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                             MEDIUM-TERM NOTES, SERIES B
                                Up to U.S. $75,000,000
                       Maturities from One Year to Thirty Years

                                 AMENDED AND RESTATED
                              PLACEMENT AGENCY AGREEMENT


                                        among


                         CONNECTICUT NATURAL GAS CORPORATION,

                                                            as Issuer,

                                         and


                               PAINEWEBBER INCORPORATED


                                         and


                              A.G. EDWARDS & SONS, INC.,

                                                            as Agents.







                                Dated August 13, 1997


          =================================================================<PAGE>









                         CONNECTICUT NATURAL GAS CORPORATION

                                   U.S. $75,000,000
                             Medium-Term Notes, Series B
                            with Maturities from One Year
                          to Thirty Years from Date of Issue

                                 Amended and Restated
                              Placement Agency Agreement
                              --------------------------


                                                         New York, New York
                                                            August 13, 1997


          PaineWebber Incorporated
          1285 Avenue of the Americas
          New York, NY  10019

          A.G. Edwards & Sons, Inc.
          One North Jefferson
          St. Louis, MO  63103


          Dear Sirs:

                    Connecticut Natural Gas Corporation, a Connecticut
          corporation (the "Issuer"), confirms its agreement with you, with
          respect to the issue and sale by the Issuer of its Medium-Term
          Notes, Series B (the "Notes").  This Amended and Restated
          Placement Agency Agreement (the "Agreement") amends and restates
          the Placement Agency Agreement dated June 14, 1994 among the
          Issuer, Smith Barney Inc. and A.G. Edwards & Sons, Inc. pursuant
          to which $ 20,000,000 in aggregate principal amount of the Notes
          is currently outstanding.  The Notes may be sold by the Issuer in
          an aggregate principal amount at any time outstanding of up to
          $75,000,000.  It is understood, however, that the Issuer may from
          time to time authorize the issuance of additional Notes and that
          such additional Notes may be sold through or to the Agents
          pursuant to the terms of the Agreement, all as though the
          issuance of such Notes were authorized as of the date hereof. 
          The Notes will be offered without being registered under the
          Securities Act of 1933, as amended (the "Securities Act"), in
          reliance upon the exemption therefrom provided by Section 4(2) of
          the Securities Act including in reliance upon the exemption
          therefrom provided by Regulation D promulgated thereunder
          ("Regulation D") and without qualification of an indenture under
          the Trust Indenture Act of 1939 (the "Trust Indenture Act"), in
          reliance upon the exemption therefrom provided by Section 304(b)<PAGE>





                                                                          2



          thereof.  Notes may be resold or otherwise transferred by the
          holders thereof only if they are registered under the Securities
          Act or if an exemption (including the exemption afforded by Rule
          144A ("Rule 144A") of the rules and regulations promulgated under
          the Securities Act (the "Rules and Regulations")) from the
          registration requirements of the Securities Act is available. 
          The Notes will be issued under an Issuing and Paying Agency
          Agreement dated as of June 14, 1994 (as amended by the First
          Amendment thereto dated as of August 13, 1997, the "Issuing and
          Paying Agency Agreement"), between the Issuer and State Street
          Bank and Trust Company, as successor to Shawmut Bank Connecticut,
          National Association, as issuing and paying agent (the "Issuing
          and Paying Agent").  All Notes having a common issue date,
          maturity date, interest rate and otherwise identical terms are
          referred to herein as a "Tranche".  The Notes will be issued, and
          the terms thereof established, in accordance with the Issuing and
          Paying Agency Agreement and, in the case of Notes sold pursuant
          to Section 2(a), the Medium-Term Notes Administrative Procedures
          attached hereto as Exhibit A (the "Procedures").  The Procedures
          set forth in Exhibit A shall remain in effect with respect to
          sales solicited by Agents until changed by the Issuer and the
          applicable Agent or Agents and the Issuing and Paying Agent.  For
          the purposes of this Agreement:  the term "Agents" shall refer to
          any of you acting solely in the capacity as agent for the Issuer
          pursuant to Section 2(a) and not as principal; the term
          "Purchaser" shall refer to any of you acting solely as principal
          pursuant to Section 2(b) and not as agent; and the term "you"
          shall refer to any of the firms which are addressees named above,
          acting in both such capacities or in either such capacity.

                    1.  REPRESENTATIONS AND WARRANTIES.  The Issuer
          represents and warrants to each of you as of the date hereof, and
          shall be deemed to represent and warrant to each of you at and as
          of each time the Issuer gives a notice requesting any of you to
          solicit offers as Agent, at and as of each acceptance of an offer
          by the Issuer, at and as of the date of each Terms Agreement (as
          defined in Section 2(b)), and upon the delivery to the purchaser
          (or its agent) pursuant to such offer or to any Purchaser of any
          Note pursuant to such Terms Agreement and as of any time that the
          Offering Memorandum (as defined below) shall be amended or
          supplemented, as the case may be, that:

                    (a)  The Offering Memorandum, as defined below, does
               not contain any untrue statement of a material fact or omit
               to state any material fact necessary to make the statements
               therein, in the light of the circumstances under which they
               were made, not misleading; PROVIDED, HOWEVER, that the
               foregoing representations and warranties shall not apply to
               statements in the Offering Memorandum made in reliance upon
               and in conformity with information furnished to the Issuer<PAGE>





                                                                          3



               in writing by any of you, or on behalf of any of you which
               has been furnished by a person authorized to do so,
               specifically for use therein; provided, however, that the
               information set forth in Schedule III hereto constitutes the
               only information furnished to the Issuer by or on behalf of
               the Agents expressly for use in the Offering Memorandum (or
               any amendment or supplement thereto).  As used in this
               Agreement, the term "Offering Memorandum" means the
               confidential offering memorandum dated the same date as this
               Agreement relating to the Notes, as it may be amended or
               supplemented from time to time, including any documents
               incorporated by reference therein and any quarterly,
               semiannual or annual report of the Issuer delivered to any
               of you for delivery together with the Offering Memorandum,
               which amendment or supplement may be in the form of a
               separate document that does not state that it is a
               supplement to the Offering Memorandum, and any reference to
               the terms "amend", "amendment" or "supplement" with respect
               to the Offering Memorandum shall refer to and include the
               filing with the Securities and Exchange Commission (the
               "Commission") of any documents incorporated by reference
               into the Offering Memorandum after the date hereof.

                    (b)  The financial statements of the Issuer included or
               incorporated by reference in, or as an exhibit, attachment
               or appendix to, the Offering Memorandum present fairly the
               financial position of the Issuer as of the dates indicated
               and the results of its operations for the periods specified,
               and, except as disclosed in the Offering Memorandum, the
               audited financial statements of the Issuer therein have been
               prepared in accordance with generally accepted accounting
               principles in the United States consistently applied and any
               interim financial statements therein have been prepared on a
               basis substantially consistent with that of the audited
               year-end financial statements, except as otherwise required
               or permitted by generally accepted accounting principles for
               interim periods in the United States.

                    (c)  Since the respective dates as of which information
               is given in the Offering Memorandum, except as otherwise set
               forth therein, (i) there has been no material adverse
               change, or to the knowledge of the Issuer any development
               involving a prospective change, in the financial condition,
               earnings, results of operations, business or business
               prospects or properties of the Issuer and its subsidiaries
               considered as a single enterprise, whether or not arising in
               the ordinary course of business and (ii) no rating of any of
               the debt securities of the Issuer has been lowered by
               Moody's Investors Service, Inc., or Standard & Poor's
               Ratings Group (each a "Rating Agency"), nor has there been<PAGE>





                                                                          4



               any public announcement that any Rating Agency has under
               surveillance or review its rating of any such debt
               securities (other than an announcement with positive
               implications of a possible upgrading, and no implication of
               a possible downgrading, of such rating).

                    (d)  The Issuer and each of its subsidiaries have been
               duly incorporated and are validly existing as corporations
               in good standing under the laws of the State of Connecticut;
               the Issuer has full power, authority and legal right to
               execute and deliver this Agreement and the Issuing and
               Paying Agency Agreement, to issue the Notes, and to perform
               its obligations under this Agreement, the Issuing and Paying
               Agency Agreement and the Notes; the execution and delivery
               of this Agreement, the Issuing and Paying Agency Agreement
               and the Notes have been duly authorized by all necessary
               corporate action on the part of the Issuer; each Note, when
               completed, executed, authenticated and delivered in
               accordance with the Issuing and Paying Agency Agreement
               against payment of the consideration therefor will
               constitute a legal, valid and binding obligation of the
               Issuer, enforceable against the Issuer in accordance with
               the terms of such Note, except as enforcement thereof may be
               limited by bankruptcy, insolvency, reorganization,
               moratorium or other laws relating to or affecting the
               enforcement of creditors' rights generally or by general
               equity principles, and will entitle its holder to the
               benefits of the Issuing and Paying Agency Agreement; and the
               Issuing and Paying Agency Agreement conforms and each Note
               will conform in all material respects to the descriptions
               thereof in the Offering Memorandum.

                    (e)  The execution and delivery of this Agreement and
               the Issuing and Paying Agency Agreement, the issuance of any
               Note and the consummation of the transactions contemplated
               hereunder or thereunder will not conflict with, constitute a
               breach of, constitute a default under, or result in the
               creation or imposition of any lien, charge or encumbrance
               (in each case material to the Issuer and its subsidiaries
               considered as a single enterprise) upon any property or
               assets of the Issuer or any of the Issuer's subsidiaries
               pursuant to, the charter or by-laws of the Issuer or any of
               the Issuer's subsidiaries, or any contract, indenture,
               mortgage, loan agreement, note, lease or other instrument to
               which the Issuer or any of the Issuer's subsidiaries is a
               party or to which any of the property or assets of the
               Issuer or any of the Issuer's subsidiaries is subject.  No
               such action will result in any violation, material to the
               Issuer and its subsidiaries considered as a single
               enterprise or to the power, authority or ability of the<PAGE>





                                                                          5



               Issuer to perform its obligations under this Agreement, the
               Issuing and Paying Agency Agreement and the Notes, of the
               provisions of any law, decree, regulation, order or judgment
               of any court, arbitrator, government, governmental authority
               or agency to which the Issuer or any of the Issuer's
               subsidiaries or any of their respective properties or assets
               is subject.

                    (f)  Since the respective dates as of which information
               is given in the Offering Memorandum, except as otherwise set
               forth therein, (i) there are no legal or governmental
               actions, suits or proceedings before or by any court or
               governmental agency or body of any jurisdiction now pending
               or, to the knowledge of the Issuer, threatened against the
               Issuer or any of the Issuer's subsidiaries or to which any
               property of the Issuer or any of the Issuer's subsidiaries
               is the subject, other than such actions, suits or
               proceedings which in each case will not have a material
               adverse effect on the financial condition, earnings, results
               of operations, business or business prospects or properties
               of the Issuer and its subsidiaries considered as a single
               enterprise or the ability of the Issuer to perform its
               obligations under this Agreement, the Issuing and Paying
               Agent Agreement and the Notes and (ii) there are no such
               actions, suits or proceedings pending or, to the knowledge
               of the Issuer, threatened, relating to the Notes, their
               offering or the Offering Memorandum.

                    (g)  No approval, authorization, consent or other order
               of, or any filing with, any government, governmental or
               other administrative agency or body is required in
               connection with the execution and delivery by the Issuer of
               this Agreement and the Issuing and Paying Agency Agreement,
               the solicitation of offers to purchase Notes, the issuance
               of any Note or the performance by the Issuer of any of its
               obligations hereunder or thereunder, except such as may be
               required under the blue sky laws of any jurisdiction in
               connection with the issue and sale of the Notes.  All neces-
               sary approvals, if any, have been obtained from the
               Connecticut Department of Public Utility Control to
               authorize the issuance and sale of the Notes and such
               approvals, if any, remain in full force and effect on the
               date hereof.

                    (h)  This Agreement and the Issuing and Paying Agency
               Agreement have been duly executed and delivered by the
               Issuer and constitute the legal, valid and binding
               agreements of the Issuer, and are enforceable against the
               Issuer in accordance with their terms, except as enforcement
               thereof may be limited by bankruptcy, insolvency,<PAGE>





                                                                          6



               reorganization, moratorium or other laws relating to or
               affecting creditors' rights generally or by general equity
               principles.

                    (i)  The Notes satisfy the requirements set forth in
               paragraph (d)(3) of Rule 144A.

                    (j)  Neither the Issuer nor any affiliate (which, for
               purposes of this Agreement, shall have the meaning given in
               Rule 501(b) of Regulation D of the Rules and Regulations) of
               the Issuer has directly or indirectly, (i) sold, offered for
               sale, solicited offers to buy or otherwise negotiated in
               respect of, any of the Notes or any other security (as
               defined in the Securities Act) which is or will be
               integrated with any sale of the Notes in a manner that would
               require the registration of the Notes under the Securities
               Act or (ii) engaged in any form of general solicitation or
               general advertising (within the meaning of Rule 502(c) of
               Regulation D of the Rules and Regulations) in connection
               with the offering of the Notes.

                    (k)  Neither the registration of the Notes under the
               Securities Act nor the qualification of the Issuing and
               Paying Agency Agreement under the Trust Indenture Act is
               required for the offer and sale of the Notes in the manner
               contemplated by the Offering Memorandum and this Agreement.

                    (l)  The Issuer and its subsidiaries have statutory
               authority, franchises, permits, easements and consents free
               from unduly burdensome restrictions and adequate for the
               conduct of the respective businesses in which they are
               engaged.

                    (m)  The Issuer is a subsidiary of CTG Resources, Inc.,
               a Connecticut corporation ("CTG"), and is exempt from any
               provisions imposed upon it as a "subsidiary company" of a
               "holding company" under the Public Utility Holding Company
               Act of 1935, as amended, except Section 9(a)(2) thereof. 

                    (n)  The Issuer is not subject to regulation by the
               Federal Energy Regulatory Commission ("FERC") under the
               Natural Gas Act, except with respect to certain interstate
               sales for resale as to which the Issuer has a blanket
               certificate of public convenience and authority from FERC.

                    (o)  All of the issued shares of capital stock of the
               Issuer have been duly and validly authorized and issued, and
               are fully paid and nonassessable and are owned by CTG.  All
               of the issued shares of capital stock of each subsidiary of<PAGE>





                                                                          7



               the Issuer are owned by the Issuer free and clear of all
               liens, encumbrances, equities or claims.

                    (p)  Except as set forth or arising out of facts
               disclosed in the Offering Memorandum or incorporated by
               reference therein, neither the Issuer nor its subsidiaries
               to the best of its knowledge (a) is in violation of any
               laws, ordinances, governmental rules and regulations to
               which it is subject or (b) has failed to obtain any
               licenses, permits, franchises or other governmental
               authorizations, necessary to the ownership of its property
               or to the conduct of its business, which violation or such
               failure to obtain could reasonably be expected to materially
               adversely affect the business, business prospects, profits,
               properties or condition (financial or otherwise) of the
               Issuer and its subsidiaries considered as one enterprise.

                    (q)  Neither the Issuer nor any of its subsidiaries has
               sustained since the date of the latest audited financial
               statements included or incorporated by reference in the
               Offering Memorandum any material loss or interference with
               its business from fire, explosion, flood or other calamity,
               whether or not covered by insurance, or from any labor
               dispute or court or governmental action, order or decree,
               otherwise than as set forth or contemplated in the Offering
               Memorandum as amended or supplemented.

                    (r)  Each Note will be an unconditional and direct debt
               obligation of the Issuer and will rank PARI PASSU with other
               unsecured and unsubordinated existing and future obligations
               of the Issuer.

                    (s)  The Issuer is not required to register as an
               "investment company" under the Investment Company Act of
               1940, as amended and will not be required to so register as
               a result of the transactions contemplated herein.

                    (t)  No labor dispute with the employees of the Issuer
               or its subsidiaries exists or, to the knowledge of the
               Issuer, is imminent that could reasonably be expected to
               result in any material adverse change in the condition,
               financial or otherwise, earnings, results of operations,
               properties, business affairs or business prospects of the
               Issuer and its subsidiaries considered as a single
               enterprise; and the Issuer is not aware of any existing or
               imminent labor disturbance by the employees of any of its
               principal suppliers, manufacturers or contractors that could
               reasonably be expected to result in any material adverse
               change in the financial condition, earnings, results of
               operations, business or business prospects or properties of<PAGE>





                                                                          8



               the Issuer and its subsidiaries considered as a single
               enterprise.

