, that so long as the Company has no Unrestricted Subsidiaries and so long as such delivery is made within the time requirement set forth above in this paragraph (a), delivery pursuant to paragraph (d) below of copies of the Quarterly Report on Form 10-Q of the Company for such quarterly period prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this paragraph (a); (b) Annual Statements. As soon as available and in any event within 90 days after the close of each fiscal year of the Company, copies of: (1) consolidated balance sheets of the Company and its Restricted Subsidiaries as of the close of such fiscal year, and (2) consolidated statements of income and retained earnings and cash flows of the Company and its Restricted Subsidiaries for such fiscal year, in each case setting forth in comparative form the consolidated figures for the preceding fiscal year, all in reasonable detail and accompanied by a report thereon of Deloitte & Touche LLP or another firm of independent public accountants of recognized national standing selected by the Company to the effect that the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company and its Restricted Subsidiaries as of the end of the fiscal year being reported on and the consolidated results of the operations and cash flows for said year in conformity with GAAP and that the examination of such accountants in connection with such financial statements has been conducted in accordance with generally accepted auditing standards and included such tests of the accounting records and such other auditing procedures as said accountants deemed necessary in the circumstances; provided, however, that so long as the Company has no Unrestricted Subsidiaries and so long as such delivery is made within the time requirement set forth above in this paragraph (b), delivery pursuant to paragraph (d) below of copies of the Annual Report on Form 10-K of the Company for such fiscal year (together with the Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Securities Exchange Act) prepared in accordance with the requirements therefor filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this paragraph (b); (c) Audit Reports. Promptly upon receipt thereof, one copy of each interim or special audit made by independent accountants of the books of the Company or any Restricted Subsidiary and any management letter received from such accountants in connection with such interim or special audits; (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 to stockholders generally and of each regular or periodic report, and any registration statement or prospectus filed by the Company or any Subsidiary with any securities exchange or the Securities and Exchange Commission or any successor agency, and copies of any orders in any proceedings to which the Company or any of its Subsidiaries is a party, issued by any governmental agency, Federal or state, having jurisdiction over the Company or any of its Subsidiaries; (e) ERISA Reports. Promptly upon the occurrence thereof, written notice of (i) a Reportable Event with respect to any Plan; (ii) the institution of any steps by the Company, any ERISA Affiliate, the PBGC or any other person to terminate any Plan; (iii) the institution of any steps by the Company or any ERISA Affiliate to withdraw from any Plan; (iv) a non-exempt "prohibited transaction" within the meaning of Section 406 of ERISA in connection with any Plan; (v) any material increase in the contingent liability of the Company or any Restricted Subsidiary with respect to any post- retirement welfare liability; or (vi) the taking of any action by, or the threatening of the taking of any action by, the Internal Revenue Service, the Department of Labor or the PBGC with respect to any of the foregoing; (f) Officer's Certificates. Within the periods provided in paragraphs (a) and (b) above, a certificate of an authorized financial officer of the Company stating that such officer has reviewed the provisions of this Agreement and setting forth: (i) the information and computations (in sufficient detail) required in order to establish whether the Company was in compliance with the requirements of [SECTION]5.6 through [SECTION]5.15 at the end of the period covered by the financial statements then being furnished, and (ii) whether there existed as of the date of such financial statements and whether, to the best of such officer's knowledge, there exists on the date of the certificate or existed at any time during the period covered by such financial statements any Default or Event of Default and, if any such condition or event exists on the date of the certificate, specifying the nature and period of existence thereof and the action the Company is taking and proposes to take with respect thereto; (g) Accountant's Certificates. Within the period provided in paragraph (b) above, a certificate of the accountants who render an opinion with respect to such financial statements, stating that they have reviewed this Agreement and stating further whether, in making their audit, such accountants have become aware of any Default or Event of Default under any of the terms or provisions of this Agreement insofar as any such terms or provisions pertain to or involve accounting matters or determinations, and if any such condition or event then exists, specifying the nature and period of existence thereof; (h) Unrestricted Subsidiaries. Within the respective periods provided in paragraphs (a) and (b) above, financial statements of the character and for the dates and periods as in said paragraphs (a) and (b) provided covering each Unrestricted Subsidiary (or groups of Unrestricted Subsidiaries on a consolidated basis); and (i) Requested Information. With reasonable promptness, such other data and information as such Institutional Holder may reasonably request. Without limiting the foregoing, the Company will permit each Institutional Holder (or such Persons as such Institutional Holder may designate), to visit and inspect, under the Company's guidance, any of the properties of the Company or any Restricted Subsidiary, to examine all of their books of account, records, reports and other papers, to make copies and extracts therefrom and to discuss their respective affairs, finances and accounts with their respective officers, employees, and independent public accountants (and by this provision the Company authorizes said accountants to discuss with any Institutional Holder the finances and affairs of the Company and its Restricted Subsidiaries) all at such reasonable times and as often as may be reasonably requested. The Company shall not be required to pay or reimburse any Holder for expenses which such Holder may incur in connection with any such visitation or inspection, except that if such visitation or inspection is made during any period when a Default or an Event of Default shall have occurred and be continuing, the Company agrees to reimburse such Holder for all such expenses promptly upon demand. SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR. Section 6.1. Events of Default. Any one or more of the following shall constitute an "Event of Default" as such term is used herein: (a) Default shall occur in the payment of interest on any Note when the same shall have become due and such default shall continue for more than five days; or (b) Default shall occur in the making of any required prepayment on any of the Notes as provided in [SECTION]2.1; or (c) Default shall occur in the making of any other payment of the principal of any Note or premium, if any, thereon at the expressed or any accelerated maturity date or at any date fixed for prepayment; or (d) Default shall be made in the payment when due (whether by lapse of time, by declaration, by call for redemption or otherwise) of the principal of or interest on any Debt (other than the Notes) of the Company or any Restricted Subsidiary in an aggregate amount exceeding $1,000,000 and such default shall continue beyond the period of grace, if any, allowed with respect thereto; or (e) Default or the happening of any event shall occur under any indenture, agreement or other instrument under which any Debt of the Company or any Restricted Subsidiary may be issued and such default or event shall continue for a period of time sufficient to permit the acceleration of the maturity of such Debt of the Company or any Restricted Subsidiary outstanding thereunder in an aggregate amount exceeding $1,000,000; or (f) Default shall occur in the observance or performance of any covenant or agreement contained in [SECTION]5.6 through [SECTION]5.11; or (g) Default shall occur in the observance or performance of any other provision of this Agreement which is not remedied within 30 days after the earlier of (i) the day on which the Company first obtains knowledge of such default, or (ii) the day on which written notice thereof is given to the Company by any Holder; or (h) Any representation or warranty made by the Company herein, or made by the Company in any statement or certificate furnished by the Company in connection with the consummation of the issuance and delivery of the Notes or furnished by the Company pursuant hereto, is untrue in any material respect as of the date of the issuance or making thereof; or (i) Final judgment or judgments for the payment of money aggregating in excess of $100,000 is or are outstanding against the Company or any