EXHIBIT 4.4
NIPSCO INDUSTRIES, INC.
NIPSCO CAPITAL MARKETS, INC.
NIPSCO CAPITAL TRUST I
6,000,000 PREMIUM INCOME EQUITY SECURITIES(SM) ("PIES(SM)")*
Consisting of 6,000,000 Corporate PIES
UNDERWRITING AGREEMENT
February 9, 1999
LEHMAN BROTHERS INC.
GOLDMAN, SACHS & CO. AND
MORGAN STANLEY & CO. INCORPORATED,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
NIPSCO Industries, Inc., an Indiana corporation (the "Company"), and
NIPSCO Capital Trust I, a Delaware statutory business trust (the "Trust" and,
together with the Company, the "PIES Issuers") propose to sell to you (the
"Underwriters") 6,000,000 Premium Income Equity Securities ("PIES") (the "Firm
PIES"). In addition, the PIES Issuers propose to grant to the Underwriters an
option to purchase up to an additional 900,000 PIES on the terms and for the
purposes set forth in Section 3 (the "Option PIES"). The Firm PIES and the
Option PIES, if purchased, are hereinafter collectively called the "PIES."
Capitalized terms used herein without definition shall be used as defined in the
Final Prospectus (as hereinafter defined).
Each PIES will initially consist of a unit (a "Corporate PIES")
comprised of (a) a stock purchase contract (a "Purchase Contract") under which
(i) the holder will purchase from the Company on February 16, 2003, for $50, a
number of common shares, without par value, of the Company (the "Common Stock"),
equal to the Settlement Rate as set forth in the Purchase Contract Agreement (as
hereinafter defined) and (ii) the Company will pay to the holder contract
adjustment payments and (b) a Trust Preferred Security (a "Trust Preferred
Security"), having a stated liquidation amount of $50 per Trust Preferred
Security, representing an undivided beneficial ownership interest in the assets
of the Trust. In accordance with the terms of a Purchase Contract Agreement (the
"Purchase Contract Agreement") to be entered into between the Company and The
- --------
* "Premium Income Equity Securities" and "PIES" are service marks owned
by Lehman Brothers Inc.
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Chase Manhattan Bank, as Purchase Contract Agent (the "Purchase Contract
Agent"), the holders of the PIES will pledge the Trust Preferred Securities to
The First National Bank of Chicago, as Collateral Agent (the "Collateral
Agent"), pursuant to a Pledge Agreement (the "Pledge Agreement") to be entered
into among the Company, the Purchase Contract Agent, The First National Bank of
Chicago, as Securities Intermediary (the "Securities Intermediary"), and the
Collateral Agent, to secure the holders' obligations to purchase Common Stock
under the Purchase Contracts.
NIPSCO Capital Markets, Inc., an Indiana corporation and a
wholly-owned subsidiary of the Company ("Capital Markets" and, together with the
Company and the Trust, the "Issuers") will own all of the beneficial ownership
interests represented by the common securities (the "Common Securities" and,
together with the Trust Preferred Securities, the "Trust Securities") of the
Trust. Concurrently with the issuance of the Trust Preferred Securities and
Capital Markets' purchase of all of the Common Securities, the Trust will invest
the proceeds of each thereof in Capital Markets' Debentures due 2005 (the
"Debentures") to be issued pursuant to an Indenture, dated as of February 14,
1997 (the "Indenture"), between Capital Markets, the Company and The Chase
Manhattan Bank, as trustee (the "Indenture Trustee"). Capital Markets will
guarantee (the "Guarantee") the Trust Securities to the extent set forth in a
Guarantee Agreement (the "Guarantee Agreement") to be entered into between
Capital Markets and The Chase Manhattan Bank, as trustee (the "Guarantee
Trustee"), for the benefit of the holders from time to time of the Trust
Securities. The Trust Securities will be issued pursuant to the amended and
restated declaration of trust of the Trust (the "Amended Declaration"), among
Capital Markets, as Sponsor, Stephen P. Adik, Francis P. Girot, Jr. and Arthur
A. Paquin, as trustees (the "Regular Trustees"), The Chase Manhattan Bank, as
property trustee (the "Property Trustee"), Chase Manhattan Bank Delaware as the
Delaware trustee (the "Delaware Trustee" and, together with the Property Trustee
and the Regular Trustees, the "Trustees"), and the holders from time to time of
undivided beneficial ownership interests in the assets of the Trust.
