Nicor Gas Company
Form 10-Q
Exhibit 1.01
NORTHERN ILLINOIS GAS COMPANY
$75,000,000
FIRST MORTGAGE BONDS
5 7/8% SERIES DUE AUGUST 15, 2008
UNDERWRITING AGREEMENT
August 16, 2001
Banc One Capital Markets, Inc.
Bank One Plaza
Chicago, IL 60670
Dear Sirs:
Northern Illinois Gas Company, doing business as Nicor Gas Company (the
"Company") proposes, subject to the terms and conditions stated herein and in
the General Terms and Conditions of Underwriting Agreement in the form of Annex
A hereto, a copy of which you have previously received, to issue and sell to you
(the "Underwriter"), $75,000,000 aggregate principal amount of the Company's
First Mortgage Bonds (the "Bonds"). All of the provisions of such General Terms
and Conditions of Underwriting Agreement are incorporated herein by reference in
their entirety, and shall be deemed to be a part of this Underwriting Agreement
to the same extent as if such provisions had been set forth in full herein.
Unless otherwise defined herein, terms defined in the General Terms and
Conditions of Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Bonds in the form heretofore
delivered to you is now proposed to be filed or mailed for filing with the
Commission. Such amendment or supplement sets forth the terms of the Bonds.
Subject to the terms and conditions set forth herein, the Company agrees
to issue and sell to the Underwriter, and the Underwriter agrees to purchase
from the Company, all of the Bonds on the following terms and conditions:
Aggregate principal amount of Bonds
to be purchased: $75,000,000
Rate of interest per annum to be
borne by the Bonds (payable semiannually) 5 7/8% (such rate to be
a multiple of .001%)
Maturity date of the Bonds: August 15, 2008
Price to be paid to the Company for
the Bonds: 99.102% of the
principal amount of the Bonds
plus accrued interest from
date of Supplemental Indenture
to the date of delivery of the
Bonds.
Initial public offering price of the Bonds: 99.727% of the principal
amount of the Bonds
plus accrued interest from
date of Supplemental
Indenture to the date of
delivery of the Bonds. (If
other, give details.)
Place for delivery of Bonds: The Depository Trust Company
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Date and time of Time of Delivery: August 24, 2001 at 9:00 a.m.
Chicago Time
Place for checking Bonds on the
business day prior to
Time of Delivery: The Depository Trust Company
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Redemption and Sinking Fund: The Bonds will be redeemable
in whole at any time or in
part from time to
time, at a redemption
price equal to the greater of
(i) 100% of the
principal amount of the Bonds
to be redeemed or
(ii) the sum of the present
values of the
remaining scheduled payments
of principal and
interest thereon (exclusive
of interest accrued to
the date of redemption)
discounted, at the then
current Treasury Rate (as
defined in the
Supplemental Indenture) plus
20 basis points, to
the date of redemption on a
semiannual basis
(assuming a 360-day year
consisting of twelve
30-day months), plus in each
case, accrued and
unpaid interest on the
principal amount being
redeemed to the date of
redemption. No sinking
fund will be provided.
Address for notices per Section 12
of the General Terms and Conditions
of the Underwriting Agreement: Banc One Capital Markets, Inc.
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If the foregoing is in accordance with your understanding, please sign
and return to us the enclosed counterparts hereof, whereupon it will become a
binding agreement between the Underwriter and the Company in accordance with its
terms.
Very truly yours,
NORTHERN ILLINOIS GAS COMPANY
BY:
TITLE: Vice President and
Treasurer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
BANC ONE CAPITAL MARKETS, INC.
BY:
TITLE:
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ANNEX A
NORTHERN ILLINOIS GAS COMPANY
$75,000,000
FIRST MORTGAGE BONDS
GENERAL TERMS AND CONDITIONS OF UNDERWRITING AGREEMENT
Northern Illinois Gas Company, an Illinois corporation (the "Company"),
proposes to enter into an Underwriting Agreement into which these General Terms
and Conditions are incorporated by reference ( the "Underwriting Agreement")
and, subject to the terms and conditions stated therein, to issue and sell to
the underwriter or underwriters named in Schedule I to the Underwriting
Agreement $75,000,000 aggregate principal amount of its First Mortgage Bonds
(hereinafter called the "Bonds") under the registration statement referred to in
Section 2(a) hereof. Such Bonds will be issued under the Company's Indenture
dated as of January 1, 1954, to Continental Bank, National Association, Trustee
(the "Trustee"), as supplemented by supplemental indentures dated February 9,
1954, April 1, 1956, June 1, 1959, July 1, 1960, June 1, 1963, July 1, 1963,
August 1, 1964, August 1, 1965, May 1, 1966, August 1, 1966, July 1, 1967, June
1, 1968, December 1, 1969, August 1, 1970, June 1, 1971, July 1, 1972, July 1,
1973, April 1, 1975, April 30, 1976, April 30, 1976, July 1, 1976, August 1,
1976, December 1, 1977, January 15, 1979, December 1, 1981, March 1, 1983,
October 1, 1984, December 1, 1986, March 15, 1988, July 1, 1988, July 1, 1989,
July 15, 1990, August 15, 1991, July 15, 1992, February 1, 1993, March 15, 1993,
May 1, 1993, July 1, 1993, August 15, 1994, October 15, 1995, May 10, 1996,
August 1, 1996, June 1, 1997, October 15, 1997, February 15, 1998, June 1, 1998,
February 1, 1999, February 1, 2001, and May 15, 2001 respectively, and as to be
further supplemented by a Supplemental Indenture (the "Supplemental Indenture")
which will be dated the first or fifteenth day of the calendar month in which
the "Time of Delivery" (as hereinafter defined) falls, creating the series in
which the Bonds are to be issued. Said Indenture as so supplemented is
hereinafter called the "Indenture." The term "Underwriters" herein shall refer
to the several persons, firms and corporations named in Schedule I to the
Underwriting Agreement and the term "Representatives" herein shall refer to the
Underwriters identified as the Representatives who are acting on behalf of the
Underwriters (including themselves) in the Underwriting Agreement. All
obligations of the Underwriters under the Underwriting Agreement are several and
not joint. The terms "Underwriters", "Representatives", "persons", "firms" and
"corporations" shall include the singular as well as the plural.