                    (u)   (i) Neither the Issuer nor any of its
               subsidiaries is in violation of any federal, state, local or
               foreign laws or regulations relating to pollution or
               protection of human health, the environment (including,
               without limitation, laws and regulations relating to the
               release or threatened release of chemicals, pollutants,
               contaminants, wastes, toxic substances, hazardous
               substances, petroleum or petroleum products (collectively,
               "Materials of Environmental Concern") or to the manufacture,
               processing, distribution, use, treatment, storage, disposal,
               transport or handling of Materials of Environmental Concern
               (collectively, "Environmental Laws"), except such violations
               which, singly or in the aggregate, could not reasonably be
               expected to have a material adverse effect on the financial
               condition, earnings, results of operations, business or
               business prospects or properties of the Issuer and its
               subsidiaries considered as a single enterprise, and (ii) to
               the best of the Issuer's knowledge, there are no events or
               circumstances that could form the basis of an order for
               clean-up or remediation, or any action, suit or proceeding
               by any private property or governmental body or agency,
               against or affecting the Issuer or any of its subsidiaries
               relating to any Materials of Environmental Concern or the
               violation of any Environmental Law, which, singly or in the
               aggregate, could not reasonably be expected to have a
               material adverse effect on the financial condition,
               earnings, results of operations, business or business
               prospects or properties of the Issuer and its subsidiaries
               considered as a single enterprise.

                    (v)  The Issuer and its subsidiaries have filed all
               federal, state and local tax returns that are required to be
               filed or have duly requested extensions thereof and have
               paid all taxes required to be paid by any of them and any
               related assessments, fines or penalties, except for any such
               tax, assessment, fine or penalty that is being contested in
               good faith and by appropriate proceedings; and adequate
               charges, accruals and reserves have been provided for in the
               financial statements of the Issuer in respect of all
               federal, state or local taxes for all periods as to which
               the tax liability of the Issuer or any of its subsidiaries
               has not been finally determined or remains open to
               examination by applicable taxing authorities, except such
               failures to file, pay or reserve as would not, singly or in
               the aggregate, have a material adverse effect on the
               financial condition, earnings, results of operations,<PAGE>





                                                                          9



               business or business prospects or properties of the Issuer
               and its subsidiaries considered as a single enterprise.

                    2.  APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS
          OF OFFERS TO PURCHASE; SALES OF NOTES TO A PURCHASER. 
          (a) (i)  Subject to the terms and conditions set forth herein,
          the Issuer hereby appoints and authorizes each of the Agents to
          act as its agent to solicit offers for the Purchase of Notes from
          the Issuer.  

                   (ii)  On the basis of the representations and
          warranties, and subject to the terms and conditions, set forth
          herein, each Agent agrees, severally and not jointly, as agent of
          the Issuer, to use its reasonable efforts to solicit offers to
          purchase Notes from the Issuer upon the terms and conditions
          described in the Offering Memorandum and in the Procedures.  In
          soliciting offers as agents, each Agent is acting individually,
          and not jointly, solely as agent of the Issuer and not as
          principal.  Each Agent shall use its reasonable efforts to assist
          the Issuer in obtaining performance by each purchaser whose offer
          to purchase Notes has been solicited by such Agent and accepted
          by the Issuer, but such Agent shall not, except as otherwise
          provided in this Agreement, be obligated to disclose the identity
          of any purchaser and shall not have any liability to the Issuer
          in the event any such purchase is not consummated for any reason;
          PROVIDED that the foregoing shall not operate to release any
          Agent from any liability it may otherwise have as a result of its
          failure to perform its obligations under this Agreement.  Except
          as provided in Section 2(b), under no circumstances will any
          Agent be obligated to purchase any Notes for its own account.  It
          is understood and agreed, however, that any Agent may purchase
          Notes for its own account as Purchaser pursuant to Section 2(b)
          or otherwise as may be agreed or permitted by the Issuer and such
          Agent.

                  (iii)  The Issuer reserves the right, in its sole
          discretion, to instruct the Agents to suspend at any time, for
          any period of time or permanently, the solicitation of offers to
          purchase Notes.  Within one business day of receipt of
          instructions to that effect from the Issuer, each Agent will
          forthwith suspend solicitation of offers to purchase Notes from
          the Issuer until such time as the Issuer has advised it that such
          solicitation may be resumed.

                   (iv)  The Issuer agrees to pay each Agent a commission,
          upon closing, with respect to each sale of Notes by the Issuer as
          a result of a solicitation made by such Agent, including any sale
          for the account of any affiliate of the Agent, in an amount equal
          to that percentage of the aggregate principal amount of the Notes
          sold by the Issuer specified on Schedule I hereto for Notes with<PAGE>





                                                                         10



          the relevant term.  Such commission shall be payable as specified
          in the Procedures.

                    (v)  Subject to the provisions of this Section 2(a) and
          to the Procedures, offers for the purchase of Notes may be
          solicited by the Agents, as agents for the Issuer, at such time
          and in such amounts as the Agents and the Issuer deem advisable.
          The Issuer may from time to time offer Notes for sale otherwise
          than through an Agent (but subject to Section 4(a)(v)); PROVIDED,
          HOWEVER, that so long as this Agreement shall be in effect the
          Issuer shall not solicit or accept offers to purchase Notes
          through any agent other than an Agent without giving the Agents
          prior notice of such appointment and appointing such agent as an
          additional Agent hereunder on the same terms and conditions as
          provided herein for the Agents.  Each such additional Agent shall
          execute this Agreement and shall become an Agent for all purposes
          hereof.

                   (vi)  Each Agent may, in the exercise of its reasonable
          discretion, reject any offer to purchase Notes received by it as
          agent of the Issuer and not communicate such offer to the Issuer. 
          Each Agent shall communicate to the Issuer, orally or in writing,
          each such offer that it does not reject and, if such Agent or any
          of its affiliates shall be the offeror, shall advise the Issuer
          of that fact.  The Issuer shall have full discretion to reject
          any offer to purchase Notes in whole or, if permitted by the
          terms of such offer, in part.

                  (vii)  If the Issuer shall default in its obligations to
          deliver Notes to a purchaser whose offer it has accepted, or, in
          the event that the Notes are to be issued in book-entry form, to
          deliver a book-entry Note to The Depository Trust Company or such
          other depository as may be mutually agreed upon by the parties
          hereto, the Issuer shall hold each of you harmless against any
          loss, claim or damage arising from or as a result of such default
          by the Issuer (except to the extent that such default by the
          Issuer shall result from the failure of you yourself to perform
          your obligations hereunder).

                    (b)  (i)  Subject to the terms and conditions stated
          herein, whenever the Issuer and any one (or more) of you
          determine that the Issuer shall sell Notes directly to any one
          (or more) of you as the Purchaser, each such sale of Notes shall
          be made in accordance with the terms of this Agreement and,
          unless specifically waived by the Purchaser, a supplemental
          agreement relating thereto between the Issuer and the Purchaser. 
          Each such supplemental agreement (which shall be substantially in
          the form of Exhibit B) is herein referred to as a "Terms
          Agreement".  A Purchaser's commitment to purchase Notes pursuant
          to any Terms Agreement shall be deemed to have been made on the<PAGE>





                                                                         11



          basis of the representations and warranties of the Issuer
          contained herein or therein (if any) and shall be subject to the
          terms and conditions set forth herein and in such Terms
          Agreement.  Each Terms Agreement shall describe the Notes to be
          purchased by the Purchaser pursuant thereto, specify the
          principal amount of such Notes, the price to be paid to the
          Issuer for such Notes specified by reference to the principal
          amount of the Notes and the discount to the Purchaser from the
          principal amount thereof, the rate at which interest will be paid
          on such Notes, the date of issuance of such Notes (the "Closing
          Date"), the place of delivery of the Notes and payment therefor,
          the method of payment, any modification of, or addition to, the
          requirements for the delivery of the opinions of counsel set
          forth in Section 6(a)(ii), the certificates from the Issuer or
          its officers and the letter from the Issuer's independent public
          accountants, and such other terms and conditions as may be
          specified therein from time to time.  The discount to the
          Purchaser with respect to any Notes sold pursuant to this Section
          2(b) shall be equal to that percentage of the principal amount
          thereof specified in Schedule I hereto for Notes with the
          relevant term, unless a higher percentage is specified in the
          applicable Terms Agreement.

                   (ii)  The settlement details for Notes sold to a
          Purchaser pursuant to any Terms Agreement shall be agreed to
          between the Issuer and such Purchaser in the respective Terms
          Agreement.  If there is no such Terms Agreement, the settlement
          details specified in the Procedures shall apply with the
          Purchaser filling the roles specified therein of the Agent and
          the beneficial owner.

                  (iii)  Nothing contained in this Agreement shall obligate
          an Agent to enter into a Terms Agreement with the Issuer or to
          otherwise agree to purchase Notes for its own account

                    3.  OFFERING AND SALE OF NOTES.  Each party hereto
          agrees to perform the respective duties and obligations
          specifically provided to be performed by it in the Procedures.

                    4.  AGREEMENTS.  (a)  The Issuer agrees with each of
          you that:

                   (i)  If reasonably necessary to set forth information
               that is material to an investment in a Note and not
               otherwise contained in the Offering Memorandum, the Issuer
               shall prepare a supplement to the Offering Memorandum with
               respect to such Note.  The Issuer will give each of you
               advance notice of its intention to prepare any additional
               offering memorandum with respect to the Notes or any
               amendment or supplement to the Offering Memorandum (other<PAGE>





                                                                         12



               than a Terms Agreement), and will furnish each of you with
               copies of any such additional offering memorandum or any
               such amendment or supplement proposed to be prepared a
               reasonable time in advance of such preparation, and will not
               prepare any additional offering memorandum or make any
               amendment or supplement to the Offering Memorandum in a form
               to which either of you or counsel for the Agents shall
               reasonably object.  Furthermore, if the Issuer is subject to
               the reporting requirements of the Exchange Act, the Issuer
               will furnish each Agent with copies of any documents filed
               by it with the Commission as soon as possible after such
               filing.

                  (ii)  The Issuer shall furnish to each of you such
               information and documents relating to the business,
               operations and affairs of the Issuer, the Offering Mem-
               orandum and any amendments thereof or supplements thereto,
               the Issuing and Paying Agency Agreement, the Notes, this
               Agreement, any Terms Agreement, the Procedures and the
               performance by the parties hereto of their respective
               obligations hereunder and thereunder as you may from time to
               time and at any time prior to the termination of this
               Agreement reasonably request in connection with soliciting
               offers to purchase Notes.  The Issuer shall notify each of
               you promptly (1) if at any time any event occurs which
               constitutes (or after notice or lapse of time or both would
               constitute) a default or an event of default under the
               Notes, the Issuing and Paying Agency Agreement or this
               Agreement or (2) of any material adverse change, or to the
               knowledge of the Issuer any development involving a
               prospective change, in the financial condition, earnings,
               results of operations, business or business prospects or
               properties of the Issuer and its subsidiaries considered as
               a single enterprise.

                 (iii)  The Issuer shall, whether or not any sale of Notes
               is consummated, (1) pay all expenses incident to the
               performance of its obligations under this Agreement and any
               Terms Agreement, including the fees and disbursements of its
               accountants and counsel, the cost of printing or other
               production and delivery of the Offering Memorandum, all
               amendments thereof and supplements thereto, the Issuing and
               Paying Agency Agreement, this Agreement, any Terms Agreement
               and all other documents relating to the offering of Notes
               pursuant hereto and thereto, the cost of preparing,
               printing, packaging and delivering the Notes, the fees and
               disbursements of the Issuing and Paying Agent and any paying
               or other agents under the Issuing and Paying Agency
               Agreement and the fees of any agency that rates the Notes,
               (2) reimburse each of you on a quarterly basis for all<PAGE>





                                                                         13



               reasonable out-of-pocket expenses incurred by you in
               connection with this Agreement and the transactions
               contemplated hereby and (3) pay the reasonable fees and
               expenses of Jones, Day, Reavis & Pogue incurred in
               connection with this Agreement and the transactions
               contemplated hereby.

                  (iv)  Each time that the Offering Memorandum is amended
               or supplemented (other than solely (1) to provide updated
               financial information, (2) to specify additional or revised
               terms of the Notes, (3) as a result of the incorporation by
               reference of a document filed by the Issuer with the
               Securities and Exchange Commission and/or (4) to revise the
               plan of distribution), the Issuer shall deliver or cause to
               be delivered promptly to each of you an officer's
               certificate and an opinion of counsel for the Issuer, dated
               the date of such amendment or of such supplement, in form
               reasonably satisfactory to each of you, of the same tenor as
               the certificate and opinion referred to in Sections 5(a)(ii)
               and (iii) but modified to relate to the Offering Memorandum,
               this Agreement and the Issuing and Paying Agency Agreement
               as then in effect.  At the request of either Agent, the
               Issuer shall furnish to each of you an officer's certificate
               and an opinion of counsel for the Issuer, each dated not
               more than five days prior to the date of delivery and in a
               form reasonably satisfactory to each of you, of the same
               tenor as the certificate and opinion referred to in Sections
               5(a)(ii) and (iii) but modified to relate to the Offering
               Memorandum, this Agreement and the Issuing and Paying Agency
               Agreement as then in effect.  At the request of either
               Agent, the Issuer shall furnish to you a letter of the
               independent accountants for the Issuer of the same tenor as
               the letter referred to in Section 5(a)(v), but modified to
               relate to the most recent annual and quarterly financial
               statements of the Issuer included in the Offering Memorandum
               as then in effect pursuant to Section 4(a)(ix).

                   (v)  Unless otherwise specified in any Terms Agreement,
               the Issuer shall not, without the prior consent of the
               Purchaser thereunder, issue or announce the proposed
               issuance of any of its debt securities (including Notes),
               which are denominated in the same currency as, and have
               similar maturities, similar interest rates and other terms
               (including in respect of the method of computing interest)
               substantially similar to those of, the Notes being purchased
               pursuant to such Terms Agreement, during the period
               commencing on the date on which the Issuer accepts an offer
               to purchase any Note in accordance with such Terms Agreement
               and terminating on the Closing Date for the sale of such
               Note.<PAGE>





                                                                         14



                  (vi)  The Issuer shall deliver to each of you, from time
               to time, as many copies of the Offering Memorandum and of
               any amendment or supplement that has been prepared with
               respect thereto, and as many copies of any financial
               statements and other periodic reports that the Issuer may
               furnish generally to holders of its debt securities, as each
               of you may reasonably request.

                 (vii)  Except as otherwise provided in Section 4(b), if at
               any time during the term of this Agreement the Issuer has
               been advised that any event shall have occurred or condition
               exist as a result of which it is necessary, in the
               reasonable opinion of counsel for the Agents or counsel for
               the Company, to further amend or supplement the Offering
               Memorandum in order that the Offering Memorandum will not
               include an untrue statement of material fact or omit to
               state a material fact necessary in order to make the
               statements therein not misleading in the light of the
               circumstances existing at the time the Offering Memorandum
               is delivered to a purchaser, immediate telephone notice
               shall be given by the Issuer, and confirmed in writing, to
               each of you to cease the solicitation of offers to purchase
               the Notes in each of your capacity as agent and to promptly
               prepare and deliver to each of you such amendment or
               supplement (in form and substance satisfactory to counsel
               for the Agents) as may be necessary to correct such untrue
               statement or omission.

                (viii)  The Issuer shall furnish to each of you in written
               form all interim financial statement information updating
               the financial statement information included in, or as an
               exhibit, attachment or appendix to, the Offering Memorandum
               promptly upon publication of such interim information and,
               within 45 days of the end of each such interim period, cause
               the Offering Memorandum to be supplemented to include such
               financial information and corresponding information for the
               comparable period of the preceding fiscal year and financial
               information showing year-to-date results for such current
               fiscal year together with comparative prior information for
               the preceding fiscal year, as well as such other information
               and explanations as shall be necessary for an understanding
               of such financial information, which supplement may be in
               the form of a separate quarterly or semiannual report or
               report attached to the Offering Memorandum.

                  (ix)  The Issuer shall furnish to each of you the audited
               consolidated financial statements updating the audited
               consolidated financial statements and the financial
               information included in the Offering Memorandum for each
               corresponding fiscal year as promptly as practicable after<PAGE>





                                                                         15



               the publication of such financial statements but in any
               event not later than 90 days after the end of such fiscal
               year and cause the Offering Memorandum to be supplemented to
               include such audited financial statements and the
               accountants' report with respect thereto, as well as such
               other information and explanations as shall be necessary for
               an understanding of such financial statements, which
               supplement may be in the form of a separate annual report
               attached to the Offering Memorandum.

