EXHIBIT 1
XXXXX X. XXXXX
c/o Chase Enterprises
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
December 24, 1997
Xxxxx X. Xxxxx
c/x Xxxxx Enterprises
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: LOAN OF COMMON STOCK OF THE UNITED ILLUMINATING COMPANY
This letter will set forth and confirm the agreement entered into between
Xxxxx X. Xxxxx ("Borrower") and Xxxxx X. Xxxxx ("Lender") regarding shares of
common stock of The United Illuminating Company (the "Company").
1. Xxxxxx xxxxxx confirms that it has loaned to Borrower 100,000 shares
of the common stock, no par value, of the Company ("Borrowed Securities").
2. Until this Agreement is terminated, Borrower shall have the full use
of the Borrowed Securities including the right to sell, pledge or otherwise
transfer or encumber such securities to others.
3. Upon the termination of this Agreement, Borrower shall deliver to
Lender securities identical in kind and amount to the Borrowed Securities and
including all dividends and distributions in the form of stock, rights,
warrants or other securities which the Company has made during the term of
this Agreement with respect to the Borrowed Securities. During the term of
this Agreement and from time to time, but in no event later than ten (10) days
after the date of any distributions, Borrower shall pay over to Lender in cash
the amount of any cash dividends or distributions made by the Company
respecting the Borrowed Securities. In the event of a recapitalization, stock
split or other exchange by the Company with respect to the Borrowed
Securities, the exchanged or newly issued shares shall be deemed identical in
kind to the Borrowed Securities.
4. Xxxxxxxx agrees to pay Xxxxxx a service fee for the use of the
Borrowed Securities. The service fee shall be six percent (6%) per annum of
the average monthly market value of the Borrowed Securities pro rated over the
number of days this Agreement is in effect. Such fee shall be due and payable
Borrowed Securities pro rated over the number of days this Agreement is in
effect. Such feel shall be due and payable quarterly on the last day of each
March, June, September and December for which this Agreement is in effect.
5. Upon demand, Borrower will secure its obligations under this
agreement by delivering to Lender marketable securities or other property
having a market value of at least one hundred and five percent (105%) of the
market value of the Borrowed Securities. Such transfer of property as
security shall be accompanied by such instruments and documents as shall be
adequate to provide Lender with a good and valid security interest therein.
The said security interest shall give Borrower the right to substitute
collateral. Except in the event of a default by Borrower, Lender shall not
have any right to sell or otherwise dispose of the collateral.
6. Xxxxxx and Xxxxxxxx agree that the loan of the Borrowed Securities
shall not reduce Lender's risk of loss or opportunity for gain respecting the
Borrowed Securities.
7. Borrower and Xxxxxx agree that they shall maintain their respective
books and records with respect to the Borrowed Securities to reflect the
transfer of said securities under this Agreement; to record any obligation
that may arise with respect to any dividends or distributions respecting the
Borrowed Securities which may be made by the Company; to record the transfer
of any property or cash in satisfaction of any dividend or distribution
obligation; and to record the transfer of stock in whole or partial
satisfaction of the obligation respecting return of the Borrowed Securities.
Xxxxxxxx and Xxxxxx further agree that they will, upon reasonable request,
confirm to the other or any auditors of the other their respective obligations
with respect to the Borrowed Securities. The obligation hereunder regarding
the records of the parties shall also apply with respect to any collateral
which may be transferred to secure Xxxxxxxx's obligation.
8. Unless otherwise sooner terminated as herein provided, this
Agreement shall terminate on December 31, 2001. Borrower reserves the right
to terminate this Agreement by return of the Borrowed Securities upon two (2)
days' notice to Lender. Such right of termination shall be exercisable in
whole or in part. Lender reserves the right to terminate this Agreement on
written notice to Borrower of five (5) business days at which time Borrower
shall fulfill its obligations to Lender as provided in paragraph 3 hereof.
9. This Agreement shall be binding upon the respective successors and
assigns of Xxxxxx and Xxxxxxxx.
Please confirm that the foregoing sets forth our understanding regarding
the Borrowed Securities by signature below.
Very truly yours,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
THE FOREGOING IS XXXXXX
CONFIRMED AND AGREED TO:
/S/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