This is to confirm the agreement concerning the purchase of the PIES
by the Underwriters.
1. Representations, Warranties and Agreements of the Company and
Capital Markets. The Company and Capital Markets jointly represent, warrant and
agree that:
(a) A registration statement on Form S-3 (File No. 333-69279)
and an amendment or amendments thereto with respect to the PIES have
(i) been prepared by the Issuers in conformity with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder,
(ii) been filed with the Commission under the Securities Act and
(iii) become effective under the Securities Act. The registration
statement, as amended at the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act
and complies in all other material respects with such Rule. The
Issuers propose to file with the Commission pursuant to Rule 424(b)
under the Securities Act ("Rule 424(b)") a supplement to the form of
prospectus included in the
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registration statement relating to the initial offering of the PIES
and the plan of distribution thereof and has previously advised you
of all further information (financial and other) with respect to the
Issuers to be set forth therein. The term "Registration Statement"
means the registration statement, as amended at the date of this
Agreement and as amended from time to time hereafter, including the
exhibits thereto, and all documents incorporated therein by
reference pursuant to Item 12 of Form S-3 (the "Incorporated
Documents"), and such prospectus as then amended, including the
Incorporated Documents, is hereinafter referred to as the "Basic
Prospectus"; and such supplemented form of prospectus, in the form
in which it shall be filed with the Commission pursuant to Rule
424(b) (including the Basic Prospectus as so supplemented), is
hereinafter called the "Final Prospectus". The Basic Prospectus, as
the same may be amended or supplemented from time to time,
including, without limitation, by any preliminary form of prospectus
supplement relating to the Corporate PIES, which has heretofore been
filed pursuant to Rule 424(b) is hereinafter called the "Interim
Prospectus". Any reference herein to the Registration Statement, any
Interim Prospectus or the Final Prospectus shall be deemed to refer
to and include the Incorporated Documents which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on
or before the date of this Agreement, the issue date of any Interim
Prospectus or the issue date of the Final Prospectus, as the case
may be; and any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement, any
Interim Prospectus or the Final Prospectus shall be deemed to refer
to and include the filing of any Incorporated Documents under the
Exchange Act after the date of this Agreement or the issue date of
the Basic Prospectus, any Interim Prospectus or the Final
Prospectus, as the case may be, and deemed to be incorporated
therein by reference. Copies of the Registration Statement and the
amendment or amendments to such Registration Statement have been
delivered by Issuers to the Underwriters.
(b) Giving effect to the interpretations of the requirements
of the Securities Act reflected in the Company's letter requesting
"no-action" submitted to the staff of the Commission (the "Staff"),
dated April 27, 1992, as supplemented by letters dated July 9, 1992
and September 21, 1992 (the "No-Action Request") and the Staff's
response thereto dated September 25, 1992 (the "Staff Response"),
(i) each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Interim Prospectus
or Final Prospectus complied or will comply when so filed in all
material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became effective, did not
contain and each such part, as amended or supplemented, if
applicable, will not contain any 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, (iii) any
Interim Prospectus complied and the Registration Statement and the
Final Prospectus comply, and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities
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Act and the Rules and Regulations and (iv) any Interim Prospectus
did not contain and the Final Prospectus does not contain and, as it
may be amended or supplemented, will not contain an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; provided
that no representation and warranty is made as to the statement of
eligibility and qualification on Form T-1 of the Indenture Trustee,
the Property Trustee or the Guarantee Trustee under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), or as
to information contained in or omitted from the Registration
Statement or the Final Prospectus in reliance upon and in conformity
with written information furnished to the Issuers by any Underwriter
specifically for inclusion therein; the Indenture, the Guarantee
Agreement and the Amended Declaration shall have been qualified
under and will comply in all material respects with the Trust
Indenture Act and the applicable rules and regulations thereunder;
and the Commission has not issued an order preventing or suspending
the use of the Registration Statement, any Interim Prospectus or the
Final Prospectus.