Restricted Subsidiary or against any property or assets of either and any one of such judgments has remained unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period of 30 days from the date of its entry; or (j) A custodian, liquidator, trustee or receiver is appointed for the Company or any Restricted Subsidiary or for the major part of the property of either and is not discharged within 30 days after such appointment; or (k) The Company or any Restricted Subsidiary becomes insolvent or bankrupt, is generally not paying its debts as they become due or makes an assignment for the benefit of creditors, or the Company or any Restricted Subsidiary applies for or consents to the appointment of a custodian, liquidator, trustee or receiver for the Company or such Restricted Subsidiary or for the major part of the property of either; or (l) Bankruptcy, reorganization, arrangement or insolvency proceedings, or other proceedings for relief under any bankruptcy or similar law or laws for the relief of debtors, are instituted by or against the Company or any Restricted Subsidiary and, if instituted against the Company or any Restricted Subsidiary, are consented to or are not dismissed within 60 days after such institution. Section 6.2. Notice to Holders. When any Event of Default described in the foregoing [SECTION]6.1 has occurred, or if any Holder or the holder of any other evidence of Funded Debt or Current Debt of the Company gives any notice or takes any other action with respect to a claimed default, the Company agrees to give notice within three business days of such event to all Holders. Section 6.3. Acceleration of Maturities. When any Event of Default described in paragraph (a), (b) or (c) of [SECTION]6.1 has happened and is continuing, any Holder may, and when any Event of Default described in paragraphs (d) through (j), inclusive, of said [SECTION]6.1 has happened and is continuing, any Holder or Holders holding 25% or more of the principal amount of Notes at the time outstanding may, by notice to the Company, declare the entire principal and all interest accrued on all Notes to be, and all Notes 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. When any Event of Default described in paragraph (k) or (l) of [SECTION]6.1 has occurred, then all outstanding Notes shall immediately become due and payable without presentment, demand or notice of any kind. Upon the Notes becoming due and payable as a result of any Event of Default as aforesaid, the Company will forthwith pay to the Holders, the entire principal and interest accrued on the Notes and, to the extent not prohibited by applicable law, an amount as liquidated damages for the loss of the bargain evidenced hereby (and not as a penalty) equal to the Make- Whole Amount, determined as of the date on which the Notes shall so become due and payable. No course of dealing on the part of the Holder or Holders nor any delay or failure on the part of any Holder to exercise any right shall operate as a waiver of such right or otherwise prejudice such Holder's rights, powers and remedies. The Company further agrees, to the extent permitted by law, to pay to the Holder or Holders all reasonable costs and expenses incurred by them in the collection of any Notes upon any default hereunder or thereon, including reasonable compensation to such Holder's or Holders' attorneys for all services rendered in connection therewith. Section 6.4. Rescission of Acceleration. The provisions of [SECTION]6.3 are subject to the condition that if the principal of and accrued interest on all or any outstanding Notes have been declared immediately due and payable by reason of the occurrence of any Event of Default described in paragraphs (a) through (j), inclusive, of [SECTION]6.1, the Holders holding 66-2/3% in aggregate principal amount of the Notes then outstanding may, by written instrument filed with the Company, rescind and annul such declaration and the consequences thereof, provided that at the time such declaration is annulled and rescinded: (a) no judgment or decree has been entered for the payment of any monies due pursuant to the Notes or this Agreement; (b) all arrears of interest upon all the Notes and all other sums payable under the Notes and under this Agreement (except any principal, interest or premium on the Notes which has become due and payable solely by reason of such declaration under [SECTION]6.3) shall have been duly paid; and (c) each and every other Default and Event of Default shall have been made good, cured or waived pursuant to [SECTION]7.1; and provided further, that no such rescission and annulment shall extend to or affect any subsequent Default or Event of Default or impair any right consequent thereto. SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS. Section 7.1. Consent Required. Any term, covenant, agreement or condition of this Agreement may, with the consent of the Company, be amended or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), if the Company shall have obtained the consent in writing of the Holders holding at least 66-2/3% in aggregate principal amount of outstanding Notes; provided, however, that without the written consent of all of the Holders, no such amendment or waiver shall be effective (i) which will change the time of payment (including any prepayment required by [SECTION]2.1) of the principal of or the interest on any Note or change the principal amount thereof or change the rate of interest thereon, or (ii) which will change any of the provisions with respect to optional prepayments, or (iii) which will change the percentage of Holders required to consent to any such amendment or waiver of any of the provisions of this [SECTION]7 or [SECTION]6. Section 7.2. Solicitation of Holders. So long as there are any Notes outstanding, the Company will not solicit, request or negotiate for or with respect to any proposed waiver or amendment of any of the provisions of this Agreement or the Notes unless each Holder (irrespective of the amount of Notes then owned by it) shall be informed thereof by the Company and shall be afforded the opportunity of considering the same and shall be supplied by the Company with sufficient information to enable it to make an informed decision with respect thereto. The Company will not, directly or indirectly, pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, to any Holder as consideration for or as an inducement to entering into by any Holder of any waiver or amendment of any of the terms and provisions of this Agreement or the Notes unless such remuneration is concurrently offered, on the same terms, ratably to all Holders. Section 7.3. Effect of Amendment or Waiver. Any such amendment or waiver shall apply equally to all of the Holders and shall be binding upon them, upon each future Holder and upon the Company, whether or not any Note shall have been marked to indicate such amendment or waiver. No such amendment or waiver shall extend to or affect any obligation not expressly amended or waived or impair any right consequent thereon. SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS. Section 8.1. Definitions. Unless the context otherwise requires, the terms hereinafter set forth when used herein shall have the following meanings and the following definitions shall be equally applicable to both the singular and plural forms of any of the terms herein defined: "Additional First Mortgage Bonds" shall mean First Mortgage Bonds issued after the Closing Date other than (i) bonds issued in exchange for, in connection with a transfer of the ownership of, or as a replacement for lost, mutilated, stolen or destroyed, First Mortgage Bonds which are outstanding on the Closing Date and (ii) First Mortgage Bonds issued to the Holders of the Notes upon conversion of the Notes pursuant to [SECTION]9.4. "Additional Funded Debt" shall mean the amount, if any, by which (i) the lowest average of the highest balances of Consolidated Current Debt outstanding on any three consecutive Current Debt Test Dates during the 12- month period immediately preceding any date of determination exceeds (ii) the Current Debt Basket Amount for such date. "Affiliate" shall mean any Person (other than a Restricted Subsidiary) (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Company, (ii) which beneficially owns or holds 5% or more of any class of the Voting Stock of the Company or (iii) 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 Stock, by contract or otherwise. "Agreement" shall mean this Note Agreement. "Capitalized Lease" shall mean any lease the obligation for Rentals with respect to which is required to be capitalized on a consolidated balance sheet of the lessee and its subsidiaries in accordance with GAAP. "Capitalized Rentals" of any Person shall mean as of the date of any determination thereof the amount at which the aggregate Rentals due and to become due under all Capitalized Leases under which such Person is a lessee would be reflected as a liability on a consolidated balance sheet of such Person. