EXHIBIT 1
Indianapolis Power & Light Company
Cumulative Preferred Stock
$100 Par Value
UNDERWRITING AGREEMENT BASIC PROVISIONS
The basic provisions set forth herein are intended to be
incorporated by reference in a terms agreement (a "Terms
Agreement") of the type referred to in Paragraph 2 hereof
executed by Indianapolis Power & Light Company (the "Company")
and the underwriter or underwriters named therein (the
"Underwriters"). With respect to any particular Terms
Agreement, the Terms Agreement, together with the provisions
hereof incorporated therein by reference, is herein referred to
as this "Agreement." Terms defined in the Terms Agreement are
used herein as therein defined.
The Company may issue and sell from time to time series of
its Cumulative Preferred Stock, $100 par value, registered
under the registration statement referred to in Paragraph 1(a)
hereof (the "New Preferred Stock"). The New Preferred Stock
may have varying designations, preferences, rights, powers,
restrictions, dividend rates and payment dates, redemption
provisions and selling prices, with all such terms for any
particular series of New Preferred Stock (together with any
other terms relating to such series) to be determined and set
forth in the Terms Agreement relating to the series.
1. The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect
to the New Preferred Stock has been prepared by the Company
in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has become
effective. As used in this Agreement, (i) "Preliminary
Prospectus" means each prospectus (including all documents
incorporated therein by reference) included in that
registration statement, or amendments or supplements thereto,
before it became effective under the Act, including any
prospectus filed with the Commission pursuant to Rule 424(a) of
the Rules and Regulations, (ii) "Registration Statement" means
that registration statement, as amended or supplemented at the
date of the Terms Agreement; (iii) "Basic Prospectus" means the
prospectus (including all documents incorporated therein by
reference) included in the Registration Statement; and
(iv) "Prospectus" means the Basic Prospectus, together with
each prospectus amendment or supplement (including in each case
all documents incorporated therein by reference) specifically
relating to the New Preferred Stock, as filed with, or mailed
for filing to, the Commission pursuant to paragraph(b) or (c)
of Rule 424 of the Rules and Regulations. The Commission has
not issued any order preventing or suspending the use of any
Prospectus.
(b) The Registration Statement and each Prospectus contains,
and (in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which
this representation is being made) will contain at all times
during the period specified in Paragraph 6(c) hereof, all
statements which are required by the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations of the Commission under the Act and the
Exchange Act; and the Registration Statement and each
Prospectus does not, and (in the case of any amendment or
supplement to any such document, or any material incorporated
by reference in any such document, filed with the Commission
after the date as of which this representation is being made)
will not at any time during the period specified in Paragraph
6(c) hereof, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;
provided that the Company makes no representation or warranty
as to information contained in or omitted from the Registration
Statement or any Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Underwriters by or on behalf of any Underwriter specifically
for inclusion therein.
(c) The Company is not in violation of its corporate charter
or by-laws or in default under any agreement, mortgage or
instrument, the effect of which violation or default would be
material to the Company, the execution, delivery and
performance of this Agreement and compliance by the Company
with the provisions of the New Preferred Stock will not
conflict with, result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the
Company pursuant to the terms of, or constitute a default
under, any agreement, mortgage or instrument, or result in a
violation of the corporate charter or by-laws of the Company or
any order, rule or regulation of any court or governmental
agency having jurisdiction over the Company, or its respective
properties, and except as required by the Act, the Exchange
Act, The Public Service Commission Act of Indiana and
applicable state securities laws; no consent, authorization or
order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and
performance of this Agreement.
(d) Except as described in or contemplated by the Registration
Statement and each Prospectus, there has not been any material
adverse change in, or any adverse development which materially
affects, the business, properties, financial condition, results
of operations or prospects of the Company from the dates as of
which information is given in the Registration Statement and
each Prospectus.
(e) Deloitte & Touche, whose report appears in the Company's
most recent Annual Report on Form 10-K which is incorporated by
reference in each Prospectus, are independent certified public
accountants as required by the Act and the Rules and
Regulations.
