EXHIBIT 1
NORTHERN INDIANA PUBLIC SERVICE COMPANY
$217,692,000
MEDIUM-TERM NOTES, SERIES E
Distribution Agreement
----------------------
_____________, 1997
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Northern Indiana Public Service Company, an Indiana corporation (the
"Company") proposes to issue and sell from time to time its Medium-Term Notes,
Series E (the "Securities"), in an aggregate amount up to $217,692,000 and
agrees with each of you (individually, an "Agent" and collectively, the
"Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities on its own behalf as set forth in
Section 2(a) hereof, the Company hereby (i) appoints each Agent as an agent of
the Company for the purpose of soliciting and receiving offers to purchase
Securities from the Company pursuant to Section 2(a) hereof and (ii) agrees
that, except as otherwise contemplated herein, whenever it determines to sell
Securities directly to any Agent as principal, it will enter into a separate
agreement, which may be an oral agreement confirmed in writing by such Agent to
the Company (each a "Terms Agreement"), substantially in the form of Annex I
hereto or otherwise specifying the applicable terms set forth in the Schedule to
Annex I relating to such sale, in accordance with Section 2(b) hereof. Without
limiting the generality of the foregoing, any Agent may sell Securities to or
through any dealer or dealers selected by such Agent and may allow all or part
of such Agent's commission with respect to such Securities to such dealer or
dealers. This Distribution Agreement shall not be construed to create either an
obligation on the part of the Company to sell any Securities or an obligation of
any of the Agents to purchase Securities as a principal.
The Securities will be issued under an indenture, dated as of March 1,
1988, as amended by a First Supplemental Indenture dated as of December 1, 1991
(collectively, the "Indenture"), between the Company and Manufacturers Hanover
Trust Company, as Trustee under which The Chase Manhattan
Bank, as successor to Manufacturers Hanover Trust Company, is currently serving
as Trustee (the "Trustee"). The Securities shall have the maturity ranges,
interest rates, if any, redemption provisions and other terms set forth in the
Prospectus referred to below as it may be amended or supplemented from time to
time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company, in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) A registration statement on Form S-3 (Reg. No. 333-______) in respect
of the Securities has been filed with the Securities and Exchange Commission
(the "Commission"); such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered to or to be delivered to such
Agent, excluding exhibits to such registration statement but including all
documents incorporated by reference in the prospectus included therein, and such
registration statement in such form has been declared effective by the
Commission in such form; no other document with respect to such registration
statement or document incorporated by reference therein has heretofore been
filed or transmitted for filing with the Commission (other than the prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Securities Act of 1933, as amended (the "Act"), each in the form
heretofore delivered to the Agents); and no stop order suspending the
effectiveness of such registration statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission. Any
preliminary prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto but excluding Form T-1
and the documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
becomes effective and, if applicable, including the information contained in the
form of final prospectus filed with the Commission pursuant to Rule 424(b) under
the Act, each as amended at the time such part of the registration statement
became effective, is hereinafter called the "Registration Statement"; the
prospectus (including, if applicable, any prospectus supplement) relating to the
Securities, in the form in which it has most recently been filed or transmitted
for filing with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the applicable form
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus, including any supplement to the Prospectus that
sets forth only the terms of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated therein by reference; any reference to the Registration Statement
shall be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as amended
or supplemented (including by the applicable Pricing Supplement filed in
accordance with Section 4(a) hereof in relation to Securities sold pursuant to
this Agreement, in the form in which it is filed with the Commission pursuant to
Rule 424(b) under the Act and in accordance with Section 4(a) hereof, including
any documents incorporated by reference therein as of the date of such filing).
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the
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requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents 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; and any further documents so filed and incorporated by reference in
the Prospectus, or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder and 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; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by
any Agent expressly for use in the Prospectus as amended or supplemented.
(c) The Registration Statement, the Prospectus and the Form T-1 conform,
and any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements 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 and do not and will not,
as of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus and
any supplement thereto, 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; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by
any Agent expressly for use in the Prospectus as amended or supplemented to
relate to a particular issuance of Securities.
(d) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited consolidated financial statements included or
incorporated by reference in the Prospectus any 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, which could, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole or upon the ability the Company to perform its
obligations under this Agreement (a "Material Adverse Effect"), otherwise than
as set forth or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Prospectus, there has not been any
material change in the consolidated share capital or long-term debt of the
Company and its subsidiaries, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries (taken as a whole), otherwise
than as set forth or contemplated in the Prospectus.
(e) The accountants who certified the audited financial statements
included in the Registration Statement are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder.
(f) The financial statements included or incorporated by reference in the
Prospectus present fairly the financial position of the Company and its
subsidiaries as at the dates indicated and the results of their operations for
the periods specified; except as may otherwise be stated in the Prospectus or in
the reports of independent public accountants accompanying said financial
statements, said financial statements have
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been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included or
incorporated by reference in the Prospectus present fairly the information
required to be stated therein.
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Indiana, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so qualified
in any such jurisdiction; and each other subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation.
(h) The Company has an authorized capitalization as set forth in the
Prospectus; all of the issued capital shares of the Company and each wholly-
owned subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable; and except as the Company shall have
otherwise advised the Agents in writing prior to the date of the amendment or
supplement to the Prospectus (including any Pricing Supplement) relating to any
particular sale of Securities, all of the issued capital shares of each
subsidiary of the Company (except for directors' qualifying shares and as set
forth or incorporated by reference in the Registration Statement) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(i) The Securities have been duly authorized and, when duly executed,
authenticated, issued and delivered pursuant to the Indenture, this Agreement
and any applicable Terms Agreement against payment of the agreed consideration
therefor, will constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other laws relating to or affecting
enforcement of creditors' rights or by general equity principles, and will be
entitled to the benefits of the Indenture, which will be substantially in the
form filed as an exhibit to the Registration Statement; the Indenture has been
duly authorized, executed and delivered and qualified under the Trust Indenture
Act and, with like exception, constitutes the valid and legally binding
obligation of the Company enforceable in accordance with its terms; and the
Indenture conforms and the Securities of any particular issuance of Securities
will conform in all material respects to the descriptions thereof contained in
the Prospectus as amended or supplemented to relate to such issuance of
Securities.
