Exhibit (1)
INDIANA GAS COMPANY, INC.
$100,000,000
Medium-Term Notes, Series G
Distribution Agreement
_________________, 1999
New York, New York
Merrill Lynch & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
World Financial Center - North Tower
250 Vesey Street
New York, New York 10281
Ladies and Gentlemen:
Indiana Gas Company, Inc., an Indiana corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series G
(the "Securities") in an aggregate amount up to $100,000,000 and agrees with you
(the "Agent") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints the Agent as an agent of the Company for
the purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to the Agent as principal, it will enter into a separate agreement
(each, a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. A Terms Agreement
may be an oral agreement confirmed in writing. This Distribution Agreement shall
not be construed to create either an obligation on the part of the Company to
sell any Securities or an obligation of the Agent to purchase Securities as
principal.
The Company will notify the Agent of its appointment of such other
agents, dealers or underwriters in accordance with the provisions of this
paragraph and of the principal amount of Securities sold to such other agents,
dealers or underwriters. Such other agents, dealers or underwriters will be
required (i) if in connection with a particular issuance of Securities only and
not in connection with being named the Agent, to acknowledge delivery to it of a
letter from the Company substantially in the form of Exhibit A hereto, and (ii)
if such other agent, dealer or underwriter is to be named the Agent, to deliver
to the Company a letter substantially in the form of Exhibit B hereto, to be
signed and returned by the Company.
The Securities will be issued under an indenture, dated as of February
1, 1991 (the "Indenture"), between the Company and U.S. Bank Trust National
Association (formerly known as First Trust National Association which was
formerly known as Bank of America Illinois which was formerly known as
Continental Bank, National Association), as Trustee (the "Trustee"), as
heretofore supplemented. The Securities shall have the maturities, interest
rates and redemption provisions, if any, and other terms set forth in the
Prospectus referred to below as it may be amended or supplemented from time to
time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, the Agent that:
(a) A registration statement on Form S-3 (File No. ____________ in
respect of $100,000,000 aggregate principal amount of debt securities,
including the Securities, has been filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Act
of 1933, as amended (the "Act"); such registration statement, as
amended, and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to such Agent, excluding
exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus included therein, have been
declared effective by the Commission in such form; no other document
with respect to such registration statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing
with the Commission (other than the prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the Act,
each in the form heretofore delivered to the Agent); and no stop order
suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
such registration statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the
Act, is hereinafter called a "Preliminary Prospectus"; the various
parts of such registration statement, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained
in the registration statement at the time such part of the registration
statement became effective but excluding Form T-1, each as amended at
the time such part of the registration statement became effective, is
hereinafter collectively called the "Registration Statement", and the
Registration Statement does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; the
prospectus (including, if applicable, any prospectus supplement)
relating to the Securities, in the form in which it has most recently
been filed, or transmitted for filing, with the Commission on or prior
to the date of this Agreement, is hereinafter called the "Prospectus",
and neither the Prospectus nor any amendment or supplement thereto
includes or will include an untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus, including any supplement to the Prospectus that sets forth
only the terms of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated therein by reference; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to and
include the Prospectus as amended or supplemented (including by the
applicable Pricing Supplement filed in accordance with Section 4(a)
hereof) in relation to Securities to be sold pursuant to this
Agreement, in the form filed or transmitted for filing with the
Commission pursuant to Rule 424(b) under the Act and in accordance with
Section 4(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, or any further amendment
or supplement thereto, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(c) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company (other than any changes
in long-term debt resulting from the issuance of Securities pursuant to
this Agreement) or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus;
(d) The Company has been duly incorporated and is validly existing as a
corporation under the laws of the jurisdiction of its incorporation,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus;
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable;
(f) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and any Terms Agreement, will have
been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture, which will be
substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified
under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture conforms and
the Securities of any particular issuance of Securities will conform to
the descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance of Securities;
(g) The issue and sale of the Securities, the compliance by the Company
with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such action
result in any violation of the provisions of the Articles of
Incorporation, as amended, or the By-laws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties; and
no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the solicitation of offers to purchase Securities, the
issue and sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such as have been, or will have been
prior to the Commencement Date (as defined in Section 3 hereof),
obtained under the Act or the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
solicitation by such Agent of offers to purchase Securities from the
Company and with purchases of Securities by such Agent as principal, as
the case may be, in each case in the manner contemplated hereby;
(h) Neither the Company nor any of its subsidiaries is in violation of
its Articles of Incorporation or By-laws or in default in the
performance or observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(i) The statements set forth in the Prospectus under the captions
"Description of the Debt Securities" and "Description of the Notes",
insofar as they purport to constitute a summary of the terms of the
Securities, and under the two captions "Plan of Distribution", insofar
as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(j) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any
of its subsidiaries is subject, which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(k) The Company is not, and after giving effect to each offering and
sale of the Securities will not be, an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(l) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(m) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate amount of Securities which
shall have been issued and sold by the Company hereunder or under any
Terms Agreement and of any debt securities of the Company (other than
such Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement;
(n) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(o) The order of the Indiana Utility Regulatory Commission (the
"Indiana Commission"), dated December 29, 1998, authorizing the
Company, among other things, to issue up to $100,000,000 of debt
securities, including the Securities (the "Indiana Commission Order"),
is in full force and effect and is not the subject of any appeal or
other proceeding.