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Company" shall mean The Berkshire Gas Company, a Massachusetts corporation, and any Person who succeeds to all, or substantially all, of the assets and business of The Berkshire Gas Company. "Consolidated Adjusted Tangible Net Worth" shall mean Consolidated Tangible Net Worth less Restricted Investments. "Consolidated Adjusted Total Assets" shall mean (a) total assets of the Company and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP, less (b) Restricted Investments. "Consolidated Adjusted Capitalization" shall mean (a) the sum of (i) Consolidated Tangible Net Worth plus (ii) Consolidated Funded Debt, less (b) Restricted Investments. "Consolidated Adjusted Total Capitalization" shall mean (a) the sum of (i) Consolidated Tangible Net Worth plus (ii) Consolidated Total Debt, less (b) Restricted Investments. "Consolidated Current Debt" shall mean Current Debt of the Company and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP. "Consolidated Funded Debt" shall mean Funded Debt of the Company and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP plus Additional Funded Debt. "Consolidated Net Income" for any period shall mean the gross revenues of the Company and its Restricted Subsidiaries for such period less all expenses and other proper charges (including taxes on income), determined on a consolidated basis after eliminating earnings or losses attributable to outstanding Minority Interests, but excluding in any event: (a) any gains or losses on the sale or other disposition of Investments or fixed or capital assets, and any taxes on such excluded gains and any tax deductions or credits on account of any such excluded losses; (b) the proceeds of any life insurance policy; (c) net earnings and losses of any Restricted Subsidiary accrued prior to the date it became a Restricted Subsidiary; (d) net earnings and losses of any corporation (other than a Restricted Subsidiary), substantially all the assets of which have been acquired in any manner by the Company or any Restricted Subsidiary, realized by such corporation prior to the date of such acquisition; (e) net earnings and losses of any corporation (other than a Restricted Subsidiary) with which the Company or a Restricted Subsidiary shall have consolidated or which shall have merged into or with the Company or a Restricted Subsidiary prior to the date of such consolidation or merger; (f) net earnings of any business entity (other than a Restricted Subsidiary) in which the Company or any Restricted Subsidiary has an ownership interest unless such net earnings shall have actually been received by the Company or such Restricted Subsidiary in the form of cash distributions; (g) any portion of the net earnings of any Restricted Subsidiary which for any reason is unavailable for payment of dividends to the Company or any other Restricted Subsidiary; (h) earnings resulting from any reappraisal, revaluation or write-up of assets; (i) any deferred or other credit representing any excess of the equity in any Subsidiary at the date of acquisition thereof over the amount invested in such Subsidiary; (j) any gain arising from the acquisition of any Securities of the Company or any Restricted Subsidiary; and (k) any reversal of any contingency reserve, except to the extent that provision for such contingency reserve shall have been made from income arising during such period. "Consolidated Tangible Net Worth" shall mean as of the date of any determination thereof the total amount of all Tangible Assets of the Company and its Restricted Subsidiaries after deducting therefrom all items which, in accordance with GAAP, would be included on the liability and equity side of a consolidated balance sheet except capital stock of any class, surplus and retained earnings. "Consolidated Total Debt" shall mean the sum of Consolidated Funded Debt plus Consolidated Current Debt. "Current Debt" of any Person shall mean as of the date of any determination thereof (i) all Indebtedness of such Person for borrowed money other than Funded Debt of such Person and (ii) Guaranties by such Person of Current Debt of others. "Current Debt Basket Amount" shall mean for any date the amount specified as follows for the fiscal year in which such date shall occur: (i) for the fiscal years ending on or before June 30, 1998, $5,000,000, (ii) for the fiscal year ending June 30, 1999, $4,000,000, (iii) for the fiscal year ending June 30, 2000, $3,000,000, (iv) for the fiscal year ending June 30, 2001, $2,000,000, (v) for the fiscal year ending June 30, 2002, $1,000,000, and (vi) for the fiscal year ending June 30, 2003 and each fiscal year occurring thereafter, $-0-. "Current Debt Test Date" shall mean the first and fifteenth days of each month, provided that, if any such day is not a business day, then the Current Debt Test Date shall be the business day which shall first occur thereafter. "Debt" of any Person shall mean all Funded Debt and all Current Debt of such Person. "Default" shall mean any event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, constitute an Event of Default. "ERISA" shall mean 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 successor sections. "ERISA Affiliate" shall mean any corporation, trade or business that is, along with the Company, a member of a controlled group of corporations or a controlled group of trades or businesses, as described in section 414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA. "Event of Default" shall have the meaning set forth in [SECTION]6.1. "First Mortgage Bonds" shall mean any Bonds issued under the First Mortgage Bond Indenture. "First Mortgage Bond Indenture" shall mean that certain First Mortgage Indenture and Deed of Trust dated as of July 1, 1954 between the Company (f/k/a Pittsfield Coal Gas Company) and Chemical Bank & Trust Company, as Trustee, as such First Mortgage Indenture and Deed of Trust has heretofore been and may hereafter be amended, modified or supplemented. "Fixed Charges" for any period shall mean on a consolidated basis the sum of (i) all Rentals (other than Rentals on Capitalized Leases) payable during such period by the Company and its Restricted Subsidiaries, and (ii) all Interest Charges on all Debt (including the interest component of Rentals on Capitalized Leases) of the Company and its Restricted Subsidiaries. "Funded Debt" of any Person shall mean (i) all Indebtedness of such Person for borrowed money or which has been incurred in connection with the acquisition of assets in each case having a final maturity of one or more than one year from the date of origin thereof (or which is renewable or extendible at the option of the obligor for a period or periods more than one year from the date of origin), including all payments in respect thereof that are required to be made within one year from the date of any determination of Funded Debt, whether or not the obligation to make such payments shall constitute a current liability of the obligor under GAAP, (ii) all Capitalized Rentals of such Person, and (iii) all Guaranties by such Person of Funded Debt of others. "GAAP" shall mean generally accepted accounting principles at the time in the United States. "Guaranties" by any Person shall mean all obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing, or in effect guaranteeing, any Indebtedness, dividend or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person: (i) to purchase such Indebtedness or obligation or any property or assets constituting security therefor, (ii) to advance or supply funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (iii) 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 (iv) otherwise to assure the owner of the Indebtedness or obligation of the primary obligor against loss in respect thereof. For the purposes of all computations made under this Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the principal amount of such Indebtedness for borrowed money which has been guaranteed, and a Guaranty 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 obligation, liability or dividend. "Holder" shall mean any Person which is, at the time of reference, the registered Holder of any Note. "Indebtedness" of any Person shall mean and include all obligations of such Person which in accordance with GAAP shall be classified upon a balance sheet of such Person as liabilities of such Person, and in any event shall include all (i) obligations of such Person for borrowed money or which has been incurred in connection with the acquisition of property or assets, (ii) obligations secured by any Lien upon property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such obligations, (iii) obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, notwithstanding the fact that the rights and remedies of the seller, lender or lessor under such agreement in the event of default are limited to repossession or sale of property, (iv) Capitalized Rentals and (v) Guaranties of obligations of others of the character referred to in this definition. "Institutional Holder" shall mean any Holder which is the Purchaser or an insurance company, bank, savings and loan association, trust company, investment company, charitable foundation, employee benefit plan (as defined in ERISA) or other institutional investor or financial institution and, for purposes of the direct payment provisions of this Agreement, shall include any nominee of any such Holder. "Interest Charges" for any period shall mean all interest and all amortization of debt discount and expense on any particular Indebtedness for which such calculations are being made. "Investments" shall mean all investments, in cash or by delivery of property made, directly or indirectly in any Person, whether by acquisition of shares of capital stock, indebtedness