INDIANA ENERGY, INC. STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 11, 1999 by and
between Indiana Energy, Inc., an Indiana corporation ("INDIANA"),
and SIGCORP, INC., an Indiana corporation ("SIGCORP").
WHEREAS, concurrently with the execution and delivery of this
Agreement, Indiana, SIGCORP and Vectren Corporation, an Indiana
corporation 50% of whose outstanding capital stock is owned by
Indiana and 50% of whose outstanding capital stock is owned by
SIGCORP (the "Company") are entering into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), which
provides, among other things, upon the terms and subject to the
conditions thereof, for the merger of each of Indiana and SIGCORP
with and into the Company (the "Merger"); and
WHEREAS, as a condition to Indiana willingness to enter into
the Merger Agreement, SIGCORP has requested that Indiana agree, and
Indiana has so agreed, to grant to SIGCORP an option with respect
to certain shares of Indiana's common stock, on the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, to induce SIGCORP to enter into the Merger
Agreement, and in consideration of the mutual covenants and
agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. GRANT OF OPTION. Indiana hereby grants SIGCORP an
irrevocable option (the "Indiana Option") to purchase up to
5,927,524 shares, subject to adjustment as provided in Section 11
(such shares being referred to herein as the "Indiana Shares"), of
common stock, without par value, of Indiana (the "Indiana Common
Stock") (being 19.9% of the number of shares of Indiana Common
Stock outstanding on the date hereof), together with the associated
purchase rights (the "Indiana Rights"), issued pursuant to the
Indiana Rights Agreement referred to in Section 4.15 of the Merger
Agreement (the "Indiana Rights Agreement"), in the manner set forth
below at a price (the "Exercise Price") per Indiana share of
$22.27, payable, at SIGCORP's option, (a) in cash or (b) subject to
the receipt of approvals of any Governmental Authority required for
Indiana to acquire the SIGCORP Shares (as defined below) from
SIGCORP, and for SIGCORP to issue the SIGCORP Shares to Indiana,
which approvals Indiana and SIGCORP shall use their respective
reasonable best efforts to obtain, in shares of common stock,
without par value, of SIGCORP (the "SIGCORP Shares"), in either
case in accordance with Sections 3 and 4 hereof. Notwithstanding
the foregoing, in no event shall the number of Indiana Shares for
which the Indiana Option is exercisable exceed 19.9% of the number
of issued and outstanding shares of Indiana Common Stock. As used
herein, the "Fair Market Value" of any share shall be the average
of the daily closing sales price for such share on the New York
Stock Exchange (the "NYSE") during the five NYSE trading days prior
to the NYSE trading day preceding the date such Fair Market Value
is to be determined.
2. EXERCISE OF OPTION. The Indiana Option may be exercised
by SIGCORP, in whole or in part, at any time or from time to time
after the Merger Agreement becomes terminable by SIGCORP under
circumstances which could entitle SIGCORP to termination fees under
either Section 9.3(a) of the Merger Agreement or Section 9.3(b) of
the Merger Agreement, provided that the events specified in Section
9.3(b)(ii) of the Merger Agreement shall have occurred (regardless
of whether the Merger Agreement is actually terminated or whether
there occurs a closing of any Business Combination involving an
Indiana Target Party or a closing by which an Indiana Target Party
becomes a subsidiary), any such event by which the Merger Agreement
becomes so terminable by SIGCORP being referred to herein as a
"Trigger Event." Indiana shall notify SIGCORP promptly in writing
of the occurrence of any Trigger Event, it being understood that
the giving of such notice by Indiana shall not be a condition to
the right of SIGCORP to exercise the Indiana Option. In the event
SIGCORP wishes to exercise the Indiana Option, SIGCORP shall
deliver to Indiana a written notice (an "Exercise Notice")
specifying the total number of Indiana Shares it wishes to
purchase. If at the time of issuance of any Indiana Shares
pursuant to an exercise of all or part of the Indiana Option
hereunder, Indiana shall not have redeemed the Indiana Rights, or
shall have issued any similar securities, then each Indiana Share
issued pursuant to such exercise shall also represent Indiana
Rights or new rights with terms substantially the same as and at
least as favorable to SIGCORP as are provided under the Indiana
Rights Agreement or any similar agreement then in effect. Each
closing of a purchase of Indiana Shares (a "Closing") shall occur
at a place, on a date and at a time designated by SIGCORP in an
Exercise Notice delivered at least two business days prior to the
date of the Closing. The Indiana Option shall terminate upon the
earlier of: (i) the Effective Time; (ii) the termination of the
Merger Agreement pursuant to Section 9.1 thereof (other than upon
or during the continuance of a Trigger Event); or (iii) 180 days
following any termination of the Merger Agreement upon or during
the continuance of a Trigger Event (or if, at the expiration of
such 180 day period the Indiana Option cannot be exercised by
reason of any applicable judgment, decree, order, law or
regulation, ten business days after such impediment to exercise
shall have been removed or shall have become final and not subject
to appeal, but in no event under this clause (iii) later than the
third anniversary of the date hereof). Notwithstanding the
foregoing, the Indiana Option may not be exercised if SIGCORP is in
material breach of any of its material representations or
warranties, or in material breach of any of its covenants or
agreements, contained in this Agreement or in the Merger Agreement.