(f) On the Delivery Date (as defined in Paragraph 5 hereof),
(i) the New Preferred Stock will have been validly authorized
and, upon payment therefor as provided in this Agreement, will
be validly issued and outstanding, will be fully paid and
nonassessable and have the rights set forth in the Amended
Articles of Incorporation, as amended, of the Company and (ii)
the New Preferred Stock will conform to the description thereof
contained in the Prospectus.
(g) The Company is duly incorporated and validly existing
under the laws of the State of Indiana, is not required to
qualify to do business as a foreign corporation in any other
jurisdiction, and has the power and authority necessary to own
or hold its respective properties and to conduct the businesses
in which it is engaged.
(h) Except as described in each Prospectus, there is no
material litigation or governmental proceeding pending or, to
the knowledge of the Company, threatened against the Company
which might result in any material adverse change in the
financial condition, results of operations, business or
prospects of the Company or which is required to be disclosed
in the Registration Statement.
(i) The financial statements filed as part of the
Registration Statement or included in any Preliminary Prospectus
or Prospectus Supplement (or in the case of any amendment or
supplement to any such document, or any material incorporated
by reference in any such document, filed with the Commission
after the date as of which this representation is being made),
will present fairly, the financial condition and results of
operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been, and (in
the case of any amendment or supplement to any such document,
or any material incorporated by reference in any such document,
filed with the Commission after the date as of which this
representation is being made) will be, prepared in conformity
with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(j) The documents incorporated by reference into any
Preliminary Prospectus or Prospectus have been and (in the case
of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed
with the Commission after the date as of which this
representation is being made) will be at all times during the
period specified in Paragraph 6(c) hereof, prepared by the
Company in conformity with the applicable requirements of the
Act and the Rules and Regulations and the Exchange Act and the
rules and regulations of the Commission thereunder and such
documents have been (or in the case of any amendment or
supplement to any such document, or any material incorporated
by reference in any such document, filed with the Commission
after the date as of which this representation is being made)
will be, at all times during the period specified in Paragraph
6(c) hereof, timely filed as required thereby.
(k) There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement
by the Act or by the Rules and Regulations, or which were
required to be filed as exhibits to any document incorporated
by reference in any Prospectus by the Exchange Act or the rules
and regulations of the Commission thereunder, which have not
been filed as exhibits to the Registration Statement or to such
document incorporated therein by reference as permitted by the
Rules and Regulations or the rules and regulations of the
Commission under the Exchange Act as required.
(l) The Indiana Utility Regulatory Commission has issued an
appropriate order with respect to the issue and sale of the New
Preferred Stock; such order is sufficient for the issue and
sale of the New Preferred Stock; the terms of this Agreement
with respect to the issue and sale of the New Preferred Stock
are in conformity with the terms of such order; no other
approval or consent of any governmental body (other than in
connection or in compliance with the provisions of the
securities or "blue sky" laws of any jurisdiction) is legally
required for the issue and sale of the New Preferred Stock by
the Company or the carrying out of the provisions of this
Agreement.
2. The obligation of the Underwriters to purchase, and the Company to
sell, the New Preferred Stock shall be evidenced by a Terms Agreement
delivered at the time the Company determines to sell the New Preferred Stock.
The Terms Agreement specifies the firm or firms which will be Underwriters,
the number of shares of the New Preferred Stock to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters for the New
Preferred Stock, the public offering price of the New Preferred Stock and
any terms of the New Preferred Stock not already specified herein (including,
but not limited to, designations, dividend rates, payment dates and
redemption provisions). The Terms Agreement specifies any details of the
terms of the offering which should be reflected in a post-effective amendment
to the Registration Statement or the supplement to the Prospectus relating to
the offering of the New Preferred Stock.
3. The Company shall not be obligated to deliver any New Preferred
Stock except upon payment for all New Preferred Stock to be purchased
pursuant to this Agreement as hereinafter provided.