The terms of the issuance of the Bonds shall be as specified in the
Underwriting Agreement. The Underwriting Agreement shall constitute an agreement
by the Company and the Underwriters to be bound by all of the provisions of
these General Terms and Conditions of Underwriting Agreement, as follows:
SECTION 1. Sale of Bonds. Sales of the Bonds will be made to the
Underwriters, for whom the Representatives will act as such. The obligation of
the Company to issue and sell any of the Bonds and the obligation of any of the
Underwriters to purchase any of the Bonds shall be evidenced by the Underwriting
Agreement. The Underwriting Agreement shall specify the aggregate principal
amount of Bonds to be purchased, the rate and time of payment of interest to be
borne by the Bonds, the maturity date of the Bonds, the price to be paid to the
Company for the Bonds, the initial public offering price or other offering terms
of such Bonds and the redemption prices and other special terms, if any,
relating to the Bonds, the names of the Underwriters of such Bonds, the names of
the Representatives of such Underwriters and the amount of Bonds to be purchased
by each Underwriter, and, subject to the provisions of Section 3 hereof, shall
set forth the date, time and manner of the delivery of such Bonds. The terms of
the Bonds will be set forth in the Prospectus Supplement (as hereinafter
defined). The Underwriting Agreement shall be in the form of an executed writing
(which may be in counterparts) and may be evidenced by an exchange of telecopied
communications or any other rapid transmission device to produce a written
record of communications transmitted.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-3 with respect to the Bonds,
including a related preliminary prospectus, has been prepared by the Company
in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations of the Securities and
Exchange Commission (the "Commission") under the Act (the "Regulations"),
and has been filed with the Commission on July 20, 2001 and, if one or more
amendments to such registration statement, which may include an amended
preliminary prospectus, have been filed with the Commission, such amendments
have been similarly prepared; and such registration statement has become
effective. Such registration statement, as amended to the date of the
Underwriting Agreement, together with the prospectus supplement referred to
below is hereinafter referred to as the "Registration Statement". Such
prospectus as supplemented specifically relating to the Bonds and filed with
the Commission under Rule 424(b) of the Act is hereinafter referred to as
the "Prospectus". The Prospectus has been prepared by the Company in
conformity with the requirements of the Act and the Regulations. Copies of
the Registration Statement and any related prospectus have been delivered to
the Representatives. As used herein, Registration Statement, Prospectus and
preliminary prospectus shall include, in each case, the material
incorporated therein pursuant to Item 12 of Form S-3 filed under the
Securities Exchange Act of 1934 (the "1934 Act") on or prior to the date of
the Underwriting Agreement, and "amended", "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus shall be deemed to
include the filing by the Company of any document pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of the Underwriting
Agreement.
(b) The registration statement at the time it became effective, and the
related Prospectus and any amendments and supplements thereto filed prior to
the date of the Underwriting Agreement, conformed in all material respects
to the provisions of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") and the rules and regulations of the Commission
thereunder, on the date of the Underwriting Agreement and at the Time of
Delivery (referred to in Section 3) the Registration Statement, the
Prospectus, and any amendments and supplements thereto, and the Indenture,
will conform in all material respects to the Act, the Trust Indenture Act
and the respective rules and regulations of the Commission thereunder; and
at the time the registration statement became effective, the registration
statement and related prospectus did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and at the date
of this Underwriting Agreement and at the Time of Delivery, the Registration
Statement and the Prospectus and any amendments and supplements thereto do
not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading; provided, however, that none of the representations and
warranties in this subsection shall apply to statements in or omissions from
the Registration Statement or Prospectus or any amendment or supplement
thereto made in reliance upon and in conformity with information respecting
the Underwriters furnished to the Company in writing by or on behalf of any
Underwriter through the Representatives expressly for use in the
Registration Statement or Prospectus.
(c) The documents incorporated by reference into the Prospectus, at the
time they were filed with the Commission, complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Regulations"), and, at the date of this
Underwriting Agreement and at the Time of Delivery, when read together with
the Prospectus and any supplement thereto will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and any documents filed after the date of the Underwriting Agreement and so
incorporated by reference in the Prospectus will, when they are filed with
the Commission, comply in all material respects with the requirements of the
1934 Act and the 1934 Regulations, and when read together with the
Prospectus and any supplement thereto will not contain an untrue statement
of material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
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(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP are independent public accountants with respect
to the Company and its subsidiaries as required by the Act and the
Regulations.
(e) The financial statements included in the Registration Statement
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their operations
for the periods specified, and said financial statements have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved.
(f) The Company is a corporation in good standing, duly organized and
validly existing under the laws of Illinois, and has due corporate authority
to carry on the business in which it is engaged and to own and operate the
properties used by it in such business as described in the Prospectus. The
Company's subsidiary constitutes less than 5% of its consolidated assets and
during the year ended December 31, 2000 contributed less than 5% of its
consolidated annual operating revenues and net income, and the Company does
not consider its subsidiary to be material.
