Exhibit 4.5
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GUARANTEE AGREEMENT
NIPSCO CAPITAL TRUST I
Dated as of ______ __, 1999
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION.......................... 1
SECTION 1.1. Definitions and Interpretation................................ 1
ARTICLE II
TRUST INDENTURE ACT............................. 4
SECTION 2.1. Trust Indenture Act: Application.............................. 4
SECTION 2.2. List of Holders of Securities................................. 4
SECTION 2.3. Reports by the Guarantee Trustee.............................. 4
SECTION 2.4. Periodic Reports to Guarantee Trustee......................... 4
SECTION 2.5. Evidence of Compliance Conditions Precedent................... 5
SECTION 2.6. Events of Default; Waiver..................................... 5
SECTION 2.7. Event of Default; Notice...................................... 5
SECTION 2.8. Conflicting Interests......................................... 5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE............................. 5
SECTION 3.1. Powers and Duties of the Guarantee Trustee.................... 5
SECTION 3.2. Certain Rights of Guarantee Trustee........................... 7
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee......... 8
ARTICLE IV
GUARANTEE TRUSTEE............................. 9
SECTION 4.1. Guarantee Trustee; Eligibility................................ 9
SECTION 4.2. Appointment, Removal and Resignation of Guarantee Trustees.... 9
ARTICLE V
GUARANTEE................................. 10
SECTION 5.1. Guarantee..................................................... 10
SECTION 5.2. Waiver of Notice and Demand................................... 10
SECTION 5.3. Obligations Not Affected...................................... 10
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SECTION 5.4. Rights of Holders............................................. 11
SECTION 5.5. Guarantee of Payment.......................................... 11
SECTION 5.6. Subrogation................................................... 11
SECTION 5.7. Independent Obligations....................................... 12
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION.................. 12
SECTION 6.1. Limitation of Transactions.................................... 12
SECTION 6.2. Ranking....................................................... 12
ARTICLE VII
TERMINATION................................. 13
SECTION 7.1. Termination................................................... 13
ARTICLE VIII
INDEMNIFICATION............................... 13
SECTION 8.1. Exculpation................................................... 13
SECTION 8.2. Indemnification............................................... 13
ARTICLE IX
MISCELLANEOUS............................... 14
SECTION 9.1. Successors and Assigns........................................ 14
SECTION 9.2. Amendments.................................................... 14
SECTION 9.3. Notices....................................................... 14
SECTION 9.4. Benefit....................................................... 15
SECTION 9.5. Governing Law................................................. 15
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of _______ ___,
1999, is executed and delivered by NIPSCO Capital Markets, Inc., an Indiana
corporation (the "Guarantor"), and The Chase Manhattan Bank, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Securities (as defined herein) and of NIPSCO Capital Trust
I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of _______ __, 1999, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial ownership interests in the assets of the Issuer, the Issuer
is issuing on the date hereof _________ preferred securities, stated liquidation
amount $50 per security, having an aggregate liquidation amount of $___________,
designated the Preferred Securities (the "Preferred Securities") and
____________ common securities, liquidation amount $50 per security, having an
aggregate liquidation amount of $________, designated the Common Securities (the
"Common Securities" and, together with the Preferred Securities, the
"Securities"); and
WHEREAS, as an incentive for the Holders to purchase the Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay in full, to the Holders of the Securities,
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation. Unless the context
otherwise requires:
(a) capitalized terms used in this Guarantee but not defined in the
preamble above shall have the meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Guarantee shall have the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" shall be to
this Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Guarantee to Articles, Sections or
recitals shall be to Articles and Sections of, or recitals to, this
Guarantee unless otherwise specified;
(e) a term defined in the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation (the "Trust Indenture Act")
shall have the same meaning when used in this Guarantee unless otherwise
defined in this Guarantee; and
(f) a reference to the singular shall include the plural and vice
versa, and a reference to any masculine form of a term shall include the
feminine form of a term, as applicable.