                   (x)  The Issuer shall (1) furnish to each of you copies
               of any proposed supplement or amendment to the Offering
               Memorandum (other than any document incorporated by
               reference therein) two business days in advance of using
               such supplement or amendment and (2) permit each of you to
               review and comment as to the form and content thereof;
               PROVIDED, HOWEVER, that an amendment or supplement prepared
               to set forth terms and conditions of any Notes need not be
               furnished to or reviewed by those of you who are not named
               therein, who shall not have solicited offers for such Notes
               and who are not to be Purchasers of such Notes.  Any of you
               who shall have an objection to such proposed amendment or
               supplement may immediately terminate this Agreement as to
               such of you by notice to the Issuer.  At the request of any
               of you so terminating, the Issuer shall promptly amend or
               supplement the Offering Memorandum to indicate those firms
               that remain Agents.

                  (xi)  The Issuer shall not offer or sell any securities
               under circumstances which would require the registration of
               any of the Notes under the Securities Act.

                 (xii)  The Issuer will take appropriate steps to ensure
               that the aggregate principal amount of Notes at any time
               outstanding does not exceed U.S. $75,000,000, will not issue
               any Notes if such issuance would cause such limit to be
               exceeded, will promptly notify each of you in the event that
               at any time such limit has been reached and will promptly
               notify each of you if such limit is increased pursuant to
               this Agreement.

                (xiii)  The Issuer shall not, without having given prior
               written notice to each of you, consent to any amendment of
               the Issuing and Paying Agency Agreement.  The Issuer shall
               promptly notify each of you of any resignation or removal of
               the Issuing and Paying Agent and the appointment of any
               successor thereto.

                 (xiv)  For so long as any of the Notes are outstanding,
               the Issuer will make available, upon request, and such<PAGE>





                                                                         16



               quantities as are reasonably requested, to any holder of a
               Note and any prospective purchaser to whom such Note may be
               offered or sold by such holder of the information (the "Rule
               144A Information") required to allow the resale of such Note
               pursuant to Rule 144A and shall further amend or supplement
               the Offering Memorandum as required to satisfy Rule
               144A(d)(4);

                        If at any time an event occurs or conditions exist
               as a result of which any Rule 144A Information or any
               amendment or supplement thereto would not comply with the
               requirements of Rule 144A or would include an untrue
               statement of a material fact or omit to state a material
               fact necessary in order to make the statements therein, in
               the light of the circumstances under which they were made
               not misleading, the Issuer will promptly notify each of you
               by telephone (with confirmation in writing) and will
               promptly prepare an amendment or supplement to such Rule
               144A Information that will correct such non-compliance,
               untrue statement or omission.  Notwithstanding the
               foregoing, the Issuer shall not be required to provide more
               information than is required to be delivered pursuant to
               Rule 144A as in effect as of the date the Notes of the
               corresponding Tranche shall have been first issued, to the
               extent that such information cannot be provided without
               unreasonable additional expense to the Issuer.

                  (xv)  None of you shall be liable or responsible to the
               Issuer for any losses, damages or liabilities suffered or
               incurred by the Issuer, including any losses, damages or
               liabilities under the Securities Act, arising from or
               relating to any resale or transfer of a Note by a holder in
               any manner that does not comply with the applicable
               restrictions on resale and transfer or the procedures
               required for resale and transfer set forth herein, in the
               Issuing and Paying Agency Agreement and in the Notes;
               provided that each of you, severally and not jointly, shall
               remain liable for the performance of your own obligations
               under this Agreement.

                 (xvi)  The Issuer will at all times ensure that all
               approvals, authorizations, consents or other orders of, and
               all filings with, any governmental or other administrative
               agency or body will be, prior to the time required, obtained
               or made (1) so that the Issuer may lawfully perform its
               obligations under the Notes, this Agreement and the Issuing
               and Paying Agency Agreement and (2) so that performance of
               such obligations will, in all respects material to the
               Issuer and its subsidiaries considered as a single
               enterprise or material to the Issuer's ability to perform<PAGE>





                                                                         17



               its obligations under this Agreement, the Issuing and Paying
               Agency Agreement or the Notes, comply with any laws,
               decrees, regulations, judgments or orders of any court,
               government, governmental authority or agency to which the
               Issuer or any of its subsidiaries or any of their respective
               properties or assets is subject.

                (xvii)  The Issuer will send to each of you a copy of every
               notice of a meeting of the holders of the Notes (or any of
               them) that is sent by the Issuer to such holders at the same
               time it is sent to such holders and will promptly notify
               each of you immediately upon its becoming aware that a
               meeting of the holders of the Notes (or any of them) has
               been convened by any of such holders.

               (xviii)  The Issuer shall promptly notify each of you of any
               lowering in the ratings of any of the Issuer's debt
               securities by any Rating Agency, or any public announcement
               that any Rating Agency has under surveillance or review its
               ratings of any such debt securities (other than an
               announcement with positive implications of a possible
               upgrading, and no implication of a possible downgrading, of
               such rating).

                 (xix)  During the six-month period following the issue
               date of any Note, neither the Issuer nor any affiliate of
               the Issuer will directly or indirectly, sell, offer for
               sale, solicit offers to buy or otherwise negotiate in
               respect of, any of the Notes or any other security (as
               defined in the Securities Act) which will be integrated with
               such sale of Notes in a manner that would require the
               registration of the Notes under the Securities Act.

                    (xx)  The Issuer will immediately notify each Agent by
               telephone, promptly confirmed in writing, of any change, or
               any development that the Company has reasonable cause to
               believe will involve a prospective change in the financial
               condition, earnings, results of operations, business or
               business prospects or properties of the Issuer and its
               subsidiaries considered as a single enterprise, that if not
               disclosed in the Offering Memorandum would cause the
               Offering Memorandum to include an untrue statement of fact
               or to omit to state a material fact necessary in order to
               make the statements therein, in the light of the
               circumstances under which they were made or existing at the
               time of the Offering Memorandum is delivered to a
               prospective purchaser of Notes, not misleading.  In such
               event, each Agent shall not thereafter attempt to offer or
               place any of the Notes until the Issuer shall have prepared
               and furnished to each Agent, in such numbers as may be<PAGE>





                                                                         18



               required, supplements to or amendments of the Offering
               Memorandum reflecting any such material change.

                    (xxi)  If required by the Rules and Regulations, the
               Issuer will file five copies of a notice on Form D with the
               Commission no later than fifteen days after the first sale
               of a Note hereunder.

                    (xxii)  In the event that any Note being offered or to
               be offered by an Agent would be ineligible for resale under
               Rule 144A (because such Note is of the same class (within
               the meaning of Rule 144A) as any other securities of the
               Issuer that are at such time listed on a national securities
               exchange registered under Section 6 of the Exchange Act, or
               quoted in a U.S.  automated inter-dealer quotation system),
               the Issuer shall immediately notify each Agent (by
               telephone, confirmed in writing) of such fact and will
               promptly prepare and deliver to the Agents an amendment or
               supplement to the Offering Memorandum describing the Notes
               that are ineligible, the reason for such ineligibility and
               any other relevant information relating thereto.

                    (xxiii)  As of the date of delivery of any Notes sold
               hereunder, the Issuer will not have any securities of the
               same class as such Notes listed on a national securities
               exchange registered under Section 6 of the Exchange Act or
               quoted in a U.S. automated inter-dealer quotation system.

                    (xxiv)  The Issuer and its subsidiaries possess such
               certificates, authorities, permits, licenses and approvals
               issued by the appropriate federal, state or local regulatory
               agencies or bodies necessary to conduct the business now
               operated by them except where failure to so possess would
               not have a material adverse effect on the financial
               condition, earnings, results of operations, business or
               business prospects or properties of the Issuer and its
               subsidiaries considered as a single enterprise; the Issuer
               and its subsidiaries are in compliance with the terms and
               conditions of all such certificates, authorities, permits,
               licenses and approvals, except where the failure so to
               comply would not have a material adverse effect on the
               financial condition, earnings, results of operations,
               business or business prospects or properties of the Issuer
               and its subsidiaries considered as a single enterprise; and
               neither the Issuer nor any of its subsidiaries has received
               any notice of proceedings relating to the revocation or
               modification of any such certificate, authority, permit,
               license or approval that, singly or in the aggregate, if the
               subject of an unfavorable decision, ruling or finding, would
               have a material adverse effect on the financial condition,<PAGE>





                                                                         19



               earnings, results of operations, business or business
               prospects or properties of the Issuer and its subsidiaries
               considered as a single enterprise.

                    (b)  The obligations of the Issuer under Sections
          4(a)(i), (ii), (vi), (vii), (viii) and (ix) shall be suspended
          during any period of time during which the Issuer shall have
          suspended the solicitation of offers to purchase Notes by written
          notice to each Agent; PROVIDED, HOWEVER, such obligations of the
          Issuer shall remain in effect with respect to an Agent (i) for a
          period of two years following the date of notice of such
          suspension if such Agent shall own any Notes with the intention
          of reselling them as contemplated by Section 2(b) or (ii) if the
          Issuer has accepted an offer to purchase Notes solicited by such
          Agent pursuant to this Agreement and the settlement for such sale
          shall not have occurred.  At least one week prior to end of any
          such period during which solicitations shall have been suspended,
          the Issuer shall notify each of you of any event or change
          contemplated by the last sentence of Section 4(a)(ii) or by
          Section 4(a)(vii) of which the Issuer would have been obligated
          to notify each of you, and shall provide each of you all written
          information and supplements referred to in Sections 4(a)(viii)
          and (ix) that the Issuer would have been obligated to deliver to
          each of you, had the Issuer not so suspended the solicitation of
          offers.

                    5.  CONDITIONS TO THE OBLIGATIONS OF THE AGENTS. 
          (a) The obligations of each Agent to solicit offers to purchase
          any Notes shall be subject to the accuracy of the representations
          and warranties on the part of the Issuer contained herein as of
          each time the Issuer gives a notice requesting any of you to
          solicit offers as agents, at and as of each acceptance of an
          offer by the Issuer and upon delivery of any Note to the
          purchaser (or its agent) pursuant to such offer, to the accuracy
          of the statements of the Issuer made in any certificates
          delivered pursuant to the provisions hereof as of the respective
          dates of such certificates, to the performance and observance by
          the Issuer of all covenants and agreements herein contained on
          its part to be performed and observed and to the following
          additional conditions precedent:

                   (i)  The Issuer shall have obtained all authorizations,
               consents and approvals of any court or governmental or other
               regulatory agency or body required in connection with the
               issuance and sale of the Notes and the performance of its
               obligations hereunder and under the Notes and the Issuing
               and Paying Agency Agreement.

                  (ii)  The Issuer shall have furnished to each Agent a
               certificate of the Issuer signed by the principal financial<PAGE>





                                                                         20



               or accounting officer of the Issuer, dated as of the date
               hereof, to the effect that, to the best of his knowledge
               after reasonable inquiry:

                         (1)  the representations and warranties of the
                    Issuer in this Agreement are true and correct in all
                    material respects on and as of the date of the
                    certificate and the Issuer has performed in all
                    material respects all its obligations and satisfied all
                    the conditions on its part to be satisfied at or prior
                    to the date of the certificate;

                         (2)  since the date of the most recent financial
                    statements included in the current Offering Memorandum,
                    there has been no material adverse change, or to the
                    knowledge of the Issuer any development involving a
                    prospective change, in the financial condition,
                    earnings, business or business prospects or properties
                    of the Issuer and its subsidiaries considered as a
                    single enterprise, except as set forth or contemplated
                    in the Offering Memorandum; and

                         (3)  the Offering Memorandum (other than
                    statements made therein in reliance upon and in
                    conformity with information furnished to the Issuer in
                    writing by any of you, or on behalf of any of you which
                    has been furnished by a person authorized to do so,
                    specifically for use therein, as to which no
                    representation shall be made) does not contain any
                    untrue statement of a material fact or omit to state
                    any material fact necessary to make the statements
                    therein, in light of the circumstances under which they
                    were made, not misleading.

                 (iii)  The Issuer shall have furnished to each Agent the
               opinion of Murtha, Cullina, Richter and Pinney, counsel to
               the Issuer, substantially in the form of Exhibit C hereto.

                  (iv)  Each Agent shall have received from Jones, Day,
               Reavis & Pogue, your counsel, such opinion with respect to
               the proposed issue and sale of the Notes and other related
               matters as such Agent may reasonably require.

                   (v)  Arthur Andersen LLP, independent accountants for
               the Issuer, shall have furnished to each Agent an executed
               copy of a letter in the form heretofore agreed to by each
               Agent.

                    (b) The documents required to be delivered by this
          Section 5 shall be delivered at, or transmitted by telecopy (with<PAGE>





                                                                         21



          an undertaking promptly to forward the original copies thereof)
          to, the offices of Jones, Day, Reavis & Pogue, counsel for the
          Agents, at 77 West Wacker, Chicago, Illinois  60601-1692 Attn:
          Timothy J. Melton, at 9:30 A.M., New York City time, on the date
          hereof, and an original of each such document will be sent to
          each of you.

                    6.  CONDITIONS TO THE OBLIGATIONS OF A PURCHASER. 
          (a) The obligations of any Purchaser to purchase any Notes shall
          be subject to the accuracy of the representations and warranties
          on the part of the Issuer contained herein or in the
          corresponding Terms Agreement, if any, at and as of the date of
          the corresponding Terms Agreement and upon the delivery to any
          Purchaser of any Note pursuant to such Terms Agreement, to the
          performance and observance by the Issuer of all covenants and
          agreements herein or therein contained on its part to be
          performed and observed and to the following additional conditions
          precedent:

                   (i)  The Issuer shall have obtained all authorizations,
               consents and approvals of any court or governmental or other
               regulatory agency or body required in connection with the
               issuance and sale of the Notes and the performance of its
               obligations hereunder and under the Notes and the Issuing
               and Paying Agency Agreement.

                  (ii)  To the extent provided by such Terms Agreement, the
               Purchaser shall have received, appropriately updated, (1) a
               certificate of the Issuer dated as of the Closing Date to
               the effect set forth in Section 5(a)(ii), (2) the opinion of
               Murtha, Cullina, Richter and Pinney dated the Closing Date
               to the effect set forth in Section 5(a)(iii), (3) the
               opinion of Jones, Day, Reavis & Pogue dated the Closing Date
               to the effect set forth in Section 5(a)(iv) and (4) the
               letter of Arthur Andersen LLP dated the Closing Date to the
               effect set forth in Section 5(a)(v).

                 (iii)  Prior to the Closing Date, the Issuer shall have
               furnished to the Purchaser such further information,
               certificates and documents as the Purchaser may reasonably
               request.

                    (b) If any of the conditions specified in this Section
          6 shall not have been fulfilled in all material respects when and
          as provided in this Agreement and any Terms Agreement, or if any
          other event occurs which permits cancellation under this
          Agreement, such Terms Agreement and all obligations of the
          Purchaser thereunder and with respect to the Notes subject
          thereto may be canceled at, or at any time prior to, the
          respective Closing Date by the Purchaser.  Notice of such<PAGE>





                                                                         22



          cancellation shall be given to the Issuer in writing or by
          telephone confirmed in writing, which confirmation may be made by
          telex or telecopy.

                    7.  CONDITIONS TO ALL PURHCASES.  The consummation of
          the sale of any Note pursuant to this Agreement shall be subject
          to the further condition that, at the date of issuance thereof,
          in the judgment of the Purchaser or the Agent that obtained the
          offer, (a) each condition set forth in Section 5 or 6, as
          applicable, shall be satisfied and (b) subsequent to the
          respective dates as of which information is given in the Offering
          Memorandum (current as of the date of such agreement to purchase
          a Note), except as set forth therein or contemplated thereby,
          there shall not have occurred any change, or to the knowledge of
          the Issuer any development involving a prospective change, in or
          affecting the business or business prospects or properties of the
          Issuer and its subsidiaries, the effect of which makes it
          impracticable or inadvisable to market the Notes or to proceed
          with completion of the sale and payment for such Notes.