(g) The execution and delivery of the Underwriting Agreement have been
duly authorized by the Company and the Underwriting Agreement constitutes a
valid and legally binding obligation of the Company; the Bonds have been
duly authorized, and when issued and delivered pursuant to the Underwriting
Agreement and the Indenture, will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally binding
obligations of the Company in accordance with their respective terms,
entitled to the benefits provided by the Indenture; the Supplemental
Indenture has been duly authorized in substantially the form filed as an
exhibit to the Registration Statement and, when executed and delivered by
the Company and the Trustee, will constitute a valid and legally binding
instrument enforceable in accordance with its terms, except to the extent
the enforceability of the Bonds and the Indenture may be limited by
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights or general
equity principles; and the Indenture and the Bonds as executed and delivered
will conform in all material respects to the descriptions thereof in the
Prospectus.
(h) The issue and sale of the Bonds and the compliance by the Company
with all of the provisions of the Bonds, the Indenture, and the Underwriting
Agreement and the transactions contemplated thereby will not conflict with
or result in any breach or violation of any of the provisions of, or
constitute (disregarding any grace or notice period) a default under, or
result in the imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of, any other
indenture, or any mortgage, loan agreement, contract, note, lease or other
agreement or instrument to which the Company is a party or by which the
Company may be bound or to which any of the property or assets of the
Company is subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any statute or any
order, rule or regulation applicable to the Company of any court or any
federal, state or other regulatory authority or other governmental body
having jurisdiction over the Company or any of its properties.
(i) Since the respective dates as of which information is given in the
Registration Statement and Prospectus and except as may otherwise be stated
or contemplated therein; (i) there has not been any material adverse change
in the condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise, or in the earnings, affairs,
business prospects or properties of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business or arising from any court or governmental action, order or
decree, and (ii) there has been no transaction entered into by the Company
or any subsidiary which is material to the Company and its subsidiaries
considered as one enterprise, other than transactions in the ordinary course
of business.
(j) Except as set forth in the Prospectus, the Company, with minor
exceptions, and subject to noncompliance with certain procedural and other
requirements in the procurement and granting of gas franchises in a number
of smaller municipalities formerly served by Mid-Illinois Gas Company, has
statutory authority, franchises, licenses, rights-of-way, easements and
consents, free from unduly burdensome restrictions and adequate for the
conduct of the business in which it is engaged.
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(k) The Illinois Commerce Commission has entered an order authorizing
the issue and sale of the Bonds by the Company upon terms consistent with
the Underwriting Agreement, and no other consent, approval, authorization or
other order or filing with any regulatory or governmental body is required
for the issuance and sale of the Bonds and consummation of the transactions
contemplated hereby, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Bonds
by the Underwriters.
(l) The Company is not in violation of its charter or, except as
disclosed in the Prospectus, in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or its property is bound or affected
which is material to the Company and its subsidiary considered as one
enterprise.
(m) Except as set forth in the Registration Statement and Prospectus,
there are no legal or governmental proceedings pending to which the Company
or its subsidiary is a party or of which any property of the Company or its
subsidiary is the subject, and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities
or threatened by others, other than proceedings which, if determined
adversely to the Company and its subsidiary, would not individually or in
the aggregate have a material adverse effect on the business, properties,
financial position, net worth or results of operations of the Company and
its subsidiary considered as a whole.
(n) The Company has good and sufficient title to all property described
or referred to in the Indenture and purported to be conveyed thereby (except
property released from the lien of the Indenture in connection with the sale
or other disposition thereof), subject only to the lien of the Indenture and
to permitted liens as defined therein; the Indenture has been duly filed for
recordation in such manner and in such places as is required by law in order
to give constructive notice of, establish, preserve and protect the lien of
the Indenture; the Indenture constitutes a valid, direct first mortgage
lien, subject only to permitted liens, on substantially all property of the
Company, except property expressly excepted by the terms of the Indenture;
the Indenture will, when recorded or registered by the Company in accordance
with its covenants under the Indenture, constitute a valid, direct first
mortgage lien on all property of the character of that now subject to the
lien of the Indenture hereafter acquired by the Company, subject only to
permitted liens and to liens, if any, existing or placed on such
after-acquired property at the time of the acquisition thereof;
Any certificate signed by any officer of the Company and delivered to
you or to Underwriters' counsel shall be deemed a representation and warranty by
the Company to each Underwriter as to the statements made therein.
SECTION 3. Purchase, Sale and Delivery of Bonds. Following the execution
of the Underwriting Agreement, the several Underwriters propose to make a public
offering of their respective portions of the Bonds as soon as in the
Representatives' judgment it is advisable upon the terms and conditions set
forth in the Prospectus Supplement.
The Bonds to be purchased by each Underwriter pursuant to the
Underwriting Agreement, in definitive form and registered in such names as the
Representatives may request upon at least forty-eight hours' prior notice to the
Company, shall be delivered by or on behalf of the Company to the
Representatives for the respective accounts of the several Underwriters, against
payment therefor as specified in the Underwriting Agreement in immediately
available funds, at the office of ▇▇▇▇▇, Brown & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (except as hereinafter provided with respect to
delivery of such Bonds), at the time and date specified in the Underwriting
Agreement or at such other place and time and date as the Representatives and
the Company may agree upon in writing, such time and date being herein called
the "Time of Delivery". If specified by the Representatives in the Underwriting
Agreement, delivery of the Bonds will be made at the Time of Delivery at such
place in New York, New York as shall have been so specified against payment
therefor in Chicago as aforesaid.