or other obligations or Securities or by loan, advance, capital contribution or otherwise; provided, however, that "Investments" shall not mean or include routine investments in property to be used or consumed in the ordinary course of business. "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 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 (including, with respect to stock, stockholder agreements, voting trust agreements, buy-back agreements and all similar arrangements) affecting property. For the purposes of this Agreement, 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 agreement, Capitalized 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. "Make-Whole Amount" shall mean in connection with any prepayment or acceleration of the Notes the excess, if any, of (i) the aggregate present value as of the date of such prepayment of each dollar of principal being prepaid (taking into account the application of such prepayment required by [SECTION]2.1) and the amount of interest (exclusive of interest accrued to the date of prepayment) that would have been payable in respect of such dollar if such prepayment had not been made, determined by discounting such amounts at the Reinvestment Rate from the respective dates on which they would have been payable, over (ii) 100% of the principal amount of the outstanding Notes being prepaid. If the Reinvestment Rate is equal to or higher than 7.80%, the Make-Whole Amount shall be zero. For purposes of any determination of the Make-Whole Amount: "Reinvestment Rate" shall mean 0.50%, plus the arithmetic mean of the yields for the two columns under the heading "Week Ending" published in the Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the Weighted Average Life to Maturity of the principal being prepaid (taking into account the application of such prepayment required by [SECTION]2.1). If no maturity exactly corresponds to such Weighted Average Life to Maturity, yields for the published maturity next longer than the Weighted Average Life to Maturity and for the published maturity next shorter than the Weighted Average Life to Maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. "Statistical Release" shall mean the then most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded U.S. Government Securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination hereunder, then such other reasonably comparable index which shall be designated by the Holders holding 66-2/3% in aggregate principal amount of the outstanding Notes. "Weighted Average Life to Maturity" of the principal amount of the Notes being prepaid shall mean, as of the time of any determination thereof, the number of years obtained by dividing the then Remaining Dollar-Years of such principal by the aggregate amount of such principal. The term "Remaining Dollar-Years" of such principal shall mean the amount obtained by (i) multiplying (x) the remainder of (1) the amount of principal that would have become due on each scheduled payment date if such prepayment had not been made, less (2) the amount of principal on the Notes scheduled to become due on such date after giving effect to such prepayment and the application thereof in accordance with the provisions of [SECTION]2.1, by (y) the number of years (calculated to the nearest one-twelfth) which will elapse between the date of determination and such scheduled payment date, and (ii) totaling the products obtained in (i). "Minority Interests" shall mean any shares of stock of any class of a Restricted Subsidiary (other than directors' qualifying shares as required by law) that are not owned by the Company and/or one or more of its Restricted Subsidiaries. Minority Interests shall be valued by valuing Minority Interests constituting preferred stock at the voluntary or involuntary liquidating value of such preferred stock, whichever is greater, and by valuing Minority Interests constituting common stock at the book value of capital and surplus applicable thereto adjusted, if necessary, to reflect any changes from the book value of such common stock required by the foregoing method of valuing Minority Interests in preferred stock. "Multiemployer Plan" shall have the same meaning as in ERISA. "Net Income Available for Fixed Charges" for any period shall mean the sum of (i) Consolidated Net Income during such period plus (to the extent deducted in determining Consolidated Net Income), (ii) all provisions for any Federal, state or other income taxes made by the Company and its Restricted Subsidiaries during such period and (iii) Fixed Charges of the Company and its Restricted Subsidiaries during such period. "PBGC" means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA. "Person" shall mean an individual, partnership, corporation, trust or unincorporated organization, and a government or agency or political subdivision thereof. "Plan" means a "pension plan," as such term is defined in ERISA, established or maintained by the Company or any ERISA Affiliate or as to which the Company or any ERISA Affiliate contributed or is a member or otherwise may have any liability. "Purchaser" shall have the meaning set forth in [SECTION]1.1. "Rentals" shall mean and include as of the date of any determination thereof all fixed payments (including as such all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the property) payable by the Company or a Restricted Subsidiary, as lessee or sublessee under a lease of real or personal property, but shall be exclusive of any amounts required to be paid by the Company or a Restricted Subsidiary (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges. Fixed rents under any so-called "percentage leases" shall be computed solely on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues. "Reportable Event" shall have the same meaning as in ERISA. "Restricted Investments" shall mean all Investments existing on or made after the Closing Date other than: (a) Investments of the Company and its Restricted Subsidiaries in and to Restricted Subsidiaries. including any Investment in any Person which, after giving effect to such Investment, will become a Restricted Subsidiary; (b) Investments in commercial paper maturing in 270 days or less from the date of issuance which, at the time of acquisition by the Company or any Restricted Subsidiary, is accorded the highest rating by Standard & Poor's Ratings Group, Moody's Investors Service, Inc. or other nationally recognized credit rating agency of similar standing; (c) Investments in direct obligations of the United States of America or any agency or instrumentality of the United States of America, the payment or guarantee of which constitutes a full faith and credit obligation of the United States of America, in either case, maturing in twelve months or less from the date of acquisition thereof; (d) Investments in certificates of deposit maturing within one year from the date of issuance thereof, issued by a bank or trust company organized under the laws of the United States or any state thereof, having capital, surplus and undivided profits aggregating at least $100,000,000 and whose long-term certificates of deposit are, at the time of acquisition thereof by the Company or a Restricted Subsidiary, rated AA or better by Standard & Poor's Ratings Group or Aa or better by Moody's Investors Service, Inc.; (e) loans or advances in the usual and ordinary course of business to officers, directors and employees for expenses (including moving expenses related to a transfer) incidental to carrying on the business of the Company or any Restricted Subsidiary; (f) receivables arising from the sale of goods and services in the ordinary course of business of the Company and its Restricted Subsidiaries; and (g) Investments in addition to those described in the foregoing paragraphs (a) through (f) hereof, provided that the aggregate amount of all Investments made pursuant to the provisions of this paragraph (g) shall not exceed an amount equal to 5% of Common Shareholders' Equity. As used herein, "Common Shareholders' Equity" shall mean at any time the sum of the common stock, surplus and retained earnings of the Company as of the end of the most recent fiscal quarter as determined in accordance with GAAP. In valuing any Investments, such Investments shall be taken at the original cost thereof, without allowance for any subsequent write-offs or appreciation or depreciation therein, but less any amount repaid or recovered on account of capital or principal. "Restricted Subsidiary" shall mean any Subsidiary (a) which is organized under the laws of the United States or any State thereof; (b) which conducts substantially all of its business and has substantially all of its assets within the United States; (c) of which more than 80% (by number of votes) of the Voting Stock is beneficially owned, directly or indirectly, by the Company; and (d) which has been designated by the Board of Directors of the Company as a Restricted Subsidiary in accordance with [SECTION]5.16. "Security" shall have the same meaning as in Section 2(1) of the Securities Act of 1933, as amended. The term "subsidiary" shall mean as to any particular parent corporation any corporation of which more than 50% (by number of votes) of the Voting Stock shall be beneficially owned, directly or indirectly, by such parent corporation. The term "Subsidiary" shall mean a subsidiary of the Company. "Tangible Assets" shall mean as of the date of any determination thereof the total amount of all assets of the Company and its Restricted Subsidiaries (less depreciation, depletion and other properly deductible valuation reserves) after deducting good will, patents, trade names, trade marks, copyrights, franchises, experimental expense, organization expense, unamortized debt discount and expense, deferred assets other than prepaid insurance and prepaid taxes, the excess of cost of shares acquired over book value of related assets and such other assets as are properly classified as "intangible assets" in accordance with GAAP. "Unrestricted Subsidiary" shall mean any Subsidiary which is not a Restricted Subsidiary. "Voting Stock" shall mean Securities of any class or classes, 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). "Wholly-owned" when used in connection with any Subsidiary shall mean a Subsidiary of which all of the issued and outstanding shares of stock (except shares required as directors' qualifying shares) and all Funded Debt and Current Debt shall be owned by the Company and/or one or more of its Wholly-owned Subsidiaries. Section 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, the same shall be done in accordance with GAAP, to the extent applicable, except where such principles are inconsistent with the requirements of this Agreement. Section 8.3. Directly or Indirectly. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether the action in question is taken directly or indirectly by such Person. SECTION 9. MISCELLANEOUS. Section 9.1. Registered Notes. The Company shall cause to be kept at its principal office a register for the registration and transfer of the Notes (hereinafter called the "Note Register"), and the Company will register or transfer or cause to be registered or transferred as hereinafter provided any Note issued pursuant to this Agreement. At any time and from time to time any Holder of a Note which has been duly registered as hereinabove provided may transfer such Note upon surrender thereof at the principal office of the Company duly endorsed or accompanied by a written instrument of transfer duly executed by the Holder or its attorney duly authorized in writing. The Person in whose name any registered Note shall be registered shall be deemed and treated as the owner and Holder thereof and a holder for all purposes of this Agreement. Payment of or on account of the principal, premium, if any, and interest on any registered Note shall be made to or upon the written order of such Holder. Section 9.2. Exchange of Notes. At any time and from time to time, upon not less than ten days' notice to that effect given by the Holder of any Note initially delivered or of any Note substituted therefor pursuant to [SECTION]9.1, this [SECTION]9.2 or [SECTION]9.3, and, upon surrender of such Note at its office, the Company will deliver in exchange therefor, without expense to such Holder, except as set forth below, a Note for the same aggregate principal amount as the then unpaid principal amount of the Note so surrendered, or Notes in the denomination of $100,000 or any amount in excess thereof as such Holder shall specify, dated as of the date to which interest has been paid on the Note so surrendered or, if such surrender is prior to the payment of any interest thereon, then dated as of the date of issue, registered in the name of such Person or Persons as may be designated by such Holder, and otherwise of the same form and tenor as the Notes so surrendered for exchange. The Company may require the payment of a sum sufficient to cover any stamp tax or governmental charge imposed upon such exchange or transfer. Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence satisfactory to the Company of the loss, theft, mutilation or destruction of any Note, and in the case of any such loss, theft or destruction upon delivery of a bond of indemnity in such form and amount as shall be reasonably satisfactory to the Company, or in the event of such mutilation upon surrender and cancellation of the Note, the Company will make and deliver without expense to the Holder thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note. If an Institutional Holder is the owner of any such lost, stolen or destroyed Note, then the affidavit of an authorized officer of such owner, setting forth the fact of loss, theft or destruction and of its ownership of such Note at the time of such loss, theft or destruction shall be accepted as satisfactory evidence thereof and no further indemnity shall be required as a condition to the execution and delivery of a new Note other than the written agreement of such owner to indemnify the Company. Section 9.4. Conversion of Notes to First Mortgage Bonds. (a) The Company may issue Additional First Mortgage Bonds provided that (i) the Additional First Mortgage Bonds are issued in compliance with the following provisions of this [SECTION]9.4, (ii) no Default or Event of Default shall then exist and (iii) after giving effect thereto the Company shall be in compliance with [SECTION]5.7(a). (b) The Company may issue Additional First Mortgage Bonds provided that concurrently with or prior to the issuance thereof the Company shall convert all outstanding Notes by issuing First Mortgage Bonds to the Holders of such Notes as herein provided. Not later than 60 days nor earlier than 30 days prior to the date of the issuance of any Additional First Mortgage Bonds, the Company shall give written notice of such fact in the manner provided in [SECTION]9.7 hereof to the Holders of the Notes which notice shall (1) state the details of the proposed issuance of the Additional First Mortgage Bonds and the effective date thereof (the "Effective Date"), (2) state that pursuant to this [SECTION]9.4, the Company shall convert all Notes to First Mortgage Bonds and (3) specify the date upon which the conversion shall take place (the "Conversion Date"). On the Conversion Date, the Company, as provided herein, shall convert to First Mortgage Bonds all of the outstanding Notes. (c) Any First Mortgage Bonds to be issued to the Holders of Notes pursuant to the foregoing provisions (i) shall be issued in a separate series of First Mortgage Bonds, (ii) shall be in a principal amount equal to the aggregate unpaid principal amount of the Notes, (iii) shall bear interest at the rate of 7.80% per annum from the date to which interest has been paid on the Notes, (iv) shall be payable with respect to interest and principal on the same respective payment dates of the Notes, (v) shall have the same optional prepayment provisions and, to the extent permitted under the First Mortgage Bond Indenture, the same events of default as such Notes or, if not so permitted for any similar event of default, provisions which result in a mandatory redemption upon the occurrence of such event, (vi) shall, in the First Mortgage Bond Indenture, receive the benefit of terms and provisions substantially the same as those contained in this Agreement, including without limitation, the covenants of the Company contained in [SECTION]5 (other than [SECTION]5.9) of this Agreement (allowing for differences in form and with appropriate adjustments to reflect the changed nature of the securities), and (vii) shall be issued pursuant to the First Mortgage Bond Indenture in a manner satisfactory in form and substance to such Holders and their counsel. The Holders of the Notes may be represented by such special counsel as they shall select and the reasonable charges and disbursements of such special counsel shall be paid by the Company. (d) On or prior to the Conversion Date, and as a condition to the effectiveness of such conversion, the supplemental indenture pursuant to which such First Mortgage Bonds shall be issued shall be duly recorded, and any necessary financing statements shall be duly filed in respect thereof, to the extent required by law to perfect the lien of the First Mortgage Bond Indenture on the mortgaged property thereunder, and the Company shall deliver to the trustee under the First Mortgage Bond Indenture and to each of the Holders of the outstanding Notes, an opinion of counsel (who shall be satisfactory to each of such Holders) and such other evidence as such Holders may request as to (A) the priority of the Lien created by the First Mortgage Bond Indenture in favor of the First Mortgage Bonds issued to such Holders, (B) the equal and ratable benefit and security provided by the First Mortgage Bond Indenture to such First Mortgage Bonds in favor of such Holders, (C) the due authorization, execution and delivery of such First Mortgage Bonds and the legality, validity, binding effect and enforceability thereof, (D) the due authentication and issuance thereof under the First Mortgage Bond Indenture, (E) the absence of any default or event which with the giving of notice or passage of time, or both, would constitute a default or event of default under the First Mortgage Bond Indenture or any Indebtedness secured thereby, (F) the due authorization, execution and delivery of the First Mortgage Bond Indenture and the legality, validity, binding effect and enforceability thereof, (G) the approval of such First Mortgage Bonds and such supplemental indenture by any necessary governmental agencies, and (H) the good title of the Company to its real properties (which opinion with respect to such title may be based upon an examination of title