4. If any one or more of the Underwriters defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriter or Underwriters or such other underwriters satisfactory to the
Company who so agree, shall have the right, but shall not be obligated to,
purchase in such proportion as may be agreed upon among them, the shares
of New Preferred Stock which the defaulting Underwriter failed to purchase.
If the non-defaulting Underwriter or Underwriters or other underwriters
satisfactory to the non-defaulting Underwriters and the Company do not elect
to purchase the New Preferred Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the
Company, except that the Company will continue to be liable for the payment
of expenses as set forth in Paragraphs 6(j) and 10 hereof.
Nothing contained in this Paragraph 4 shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused
by its default. If other Underwriters are obligated or agree to purchase the
New Preferred Stock of the defaulting or withdrawing Underwriter, either the
non-defaulting Underwriters or the Company may postpone the Delivery Date for
up to seven full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, any Prospectus or in any other
document or arrangement.
5. Delivery of any payment for the New Preferred Stock shall be made
at the office of SBC Warburg Dillon Read, Inc. upon or before the third
business day following the date of the Terms Agreement, or at such other
location, time and date as shall be agreed upon as specified in the Terms
Agreement. This date and time are sometimes referred to as the "Delivery
Date." On the Delivery Date, the Company shall deliver the New Preferred
Stock to the Underwriters for the account of each Underwriter against payment
to or upon the order of the Company of the purchase price by certified or
official bank check or checks payable in New York Clearing House funds or by
wire transferred immediately available funds, as shall be provided in the
Terms Agreement. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the New Preferred
Stock shall be in definitive fully registered form and in such denominations
and registered in such names, as the Underwriters shall request in writing
not less than two full business days prior to the Delivery Date. For the
purpose of expediting the checking and packaging of the shares of New
Preferred Stock the Company shall make the New Preferred Stock available for
inspection by the Representative in New York, New York not later than 2:00
P.M., New York City Time, on the business day prior to the Delivery Date.
6. The Company agrees:
(a) To furnish promptly to the Underwriters and to counsel
for the Underwriters a conformed copy of the Registration Statement
and each amendment or supplement thereto filed prior to the
date of the Terms Agreement or relating to or covering the New
Preferred Stock, and a copy of each Prospectus filed with the
Commission, including all documents incorporated therein by
reference and all consents and exhibits filed therewith;
(b) To deliver promptly to the Underwriters such number of
the following documents as the Underwriters may request: (i)
conformed copies of the Registration Statement (excluding
exhibits other than this Agreement), (ii) the computation of
the ratio of earnings to fixed charges and preferred stock
dividends, (iii) each Prospectus, and (iv) any documents
incorporated by reference in any Prospectus;
(c) Subject to clause (d), to file with the Commission,
during such period following the date of the Terms Agreement as,
in the opinion of counsel for the Underwriters, any Prospectus is
required by law to be delivered, any amendment or supplement to
the Registration Statement or any Prospectus that may, in the
judgment of the Company or the Underwriters, be required by the
Act or requested by the Commission;
(d) During the period referred to in (c) above not to file
with the Commission(i) any amendment or supplement to the
Registration Statement, (ii) any Prospectus or any amendment or
supplement thereto or (iii) any document incorporated by
reference in any of the foregoing or any amendment or
supplement to any such incorporated document, unless a copy
thereof has been previously furnished to the Underwriters and
to counsel for the Underwriters and the Underwriters shall not
have objected to the filing;
(e) To advise the Underwriters promptly (i) when any post-
effective amendment to the Registration Statement relating to
or covering the New Preferred Stock becomes effective, (ii) of
any request or proposed request by the Commission for an
amendment or supplement to the Registration Statement, to any
Prospectus, to any document incorporated by reference in any of
the foregoing or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any order
directed to any Prospectus or any document incorporated therein
by reference or the initiation or threat of any stop order
proceeding or of any challenge to the accuracy or adequacy of
any document incorporated by reference in any Prospectus,
(iv) of receipt by the Company of any notification with respect
to the suspension of the qualification of the New Preferred
Stock for sale in any jurisdiction or the initiation or threat
of any proceeding for that purpose and (v) of the happening of
any event which makes untrue any statement of a material fact
made in the Registration Statement or any Prospectus or which
requires the making of a change in the Registration Statement
or any Prospectus in order to make the statements therein not
misleading;
(f) If, during the period referred to in (c) above, the
Commission shall issue a stop order suspending the
effectiveness of the Registration Statement, to make every
reasonable effort to obtain the lifting of that order at the
earliest possible time;
(g) To make generally available to its security holders and