(j) This Agreement has been duly authorized and, when executed and
delivered by the parties hereto, will be the valid and legally binding
obligation of the Company enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
relating to or affecting enforcement of creditors' rights or by general equity
principles.
(k) The Company is not in violation of its Articles of Incorporation or
By-Laws or 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 any other instrument to which it is a party or by
which it may be bound where such defaults, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. The issue and
sale of the Securities, the compliance by the Company with all of the provisions
of the Securities, the Indenture and this Agreement, and the consummation of the
transactions herein and therein contemplated, will not conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture,
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mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will any such action
result in any violation of the provisions of the Articles of Incorporation or
By-laws of the Company or any of its subsidiaries, or any statute, rule or
regulation, or any order of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties.
(l) As of the Commencement Date (as defined in Section 3 hereof), the
Indiana Utility Regulatory Commission will have duly authorized the issuance and
sale of the Securities on terms consistent with this Agreement, and no other
approval, consent, authorization, order, registration or qualification of or
with any court, regulatory agency or public body, State or Federal, is or will
be necessary in connection with the solicitation of offers for or the issuance
and sale of the Securities by the Company and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Securities
or the consummation by the Company of the transactions contemplated by this
Agreement, any Terms Agreement or the Indenture, except as have been or will
have been prior to the Commencement Date obtained under the Act or the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the solicitation by any Agent of offers to purchase Securities
from the Company and with purchases of Securities by such Agent as principal, as
the case may be, in each case in the manner contemplated hereby.
(m) The Company has no material contingent liability which is not
disclosed in the Prospectus.
(n) The Company has statutory authority, franchises and consents free from
burdensome restrictions and adequate for the conduct of the business in which it
is engaged.
(o) Except for NIPSCO Industries, Inc. ("Industries"), as and to the
extent described in the Prospectus, no person or corporation which is a "holding
company" or a "subsidiary of a holding company" within the meaning of such terms
as defined in the Public Utility Holding Company Act of 1935, as amended (the
"1935 Act"), directly or indirectly owns, controls or holds with power to vote
10% or more of the outstanding voting securities of the Company; Industries is
exempt from all provisions of the 1935 Act except Section 9(a)(2); and the
Company is not a "holding company" as so defined.
(p) The Company has good and marketable title in fee simple to such of its
fixed assets as are real property and good and marketable title to its other
assets reflected in the most recent consolidated balance sheet incorporated by
reference in the Prospectus, except properties and assets that are leased by the
Company or that are sold or otherwise disposed of in the ordinary course of
business after the date of said balance sheet, subject to no mortgages, liens,
charges or encumbrances of any kind whatsoever ("Liens") other than Liens
permitted under the Indenture.
(q) The Company will apply the proceeds of the sale of the Securities in
the manner described in the Prospectus.
(r) Neither the Company nor any of its subsidiaries does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes.
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(s) Other than as disclosed in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or to which any property of the Company or any of its subsidiaries is
subject which could reasonably be expected, individually or in the aggregate, to
have a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(t) Immediately after the sale of Securities by the Company hereunder or
under any Terms Agreement, the aggregate amount of Securities which shall have
been issued and sold by the Company hereunder or under any Terms Agreement and
of any debt securities of the Company (other than such Securities) that shall
have been issued and sold pursuant to the Registration Statement will not exceed
the amount of debt securities registered under the Registration Statement.
2. (a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, each of the Agents hereby severally
and not jointly agrees, as agent of the Company, to use its reasonable efforts
to solicit and receive offers to purchase the Securities from the Company upon
the terms and conditions set forth in the Prospectus as amended or supplemented
from time to time. The Company reserves the right to offer and sell Securities
otherwise than to or through an Agent; provided, however, that so long as this
Agreement is in effect the Company will not appoint any other agent for the
purpose of soliciting purchases of the Securities on an ongoing basis. It is
understood, however, that if from time to time the Company is approached by a
prospective agent offering to solicit a specific purchase of Securities, the
Company may appoint such agent to act as its agent with respect to such specific
purchase of Securities, provided that (i) the Agents are given at least five
business days advance notice of the proposed appointment of such agent and (ii)
any such agent shall have entered into an agreement with the Company upon the
same terms and conditions as set forth in this Agreement (including the
commission schedule set forth in Section 2(a) hereof). Each such agent acting
in connection with the Securities is acting individually and not collectively or
jointly with the Agents. So long as this Agreement shall remain in effect with
respect to any Agent, the Company shall not, without the consent of such Agent,
solicit or accept offers to purchase, or sell, any unsecured and unsubordinated
debt securities with a maturity at the time of original issuance of one year to
30 years except (i) pursuant to this Agreement or any Terms Agreement, (ii)
pursuant to a private placement not constituting a public offering under the Act
or (iii) in connection with a firm commitment underwriting pursuant to any
underwriting agreement that does not provide for a continuous offering of
medium-term debt securities. However, the Company reserves the right to sell
(and may solicit and accept offers to purchase) Securities directly on its own
behalf; in the case of any such sale not resulting from a solicitation made by
any Agent, no commission will be payable to an Agent with respect to such sale.
These provisions shall not limit Section 4(f) hereof or any similar provision
included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities, the
solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedures attached hereto
as Annex II as they may be amended from time to time by written agreement
between the Agents and the Company (the "Administrative Procedures"), it being
understood that the provisions of the Administrative Procedures shall apply to
all transactions contemplated hereby other than those made pursuant to a Terms
Agreement. Each Agent and the Company agree to perform the respective duties
and obligations specifically provided to be performed by each of them in the
Administrative Procedures. The Company will furnish to the Trustee a copy of
the Administrative Procedures as from time to time in effect.