(g) the following terms shall have the following meanings:
"Affiliate" of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person shall mean
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Authorized Officer" of a Person shall mean any Person that is
authorized to bind such Person.
"Business Day" shall mean any day other than a Saturday or Sunday or a
day on which banking institutions in New York City are authorized or required by
law or executive order to remain closed, or a day on which the trustee under the
Indenture or the principal office of the Property Trustee under the Declaration
is closed for business.
"Corporate Trust Office" shall mean the principal office of the
Guarantee Trustee at which, at any particular time, its corporate trust business
shall be administered, which office at the date hereof is located at 450 West
33rd Street, 15th Floor, New York, New York 10001, Attention: Corporate Trust
Administration.
"Covered Person" shall mean any Holder or beneficial owner of
Securities.
"Debentures" shall mean the series of debentures to be issued by the
Debenture Issuer under the Indenture and to be purchased by the Issuer and held
by the Property Trustee.
"Debenture Issuer" shall mean NIPSCO Capital Markets, Inc., in its
capacity as issuer of the Debentures under the Indenture.
"Direction" by a person shall mean a written direction signed: (a) if
the Person is a natural person, by that Person; or (b) in any other case in the
name of such Person by one or more Authorized Officers of that Person.
"Event of Default" shall mean the failure of the Guarantor to perform
any of its payment or other obligations under this Guarantee.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Securities, to the
extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
the Securities, to the extent the Issuer has funds available therefor, (ii) the
redemption price, including all accumulated and unpaid Distributions to the date
of redemption with respect to the Securities in respect of which the related
Debentures have been redeemed by the Debenture Issuer upon the occurrence of a
Tax Event Redemption or repaid at maturity, to the extent the Issuer has funds
available therefor, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for the Securities as
provided in the Declaration), the lesser of (a) the aggregate of the stated
liquidation amount and all accumulated and unpaid Distributions on the
Securities to the date of payment, to the extent the Issuer has funds available
therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders of the Securities in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
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"Guarantee Trustee" shall mean The Chase Manhattan Bank, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter shall mean each such
Successor Guarantee Trustee.
"Holder" shall have the meaning given such term in the Declaration.
"Indemnified Person" shall mean the Guarantee Trustee, any Affiliate
of the Guarantee Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Guarantee Trustee.
"Indenture" shall mean the indenture, dated as of February 14, 1997,
among the Guarantor, Industries and The Chase Manhattan Bank, as trustee, as
amended and supplemented (including provisions of the Trust Indenture Act that
are deemed incorporated therein), pursuant to which the Debentures are to be
issued.
"Industries" shall mean NIPSCO Industries, Inc., an Indiana
corporation and an Affiliate of the Issuer.
"Majority in Liquidation Amount" shall mean, except as provided in the
terms of the Securities or the Trust Indenture Act, the Holders of outstanding
Securities, voting together as a single class, or, as the context may require,
the Holders of outstanding Preferred Securities or the Holders of outstanding
Common Securities, voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Officers' Certificate" shall have the meaning given such term in the
Declaration.
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Property Trustee" shall mean The Chase Manhattan Bank, in its
capacity as property trustee under the Declaration.
"Responsible Officer" shall mean, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office, including any vice-
president, any assistant vice-president, any assistant secretary, the treasurer,
any assistant treasurer or other officer of the Corporate Trust Office
customarily performing functions similar to those performed by any of the above
designated officers and also shall mean, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred due to that
officer's knowledge of and familiarity with the particular subject.
"Successor Guarantee Trustee" shall mean a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Tax Event Redemption" shall have the meaning given such term in the
Declaration.
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"Trust Enforcement Event" shall have the meaning given such term in
the Declaration.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application.
(a) This Guarantee is subject to the provisions of the Trust Indenture
Act that are required to be part of this Guarantee and, to the extent
applicable, shall be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee
conflicts with the duties imposed by Section 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties of the Trust Indenture Act shall control.
SECTION 2.2. List of Holders of Securities.