to deliver to the Underwriters an earnings statement, conforming
with the requirements of Section 11(a) of the Act, covering a
period of at least twelve months beginning after the effective
date of the Registration Statement;
(h) So long as any shares of the New Preferred Stock are
outstanding, to furnish to the Underwriters copies of all
public reports and all reports and financial statements
furnished by the Company to the New York Stock Exchange
pursuant to requirements of or agreements with such exchange or
to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(i) To take all reasonable efforts to qualify the New
Preferred Stock for offer and sale under the securities laws of
such jurisdictions as the Underwriters may reasonably request;
(j) To pay the costs incident to the authorization, issuance,
sale and delivery of the New Preferred Stock and any taxes
payable in that connection; the costs incident to the
preparation, printing and filing under the Act of the
Registration Statement and any amendments, supplements and
exhibits thereto; the costs incident to the preparation,
printing and filing of any document and any amendments and
exhibits thereto required to be filed by the Company under the
Exchange Act; the costs of distributing the Registration
Statement as originally filed and each amendment and post-
effective amendment thereof (including exhibits), any
Preliminary Prospectus, each Prospectus and any documents
incorporated by reference in any of the foregoing documents;
the costs of printing this Agreement, if any; the costs of
filings with the National Association of Securities Dealers,
Inc.; fees paid to rating agencies in connection with the
rating of the New Preferred Stock; the fees and expenses of
qualifying the New Preferred Stock under the securities laws of
the several jurisdictions as provided in this Paragraph and of
preparing and printing Blue Sky and legality memoranda
(including fees of counsel to the Underwriters); the costs and
charges of any transfer agent or registrar (including DTC); and
all other costs and expenses incident to the performance of the
Company's obligations under this Agreement; provided that,
except as provided in this Paragraph and in Paragraph 10
hereof, the Underwriters shall pay their own costs and
expenses, including the fees and expenses of their counsel, any
transfer taxes on the New Preferred Stock which it may sell and
the expenses of advertising any offering of the New Preferred
Stock made by the Underwriters;
(k) until the termination of the offering of the New Preferred
Stock, to timely file all documents, and any amendments to
previously filed documents, required to be filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act;
(l) To obtain the approval of DTC for "book entry" transfer of
the New Preferred Stock and to comply with all of its
agreements set forth in the representation letter of the
Company to DTC relating to such approval; and
(m) To use the proceeds of any offering of New Preferred Stock
as specified in the Prospectus.
7. (a) The Company shall indemnify and hold harmless each
Underwriter and its director, officers and each person, if any,
who controls any Underwriter within the meaning of the Act from
and against any loss, claim, damage or liability, joint or
several, and any action in respect thereof, to which that
Underwriter or director, officer or controlling person may
become subject, under the Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the
Registration Statement or any Prospectus or in any blue sky
application or other document executed by the Company
specifically for that purpose or based upon written information
furnished by the Company (any such application, document or
information is hereinafter referred to as a "Blue Sky
Application") filed in any state or other jurisdiction in order
to qualify any or all of the New Preferred Stock under the
securities laws thereof, or arises out of, or is 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 shall reimburse each
Underwriter, director, officer and controlling person for any
legal and other expenses reasonably incurred by such person in
investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such
loss, claim, damage, liability or action; provided that the
Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement, any
Prospectus or any Blue Sky Application in reliance upon and in
conformity with written information about the Underwriters
furnished to the Company by or on behalf of any Underwriter
specifically for inclusion therein; and provided further that
as to any Preliminary Prospectus this indemnity agreement shall
not inure to the benefit of any Underwriter or any director or
officer of or person controlling that Underwriter on account of
any loss, claim, damage, liability or action arising from the
sale of New Preferred Stock to any person by that Underwriter
if that Underwriter failed to send or give a copy of any
Prospectus, as the same may be amended or supplemented, to that
person within the time required by the Act, and the untrue
statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in such Prospectus, unless
such failure resulted from non-compliance by the Company with
Paragraph 6(b) hereof. For purposes of the second proviso to
the immediately preceding sentence, the term Prospectus shall
not be deemed to include the documents incorporated therein by
reference, and no Underwriter shall be obligated to send or
give any supplement or amendment to any document incorporated
by reference in any Preliminary Prospectus or any Prospectus to
any person other than a person to whom such Underwriter has
delivered such incorporated documents in response to a written
request therefor. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have
to any Underwriter or controlling person.