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The Company 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 the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agents will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission (which may be in the form
of a discount), at the time of settlement of any sale of a Security by the
Company as a result of a solicitation made by such Agent, in an amount equal to
the following applicable percentage of the principal amount of such Security
sold:
Commission (percentage of
aggregate principal amount
Range of Maturities of Securities sold)
------------------- --------------------------
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years to 30 years .750%
(b) Each sale of Securities to any Agent as principal shall be made in
accordance with the terms of this Agreement and (unless such Agent shall
otherwise agree) a Terms Agreement which will provide for the sale of such
Securities to, and the purchase thereof by, such Agent. A Terms Agreement may
also specify certain provisions relating to the reoffering of such Securities by
such Agent. The commitment of any Agent to purchase Securities as principal,
whether pursuant to any Terms Agreement or otherwise, shall be deemed to have
been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount of Securities to
be purchased by any Agent pursuant thereto, the price to be paid to the Company
for such Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the Securities
and the time and date and place of delivery of, if applicable, and payment for
such Securities. Such Terms Agreement shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof. Each Agent proposes to offer Securities purchased by it as
principal for sale at prevailing market prices or prices related thereto at the
time of sale, which may be equal to, greater than or less than the price at
which such Securities are purchased by such Agent from the Company.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedures. For each such sale of Securities to an Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such
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Agent a commission as provided in Section 2(a) hereof and in accordance with the
schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedures, is referred to herein as a "Time
of Delivery."
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency, except as permitted
by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx at
10:00 a.m., Chicago time, on the date of this Agreement, which date and time of
such delivery may be postponed by agreement between the Agents and the Company
but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration Statement
or the Prospectus (A) after the date hereof but prior to the Commencement Date
which shall be disapproved by any Agent promptly after reasonable notice thereof
or (B) after the date of any Terms Agreement and prior to the related Time of
Delivery which shall be disapproved by any Agent party to such Terms Agreement
promptly after reasonable notice thereof, (ii) to prepare, with respect to any
Securities to be sold pursuant to this Agreement, a Pricing Supplement with
respect to such Securities in a form previously approved by the Agent which
solicited the purchaser of such Securities and to file such Pricing Supplement
pursuant to Rule 424(b) under the Act not later than the close of business of
the Commission on the legally required day following the date on which such
Pricing Supplement is first used, (iii) to make no amendment or supplement to
the Registration Statement or Prospectus, other than any Pricing Supplement, at
any other time prior to having afforded each Agent a reasonable opportunity to
review and comment thereon, (iv) to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities, and during such same period to advise such
Agent, promptly after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has become effective
or any supplement to the Prospectus or any amended Prospectus (other than any
Pricing Supplement that relates to Securities not purchased through or by such
Agent) has been filed with the Commission, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose or of any request by the
Commission for the amendment or supplement of the Registration Statement or
Prospectus or for additional information and (v) in the event of the issuance of
any such stop order or of any such order preventing or suspending the use of any
such prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal.
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(b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as such Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution or sale of the
Securities; provided, however, that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction.
(c) To furnish such Agent copies of the Registration Statement and
each amendment thereto, and copies of the Prospectus as each time amended or
supplemented, other than any Pricing Supplement (except as provided in the
Administrative Procedures), in the form in which it is filed with the Commission
pursuant to Rule 424 under the Act, and with copies of the documents
incorporated by reference therein, all in such quantities as such Agent may
reasonably request from time to time; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the Securities
(including Securities purchased from the Company by such Agent as principal) and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to purchase
Securities from the Company (and if so notified, such Agent shall cease such
solicitations as soon as practicable, but in any event not later than one
business day later); and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus as then amended or supplemented, to so
advise such Agent promptly by telephone (with confirmation in writing) and to
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect such
compliance, provided, however, that if during such same period such Agent
continues to own Securities purchased from the Company by such Agent as
principal or such Agent is otherwise required to deliver a prospectus in respect
of transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement.
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earning statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) So long as any Securities are outstanding, to furnish to such Agent
copies of all reports or other communications (financial or other) furnished to
shareholders and deliver to such Agent (i) as soon as they are available, copies
of any reports and financial statements of the Company furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Company is listed, and (ii) such additional information
concerning the business and financial condition of the Company and its
subsidiaries as such Agent may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission).
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(f) That, from the date of any Terms Agreement with such Agent and
continuing to and including the later of (i) the termination of the trading
restrictions for the Securities purchased thereunder, as notified to the Company
by such Agent and (ii) the related Time of Delivery, the Company will not,
without the prior written consent of such Agent, offer, sell, contract to sell
or otherwise dispose of any debt securities of the Company (other than
Securities) which both mature more than nine months after such Time of Delivery
and are substantially similar to the Securities.
(g) That each acceptance by the Company of an offer to purchase Securities
hereunder (including any purchase by such Agent as principal not pursuant to a
Terms Agreement), and each execution and delivery by the Company of a Terms
Agreement with such Agent, shall be deemed to be an affirmation to such Agent
that the representations and warranties of the Company contained in or made
pursuant to this Agreement are true and correct as of the date of such
acceptance or of such Terms Agreement, as the case may be, as though made at and
as of such date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Securities relating
to such acceptance or as of the Time of Delivery relating to such sale, as the
case may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Securities).
(h) That reasonably in advance of each time the Registration Statement or
the Prospectus shall be amended or supplemented (other than by a Pricing
Supplement) and each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, and each time the Company sells
Securities to such Agent as principal and the applicable Terms Agreement
specifies the delivery of an opinion or opinions by Xxxxxxxxxxxx Xxxx &
Xxxxxxxxx, counsel to the Agents, as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish to such counsel such
papers and information as they may reasonably request to enable them to furnish
to such Agent the opinion or opinions referred to in Section 6(b) hereof.