(c) Each of the Company and Capital Markets, Northern Indiana
Public Service Company ("Northern Indiana"), Bay State Gas Company
("Bay State") and IWC Resources Corporation ("IWCR" and, together
with Northern Indiana and Bay State, the "Significant Subsidiaries")
has been duly incorporated and is validly existing as a corporation
in good standing 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 Final
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each other
subsidiary (as defined in Section 16) of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation.
(d) The Company has an authorized capitalization as set forth
in the Final Prospectus; all of the issued capital shares of the
Company and each wholly-owned subsidiary of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable; and except as set forth in Exhibit 21 to the most
recent Form 10-K of the Company, all of the issued common shares of
Northern Indiana and Indianapolis Water Company ("IWC") and all the
issued capital shares of each other subsidiary of the Company
(except for directors' qualifying shares and except as set forth or
incorporated by reference in the Registration Statement) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
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(e) Northern Indiana and IWCR constitute the only "significant
subsidiaries" (as such term is defined in Rule 1-02 of Regulation
S-X) of the Company.
(f) The unissued shares of Common Stock to be issued and sold
by the Company pursuant to the Purchase Contracts have been duly and
validly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Purchase
Contracts, will be duly and validly issued, fully paid and
non-assessable.
(g) The Corporate PIES have been duly authorized by the
Company, and when duly executed by the Company (assuming due
execution by the Purchase Contract Agent as attorney-in-fact for the
holders thereof and due authentication by the Purchase Contract
Agent) and delivered by the Company and upon payment therefor as set
forth herein, will be duly and validly issued and outstanding, and
will constitute valid and binding obligations of the Company
entitled to the benefits of the Purchase Contract Agreement and
enforceable against the Company in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors rights generally, general
equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing.
(h) The Indenture has been duly authorized by Capital Markets
and the Company and (assuming due execution and delivery by the
Indenture Trustee) constitutes a valid and binding agreement of each
of Capital Markets and the Company enforceable against Capital
Markets and the Company in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; and the Debentures
have been duly authorized by Capital Markets and, when duly
executed, authenticated, issued and delivered as contemplated by the
Indenture against payment of the agreed consideration therefor, will
be duly and validly issued and outstanding, and will constitute
valid and binding obligations of Capital Markets entitled to the
benefits of the Indenture and the Support Agreement, dated April 4,
1989, as amended as of May 15, 1989, December 10, 1990 and February
14, 1991 (the "Support Agreement"), between the Company and Capital
Markets, and enforceable in accordance with their terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
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(i) The Amended Declaration has been duly authorized by
Capital Markets, and when duly executed by the proper officers of
Capital Markets and the Regular Trustees (assuming due execution and
delivery by the Property Trustee and the Delaware Trustee) and
delivered by Capital Markets, will constitute a valid and binding
agreement of Capital Markets, enforceable against Capital Markets in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(j) The Guarantee Agreement has been duly authorized by
Capital Markets and, when duly executed by the proper officers of
Capital Markets (assuming due execution and delivery by the
Guarantee Trustee) and delivered by Capital Markets, will constitute
a valid and binding agreement of Capital Markets enforceable against
Capital Markets in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(k) The Purchase Contract Agreement has been duly authorized
by the Company and, when duly executed by the proper officers of the
Company (assuming due execution and delivery by the Purchase
Contract Agent) and delivered by the Company, will constitute a
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(l) The Pledge Agreement has been duly authorized by the
Company and, when duly executed by the proper officers of the
Company (assuming due execution and delivery by the Purchase
Contract Agent, the Securities Intermediary and the Collateral
Agent) and delivered by the Company, will constitute a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(m) This Agreement has been duly authorized, executed and
delivered by each of the Company and Capital Markets; and the
Remarketing Agreement (the "Remarketing Agreement") to be entered
into by the Company, the Trust, Capital
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Markets and Lehman Brothers Inc., as Remarketing Agent, has been
duly authorized by the Company and Capital Markets and will be, when
executed and delivered by the Company and Capital Markets, duly
executed and delivered by the Company and Capital Markets.