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SECTION 4. Covenants of the Company. The Company covenants with
each Underwriter that:
(a) The Company will notify the Representatives immediately and confirm
the notice in writing (i) of the receipt of any request by the Commission
for any amendment or supplement to the Registration Statement or the
Prospectus or any amendment or supplement thereto or for additional
information, and (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the
initiation or threatened initiation of any proceedings for that purpose or
of the suspension or threatened suspension of the qualification of the Bonds
for offering or sale in any jurisdiction. The Company will make every
reasonable effort to prevent the issuance by the Commission of any stop
order and, if any such stop order shall at any time be issued, to obtain the
lifting thereof at the earliest moment.
(b) The Company will not file any amendment to the Registration
Statement or any amendment or supplement to the Prospectus (including a
prospectus filed pursuant to Rule 424 and including documents deemed to be
incorporated by reference into the Prospectus) without first having
furnished the Representatives with a copy of the proposed form thereof and
given the Representatives a reasonable opportunity to review and comment
respecting the same and having given reasonable consideration to any
comments or objections made by the Representatives.
(c) The Company will deliver to each of the Representatives, as soon as
available, one signed copy of the Registration Statement as originally filed
and of each amendment thereto, including, in each case, documents
incorporated by reference into the Registration Statement and one set of
exhibits thereto (other than exhibits incorporated by reference which will
be furnished upon specific request), and will also deliver to the
Representatives a reasonable number of conformed copies of the Registration
Statement as originally filed and of each amendment and post-effective
amendment thereto including such incorporated documents (without exhibits)
for each of the Underwriters.
(d) The Company will deliver to each Underwriter from time to time
during the period when a prospectus is required to be delivered under the
Act such number of copies of the Prospectus (as amended or supplemented and
including incorporated documents) as the Representatives may reasonably
request for the purposes contemplated by the Act or the Regulations;
provided, however, that the delivery of copies of the Prospectus (as amended
or supplemented and including incorporated documents) more than nine months
after the date of the Underwriting Agreement shall be at the expense of the
Underwriter requesting such delivery.
(e) During the period when a prospectus is required to be delivered
under the Act, the Company will comply so far as it is able, and at its own
expense (for a period not to exceed nine months), with all requirements
imposed upon it by the Act, and by Sections 13 and 14 of the 1934 Act, as
now or hereafter amended, and by the Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealing
in the Bonds during such period in accordance with the provisions hereof and
of the Prospectus.
(f) If any event shall occur as a result of which it is necessary, in
the opinion of counsel for the Company and of Underwriters' counsel, to
amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement the
Prospectus to comply with law, the Company will forthwith prepare and
furnish to the Underwriters, without expense to them except as otherwise
provided in subsection (d) of this Section 4, a reasonable number of copies
of an amendment or amendments or a supplement or supplements to the
Prospectus (in the form referred to in subsection (b) of this Section 4)
which will amend or supplement the Prospectus so that as amended or
supplemented it will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein not misleading, or so that the Prospectus will comply with law. For
the purposes of this subsection, the Company will furnish such information
as the Representatives may from time to time reasonably request.
(g) The Company will endeavor in good faith, in cooperation with the
Underwriters, to qualify the Bonds for offering and sale under the
applicable securities laws of such jurisdictions as the Representatives
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may designate; provided, however, that the Company shall not be obligated to
file any general consent to service or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so
qualified. In each jurisdiction where any of the Bonds shall be qualified as
above provided, the Company will make and file such statements and reports
in each year as are or may be reasonably required by the laws thereof.
(h) The Company will make generally available to its security holders as
soon as practicable, but not later than 75 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Section 11 (a) of the Act and the Regulations thereunder
(including, at the option of the Company, Rule 158), which need not be
certified by independent public accountants unless required by the Act or
the Regulations), covering a twelve-month period beginning on the first day
of the calendar quarter following the Time of Delivery.
(i) The Company agrees that it will not publicly offer or sell any
intermediate or long-term debt between the date of the Underwriting
Agreement and Time of Delivery without the prior written consent of the
Representatives.
SECTION 5. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under the Underwriting Agreement,
including (i) the printing and filing by the Company of the registration
statement and the printing of the Underwriting Agreement, any Agreement Among
Underwriters, any Selling Agreement, the Supplemental Indenture and the
Underwriters' Questionnaire, (ii) the authorization, issuance and delivery of
the Bonds to the Underwriters, including the printing and engraving of the
Bonds, and all taxes, if any, upon the issuance and sale of the Bonds to the
Underwriters, (iii) the qualification of the Bonds under the securities laws of
the various jurisdictions in accordance with the provisions of subsection (g) of
Section 4, including filing fees and fees and disbursements of Underwriters'
counsel in connection with such qualification and in connection with the
preparation of the Blue Sky Survey (such fees of Underwriters' counsel not to
exceed $5,000 in the aggregate), (iv) any fees charged by securities rating
services for rating the Bonds, (v) the fees and expenses of the Trustee and its
counsel in connection with the Bonds and the Supplemental Indenture, (vi) the
printing and delivery to the Underwriters and dealers in quantities as
hereinbefore stated of copies of the registration statement and all amendments
thereto, of any preliminary prospectuses and amended preliminary prospectuses,
of the Registration Statement and any amendments thereto, and of the Prospectus
and any amendments or supplements thereto, and (vii) the cost of printing and
delivery to the Underwriters of copies of the Blue Sky Survey.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 6 or Section l0(b), or is prevented by the
Company from becoming effective in accordance with the provisions of Section
l0(a), the Company shall reimburse the Underwriters severally for their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters incurred in connection with the offering.