2. (a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Agent hereby agrees,
as agent of the Company, to use its reasonable efforts to solicit and receive
offers to purchase the Securities from the Company upon the terms and conditions
set forth in the Prospectus as amended or supplemented from time to time. So
long as this Agreement shall remain in effect with respect to the Agent, the
Company shall not, without the consent of such Agent, solicit or accept offers
to purchase, or sell, any debt securities with a maturity at the time of
original issuance of 9 months or more from date of issuance except pursuant to
this Agreement (including, without limitation, the third paragraph hereof), any
Terms Agreement, or except pursuant to a private placement not constituting a
public offering under the Act or except in connection with a firm commitment
underwriting pursuant to an underwriting agreement that does not provide for a
continuous offering of medium-term debt securities or except for any commercial
paper program with maturities of 9 months or less. However, the Company reserves
the right to sell, and may solicit and accept offers to purchase, Securities
directly on its own behalf in transactions with persons other than
broker-dealers, and, in the case of any such sale not resulting from a
solicitation made by the Agent, no commission will be payable with respect to
such sale. These provisions shall not limit Section 4(f) hereof or any similar
provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agent and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. The Agent and the
Company agree to perform the respective duties and obligations specifically
provided to be performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative Procedure as
from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct the
Agent to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agent will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agent that such solicitation may be resumed. During such period, the Company
shall not be required to comply with the provisions of Sections 4(h), 4(i), 4(j)
and 4(k). Upon advising the Agent that such solicitation may be resumed,
however, the Company shall simultaneously provide the documents required to be
delivered by Sections 4(h), 4(i), 4(j) and 4(k), and the Agent shall have no
obligation to solicit offers to purchase the Securities until such documents
have been received by the Agent. In addition, any failure by the Company to
comply with its obligations hereunder, including without limitation its
obligations to deliver the documents required by Sections 4(h), 4(i), 4(j) and
4(k), shall automatically terminate the Agent's obligations hereunder, including
without limitation its obligations to solicit offers to purchase the Securities
hereunder as agent or to purchase Securities hereunder as principal.
Unless otherwise agreed upon in a Terms Agreement, the Company agrees
to pay the Agent a commission, at the time of settlement of any sale of a
Security by the Company as a result of a solicitation made by such Agent, in an
amount equal to the following applicable percentage of the principal amount of
such Security sold:
Range of Maturities Commission (percentage
of aggregate principal
amount of Securities sold)
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to 30 years .750%
From more than 30 years as agreed to by the
Company and the
applicable agent at
the time of sale
(b) Each sale of Securities to the Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and
such Agent shall otherwise agree) a Terms Agreement, which will provide
for the sale of such Securities to, and the purchase thereof by, such
Agent. A Terms Agreement may also specify certain provisions relating
to the reoffering of such Securities by such Agent. The commitment of
the Agent to purchase Securities as principal, whether pursuant to any
Terms Agreement or otherwise, shall be deemed to have been made on the
basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount of
Securities to be purchased by the agent pursuant thereto, the price to
be paid to the Company for such Securities, the underwriting discounts
or commissions to be paid to the agents, if different from those
specified in the table in Section 2(a) of this Agreement, any
provisions relating to rights of, and default by, underwriters acting
together with such Agent in the reoffering of the Securities and the
time and date and place of delivery of and payment for such Securities.
Such Terms Agreement shall also specify any requirements for opinions
of counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof. The Agent proposes to offer Securities purchased by
it as principal for sale at prevailing market prices or prices related
thereto at the time of sale, which may be equal to, greater than or
less than the price at which such Securities are purchased by such
Agent from the Company.
For each sale of Securities to the Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to the Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a commission (or grant an equivalent discount) as provided in
Section 2(a) hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by the Agent as principal, whether set forth in a Terms Agreement or
in accordance with the Administrative Procedure, is referred to herein as a
"Time of Delivery".