Upon the giving by SIGCORP to Indiana of the Exercise Notice and
the tender of the applicable aggregate Exercise Price, SIGCORP
shall be deemed to be the holder of record of the Indiana Shares
issuable upon such exercise, notwithstanding that the stock
transfer books of Indiana shall then be closed or that certificates
representing such Indiana Shares shall not then be actually
delivered to SIGCORP.
3. CONDITIONS TO CLOSING. The obligation of Indiana to
issue the Indiana Shares to SIGCORP hereunder is subject to the
conditions, which (other than the conditions described in clauses
(i), (iii) and (iv) below) may be waived by Indiana in its sole
discretion, that (i) all waiting periods, if any, under the HSR
Act, applicable to the issuance of the Indiana Shares hereunder
shall have expired or have been terminated; (ii) the Indiana
Shares, and any SIGCORP Shares which are issued in payment of the
Exercise Price, shall have been approved for listing on the NYSE
upon official notice of issuance; (iii) all consents, approvals,
orders or authorizations of or registrations, declarations or
filings with, any federal, state or local administrative agency or
commission or other federal, state or local Governmental Authority,
if any, required in connection with the issuance of the Indiana
Shares or the acquisition of such Indiana Shares by SIGCORP
hereunder shall have been obtained or made, as the case may be,
including, without limitation, the approval of, if applicable, the
issuance of the SIGCORP Shares to Indiana and the acquisition by
Indiana of the SIGCORP shares constituting the Exercise Price
hereunder, and approval of the SEC under the 1935 Act of the
acquisition of the Indiana Shares by SIGCORP; and (iv) no
preliminary or permanent injunction or other order by any court of
competent jurisdiction prohibiting or otherwise restraining such
issuance shall be in effect.
4. CLOSING. At any Closing, (a) Indiana will deliver to
SIGCORP or its designee a single certificate in definitive form
representing the number of Indiana Shares designated by SIGCORP in
its Exercise Notice, such certificate to be registered in the name
of SIGCORP and to bear the legend set forth in Section 12 and (b)
SIGCORP will deliver to Indiana the aggregate Exercise Price for
the Indiana Shares so designated and being purchased by (i) wire
transfer of immediately available funds or certified check or bank
check or (ii) subject to the condition in Section 1(b), a
certificate or certificates representing the number of SIGCORP
Shares being issued by SIGCORP in consideration thereof, as the
case may be. For the purposes of this Agreement, the number of
SIGCORP Shares to be delivered to Indiana shall be equal to the
quotient obtained by dividing (i) the product of (x) the number of
Indiana Shares with respect to which the Indiana Option is being
exercised and (y) the Exercise Price by (ii) the Fair Market Value
of the SIGCORP Shares at the date immediately preceding the date
the Exercise Notice is delivered to Indiana. Indiana shall pay all
expenses, and any and all United States federal, state and local
taxes and other charges that may be payable in connection with the
preparation, issue and delivery of stock certificates under this
Section 4 in the name of SIGCORP or such designee of SIGCORP as
shall have obtained appropriate regulatory approval.