SECTION 6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of and
compliance with the representations and warranties of the Company herein
contained, to the performance by the Company of its obligations hereunder and to
the following further conditions:
(a) At the Time of Delivery no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the Act or
proceedings therefor initiated or threatened by the Commission.
(b) At the Time of Delivery the Representatives shall have
received:
(1) The favorable opinion, dated as of the Time of Delivery, of
▇▇▇▇▇, Brown & ▇▇▇▇▇, counsel for the Company (or, with respect to the
matters in subdivision (vi) below, other counsel reasonably satisfactory
to the Underwriters), in form and substance satisfactory to counsel for
the Underwriters, to the effect that:
(i) the Company is a corporation in good standing, duly
organized and validly existing under the laws of the State of
Illinois and has due corporate authority to carry on the business in
which it is engaged and to own and operate the properties used by it
in such business;
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(ii) the Indenture is in due and proper form, has been
duly and validly authorized by the necessary corporate action and by
orders duly entered by the Illinois Commerce Commission; no
authorization, approval, consent, certificate or order of any other
state commission or regulatory authority or of any federal commission
or regulatory authority not already obtained is required in respect
of the execution and delivery of the Indenture; and the Indenture has
been duly and validly executed and delivered and is a valid and
enforceable instrument in accordance with its terms, except as
enforcement of provisions of the Indenture may be limited by
bankruptcy or other laws of general application affecting the
enforcement of creditors' rights and by general equity principles;
(iii) the Bonds are in due and proper form; the issue
and sale of the Bonds by the Company in accordance with the terms of
the Underwriting Agreement have been duly and validly authorized by
the necessary corporate action and by order duly entered by the
Illinois Commerce Commission; no authorization, approval, consent,
certificate or order of any other state commission or regulatory
authority or of any federal commission or regulatory authority not
already obtained is required in respect of such issue and sale
(except such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Bonds by
the Underwriters); the Bonds have been duly executed and delivered to
the Underwriters against payment of the agreed consideration therefor
and, assuming due authentication thereof by the Trustee, constitute
valid and enforceable obligations of the Company in accordance with
their terms, secured by the lien of and, with like exception as noted
in the foregoing subdivision (ii), entitled to the benefits provided
by the Indenture, and the registered owners of the Bonds will be
entitled to the payment of principal and interest, and premium in
case of redemption, as therein provided; the Bonds and the Indenture
conform as to legal matters in all material respects with the
statements concerning them made in the Prospectus, and such
statements accurately set forth the matters respecting the Bonds and
the Indenture required to be set forth in the Prospectus;
(iv) the Registration Statement is effective under the
Act and the Indenture has been duly qualified under the Trust
Indenture Act, and to the best of the knowledge of said counsel no
proceedings for a stop order are pending or threatened under Section
8(d) of the Act;
(v) the execution and delivery of the Underwriting
Agreement by the Company has been duly authorized by the necessary
corporate action, and the Underwriting Agreement has been duly
executed and delivered by the Company;
(vi) the Company has good and sufficient title to all
property described or referred to in the Indenture and purported to
be conveyed thereby (except property released from the lien of the
Indenture in connection with the sale or other disposition thereof),
subject only to the lien of the Indenture and to permitted liens as
defined therein; the Indenture has been duly filed for recordation in
such manner and in such places as is required by law in order to give
constructive notice of, establish, preserve and protect the lien of
the Indenture; the Indenture constitutes a valid, direct first
mortgage lien, subject only to permitted liens, on substantially all
property of the Company, except property expressly excepted by the
terms of the Indenture; the Indenture will, when recorded or
registered by the Company in accordance with its covenants under the
Indenture, constitute a valid, direct first mortgage lien on all
property of the character of that now subject to the lien of the
Indenture hereafter acquired by the Company, subject only to
permitted liens and to liens, if any, existing or placed on such
after-acquired property at the time of the acquisition thereof;
(vii) the issue and sale of the Bonds and the compliance
by the Company with all of the provisions of the Bonds, the Indenture
and the Underwriting Agreement will not conflict with or result in a
breach or violation of any of the provisions of, or constitute
(disregarding any grace or notice period) a default under, any
indenture, mortgage, loan agreement, contract, note, lease or
7
other agreement or instrument, known to such counsel, to which the
Company is party or by which the Company is bound or to which any of
the property or assets of the Company is subject (with such
exceptions as are in the aggregate not material to the business or
financial condition of the Company or the validity of the Bonds), nor
will such action result in any violation of the provisions of the
Charter or By-Laws of the Company, or, to the best of their
knowledge, any statute or any order, rule or regulation applicable to
the Company of any court or governmental agency or body having
jurisdiction over the Company or any of its properties (except such
consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Bonds by the
Underwriters);
(viii) at the time the registration statement became
effective, the registration statement and the related prospectus
(other than the financial statements and notices thereto and
supporting schedules and other financial information included
therein, as to which no opinion need be rendered) complied as to form
in all material respects with the requirements of the Act and the
Trust Indenture Act and the Regulations;
(ix) with minor exceptions, and subject to noncompliance
with certain procedural and other requirements in the procurement and
granting of gas franchises in a number of smaller municipalities
formerly served by Mid-Illinois Gas Company, the Company holds
franchises from all of the incorporated cities and villages included
in the communities in which the Company renders gas service; all of
the franchises so held by the Company are valid and subsisting and
authorize it to engage in the business conducted by it in the
respective municipalities granting such franchises; the Company also
holds certificates of public convenience and necessity issued by the
Illinois Commerce Commission, which are valid and subsisting and
constitute due authorization by such commission for the conduct by
the Company of its operations in all areas served;
(x) to the best of their knowledge and information,
there are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments of a character required to be
described in the Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement other than those described
therein or filed or incorporated by reference as exhibits thereto and
the descriptions thereof or reference thereto are correct; and
(xi) except as disclosed in the Prospectus, there are no
material pending or threatened legal proceedings, considering the
Company and the subsidiaries as a single enterprise, known to said
counsel, to which the Company or any subsidiary is a party or of
which property of the Company or any subsidiary is the subject, and
to the best of the knowledge of said counsel there are no such
proceedings contemplated by governmental authorities.