(i) That each time the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Supplement), each time a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus, and each time the Company sells Securities to such Agent as
principal and the applicable Terms Agreement specifies the delivery of an
opinion under this Section 4(i) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a written opinion of Xxxxxx Xxxxxx & Xxxxx,
counsel for the Company, or other counsel for the Company satisfactory to such
Agent, dated the date of such amendment, supplement, incorporation or Time of
Delivery relating to such sale, as the case may be, in form satisfactory to such
Agent, to the effect that such Agent may rely on the opinion of such counsel
referred to in Section 6(c) hereof which was last furnished to such Agent to the
same extent as though it were dated the date of such letter authorizing reliance
(except that the statements in such last opinion shall be deemed to relate to
the Registration Statement and the Prospectus as amended and supplemented to
such date) or, in lieu of such opinion, an opinion of the same tenor as the
opinion of such counsel referred to in Section 6(c) hereof but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date.
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus, in either
case to set forth financial information included in or derived from the
Company's consolidated financial statements or accounting records, and each time
the Company sells Securities to such Agent as principal and the applicable Terms
Agreement specifies the delivery of a letter under this
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Section 4(j) as a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall cause the independent certified public accountants
who have certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement forthwith to
furnish such Agent a letter, dated the date of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as the case may be, in
form satisfactory to such Agent, of the same tenor as the letter referred to in
Section 6(d) hereof but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date of such letter, with such
changes as may be necessary to reflect changes in the financial statements and
other information derived from the accounting records of the Company and its
subsidiaries, to the extent such financial statements and other information are
available as of a date not more than five business days prior to the date of
such letter; provided, however, that, with respect to any financial information
or other matter, such letter may reconfirm as true and correct at such date as
though made at and as of such date, rather than repeat, statements with respect
to such financial information or other matter made in the letter referred to in
Section 6(d) hereof which was last furnished to such Agent.
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus, and each time the Company sells Securities to such Agent as
principal and the applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(k) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a certificate, dated the date of such
supplement, amendment, incorporation or Time of Delivery relating to such sale,
as the case may be, in such form and executed by such officers of the Company as
shall be satisfactory to such Agent, to the effect that the statements contained
in the certificates referred to in Section 6(i) hereof which was last furnished
to such Agent are true and correct at such date as though made at and as of such
date (except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or, in
lieu of such certificate, certificates of the same tenor as the certificates
referred to in said Section 6(i) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date.
(l) To offer to any person who has agreed to purchase Securities as
the result of an offer to purchase solicited by such Agent the right to refuse
to purchase and pay for such Securities if, on the related settlement date fixed
pursuant to the Administrative Procedures, any condition set forth in the
introductory language of Section 6 and in Section 6(a), 6(e), 6(f) or 6(g)
hereof shall not have been satisfied (it being understood that the judgment of
such person with respect to the impracticability or inadvisability of such
purchase of Securities shall be substituted, for purposes of this Section 4(l),
for the respective judgments referred to therein of an Agent with respect to
certain matters referred to in such introductory language of Section 6 and in
such Sections 6(a), 6(e) and 6(g), and that such Agent shall have no duty or
obligation whatsoever to exercise the judgment permitted under such introductory
language of Section 6 and in such Sections 6(a), 6(e) and 6(g) on behalf of any
such person).
(m) So long as any Securities are outstanding, to promptly notify the
Agents of (i) any adverse change in the rating accorded any debt securities of
Industries, NIPSCO Capital Markets, Inc. ("Capital Markets") or the Company by
any "nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act; (ii) the
public announcement of any such rating organization that it has under
surveillance or review its rating of any of Industries', Capital Market's or the
Company's debt securities; (iii) any change in the consolidated share capital or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving
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a prospective change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and Pricing Supplements and all other amendments and
supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the fees, disbursements and expenses of counsel for the Agents in
connection with the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and the transactions
contemplated hereunder; (iii) the out-of-pocket expenses of such Agent; (iv) the
cost of printing, producing or reproducing this Agreement, any Terms Agreement,
any Indenture, any Blue Sky and Legal Investment Memoranda and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (v) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including fees and disbursements of counsel for the Agents
in connection with such qualification and in connection with the Blue Sky and
Legal Investment Memoranda; (vi) any fees charged by securities rating services
for rating the Securities; (vii) any filing fees incident to, and the fees and
disbursements of counsel for the Agents in connection with, any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; (viii) the cost of preparing the Securities; (ix) the fees
and expenses of any Trustee and any agent of any Trustee and any transfer or
paying agent of the Company and the fees and disbursements of counsel for any
Trustee or such agent in connection with any Indenture and the Securities; (x)
any advertising expenses connected with the solicitation of offers to purchase
and the sale of Securities so long as such advertising expenses have been
approved by the Company; and (xi) all other costs and expenses incident to the
performance of the Company's obligations hereunder which are not otherwise
specifically provided for in this Section. Except as provided in Sections 7 and
8 hereof, each Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated in such Terms Agreement by
reference) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be (except that the
representations and warranties herein shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented through
such applicable date), the condition that prior to such Solicitation Time or
Time of Delivery, as the case may be, the Company shall have performed all of
its obligations hereunder theretofore to be performed and the following
additional conditions precedent:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus as
amended or supplemented (including the Pricing Supplement) with respect to such
Securities, shall have been filed with the Commission pursuant to Rule 424(b)
under the Act within the applicable time period prescribed for such filing by
the rules and
-12-
regulations under the Act and in accordance with Section 4(a) hereof; (ii) no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and (iii) all requests for additional information
on the part of the Commission shall have been complied with to the reasonable
satisfaction of such Agent.
(b) Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, counsel to the Agents, shall have
furnished to such Agent (i) such opinion or opinions, dated the Commencement
Date, with respect to the incorporation of the Company, the validity of the
Indenture, the Securities, the Registration Statement, the Prospectus as amended
or supplemented and other related matters as such Agent may reasonably request,
and (ii) if and to the extent requested by such Agent, with respect to each
applicable date referred to in Section 4(a) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, an opinion or
opinions, dated such applicable date, to the effect that such Agent may rely on
the opinion or opinions which were last furnished to such Agent pursuant to this
Section 6(b) to the same extent as though it or they were dated the date of such
letter authorizing reliance (except that the statements in such last opinion or
opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in any case, in lieu of
such an opinion or opinions, an opinion or opinions of the same tenor as the
opinion or opinions referred to in clause (i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date; and in each case such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters.