insurance policies and/or endorsements thereto, abstracts or certificates of title or similar documents) and as to such other matters as such Holders may request. Upon completion of the conversion of the Notes into First Mortgage Bonds pursuant to the foregoing provisions of this [SECTION]9.4, this Agreement shall terminate except for any obligations of the Company arising under this Agreement prior to such termination which have not been satisfied. Section 9.5. Expenses, Stamp Tax Indemnity. Whether or not the transactions herein contemplated shall be consummated, the Company agrees to pay directly all of the Purchaser's reasonable out-of-pocket expenses in connection with the preparation, execution and delivery of this Agreement and the transactions contemplated hereby, including but not limited to the reasonable charges and disbursements of Chapman and Cutler, special counsel to the Purchaser, duplicating and printing costs and charges for shipping the Notes, adequately insured to the Purchaser's home office or at such other place as such Purchaser may designate, and all such expenses of the Holders relating to any amendment, waivers or consents pursuant to the provisions hereof, including, without limitation, any amendments, waivers, or consents resulting from any work-out, renegotiation or restructuring relating to the performance by the Company of its obligations under this Agreement and the Notes. The Company also agrees that it will pay and save the Purchaser harmless against any and all liability with respect to stamp and other taxes, if any, which may be payable or which may be determined to be payable in connection with the execution and delivery of this Agreement or the Notes, whether or not any Notes are then outstanding. The Company agrees to protect and indemnify the Purchaser against any liability for any and all brokerage fees and commissions payable or claimed to be payable to any Person in connection with the transactions contemplated by this Agreement. The Purchaser represents that no placement agent, broker or finder has been retained or engaged by the Purchaser in connection with its purchase of the Notes. Section 9.6. Powers and Rights Not Waived; Remedies Cumulative. No delay or failure on the part of any Holder in the exercise of any power or right shall operate as a waiver thereof; nor shall any single or partial exercise of the same preclude any other or further exercise thereof, or the exercise of any other power or right, and the rights and remedies of each Holder are cumulative to, and are not exclusive of, any rights or remedies any such Holder would otherwise have. Section 9.7. Notices. All communications provided for hereunder shall be in writing and, if to a Holder, delivered or mailed prepaid by registered or certified mail or overnight air courier, or by facsimile communication, in each case addressed to such Holder at its address appearing on Schedule I to this Agreement or such other address as any Holder may designate to the Company in writing, and if to the Company, delivered or mailed by registered or certified mail or overnight air courier, or by facsimile communication, to the Company at the address beneath its signature at the foot of this Agreement or to such other address as the Company may in writing designate to the Holders; provided, however, that a notice to a Holder by overnight air courier shall only be effective if delivered to such Holder at a street address designated for such purpose in accordance with this [SECTION]9.7, and a notice to such Holder by facsimile communication shall only be effective if made by confirmed transmission to such Holder at a telephone number designated for such purpose in accordance with this [SECTION]9.7 and promptly followed by the delivery of such notice by registered or certified mail or overnight air courier, as set forth above. Section 9.8. Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Purchaser and its successor and assigns, including each successive Holder. Section 9.9. Survival of Covenants and Representations. All covenants, representations and warranties made by the Company herein and in any certificates delivered pursuant hereto, whether or not in connection with the Closing Date, shall survive the closing and the delivery of this Agreement and the Notes. Section 9.10. Severability. Should any part of this Agreement for any reason be declared invalid or unenforceable, such decision shall not affect the validity or enforceability of any remaining portion, which remaining portion shall remain in force and effect as if this Agreement had been executed with the invalid or unenforceable portion thereof eliminated and it is hereby declared the intention of the parties hereto that they would have executed the remaining portion of this Agreement without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid or unenforceable. Section 9.11. Governing Law. This Agreement and the Notes issued and sold hereunder shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. Section 9.12. Captions. The descriptive headings of the various Sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof. The execution hereof by you shall constitute a contract between the Company and you for the uses and purposes hereinabove set forth. This Agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement. THE BERKSHIRE GAS COMPANY By: /s/ Scott S. Robinson --------------------------------- Its President THE BERKSHIRE GAS COMPANY 115 Cheshire Road Pittsfield, Massachusetts 01201 Attention: Michael J. Marrone Telefacsimile: (413) 443-0546 Confirmation: (413) 445-0259 Accepted as of November 1, 1996: FIRST COLONY LIFE INSURANCE COMPANY By: /s/ George D. Vermilya, Jr. --------------------------------- Its Associate Vice President SCHEDULE I (to Note Agreement) PRINCIPAL AMOUNTS NAME OF PURCHASER OF NOTES TO BE PURCHASED FIRST COLONY LIFE INSURANCE COMPANY $16,000,000 700 Main Street Lynchburg, Virginia 24504 Attention: Mr. George D. Vermilya, Jr. Telecopier Number: (804) 948-5484 Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as "The Berkshire Gas Company, 7.80% Senior Notes due November 15, 2021, PPN 084653 D@ 0 principal, premium or interest") to: Crestar Bank (ABA #0510-0002-0) Richmond, Virginia Credit - 2111 Attention: Incoming Processing Unit Number 27955 for credit to: First Colony Life Insurance Company Account Number 10765400 Notices All notices and communications, including notices with respect to payments and written confirmation of each such payment, to be addressed as first provided above. Name of Nominee in which Notes are to be issued: None Taxpayer I.D. Number: 54-0596414 SCHEDULE II (to Note Agreement) LIENS SECURING DEBT (INCLUDING CAPITALIZED LEASES) AS OF THE CLOSING DATE The Lien of the First Mortgage Bond Indenture. EXHIBIT A (to Note Agreement) THE BERKSHIRE GAS COMPANY 7.80% Senior Note Due November 15, 2021 PPN: 084653 D@ 0 No. __________________, 19____ $ The Berkshire Gas Company, a Massachusetts corporation (the "Company"), for value received, hereby promises to pay to or registered assigns on the fifteenth day of November, 2021 the principal amount of DOLLARS ($_______________) and to pay interest (computed on the basis of a 360-day year of twelve 30- day months) on the principal amount from time to time remaining unpaid hereon at the rate of 7.80% per annum from the date hereof until maturity, payable quarterly on the fifteenth day of each February, May, August and November in each year (commencing on the first of such dates after the date hereof) and at maturity. The Company agrees to pay interest on overdue principal (including any overdue required or optional prepayment of principal) and premium, if any, and (to the extent legally enforceable) on any overdue installment of interest, at the rate of 8.80% per annum after the due date, whether by acceleration or otherwise, until paid. Both the principal hereof and interest hereon are payable at the principal office of the Company in Pittsfield, Massachusetts in coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. This Note is one of the 7.80% Senior Notes due November 15, 2021 (the "Notes") of the Company in the aggregate principal amount of $16,000,000 issued or to be issued under and pursuant to the terms and provisions of the Note Agreement dated as of November 1, 1996 (the "Note Agreement"), entered into by the Company with the original Purchaser therein referred to, and this Note and the holder hereof are entitled equally and ratably with the holders of all other Notes outstanding under the Note Agreement to all the benefits provided for thereby or referred to therein. Reference is hereby made to the Note Agreement for a statement of such rights and benefits. This Note and the other Notes outstanding under the Note Agreement may be declared due prior to their expressed maturity dates and certain prepayments are required to be made thereon, all in the events, on the terms and in the manner and amounts as provided in the Note Agreement. The Notes are not subject to prepayment or redemption at the option of the Company prior to their expressed maturity dates except on the terms and conditions and in the amounts and with the premium, if any, set forth in the Note Agreement. This Note is registered on the books of the Company and is transferable only by surrender thereof at the principal office of the Company duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of this Note or its attorney duly authorized in writing. Payment of or on account of principal, premium, if any, and interest on this Note shall be made only to or upon the order in writing of the registered holder. THE BERKSHIRE GAS COMPANY By -------------------------------- Its EXHIBIT B (to Note Agreement) REPRESENTATIONS AND WARRANTIES The Company represents and warrants to the Purchaser as follows: 1. Subsidiaries. The Company has no Subsidiaries. 