5. REPRESENTATIONS AND WARRANTIES OF INDIANA. Indiana
represents and warrants to SIGCORP that (a) Indiana is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Indiana and has the corporate power
and authority to enter into this Agreement and to carry out its
obligations hereunder, (b) the execution and delivery of this
Agreement by Indiana and the consummation by Indiana of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Indiana and no other
corporate proceedings on the part of Indiana are necessary to
authorize this Agreement or any of the transactions contemplated
hereby, (c) this Agreement has been duly executed and delivered by
Indiana, constitutes a valid and binding obligation of Indiana and,
assuming this Agreement constitutes a valid and binding obligation
of SIGCORP, is enforceable against Indiana in accordance with its
terms, (d) Indiana has taken all necessary corporate or other
action (including the approval of the Board of Directors of
Indiana) to render inapplicable to this Agreement and the Merger
Agreement and the transactions contemplated hereby and thereby, the
provisions of the IBCL referred to in Section 4.15 of the Merger
Agreement and the Indiana Rights Agreement, (e) Indiana has taken
all necessary corporate action to authorize and reserve for
issuance and to permit it to issue, upon exercise of the Indiana
Option in accordance with its terms, and at all times from the date
hereof through the expiration of the Indiana Option will have
reserved, 5,927,524 authorized and unissued Indiana Shares, such
amount being subject to adjustment as provided in Section 11, all
of which, upon their issuance and delivery in accordance with the
terms of this Agreement, will be validly issued, fully paid and
nonassessable, (f) upon delivery of the Indiana Shares to SIGCORP
upon the exercise of the Indiana Option in accordance with its
terms, SIGCORP will acquire the Indiana shares free and clear of
all claims, liens, charges, encumbrances and security interests of
any nature whatsoever, (g) except as described in Section 4.4(b) or
(c) of the Merger Agreement and subject to the satisfaction of the
conditions set forth in Section 3 hereof, the execution and
delivery of this Agreement by Indiana does not, and the
consummation by Indiana of the transactions contemplated hereby
will not, violate, conflict with, or result in a breach of any
provision of, or constitute a default (with or without notice or
lapse of time, or both) under, or result in the termination of, or
accelerate the performance required by, or result in a right of
termination, cancellation, or acceleration of any obligation or the
loss of a material benefit under, or the creation of a lien,
pledge, security interest or other encumbrance on assets (any such
conflict, violation, default, right of termination, cancellation or
acceleration, loss or creation, a "Violation") of Indiana or any of
its subsidiaries, pursuant to, (A) any provision of the Amended and
Restated Articles of Incorporation or bylaws of Indiana, (B) any
provisions of any loan or credit agreement, note, mortgage,
indenture, lease, Indiana benefit plan or other agreement,
obligation, instrument, permit, concession, franchise, license or
(C) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Indiana or its properties or assets, which
Violation, in the case of each of clauses (B) and (C), could
reasonably be expected to have an Indiana Material Adverse Effect,
(h) except as described in Section 4.4(c) of the Merger Agreement
or Section 1(b) or Section 3 hereof, the execution and delivery of
this Agreement by Indiana does not, and the performance of this
Agreement by Indiana will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any
Governmental Authority, (i) none of Indiana, any of its affiliates
or anyone acting on its or their behalf has issued, sold or offered
any security of Indiana to any person under circumstances that
would cause the issuance and sale of the Indiana Shares, as
contemplated by this Agreement, to be subject to the registration
requirements of the Securities Act as in effect on the date hereof
and, assuming the representations of SIGCORP contained in Section
6(h) hereof are true and correct, the issuance, sale and delivery
of the Indiana Shares hereunder would be exempt from the
registration and prospectus delivery requirements of the Securities
Act, as in effect on the date hereof (and Indiana shall not take
any action which would cause the issuance, sale and delivery of the
Indiana Shares hereunder not to be exempt from such requirements),
and (j) any SIGCORP Shares acquired pursuant to this Agreement will
be acquired for Indiana's own account, for investment purposes only
and will not be acquired by Indiana with a view to the public
distribution thereof in violation of any applicable provision of
the Securities Act.