(c) Xxxxxx Xxxxxx & Xxxxx, counsel for the Company, or other counsel
for the Company satisfactory to such Agent, shall have furnished to such Agent
their written opinions, dated the Commencement Date and each applicable date
referred to in Section 4(i) hereof that is on or prior to such Solicitation Time
or Time of Delivery, as the case may be, in form and substance satisfactory to
such Agent to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Indiana, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus.
(ii) The Company has an authorized capitalization as set forth in the
Prospectus; all of the issued capital shares of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable.
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction.
(iv) To the best of such counsel's knowledge, other than as set forth
in the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or to which any
property of the Company or any of its subsidiaries is subject which could
reasonably be expected, individually or in the aggregate, to have a
material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
-13-
(v) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding obligation,
enforceable against each in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles and to any
limitations by reason of public policy considerations on the enforcement
under certain circumstances of the indemnity provisions thereof.
(vi) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been duly
qualified under the Trust Indenture Act.
(vii) The Securities have been duly and validly authorized by all
necessary corporate action; the Securities, when duly executed,
authenticated, issued and delivered pursuant to the terms of the Indenture,
this Agreement and any applicable Terms Agreement against payment of the
agreed consideration therefor, will be valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture and will be enforceable obligations of the Company in accordance
with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws relating to or affecting enforcement of creditors'
rights or by general equity principles; the Securities and the Indenture
conform as to legal matters with the statements concerning them made in the
Prospectus, and such statements accurately set forth the matters respecting
the Securities and the Indenture required to be set forth in the
Prospectus.
(viii) The execution and delivery of this Agreement, any applicable
Terms Agreement and the Indenture, the compliance by the Company with all
of the provisions of the Securities, the Indenture, this Agreement and any
applicable Terms Agreement, and the consummation of the transactions herein
and therein contemplated, will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its
Significant Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or to which any of the property or assets
of the Company or any of its Significant Subsidiaries is subject, nor will
such actions result in any violation of the provisions of the Articles of
Incorporation or the By-Laws of the Company or any of its Significant
Subsidiaries, or any statute, rule or regulation, or any order known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its Significant Subsidiaries or any
of their properties.
(ix) The Indiana Utility Regulatory Commission has duly authorized
the issue and sale of the Securities on terms consistent with the terms set
forth in the Registration Statement and this Agreement; such authorization,
to the best of their knowledge, is still in force and effect; and no other
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, any applicable Terms Agreement
or the Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or
-14-
qualifications as may be required under state securities or Blue Sky laws
in connection with the solicitation by any Agent of offers to purchase
Securities from the Company and with purchases of Securities by such Agent
as principal, as the case may be.
(x) The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder.
(xi) The Registration Statement has become effective under the Act,
and, to the best of the knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Act;
the Registration Statement and the Prospectus and any further amendments
and supplements thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Trust Indenture
Act and the rules and regulations thereunder.
(xii) This Agreement and any applicable Terms Agreement have been
duly authorized, executed and delivered by the Company.
(xiii) The Company holds and operates under certain indeterminate
permits and franchises conferring upon it certain rights and privileges
which enable it to conduct its business as a public utility.
(xiv) The statements made in the Prospectus under the captions
"Description of Notes" and "Certain United States Federal Income Tax
Consequences" and any other statements which are stated therein to have
been made on the basis of the opinion of said counsel have been reviewed by
said counsel and, as to matters of law and legal conclusions, are correct
in all material respects.
Such counsel shall also advise the Agents that although such counsel is not
passing upon and assumes no responsibility or liability for the accuracy,
completeness or fairness of the statements contained in the documents
incorporated by reference in the Prospectus or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion), they have no reason to believe that any of such
documents, when such documents became effective or were filed with the
Commission, as the case may be, contained, in the case of a registration
statement which became effective under the Act, 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, in the case of
other documents which were filed under the Act or the Exchange Act with the
Commission, 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 when such documents were so filed, not
misleading.
-15-
Such counsel shall also advise the Agents that although such counsel is not
passing upon and assumes no responsibility or liability for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need express
no opinion), they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to the Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) 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, as of its date, the Prospectus or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or that,
as of the Time of Delivery either the Registration Statement or the Prospectus
or any further amendment or supplement thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and they do not know of any amendment to the Registration
Statement required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus or required to be
described in the Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required.
(d) Not later than 10:00 a.m., New York City time, on the Commencement
Date and on each applicable date referred to in Section 4(j) hereof that is on
or prior to such Solicitation Time or Time of Delivery, as the case may be, the
independent certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to such Agent a
letter, dated the Commencement Date or such applicable date, as the case may be,
in form and substance satisfactory to such Agent, to the effect set forth in
Annex III hereto.
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any 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 Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the consolidated share
capital or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity or results
of operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of such Agent so material
and adverse as to make it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities from the Company or
the purchase by such Agent of Securities from the Company as principal, as the
case may be, on the terms and in the manner contemplated by the Prospectus.
-16-
(f) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded any of Industries', Capital Market's, or the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
any of Industries', Capital Market's or the Company's debt securities.
(g) There shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange; (ii) a suspension or material limitation in trading of any securities
of the Industries, Capital Markets or the Company on any securities exchange;
(iii) a general moratorium on commercial banking activities in New York or
Illinois declared by either Federal or State authorities; or (iv) the outbreak
or escalation of hostilities or the declaration by the United States of a
national emergency or war, or any change in financial markets or any calamity or
crisis, if the effect of any such event specified in the clause in the judgment
of such Agent makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase Securities or the purchase of Securities from
the Company as principal, pursuant to the applicable Terms Agreement or
otherwise, as the case may be, on the terms and in the manner contemplated by
the Prospectus as amended or supplemented.