(a) The Guarantor shall provide the Guarantee Trustee with a list, in
such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Securities ("List of Holders") (i) within one
Business Day after January 1 and July 1 of each year, and (ii) at any other
time, within 30 days of receipt by the Guarantor of a written request from the
Guarantee Trustee for a List of Holders as of a date no more than 15 days before
such List of Holders is given to the Guarantee Trustee. If at any time the List
of Holders does not differ from the most recent List of Holders given to the
Guarantee Trustee by the Guarantor, the Guarantor shall not be obligated to
provide such List of Holders. The Guarantee Trustee shall preserve, in as
current form as is reasonably practicable, all information contained in Lists of
Holders it receives in its capacity as Guarantee Trustee; provided that the
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under, and
shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Within 60 days after May 15 of each year (commencing with the year of
the first anniversary of the issuance of the Preferred Securities), the
Guarantee Trustee shall provide to the Holders of the Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee
Trustee also shall comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4. Periodic Reports to Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee such documents,
reports and information as required by Section 314 of the Trust Indenture Act
(if any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act.
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SECTION 2.5. Evidence of Compliance Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Guarantee
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Securities may,
by vote, on behalf of the Holders of all of the Securities, waive any past Event
of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee. No such waiver shall
extend to any subsequent Event of Default or other default or impair any right
consequent thereon.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all Events of Default actually known to a
Responsible Officer of the Guarantee Trustee, unless such defaults have been
cured before the giving of such notice; provided that the Guarantee Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Guarantee Trustee determines in good faith that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written notice
or a Responsible Officer of the Guarantee Trustee, charged with the
administration of the Declaration, shall have obtained actual knowledge.
SECTION 2.8. Conflicting Interests.
The Declaration and the Indenture shall be deemed to be specifically
described in this Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Securities. The Guarantee Trustee shall not
transfer this Guarantee to any Person except a Holder of Securities exercising
his or her rights pursuant to Section 5.4(b) or to a Successor Guarantee Trustee
on acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee
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pursuant to Section 4.2. The right, title and interest of the Guarantee Trustee
shall automatically vest in any Successor Guarantee Trustee, and such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee for the benefit of the Holders of the Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only those duties specifically set forth in
this Guarantee, and no implied covenants shall be read into this Guarantee
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), the Guarantee Trustee
shall exercise the rights and powers vested in it by this Guarantee, and use the
same degree of care and skill in its exercise thereof, as a prudent individual
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by reference to the express provisions of
this Guarantee, and the Guarantee Trustee shall not be liable except
for the performance of those duties and obligations specifically set
forth in this Guarantee, and no implied covenants or obligations shall
be read into this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee; but in
the case of any such certificates or opinions that are specifically
required to be furnished to the Guarantee Trustee under this
Guarantee, the Guarantee Trustee shall be under a duty to examine such
certificates or opinions to determine whether or not they conform to
the requirements of this Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of this
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Guarantee, or the exercise of any trust or power conferred upon the
Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
or indemnity, reasonably satisfactory to the Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee shall be sufficiently evidenced by a Direction or an Officers'
Certificate.
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is specifically prescribed in this
Guarantee) may request, in the absence of bad faith on its part, and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to record, file or
register any instrument (or rerecord, refile or reregister such
instrument).
(v) The Guarantee Trustee may consult with counsel of its choice
or other experts. The advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise, and the written advice or opinion of such counsel with
respect to such matters, shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by the
Guarantee Trustee under this Guarantee in good faith and in accordance with
such advice or opinion. Such counsel may be counsel to the Guarantor or any
of its Affiliates and may include any of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Guarantee from any court of competent
jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee at the
request or direction of any Holder of the Securities, unless such Holder
has provided to the Guarantee Trustee security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Guarantee
Trustee's agents, nominees or custodians) and
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liabilities that might be incurred thereby, including such reasonable
advances as may be requested by the Guarantee Trustee. The foregoing will
not relieve the Guarantee Trustee, upon the occurrence of an Event of
Default under this Guarantee, of its obligation to exercise the rights and
powers vested in it by this Guarantee.