2. Corporate Organization and Authority. The Company (a) is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation; (b) has all requisite power and authority and all material licenses and permits to own and operate its properties and to carry on its business as now conducted and as presently proposed to be conducted; and (c) is duly licensed or qualified and is in good standing as a foreign corporation in each jurisdiction wherein the nature of the business transacted by it or the nature of the property owned or leased by it makes such licensing or qualification necessary. 3. Financial Statements. (a) The balance sheets of the Company as of June 30 in each of the years 1992 to 1996, both inclusive, and the statements of income and retained earnings and changes in financial position or cash flows for the fiscal years ended on said dates, each accompanied by a report thereon containing an opinion unqualified as to scope limitations imposed by the Company and otherwise without qualification except as therein noted, by Deloitte & Touche LLP, have been prepared in accordance with GAAP consistently applied except as therein noted, are correct and complete and present fairly the financial position of the Company as of such dates and the results of its operations and changes in its financial position or cash flows for such periods. (b) Since June 30, 1996, there has been no change in the condition, financial or otherwise, of the Company as shown on the balance sheet as of such date except changes in the ordinary course of business, none of which individually or in the aggregate has been materially adverse. 4. Indebtedness. Annex A attached hereto correctly describes all Current Debt and Funded Debt of the Company outstanding on the Closing Date. 5. Full Disclosure. Neither the financial statements referred to in paragraph 4 hereof nor any other written statement furnished by the Company to the Purchaser in connection with the negotiation of the sale of the Notes, contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained therein or herein not misleading. There is no fact peculiar to the Company which the Company has not disclosed to the Purchaser 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. 6. Pending Litigation. Except for the matters described in the letter from the Company to the Purchaser dated November 1, 1996 (the "Litigation Disclosure Letter"), 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 which involve the possibility of materially and adversely affecting the properties, business, prospects, profits or condition (financial or otherwise) of the Company and its Subsidiaries. 7. Title to Properties. The Company has good and marketable title in fee simple (or its equivalent under applicable law) to all material parcels of real property and has good title to all the other material items of property it purports to own, including that reflected in the most recent balance sheet referred to in paragraph 3 hereof, except as sold or otherwise disposed of in the ordinary course of business and except for Liens permitted by the Agreement. 8. Patents and Trademarks. The Company owns or possesses all the patents, trademarks, trade names, service marks, copyright, licenses and rights with respect to the foregoing necessary for the present and planned future conduct of its business, without any known conflict with the rights of others. 9. Sale is Legal and Authorized. The sale of the Notes and compliance by the Company with all of the provisions of the Agreement and the Notes -- (a) are within the corporate powers of the Company; (b) will not violate any provisions of any law or any order of any court or governmental authority or agency and will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under the Articles of Incorporation or By-laws of the Company or any indenture or other agreement or instrument to which the Company is a party or by which it may be bound or result in the imposition of any Liens or encumbrances on any property of the Company; and (c) have been duly authorized by proper corporate action on the part of the Company (no action by the stockholders of the Company being required by law, by the Articles of Incorporation or By-laws of the Company or otherwise), executed and delivered by the Company and the Agreement and the Notes constitute the legal, valid and binding obligations, contracts and agreements of the Company enforceable in accordance with their respective terms. 10. No Defaults. No Default or Event of Default has occurred and is continuing. The Company is not in default in the payment of principal or interest on any Funded Debt or Current Debt or is in default under any instrument or instruments or agreements under and subject to which any Funded Debt or Current Debt has been issued, and no event has occurred and is continuing under the provisions of any such instrument or agreement which with the lapse of time or the giving of notice, or both, would constitute an event of default thereunder. 11. Governmental Consent. Except for the order of the Massachusetts Department of Public Utilities approving the issuance and sale of the Notes, which order has been obtained, is in full force and effect and is not subject to any appeal, no approval, consent or withholding of objection on the part of any regulatory body, state, Federal or local, is necessary in connection with the execution and delivery by the Company of the Agreement or the Notes or compliance by the Company with any of the provisions of the Agreement or the Notes. 12. Taxes. All tax returns required to be filed by the Company in any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and other governmental charges upon the Company or upon any of its properties, income or franchises, which are shown to be due and payable in such returns have been paid. For all taxable years ending on or before June 30, 1993, the Federal income tax liability of the Company has been satisfied and either the period of limitations on assessment of additional Federal income tax has expired or the Company has entered into an agreement with the Internal Revenue Service closing conclusively the total tax liability for the taxable year. The Company does not know of any proposed additional tax assessment against it for which adequate provision has not been made on its accounts, and no material controversy in respect of additional Federal or state income taxes due since said date is pending or to the knowledge of the Company threatened. The provisions for taxes on the books of the Company are adequate for all open years, and for its current fiscal period. 13. Use of Proceeds. The net proceeds from the sale of the Notes will be used to retire Company's short-term bank debt and the 8.40% Preferred Stock. None of the transactions contemplated in the Agreement (including, without limitation thereof, the use of proceeds from the issuance of the Notes) will violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulation issued pursuant thereto, including, without limitation, Regulations G, T and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. Neither the Company nor any Subsidiary owns or intends to carry or purchase any "margin stock" within the meaning of said Regulation G. None of the proceeds from the sale of the Notes will be used to purchase, or refinance any borrowing the proceeds of which were used to purchase, any "security" within the meaning of the Securities Exchange Act of 1934, as amended. 14. Private Offering. Neither the Company, directly or indirectly, nor any agent on its behalf has offered or will offer the Notes or any similar Security or has solicited or will solicit an offer to acquire the Notes or any similar Security from or has otherwise approached or negotiated or will approach or negotiate in respect of the Notes or any similar Security with any Person other than the Purchaser. Neither the Company, directly or indirectly, nor any agent on its behalf has offered or will offer the Notes or any similar Security or has solicited or will solicit an offer to acquire the Notes or any similar Security from any Person so as to bring the issuance and sale of the Notes within the provisions of Section 5 of the Securities Act of 1933, as amended. 