3. The documents required to be delivered pursuant to Section 6 hereof on the
Commencement Date (as defined below) shall be delivered to the Agent at the
offices of Brown & Wood LLP, One World Trade Center, New York, New York, at
11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agent and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company covenants and agrees with the Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which
shall be disapproved by the Agent promptly after reasonable notice
thereof or (B) after the date of any Terms Agreement or other agreement
by the Agent to purchase Securities as principal and prior to the
related Time of Delivery which shall be disapproved by the Agent party
to such Terms Agreement or so purchasing as principal promptly after
reasonable notice thereof; (ii) to prepare, with respect to any
Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by such Agent and to file such Pricing
Supplement pursuant to Rule 424(b)(3) under the Act not later than the
close of business of the Commission on the fifth business day after the
date on which such Pricing Supplement is first used; (iii) to make no
amendment or supplement to the Registration Statement or Prospectus,
other than any Pricing Supplement (including, without limitation, any
Pricing Supplement relating to Securities sold to or through an
underwriter or agent pursuant to the third paragraph of this
Agreement), at any time prior to having afforded the Agent a reasonable
opportunity to review and comment thereon; (iv) to file promptly all
reports and any definitive proxy or information statements required to
be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Securities, and during such same period to advise such Agent, promptly
after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has become
effective or any supplement to the Prospectus or any amended Prospectus
(other than any Pricing Supplement that relates to Securities not
purchased through or by such Agent) has been filed with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amendment or supplement of the Registration
Statement or Prospectus or for additional information; and (v) in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly to take such action as such Agent may reasonably request
to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as such Agent may request and to comply with
such laws so as to permit the continuance of sales and dealings therein
for as long as may be necessary to complete the distribution or sale of
the Securities; provided, however, that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement and
each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is
filed with the Commission pursuant to Rule 424 under the Act, and with
copies of the documents incorporated by reference therein, all in such
quantities as such Agent may reasonably request from time to time; and,
if the delivery of a prospectus is required at any time in connection
with the offering or sale of the Securities (including Securities
purchased from the Company by such Agent as principal) and if at such
time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified, such Agent
shall cease such solicitations as soon as practicable, but in any event
not later than one business day later); and if the Company shall decide
to amend or supplement the Registration Statement or the Prospectus as
then amended or supplemented, to so advise such Agent promptly by
telephone (with confirmation in writing) and to prepare and cause to be
filed promptly with the Commission an amendment or supplement to the
Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect
such compliance; provided, however, that if during such same period
such Agent continues to own Securities purchased from the Company by
such Agent as principal or such Agent is otherwise required to deliver
a prospectus in respect of transactions in the Securities, the Company
shall promptly prepare and file with the Commission such an amendment
or supplement;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to such Agent
copies of all reports or other communications (financial or other)
furnished to shareholders, and deliver to such Agent (i) as soon as
they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed;
(ii) such additional information concerning the business and financial
condition of the Company as such Agent may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to
the Commission); and (iii) information relating to any downgrading in
the rating of the Securities or any other debt securities of the
Company, or any published or publicly disseminated proposal to consider
a downgrade in the rating of the Securities or any other debt
securities of the Company, by any "nationally recognized statistical
rating organization" (as defined for such purposes of Rule 436(g) under
the Act), as soon as an executive officer of the Company is informed of
any such downgrading or publicly disseminated proposal to consider such
downgrading;
(f) That, from the date of any Terms Agreement with such Agent or other
agreement by such Agent to purchase Securities as principal and
continuing to and including the later of (i) the termination of the
trading restrictions for the Securities purchased thereunder, as
notified to the Company by such Agent and (ii) the related Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of
any debt securities of the Company which both mature more than 9 months
after such Time of Delivery and are substantially similar to the
Securities, without the prior written consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal
not pursuant to a Terms Agreement), and each execution and delivery by
the Company of a Terms Agreement with such Agent, shall be deemed to be
an affirmation to such Agent that the representations and warranties of
the Company contained in or made pursuant to this Agreement are true
and correct as of the date of such acceptance, as though made at and as
of such date, and an undertaking that such representations and
warranties will be true and correct as of the settlement date for the
Securities relating to such acceptance as though made at and as of such
date (except that such representations and warranties shall be deemed
to relate to the Registration Statement and the Prospectus as amended
and supplemented relating to such Securities);
(h) That reasonably in advance of each time the Registration Statement
or the Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus, and each
time the Company sells Securities to such Agent as principal pursuant
to a Terms Agreement and such Terms Agreement specifies the delivery of
an opinion or opinions by Brown & Wood LLP, counsel to the Agent, as a
condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish to
such Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each
time a document filed under the Act or the Exchange Act is incorporated
by reference into the Prospectus and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement and
such Terms Agreement specifies the delivery of an opinion under this
Section 4(i) as a condition to the purchase of Securities pursuant to
such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a written opinion of Barnes &
Thornburg, counsel for the Company, or other counsel for the Company
satisfactory to such Agent, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as
the case may be, in form satisfactory to such Agent, to the effect that
such Agent may rely on the opinion of such counsel referred to in
Section 6(c) hereof which was last furnished to such Agent to the same
extent as though it were dated the date of such letter authorizing
reliance (except that the statements in such last opinion shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in lieu of such opinion, an
opinion of the same tenor as the opinion of such counsel referred to in
Section 6(c) hereof but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under
the Act or the Exchange Act is incorporated by reference into the
Prospectus, in either case to set forth financial information included
in or derived from the Company's consolidated financial statements or
accounting records, and each time the Company sells Securities to such
