EXHIBIT 4.1
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PRICING AGREEMENT
Goldman, Sachs & Co.,
Barclays Capital Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
September 23, 1999
Ladies and Gentlemen:
NiSource Capital Markets, Inc., an Indiana corporation (the
"Company") and wholly-owned subsidiary of NiSource Inc., an Indiana
corporation ("NiSource"), proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated
September 23, 1999. (the "Underwriting Agreement"), between NiSource
and the Company on the one hand and Goldman, Sachs & Co. and Barclays
Capital Inc. on the other hand, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth
in full herein; and each of the representations and warranties set
forth therein shall be deemed to have been made at and as of the date
of this Pricing Agreement, except that each representation and
warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or
warranty as of the date of the Underwriting Agreement in relation to
the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the
Prospectus as amended or supplemented relating to the Securities which
are the subject of this Pricing Agreement. Each reference to the
Representatives herein and in the provisions of the Underwriting
Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and
on behalf of each of the Underwriters of the Securities pursuant to
Section 12 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 12 are set forth at the
end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the 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
Underwriting Agreement incorporated herein by reference, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Company, at the time and place and at the purchase price to the
Underwriters set forth in Schedule II hereto, the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule
I hereto.
If the foregoing is in accordance with your understanding, please
sign and return to us one for the Company and each of the
Representatives plus one for each counsel counterparts hereof, and
upon acceptance hereof by you, on behalf of each of the Underwriters,
this letter and such acceptance hereof, including the provisions of
the Underwriting Agreement incorporated herein by reference, shall
constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the
form of which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Representatives as to
the authority of the signers thereof.
Very truly yours,
NiSource Capital Markets, Inc.
By: /s/ Stephen P. Adik
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Name: Stephen P. Adik
Title: President
NiSource Inc.
By: /s/ Stephen P. Adik
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Name: Stephen P. Adik
Title: Senior Executive
Vice President,
Chief Financial
Officer and Treasurer
Goldman, Sachs & Co.
Accepted as of the date hereof:
Goldman, Sachs & Co.
Barclays Capital Inc.
By: /s/ Goldman, Sachs & Co.
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(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
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SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
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Goldman, Sachs & Co. $ 80,000,000
Barclays Capital Inc. 80,000,000
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$160,000,000
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SCHEDULE II
TITLE OF SECURITIES:
Puttable Reset Securities PURS Servicemark due 2010 ("PURS")
AGGREGATE PRINCIPAL AMOUNT:
$160,000,000
PRICE TO PUBLIC:
100% of the principal amount of the Securities, plus accrued
interest, if any, from September 28, 1999
PURCHASE PRICE BY UNDERWRITERS:
99.726% of the principal amount of the Securities, plus accrued
interest, if any, from September 28, 1999
FORM OF SECURITIES:
Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its
designated custodian, to be made available for checking by the
Representatives at least twenty-four hours prior to the Time of
Delivery at the office of DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds
TIME OF DELIVERY:
10:00 a.m. (New York City time), September 28, 1999
INDENTURE:
Indenture dated February 14, 1997, as amended by the First
Supplemental Indenture dated February 16, 1999, among the
Company, NiSource and the Trustee
MATURITY:
September 28, 2010
INTEREST RATE:
See Floating Rate Provisions
INTEREST PAYMENT DATES:
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Interest is payable on October 28, 1999, January 28, 2000, April
28, 2000, July 28, 2000 and September 28, 2000.
REDEMPTION PROVISIONS:
No provisions for redemption.
SINKING FUND PROVISIONS:
No sinking fund provisions.
OPTIONAL REPAYMENT PROVISIONS:
Put Option as provided in paragraph 3 of the form of PURS
attached hereto as Exhibit A.
FLOATING RATE PROVISIONS:
Until September 28, 2000, the interest rate on the PURS will be
reset on each of October 28, 1999, January 28, 2000, April 28,
2000, July 28, 2000 and September 28, 2000 to the Applicable
LIBOR Rate plus 125 basis points (1.25%). The Chase Manhattan
Bank will compute the Applicable LIBOR Rate and the interest rate
on the PURS until September 28, 2000.
The Applicable LIBOR Rate means the rate for deposits in U.S.
dollars having the Relevant Maturity that appears on the Telerate
page 3750 as of 11:00 A.M., London time, on the second day on
which dealings in U.S. dollars are transacted in the London
interbank market preceding October 28, 1999, January 28, 2000,
April 28, 2000, July 28, 2000 and September 28, 2000, as the case
may be. The Relevant Maturity for the interest period beginning
on September 28, 1999 will be one month; the Relevant Maturity
for the interest period beginning on October 28, 1999, January
28, 2000 and April 28, 2000 will be three months; and the
Relevant Maturity for the interest period beginning on July 28,
2000 will be two months. Telerate page 3750 means the display
page so designated on the service operated by Bridge Telerate,
Inc. or any other page or pages that may replace that page on
that service or any other service that may be nominated by the
British Banker's Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits.
If the Applicable LIBOR Rate on an interest determination date
does not appear on the Telerate page 3750, the Applicable LIBOR
Rate will be determined by The Chase Manhattan Bank on the basis
of the rates at which deposits in U.S. dollars are offered by
four major banks in the London interbank market selected by The
Chase Manhattan Bank at approximately 11:00 A.M., London time, on
that interest determination date to prime banks in the London
interbank market having the relevant maturity and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that
is representative for a single transaction in that market at that
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time. The Chase Manhattan Bank will request the principal London
office of each of those four major banks to provide a quotation
of its rate. If at least two quotations are provided, the
Applicable LIBOR Rate will be the arithmetic mean (rounded, if
necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded
upwards) of those quotations. If fewer than two quotations are
provided, the Applicable LIBOR Rate will be the arithmetic mean
(rounded, if necessary, to the nearest one hundred-thousandth of
a percentage point, with five one-millionths of a percentage
point rounded upwards) of the rates quoted by three major banks
in New York City selected by The Chase Manhattan Bank at
approximately 11:00 A.M., New York City time, on the interest
determination date for loans in U.S. dollars to leading European
banks, having the Relevant Maturity and in a principal amount
equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in that market at that
time. If the banks in New York City selected by The Chase
Manhattan Bank are not quoting rates as mentioned above on the
interest determination date, then the Applicable LIBOR Rate for
the subsequent interest period will be the Applicable LIBOR Rate
in effect on the interest determination date.
DEFEASANCE PROVISIONS:
None
CLOSING LOCATION FOR DELIVERY OF SECURITIES:
Schiff Hardin & Waite
6600 Sears Tower
Chicago, Illinois 60606
NAMES AND ADDRESSES OF REPRESENTATIVES:
Goldman, Sachs & Co.
Barclays Bank Inc.
Address for Notices, etc.:
Goldman, Sachs & Co.
Attn: Registration Department
85 Broad Street
New York, New York 10004
Barclays Capital Inc.
Attn: Swap Operations
222 Broadway
New York, New York 10038
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OTHER TERMS:
As provided in paragraphs 2, 3, 4, 5 and 10 of the form of PURS
attached hereto as Exhibit A.
At the time of the closing of the sale and purchase of the PURS,
and subject thereto, Goldman, Sachs & Co. and Barclays Bank PLC
will pay to the Company, in immediately available funds, an
amount equal to 1.83% of the principal amount of the PURS in
respect of the call option granted to Goldman, Sachs & Co. and
Barclays Bank PLC pursuant to the terms of the PURS.
The opinion in section 7(c) of the Underwriting Agreement will
also cover the validity, binding effect and enforceability of the
Calculation Agency Agreement to be entered into in connection
with the PURS.
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