(b) Each Underwriter, severally, but not jointly, shall
indemnify and hold harmless the Company, each of its directors,
each of its officers who signed the Registration Statement and
any person who controls the Company within the meaning of the
Act from and against any loss, claim, damage or liability, joint
or several, and any action in respect thereof, to which the
Company or any such director, officer or controlling person may
become subject, under the Act or otherwise, insofar as such
loss, claim, damage, liability or action, arises out of, or is
based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement, any Prospectus or any Blue Sky Application,
or arises out of, or is 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,
but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information about
the Underwriters furnished to the Company by or on behalf of that
Underwriter specifically for inclusion therein, and shall reimburse
the Company for any legal and other expenses reasonably incurred
by the Company or any such director, officer or controlling person
in investigating or defending or preparing to defend against or
appearing as a third-party witness in connection with any such
loss, claim, damage, liability or action. The foregoing indemnity
agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any of its directors, officers or
controlling persons.
(c) Promptly after receipt by an indemnified party under
this Paragraph of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof
is to be made against the indemnifying party under this Paragraph,
notify the indemnifying party in writing of the claim or the
commencement of that action; provided that the failure to notify
the indemnifying party shall not relieve it from any liability
which it may have under this Paragraph 7, except to the extent it
has been prejudiced in any material respect by such failure,
or from any liability which it may have to an indemnified party
otherwise than under this Paragraph. If any such claim or action
shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel satisfactory to
the indemnified party. After notice from the indemnifying party to
the indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to the
indemnified party under this Paragraph for any legal or other
expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided that the indemnified party shall have the
right to employ one counsel to represent it and its controlling
persons in respect of any claim in respect of which indemnity may
be sought by it against the indemnifying party under this Paragraph
if, in the reasonable judgment of the indemnified party, it is
advisable for it to be represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid
by the indemnifying party.
(d) If the indemnification provided for in this
Paragraph 7 shall for any reason be unavailable to an
indemnified party under Paragraph 7(a) or 7(b) hereof
in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu
of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party
as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and
the Underwriters on the other from the offering of
the New Preferred Stock or (ii) if the allocation
provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on
the other with respect to the statements or omissions
which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as
any other relevant equitable considerations. The
relative benefits received by the Company on the one
hand and the Underwriters on the other with respect
to such offering shall be deemed to be in the same
proportion as the total net proceeds from the
offering of the New Preferred Stock (before deducting
expenses) received by the Company bear to the total
underwriting discounts and commissions received by
the Underwriters with respect to such offering, in
each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or
alleged untrue statement of a material fact or
omission or alleged omission to state a material fact
relates to information supplied by the Company or the
Underwriters, the intent of the parties and their
relative knowledge, access to information and
opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree
that it would not be just and equitable if
contributions pursuant to this Paragraph 7(d) were to
be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such
purpose) or by any other method of allocation which
does not take into account the equitable
considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in
respect thereof, referred to above in this Paragraph
7(d) shall be deemed to include, for purposes of this
Paragraph 7(d), 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 Paragraph 7(d), no Underwriter shall be required
to contribute any amount in excess of the amount by
which the total price at which the New Preferred
Stock underwritten by it and distributed to the
public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise
paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to
contribute as provided in this Paragraph 7(d) are
several in proportion to their respective
underwriting obligations and not joint.