Agent as principal pursuant to a Terms Agreement and such Terms
Agreement specifies the delivery of a letter under this Section 4(j) as
a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall cause the independent certified public
accountants who have certified the financial statements of the Company
and its subsidiaries included or incorporated by reference in the
Registration Statement forthwith to furnish such Agent a letter, dated
the date of such amendment, supplement, incorporation or Time of
Delivery relating to such sale, as the case may be, in form
satisfactory to such Agent, of the same tenor as the letter referred to
in Section 6(d) hereof but modified to relate to the Registration
Statement and the Prospectus as amended or supplemented to the date of
such letter, with such changes as may be necessary to reflect changes
in the financial statements and other information derived from the
accounting records of the Company, to the extent such financial
statements and other information are available as of a date not more
than three business days prior to the date of such letter; provided,
however, that, with respect to any financial information or other
matter, such letter may reconfirm as true and correct at such date as
though made at and as of such date, rather than repeat, statements with
respect to such financial information or other matter made in the
letter referred to in Section 6(d) hereof which was last furnished to
such Agent;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each
time a document filed under the Act or the Exchange Act is incorporated
by reference into the Prospectus and each time the Company sells
Securities to such Agent as principal and the applicable Terms
Agreement specifies the delivery of a certificate under this Section
4(k) as a condition to the purchase of Securities pursuant to such
Terms Agreement, the Company shall furnish or cause to be furnished
forthwith to such Agent a certificate, dated the date of such
supplement, amendment, incorporation or Time of Delivery relating to
such sale, as the case may be, in such form and executed by such
officers of the Company as shall be satisfactory to such Agent, to the
effect that the statements contained in the certificates referred to in
Section 6(h) hereof which were last furnished to such Agent are true
and correct at such date as though made at and as of such date (except
that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date)
or, in lieu of such certificate, certificates of the same tenor as the
certificates referred to in said Section 6(h) but modified to relate to
the Registration Statement and the Prospectus as amended and
supplemented to such date; and
(l) To offer to any person who has agreed to purchase Securities from
the Company as the result of an offer to purchase solicited by such
Agent the right to refuse to purchase and pay for such Securities if,
on the related settlement date fixed pursuant to the Administrative
Procedure, any condition set forth in Section 6(a), 6(e), 6(f) or 6(g)
hereof shall not have been satisfied (it being understood that the
judgment of such person with respect to the impracticability or
inadvisability of such purchase of Securities shall be substituted, for
purposes of this Section 4(l), for the respective judgments of the
Agent with respect to certain matters referred to in such Sections 6(e)
and 6(g), and that such Agent shall have no duty or obligation
whatsoever to exercise the judgment permitted under such Sections 6(e)
and 6(g) on behalf of any such person).
5. The Company covenants and agrees with the Agent that the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the fees, disbursements and expenses of counsel for the Agent in
connection with the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and under any Terms Agreement
and the transactions contemplated hereunder and under any Terms Agreement; (iii)
the cost of printing, producing or reproducing this Agreement, any Terms
Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iv) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 4(b)
hereof, including the fees and disbursements of counsel for the Agent in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (v) any fees charged by securities rating services for
rating the Securities; (vi) any filing fees incident to, and the fees and
disbursements of counsel for the Agent in connection with, any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; (vii) the cost of preparing the Securities; (viii) the fees
and expenses of any Trustee and any agent of any Trustee and any transfer or
paying agent of the Company and the fees and disbursements of counsel for any
Trustee or such agent in connection with any Indenture and the Securities; (ix)
any advertising expenses connected with the solicitation of offers to purchase
and the sale of Securities so long as such advertising expenses have been
approved by the Company; and (x) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. Except as provided in Sections 7 and 8 hereof, the
Agent shall pay all other expenses it incurs.
6. The obligation of the Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of the Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of the Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed with
the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof;
(ii) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and (iii)
all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such
Agent;
(b) Brown & Wood LLP, counsel to the Agent, shall have furnished to
such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to the matters covered in paragraphs (i), (iv), (v), (vi),
(ix) and (xiii) of subsection (c) below, as well as such other related
matters as such Agent may reasonably request; and (ii) if and to the
extent requested by such Agent, with respect to each applicable date
referred to in Section 4(h) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, an opinion
or opinions, dated such applicable date, to the effect that such Agent
may rely on the opinion or opinions which were last furnished to such
Agent pursuant to this Section 6(b) to the same extent as though it or
they were dated the date of such letter authorizing reliance (except
that the statements in such last opinion or opinions shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in any case, in lieu of such an opinion
or opinions, an opinion or opinions of the same tenor as the opinion or
opinions referred to in clause (i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented
to such date; and in each case such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Barnes & Thornburg, counsel for the Company, or other counsel for
the Company satisfactory to such Agent, shall have furnished to such
Agent their written opinions, dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof that is on or prior
to such Solicitation Time or Time of Delivery, as the case may be, in
form and substance satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the jurisdiction
of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus and all of the issued shares of capital
stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iii) To the best of such counsel's knowledge and other than
as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or to which any property of the
Company or any of its subsidiaries is subject which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and to the
best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(iv) This Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company;
(v) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company,
will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture;
and the Indenture and the Securities conform to the
descriptions thereof in the Prospectus;
(vi) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and
legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to (i) the United States
Bankruptcy Code, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
or remedies generally and (ii) general equitable principles
(regardless of whether such enforcement is considered in a
proceeding at law or in equity) and to judicial discretion.