                    8.  RESTRICTIONS ON OFFERS AND SALES OF THE NOTES.  
          Each party hereto represents, warrants and agrees, severally and
          not jointly, as follows:

                    (a)  It will solicit offers to purchase Notes only
               from, and it will offer and sell Notes only to, (i)
               institutional purchasers that qualify, or that it reasonably
               believes qualify, as "accredited investors" as such term is
               defined in paragraphs (1), (2) and (3) of Rule 501(a) under
               the Securities Act ("Institutional Accredited Investors"),
               (ii) institutional purchasers that are, or that it
               reasonably believes are, "qualified institutional buyers" as
               such term is defined in paragraph (a)(1) of Rule 144A
               ("QIBs") or (iii) any of you.  If it is an Agent, any
               resales or transfers of Notes through, or arranged by, it
               similarly will be made only to Institutional Accredited
               Investors or QIBs.  It will solicit such offers and offer to
               sell Notes to Institutional Accredited Investors that are
               not QIBs only by approaching such Institutional Accredited
               Investors on an individual basis.  Neither it, its
               affiliates, nor any person acting on its or their behalf
               (except that no representation is made with respect to any
               other party to this Agreement) has engaged or will engage in
               any form of general solicitation or general advertising
               (within the meaning of Rule 502(c) under the Securities Act)
               in the United States with respect to the Notes.

                    (b)  It will make reasonable inquiry to determine
               whether a purchaser is purchasing for such purchaser's own
               account as an Institutional Accredited Investor or QIB or<PAGE>





                                                                         23



               for the account of others and not with a view to, or for
               sale in connection with, the public distribution thereof in
               any transaction that would be in violation of Federal or
               state securities laws and, in the case of any purchaser
               acting on behalf of one or more third parties, it shall make
               reasonable inquiry to determine that each such third party
               is an Institutional Accredited Investor or QIB and that the
               amount being purchased on behalf of each such third party is
               not less than the authorized minimum denomination of such
               Notes; PROVIDED that the Issuer shall have no duty to make
               any such inquiry in connection with sales to any of you or
               pursuant to offers transmitted to it by any of you.

                    9.  INDEMNIFICATION AND CONTRIBUTION.  (a)  The Issuer
          agrees to indemnify and hold harmless each of you and each person
          who controls one or more of you within the meaning of either the
          Securities Act or the Exchange Act against any and all losses,
          claims, damages or liabilities, joint or several, to which any
          such person may become subject under the law of any jurisdiction
          insofar as such losses, claims, damages or liabilities (or
          actions in respect thereof) arise out of or are based upon any
          untrue statement or alleged untrue statement of a material fact
          contained in the Offering Memorandum, in any amendment thereof or
          supplement thereto or in any information provided by the Issuer
          and furnished to any purchaser of the Notes pursuant to Section
          4(a)(xiv), or arise out of or are based upon the omission or
          alleged omission to state therein a material fact required to be
          stated therein or necessary to make the statements therein not
          misleading, and agrees to reimburse each such indemnified party,
          as incurred, for any legal or other expenses reasonably incurred
          by it in connection with investigating or defending any such
          loss, claim, damage, liability or action; PROVIDED, HOWEVER, that
          (i) the Issuer will not be liable in any such case to the extent
          that any such loss, claim, damage or liability arises out of or
          is based upon any such untrue statement or alleged untrue
          statement or omission or alleged omission made in the Offering
          Memorandum or in any amendment thereof or supplement thereto in
          reliance upon and in conformity with written information
          furnished to the Issuer by the person seeking indemnification, or
          on behalf of such person by another person authorized to do so,
          specifically for use in connection with the preparation thereof
          and identified on Schedule III hereto and (ii) the Issuer will
          not be liable to those of you (or any person controlling those of
          you) who sold to the person asserting any such loss, claim,
          damage or liability the Notes which are the subject thereof to
          the extent that (1) such loss, claim, damage or liability arises
          out of or is based upon the fact that such person did not receive
          a copy of the Offering Memorandum, as amended or supplemented,
          excluding documents incorporated by reference therein, at or
          prior to the confirmation of the sale of such Notes to such<PAGE>





                                                                         24



          person in any case where delivery of the Offering Memorandum by
          such of you is required by this Agreement, unless such failure to
          deliver the Offering Memorandum was a result of noncompliance by
          the Issuer with Section 4(a)(vi) of this Agreement, and (2) such
          loss, claim, damage or liability would have been avoided by
          delivery of the Offering Memorandum to such person as so
          required.  This indemnity will be in addition to any liability
          which the Issuer may otherwise have.

                    (b)  Each of you, severally and not jointly, agrees to
          indemnify and hold harmless the Issuer and each person who
          controls the Issuer within the meaning of either the Securities
          Act or the Exchange Act, to the same extent as the foregoing
          indemnity from the Issuer, but only with reference to written
          information relating to the indemnifying party furnished to the
          Issuer by it, or on its behalf by another person authorized to do
          so, specifically for use in the preparation of the Offering
          Memorandum or any amendment thereof (or supplement thereto) and
          identified on Schedule III hereto.  This indemnity will be in
          addition to any liability which any of you may otherwise have.

                    (c)  Promptly after receipt by an indemnified party
          under this Section 9 of notice of the commencement of any action,
          such indemnified party will, if a claim in respect thereof is to
          be made against the indemnifying party under this Section 9,
          notify the indemnifying party in writing of the commencement
          thereof; but the omission so to notify the indemnifying party
          will not relieve it from any liability which it may have to any
          indemnified party otherwise than under this Section 9.  In case
          any such action is brought against any indemnified party, and it
          notifies the indemnifying party of the commencement thereof, the
          indemnifying party will be entitled to participate therein, and
          to the extent that it may elect by written notice delivered to
          the indemnified party promptly after receiving the aforesaid
          notice from such indemnified party, to assume the defense
          thereof, with counsel satisfactory to such indemnified party;
          PROVIDED, HOWEVER, that if the defendants in any such action
          include both the indemnified party and the indemnifying party and
          the indemnified party shall have reasonably concluded that there
          may be legal defenses available to it and/or other indemnified
          parties which are different from or additional to those available
          to the indemnifying party, the indemnified party or parties shall
          have the right to select separate counsel to assert such legal
          defenses and to otherwise participate in the defense of such
          action on behalf of such indemnified party or parties.  Upon
          receipt of notice from the indemnifying party to such indemnified
          party of its election so to assume the defense of such action and
          approval by the indemnified party of counsel (which approval
          shall not be unreasonably withheld), the indemnifying party will
          not be liable to such indemnified party under this Section 9 for<PAGE>





                                                                         25



          any legal or other expenses subsequently incurred by such
          indemnified party in connection with the defense thereof unless
          (i) the indemnified party shall have employed separate counsel in
          connection with the assertion of legal defenses in accordance
          with the proviso to the next preceding sentence (it being
          understood, however, that the indemnifying party shall not be
          liable for the expenses of more than one separate counsel (in
          addition to any local counsel), approved by a majority of the
          indemnified parties in the case of paragraph (a) of this Section
          9, representing the indemnified parties under such paragraph (a)
          who are parties to such action), (ii) the indemnifying party
          shall not have employed counsel satisfactory to the indemnified
          party to represent the indemnified party within a reasonable time
          after notice of commencement of the action or (iii) the
          indemnifying party has authorized the employment of counsel for
          the indemnified party at the expense of the indemnifying party;
          and except that, if clause (i) or (iii) is applicable, such
          liability shall be only in respect of the counsel referred to in
          such clause (i) or (iii).  The indemnifying party shall not be
          liable for any settlement of any action or claim effected without
          its consent, which consent shall not be unreasonably withheld.

                    (d)  In order to provide for just and equitable
          contribution in circumstances in which the indemnification
          provided for in this Section 9 is due in accordance with its
          terms but if for any reason held by a court to be unavailable on
          grounds of policy or otherwise, the Issuer and each of you shall
          contribute to the aggregate losses, claims, damages and
          liabilities (including legal or other expenses reasonably
          incurred in connection with investigating or defending same) to
          which the Issuer and any of you may be subject in such proportion
          so that each of you, severally and not jointly, is responsible
          only for that portion represented by the percentage that the
          aggregate commissions received by you yourself pursuant to
          Section 2 in connection with the Notes from which such losses,
          claims, damages and liabilities arise (or, in the case of Notes
          sold to a Purchaser, the discount to the Purchaser), bears to the
          aggregate principal amount of such Notes sold and the Issuer is
          responsible for the balance; PROVIDED, HOWEVER, that in no case
          shall any of you be responsible for any amount in excess of the
          commissions received by you yourself in connection with the Notes
          from which such losses, claims, damages and liabilities arise
          (or, in the case of Notes sold to a Purchaser, the discount to
          the Purchaser).  For purposes of this Section 9, each person who
          controls any of you within the meaning of either the Securities
          Act or the Exchange Act shall have the same rights to
          contribution as such of you and each person who controls the
          Issuer within the meaning of either the Securities Act or the
          Exchange Act shall have the same rights to contribution as the
          Issuer, subject in each case to the proviso to the preceding<PAGE>





                                                                         26



          sentence.  No person guilty of fraudulent misrepresentation
          (within the meaning of Section 11(f) of the Securities Act) shall
          be entitled to contribution hereunder from any person who was not
          guilty of such fraudulent misrepresentation.  Any party entitled
          to contribution will, promptly after receipt of notice of
          commencement of any action, suit or proceeding against such party
          in respect of which a claim for contribution may be made against
          another party or parties under this paragraph (d), notify such
          party or parties from whom contribution may be sought (which
          obligation to give notice shall be deemed to be satisfied by the
          delivery of notice pursuant to paragraph (c) of this Section 9),
          but the omission so to notify such party or parties shall not
          relieve the party or parties from whom contribution may be sought
          from any other obligation it or they may have hereunder or
          otherwise than under this paragraph (d).

                    10.  TERMINATION.  (a)  This Agreement will continue in
          effect until terminated as provided in this Section 10 or
          Section 4(a)(x).  This Agreement may be terminated by the Issuer
          as to any Agent or, in the case of any Agent, by such Agent
          insofar as this Agreement relates to such Agent, by giving at
          least 30 days' written notice of such termination to the other
          parties hereto.   Notwithstanding any such termination, the
          rights and liabilities of each party under Sections 2(a)(iv) and
          (vii), Sections 4(a)(iii), (xv) and (xvii), Sections 8(a) and (b)
          (with respect to resales and transfers of Notes), Section 9,
          Section 11 and any Terms Agreement executed prior to the date of
          termination hereof shall survive any termination of this
          Agreement, in whole or in part.  In addition, if any termination
          shall occur either (i) at a time when any Purchaser shall own any
          Notes, purchased under this Agreement from the Issuer, with the
          intention of reselling them or (ii) after the Issuer has accepted
          an offer to purchase Notes and prior to the related settlement,
          all agreements, terms and conditions relating to the purchase and
          sale of such Notes shall also remain in effect.

                    (b)  Each agreement to purchase Notes pursuant to a
          solicitation by an Agent hereunder, and each agreement by a
          Purchaser to purchase Notes hereunder, shall be subject to
          termination in the absolute discretion of such Agent or the
          Purchaser (as the case may be), by notice given to the Issuer
          prior to delivery of any payment for Notes to be purchased, if
          prior to such time (i) trading in any securities issued by the
          Issuer shall have been suspended or halted on any exchange
          (whether U.S. or foreign), or trading in securities generally on
          the New York Stock Exchange shall have been suspended or limited
          or minimum prices shall have been established on such Exchange,
          (ii) a banking moratorium shall have been declared by either U.S.
          Federal or New York State or Connecticut State authorities,
          (iii) there shall have been a lowering in the ratings of any of<PAGE>





                                                                         27



          the Issuer's debt securities by any Rating Agency or any public
          announcement that any Rating Agency has under surveillance or
          review its rating of any such debt securities (other than an
          announcement with positive implications of a possible upgrading,
          and no implication of a possible downgrading, of such rating) or
          (iv) there shall have occurred, in the reasonable judgment of
          such Agent or Purchaser (as the case may be), a material change
          in national or international political, financial or economic
          conditions that makes it impracticable or inadvisable to market
          the Notes or to proceed with completion of the sale of and
          payment for such Notes.

                    11.  REPRESENTATIONS AND INDEMNITIES TO SURVIVE.  The
          respective agreements, representations, warranties, indemnities
          and other statements of the Issuer or its officers and of each of
          you set forth in or made pursuant to this Agreement will remain
          in full force and effect, regardless of any investigation made by
          or on behalf of any of you or by or on behalf of the Issuer or
          any of the controlling persons referred to in Section 9, and will
          survive delivery of and payment for the Notes.

                    12.  INCREASES IN THE AMOUNT OF THE NOTES.  The
          aggregate principal amount of Notes that may be sold by the
          Issuer may be increased pursuant to an amendment to this
          Agreement in the form attached hereto as Exhibit D executed by
          all the parties hereto.  Upon the execution and delivery of any
          such amendment, to the extent agreed upon by the Issuer and you,
          the Issuer shall deliver to each of you, appropriately updated,
          (a) a certificate of the Issuer dated as of the date of such
          amendment to the effect set forth in Section 5(a)(ii), (b) the
          opinion of Murtha, Cullina, Richter and Pinney dated the date of
          such amendment to the effect set forth in Section 5(a)(iii) and
          (c) the letter of Arthur Andersen LLP dated the date of such
          amendment to the effect set forth in Section 5(a)(v), and the
          Issuer shall furnish to each of you such further information,
          certificates and documents as you may reasonably request.

                    13.  NOTICES.  All communications hereunder will be in
          writing, and effective only on receipt, or (but only where
          specifically provided in the Procedures) by telephone and, if
          sent to you, will be mailed, delivered, telecopied and confirmed
          or telexed and confirmed to you, at the address specified in
          Schedule II hereto; or, if sent to the Issuer, will be mailed,
          delivered, telecopied and confirmed or telexed and confirmed to
          it at 100 Columbus Boulevard, Hartford, Connecticut 06144,
          Attention:  Chief Financial Officer (telephone:  (860) 727-3000;
          telecopy:  (860) 727-3064).

                    14.  SUCCESSORS.  This Agreement will inure to the
          benefit of and be binding upon the parties hereto and their<PAGE>





                                                                         28



          respective successors and the controlling persons referred to in
          Section 9, and no other person will have any right or obligation
          hereunder.

                    15.  APPLICABLE LAW.  THIS AGREEMENT WILL BE GOVERNED
                         -------------------------------------------------
          BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
          ----------------------------------------------------------------
          YORK.
          ----

                    16.  COUNTERPARTS.  This Agreement may be signed in
          counterparts with the same effect as if the signatures thereto
          and hereto were upon the same instrument.

                    If the foregoing is in accordance with your
          understanding of our agreement, please sign and return to us the 
          enclosed duplicate hereof, whereupon this letter and your
          acceptance shall represent a binding agreement between the Issuer
          and each of you.

                                   Very truly yours,

                                   CONNECTICUT NATURAL GAS CORPORATION,


                                   by:                          
                                        Name:  James P. Bolduc
                                        Title: Executive Vice President
                                               and Chief Financial Officer

          The foregoing Agreement is 
          hereby confirmed and accepted
          as of the date hereof.