Such counsel shall further state that, based upon their participation in
the preparation of the Registration Statement and the Prospectus, and any
amendment or supplement thereto, and upon their review and discussions of
the contents thereof, but without independent check or verification
except as specified, nothing has come to their attention that has caused
them to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, and any
amendment or supplement thereto, at the date the Registration Statement
became effective, the date of this Agreement or at the Time of Delivery,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(2) The favorable opinion of ▇▇▇▇▇▇▇, Harrold, ▇▇▇▇▇ & ▇▇▇▇▇,
counsel for the Underwriters, with respect to the incorporation of the
Company, the validity of the Bonds and the Indenture, the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request; provided that any opinion
requested with respect to the jurisdiction of regulatory authorities
8
(other than the Illinois Commerce Commission, the Securities and Exchange
Commission and state securities or Blue Sky authorities) and the matters
in subdivisions (vi) and (ix) above will rely upon the opinion of ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇.
(c) At the effective date of the Registration Statement and at the Time
of Delivery the Representatives shall have received a letter from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, dated the effective date or Time of Delivery, respectively, in
form and substance satisfactory to the Representatives, advising that (i)
they are independent public accountants with respect to the Company and its
subsidiaries as required by the Act and the 1934 Act and the applicable
Regulations, (ii) in their opinion, the audited consolidated financial
statements and any supplemental financial information and schedules of the
Company examined by them and incorporated by reference in the Registration
Statement and Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act, the 1934 Act and the
applicable Regulations, (iii) on the basis of a reading of the latest
available unaudited interim consolidated financial statements prepared by
the Company, a reading of the minutes of meetings of the shareholder and the
board of directors and executive committee of the Company and its
subsidiaries, consultation with officers of the Company responsible for
financial and accounting matters and other specified procedures, nothing has
come to their attention which caused them to believe that (A) the unaudited
interim condensed consolidated financial statements included or incorporated
by reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act, the 1934
Act and the applicable Regulations or are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with that of the audited financial statements incorporated as aforesaid, (B)
the unaudited income statement data and balance sheet data (other than such
data for the periods referred to in (A) above) included or incorporated by
reference in the Prospectus do not agree with the corresponding items in the
audited or unaudited, as the case may be, financial statements from which
such data were derived or were not determined on a basis substantially
consistent with that of the corresponding amounts included in the audited
consolidated financial statements of the Company incorporated in the
Registration Statement and Prospectus, or (C) at a specified date within
five business days of the date of such letter with respect to (1) below, and
during the period from the date of the latest audited consolidated financial
statements or unaudited interim condensed consolidated financial statements,
as the case may be, incorporated in the Prospectus to the date of the latest
available unaudited interim consolidated financial statements (if any)
prepared by the Company with respect to (2) below, except in all instances
as set forth in or contemplated by the Prospectus or as set forth in such
letter: (1) there was any increase in the consolidated long-term debt of the
Company and its subsidiaries, as compared with the amounts set forth in the
latest balance sheet included or incorporated by reference in the
Prospectus, or (2) there were any decreases in consolidated operating income
or net income as compared with the corresponding period in the preceding
year; and (iv) they have carried out specified procedures performed for the
purpose of comparing certain financial information and percentages (which is
limited to financial information derived from general accounting records of
the Company) specified by the Representatives and appearing in the
Registration Statement or in schedules or exhibits to the Registration
Statement or in the Prospectus or in documents incorporated by reference in
the Prospectus with indicated amounts in the financial statements or
accounting records of the Company and (excluding any questions of legal
interpretation and, in the case of the letter delivered at the Time of
Delivery, any exceptions disclosed in the letter delivered at the Effective
Date) have found such information and percentages to be in agreement with
the relevant accounting and financial information of the Company referred to
in such letter in the description of the procedures performed by them. If
such letter discloses any material adverse decreases or increases, as the
case may be, in the items specified in item (iii) (C) above which are not
set forth in or contemplated by the Prospectus which, in the judgment of the
Representatives, makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Bonds on the terms and in the manner
contemplated by the Prospectus, this Agreement and all obligations of the
Underwriters hereunder may be cancelled by the Representatives by notifying
the Company in the manner and with the effect provided below in the last
sentence of this Section 6.
(d) At the Time of Delivery the Representatives shall have received a
certificate of the Chairman, President, Vice President and principal
financial officer, Vice President and principal accounting officer or
9
Treasurer of the Company, dated as of the Time of Delivery, to the effect
that the signer of such certificate has carefully examined the Registration
Statement, the Prospectus and any amendment or supplement thereto and the
Underwriting Agreement and that, in his opinion, at the time the
Registration Statement became effective, the Registration Statement did not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, and at the date of the Underwriting
Agreement the Prospectus did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and since
the date of the Underwriting Agreement, no event has occurred which should
have been set forth in an amendment of or supplement to the Prospectus which
has not been so set forth; and no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings therefor have
been instituted or threatened by the Commission; and to the further effect
that all the representations and warranties contained in Section 2 hereof
are true and correct, with the same force and effect as though expressly
made at the Time of Delivery.