(h) With respect to any Security denominated in a currency other than the
U.S. dollar, more than one currency or a composite currency or any Security the
principal or interest of which is indexed to such currency, currencies or
composite currency, there shall not have occurred a suspension or material
limitation in foreign exchange trading in such currency, currencies or composite
currency by a major international bank, a general moratorium on commercial
banking activities in the country or countries issuing such currency, currencies
or composite currency, the outbreak or escalation of hostilities involving, the
occurrence of any material adverse change in the existing financial, political
or economic conditions of, or the declaration of war or a national emergency by,
the country or countries issuing such currency, currencies or composite currency
or the imposition or proposal of exchange controls by any governmental authority
in the country or countries issuing such currency, currencies or composite
currency.
(i) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Commencement Date and
each applicable date referred to in Section 4(k) hereof that is on or prior to
such Solicitation Time or Time of Delivery, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such Agent,
as to the accuracy of the representations and warranties of the Company herein
at and as of the Commencement Date or such applicable date, as the case may be
(except that the representations and warranties herein shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented
through such applicable date or, in the case of an obligation of an Agent under
a Terms Agreement, to the Registration Statement and the Prospectus as described
therein), as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to the Commencement Date or such
applicable date, as the case may be, as to the matters set forth in subsections
(a), (e), (f) and (g) of this Section 6; as to the identity of all "Significant
Subsidiaries" of the Company (as defined in Section 13 below); and as to such
other matters as such Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent against any
losses, claims, damages or liabilities, joint or several, to which such Agent
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
-17-
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement (including the Form T-1), the Prospectus or any other prospectus
relating to the Securities, or any amendment or supplement thereto, 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 will reimburse such Agent for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
the Company shall 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 an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement, the Prospectus or any
other prospectus relating to the Securities, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, 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,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party was or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability and claims that are the subject matter
of such proceeding.
-18-
(d) If the indemnification provided for in this Section 7 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof), referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and each Agent on the other from the offering of
the Securities to which such loss, claim, damage or liability (or action in
respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and each Agent on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each Agent on the
other shall be deemed to be in the same proportion as the total net proceeds
from the sale of Securities (before deducting expenses) received by the Company
bears to the total commissions or discounts received by such Agent in respect
thereof. 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 required to be stated
therein or necessary in order to make the statements therein not misleading
relates to information supplied by the Company on the one hand or by any Agent
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and each Agent agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by per capita allocation (even
if all Agents were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claim, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), an Agent shall
not be required to contribute any amount in excess of the amount by which the
total public offering price at which the Securities purchased by or through it
were sold exceeds the amount of the damages which such Agent 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
obligations of each of the Agents under this subsection (d) and any similar
provision of any agreement contemplated by Section 2(a) hereof to contribute are
several in proportion to the respective purchases made by or through it to which
such loss, claim, damage or liability (or action in respect thereof) relates and
are not joint.
(e) The obligations of the Company under this Section 7 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
Agent within the meaning of the Act; and the obligations of each Agent under
this Section 7 shall be in addition to any liability which such Agent 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.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any Terms Agreement), is acting
-19-
solely as agent for the Company and not as principal. Each Agent will make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Securities from the Company was solicited by
such Agent and has been accepted by the Company but such Agent shall not have
any liability to the Company in the event such purchase is not consummated for
any reason. If the Company shall default on its obligation to deliver
Securities to a purchaser whose offer it has accepted, the Company shall (i)
hold each Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) notwithstanding such default, pay
to the Agent that solicited such offer any commission to which it would be
entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties and
other statements by any Agent and the Company set forth in or made pursuant to
this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Agent or any controlling person of any Agent or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. (a) The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (i) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (ii) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination
(including any Securities held by an Agent as principal) and (iii) in any event,
this Agreement shall remain in full force and effect insofar as the fourth
paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5, Section 7,
Section 8 and Section 9 hereof are concerned.
(b) Without limiting the provisions of clause (a) above, and in any event
subject to the provisions of clause (a)(iii) above, this Agreement may be
terminated at any time by the Company as to any Agent or by any Agent upon the
giving of written notice of such termination to such Agent or the Company, as
the case may be.
(c) In the event of any suspension of the provisions of this Agreement
relating to the solicitation of offers to purchase securities by all of the
Agents, the obligations of the Company under Section 4(h), 4(i), 4(j) and 4(k)
shall cease during the pendency of such suspension, provided that prior to any
termination of such suspension the Company shall furnish the deliveries required
under Sections 4(h), 4(i), 4(j) and 4(k) as of the time then most recently
required thereunder.
11. Except as otherwise specifically provided herein or in the
Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Xxxxxxx, Xxxxx & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to Xxxxxxx, Sachs
& Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No.
(000) 000-0000, Attention: Registration Department, and, if the notice to be
delivered is a Pricing Supplement, to Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Facsimile Transmission No. (000) 000-0000, Attention:
Xxxxx Xxxxxxxxx, Medium-Term Note Trading Department, if to Xxxxxxx Xxxxx & Co.
shall be sufficient
-20-
in all respects when delivered or sent by facsimile transmission or registered
mail to Xxxxxxx Xxxxx & Co., Xxxxxxx Xxxxx World Headquarters, World Financial
Center, Xxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MTN
Product Management, Facsimile Transmission No. (000) 000-0000 and, if the notice
to be delivered is a Pricing Supplement, also to Xxxxxxx Xxxxx & Co.-Tritech
Services, 00 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: Final
Prospectus Unit/Xxxxxxx Xxxxxxxxxx, Facsimile Transmission No. (000) 000-0000,
if to Xxxxxx Xxxxxxx & Co. Incorporated shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to Xxxxxx Xxxxxxx
& Co. Incorporated, 2nd Floor, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Manager, Continuously Offered Products, Facsimile Transmission No.
(000) 000-0000 and to Xxxxxx Xxxxxxx & Co. Incorporated, 34th Floor, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxx, Investment Banking
Information Center, Facsimile Transmission No. (000) 000-0000, and, if the
notice to be delivered is a Pricing Supplement, to Xxxxxx Xxxxxxx & Co.