The Indenture has been duly qualified under the Trust
Indenture Act. All taxes and fees required to be paid with
respect to the execution of the Indenture and the issuance of
the Securities have been paid;
(vii) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any applicable Terms Agreement
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which the
Company is bound or to which any of the property or assets of
the Company is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation,
as amended, of the Company or the By-laws of the Company or
any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties;
(viii) The Company and its parent, Indiana Energy, Inc., are
presently exempt from the provisions of the Public Utility
Holding Company Act of 1935, as amended (except Section 9
thereof), which would otherwise require them to register
thereunder; and the Company's gas distribution activities are
exempt from or do not require compliance with the provisions
of the Natural Gas Act;
(ix) The statements set forth in the Prospectus under the
captions "Description of the Debt Securities" and "Description
of the Notes", insofar as they purport to constitute a summary
of the terms of the Securities, and under the two captions
"Plan of Distribution", insofar as they purport to describe
the provisions of the laws and documents referred to therein,
are accurate and complete in all material respects;
(x) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an
"investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act;
(xi) The documents incorporated by reference in the Prospectus
(other than the financial statements and related schedules,
financial data or statistical information therein, as to which
such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
and although they are not passing upon and do not assume any
responsibility for the accuracy and completeness of the
statements contained in such documents, such counsel advises
you on the basis of the discussions and inquiries concerning
various legal and related subjects and reviews of and reports
on certain corporate records, documents and proceedings and
conferences with representatives of the Company at which
certain portions of such documents were discussed (relying as
to certain facts relevant to a determination of materiality
upon the representations of the Company), no facts have come
to our attention which would lead us to believe that any of
such documents, when they became effective or were so filed,
as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of other
documents which were filed under the Act or the Exchange Act
with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading;
(xii) To such counsel's knowledge, the Indiana Commission
Order is in full force and effect and is sufficient to permit
the Company to enter into and perform the transactions
contemplated by this Agreement; and no other consent,
approval, authorization, order, registration or qualification
of any court or governmental agency or body is required for
solicitation of offers to purchase Securities, the issue and
sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any
applicable Terms Agreement, or the Indenture, except such as
have been obtained under the Act and the Trust Indenture Act
and such as may be required under the blue sky laws of any
jurisdiction in connection with the sale of the Securities as
contemplated by this Agreement; and
(xiii) The Registration Statement and the Prospectus (other
than the financial statements and related schedules, financial
data or statistical information therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Trust Indenture Act and the applicable rules and regulations
thereunder; further, although they are not passing upon and do
not assume any responsibility for the accuracy and
completeness of the statements contained in the Registration
Statement and the Prospectus, such counsel advises you on the
basis of the discussions and inquiries concerning various
legal and related subjects and reviews of and reports on
certain corporate records, documents and proceedings and
conferences with representatives of the Company at which
certain portions of the Registration Statement and the
Prospectus were discussed (relying as to certain facts
relevant to a determination of materiality upon the
representations of the Company), no facts have come to our
attention which would lead us to believe that (A) as of its
effective date, the Registration Statement (other than the
financial statements and related schedules, financial data or
statistical information therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, (B) as of their respective dates, the
Prospectus (other than the financial statements and related
schedules therein, financial data or statistical information,
as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were
made, not misleading or (C) as of the date hereof either the
Registration Statement or the Prospectus (other than the
financial statements and related schedules, financial data or
statistical information therein, as to which such counsel need
express no opinion) contains an untrue statement of a material
fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and they do not know of any amendment to the
Registration Statement required to be filed or any contracts
or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which
are not filed or incorporated by reference or described as
required;
(d) Not later than 10:00 a.m., New York City time, on the Commencement
Date and on each applicable date referred to in Section 4(j) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as
the case may be, the independent certified public accountants who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement
shall have furnished to such Agent a letter, dated the Commencement
Date or such applicable date, as the case may be, in form and substance
satisfactory to such Agent, to the effect set forth in Annex III
hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery and
(ii) since the respective dates as of which information is given in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities to be delivered at the relevant
Time of Delivery there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities to be delivered at the relevant
Time of Delivery, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of such Agent so material and
adverse as to make it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities from the
Company or the purchase by such Agent of Securities from the Company as
principal, as the case may be, on the terms and in the manner
contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Supplement relating to the Securities to be
delivered at the relevant Time of Delivery;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; or (ii) a general
moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; or (iii) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iii) in the judgment
of such Agent makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase Securities or the purchase of the
Securities from the Company as principal pursuant to the applicable
Terms Agreement or otherwise, as the case may be, on the terms and in
the manner contemplated in the Prospectus; and
(h) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Commencement
Date and each applicable date referred to in Section 4(k) hereof that
is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, in such form and executed by such officers of the Company
as shall be satisfactory to such Agent, as to the accuracy of the
representations and warranties of the Company herein at and as of the
Commencement Date or such applicable date, as the case may be, as to
the performance by the Company of all of its obligations hereunder to
be performed at or prior to the Commencement Date or such applicable
date, as the case may be, as to the matters set forth in subsections
(a) and (e) of this Section 6, and as to such other matters as such
Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless the Agent against any
losses, claims, damages or liabilities, joint or several, to which such Agent
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Agent for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein.