(e) At the Time of Delivery the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company as
of the date of the Underwriting Agreement shall not have been lowered since
the date of the Underwriting Agreement and no such agency shall have
publicly announced that it has placed any of such debt securities on what is
commonly termed a "watch list" for possible downgrading.
(f) At the Time of Delivery counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the sale of the Bonds as
herein contemplated and related proceedings, or in order to evidence the
accuracy or completeness of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the sale of the Bonds as herein
contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
If any of the conditions specified in this Section shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
and all obligations of the Underwriters hereunder may be cancelled by the
Representatives by notifying the Company of such cancellation in writing or by
telecopy at any time at or prior to the Time of Delivery and any such
cancellation shall be without liability of any party to any other party except
as otherwise provided in this Agreement.
SECTION 7. Condition of Company's Obligations. The obligations of the
Company to sell and deliver the Bonds are subject to the following conditions:
that at the Time of Delivery no stop order suspending the effectiveness of the
Registration Statement shall have been issued or proceedings therefor initiated
or threatened; that the order of the Illinois Commerce Commission, referred to
in Section 2(k), shall be in full force and effect substantially in the form in
which such order shall originally have been entered; and that the Indenture
shall be qualified under the Trust Indenture Act.
SECTION 8. Indemnification. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls
any Underwriter within the meaning of the Act or the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense,
whatsoever, arising out of any untrue statement or alleged untrue statement
of a material fact contained in the registration statement as it became
effective, or in any amendment thereto, or in the Registration Statement (or
any amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading, unless such untrue statement or omission or
such alleged untrue statement or omission was made in reliance upon and in
10
conformity with written information respecting the Underwriters furnished to
the Company by or on behalf of any Underwriter through the Representatives
expressly for use in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of the
Company; and
(iii) against any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above, and, in the case
of (i) above, unless such untrue statement or omission or such alleged
untrue statement or omission was made in reliance upon and in conformity
with written information respecting the Underwriters furnished to the
Company by or on behalf of any Underwriter through the Representatives
expressly for use in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto), or, in the case
of (ii) above, provided such settlement is effected with the written consent
of the Company.
This indemnity agreement is subject to the condition that, insofar as it
relates to any untrue statement, alleged untrue statement, omission or alleged
omission made in a preliminary prospectus or preliminary prospectus supplement,
but eliminated or remedied in the Prospectus, such indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting any loss,
liability, claim or damage purchases the Bonds which are the subject thereof (or
to the benefit of any person who controls such Underwriter) if such Underwriter
fails to send or give a copy of the Prospectus (excluding documents incorporated
by reference) to such person prior to or together with written confirmation of
the sale of such Bonds to such person and the delivery thereof would have
constituted a defense to the claim by such person.
In no case shall the Company be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Company shall be notified in writing of the nature of the
claim within a reasonable time after the assertion thereof, but failure to so
notify the Company shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. The Company shall be
entitled to participate at its own expense in the defense, or, if it so elects,
within a reasonable time after receipt of such notice, to assume the defense of
any suit brought to enforce any such claim, but if it so elects to assume the
defense, such defense shall be conducted by counsel chosen by it and approved by
the Underwriter or Underwriters or controlling person or persons, defendant or
defendants in any suit so brought, which approval shall not be unreasonably
withheld. In the event that the Company elects to assume the defense of any such
suit and retains such counsel, the Underwriter or Underwriters or controlling
person or persons, defendant or defendants in the suit shall thereafter bear the
fees and expenses of any additional counsel retained by them. In the event that
the parties to any such action (including impleaded parties) include both the
Company and one or more Underwriters and any such Underwriter shall have been
advised by counsel chosen by it and satisfactory to the Company that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Company, the Company shall not have the
right to assume the defense of such action on behalf of such Underwriter and
will reimburse such Underwriter and any person controlling such Underwriter as
aforesaid for the reasonable fees and expenses of any counsel retained by them,
it being understood that the Company shall not, in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expense of more than one separate firm of attorneys for all
such Underwriters and controlling persons, which firm shall be designated in
writing by the Representatives. The Company agrees to notify the Representatives
within a reasonable time of the assertion of any claim against it, any of its
officers or directors or any person who controls the Company within the meaning
of the Act or the 1934 Act, in connection with the sale of the Bonds.
11
(b) Each Underwriter severally agrees that it will indemnify and hold
harmless the Company, its directors, and each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act or the 1934 Act, to the same extent as the indemnity
contained in subsection (a) of this Section, but only with respect to statements
or omissions made in the registration statement as it became effective, or in
any amendment thereto, or in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information respecting the Underwriters
furnished to the Company by or on behalf of such Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
In case any action shall be brought against the Company or any person so
indemnified based on the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto) and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have the
rights and duties given to the Company, and the Company and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section.
(c) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Bonds and
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact,
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (c) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (c). Notwithstanding the provisions of this subsection (c), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Bonds underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(c) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(d) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act or the 1934 Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act or
the 1934 Act.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in the
Underwriting Agreement and/or contained in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or any controlling person of any Underwriter, or by or on behalf of the Company,
and shall survive payment for and delivery of the Bonds.