6. REPRESENTATIONS AND WARRANTIES OF SIGCORP. SIGCORP
represents and warrants to Indiana that (a) SIGCORP is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Indiana and has the corporate power
and authority to enter into this Agreement and to carry out its
obligations hereunder, (b) the execution and delivery of this
Agreement by SIGCORP and the consummation by SIGCORP of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of SIGCORP and no other
corporate proceedings on the part of SIGCORP are necessary to
authorize this Agreement or any of the transactions contemplated
hereby, (c) this Agreement has been duly executed and delivered by
SIGCORP and constitutes a valid and binding obligation of SIGCORP,
and, assuming this Agreement constitutes a valid and binding
obligation of Indiana, is enforceable against SIGCORP in accordance
with its terms, (d) prior to any delivery of SIGCORP Shares in
consideration of the purchase of Indiana Shares pursuant hereto,
SIGCORP will have taken all necessary corporate action to authorize
for issuance and to permit it to issue such SIGCORP Shares all of
which, upon their issuance and delivery in accordance with the
terms of this Agreement, will be validly issued, fully paid and
nonassessable, and to render inapplicable to the receipt by Indiana
of the SIGCORP Shares the provisions of the IBCL referred to in
Section 5.15 of the Merger Agreement and the SIGCORP Rights
Agreement referred to in Section 5.15 of the Merger Agreement, (e)
upon any delivery of such SIGCORP Shares to Indiana in
consideration of the purchase of Indiana Shares pursuant hereto,
Indiana will acquire the SIGCORP Shares free and clear of all
claims, liens, charges, encumbrances and security interests of any
nature whatsoever, (f) except as described in Section 5.4(b) of the
Merger Agreement and subject to the satisfaction of the conditions
set forth in Section 3 hereof, the execution and delivery of this
Agreement by SIGCORP does not, and the consummation by SIGCORP of
the transactions contemplated hereby will not, violate, conflict
with, or result in the breach of any provision of, or constitute a
default (with or without notice or lapse of time, or both) under,
or result in any Violation by SIGCORP or any of its subsidiaries,
pursuant to (A) any provision of the Restated Articles of
Incorporation or bylaws of SIGCORP (B) any provisions of any loan
or credit agreement, note, mortgage, indenture, lease, SIGCORP
benefit plan or other agreement, obligation, instrument, permit,
concession franchise, license or (C) any judgment order, decree,
statute, law, ordinance, rule or regulation applicable to SIGCORP
or its properties or assets which Violation, in the case of each of
clauses (B) and (C), would have a SIGCORP Material Adverse Effect,
(g) except as described in Section 5.4(c) of the Merger Agreement
or Section 1(b) or Section 3 hereof, the execution and delivery of
this Agreement by SIGCORP does not, and the consummation by SIGCORP
of the transactions contemplated hereby will not, require any
consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority and (h) any Indiana
Shares acquired upon exercise of the Indiana Option will be
acquired for SIGCORP's own account, for investment purposes only
and will not be, and the Indiana Option is not being, acquired by
SIGCORP with a view to the public distribution thereof in violation
of any applicable provision of the Securities Act.
7. CERTAIN REPURCHASES.
(a) SIGCORP PUT. At the request of SIGCORP by written notice
at any time during which the Indiana Option is exercisable pursuant
to Section 2 (the "Repurchase Period"), Indiana (or any successor
entity thereof) shall repurchase from SIGCORP all or any portion of
the Indiana Option, at the price set forth in subparagraph (i)
below, or, at the request of SIGCORP by written notice at any time
prior to the later of (I) June 11, 2000 (provided that such date
shall be extended to December 31, 2000 under the circumstances
where the date after which either party may terminate the Merger
Agreement pursuant to Section 9.1(b) of the Merger Agreement has
been extended to December 31, 2000) or (II) 180 days following any
termination of the Merger Agreement upon or during the continuance
of the Trigger Event, Indiana (or any successor entity thereof)
shall repurchase from SIGCORP all or any portion of the Indiana
Shares purchased by SIGCORP pursuant to the Indiana Option, at the
price set forth in subparagraph (ii) below:
(i) the difference between (x) the "Market/Offer Price"
for shares of Indiana Common Stock as of the date SIGCORP
gives notice of its intent to exercise its rights under this
Section 7 (defined as the higher of (A) the price per share
offered as of such date pursuant to any tender or exchange
offer or other offer with respect to a Business Combination
which was made prior to such date and not terminated or
withdrawn as of such date (the "Offer Price") and (B) the Fair
Market Value of Indiana Common Stock as of such date (the
"Market Price")) and the (y) Exercise Price, multiplied by the
number of Indiana Shares purchasable pursuant to the Indiana
Option (or portion thereof with respect to which SIGCORP is
exercising its rights under this Section 7), but only if the
Market/Offer Price is greater than the Exercise Price;
(ii) the product of (x) the sum of (A) the Exercise Price
paid by SIGCORP per Indiana Share acquired pursuant to the
Indiana Option and (B) the difference between the Market/Offer
Price and the Exercise Price, but only if the Market/Offer
Price is greater than the Exercise Price, and (y) the number
of Indiana Shares so to be repurchased pursuant to this
Section 7. For purposes of this clause (ii), the Offer Price
shall be the highest price per share offered pursuant to a
tender or exchange offer or other Business Combination offer
during the Repurchase Period prior to the delivery by SIGCORP
of a notice of repurchase.