Incorporated, 2nd Floor, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxxxx, Medium-Term Note Trading Desk, Facsimile Transmission No. (212)
761-8846, and if to the Company shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to Northern
Indiana Public Service Company, 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxx, Xx., Treasurer, Facsimile Transmission No. (219)
853-5352.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of each Agent and the Company, and to the extent
provided in Section 7, Section 8 and Section 9 hereof, the officers and
directors of the Company and any person who controls any Agent or the Company,
and their respective personal representatives, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any Agent hereunder shall be deemed a successor or assign merely by
reason of such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business. As used herein,
"Significant Subsidiaries" shall mean all direct and indirect subsidiaries of
the Company as of the Time of Delivery other than any subsidiaries which,
considered in the aggregate as a single subsidiary as of the end of the most
recent fiscal year of the Company, would not constitute a significant subsidiary
as defined in Rule 1-02 of Regulation S-X (or any successor thereto).
14. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
-21-
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, whereupon this letter and the acceptance
by you thereof shall constitute a binding agreement between the Company, on the
one hand, and each of you, on the other hand, in accordance with its terms.
Very truly yours,
NORTHERN INDIANA PUBLIC SERVICE COMPANY
By: _______________________________________
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
________________________________
(Xxxxxxx, Xxxxx & Co.)
Xxxxxx Xxxxxxx & Co. Incorporated
By: _____________________________
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
By: _____________________________
-22-
ANNEX I
NORTHERN INDIANA PUBLIC SERVICE COMPANY
MEDIUM-TERM NOTES, SERIES E
Terms Agreement
---------------
___________________, 19__
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Northern Indiana Public Service Company, an Indiana corporation (the
"Company") proposes, subject to the terms and conditions stated herein and in
the Distribution Agreement dated ______________, 1997 (the "Distribution
Agreement"), between the Company on the one hand and Xxxxxxx, Sachs & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx Xxxxxxx & Co.
Incorporated (the "Agents") on the other, to issue and sell to [Xxxxxxx, Sachs &
Co.] [Xxxxxxx Xxxxx & Co.] [Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated]
[Xxxxxx Xxxxxxx & Co. Incorporated] the securities specified in the Schedule
hereto (the "Purchased Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the Agents as agents
of the Company of offers to purchase Securities is incorporated herein by
reference in its entirety, and shall be deemed to be part of this Terms
Agreement to the same extent as if such provisions had been set forth in full
herein. Nothing contained herein or in the Distribution Agreement shall make
any party hereto an agent of the Company or make such party subject to the
provisions therein relating to the solicitation of offers to purchase securities
from the Company, solely by virtue of its execution of this Terms Agreement.
Each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined) and also a representation and warranty as of the
date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
I-1
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Xxxxxxx, Sachs & Co.] [Xxxxxxx Xxxxx & Co.] [Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated] [Xxxxxx Xxxxxxx & Co. Incorporated] and
[Xxxxxxx, Sachs & Co.] [Xxxxxxx Xxxxx & Co.] [Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated] [Xxxxxx Xxxxxxx & Co. Incorporated] agrees to purchase from
the Company the Purchased Securities, at the time and place, in the principal
amount and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you, on the one hand, and the Company on the other.
Very truly yours,
NORTHERN INDIANA PUBLIC SERVICE COMPANY
By: _______________________________________
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
________________________________
(Xxxxxxx, Sachs & Co.)
Xxxxxx Xxxxxxx & Co. Incorporated
By: _____________________________
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
By: _____________________________
I-2
Schedule to Annex I
Title of Purchased Securities:
[ %] Medium-Term Notes, Series E
Aggregate Principal Amount:
[$________]
[Price to Public:]
Purchase Price by [Xxxxxxx, Sachs & Co.] [Xxxxxxx Xxxxx, & Co.] [Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated] [Xxxxxx Xxxxxxx & Co. Incorporated]
% of the principal amount of the Purchased Securities [plus accrued
interest, if any, from __________ to __________] [and accrued amortization,
if any, from __________ to __________]
Method of and Specified Funds for Payment of Purchase Prices
[By certified or official bank check or checks, payable to the order of the
Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next day]
[immediately available] funds]
[Through the facilities of the Same-Day Funds Settlement System of The
Depository Trust Company]
Indenture:
Indenture, dated as of March 1, 1988, as amended by a First Supplemental
Indenture dated as of December 1, 1991, between the Company and
Manufacturers Hanover Trust Company, as Trustee under which The Chase
Manhattan Bank, as successor to Manufacturers Hanover Trust Company, is
currently serving as Trustee
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
I-3
Interest Payment Date:
[months and dates, commencing __________]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to in
Section 4(h).]
[(2) The opinion of counsel to the Company referred to in Section 4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section 4(k).]
Other Provisions (including Syndicate Provisions, if applicable):
I-4
ANNEX II
NIPSCO CAPITAL MARKETS, INC.
Administrative Procedures
These Administrative Procedures relate to the Securities defined in the
Distribution Agreement dated _______________, 1997 (the "Distribution
Agreement"), between Northern Indiana Public Service Company, an Indiana
corporation (the "Company"), and Xxxxxxx, Xxxxx & Co., Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx Xxxxxxx & Co.
Incorporated (together, in such capacity, the "Agents"), to which these
Administrative Procedures are attached as Annex II. Defined terms used herein
and not defined herein shall have the meanings given such terms in the
Distribution Agreement, the Prospectus as amended or supplemented or the
Indenture.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the Administrative
Procedure set forth in Part I hereof, and Certificated Securities will be issued
in accordance with the Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
-----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated as of
.................., 19.., and a Medium-Term Note Certificate Agreement between
the Trustee and the Depositary, dated as of .................., 19.., (the
"Certificate Agreement"), and its obligations as a participant in the
Depositary, including the Depositary's Same-Day Funds Settlement System
("SDFS").