          PAINEWEBBER INCORPORATED


          by:                      
               Name:
               Title:


          A.G. EDWARDS & SONS, INC.,


          by:                      
               Name:  Lester H. Krone
               Title: Vice President<PAGE>





                                 INDEX OF DEFINITIONS
                                 --------------------

                       Term                              Section
                       ----                              -------
                                             Introductory Paragraph 
          Agents                                       2(b)(i)
          Closing Date                                    1(m)
          CTG                                            2(a)(i)
          Commission                                      1(u)
          Environmental Laws                           4(a)(viii)
          Exchange Act                                  1(n)
          FERC
          Institutional Accredited                        8(a)
               Investors                     Introductory Paragraph
          Issuer
          Issuing and Paying Agency          Introductory Paragraph
               Agreement                     Introductory Paragraph 
          Issuing and Paying Agent
          Materials of Environmental                      1(n)
               Concern                       Introductory Paragraph
          Notes                                          1(a)
          Offering Memorandum                Introductory Paragraph
          Procedures                         Introductory Paragraph
          Purchaser                                      8(a)
          QIBs                                           1(c)
          Rating Agency                      Introductory Paragraph
          Regulation D                                   1(i) 
          Rule 144A                                     4(a)(xiv)
          Rule 144A Information              Introductory Paragraph
          Rules and Regulations              Introductory Paragraph
          Securities Act                                 2(b)(i)
          Terms Agreement                    Introductory Paragraph
          Tranche                            Introductory Paragraph
          Trust Indenture Act                Introductory Paragraph
          you<PAGE>





                                      SCHEDULE I
                                      ----------

                    The Issuer agrees to pay the Agents a commission equal
          to the following percentage of the principal amount of each Note
          sold by such Agent, and to pay the Purchasers a commission in the
          form of a discount to the purchase price equal to the following
          percentage of the principal amount of each Note purchased by such
          Agent under Section 2(b):

          Term                                              Commission Rate
          ----                                              ---------------

          Twelve months to less than eighteen months             .150%
          Eighteen months to less than two years                 .200%
          Two years to less than three years                     .250%
          Three years to less than four years                    .350%
          Four years to less than five years                     .450%
          Five years to less than six years                      .500%
          Six years to less than seven years                     .550%
          Seven years to less than ten years                     .600%
          Ten years to less than fifteen years                   .625%
          Fifteen years to less than twenty years                .700%
          Twenty years or longer but not more than
            thirty years                                         .750%


                    The commission rate payable to any Agent with respect
          to any Notes, and the discount with respect to Notes sold to a
          Purchaser, may be increased by agreement between the Issuer and
          such Agent or Purchaser, with no requirement that the other
          Agents or Purchasers receive notice of, or consent to, such
          higher commission rate or discount.<PAGE>





                                     SCHEDULE II
                                     -----------


          PaineWebber Incorporated
          1285 Avenue of the Americas
          New York, N.Y.  10019
          Telephone:  (212) 713-2000
          Telecopy:   (212) 969-7602
          Attention:  Walter S. Hulse, III

          A.G. Edwards & Sons, Inc.
          One North Jefferson
          St. Louis, MO  63103
          Telephone:  (314) 955-5000
          Telecopy:   (314) 955-5989
          Attention:  Corporate Debt Syndicate<PAGE>







                                     SCHEDULE III



               The information set forth below constitutes the only
          information furnished to the Issuer by or on behalf of the Agents
          expressly for use in the Offering Memorandum (or any amendment or
          supplement thereto):

                    the names PaineWebber Incorporated and A.G. Edwards &
               Sons, Inc. contained on the cover page of the Offering
               Memorandum (each of which names has been provided solely by
               the respective named placement agent).<PAGE>





                                                                  EXHIBIT A



                      MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
                      ------------------------------------------

                                      August _____, 1997

                    The Medium-Term Notes, Series B (the "Notes") of
          Connecticut Natural Gas Corporation (the "Issuers") are to be
          offered on a continuing basis by PaineWebber Incorporated and
          A.G. Edwards & Sons, Inc., as agents (the "Agents").  No Agent
          will be obligated to purchase Notes for its own account. The
          Notes are to be offered pursuant to an Amended and Restated
          Placement Agency Agreement dated August _____, 1997 between the
          Issuer and the Agents dated as of the date hereof (the
          "Agreement"). The Agreement provides both for the sale of Notes
          by the Company directly to investors (as may from time to time be
          agreed to by the Company and the Agents) in which case each such
          Agent will act as an agent of the Company in soliciting Note
          purchases, and for the sale of Notes by the Company to one or
          more of the Agents as principal for resale to investors and other
          purchasers.  The Agents have agreed to use reasonable efforts to
          solicit offers to purchase Notes.  State Street Bank and Trust
          Company, as successor to Shawmut Bank Connecticut, National
          Association (the "Issuing and Paying Agent") is the issuing and
          paying agent with respect to the Notes under the Issuing and
          Paying Agency Agreement, dated as of June 14, 1994 between the
          Issuer and the Issuing and Paying Agent as amended by the First
          Amendment thereto dated as of August _____, 1997, (the "Issuing
          and Paying Agency Agreement"), under which the Notes will be
          issued.  The Notes are in the form of Exhibit I to the Issuing
          and Paying Agency Agreement.

                    The procedures to be followed during, and the specific
          terms of, the solicitation of offers by each Agent and the sale
          as a result thereof by the Issuer are explained below.
          Administrative and record-keeping responsibilities will be
          handled for the Issuer by its Treasurer. The Issuer will advise
          each Agent and the Issuing and Paying Agent in writing of those
          persons handling administrative responsibilities with whom the
          Agents and the Issuing and Paying Agent are to communicate
          regarding offers to purchase Notes and the details of their
          delivery and will promptly advise each Agent and the Issuing and
          Paying Agent in writing if any such person shall cease to handle
          such responsibilities or of the authorization of any additional
          person to handle such responsibilities.

                    The Notes will either be issued (a) in book-entry form
          and represented by one or more fully registered Notes (each, a
          "Book-Entry Note") delivered to the Issuing and Paying Agent, as


                                         A-1<PAGE>





          agent for The Depository Trust Company ("DTC"), and recorded in
          the book-entry system maintained by DTC, or (b) in certificated
          form delivered to the purchaser thereof or a person designated by
          such purchaser.  Except in the limited circumstances described in
          the Offering Memorandum, owners of beneficial interests in Book-
          Entry Notes will not be entitled to physical delivery of Notes in
          certificated form equal in principal amount to their respective
          beneficial interests.

                    General procedures relating to the issuance of all
          Notes are set forth in Part I hereof.  Book-Entry Notes will be
          issued in accordance with the procedures set forth in Part II, as
          adjusted in accordance with changes in DTC's  operating
          requirements.  Notes issued in certificated form will be issued
          in accordance with the procedures set forth in Part III hereof. 
          Capitalized terms used herein that are not otherwise defined
          shall have the meanings ascribed thereto in the Issuing and
          Paying Agency Agreement or the Notes, as the case may be.  Only
          those provisions in the Administrative Procedures that are
          applicable to the particular role to be performed by the related
          Agent or Agents shall apply to the offer and sale of the relevant
          Note.  To the extent the procedures set forth below conflict with
          the provisions of the Notes, the Issuing and Paying Agency
          Agreement, DTC's operating requirements or the Agreement, the
          relevant provisions of the Notes, the Issuing and Paying Agency
          Agreement, DTC's operating requirements or the Placement Agency
          Agreement shall control.



























                                         A-2<PAGE>






                            PART I:  PROCEDURES OF GENERAL
                                    APPLICABILITY

          MATURITIES:         Each Note will mature on a Business Day not
                              less than one year nor more than 30 years
                              after the Original Issue Date (as defined
                              below) for such Note.

          DENOMINATIONS:      The denomination of any Note will be in U.S.
                              dollars and a minimum of $100,000 or any
                              larger amount that is an integral multiple of
                              $1,000.

          FORM:               Notes will be issued only in fully registered
                              form in accordance with the Issuing and
                              Paying Agency Agreement.

          DATE OF ISSUANCE:   Each Note will be dated the date of its
                              authentication by the Issuing and Paying
                              Agent.   Each Note will also bear an
                              "Original Issue Date", which will be the date
                              of its original issue, or in the case of any
                              Note (or portion thereof) issued subsequently
                              upon transfer or exchange of a Note or in
                              lieu of a destroyed, mutilated, defaced, lost
                              or stolen Note, the Original Issue Date of
                              the predecessor Note, regardless of the date
                              of authentication of such subsequently issued
                              Note.


          PROCEDURE FOR RATE
          SETTING AND POSTING:

                              The Issuer and the Agents will discuss from
                              time to time the aggregate principal amount
                              of, the issuance price of and the interest
                              rates to be borne by, Notes that may be sold
                              as a result of the solicitation of offers by
                              the Agents. If the Issuer decides to set
                              prices of, and rates borne by, any Notes in
                              respect of which the Agents are to solicit
                              offers (the setting of such prices and rates
                              to be referred to herein as "posting") or if
                              the Issuer decides to change prices or rates
                              previously posted by it, it will promptly
                              advise the Agents of such prices and rates to
                              be posted.

                              If the Issuer does not post prices and rates
                              and an Agent receives an offer to purchase


                                         A-3<PAGE>





                              Notes, such Agent will promptly advise the
                              Issuer by telephone of any such offer other
                              than offers rejected by such Agent as
                              provided below.

          ACCEPTANCE OF
          OFFERS:             Any Agent may, in its reasonable discretion,
                              reject any offer to purchase Notes received
                              by it, in whole or, if permitted by the terms
                              thereof, in part. Each Agent will promptly
                              advise the Issuer of any offers to purchase
                              Notes received by such Agent, other than
                              offers rejected by such Agent and, if such
                              Agent or any of its affiliates shall be the
                              offeror, shall advise the Issuer of that
                              fact. The Issuer will have the sole right to
                              accept offers to purchase Notes in whole or,
                              if permitted by the terms thereof, in part.
                              The Issuer may reject any such offer in whole
                              or, if permitted by the terms thereof, in
                              part. The Issuer will forthwith advise an
                              Agent of the acceptance or rejection of any
                              offer received through such Agent (the
                              "Presenting Agent"), and such Agent will so
                              advise the offeror.

          SUSPENSION OF
          SOLICITATION:       The Issuer reserves the right, in its sole
                              discretion, to instruct the Agents to suspend
                              at any time, for any period of time or
                              permanently, the solicitation of offers to
                              purchase Notes. Upon receipt of such
                              instructions, the Agents will forthwith
                              suspend solicitation of offers to purchase
                              Notes from the Issuer until such time as the
                              Issuer has advised them that such
                              solicitation may be resumed.

                              In the event that at the time the Issuer
                              suspends solicitation of offers to purchase
                              there shall be any offers previously
                              communicated to the Issuer by any Agent and
                              which offers have not been accepted or
                              rejected at the time of such suspension, the
                              Issuer will accept or reject such offers in
                              whole or, if permitted by the terms thereof,
                              in part, and will promptly advise the
                              Presenting Agents of such acceptances or
                              rejections.

                              In the event that at the time the Issuer
                              suspends solicitation of offers to purchase


                                         A-4<PAGE>





                              there shall be any offers that have been
                              accepted by the Issuer but are outstanding
                              for settlement, the Issuer will promptly
                              advise the Agents and the Issuing and Paying
                              Agent whether such offers may be settled and
                              whether copies of the Offering Memorandum as
                              in effect at the time of the suspension,
                              together with any appropriate Supplement, may
                              be delivered in connection with the
                              settlement of such offers. The Issuer will
                              have the sole responsibility for such
                              decision and for any arrangements that may be
                              made in the event that the Issuer determines
                              that such offers may not be settled or that
                              copies of such Offering Memorandum or
                              Supplement may not be so delivered. No such
                              suspension shall excuse any failure by the
                              Issuer to fulfill a contractual obligation to
                              deliver any Notes.

          DELIVERY OF
          OFFERING MEMORANDUM:

                              Subject to the immediately preceding
                              paragraph, the Presenting Agent will deliver
                              to each purchaser of Notes an Offering
                              Memorandum (other than documents incorporated
                              by reference therein unless such documents
                              are otherwise attached to the Offering
                              Memorandum) and, if applicable, a Supplement
                              as herein described with respect to each Note
                              sold pursuant to an offer solicited by such
                              Presenting Agent. Subject to the immediately
                              preceding paragraph, if notice of a change in
                              the terms of such Notes from the terms set
                              forth in the Offering Memorandum, as amended
                              or supplemented, is received by the
                              Presenting Agent between the time an offer
                              for a Note is received and the time the
                              Offering Memorandum is delivered to a
                              purchaser, such Offering Memorandum shall be
                              in the form in effect when the corresponding
                              offer was accepted. The Issuer will make such
                              delivery if such Note is sold directly by the
                              Issuer to a purchaser (other than a
                              Purchaser).


          CONFIRMATION:       For each offer to purchase a Note solicited
                              by an Agent and accepted by the Issuer, such
                              Agent will issue a confirmation to the
                              purchaser, with a copy to the Issuer, setting


                                         A-5<PAGE>





                              forth the details set forth below in clauses
                              l through 8 of the first paragraph under
                              "Details for Settlement" and delivery and
                              payment instructions.

          SETTLEMENT DATE:    Subject to Section 6 of the Agreement, the
                              Settlement Date with respect to any offer to
                              purchase Notes accepted by the Issuer will be
                              the fifth Business Day next succeeding the
                              date of acceptance unless otherwise agreed by
                              the purchaser and the Issuer and shall be
                              specified upon acceptance of such offer.  

          ISSUING AND PAYING
          AGENT NOT TO RISK FUNDS:

                              Nothing herein shall be deemed to require the
                              Issuing and Paying Agent to risk or expend
                              its own funds in connection with any payment
                              to the Issuer or the Agents or any purchaser,
                              it being understood by all parties that
                              payments made by the Issuing and Paying Agent
                              to the Issuer or the Agents or a purchaser
                              shall be made only to the extent that
                              immediately available funds are provided to
                              the Issuing and Paying Agent for such
                              purpose.

          AUTHENTICITY OF
          SIGNATURES:         The Issuer will cause the Issuing and Paying
                              Agent to furnish the Agents from time to time
                              with the specimen signatures of each of the
                              Issuing and Paying Agent's officers,
                              employees or agents who has been authorized
                              by the Issuing and Paying Agent to
                              authenticate Notes, but the Agents will have
                              no obligation or liability to the Issuer or
                              to the Issuing and Paying Agent in respect of
                              the authenticity of the signature of any
                              officer, employee or agent of the Issuer or
                              the Issuing and Paying Agent on any Note.

          PAYMENT OF EXPENSES:

                              Each Agent shall forward to the Issuer, on a
                              quarterly basis, a statement of the out-of-
                              pocket expenses incurred by such Agent during
                              that quarter that are reimbursable to it
                              pursuant to the terms of the Agency
                              Agreement. The Issuer will remit payment to
                              each Agent currently on a quarterly basis.



                                         A-6<PAGE>





          RESTRICTION ON
          TRANSFERS:          No Note may be resold or transferred in any
                              manner that does not comply with the
                              applicable restrictions on resale or transfer
                              or the procedures required for resale or
                              transfer set forth in the Issuing and Paying
                              Agency Agreement and on the Note certificate.

                              The Issuing and Paying Agent shall have no
                              obligation to monitor such restrictions,
                              other than as specifically provided in the
                              Issuing and Paying Agency Agreement.

                        PART II:  PROCEDURES FOR NOTES ISSUED
                        -------------------------------------
                                  IN BOOK-ENTRY FORM
                                  ------------------

                    In connection with the qualification of the Book-Entry
          Notes for eligibility in the book-entry system maintained by DTC,
          the Issuing and Paying Agent will perform the custodial, document
          control and administrative functions described below, in
          accordance with its respective obligations under a Letter of
          Representations from the Company and the Issuing and Paying Agent
          to DTC, dated June 14, 1994, and a Medium-Term Note Certificate
          Agreement, dated December 21, 1993, between the Issuing and
          Paying Agent and DTC (the "Certificate Agreement"), and its
          obligations as a participant in DTC, including DTC's Same-Day
          Funds Settlement System ("SDFS").

          ISSUANCE:                     All Book-Entry Notes having the
                                        same Original Issue Date,
                                        redemption provisions, interest
                                        payment dates, interest rate, and
                                        Stated Maturity (collectively, the
                                        "Terms") will be represented
                                        initially by a single Global Note
                                        in fully registered form without
                                        coupons.

                                        Each Book-Entry Note will be dated
                                        and issued as of the date of its
                                        authentication by the Issuing and
                                        Paying Agent.  Each Book-Entry Note
                                        will bear an original issue date,
                                        which will be (i) with respect to
                                        an original Book-Entry Note (or any
                                        portion thereof), the original
                                        issue date specified in such Book-
                                        Entry Note and (ii) following a
                                        consolidation of Global Notes, with
                                        respect to the Book-Entry Note


                                         A-7<PAGE>





                                        resulting from such consolidation,
                                        the most recent Interest Payment
                                        Date to which interest has been
                                        paid or duly provided for on the
                                        predecessor Global Notes,
                                        regardless of the date of
                                        authentication of such resulting
                                        Book-Entry Note.  No Book-Entry
                                        Note will represent any securities
                                        in certificated form.