(n) The Corporate PIES, the Indenture, the Debentures, the
Trust Preferred Securities, the Common Stock to be issued and sold
pursuant to the Purchase Contracts, the Purchase Contract Agreement,
the Amended Declaration, the Guarantee Agreement, the Support
Agreement, the Pledge Agreement and the Remarketing Agreement, when
the Corporate PIES are delivered pursuant to this Agreement, will
conform to the descriptions thereof contained in the Final
Prospectus.
(o) The execution, delivery and performance of this Agreement,
the Indenture, the Amended Declaration, the Guarantee Agreement, the
Support Agreement, the Purchase Contract Agreement, the Pledge
Agreement and the Remarketing Agreement by the Company and Capital
Markets, as applicable, and the consummation by the Company and
Capital Markets of the transactions contemplated hereby and thereby
and the issuance and delivery of the Corporate PIES, the Debentures
and the Common Stock to be issued and sold pursuant to the Purchase
Contracts (the "Transactions") 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
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries is subject, nor
will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries 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 subsidiaries or any of their respective properties or
assets; and except for the registration of the Debentures, the
Guarantees, the Purchase Contracts, the Common Stock to be issued
and sold pursuant to the Purchase Contracts, the PIES and the
obligations of the Company pursuant to the Support Agreement under
the Securities Act, the qualification of the Indenture, the Amended
Declaration and the Guarantee Agreement under the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase of
the Corporate PIES by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the
Transactions.
(p) There are no contracts, agreements or understandings
between (i) the Company or Capital Markets and (ii) any person
granting such person the right to require the Company or Capital
Markets to file a registration statement under the
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Securities Act with respect to any securities of the Company or
Capital Markets owned or to be owned by such person or to require
the Company or Capital Markets to include such securities in the
securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company or Capital Markets under the
Securities Act.
(q) 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 Final Prospectus, 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,
which could, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole or
upon the ability of the Company or Capital Markets to perform their
obligations under this Agreement (a "Material Adverse Effect"),
otherwise than as set forth or contemplated in the Final Prospectus;
and, since the respective dates as of which information is given in
the Final Prospectus, there has not been any material change in the
consolidated share capital or long-term debt of the Company and its
subsidiaries or the consolidated share capital or long-term debt of
any Significant Subsidiary 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 (taken as a whole), otherwise than as set forth or
contemplated in the Final Prospectus.
(r) The financial statements filed as part of the Registration
Statement or incorporated by reference in the Final Prospectus
present fairly the financial condition and results of operations of
the entities purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods involved and, with respect to financial
statements included in periodic reports filed by the Company
pursuant to Section 13 or 15(d) of the Exchange Act with the
Commission on and after September 25, 1992, contain the information
requested by the Staff in the Staff Response to be so included; and
the supporting schedules included or incorporated by reference in
the Final Prospectus present fairly the information required to be
stated therein.
(s) Arthur Andersen LLP, who have certified certain financial
statements of the Company, whose report appears in the Final
Prospectus or is incorporated by reference therein and who have
delivered the initial letter referred to in Section 8(i) hereof, are
independent public accountants as required by the Securities Act and
the Rules and Regulations, and KPMG Peat Marwick, LLP, who have
certified certain financial statements of Bay State, whose report
appears in the Final Prospectus or is
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incorporated by reference therein and who have delivered the initial
KPMG letter referred to in Section 8(j) hereof, are independent
public accountants as required by the Securities Act and the Rules
and Regulations.