(e) The indemnity agreements contained in this
Paragraph and the representations, warranties and
agreements of the Company in Paragraph 1 and
Paragraph 6 hereof shall survive the delivery of the
New Preferred Stock and shall be in full force and
effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on
behalf of any indemnified party.
8. The obligations of the Underwriters under this Agreement
may be terminated by the Underwriters obligated to purchase a
majority of the New Preferred Stock in their absolute
discretion, by notice given to and received by the Company
prior to the delivery of and payment for the New Preferred
Stock, if, during the period beginning on the date of the Terms
Agreement to and including the Delivery Date, (a) trading in
securities generally on the New York Stock Exchange, Inc., the
American Stock Exchange or the over-the-counter market is
suspended, or minimum prices are established on either the New
York Stock Exchange or the American Stock Exchange, (b) a
banking moratorium is declared by either Federal or New York
State authorities (c) the United States becomes engaged in
material hostilities or there is a material escalation in
hostilities involving the United States or there is a
declaration of a national emergency or war by the United
States, or (d) there shall have been such a material and
substantial change in economic, political or financial
conditions or the effect of international conditions on the
financial markets in the United States shall be so material and
substantial, such as, in the reasonable judgment of the
Underwriters obligated to purchase a majority of the New
Preferred Stock makes it impractical or imprudent to proceed
with the payment for and the delivery of the New Preferred
Stock.
9. The respective obligations of the Underwriters, under the
Agreement with respect to the New Preferred Stock are subject
to the accuracy, on the date of the Terms Agreement and on the
Delivery Date, of the representations and warranties of the
Company contained herein, to performance by the Company of its
obligations hereunder, and to each of the following additional
terms and conditions applicable to the New Preferred Stock:
(a) At or before the Delivery Date, no stop order suspending
the effectiveness of the Registration Statement nor any order
directed to any document incorporated by reference in any
Prospectus shall have been issued and prior to that time no
stop order proceeding shall have been initiated or threatened
by the Commission and no challenge shall have been made to the
accuracy or adequacy of any document incorporated by reference
in any Prospectus; any request of the Commission for inclusion
of additional information in the Registration Statement or any
Prospectus or otherwise shall have been complied with; after
the date of the Terms Agreement, the Company shall not have
filed with the Commission any amendment or supplement to the
Registration statement or any Prospectus (or any document
incorporated by reference therein) without the consent of the
Underwriters.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Delivery Date that the Registration
Statement or any Prospectus contains an untrue statement of a
fact which, in the opinion of counsel for the Underwriters, is
material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement and
the New Preferred Stock and the form of the Registration
Statement, each Prospectus (other than financial statements and
other financial data) and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall
be satisfactory in all respects to Cahill Gordon & Reindel,
counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such
matters.