(b) REDELIVERY OF SIGCORP SHARES. If SIGCORP elected to
purchase Indiana Shares pursuant to the exercise of the Indiana
Option by the issuance and delivery of SIGCORP Shares, then Indiana
shall, if so requested by SIGCORP, in fulfillment of its obligation
pursuant to clause (A) of Section 7(a)(ii)(x) (that is, with
respect to the Exercise Price only and without limitation to its
obligation to pay additional consideration under clause (B) of
Section 7(a)(ii)(x)), redeliver the certificate for such SIGCORP
Shares to SIGCORP free and clear of all liens, claims, damages,
charges and encumbrances of any kind or nature whatsoever,
provided, however, that if less than all of the Indiana Shares
purchased by SIGCORP pursuant to the Indiana Option are to be
repurchased pursuant to this Section 7, then SIGCORP shall issue to
Indiana a new certificate representing those SIGCORP Shares which
are not due to be redelivered to SIGCORP pursuant to this Section
7 as they constituted payment of the Exercise Price for the Indiana
Shares not being repurchased.
(c) PAYMENT AND REDELIVERY OF INDIANA OPTION OR SHARES. In
the event SIGCORP exercises its rights under this Section 7,
Indiana shall, within 10 business days thereafter, pay the required
amount to SIGCORP in immediately available funds and SIGCORP shall
surrender to Indiana the Indiana Option or the certificates
evidencing the Indiana Shares purchased by SIGCORP pursuant
thereto, and SIGCORP shall warrant that it owns the Indiana Option
or such shares and that the Indiana Option or such shares are then
free and clear of all liens, claims, damages, charges and
encumbrances of any kind or nature whatsoever.
(d) SIGCORP CALL. If SIGCORP has elected to purchase Indiana
Shares pursuant to the exercise of the Indiana Option by the
issuance and delivery of SIGCORP Shares, notwithstanding that
SIGCORP may no longer hold any such Indiana Shares or that SIGCORP
elects not to exercise its other rights under this Section 7,
SIGCORP may require, at any time or from time to time prior to June
11, 2000 (provided that such date shall be extended to December 31,
2000 under the circumstances where the date after which either
party may terminate the Merger Agreement pursuant to Section 9.1(b)
of the Merger Agreement has been extended to December 31, 2000),
Indiana to sell to SIGCORP any such SIGCORP Shares at the price
attributed to such SIGCORP Shares pursuant to Section 4 plus
interest at the rate of 7% per annum on such amount from the
Closing Date relating to the exchange of such SIGCORP Shares
pursuant to Section 4 to the closing date under this Section 7(d)
less any dividends on such SIGCORP Shares paid during such period
or declared and payable to stockholders of record on a date during
such period.
(e) REPURCHASE PRICE REDUCED AT SIGCORP'S OPTION. In the
event the repurchase price specified in Section 7(a) would subject
the purchase of the Indiana Option purchased by SIGCORP pursuant to
the Indiana Option to a vote of the shareholders of Indiana
pursuant to applicable law or Indiana's Amended and Restated
Articles of Incorporation, then SIGCORP may, at its election,
reduce the repurchase amount which would permit such repurchase
without the necessity for such a shareholder vote.
8. VOTING OF SHARES. Following the date hereof and prior to
the fifth anniversary of the date hereof (the "Expiration Date"),
each party shall vote any shares of capital stock of the other
party acquired by such party pursuant to this Agreement
("Restricted Shares"), including any SIGCORP Shares issued pursuant
to Section 1(b) or otherwise beneficially owned (within the meaning
of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) by such party on each matter
submitted to a vote of shareholders of such other party for and
against such matter in the same proportion as the vote of all other
shareholders of such other party are voted (whether by proxy or
otherwise) for and against such matter.
9. RESTRICTIONS ON TRANSFER.
(a) RESTRICTIONS ON TRANSFER. Prior to the Expiration Date,
neither party shall, directly or indirectly, by operation of law or
otherwise, sell, assign, pledge, or otherwise dispose of or
transfer any Restricted Shares beneficially owned by such party,
other than (i) pursuant to Section 7, or (ii) in accordance with
Section 9(b) or Section 10.