(t) Each of the Company and each Significant Subsidiary has
good and marketable title in fee simple to such of its fixed assets
as are real property and good and marketable title to its other
assets reflected in the most recent consolidated balance sheet
incorporated by reference in the Final Prospectus, except properties
and assets that are leased or that are sold or otherwise disposed of
in the ordinary course of business after the date of said balance
sheet, subject to no mortgages, liens, charges or encumbrances of
any kind whatsoever ("Liens") other than Liens permitted under the
Indenture.
(u) Other than as set forth or incorporated by reference in
the Final 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 or asset of the Company or any of its
subsidiaries is the subject which could reasonably be expected
individually or in the aggregate to have a Material Adverse Effect;
and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others.
(v) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(w) There are no contracts or other documents which are
required to be described in the Final Prospectus or filed as
exhibits to the Registration Statement by the Securities Act or by
the Rules and Regulations which have not been described in the Final
Prospectus or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and
Regulations.
(x) None of the Company nor any Significant Subsidiary has any
material contingent liability which is not disclosed in the Final
Prospectus.
(y) None of the Company nor any Significant Subsidiary (i) is
in violation of its charter or by-laws or similar constitutive
documents, (ii) is in default in any respect, and no event has
occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject, except where such
defaults, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, or (iii) is in violation
in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its properties or assets
may be subject or has failed to obtain any material license, permit,
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certificate, franchise or other governmental authorization or permit
necessary to the ownership of its properties or assets or to the
conduct of its business, except where such violations or failures,
individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
(z) Neither the Company nor any subsidiary of the Company is
an "investment company" within the meaning of such term under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the
rules and regulations of the Commission thereunder; the Commission
has issued an order (the "Order") exempting Capital Markets from all
of the provisions of the 1940 Act; the Order is in full force and
effect; Capital Markets will continue to comply with the terms and
conditions of the Order, or otherwise remain exempt from all of the
provisions of the 1940 Act, so long as any PIES or Debentures are
outstanding; and Capital Markets will apply the proceeds of the sale
of the Debentures in the manner described in the Final Prospectus
and in accordance with the provisions of Rule 3a-5 under the 1940
Act.
(aa) The Support Agreement has been duly authorized by Capital
Markets and the Company and constitutes a valid and binding
agreement of each of Capital Markets and the Company enforceable
against Capital Markets and the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing;
the Company's obligations under the Support Agreement will rank
prior to the equity securities of the Company and equal with all
other unsecured and unsubordinated indebtedness of the Company,
whether now or hereafter outstanding; and the Debentures and the
Guarantee will be entitled to the benefits of the Support Agreement,
the obligations of Capital Markets under the Debentures and the
Guarantees will be deemed to be "Debt" (as defined in the Support
Agreement) for purposes of the Support Agreement and the holders of
the Debentures and the Guarantee will be entitled to the rights of
"Lenders" (as defined in the Support Agreement) under the Support
Agreement.
(bb) Each of the Company and each Significant Subsidiary has
statutory authority, franchises and consents free from burdensome
restrictions and adequate for the conduct of the business in which
it is engaged.
(cc) Except for the Company's ownership of the voting
securities of the Northern Indiana and IWCR, as and to the extent
described in the Final Prospectus, no person or corporation which is
a "holding company" or a "subsidiary company" of a "holding company"
(as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended (the "1935 Act")), directly or indirectly owns,
controls or holds with power to vote 10% or more of the outstanding
voting securities
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of the Company or any Significant Subsidiary; the Company is a
"holding company" (as such term is defined in the 1935 Act) but is
exempt from all provisions of the 1935 Act pursuant to Section
3(a)(1) thereof except Section 9(a)(2) thereof; neither Northern
Indiana nor IWCR is a "holding company" as defined in the 1935 Act;
and Bay State is a "holding company" but is exempt from all
provisions of the 1935 Act pursuant to Section 3(a)(2) thereof
except Section 9(a)(2) thereof.