          IDENTIFICATION:               The Issuer has arranged with the
                                        CUSIP Service Bureau of Standard &
                                        Poor's Ratings Group, a division of
                                        McGraw-Hill, (the "CUSIP Service
                                        Bureau") for the reservation of
                                        approximately 900 PPN numbers which
                                        have been reserved for and relating
                                        to Book-Entry Notes and the Company
                                        has delivered to the Issuing and
                                        Paying Agent and DTC a written list
                                        of such PPN numbers.  The Company
                                        will assign PPN numbers to Book-
                                        Entry Notes as described below
                                        under Settlement Procedure B.  DTC
                                        will notify the CUSIP Service
                                        Bureau periodically of the PPN
                                        numbers that the Issuer has
                                        assigned to Book-Entry Notes.  The
                                        Issuing and Paying Agent will
                                        notify the Issuer at any time when
                                        fewer than 100 of the reserved PPN
                                        numbers remain unassigned to Book-
                                        Entry Notes, and, if it deems
                                        necessary, the Issuer will reserve
                                        additional PPN numbers for
                                        assignment to Book-Entry Notes. 
                                        Upon obtaining such additional PPN
                                        numbers, the Issuer will deliver a
                                        list of such additional numbers to
                                        the Issuing and Paying Agent and
                                        DTC.

          REGISTRATION:                 Unless otherwise specified by DTC,
                                        each Book-Entry Note will be
                                        registered in the name of Cede &
                                        Co., as nominee for DTC, on the
                                        register maintained by the Issuing
                                        and Paying Agent under the Issuing
                                        and Paying Agency Agreement.  The
                                        beneficial owner of a Note issued


                                         A-8<PAGE>





                                        in book-entry form (I.E., an owner
                                        of a beneficial interest in a Book-
                                        Entry Note) (or one or more
                                        indirect participants in DTC
                                        designated by such owner) will
                                        designate one or more participants
                                        in DTC (with respect to such Note
                                        issued in book-entry form, the
                                        "Participants") to act as agent or
                                        agents for such beneficial owner in
                                        connection with the book-entry
                                        system maintained by DTC, and DTC
                                        will record in book-entry form, in
                                        accordance with instructions
                                        provided by such Participants, a
                                        credit balance with respect to such
                                        Note issued in book-entry form in
                                        the account of such Participants. 
                                        The ownership interest of such
                                        beneficial owner in such Note
                                        issued in book-entry form will be
                                        recorded through the records of
                                        such Participants or through the
                                        separate records of such
                                        Participants and one or more
                                        indirect participants in DTC.

          TRANSFERS:                    Transfers of beneficial ownership   
                                        interests in a Book-Entry Note will
                                        be accomplished by book entries
                                        made by DTC and, in turn, by
                                        Participants (and in certain cases,
                                        one or more indirect participants
                                        in DTC) acting on behalf of
                                        beneficial transferors and
                                        transferees of such Book-Entry
                                        Note.

          EXCHANGES:                    After the first Interest Payment
                                        Date on individual issues of the
                                        Notes, the Issuing and Paying Agent
                                        may deliver to DTC Reorganization
                                        Department, Interactive Data
                                        Control and the CUSIP Service
                                        Bureau at any time a written notice
                                        of consolidation specifying (a) the
                                        PPN numbers of two or more Global
                                        Notes outstanding on such date that
                                        represent Book-Entry Notes having
                                        the same Terms, (other than
                                        Original Issue Dates) and for which
                                        interest has been paid to the same


                                         A-9<PAGE>





                                        date; (b) a date, occurring at
                                        least 30 days after such written
                                        notice is delivered and at least 30
                                        days before the next Interest
                                        Payment Date for the related Notes
                                        issued in book-entry form, on which
                                        such Global Notes shall be
                                        exchanged for a single replacement
                                        Global Note; and (c) a new PPN
                                        number, obtained from the Issuer,
                                        to be assigned to such replacement
                                        Global Note.  Upon receipt of such
                                        a notice, DTC will send to its
                                        participants (including the Issuing
                                        and Paying Agent) a written
                                        reorganization notice to the effect
                                        that such exchange will occur on
                                        such date.  Prior to the specified
                                        exchange date, the Issuing and
                                        Paying Agent will deliver to the
                                        CUSIP Service Bureau written notice
                                        setting forth such exchange date
                                        and the new PPN number and stating
                                        that, as of such exchange date, the
                                        PPN numbers of the Global Notes to
                                        be exchanged will no longer be
                                        valid.  On the specified exchange
                                        date, the Issuing and Paying Agent
                                        will exchange such Global Notes for
                                        a single Global Note bearing the
                                        new PPN number and the PPN numbers
                                        of the exchanged Global Notes will,
                                        in accordance with CUSIP Service
                                        Bureau procedures, be canceled and
                                        not immediately reassigned.

          INTEREST PAYMENTS:            GENERAL.  Interest (if any) on each
                                        Note will accrue from the Original
                                        Issue Date of such Note, and will
                                        be calculated and paid in the
                                        manner described in such Note.

                                        Unless otherwise provided in the
                                        Issuing and Paying Agency Agreement
                                        or the Notes, the first payment of
                                        interest on any Note originally
                                        issued after a Record Date and on
                                        or before the next succeeding
                                        Interest Payment Date will be made
                                        no earlier than the Interest
                                        Payment Date following the next
                                        succeeding Record Date. Interest


                                         A-10<PAGE>





                                        payable at maturity of a Note, or
                                        upon earlier redemption or
                                        repayment, will be payable to the
                                        person to whom the principal of
                                        such Note is payable.   DTC will
                                        arrange for each pending deposit
                                        message described under Settlement
                                        Procedure C below to be transmitted
                                        to Standard & Poor's Ratings Group,
                                        which will use the information in
                                        the message to include certain
                                        terms of the related Book-Entry
                                        Note in the appropriate daily bond
                                        report published by Standard &
                                        Poor's Ratings Group.

                                        RECORD DATES.  The Record Dates
                                        with respect to the Interest
                                        Payment Dates shall be the first
                                        calendar day (whether or not a
                                        Business Day) of the month of such
                                        Interest Payment Date.

                                        INTEREST PAYMENT DATES.  Unless
                                        otherwise specified pursuant to
                                        Settlement Procedure "A" below,
                                        interest payments on Book-Entry
                                        Notes will be made semiannually on
                                        January 15 and July 15 of each year
                                        and at Maturity; PROVIDED, HOWEVER,
                                        that if an Interest Payment Date
                                        for a Book-Entry Note is not a
                                        Business Day, the payment due on
                                        such day shall be made on the next
                                        succeeding Business Day and no
                                        interest shall accrue on such
                                        payment for the period from and
                                        after such Interest Payment Date;
                                        PROVIDED FURTHER, that in the case
                                        of a Book-Entry Note issued between
                                        a Regular Record Date and an
                                        Interest Payment Date, the first
                                        interest payment will be made on
                                        the Interest Payment Date following
                                        the next succeeding Regular Record
                                        Date.

          PAYMENTS OF PRINCIPAL AND     PAYMENTS OF INTEREST ONLY.  Not
            INTEREST:                   later than five Business Days
                                        following each Record Date, the
                                        Issuing and Paying Agent will
                                        deliver to the Issuer and DTC a


                                         A-11<PAGE>





                                        written notice specifying by PPN
                                        number the amount of interest to be
                                        paid on each Book-Entry Note on the
                                        following Interest Payment Date
                                        (other than an Interest Payment
                                        Date coinciding with a Maturity
                                        Date) and the total of such
                                        amounts.  DTC will confirm the
                                        amount payable on each Book-Entry
                                        Note on such Interest Payment Date
                                        by reference to the daily bond
                                        reports published by Standard &
                                        Poor's.  On such Interest Payment
                                        Date, the Issuer will pay to the
                                        Issuing and Paying Agent, and the
                                        Issuing and Paying Agent in turn
                                        will pay to DTC, such total amount
                                        of interest due (other than at
                                        Maturity Date), at the times and in
                                        the manner set forth below under
                                        "Manner of Payment."

                                        PAYMENTS AT MATURITY DATE.  Prior
                                        to the first Business Day of each
                                        month in which principal and/or
                                        interest is to be paid, the Issuing
                                        and Paying Agent will deliver to
                                        the Issuer and DTC a written list
                                        of principal, interest and premium,
                                        if any, to be paid on each Book-
                                        Entry Note maturing either at
                                        Stated Maturity or on a Redemption
                                        Date in the following month.  The
                                        Issuing and Paying Agent, the
                                        Issuer and DTC will confirm the
                                        amounts of such principal and
                                        interest payments with respect to a
                                        Book-Entry Note on or about the
                                        fifth Business Day preceding the
                                        Maturity of such Book-Entry Note.
                                        On or before Maturity Date, the
                                        Issuer will pay to the Issuing and
                                        Paying Agent, and the Issuing and
                                        Paying Agent in turn will pay to
                                        DTC, the principal amount of such
                                        Note, together with interest and
                                        premium, if any, due at such
                                        Maturity Date, at the times and in
                                        the manner set forth below under
                                        "Manner of Payment."  Promptly
                                        after payment to DTC of the
                                        principal and interest due at


                                         A-12<PAGE>





                                        Maturity of such Book-Entry Note,
                                        the Issuing and Paying Agent will
                                        cancel such Book-Entry Note in
                                        accordance with the Issuing and
                                        Paying Agency Agreement and so
                                        advise the Issuer.  If any Maturity
                                        of a Book-Entry Note is not a
                                        Business Day, the payment due on
                                        such day shall be made on the next
                                        succeeding Business Day and no
                                        interest shall accrue on such
                                        payment for the period from and
                                        after such Maturity.

                                        MANNER OF PAYMENT.  The total
                                        amount of any principal, premium,
                                        if any, and interest due on Book-
                                        Entry Notes on any Interest Payment
                                        Date or at Maturity shall be
                                        transferred by the Issuer to the
                                        Issuing and Paying Agent to an
                                        account designated by the Issuing
                                        and Paying Agent in funds available
                                        for use by the Issuing and Paying
                                        Agent as of 12:00 noon, New York
                                        City time, on such date.  The
                                        Issuer will confirm such
                                        instructions in writing to the
                                        Issuing and Paying Agent.  Prior to
                                        2:00 p.m., New York City time, on
                                        such date or as soon as possible
                                        thereafter, the Issuing and Paying
                                        Agent will pay (but only from funds
                                        withdrawn from such account) by
                                        separate wire transfer (using
                                        Fedwire message entry instructions
                                        in a form previously specified by
                                        DTC) to an account at the Federal
                                        Reserve Bank of New York previously
                                        specified by DTC, in funds
                                        available for immediate use by DTC,
                                        each payment of interest, principal
                                        and premium, if any, due on a Book-
                                        Entry Note on such date. Thereafter
                                        on such date, DTC will pay, in
                                        accordance with its SDFS operating
                                        procedures then in effect, such
                                        amounts in funds available for
                                        immediate use to the respective
                                        Participants in whose names such
                                        Notes are recorded in the book-
                                        entry system maintained by DTC. 


                                         A-13<PAGE>





                                        Neither the Issuer nor the Issuing
                                        and Paying Agent shall have any
                                        responsibility or liability for the
                                        payment by DTC of the principal of,
                                        or premium, if any, or interest on,
                                        the Book-Entry Notes to such
                                        Participants.

                                        WITHHOLDING TAXES.  The amount of
                                        any taxes required under applicable
                                        law to be withheld from any
                                        interest payment on a Note will be
                                        determined and withheld by the
                                        Participant, indirect participant
                                        in DTC or other Person responsible
                                        for forwarding payments and
                                        materials directly to the
                                        beneficial owner of such Note.

          SETTLEMENT PROCEDURES:        Settlement Procedures with regard
                                        to each Book-Entry Note sold by the
                                        Presenting Agent, as agent of the
                                        Company, will be as follows:

                                        A.  The Presenting Agent will
                                            advise the Issuer by telephone
                                            (confirmed in writing) or
                                            telecopy of the following
                                            Settlement information:

                                            1.  Taxpayer identification
                                                number of the purchaser.

                                            2.  Principal amount of the
                                                Note.

                                            3.  Interest rate, and interest
                                                payment dates.

                                            4.  Price to public of the
                                                Note.

                                            5.  Trade date.

                                            6.  Settlement Date (Original
                                                Issue Date).

                                            7.  Maturity.

                                            8.  Net proceeds to the
                                                Company.



                                         A-14<PAGE>





                                            9.  Agent's commission.

                                            10. Redemption provisions, if
                                                any.

                                        B.  The Issuer will advise the
                                            Issuing and Paying Agent by
                                            telephone (confirmed in
                                            writing) or telecopy by 10:00
                                            a.m. on the second Business Day
                                            preceding the Settlement Date
                                            of the above settlement
                                            information received from the
                                            Presenting Agent with respect
                                            to the Book-Entry Note
                                            representing such Note. 

                                        C.  The Issuer will assign a PPN
                                            number to such Note and the
                                            Issuing and Paying Agent will
                                            communicate to DTC through
                                            DTC's Participant Terminal
                                            System, a pending deposit
                                            message specifying the
                                            following settlement
                                            information, which will route
                                            such relevant information to
                                            the Presenting Agent, Standard
                                            & Poor's Ratings Group and
                                            Interactive Data Corporation:

                                            1.  The information set forth
                                                in Settlement Procedure A.

                                            2.  Identification numbers of
                                                the participant accounts
                                                maintained by DTC on behalf
                                                of the Issuing and Paying
                                                Agent and the Agent.

                                            3.  Initial Interest Payment
                                                Date for such Note, number
                                                of days by which such date
                                                succeeds the related Record
                                                Date for DTC purposes and,
                                                if then calculable, the
                                                amount of interest payable
                                                on such Interest Payment
                                                Date (which amount shall
                                                have been confirmed by the
                                                Issuing and Paying Agent).



                                         A-15<PAGE>





                                            4.  PPN number of the Book-
                                                Entry Note representing
                                                such Note.

                                        D.  The Issuing and Paying Agent
                                            will complete a Book-Entry Note
                                            representing such Note in a
                                            form that has been approved by
                                            the Company, the Agents and the
                                            Issuing and Paying Agent.

                                        E.  The Issuing and Paying Agent
                                            will authenticate the Book-
                                            Entry Note representing such
                                            Note.

                                        F.  DTC will credit such Note to
                                            the participant account of the
                                            Issuing and Paying Agent
                                            maintained by DTC.

                                        G.  The Issuing and Paying Agent
                                            will enter an SDFS deliver
                                            order through DTC's Participant
                                            Terminal System instructing DTC
                                            (i) to debit such Note to the
                                            Issuing and Paying Agent's
                                            participant account and credit
                                            such Note to the participant
                                            account of the Presenting Agent
                                            maintained by DTC and (ii) to
                                            debit the settlement account of
                                            the Presenting Agent and credit
                                            the settlement account of the
                                            Issuing and Paying Agent
                                            maintained by DTC, in an amount
                                            equal to the price of such Note
                                            less such Agent's commission. 
                                            Any entry of such a deliver
                                            order shall be deemed to
                                            constitute a representation and
                                            warranty by the Issuing and
                                            Paying Agent to DTC that (i)
                                            the Book-Entry Note
                                            representing such Note has been
                                            issued and authenticated and
                                            (ii) the Issuing and Paying
                                            Agent is holding such Book-
                                            Entry Note pursuant to the Note
                                            Certificate Agreement between
                                            the Issuing and Paying Agent
                                            and DTC.


                                         A-16<PAGE>







                                        H.  The Presenting Agent will enter
                                            an SDFS deliver order through
                                            DTC's Participant Terminal
                                            System instructing DTC (i) to
                                            debit such Note to the
                                            Presenting Agent's participant
                                            account and credit such Note to
                                            the participant account of the
                                            Participants maintained by DTC
                                            and (ii) to debit the
                                            settlement accounts of such
                                            Participants and credit the
                                            settlement account of the
                                            Presenting Agent maintained by
                                            DTC, in an amount equal to the
                                            public offering price of such
                                            Note.

                                        I.  Transfers of funds in
                                            accordance with SDFS deliver
                                            orders described in Settlement
                                            Procedures G and H will be
                                            settled in accordance with SDFS
                                            operating procedures in effect
                                            on the Settlement Date.

                                        J.  Upon receipt of such funds, the
                                            Issuing and Paying Agent will
                                            credit to an account of the
                                            Company identified to the
                                            Issuing and Paying Agent funds
                                            available for immediate use in
                                            the amount transferred to the
                                            Issuing and Paying Agent in
                                            accordance with Settlement
                                            Procedure G.

                                        K.  The Presenting Agent will
                                            confirm the purchase of such
                                            Note to the purchaser either by
                                            transmitting to the Participant
                                            with respect to such Note a
                                            confirmation order through
                                            DTC's Participant Terminal
                                            System or by mailing a written
                                            confirmation to such purchaser.