(d) Bryan G. Tabler, Vice President, Secretary and General
Counsel of the Company, shall have furnished to the
Underwriters his opinion addressed to the Underwriter and dated
the Delivery Date, as general counsel of the Company, to the
effect that:
(i) The Company is a duly organized and validly existing
public utility corporation under the laws of the State of
Indiana, has full corporate authority to engage in the business
in which it is engaged in as stated in the Registration
Statement and each Prospectus, has full corporate power and
authority to issue and sell the New Preferred Stock, and is
subject to regulation by the Indiana Utility Regulatory
Commission in matters pertaining, among other things, to the
issue and sale of the New Preferred Stock. The terms
"Registration Statement" and "each Prospectus," as used herein,
have the same meanings as in Paragraph 1(a) of this Agreement;
(ii) The shares of New Preferred Stock have been duly
authorized and issued and are fully paid and nonassessable and
have the rights set forth in the Amended Articles of
Incorporation, as amended, of the Company; the certificates for
the New Preferred Stock are in due and proper form; the holders
of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the New
Preferred Stock;
(iii) The Indiana Utility Regulatory Commission has
issued an appropriate order under date of [ ], 1997 in
Cause No. [ ], with respect to the issue and sale of the
New Preferred Stock; such order is sufficient for such
purpose; the issue and sale of the New Preferred Stock is in
conformity with the terms of such order, and no other
authorization, approval or consent of any governmental body is
legally required for the issue and sale of the New Preferred
Stock by the Company, or for the carrying out of the provisions
of this Agreement (other than in connection or in compliance
with the provisions of the securities or "blue sky" laws of
any jurisdiction);
(iv) The New Preferred Stock conform, as to legal matters,
to the statements' concerning them contained or incorporated by
reference in the Registration Statement and each Prospectus
referred to herein, filed by the Company with the Commission;
(v) The Registration Statement is effective under the
Act, no stop order suspending its effectiveness has been
issued, and, to the knowledge of such counsel, no proceeding
for that purpose is pending or threatened by the Commission;
(vi) No order directed to any document incorporated by
reference in any Prospectus has been issued and to the
knowledge to such counsel, no challenge has been made to the
accuracy or adequacy of any such document;
(vii) The Registration Statement and each Prospectus
(except that no opinion need be expressed as to the financial
statements contained therein), comply as to form in all
material respects with the relevant requirements of the Act
and the Rules and Regulations and the documents incorporated
or deemed to be incorporated by reference in the Prospectus
(except that no opinion need be expressed as to the financial
statements and other financial data contained therein) comply
as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations thereunder, and
such counsel has no reason to believe that the Registration
Statement or any Prospectus contains any untrue statements of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading;
(viii) The statements made in the Prospectus under the
caption "Description of the New Preferred Stock` insofar as
they purport to summarize the provisions of documents or
arrangements specifically referred to therein present the
information called for with respect thereto by Form S-3;
(ix) Such counsel does not know of any contracts or other
documents which are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and
Regulations or which are required to be filed by the Exchange
Act or the rules and regulations thereunder as exhibits to any
documents incorporated by reference in any Prospectus, which
have not been filed as exhibits to the Registration Statement
or to such documents incorporated therein by reference
permitted by the rules and regulations or the Rules and
Regulations of the Commission under the Exchange Act;
(x) The Company holds valid indeterminate permits from
the state of Indiana authorizing it to carry on its utility
business in the city of Indianapolis, Indiana, and adjacent
areas, from which more than 98% of its operating revenues,
excluding sales to other electric utilities, are derived;
(xi) Since the end of its latest fiscal year, the Company
has timely filed all documents and amendments to previously
filed documents required to be filed by it pursuant to
Sections 12, 13, 14 or 15(d) of the Exchange Act;
(xii) Such counsel does not know of any litigation or
any governmental proceeding instituted or threatened against
the Company of a character referred to in Paragraph 1(h) above
other than as disclosed in the Prospectus or in any document
incorporated, or deemed to be incorporated, by reference in the
Prospectus; and
(xiii) This Agreement has been duly authorized, executed
and delivered by the Company, and the provisions thereof do not
conflict with or result in a breach of the Amended Articles of
Incorporation, as amended, of the Company, or of any of the
terms, conditions or provisions of any outstanding agreements,
notes or other instruments under which the Company is
obligated.
(e) The Company shall have furnished to the Underwriters on
the Delivery Date a certificate, dated the Delivery Date, of
its Chairman of the Board, its President or a Vice President
and its Treasurer stating that:
(i) The representations, warranties and agreements of the
Company in Paragraph 1 hereof are true and correct as of the
Delivery Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in
Paragraph 9(a) hereof have been fulfilled;
(ii) They have carefully examined the Registration
Statement and each Prospectus and, in their opinion, (A) as of
the date of each Prospectus, the Registration Statement and
the Prospectus did not include any untrue statement of a
material fact and did not omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the date of
each Prospectus, no event has occurred which should have been
set forth in a supplement to or amendment of each Prospectus
which has not been set forth in such a supplement or amendment.