(dd) The Final Prospectus accurately describes the most
restrictive of the existing limitations on the payment of dividends
by Northern Indiana on its common shares held by the Company.
2. Representations, Warranties and Agreements of the Company,
Capital Markets and the Trust. The Company, Capital Markets and the Trust,
jointly and severally, represent, warrant and agree that:
(a) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of
the State of Delaware (the "Delaware Trust Act") with the trust power and
authority to own property and conduct its business as described in the
Final Prospectus, and has conducted and will conduct no business other
than the transactions contemplated by this Agreement as described in the
Final Prospectus; the Trust is not a party to or bound by any agreement or
instrument and after the Trust executes the Amended Declaration, the Trust
will not be a party to or bound by any agreement or instrument other than
this Agreement, the Remarketing Agreement, the Amended Declaration and the
other agreements entered into in connection with the transactions
contemplated hereby; the Trust has no liabilities or obligations other
than those arising out of the transactions contemplated by this Agreement,
the Remarketing Agreement and the Amended Declaration and described in the
Final Prospectus; and the Trust is not a party to or subject to any
action, suit or proceeding of any nature.
(b) The Amended Declaration has been duly authorized by Capital
Markets, as Sponsor, and, when duly executed and delivered by Capital
Markets, as Sponsor, and the Regular Trustees (assuming due authorization,
execution and delivery by the Property Trustee and the Delaware Trustee),
will constitute a valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing, and will conform to the description thereof contained in the
Final Prospectus.
(c) The Trust Securities, upon issuance and delivery and payment
therefor in the manner described herein, will be duly authorized, validly
issued, fully paid and, in the case of the Preferred Securities,
non-assessable and will conform to the descriptions contained in the Final
Prospectus.
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(d) This Agreement has been duly authorized, executed and delivered
by the Trust; and the Remarketing Agreement has been duly authorized by
the Trust and will be, when delivered by the Trust, duly executed and
delivered by the Trust.
(e) The execution, delivery and performance of this Agreement, the
Amended Declaration, the Remarketing Agreement and the Trust Securities by
the Trust, the purchase of the Debentures by the Trust from Capital
Markets, the distribution of the Debentures upon the liquidation of the
Trust in the circumstances contemplated by the Amended Declaration, and
the consummation by the Trust of the transactions contemplated herein and
in the Amended Declaration and the Remarketing Agreement (the "Trust
Transactions"), will not result in a violation of any statute or order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its assets; and except for the
registration of the Trust Preferred Securities under the Securities Act,
the qualification of the Amended Declaration under the Trust Indenture
Act, and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act or under
applicable state securities laws in connection with the purchase and
distribution of the Trust Preferred Securities by the Underwriters, no
consent, approval, authorization or order of or filing or registration
with, any such court or governmental agency or body is required for the
Trust Transactions.
(f) The Trust is not an "investment company" within the meaning of
such term under the Investment Company Act and the rules and regulations
of the Commission thereunder.
3. Purchase of the PIES by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the PIES Issuers agree to sell 6,000,000 Firm
PIES to the several Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase the number of the Firm PIES set forth opposite such
Underwriter's name in Schedule 1 hereto.
In addition, the PIES Issuers grant to the Underwriters an option to
purchase up to 900,000 Option PIES. Such option is granted solely for the
purpose of covering over-allotments in the sale of the Firm PIES and is
exercisable as provided in Section 5 hereof. Option PIES shall be purchased
severally for the account of the Underwriters in proportion to the number of
Firm PIES set forth opposite the name of such Underwriter in Schedule 1 hereto.
The respective obligations of each Underwriter with respect to the Option PIES
shall be adjusted by Lehman Brothers Inc. so that no Underwriter should be
obligated to purchase Option PIES other than in 100 unit amounts.
The price of both the Firm PIES and any Option PIES shall be $50 per
PIES.
The Issuers shall not be obligated to deliver any of the PIES to be
delivered on the First Delivery Date (as hereinafter defined) or the Second
Delivery Date (as hereinafter defined), as the case may be, except upon payment
for all the PIES to be purchased on such Delivery Date as provided herein.