15. ERISA. The consummation of the transactions provided for in the Agreement and compliance by the Company with the provisions thereof and the Notes issued thereunder will not involve any prohibited transaction within the meaning of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended. Each Plan complies in all material respects with all applicable statutes and governmental rules and regulations, and (a) no Reportable Event has occurred and is continuing with respect to any Plan, (b) neither the Company nor any ERISA Affiliate has withdrawn from any Plan or Multiemployer Plan or instituted steps to do so, and (c) no steps have been instituted to terminate any Plan. No condition exists or event or transaction has occurred in connection with any Plan which could result in the incurrence by the Company or any ERISA Affiliate of any material liability, fine or penalty. No Plan maintained by the Company or any ERISA Affiliate, nor any trust created thereunder, has incurred any "accumulated funding deficiency" as defined in Section 302 of ERISA nor does the present value of all benefits vested under all Plans exceed, as of the last annual valuation date, the value of the assets of the Plans allocable to such vested benefits. Neither the Company nor any ERISA Affiliate has any contingent liability with respect to any post-retirement "welfare benefit plan" (as such term is defined in ERISA) except as has been disclosed to the Purchaser. 16. Compliance with Law. The Company (a) is not in violation of any law, ordinance, franchise, governmental rule or regulation to which it is subject or (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 would materially adversely affect the business, prospects, profits, properties or condition (financial or otherwise) of the Company, or impair the ability of the Company to perform its obligations contained in the Agreement or the Notes. The Company is not in default with respect to any order of any court or governmental authority or arbitration board or tribunal. 17. Compliance with Environmental Laws. Except for matters described in the Litigation Disclosure Letter, the Company is not in violation of any applicable Federal, state, or local laws, statutes, rules, regulations or ordinances relating to public health, safety or the environment which violation could have a material adverse effect on the business, prospects, profits, properties or condition (financial or otherwise) of the Company. The Company does not know of any liability or class of liability of the Company or any Subsidiary under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), or the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.). 18. Holding Company Act Status. The Company is not a "registered holding company" or a "subsidiary company" of a "registered holding company" or an "affiliate" of a "registered holding company" or a "subsidiary company" of a "registered holding company," as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. ANNEX A (to Exhibit B) DESCRIPTION OF DEBT 1. Current Debt of the Company outstanding on the Closing Date is as follows: CREDITOR AMOUNT Fleet Bank $ 6,800,000 State Street Bank 5,000,000 Bank of Boston 1,500,000 Core States Bank 2,000,000 Bay Bank 4,000,000 ----------- Total $19,000,000 2. Funded Debt (other than Capitalized Rentals) of the Company outstanding on the Closing Date is as follows: $10,000,000 Series P First Mortgage Bonds 10.06% due 2019, $6,000,000 Senior Note 9.6% due 2020, and $6,000,000 Medium Term Note (Variable Interest) due April, 1999. 3. Capitalized Leases of the Company outstanding on the Closing Date are as follows: None. EXHIBIT C (to Note Agreement) DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION The closing opinion of Chapman and Cutler, special counsel to the Purchaser, called for by [SECTION]4.1 of the Note Agreement, shall be dated the Closing Date and addressed to the Purchaser, shall be satisfactory in form and substance to the Purchaser and shall be to the effect that: 1. The Company is a corporation, duly organized and validly existing under the laws of the Commonwealth of Massachusetts and has the corporate power and the corporate authority to execute and deliver the Note Agreement and to issue the Notes. 2. The Note Agreement has been duly authorized by all necessary corporate action on the part of the Company, has been duly executed and delivered by the Company and constitutes the legal, valid and binding contract of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors' rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law). 3. The Notes have been duly authorized by all necessary corporate action on the part of the Company, and the Notes being delivered on the date hereof have been duly executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors' rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law). 4. The issuance, sale and delivery of the Notes under the circumstances contemplated by the Note Agreement do not, under existing law, require the registration of the Notes under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended. The opinion of Chapman and Cutler shall also state that the opinion of Rich, May, Bilodeau & Flaherty, P.C. is satisfactory in scope and form to Chapman and Cutler and that, in their opinion, the Purchaser is justified in relying thereon. It is understood that in giving the above opinion, Chapman and Cutler may rely upon the opinion of Rich, May, Bilodeau & Flaherty, P.C. as to all matters relating to the laws of the Commonwealth of Massachusetts. In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler may rely, as to matters referred to in paragraph 1, solely upon an examination of the Articles of Incorporation certified by, and a certificate of good standing of the Company from, the Secretary of State of the Commonwealth of Massachusetts, the By-laws of the Company and the general business corporation law of the Commonwealth of Massachusetts. The opinion of Chapman and Cutler is limited to the general business corporation law of the Commonwealth of Massachusetts and the Federal laws of the United States. With respect to matters of fact upon which such opinion is based, Chapman and Cutler may rely on appropriate certificates of public officials and officers of the Company and upon representations of the Company and the Purchaser delivered in connection with the issuance and sale of the Notes. EXHIBIT D (to Note Agreement) DESCRIPTION OF CLOSING OPINION OF COUNSEL TO THE COMPANY The closing opinion of Rich, May, Bilodeau & Flaherty, P.C., counsel for the Company, which is called for by [SECTION]4.1 of the Note Agreement, shall be dated the Closing Date and addressed to the Purchaser, shall be satisfactory in scope and form to the Purchaser and shall be to the effect that: 1. The Company is a corporation, duly organized and validly existing under the laws of the Commonwealth of Massachusetts, has the corporate power and the corporate authority to execute and perform the Note Agreement and to issue the Notes and has the full corporate power and the corporate authority to conduct the activities in which it is now engaged and is duly licensed or qualified and is in good standing as a foreign corporation in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it makes such licensing or qualification necessary. 2. The Note Agreement has been duly authorized by all necessary corporate action on the part of the Company, has been duly executed and delivered by the Company and constitutes the legal, valid and binding contract of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors' rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law). 3. The Notes have been duly authorized by all necessary corporate action on the part of the Company, have been duly executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors' rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law). 4. The issue and sale of the Notes have, to the extent required by law, been duly authorized by an order issued by the Massachusetts Department of Public Utilities, which authorization is final and not subject to any appeal which could affect the validity or terms of the Notes and no other approval, consent or authorization on the part of, or filing, registration or qualification with, any governmental body, Federal or state, is necessary in connection with the execution and delivery of the Note Agreement or the Notes. 5. The Company is not a "registered holding company" or a "subsidiary company" of a "registered holding company" or an "affiliate" of a "registered holding company" or a "subsidiary company" of a "registered holding company," as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. 6. The issuance and sale of the Notes and the execution, delivery and performance by the Company of the Note Agreement do not conflict with or result in any breach of any of the provisions of or constitute a default under or result in the creation or imposition of any Lien upon any of the property of the Company pursuant to the provisions of the Articles of Incorporation or By-laws of the Company or any agreement or other instrument known to such counsel to which the Company is a party or by which the Company may be bound. 7. The issuance, sale and delivery of the Notes under the circumstances contemplated by the Note Agreement do not, under existing law, require the registration of the Notes under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended. The opinion of Rich, May, Bilodeau & Flaherty, P.C., shall cover such other matters relating to the sale of the Notes as the Purchaser may reasonably request. With respect to matters of fact on which such opinion is based, such counsel shall be entitled to rely on appropriate certificates of public officials and officers of the Company. EX-27 4 ARTICLE UT FOR 2ND QUARTER 10-Q
UT 6-MOS JUN-30-1997 DEC-31-1996 PER-BOOK 73,089 6,003 19,809 5,416 3,290 107,607 5,443 16,652 6,823 28,918 0 363 40,000 14,965 0 0 0 0 0 0 23,361 107,607 16,226 267 5,635 6,974 1,970 1,163 3,133 1,824 416 261 155 1,215 0 (4,922) .07 0
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