(b) The Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or
any other prospectus relating to the Securities, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein; and
will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Agent on the other from the
offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company
on the one hand and the Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Agent on the other shall be deemed
to be in the same proportion as the total net proceeds from the sale of
Securities (before deducting expenses) received by the Company bear to
the total commissions or discounts received by such Agent in respect
thereof. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by
the Company on the one hand or by the Agent on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by per
capita allocation or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (d), the Agent shall not be required to contribute any
amount in excess of the amount by which the total public offering price
at which the Securities purchased by or through it were sold exceeds
the amount of any damages which such Agent has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of each Agent under this subsection
(d) to contribute are several in proportion to the respective purchases
made by or through it to which such loss, claim, damage or liability
(or action in respect thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls the Agent within the meaning of the Act; and the
obligations of the Agent under this Section 7 shall be in addition to
any liability which such Agent may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company within the
meaning of the Act.
8. The Agent, in soliciting offers to purchase Securities from the Company and
in performing the other obligations of such Agent hereunder (other than in
respect of any purchase by the Agent as principal, pursuant to a Terms Agreement
or otherwise), is acting solely as agent for the Company and not as principal.
The Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Securities from the
Company was solicited by such Agent and has been accepted by the Company, but
such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold the Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties and other
statements by the Agent and the Company set forth in or made pursuant to this
Agreement shall remain in full force and effect regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of the Agent
or any controlling person of the Agent, or the Company, or any officer or
director or any controlling person of the Company, and shall survive each
delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of offers to
purchase Securities from the Company may be suspended or terminated at any time
by the Company as to the Agent or by the Agent as to such Agent upon the giving
of written notice of such suspension or termination to such Agent or the
Company, as the case may be. In the event of such suspension or termination with
respect to the Agent, (x) this Agreement shall remain in full force and effect
with respect to the Agent as to which such suspension or termination has not
occurred, (y) this Agreement shall remain in full force and effect with respect
to the rights and obligations of any party which have previously accrued or
which relate to Securities which are already issued, agreed to be issued or the
subject of a pending offer at the time of such suspension or termination and (z)
in any event, this Agreement shall remain in full force and effect insofar as
the fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9
hereof are concerned.
11. Except as otherwise specifically provided herein or in the Administrative
Procedure, all statements, requests, notices and advice hereunder shall be in
writing, or by telephone if promptly confirmed in writing, and if to Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be
sufficient in all respects when delivered or sent by telex, facsimile
transmission or registered mail to Merrill Lynch & Co., World Financial Center,
North Tower, 10th Floor, New York, New York 10281-1310, Facsimile Transmission
No. (212) 449-2234, Attention: MTN Product Management, and if to the Company
shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to Indiana Gas Company, Inc., 1630 North
Meridian Street, Indianapolis, Indiana 46202-1496, Facsimile Transmission No.
(317) 321-0517, Attention: Vice President and Treasurer.
12. This Agreement and any Terms Agreement shall be binding upon, and inure
solely to the benefit of, the Agent and the Company, and to the extent provided
in Sections 7, 8 and 9 hereof, the officers and directors of the Company and any
person who controls the Agent or the Company, and their respective personal
representatives, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any Terms Agreement. No
purchaser of any of the Securities through or from the Agent hereunder shall be
deemed a successor or assign by reason merely of such purchase.
13. Time shall be of the essence in this Agreement and any Terms Agreement. As
used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
14. This Agreement and any Terms Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement, respectively, may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
INDIANA GAS COMPANY, INC.
By:________________________
Name:
Title:
Accepted in New York, New York, as of the date hereof:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: _____________________________
Name:
Title:
2
EXHIBIT A
[Date]
[Address]
Re: [Amount of Issue] Medium Term Notes, Series G
Ladies and Gentlemen:
We hereby confirm that, in consideration for your agreeing to
distribute this issue, for the purpose of this issue only, we will treat you in
all respects as an agent for our $100,000,000 Medium-Term Note Program and you
will enjoy all rights and benefits, and be subject to all the obligations of the
Agent as set out in the Distribution Agreement, dated ____________, 1999, a copy
of which has been delivered to you.