(vii) The Guarantee Trustee shall not be bound to investigate the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit.
(viii) The Guarantee Trustee may execute any of the trusts or
powers vested in it by this Guarantee or perform any duties imposed upon it
by this Guarantee either directly or by or through agents, nominees,
custodians or attorneys, and the Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed by the Guarantee Trustee with due care under this Guarantee.
(ix) Any action taken by the Guarantee Trustee or its agents
under this Guarantee shall bind the Holders of the Securities, and the
signature of the Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. No third party shall be required
to investigate the authority of the Guarantee Trustee so to act or the
Guarantee Trustee's compliance with any of the terms and provisions of this
Guarantee, both of which shall be evidenced conclusively by the Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders of a Majority in Liquidation Amount of the Securities, (B) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received and (C) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(b) No provision of this Guarantee shall be deemed to impose any duty
or obligation on the Guarantee Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent to act in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee.
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.
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ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any state or territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or the requirements of the applicable supervising or examining
authority, then, for the purposes of this Section 4.1(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.l(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set forth in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of Guarantee
Trustees.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by a written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee shall hold office until a Successor
Guarantee Trustee has been appointed or until its removal or resignation. The
Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by a written instrument executed by the Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by a written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
shall have accepted appointment as provided in this Section 4.2 within 60 days
after delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition any court of competent jurisdiction for
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appointment of a Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, it may deem proper, appoint a Successor
Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions of
any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation of
the Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to
the Guarantee Trustee all amounts accrued to the date of such termination,
removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
To the extent set forth in this Guarantee, the Guarantor irrevocably
and unconditionally agrees to pay in full to the Holders of the Securities the
Guarantee Payments (without duplication of amounts paid by the Issuer), as and
when due, regardless of any defense, right of set-off or counterclaim that the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders of the Securities or by causing the Issuer to pay such
amounts to the Holders of the Securities. If a Trust Enforcement Event has
occurred and is continuing, the rights of the Holders of the Common Securities
to receive Guarantee Payments will be subordinated to the rights of the Holders
of Preferred Securities to receive Guarantee Payments.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Guarantee and
of any liability to which this Guarantee applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, redemption price, Liquidation Distribution or any
other sums payable under the terms of the Securities or the extension of time
for the performance of any other obligation under, arising out of, or in
connection with, the Securities;
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(c) any failure, omission, delay or lack of diligence on the part of
the Holders of the Securities to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders of the Securities pursuant
to the terms of the Securities, or any action on the part of the Issuer granting
indulgence or an extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed or
incurred in this Guarantee; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of the Guarantor, it being the intent
of this Section 5.3 that the obligations of the Guarantor under this Guarantee
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders of the Securities to give
notice to, or obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.
SECTION 5.4. Rights of Holders.
(a) The Holders of a Majority in Liquidation Amount of the Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of this Guarantee
or to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under this Guarantee.
(b) If the Guarantee Trustee fails to enforce this Guarantee, any
Holder of the Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee, without first instituting
a legal proceeding directly against the Issuer, the Guarantee Trustee or any
other Person. Notwithstanding the foregoing, if the Guarantor has failed to make
a Guarantee Payment, a Holder of Securities may directly institute a proceeding
against the Guarantor for enforcement of this Guarantee for such payment. The
Guarantor waives any right or remedy to require that any action on this
Guarantee be brought first against the Issuer or any other Person before
proceeding directly against the Guarantor.
SECTION 5.5. Guarantee of Payment.
This Guarantee constitutes a guarantee of payment and not of
collection.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all the rights, if any, of the
Holders of the Securities against the Issuer with respect to any amounts paid to
such Holders by the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Guarantee. If any amount shall be
paid to
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the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders of the Securities and to pay over such
amount to such Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities, and
that the Guarantor shall be liable as principal and as debtor under this
Guarantee to make Guarantee Payments pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g) of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions.