(b) PERMITTED SALES. Following the termination of the Merger
Agreement, a party shall be permitted to sell any Restricted Shares
beneficially owned by it if such sale is made pursuant to a tender
or exchange offer that has been approved or recommended, or
otherwise determined to be fair to and in the best interests of the
shareholders of the other party, by a majority of the members of
the Board of Directors of such other party, which majority shall
include a majority of directors who were directors prior to the
announcement of such tender or exchange offer.
10. REGISTRATION RIGHTS. Following the termination of the
Merger Agreement, each party hereto (a "Designated Holder") may by
written notice (the "Registration Notice") to the other party (the
"Registrant") request the Registrant to register under the
Securities Act all or any part of the Restricted Shares
beneficially owned by such Designated Holder (the "Registrable
Securities") pursuant to a bona fide firm commitment underwritten
public offering in which the Designated Holder and the underwriters
shall effect as wide a distribution of such Registrable Securities
as is reasonably practicable and shall use their best efforts to
prevent any person (including any Group (as used in Rule 13d-5
under the Exchange Act)) and its affiliates from purchasing through
such offering Restricted Shares representing more than 1% of the
outstanding shares of common stock of the Registrant on a fully
diluted basis (a "Permitted Offering"). The Registration Notice
shall include a certificate executed by the Designated Holder and
its proposed managing underwriter, which underwriter shall be an
investment banking firm of nationally recognized standing (the
"Manager"), stating that (i) they have a good faith intention to
commence promptly a Permitted Offering and (ii) the Manager in good
faith believes that, based on the then prevailing market
conditions, it will be able to sell the Registrable Securities at
a per share price equal to at least 80% of the then Fair Market
Value of such shares. The Registrant (and/or any person designated
by the Registrant) shall thereupon have the option exercisable by
written notice delivered to the Designated Holder within 10
business days after the receipt of the Registration Notice,
irrevocably to agree to purchase all or any part of the Registrable
Securities proposed to be so sold for cash at a price (the "Option
Price") equal to the product of (i) the number of Registrable
Securities to be so purchased by the Registrant and (ii) the then
Fair Market Value of such shares. Any such purchase of Registrable
Securities by the Registrant (or its designee) hereunder shall take
place at a closing to be held at the principal executive offices of
the Registrant or at the offices of its counsel at any reasonable
date and time designated by the Registrant and/or such designee in
such notice within 20 business days after delivery of such notice.
Any payment for the shares to be purchased shall be made by
delivery at the time of such closing of the Option Price in
immediately available funds.
If the Registrant does not elect to exercise its option
pursuant to this Section 10 with respect to all Registrable
Securities, it shall use its best efforts to effect, as promptly as
practicable, the registration under the Securities act of the
unpurchased Registrable Securities proposed to be so sold;
provided, however, that (i) neither party shall be entitled to more
than an aggregate of two effective registration statements
hereunder and (ii) the Registrant will not be required to file any
such registration statement during any period of time (not to
exceed 40 days after such request in the case of clause (A) below
or 90 days in the case of clauses (B) and (C) below) when (A) the
Registrant is in possession of material non-public information
which it reasonably believes would be detrimental to be disclosed
at such time and, in the opinion of counsel to the Registrant, such
information would have to be disclosed if a registration statement
were filed at that time; (B) the Registrant is required under the
Securities Act to include audited financial statements for any
period in such registration statement and such financial statements
are not yet available for inclusion in such registration statement;
or (C) the Registrant determines, in its reasonable judgment, that
such registration would interfere with any financing, acquisition
or other material transaction involving the Registrant or any of
its affiliates. The Registrant shall use its reasonable best
efforts to cause any Registrable Securities registered pursuant to
this Section 10 to be qualified for sale under the securities or
Blue-Sky laws of such jurisdictions as the Designated Holder may
reasonably request and shall continue such registration or
qualification in effect in such jurisdiction; provided, however,
that the Registrant shall not be required to qualify to do business
in, or to consent to general service of process in, any
jurisdiction by reason of this provision.
The registration rights set forth in this Section 10 are
subject to the condition that the Designated Holder shall provide
the Registrant with such information with respect to such holder's
Registrable Securities, the plans for the distribution thereof, and
such other information with respect to such holder as, in the
reasonable judgment of counsel for the Registrant, is necessary to
enable the Registrant to include in such registration statement all
material facts required to be disclosed with respect to a
registration thereunder.