This letter shall be governed by, and construed in accordance with, the
laws of the State of New York.
Please confirm your acceptance of the following by signing this letter
and returning it to us.
Yours faithfully,
INDIANA GAS COMPANY, INC.
By:
Name:
Title:
Acknowledged and Accepted:
[NAME]
By:
Name:
Title:
EXHIBIT B
FORM OF DEALER ACCESSION LETTER
[Date]
Indiana Gas Company, Inc.
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
Attention:
Re: $100,000,000 Medium Term Notes, Series G
Ladies and Gentlemen:
We refer to the Distribution Agreement, dated ____________, 1999,
entered into in respect of the above $100,000,000 Medium-Term Note Program (the
"Program") and made between you and the Agent party thereto (which agreement, as
amended from time to time, is herein referred to as the " Agreement") .
Conditions Precedent
We confirm that we are in receipt of the documents referenced below:
- copy of the Agreement;
- a copy of all documents referred to in Section 6 of the
Agreement;
- a side letter in a form approved by ourselves from each of the
legal advisers referred to in Section 6 of the Agreement
addressed to ourselves and giving us the full benefit of the
existing legal opinions;
and have found them to our satisfaction.
For purposes of the Agreement, our Notice Details are as follows:
[Insert name, address, telephone, telex
(+ answerback) and attention]
In consideration of your appointment of us as an Agent under the
Agreement we hereby undertake, for the benefit of each of you and each of the
other Agents, that we will perform and comply with all the duties and
obligations expressed to be assumed by an Agent under the Agreement.
We understand that, in accordance with the Agreement, with effect from
the date hereof, we shall become a party to the Agreement, vested with all the
authority, rights, powers, duties and obligations of an Agent as if originally
named as an Agent under the Agreement.
This letter is governed by, and shall be construed in accordance with,
New York law.
If the foregoing is in accordance with your understanding, please sign
and return to us a copy hereof, whereupon this letter and the acceptance by you
thereof shall constitute a binding agreement between us and each of you in
accordance with its terms.
Yours faithfully,
Acknowledged and Accepted:
INDIANA GAS COMPANY, INC.
By:
Name:
Title:
ANNEX I
INDIANA GAS COMPANY, INC.
Medium-Term Notes, Series G
Terms Agreement
_____________, 19___
Ladies and Gentlemen:
Indiana Gas Company, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated
____________, 1999 (the "Distribution Agreement"), between the Company on the
one hand and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Agent") on the other, to issue and sell to the Agent the
securities specified in the Schedule hereto (the "Purchased Securities"). Each
of the provisions of the Distribution Agreement not specifically related to the
solicitation by the Agent, as agent of the Company, of offers to purchase
Securities is incorporated herein by reference in its entirety, and shall be
deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Nothing contained herein or in the
Distribution Agreement shall make any party hereto an agent of the Company or
make such party subject to the provisions therein relating to the solicitation
of offers to purchase Securities from the Company, solely by virtue of its
execution of this Terms Agreement. Each of the representations and warranties
set forth therein shall be deemed to have been made at and as of the date of
this Terms Agreement, except that each representation and warranty in Section 1
of the Distribution Agreement which makes reference to the Prospectus shall be
deemed to be a representation and warranty as of the date of the Distribution
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Terms Agreement in relation
to the Prospectus as amended and supplemented to relate to the Purchased
Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to _______________ and ________________ agrees to purchase from
the Company the Purchased Securities, at the time and place, in the principal
amount and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us ____ counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
INDIANA GAS COMPANY, INC.
By:
Name:
Title:
Accepted:
[NAME]
By:
Name:
Title:
2
Schedule to Annex I
Principal Amount: $_____________
Interest Rate or Formula:
[ ] If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
[ ] If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
[ ]LIBOR Reuters Page:
[ ]LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
[ ] Weekly Average
[ ] Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Authorized Denomination:
Purchase Price: __% , plus accrued interest, if any, from _________
Price to Public: __%, plus accrued interest, if any, from __________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agent referred to in
Section 4(h).]
[(2) The opinion of counsel to the Company referred to in Section
4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section 4(k).]
ANNEX II
INDIANA GAS COMPANY, INC.
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated ________________, 1999 (the "Distribution
Agreement"), between Indiana Gas Company, Inc. (the "Company") and Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the " Agent"), to
which this Administrative Procedure is attached as Annex II. Defined terms used
herein and not defined herein shall have the meanings given such terms in the
Distribution Agreement, the Prospectus as amended or supplemented or the
Indenture.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by the Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by the Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. The Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent."
The Company will advise the Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by the Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART 1: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- -----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of January 31, 1991 (the "Certificate Agreement"),
and its obligations as a participant in the Depositary, including the
Depositary's Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agent will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by the Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agent to suspend solicitation of offers until the new
posted rates have been established with the Agent.