As long as any Securities remain outstanding, if an Event of Default
occurs under the Guarantee or a Trust Enforcement Event occurs under the
Declaration and written notice of such event has been given to the Guarantor,
then the Guarantor and Industries may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to any of the Guarantor's or Industries' capital stock or (ii) make
any payment of principal, interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Guarantor or Industries that rank on a
parity with or junior in interest to the Debentures or make any guarantee
payments with respect to any guarantee by the Guarantor or Industries of the
debt securities of any subsidiary of the Guarantor or Industries if such
guarantee ranks on a parity with or junior in interest to the Debentures (other
than (a) purchases or acquisitions of capital stock of the Guarantor or
Industries in connection with the satisfaction by the Guarantor or Industries of
its obligations under any employee benefit plans or the satisfaction by the
Guarantor or Industries of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Guarantor or Industries to
purchase capital stock of the Guarantor or Industries, (b) as a result of a
reclassification of the Guarantor's or Industries' capital stock or the exchange
or conversion of one class or series of the Guarantor's or Industries' capital
stock for another class or series of the Guarantor's or Industries' capital
stock, (c) the purchase of fractional interests in shares of the Guarantor's or
Industries' capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) dividends
or distributions in capital stock of the Guarantor or Industries, (e)
redemptions or repurchases of any rights pursuant to a rights agreement and (f)
payments under this Guarantee).
SECTION 6.2. Ranking.
If a Trust Enforcement Event has occurred and is continuing under the
Declaration, the rights of the Holders of the Common Securities to receive
Guarantee Payments will be subordinated to the rights of the Holders of
Preferred Securities to receive Guarantee Payments.
ARTICLE VII
TERMINATION
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SECTION 7.1. Termination.
This Guarantee will terminate upon (i) the Guarantor's full payment of
the redemption price of all the Securities in the event of a Tax Event
Redemption or at the maturity of the Debentures, (ii) distribution of the
Debentures held by the Issuer to the Holders of the Securities or (iii) full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of the Securities must restore payment of any sums paid under
the Securities or under this Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission by such Indemnified
Person in good faith in accordance with this Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to the Holders of the Preferred Securities might properly be
paid.
SECTION 8.2. Indemnification.
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission by such Indemnified Person in good faith in accordance with this
Guarantee Agreement and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law, reasonable out-
of-pocket expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf
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of the Indemnified Person to repay such amount if it shall be determined that
the Indemnified Person is not entitled to be indemnified as authorized in
Section 8.2(a).
(c) The provisions set forth in this Section 8.2 shall survive the
termination of the Guarantee or the resignation or removal of the Guarantee
Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Securities then
outstanding.
SECTION 9.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of the Holders of the Securities in any material respect, in which case
no consent of Holders will be required, this Guarantee may be amended only with
the prior approval of the Holders of at least a Majority in Liquidation Amount
of the Securities. The provisions of Section 11.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 9.3. Notices.
All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) If given to the Guarantee Trustee, at the mailing address set
forth below (or such other address as the Guarantee Trustee may give notice of
to the Holders of the Securities):
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Administration
Telecopy No.: __________________
(b) If given to the Guarantor, at the mailing address set forth below
(or such other address as the Guarantor may give notice of to the Holders of the
Securities):
NIPSCO Capital Markets, Inc.
801 East 86th Avenue
Merrillville, Indiana 46410
Attention: Francis P. Girot, Jr.
Telecopy No.: (219) 853-5352
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(c) If given to any Holder of the Securities, at such Holder's
address as set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4. Benefit.
This Guarantee shall be solely for the benefit of the Holders of the
Securities and, subject to Section 3.1(a), is not separately transferable from
the Securities.
SECTION 9.5. Governing Law.
THIS GUARANTEE SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.6. Governing Law.
This Guarantee may contain more than one counterpart of the signature
page, and this Guarantee may be executed by the affixing of the signature of
each of the parties to one of such counterpart signature pages. All such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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THIS GUARANTEE is executed as of the day and year first above written.
NIPSCO CAPITAL MARKETS, INC., as Guarantor
By:_______________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Guarantee Trustee
By:_______________________________
Name:
Title:
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