(f) The Company shall have furnished to the Underwriters on
the Delivery Date a letter of Deloitte & Touche, addressed to
the Underwriters and dated the Delivery Date, of the type
described in the American Institute of Certified Public
Accountants' Statement on Auditing Standards No. 72 and
covering such specified financial statement items as the
Underwriters may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are In form and substance satisfactory to
counsel for the Underwriters.
10. If the Company shall fail to tender the New Preferred
Stock for delivery to the Underwriters for any reason permitted
under this Agreement, or if the Underwriters shall decline to
purchase the New Preferred Stock for any reason permitted under
this Agreement, the Company shall reimburse the Underwriters
for the reasonable fees and expenses of their counsel and for
such other out-of-pocket expenses as shall have been incurred
by them in connection with this Agreement and the proposed
purchase of the New Preferred Stock, and upon demand the
Company shall pay the full amount thereof to the Underwriters.
If this Agreement is terminated pursuant to Paragraph 4 hereof
by reason of the default by one or more of the Underwriters,
the Company shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
11. The Company shall be entitled to act and rely upon any
request, consent, behalf of the notice or agreement by SBC
Warburg Dillon Read Inc., on behalf of the Underwriters. Any
notice by the Company to the Underwriters shall be sufficient
if given in writing or by telegraph addressed to SBC Warburg
Dillon, Read Inc., on behalf of the Underwriters, at 2001 Ross
Avenue, Suite 3950, Dallas, Texas 75202, Attention:
[ ]. Any notice by the Underwriters to the
Company shall be sufficient if given in writing or by telegraph
addressed to the Company at 25 Monument Circle, P.O. Box 1595,
Indianapolis, Indiana 46206-1595, Attention of the [Senior Vice
President, Finance and Information Services].
12. This Agreement shall be binding upon the Underwriters, the
Company, and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of
only those persons, except that (a) the representations,
warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of
the directors, officers and the person or persons, if any, who
control any Underwriter within the meaning of Section 15 of the
Act, and (b) the indemnity agreement of the Underwriters
contained in Paragraph 7 hereof shall be deemed to be for the
benefit of directors of the Company, officers of the Company
who have signed the Registration Statement and any person
controlling the Company. Nothing in this Agreement is intended
or shall be construed to give any person, other than the
persons referred to in this Paragraph, any legal or equitable
right, remedy or claim under or in respect of this Agreement or
any provision contained herein.
13. For purposes of this Agreement, "business day" means any
day on which the New York Stock Exchange, Inc. is open for
trading.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. The Terms Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart the
executed counterparts shall together constitute a single
instrument.
16. SBC Warburg Dillon Read Inc., an indirect, wholly owned
subsidiary of Swiss Bank Corporation, is not a bank and is
separate from any affiliated bank, including any U.S. branch or
agency of Swiss Bank Corporation. Because SBC Warburg Dillon
Read Inc. is a separately incorporated entity, it is solely
responsible for its own contractual obligations and
commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or
recommended by SBC Warburg Dillon Read Inc. are not deposits,
are not insured by the Federal Deposit Insurance Corporation,
are not guaranteed by a branch or agency, and are not otherwise
an obligation or responsibility of a branch or agency.
A lending affiliate of SBC Warburg Dillon Read Inc. may
have lending relationships with issuers of securities
underwritten or privately placed by SBC Warburg Dillon Read
Inc. To the extent required under the securities laws,
prospectuses and other disclosure documents for securities
underwritten or privately placed by SBC Warburg Dillon Read
Inc. will disclose the existence of any such lending
relationships and whether the proceeds of the issue will be
used to repay debts owed to affiliates of SBC Warburg Dillon
Read Inc.
Without your prior written approval, the U.S. branches and
agencies of Swiss Bank Corporation will not share with SBC
Warburg Dillon Read Inc. any non-public information concerning
you, and SBC Warburg Dillon Read Inc. will not share any non-
public information received from you with any of such U.S.
branches and agencies of Swiss Bank Corporation.