13
As compensation to the Underwriters for arranging the purchase of
the Debentures with the proceeds from the sale of the PIES, Capital Markets
will, on the applicable Delivery Date (as such term is defined in Section 5),
pay to Lehman Brothers Inc., for the accounts of the several Underwriters, an
amount equal to $1.50 per PIES to be delivered hereunder on such Delivery Date.
4. Offering of PIES by the Underwriters. Upon authorization by
Lehman Brothers Inc. of the release of the Firm PIES, the several Underwriters
propose to offer the Firm PIES for sale upon the terms and conditions set forth
in the Final Prospectus.
5. Delivery of and Payment for the PIES. Delivery of and payment for
the PIES shall be made at the office of Schiff Hardin & Waite, 6600 Sears Tower,
Chicago, Illinois 60606, at 8:30 A.M., Chicago time, on the fourth full business
day following the date of this Agreement or at such other date or place as shall
be determined by agreement between the Underwriters and the Company. This date
and time are sometimes referred to as the "First Delivery Date." On the First
Delivery Date, the Company, through the facilities of The Depository Trust
Company ("DTC"), shall deliver or cause to be delivered a securities entitlement
with respect to the Firm PIES to the Lehman Brothers Inc. for the account of
each Underwriter against payment to or upon the order of the Trust of the
purchase price by wire transfer of same-day funds to a bank account designated
by the Company. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm PIES shall be registered in
the name of Cede & Co., as nominee for DTC.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 3 may be exercised by written notice
being given to the Company by the Underwriters. Such notice shall set forth the
aggregate number of Option PIES as to which the option is being exercised, the
names in which the Option PIES are to be registered, the denominations in which
the Option PIES are to be issued and the date and time, as determined by the
Underwriters, when the Option PIES are to be delivered; provided, however, that
this date and time shall not be earlier than the First Delivery Date nor earlier
than the second business day after the date on which the option shall have been
exercised nor later than the fifth business day after the date on which the
option shall have been exercised. The date and time the Option PIES are
delivered are sometimes referred to as the "Second Delivery Date" and the First
Delivery Date and the Second Delivery Date are sometimes each referred to as a
"Delivery Date".
Delivery of and payment for the Option PIES shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Underwriters and the Company) at 8:30 A.M., Chicago time, on the Second Delivery
Date. On the Second Delivery Date, the Company, through the facilities of DTC,
shall deliver or cause to be delivered a securities entitlement with respect to
the Option PIES to Lehman Brothers Inc. for the account of each Underwriter
against payment to or upon the order of the Trust of the purchase price by wire
transfer of same-day funds to a bank account designated by the Company. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option PIES shall be registered in the name of
Cede & Co., as nominee of DTC.
14
The Trust Preferred Securities underlying the PIES will be pledged
with the Collateral Agent to secure the holders' obligations to purchase Common
Stock under the Purchase Contracts. Such pledge shall be effected by the
transfer to the Securities Intermediary of the Trust Preferred Securities to be
pledged to the Collateral Agent in accordance with the Pledge Agreement.
6. Further Agreements of the Issuers. The Issuers agree:
(a) To prepare the Final Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than 10:00 A.M., New York City
time, on the second business day following the execution and
delivery of this Agreement; to make no further amendment or any
supplement to the Registration Statement, the Final Prospectus or
any Interim Prospectus except as permitted herein; to advise the
Underwriters, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Final Prospectus or any
amended Final Prospectus has been filed and to furnish the
Underwriters with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed
by the Issuers with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Final
Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the PIES; to
advise the Underwriters, promptly after it receives notice thereof,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of the Final Prospectus or any
Interim Prospectus, of the suspension of the qualification of the
PIES 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 amending or supplementing of the
Registration Statement or the Final Prospectus or for additional
information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of the Final
Prospectus or suspending any such qualification, to use promptly
their best efforts to obtain its withdrawal.
(b) To furnish promptly to the Underwriters and to counsel for
the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith.