                                         A-17<PAGE>





          SETTLEMENT PROCEDURES         For orders of Notes accepted by the
            TIMETABLE:                  Company, Settlement Procedures "A"
                                        through "K" set forth above shall
                                        be completed as soon as possible
                                        but not later than the respective
                                        times (New York City time) set
                                        forth below:

                                        SETTLEMENT
                                        PROCEDURE           TIME
                                        ----------          ----
                                            A       11:00 a.m. on the trade 
                                                    date
                                            B       12:00 noon on the trade
                                                    date
                                            C       2:00 p.m. on the trade  
                                                    date
                                            D       3:00 p.m. on the  
                                                    Business Day before  
                                                    Settlement Date
                                            E       9:00 a.m. on Settlement 
                                                     Date
                                            F       10:00 a.m. on
                                                    Settlement   Date
                                            G-H     2:00 p.m. on the
                                                    Settlement Date
                                             I      4:45 p.m. on Settlement
                                                    Date
                                            J-K     5:00 p.m. on Settlement
                                                    Date

                                        If a sale is to be settled more
                                        than one Business Day after the
                                        trade date, Settlement Procedures
                                        A, B, and C shall be completed as
                                        soon as practicable but in no event
                                        later than 11:00 a.m. and 12:00
                                        noon on the first Business Day
                                        after such sale date but no later
                                        than 2:00 p.m. on the Business Day
                                        before the Settlement Date,
                                        respectively.  Settlement Procedure
                                        I is subject to extension in
                                        accordance with any extension of
                                        Fedwire closing deadlines and in
                                        the other events specified in the
                                        SDFS operating procedures in effect
                                        on the Settlement Date.

                                        If settlement of a Book-Entry Note
                                        is rescheduled or canceled, the
                                        Issuing and Paying Agent, if


                                         A-18<PAGE>





                                        notified in time, will deliver to
                                        DTC, through DTC's Participant
                                        Terminal System, a cancellation
                                        message to such effect by no later
                                        than 2:00 pm., New York City time,
                                        on the Business Day immediately
                                        preceding the scheduled Settlement
                                        Date.

          FAILURE TO SETTLE:            If the Issuing and Paying Agent
                                        fails to enter an SDFS deliver
                                        order with respect to a Book-Entry
                                        Note pursuant to Settlement
                                        Procedure G, the Issuing and Paying
                                        Agent may deliver to DTC, through
                                        DTC's Participant Terminal System,
                                        as soon as practicable a withdrawal
                                        message instructing DTC to debit
                                        such Note to the participant
                                        account of the Issuing and Paying
                                        Agent maintained at DTC.  DTC will
                                        process the withdrawal message,
                                        PROVIDED that such participant
                                        account contains a principal amount
                                        of the Book-Entry Note representing
                                        such Note that is at least equal to
                                        the principal amount to be debited. 
                                        If withdrawal messages are
                                        processed with respect to all the
                                        Notes represented by a Book-Entry
                                        Note, the Issuing and Paying Agent
                                        will mark such Book-Entry Note
                                        "canceled," make appropriate
                                        entries in its records and send
                                        such canceled Book-Entry Note to
                                        the Company.  The CUSIP number
                                        assigned to such Book-Entry Note
                                        shall, in accordance with CUSIP
                                        Service Bureau procedures, be
                                        canceled and not immediately
                                        reassigned.  If withdrawal messages
                                        are processed with respect to a
                                        portion of the Notes represented by
                                        a Book-Entry Note, the Issuing and
                                        Paying Agent will exchange such
                                        Book-Entry Note for two Book-Entry
                                        Notes, one of which shall represent
                                        the Book-Entry Notes for which
                                        withdrawal messages are processed
                                        and shall be canceled immediately
                                        after issuance, and the other of
                                        which shall represent the other


                                         A-19<PAGE>





                                        Notes previously represented by the
                                        surrendered Book-Entry Note and
                                        shall bear the CUSIP number of the
                                        surrendered Book-Entry Note.

                                        If the purchase price for any Book-
                                        Entry Note is not timely paid to
                                        the Participants with respect to
                                        such Note by the beneficial
                                        purchaser thereof (or a person,
                                        including an indirect participant
                                        in DTC, acting on behalf of such
                                        purchaser), such Participants and,
                                        in turn, the related Agent may
                                        enter SDFS deliver orders through
                                        DTC's Participant Terminal System
                                        reversing the orders entered
                                        pursuant to Settlement Procedures G
                                        and H, respectively.  Thereafter,
                                        the Issuing and Paying Agent will
                                        deliver the withdrawal message and
                                        take the related actions described
                                        in the preceding paragraph.  If
                                        such failure shall have occurred
                                        for any reason other than default
                                        by the applicable Agent to perform
                                        its obligations hereunder or under
                                        the Placement Agency Agreement, the
                                        Company will reimburse such Agent
                                        on an equitable basis for its loss
                                        of the use of funds during the
                                        period when the funds were credited
                                        to the account of the Company.

                                        Notwithstanding the foregoing, upon
                                        any failure to settle with respect
                                        to a Book-Entry Note, DTC may take
                                        any actions in accordance with its
                                        SDFS operating Procedures then in
                                        effect.  In the event of a failure
                                        to settle with respect to a Note
                                        that was to have been represented
                                        by a Book-Entry Note also
                                        representing other Notes, the
                                        Issuing and Paying Agent will
                                        provide, in accordance with
                                        Settlement Procedures D and E, for
                                        the authentication and issuance of
                                        a Book-Entry Note representing such
                                        remaining Notes and will make
                                        appropriate entries in its records.



                                         A-20<PAGE>






                        PART III:  PROCEDURES FOR NOTES ISSUED
                        --------------------------------------
                                   IN CERTIFICATED FORM
                                   --------------------


          INTEREST PAYMENTS:            Interest (if any) on each Note will
                                        accrue from the Original Issue Date
                                        of such Note, and will be
                                        calculated and paid in the manner
                                        described in such Note.

                                        Unless otherwise provided in the
                                        Issuing and Paying Agency Agreement
                                        or the Notes, the first payment of
                                        interest on any Note originally
                                        issued after a Record Date and on
                                        or before the next succeeding
                                        Interest Payment Date will be made
                                        no earlier than the Interest
                                        Payment Date following the next
                                        succeeding Record Date. Interest
                                        payable at maturity of a Note, or
                                        upon earlier redemption or
                                        repayment, will be payable to the
                                        person to whom the principal of
                                        such Note is payable. All interest
                                        payments for each Interest Payment
                                        Date (excluding interest payments
                                        made on the Maturity Date or upon
                                        the acceleration thereof or on
                                        earlier redemption) will be made by
                                        check mailed to the person entitled
                                        thereto as provided above, or at
                                        the option of the registered
                                        holder, at such other place in the
                                        United States as the registered
                                        holder shall designate to the
                                        Issuing and Paying Agent in
                                        writing, except that a holder of
                                        the equivalent of $10,000,000 or
                                        more in aggregate principal amount
                                        of Notes with the same Interest
                                        Payment Date shall be entitled to
                                        receive such payments in
                                        immediately available funds paid to
                                        an account at a bank in New York,
                                        New York (or other bank consented
                                        to by the Issuer and the Issuing
                                        and Paying Agent), but only if
                                        appropriate payment instructions


                                         A-21<PAGE>





                                        have been received in writing by
                                        the Issuing and Paying Agent not
                                        less than 10 days prior to the
                                        applicable Interest Payment Date
                                        (provided that such bank designated
                                        by the registered holder has
                                        appropriate facilities therefor).

                                        Within five Business Days following
                                        each Record Date, the Issuing and
                                        Paying Agent will provide to the
                                        Issuer a list of interest payments
                                        to be made for each Note on the
                                        next succeeding Interest Payment
                                        Date and the total amount of the
                                        interest payments. The Issuing and
                                        Paying Agent will provide monthly
                                        to the Issuer a list of the
                                        principal, premium, if any, and
                                        interest to be paid on Notes
                                        maturing or being redeemed in the
                                        next succeeding month.

          SETTLEMENT:                   The Issuer will instruct the
                                        Issuing and Paying Agent to effect
                                        delivery of each Note no later than
                                        1:00 p.m., New York City time, on
                                        the Settlement Date to the
                                        Presenting Agent for delivery to
                                        the purchaser.

          DETAILS FOR
          SETTLEMENT:                   For each offer to purchase a Note
                                        that is accepted by the Issuer, the
                                        Presenting Agent will provide
                                        (unless provided by the purchaser
                                        directly to the Issuer) by
                                        telephone the following information
                                        to the Issuer:

                                        1.  The exact name of the
                                            Registered Owner.
                                        2.  The exact address of the
                                            Registered Owner and the
                                            address for delivery, notices
                                            and payments of principal and
                                            interest.
                                        3.  The taxpayer identification
                                            number of the Registered Owner.
                                        4.  A description of the terms and
                                            provisions of the Notes that
                                            includes the information


                                         A-22<PAGE>





                                            identified in Exhibit B to the
                                            Agreement and any other
                                            information required to
                                            describe such Notes properly.
                                        5.  The Issue Price.
                                        6.  The Trade Date.
                                        7.  The Settlement Date.
                                        8.  The Presenting Agent's
                                            commission, determined as
                                            provided in Section 2(a) of
                                            the Agreement.

                                        The Issuer will advise the Issuing
                                        and Paying Agent of the foregoing
                                        information for each offer to
                                        purchase a Note solicited by the
                                        Presenting Agent and accepted by
                                        the Issuer in time for the Issuing
                                        and Paying Agent to prepare and
                                        authenticate the required Note, but
                                        not later than 10:00 a.m. New York
                                        City time on the second Business
                                        Day preceding the Settlement Date.
                                        Before accepting any offer to
                                        purchase a Note to be settled in
                                        less than three Business Days, the
                                        Issuer shall verify that the
                                        Issuing and Paying Agent will have
                                        adequate time to prepare and
                                        authenticate such Note.

                                        After receiving from the Presenting
                                        Agent the details for each offer to
                                        purchase a Note, the Issuer will,
                                        after recording the details and any
                                        necessary calculations, provide
                                        appropriate documentation to the
                                        Issuing and Paying Agent, including
                                        the information provided by the
                                        Presenting Agent necessary for the
                                        preparation and authentication of
                                        such Note. Prior to preparing the
                                        Note for delivery (but in any case
                                        no later than 10:00 a.m. on the
                                        Business Day next preceding the
                                        Settlement Date therefor), the
                                        Issuing and Paying Agent will
                                        confirm the details of such issue
                                        with the Issuer, and the Issuer
                                        will confirm such instruction to
                                        the Presenting Agent, in each case
                                        by telephone, telecopy or telex.


                                         A-23<PAGE>





          DELIVERIES AND
          CASH PAYMENT:                 Upon receipt of appropriate
                                        documentation and instructions with
                                        respect to the Notes constituting a
                                        Tranche, the Issuer will cause the
                                        Issuing and Paying Agent to prepare
                                        and authenticate the form of Note
                                        previously approved by the Issuer,
                                        the Presenting Agent and the
                                        Issuing and Paying Agent and
                                        deliver such Note and a customer
                                        receipt to the purchaser.

                                        If the form of Note is not
                                        pre-printed and four-ply, the
                                        Issuing and Paying Agent shall
                                        deliver a photocopy of such
                                        authenticated Note to the
                                        Presenting Agent and the Issuer and
                                        shall retain one copy. Otherwise,
                                        it shall deliver the copies in the
                                        four-ply Note as follows:

                                            Stub l--For the Presenting
                                                    Agent.
                                            Stub 2--For the Issuer.
                                            Stub 3--For the Issuing and
                                                    Paying Agent.

                                        Each Note shall be authenticated on
                                        the Settlement Date therefor. The
                                        Issuing and Paying Agent will
                                        authenticate each Note and deliver
                                        it to the Presenting Agent (and
                                        deliver the stubs as indicated
                                        above), all in accordance with
                                        written instructions (or oral
                                        instructions confirmed in writing,
                                        which may be given by telex or
                                        telecopy, on the next Business Day)
                                        from the Issuer.

                                        Upon verification by the Presenting
                                        Agent that a Note has been prepared
                                        and properly authenticated by the
                                        Issuing and Paying Agent and
                                        registered in the name of the
                                        purchaser in the proper principal
                                        amount, payment will be made to the
                                        Issuer by the Presenting Agent the
                                        same day in immediately available
                                        funds. Such payment shall be made


                                         A-24<PAGE>





                                        only upon prior receipt by the
                                        Presenting Agent of immediately
                                        available funds from or on behalf
                                        of the purchaser unless the
                                        Presenting Agent decides, at its
                                        option, exercised in the sole
                                        discretion of such Presenting
                                        Agent, to advance its own funds for
                                        such payment against subsequent
                                        receipt of funds from the
                                        purchaser. The Presenting Agent
                                        shall immediately notify the Issuer
                                        of its decision to advance its own
                                        funds for payment against
                                        subsequent receipt of funds from a
                                        purchaser.

                                        Upon delivery of a Note to the
                                        Presenting Agent, the Presenting
                                        Agent shall promptly deliver such
                                        Note to the purchaser.

                                        In the event any Note is
                                        incorrectly prepared, the Issuing
                                        and Paying Agent shall promptly
                                        issue a replacement Note in
                                        exchange for the incorrectly
                                        prepared Note.

          FAILURE TO SETTLE:            If the Presenting Agent, at its own
                                        option, has advanced its own funds
                                        for payment against subsequent
                                        receipt of funds from a purchaser,
                                        and if such purchaser shall fail to
                                        make payment for the Note on the
                                        Settlement Date therefor, the
                                        Presenting Agent will promptly
                                        notify the Issuing and Paying Agent
                                        and the Issuer by telephone,
                                        promptly confirmed in writing,
                                        which may be given by telex or
                                        telecopy (but no later than the
                                        next Business Day). In such event,
                                        the Issuer shall promptly provide
                                        the Issuing and Paying Agent with
                                        appropriate documentation and
                                        instructions consistent with these
                                        procedures for the return of the
                                        Note to the Issuing and Paying
                                        Agent, and the Presenting Agent
                                        will promptly return the Note to
                                        the Issuing and Paying Agent. Upon


                                         A-25<PAGE>





                                        (i) confirmation from the Issuing
                                        and Paying Agent in writing which
                                        may be given by telex or telecopy)
                                        that the Issuing and Paying Agent
                                        has received the Note and upon (ii)
                                        confirmation from the Presenting
                                        Agent in writing (which may be
                                        given by telex or telecopy) that
                                        the Presenting Agent has not
                                        received payment from such
                                        purchaser (the matters referred to
                                        in clauses (i) and (ii) are
                                        referred to hereinafter as the
                                        ("confirmations"), the Issuer will
                                        promptly pay to the Presenting
                                        Agent an amount in immediately
                                        available funds equal to the amount
                                        previously paid by the Presenting
                                        Agent in respect of such Note.
                                        Assuming receipt of such Note by
                                        the Issuing and Paying Agent and of
                                        the confirmations by the Issuer,
                                        such payment will be made on the
                                        Settlement Date if reasonably
                                        practical, and in any event not
                                        later than the Business Day
                                        following the date of receipt of
                                        the Note and the confirmations. If
                                        a purchaser shall fail to make
                                        payment for such Note for any
                                        reason other than the failure of
                                        the Presenting Agent to provide the
                                        necessary information to the Issuer
                                        as described above for settlement
                                        or to provide a confirmation to the
                                        purchaser within a reasonable
                                        period of time as described above
                                        or otherwise to satisfy its
                                        obligations hereunder or in the
                                        Agreement, and if the Presenting
                                        Agent shall have otherwise complied
                                        with its obligations hereunder and
                                        in the Agreement, the Issuer will
                                        reimburse the Presenting Agent for
                                        its loss of the use of funds during
                                        the period when they were credited
                                        to the account of the Issuer.