II-1
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the case
may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency (it being understood that currently the Depositary
accepts deposits of Global Securities denominated in U.S. dollars
only);
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
II-2
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(12) If a Floating Rate Book-Entry Security, such of the following as
are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may
be;
(5) The interest payment period; and
II-3
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for
the Depositary's purposes (which in the case of Floating Rate
Securities which reset weekly shall be the date five calendar
days immediately preceding the applicable Interest Payment Date
and in the case of all other Book-Entry Securities shall be the
Regular Record Date, as defined in the Security) and, if
calculable at that time, the amount of interest payable on such
Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such Book-
Entry Security to the Trustee's participant account and credit such Book-Entry
Security to such Agent's participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Book-Entry Security less such Agent's commission.
The entry of such a deliver order shall constitute a representation and warranty
by the Trustee to the Depositary that (a) the Global Security representing such
Book-Entry Security has been issued and authenticated and (b) the Trustee is
holding such Global Security pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such Book-
Entry Security to such Agent's participant account and credit such Book-Entry
Security to the participant accounts of the Participants with respect to such
Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to the
account of the Company maintained at Bank of America, Illinois, Account Xx. 00-
00000, XXX No. 000000000, Reference: Northern Indiana Public Service Company,
or such other account as the Company may have previously specified to the
Trustee, in funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to the
purchaser either by transmitting to the Participants with respect to such Book-
Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it will
prepare a Pricing Supplement reflecting the terms of such Book-Entry Security
and arrange to have delivered to the Selling
II-4
Agent or Purchasing Agent, as the case may be, at least ten copies of such
Pricing Supplement, not later than 11:00 a.m., New York City time, on the
Business Day following the Trade Date (as defined below), or if the Company and
the purchaser agree to settlement on the Business Day following the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have the Pricing Supplement filed with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment for a
Book-Entry Security and the authentication and issuance of the Global Security
representing such Book-Entry Security shall constitute "settlement" with respect
to such Book-Entry Security. All orders of Book-Entry Securities solicited by a
Selling Agent or made by a Purchasing Agent and accepted by the Company on a
particular date (the "Trade Date") will be settled on a date (the "Settlement
Date") which is the fourth Business Day, if permitted under Rule 15c6-1 under
the Exchange Act, (or the third Business Day if required under Rule 15c6-1 under
the Exchange Act) after the Trade Date pursuant to the "Settlement Procedure
Timetable" set forth below, unless the Company and the purchaser agree to
settlement on another Business Day which shall be no earlier than the next
Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the fourth Business Day, if permitted
under Rule 15c6-1 under the Exchange Act, (or the third Business Day if required
under Rule 15c6-1 under the Exchange Act) after the Trade Date, Settlement
Procedures "A" through "I" set forth above shall be completed as soon as
possible but not later than the respective times (New York City time) set forth
below:
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Settlement
Procedure Time
---------- ----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00
a.m. on the Business Day prior to the Settlement Date,
whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the
Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the
Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" 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 Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a Book-
Entry Security pursuant to Settlement Procedure "F", the Trustee may deliver to
the Depositary, through the Depositary's Participant Terminal System, as soon as
practicable a withdrawal message instructing the Depositary to debit such Book-
Entry Security to the Trustee's participant account, provided that the Trustee's
participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
xxxx such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to the
participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such
II-6
Book-Entry Security to such Agent's account and then debiting such Book-Entry
Security to such Agent's participant account and crediting such Book-Entry
Security to the Trustee's participant account and shall notify the Company and
the Trustee thereof. Thereafter, the Trustee will (i) immediately notify the
Company of such order and the Company shall transfer to such Agent funds
available for immediate use in an amount equal to the price of such Book-Entry
Security which was credited to the account of the Company maintained at the
Trustee in accordance with Settlement Procedure I, and (ii) 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 Distribution Agreement, the Company will reimburse such Agent on an
equitable basis for the loss of its 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 Security, the Depositary 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 one or more, but not all, of the Book-Entry Securities to have
been represented by a Global Security, the Trustee will provide, in accordance
with Settlement Procedure "D", for the authentication and issuance of a Global
Security representing the other Book-Entry Securities to have been represented
by such Global Security and will make appropriate entries in its records. The
Company will, from time to time, furnish the Trustee with a sufficient quantity
of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
--------------------------------------------------------------
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent, as
the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
II-7
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following as
are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(12) If a Floating Rate Certificated Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
II-8
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 11:00 a.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have the Pricing Supplement filed with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated Security
a written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Certificated Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or made
by a Purchasing Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which is the fourth Business Day, if permitted under Rule
15c6-1 under the Exchange Act, (or the third Business Day if required under Rule
15c6-1 under the Exchange Act) after the date of acceptance of such offer,
unless the Company and the purchaser agree to settlement (a) on another Business
Day after the acceptance of such offer or (b) with respect to an offer accepted
by the Company prior to 10:00 a.m., New York City time, on the date of such
acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated Securities
no later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 3:00 p.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Selling Agent's commission; provided that the
Selling
II-9
Agent reserves the right to withhold payment for which it has not received funds
from the purchaser. The Company shall not use any proceeds advanced by a
Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent, the
Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Certificated Securities to the Purchasing Agent against delivery of payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to the
Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Certificated Security.
II-10
ANNEX III
ACCOUNTANTS' LETTER
Pursuant to Section 4(j) and Section 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the Agents;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their reports
thereon copies of which have been separately furnished to the Agents; and
on the basis of specified procedures including inquiries of officials of
the Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations, nothing came
to their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
III-1
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed 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 and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of
III-2
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
shareholders' equity or other items specified by the Agents, or any
increases in any items specified by the Agents, in each case as
compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Agents, or any increases in any items specified by the Agents, in
each case as compared with the comparable period of the preceding year
and with any other period of corresponding length specified by the
Agents, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Agents which are
derived from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Agents or in documents
incorporated by reference in the Prospectus specified by the Agents, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(d) thereof and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) as of the date of the
amendment, supplement, incorporation or the Time of Delivery relating to the
Terms Agreement requiring the delivery of such letter under Section 4(j)
thereof.
III-3