A registration effected under this Section 10 shall be
effected at the Registrant's expense, except for underwriting
discounts and commissions and the fees and the expenses of counsel
to the Designated Holder, and the Registrant shall provide to the
underwriters such documentation (including certificates, opinions
of counsel and "comfort" letters from auditors) as are customary in
connection with underwritten public offerings as such underwriters
may reasonably require. In connection with any such registration,
the parties agree (i) to indemnify each other and the underwriters
in the customary manner, (ii) to enter into an underwriting
agreement in form and substance customary for transactions of such
type with the Manager and the other underwriters participating in
such offering and (iii) to take all further actions which shall be
reasonably necessary to effect such registration and sale
(including, if the Manager deems it necessary, participating in
road-show presentations).
The Registrant shall be entitled to include (at its expense)
additional shares of its common stock in a registration effected
pursuant to this Section 10 only if and to the extent the Manager
determines that such inclusion will not adversely affect the
prospects for success of such offering.
11. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. Without
limitation to any restriction on Indiana contained in this
Agreement or in the Merger Agreement, in the event of any change in
Indiana Common Stock by reason of stock dividends, splitups,
mergers, (other than the Merger), recapitalizations, combinations,
exchange of shares or the like, the type and number of shares or
securities subject to the Indiana Option, and the purchase price
per share provided in Section 1, shall be adjusted appropriately to
restore to SIGCORP its rights hereunder, including the right to
purchase from Indiana (or its successors) shares of Indiana Common
Stock representing 19.9% of the outstanding Indiana Common Stock
for the aggregate Exercise Price calculated as of the date of this
Agreement as provided in Section 1.
12. RESTRICTIVE LEGENDS. Each certificate representing
shares of Indiana Common Stock issued to SIGCORP hereunder, and
SIGCORP Shares, if any, delivered to Indiana at a Closing, shall
include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT
TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK
OPTION AGREEMENT, DATED AS OF JUNE 11, 1999, A COPY OF WHICH MAY BE
OBTAINED FROM THE ISSUER UPON REQUEST.
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act in the above legend shall be
removed by delivery of substitute certificate(s) without such
reference if SIGCORP or Indiana, as the case may be, shall have
delivered to the other party a copy of a letter from the staff of
the Securities and Exchange Commission, or an opinion of counsel,
in form and substance satisfactory to the other party, to the
effect that such legend is not required for purposes of the
Securities Act; (ii) the reference to the provisions of this
Agreement in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if the shares have
been sold or transferred in compliance with the provisions of this
Agreement and in circumstances that do not require the retention of
such reference; and (iii) the legend shall be removed in its
entirety if the conditions in the preceding clauses (i) and (ii)
are both satisfied. In addition, such certificates shall bear any
other legend as may be required by law. Certificates representing
shares sold in a registered public offering pursuant to Section 10
shall not be required to bear the legend set forth in this Section
12.
13. BINDING EFFECT; NO ASSIGNMENT; NO THIRD PARTY
BENEFICIARIES. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and permitted assigns. Except as expressly provided for in this
Agreement, neither this Agreement nor the rights or the obligations
of either party hereto are assignable, except by operation of law,
or with the written consent of the other party. Nothing contained
in this Agreement, expressed or implied, is intended to confer upon
any person other than the parties hereto and their respective
permitted assigns any rights or remedies of any nature whatsoever
by reason of this Agreement. Any Restricted Shares sold by a party
in compliance with the provisions of Section 10 shall, upon
consummation of such sale, be free of the restrictions imposed with
respect to such shares by this Agreement, unless and until such
party shall repurchase or otherwise become the beneficial owner of
such shares, and any transferee of such shares shall not be
entitled to the registration rights of such party.
14. SPECIFIC PERFORMANCE. The parties recognize and agree
that if for any reason any of the provisions of this Agreement are
not performed in accordance with their specific terms or are
otherwise breached, immediate and irreparable harm or injury would
be caused for which money damages would not be an adequate remedy.
Accordingly, each party agrees that, in addition to other remedies,
the other party shall be entitled to an injunction restraining any
violation or threatened violation of the provisions of this
Agreement. In the event that any action should be brought in
equity to enforce the provisions of the Agreement, neither party
will allege, and each party hereby waives the defense, that there
is adequate remedy at law.
15. ENTIRE AGREEMENT. This Agreement, the Confidentiality
Agreement and the Merger Agreement (including the exhibits and
schedules thereto) constitute the entire agreement among the
parties with respect to the subject matter hereof and thereof and
supersede all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to
the subject matter hereof and thereof.