Acceptance of Offers by the Company:
The Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and by telephone and in writing to the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent
or Purchasing Agent, as the case may be, will communicate promptly, but in no
event later than the time set forth under "Settlement Procedure Timetable"
below, the following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) Type of Interest Rate;
(3) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(4) Trade Date;
(5) Settlement Date;
(6) Maturity Date;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as
are applicable:
(i) Initial Redemption Date,
(ii) Initial Redemption Percentage (% of par), and
(iii) Annual Redemption Percentage Reduction (% of Par)
that the Redemption Price shall decline (but not
below par) on each anniversary of the Initial
Redemption Date;
(12) If a Floating Rate Book-Entry Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(a) If LIBOR, the designated LIBOR Page and Designated
LIBOR Currency,
(b) If CMT Rate, the Designated CMT Telerate Page and
Designated CMT Maturity Index,
(ii) Index Maturity,
(iii) Spread and/or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) If a repayable Book-Entry Security, the Optional Repayment
Date(s);
(14) Name, address and taxpayer identification number of the
registered owner(s);
(15) Denomination of certificates to be delivered at settlement;
(16) Book-Entry Security or Certificated Security; and
(17) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the
following settlement information to the Depositary, and the
Depositary shall forward such information to such Agent and
Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such
time);
(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or
Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry
Security, number of days by which such date succeeds
the record date for the Depositary's purposes (or, in
the case of Floating Rate Securities which reset
daily or weekly, the date five calendar days
immediately preceding the applicable Interest Payment
Date and, in the case of all other Book-Entry
Securities, the Regular Record Date, as defined in
the Security) and, if calculable at that time, the
amount of interest payable on such Interest Payment
Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at National City Bank Indiana,
Indianapolis, Indiana, or such other account as the Company may have previously
specified to the Trustee, in funds available for immediate use in the amount
transferred to the Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will file such Pricing
Supplement pursuant to Rule 424(b)(3) under the 1933 Act not later than the
close of business of the Commission on the fifth business day after the date on
which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
Settlement Time
Procedure
- --------------------------- -------------------------------------------------------------------------
A 5:00 p.m. on the Business Day following the Trade Date or 10:00 a.m. on the Business
Day prior to the Settlement Date, whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with cusip Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the applicable Agent to perform
its obligations hereunder or under the Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for the loss of its use of funds
during the period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book- Entry Securities
to have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
- --------------------------------------------------------------
Posting Rates by Company:
The Company and the Agent will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by the Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agent to suspend solicitation of offers until
the new posted rates have been established with the Agent.
Acceptance of Offers by Company:
The Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
1. Principal Amount of Certificated Securities to be purchased;
2. Type of Interest Rate;
3. If a Fixed Rate Certificated Security, the interest rate and initial
interest payment date;
4. Trade Date;
5. Settlement Date;
6. Maturity Date;
7. Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
8. Issue Price;
9. Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
10. Net Proceeds to the Company;
11. If a redeemable Certificated Security, such of the following as are
applicable:
(i) Initial Redemption Date,
(ii) Initial Redemption Percentage (% of par), and
(iii) Annual Redemption Percentage Reduction (% of par)
that the Redemption Price shall decline (but not
below par) on each anniversary of the Initial
Redemption Date;
12. If a Floating Rate Certificated Security, such of the following as
are applicable:
(i) Interest Rate Basis,
(a) If LIBOR, the designated LIBOR Page and
Designated LIBOR Currency,
(b) If CMT Rate, the Designated CMT Telerate
Page and Designated CMT Maturity Index,
(ii) Index Maturity,
(iii) Spread and/or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
13. If a repayable Certificated Security, the Optional Repayment
Date(s);
14. Name, address and taxpayer identification number of the registered
owner(s);
15. Denomination of certificates to be delivered at settlement;
16. Book-Entry Security or Certificated Security; and
17. Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will file such Pricing Supplement pursuant to Rule 424(b)(3) under
the 1933 Act not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the third Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Certificated Securities to the Purchasing Agent against delivery of
payment for such Certificated Securities in immediately available funds to the
Company in an amount equal to the issue price of the Certificated Securities
less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to
the Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
ANNEX III
Accountants' Letter
Pursuant to Sections 4(j) and 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements
and any supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) audited by them and
incorporated by reference in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the Act and the
Exchange Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial data, pro
forma financial information, financial forecasts and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon, copies
of which are attached;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Company's
quarterly report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached; and on the
basis of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (v)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K for such
fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest audited
financial statements incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
(A)(i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus for them to
be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived;
(C) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Agent, or any increases in any items specified by the Agent,
in each case as compared with amounts shown in the latest
balance sheet incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(D) for the period from the date of the latest
financial statements incorporated by reference in the
Prospectus to the specified date referred to in Clause (C)
above there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the Agent,
or any increases in any items specified by the Agent, in each
case as compared with the comparable period of the preceding
year and with any other period of corresponding length
specified by the Agent, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
(vi) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (v) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Agent which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the Agent or
in documents incorporated by reference in the Prospectus specified by the Agent,
and have compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have found
them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(j) thereof.