                                        Immediately upon receipt of the
                                        Note in respect of which the
                                        failure occurred, the Issuing and
                                        Paying Agent will void said Note,


                                         A-26<PAGE>





                                        make appropriate entries in its
                                        records and destroy such Note; and
                                        upon such action, such Note will be
                                        deemed not to have been issued,
                                        authenticated or delivered.

















































                                         A-27<PAGE>





                                                                  EXHIBIT B




                                   TERMS AGREEMENT


                                                                     [Date]


          To:  CONNECTICUT NATURAL GAS CORPORATION

                                        Subject in all respects to the
          terms and conditions of the Amended and Restated Placement Agency
          Agreement (the "Agreement") dated as of August _____, 1997, among
          PaineWebber Incorporated., A.G. Edwards & Sons, Inc. and you, the
          undersigned agrees to purchase the following Notes of Connecticut
          Natural Gas Corporation:

            Principal Amount:
            Interest Rate:
            Maturity Date:
            Discount to the Purchaser:  ___% of Principal Amount
            Purchase Price:
            Closing Date and Time:
            Initial Redemption Date:
            Initial Redemption Percentage:
            Annual Redemption [Percentage Reduction]:
            Requirements to deliver 
              the documents specified in
              Section 6(a)(ii) of the
              Agreement:
                                        Certificate contemplated by
                                          clause (1):  [Required/Not
          Required]
                                        Opinion contemplated by
                                          clause (2): [Required/Not
          Required]
                                        Opinion contemplated by
                                          clause (3): [Required/Not
          Required]
                                        Letter contemplated by
                                          clause (4): [Required/Not
          Required]
            Period during which additional
              Notes may not be sold
              if not period between trade
              date and Closing Date
              as specified in Section 4(a)(v) of
              the Agreement:



                                         B-1<PAGE>








          OTHER PROVISIONS:




                                            [PAINEWEBBER INCORPORATED]
                                            [A.G. EDWARDS & SONS, INC.],
                                             as Purchaser(s),



                                            By:                          
                                                Name:
                                                Title:


          Accepted:


          CONNECTICUT NATURAL GAS CORPORATION,



          By:                                 
            Name:
            Title:

























                                         B-2<PAGE>





                                                                  EXHIBIT C




                                            August 13, 1997



          PaineWebber Incorporated
          1285 Avenue of the Americas
          New York, New York  10019

          A.G. Edwards & Sons, Inc.
          One North Jefferson
          St. Louis, Missouri  63103


            Re:     Connecticut Natural Gas Corporation U.S. $75,000,000
                    Medium-Term Notes, Series B                         
                    ----------------------------------------------------

          Dear Sirs:

               We have acted as counsel to Connecticut Natural Gas
          Corporation, a Connecticut corporation (the "Issuer"), in
          connection with the issuance by the Issuer from time to time of
          up to $75,000,000 aggregate principal amount of its Medium-Term
          Notes, Series B (the "Notes"), due from one year to thirty years
          from date of issuance, to be issued pursuant to the Issuing and
          Paying Agency Agreement dated as of June 14, 1994 (as amended by
          the First Amendment thereto, dated August 13, 1997, the "Issuing
          and Paying Agency Agreement"), between the Issuer and State
          Street Bank and Trust Company, as successor to Shawmut Bank
          Connecticut, National Association.

               In that connection, we have examined originals, or copies
          certified or otherwise identified to our satisfaction, of such
          documents, corporate records or other instruments as we have
          deemed necessary or appropriate for the purposes of this opinion,
          including:  (a) the Issuing and Paying Agency Agreement; (b) the
          form of the Notes; (c) the Amended and Restated Placement Agency
          Agreement (the "Placement Agency Agreement"), including the
          Procedures annexed thereto, dated as of August 13, 1997 (the
          "Placement Agency Agreement"), between PaineWebber Incorporated
          and A.G. Edwards & Sons, Inc. (each, an "Agent" and,
          collectively, the "Placement Agents") and the Issuer; (d) the
          Offering Memorandum dated August 13, 1997 (the "Offering
          Memorandum"), relating to the Notes, which includes and
          incorporates by reference the Issuer's audited financial
          statements as of and for the fiscal years ended September 30,
          1996 and 1995, as Exhibit A, the Issuer's unaudited financial


                                         C-1<PAGE>





          PaineWebber Incorporated
          A.G. Edwards & Sons, Inc.
          August 13, 1997
          Page 2


          statements as of and for the nine months ended June 30, 1997 and
          1996, as Exhibit B, Management's Discussion and Analysis of
          Financial Condition and Results of Operations, as Exhibit C, and
          the consolidated financial statements of the Issuer as of and for
          the fiscal years ended September 30, 1996 and 1995, and the
          related accountant's report and notes as filed with the
          Securities and Exchange Commission in Item 8 of the Issuer's
          Annual Report on Form 10-K for fiscal 1996 (collectively, the
          "Incorporated Documents"); (e) the Certificate of Incorporation
          and By-laws of the Issuer; (f) resolutions adopted by the Board
          of Directors of the Issuer at meetings held on February 22, 1994,
          May 24, 1994 and May 20, 1997; and (g) the Decision of the
          Connecticut Department of Public Utility Control dated May 11,
          1994 (Docket No. 94-04-10).  The agreements referred to in (a)
          and (c) above are herein referred to collectively as the
          "Transaction Agreements."

               With respect to matters stated herein to be to the best of
          our knowledge, we have consulted with officers of the Issuer who,
          by reason of their positions, would be expected to have knowledge
          of the relevant facts and circumstances, and made such other
          investigations as we have deemed necessary or appropriate.  
          Nothing has come to our attention in the course of such
          consultations and investigations which has caused us to believe
          that the statements so made herein as to the best of our
          knowledge are untrue, incorrect or misleading.  We have not
          searched the dockets of any court or agency for litigation or
          proceedings involving the Issuer.

               We express no opinion as to the laws of any jurisdiction
          other than the laws of Connecticut and the Federal laws of the
          United States.  We have made no inquiry into and express no
          opinion as to the laws of other jurisdictions.  As you are aware,
          the Placement Agency Agreement purports to be governed by the
          laws of the State of New York.  For purposes of this opinion we
          have assumed, without investigation, that the laws of the State
          of New York applicable to that document and the transactions
          contemplated thereby are the same in all respects as the
          applicable laws of the State of Connecticut.

               For purposes of our opinion concerning the valid existence
          of the Issuer in the State of Connecticut, we have relied upon a
          certificate of the Secretary of the State of the State of
          Connecticut.  Based upon the foregoing, and subject to the
          limitations and qualifications set forth herein, we are of the
          opinion that:


                                         C-2<PAGE>





          PaineWebber Incorporated
          A.G. Edwards & Sons, Inc.
          August 13, 1997
          Page 3


               1.  The Issuer and each of its subsidiaries have been duly
          incorporated, are validly existing as corporations under the laws
          of the State of Connecticut and have full corporate power and
          authority to own their properties and conduct their business as
          presently conducted.  The Issuer has full corporate power and
          authority to execute and deliver the Transaction Agreements and
          the Notes and to perform its obligations under such agreements
          and the Notes.

               2.  The Transaction Agreements have been duly authorized,
          executed and delivered by the Issuer and constitute legal, valid
          and binding obligations of the Issuer, enforceable against the
          Issuer in accordance with their respective terms.

               3.  The Issuer has duly authorized the execution, delivery,
          issuance, offering and sale of the Notes and performance of its
          obligations thereunder in accordance with their respective terms
          and conditions, subject to the determination of certain terms of
          the Notes by officers of the Issuer authorized by the Issuer to
          establish such terms.  Each Note, when completed, executed,
          authenticated and delivered as described in the Issuing and
          Paying Agency Agreement and the Placement Agency Agreement
          against payment of the consideration therefor, will constitute a
          legal, valid and binding obligation of the Issuer, enforceable
          against the Issuer in accordance with its terms and will entitle
          its registered owner to the benefits of the Issuing and Paying
          Agency Agreement.

               4.  The Issuing and Paying Agency Agreement and the form of
          the Notes attached thereto conform in all material respects to
          the descriptions thereof contained in the Offering Memorandum.

               5.  To the best of such counsels' knowledge, the Issuer is
          not in violation of its charter or by-laws.  The execution,
          delivery and performance of the Transaction Agreements and the
          execution, delivery, issuance, offering and sale of the Notes and
          the performance of the obligations under the Notes and such
          agreements will not conflict with, result in a breach of,
          constitute a default under or result in the creation or
          imposition of any lien, charge or encumbrance on any property or
          assets of the Issuer or its subsidiaries pursuant to the Issuer's
          Certificate of Incorporation, By-laws or, to the best of our
          knowledge, any indenture, mortgage, loan agreement, note or
          similar financial instrument to which the Issuer or any of its
          subsidiaries is a party or to which any of its or their property
          is subject or any statute, regulation or order or judgment


                                         C-3<PAGE>





          PaineWebber Incorporated
          A.G. Edwards & Sons, Inc.
          August 13, 1997
          Page 4


          applicable to the Issuer of any court, regulatory body,
          administrative agency, governmental body or arbitrator having
          jurisdiction over the Issuer or any of its subsidiaries.

               6.  Assuming that the Notes are offered, sold and issued in
          compliance with the terms and conditions of the Issuing and
          Paying Agency Agreement, the Placement Agency Agreement and the
          Procedures contemplated therein, no approval, authorization,
          consent or other order of, or filing with, any United States
          Federal or Connecticut State governmental authority is legally
          required in connection with the execution, delivery and
          performance by the Issuer of the Transaction Agreements or the
          issuance of the Notes, except such as may be required under
          applicable state securities laws in connection with the offer and
          sale of the Notes; provided, however, that the approval of the
          Connecticut Department of Public Utility Control is required in
          connection with the issuance of the Notes and has been obtained
          and is in full force and effect with respect to the general terms
          and conditions of the program for the issuance of Notes during
          the period ending September 30, 1998 subject to the requirement
          for further approval of said Department to proposed terms for the
          specific issuances of Notes as may be filed by the Issuer with
          said Department from time to time.

               7.  The Issuer is a subsidiary of CTG Resources, Inc., a
          Connecticut corporation ("CTG"), and is exempt from any
          provisions imposed upon it as a "subsidiary company" of a
          "holding company" under the Public Utility Holding Company Act of
          1935, as amended, except Section 9(a)(2) thereof.

               8.  Except as may be set forth or arising out of facts
          disclosed in the Offering Memorandum, to the best of our
          knowledge, there are no legal or governmental actions, suits or
          proceedings before any court or governmental or other regulatory
          agency or body of any jurisdiction or any arbitrator now pending
          or threatened against the Issuer, its subsidiaries or any of its
          or their properties, other than such actions, suits or
          proceedings that, considered in the aggregate, would not
          reasonably be expected to have a material adverse effect on the
          condition (financial or otherwise), earnings, business or
          properties of the Issuer or the ability of the Issuer to perform
          its obligations under the Transaction Agreements and the Notes.

               9.  The statements in the Offering Memorandum under the
          caption "Description of the Notes," to the extent that they
          constitute matters of law, summaries of legal matters, documents


                                         C-4<PAGE>





          PaineWebber Incorporated
          A.G. Edwards & Sons, Inc.
          August 13, 1997
          Page 5


          or proceedings, or legal conclusions, have been reviewed by us
          and are correct in all material respects.

               10.  The form of Note annexed as Exhibit I to the Issuing
          and Paying Agency Agreement conforms in all material respects to
          all statements relating thereto contained in the Offering
          Memorandum.

               11.  Neither registration of the Notes under the Securities
          Act of 1933, as amended, nor the qualification of an indenture
          under the Trust Indenture Act of 1939, as amended, with respect
          thereto is required for the offer, sale and, assuming the sale to
          an Agent as principal, initial resale of the Notes in the manner
          contemplated by the Placement Agency Agreement.

               12.  The Issuer is not required to register as an
          "investment company" under the Investment Company Act of 1940, as
          amended, and will not be required to so register as a result of
          the transactions contemplated by the Transaction Agreements.

               We have not independently verified the accuracy,
          completeness or fairness of the statements made or included in
          the Offering Memorandum or the Incorporated Documents and take no
          responsibility therefor, except to the extent referred to under
          Paragraph 4 above and in this paragraph.  In the course of the
          preparation by the Issuer of the Offering Memorandum, excluding
          the Incorporated Documents, we participated in conferences with
          certain officers and employees of the Issuer and with its
          accountants.  We also participated in the preparation by the
          Issuer of its Annual Report on Form 10-K for its fiscal year
          ended 1996, its Quarterly Report for the quarter ended
          December 31, 1996 and CTG's Quarterly Report for the quarter
          ended March 31, 1997, and its Proxy Statement respecting its
          annual meeting of stockholders held in 1997.  Based upon our
          examination of the Offering Memorandum, the Incorporated
          Documents, our investigation in connection with the preparation
          of the Offering Memorandum, and our participation in the
          conferences referred to above, we have no reason to believe that
          the Offering Memorandum (including the Incorporated Documents)
          contains any untrue statement of a material fact or omits to
          state any material fact necessary in order to make the statements
          therein, in light of the circumstances under which they were
          made, not misleading, provided, however, that we express no view
          with respect to any financial statements contained in or
          incorporated by reference into the Offering Memorandum or the



                                         C-5<PAGE>





          PaineWebber Incorporated
          A.G. Edwards & Sons, Inc.
          August 13, 1997
          Page 6


          Incorporated Documents or any financial information derived
          therefrom.

               The foregoing is subject to the following:

               a.   The enforceability of the Transaction Agreements and
          the Notes is subject to procedural due process and subject to
          applicable bankruptcy, insolvency, reorganization, fraudulent
          transfer, moratorium or other laws affecting creditor's rights
          generally from time to time in effect and general principles of
          equity (regardless of whether such enforceability is considered
          in a proceeding in equity or at law).

               b.   No opinion is expressed as to the enforceability of (i)
          provisions related to self-help, (ii) provisions which purport to
          establish evidentiary standards, (iii) provisions related to
          waiver of remedies (or the delay or omission of enforcement
          thereof), disclaimers, releases of legal or equitable rights,
          discharge of defenses, or liquidated damages, (iv) provisions
          releasing, exculpating or exempting a party from, or requiring
          indemnification of a party for, liability for its own action or
          inaction to the extent the action or inaction involves
          negligence, recklessness, willful misconduct, unlawful conduct or
          conduct against public policy, or (v) any particular remedy where
          another remedy has been selected.

               c.   Provisions in the Transaction Agreements and the Notes
          which permit the holders of the Notes to make determinations or
          to take actions may be subject to requirements that such
          determinations be made or actions be taken on a reasonable basis
          and in good faith.

               Each of you may rely on this opinion in connection with the
          transactions contemplated by the Transaction Agreements, but it
          may not be relied upon by any other person or for any other
          purpose whatsoever, without in each instance obtaining our prior
          written consent.

                                        Very truly yours,

                                        MURTHA, CULLINA, RICHTER AND PINNEY


                                        By:                               
                                            Willard F. Pinney, Jr.
                                            A Partner of the Firm


                                         C-6<PAGE>





                                                                  EXHIBIT D




                         CONNECTICUT NATURAL GAS CORPORATION

                                  U.S. $            

                             Medium-Term Notes, Series B
                           With Maturities From One Year to
                           Thirty Years From Date of Issue

             Amendment to Amended and Restated Placement Agency Agreement
             ------------------------------------------------------------


                                                         New York, New York
                                                                     [Date]

          PaineWebber Incorporated
          1285 Avenue of the Americas
          New York, New York  10019

          A.G. Edwards & Sons, Inc.
          One North Jefferson
          St. Louis, MO  63103


          Dear Sirs:

                    The Amended and Restated Placement Agency Agreement
          dated August 13, 1997 (the "Agreement"), between Connecticut
          Natural Gas Corporation, a Connecticut corporation (the
          "Issuer"), and you is hereby amended to increase the aggregate
          principal amount of Notes (as defined in the Agreement) at any
          time outstanding to up to U.S. $       .

                    [The documents referred to in the second sentence of
          Section 12 of the Agreement shall be delivered simultaneously
          herewith.]

                    In all other respects the Agreement shall remain in
          full force and effect.

                    This amendment to the Agreement may be executed in
          counterparts, and the executed counterparts shall together
          constitute a single instrument.

                    If the foregoing is in accordance with your
          understanding of our agreement, please sign and return to us the
          enclosed duplicate hereof, whereupon this letter shall represent


                                         D-1<PAGE>





          a binding agreement between the Issuer and each of you.  This
          letter shall not constitute a binding agreement unless and until
          it is executed by the Issuer and each of you.


                                        Very truly yours,
           
                                        CONNECTICUT NATURAL GAS CORPORATION


                                        by:                               
                                            Name:
                                            Title:


          The foregoing Agreement is 
          hereby confirmed and accepted
          as of the date hereof.

          PAINEWEBBER INCORPORATED



          by:                                
               Name:
               Title:


          A.G. Edwards & SONS, INC.,



          by:                                
               Name:
               Title:

           

















                                         D-2<PAGE>