16. FURTHER ASSURANCES. Each party will execute and deliver
all such further documents and instruments and take all such
further action as may be necessary in order to consummate the
transactions contemplated hereby.
17. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which
shall remain in full force and effect. In the event any court or
other competent authority holds any provisions of this Agreement to
be null, void or unenforceable, the parties hereto shall negotiate
in good faith the execution and delivery of an amendment to this
Agreement in order, as nearly as possible, to effectuate, to the
extent permitted by law, the intent of the parties hereto with
respect to such provision and the economic effects thereof. If for
any reason any such court or regulatory agency determines that
SIGCORP is not permitted to acquire, or Indiana is not permitted to
repurchase pursuant to Section 7, the full number of shares of
Indiana Common Stock provided in Section 1 hereof (as the same may
be adjusted), it is the express intention of Indiana to allow
SIGCORP to acquire or to require Indiana to repurchase such lesser
number of shares as may be permissible, without any amendment or
modification hereof. Each party agrees that, should any court or
other competent authority hold any provision of this Agreement or
part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith, or not take any action
required herein, the other party shall not be entitled to specific
performance of such provision or part hereof or to any other
remedy, including but not limited to money damages, for breach
hereof or of any other provision of this Agreement or part hereof
as the result of such holding or order.
18. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if (i) delivered
personally, or (ii) sent by reputable overnight courier service, or
(iii) telecopied (which is confirmed), or (iv) five days after
being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
A. If to Indiana Energy, Inc., to:
Indiana Energy, Inc.
1630 North Meridian Street
Indianapolis, Indiana 46202
Attention: Niel C. Ellerbrook
Telephone: (317) 321-0510
Telecopy: (317) 321-0498
and a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: James M. Cotter, Esq.
Telephone: (212) 455-2000
Telecopy: (212) 455-2502
and a copy to:
Sommer & Barnard, PC
111 Monument circle
4000 Bank One Tower
Indianapolis, Indiana 46204
Attention: James A. Strain, Esq.
Telephone: (317) 630-4000
Telecopy: (317) 236-9802
B. If to SIGCORP, INC., to:
New York, New York 10004-1490
Attention: Stephen R. Rusmisel, Esq.
Telephone: (212) 858-1442
Telecopy: (212) 858-1500
19. GOVERNING LAW; CHOICE OF FORUM. This Agreement shall be
governed by and construed in accordance with the laws of the State
of Indiana applicable to agreements made and to be performed
entirely within such State and without regard to its choice of law
principles. Each of the parties hereto (a) consents to submit
itself to the personal jurisdiction of any federal court located in
the State of Indiana or any Indiana state court in the event any
dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will
not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than
a federal court sitting in the State of Indiana or an Indiana state
court.
20. INTERPRETATION. When a reference is made in this
Agreement to a Section such reference shall be to a Section of this
Agreement unless otherwise indicated. Whenever the words
"include", "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without
limitation". The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings set forth in the Merger Agreement.
21. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original, but
both of which, taken together, shall constitute one and the same
instrument.
22. EXPENSES. Except as otherwise expressly provided herein
or in the Merger Agreement, all costs and expenses incurred in
connection with the transactions contemplated by this Agreement
shall be paid by the party incurring such expenses.
23. AMENDMENTS; WAIVER. This Agreement may be amended by the
parties hereto and the terms and conditions hereof may be waived
only by an instrument in writing signed on behalf of each of the
parties hereto, or, in the case of a waiver, by an instrument
signed on behalf of the party waiving compliance.
24. EXTENSION OF TIME PERIODS. The time periods for exercise
of certain rights under Sections 2 and 7 shall be extended: (i) to
the extent necessary to obtain all regulatory approvals for the
exercise of such rights, and for the expiration of all statutory
waiting periods; and (ii) to the extent necessary to avoid any
liability under Section 16(b) of the Exchange Act by reason of such
exercise.
25. REPLACEMENT OF INDIANA OPTION. Upon receipt by Indiana
of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of
loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Indiana will execute and deliver a new
Agreement of like tenor and date.
* * *
[remainder of page intentionally left blank] IN
WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective duly authorized officers as of
the date first above written.
INDIANA ENERGY, INC.
By: _______________________________
Name: Niel C. Ellerbrook
Title: President and Chief
Executive Officer
SIGCORP, INC.
By: ______________________________
Name: Andrew E. Goebel
Title: President and Chief
Operating Officer