12
SECTION 10. Effective Date of the Underwriting Agreement and Termination
Thereof. (a) The Underwriting Agreement shall become effective at the time of
the initial public offering by the Underwriters of any of the Bonds. The time of
the initial public offering shall mean 12:00 noon, New York City time, on the
first full business day after the Underwriting Agreement is executed or at such
time as the Representatives may authorize the sale of the Bonds to the public by
the Underwriters or other securities dealers, whichever shall first occur. The
Representatives or the Company may prevent the Underwriting Agreement from
becoming effective without liability of any party to any other party, except as
otherwise provided in the Underwriting Agreement, by giving the notice indicated
below in this Section prior to the time the Underwriting Agreement would
otherwise become effective as herein provided.
(b) The Representatives shall have the right to terminate the
Underwriting Agreement by giving the notice indicated below in this Section at
any time at or prior to the Time of Delivery if (i) the Company shall have
sustained since the respective dates as of which information is given in the
Prospectus 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; or (ii)
since the respective dates as of which information is given in the Prospectus
there shall have been any material increase in the long-term debt, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general business affairs, management,
financial position, results of operations, or business prospects of the Company
and its subsidiaries considered as one enterprise, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Bonds on the terms and in the manner contemplated in the Prospectus; or
(iii) there shall have occurred the outbreak or escalation of hostilities
involving in a significant way the armed forces of the United States, or the
declaration by the United States, on or after the date of the Underwriting
Agreement, of a national emergency or war, or there shall have occurred a
general suspension or limitation of trading in securities on the New York or
American Stock Exchanges, or the establishment of minimum prices on either such
Exchange, or a general moratorium on commercial banking activities in New York
is declared by either federal or New York state authorities, the effect of which
in the judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Bonds on the terms and
in the manner contemplated in the Prospectus. If the Representatives shall so
terminate the Underwriting Agreement, such termination shall be without
liability of any party to any other party except as otherwise provided in the
Underwriting Agreement.
(c) If the Representatives elect to prevent the Underwriting Agreement
from becoming effective or to terminate the Underwriting Agreement as provided
in this Section, the Company and each other Underwriter shall be notified
promptly by the Representatives, by telephone or telegram, confirmed by letter.
If the Company elects to prevent the Underwriting Agreement from becoming
effective as provided in this Section, the Representatives shall be notified
promptly by the Company by telephone or telegram, confirmed by letter.
SECTION 11. Default of Underwriters. If any one or more of the
Underwriters shall fail at the Time of Delivery to purchase the amount of Bonds
which it or they are obligated to purchase hereunder (the "Defaulted Bonds"),
then the Representatives shall have the right, within 24 hours thereafter, to
make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Bonds in such amounts as may be agreed upon and upon the terms herein set forth.
If, however, during such 24 hours the Representatives shall not have completed
such arrangements for the purchase of all of the Defaulted Bonds, then the
Company shall be entitled to a further period of 24 hours within which to
procure another party or parties satisfactory to the Representatives to purchase
all of such Defaulted Bonds on such terms. If, after giving effect to any
arrangements for the purchase of Defaulted Bonds by the Representatives and the
Company as provided above, then:
(a) if the amount of Defaulted Bonds does not exceed 10% of the
aggregate principal amount of the Bonds being sold hereunder, the
non-defaulting Underwriters shall be obligated to purchase severally the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
13
(b) if the amount of Defaulted Bonds exceeds 10% of the aggregate
principal amount of the Bonds being sold hereunder, the Underwriting
Agreement shall terminate without any liability on the part of the Company
or any non-defaulting Underwriter.
The termination of the Underwriting Agreement pursuant to this Section
shall be without liability on the part of the Company or any of said
non-defaulting Underwriters, except for the respective obligations of the
Company and the Underwriters pursuant to Section 8 and except that the Company
shall be obligated to reimburse the Underwriters for their out-of-pocket
expenses (including reasonable fees and disbursements of counsel for the
Underwriters) incurred in connection with the offering if the Underwriting
Agreement could have been terminated by the Representatives pursuant to Sections
6 or 10(b).
Nothing herein shall relieve any Underwriter so defaulting from
liability, if any, for such default.
In the event of a default by any one or more Underwriters as set forth
in this Section, either the Representatives or the Company shall have the right
to postpone the Time of Delivery for an additional period not exceeding 7 days
in order that any required changes in the Registration Statement and Prospectus
or in any other documents or arrangements may be effected.
SECTION 12. Notices. Except as otherwise provided in the Underwriting
Agreement, all communications under the Underwriting Agreement shall be in
writing, and, if sent to the Underwriters, shall be mailed, delivered or
telecopied and confirmed to the address of the Representatives, as set forth in
the Underwriting Agreement (except that any notice to an Underwriter pursuant to
Section 8 hereof shall be sent to it at its address set forth in the copies of
the Underwriters' Questionnaires furnished to the Company), or, if sent to the
Company shall be mailed or telecopied and confirmed to it at P.O. Box 190,
Aurora, Illinois 60507-0190, or delivered to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ for the attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President and
Treasurer.
SECTION 13. Parties. The Underwriting Agreement shall inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in the Underwriting
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and the directors and officers referred to in Section 8,
any legal or equitable right, remedy or claim under or in respect of the
Underwriting Agreement or any provision herein contained; the Underwriting
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective successors and said controlling persons, directors and officers and
for the benefit of no other person, firm or corporation. No purchaser of any
Bonds from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. Choice of Law. The Underwriting Agreement shall be
construed in accordance with, and governed by, the laws of the State of
Illinois.
14