(c) To deliver promptly to the Underwriters in New York City
such number of the following documents as the Underwriters shall
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement, the
Indenture, the Amended Declaration, the Guarantee Agreement, the
Purchase Contract Agreement, the Pledge Agreement, the Support
Agreement and the Remarketing Agreement) and, (ii) the Final
Prospectus (not later than 10:00 A.M., New York City time, of the
day following the execution and delivery of this
15
Agreement) and any amended or supplemented Final Prospectus (not
later than 10:00 A.M., New York City time, on the day following the
date of such amendment or supplement) and (iii) any document
incorporated by reference in any Interim Prospectus or Final
Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the date hereof in
connection with the offering or sale of the PIES (or any other
securities relating thereto) and if at such time any event shall
have occurred as a result of which the Final Prospectus as then
amended or supplemented would include any 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 the Final Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Final Prospectus
or to file under the Exchange Act any document incorporated by
reference in the Final Prospectus in order to comply with the
Securities Act, the Exchange Act or the Trust Indenture Act, to
notify the Underwriters and to prepare and to file such amendment,
supplement or document, to cause any amendment of the Registration
Statement containing an amended Final Prospectus to be made
effective as soon as possible and to prepare and, at any time prior
to the expiration of nine months after the date hereof, furnish,
without charge (and at any time thereafter furnish at the expense of
the Underwriters), to each Underwriter and to any dealer in
securities as many copies as the Underwriters may from time to time
request of an amended or supplemented Final Prospectus which will
correct such statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Final Prospectus or any supplement to
the Final Prospectus that may, in the judgment of the Company or the
Underwriters, be required by the Securities Act or requested by the
Commission.
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Final Prospectus or any
document incorporated by reference in the Final Prospectus, to
furnish a copy thereof to the Underwriters and counsel for the
Underwriters; and not to file any such amendment or supplement which
shall be disapproved by the Underwriters promptly after reasonable
notice.
(f) As soon as practicable to make generally available to the
Company's security holders and to deliver to the Underwriters an
earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the
Company, Rule 158).
(g) During a period of five years following the effective date
of the Registration Statement, to deliver to the Underwriters copies
of all reports or other communications (financial or other)
furnished to shareholders of the Company, and
16
deliver to the Underwriters (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed
by the Company or Capital Markets with the Commission or any
national securities exchange on which the PIES or any class of
securities of the Company or Capital Markets is listed; and (ii)
such additional information concerning the business and financial
condition of the Company or Capital Markets as the Underwriters 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 the
Company's shareholders generally or to the Commission).
(h) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Debentures, the
Trust Preferred Securities, the Guarantees, the Purchase Contracts,
the Common Stock, the Corporate PIES and the obligations of the
Company pursuant to the Support Agreement for offering and sale
under the securities laws of such jurisdictions as the Underwriters
may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the
Debentures, the Trust Preferred Securities, the Guarantees, the
Purchase Contracts, the Common Stock, the Corporate PIES and the
obligations of the Company pursuant to the Support Agreement;
provided that in connection therewith, neither the Company nor
Capital Markets nor the Trust, shall be required to qualify as a
foreign corporation or to file a general consent to service of
process in any jurisdiction.
(i) The Company, Capital Markets and the Trust shall not (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any PIES, Common Stock, Purchase Contracts,
Trust Preferred Securities or Debentures, as the case may be, or any
securities of the Company, Capital Markets or the Trust similar to
the PIES, Common Stock, Purchase Contracts, Trust Preferred
Securities or Debentures, or any security convertible into or
exercisable or exchangeable for PIES, Common Stock, Purchase
Contracts, Trust Preferred Securities or Debentures, or file any
registration statement under the Securities Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the PIES,
Common Stock, Purchase Contracts, Trust Preferred Securities or
Debentures, or any securities convertible into or exercisable or
exchangeable for PIES, Common Stock, Purchase Contracts, Trust
Preferred Securities or Debentures, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled
by delivery of PIES, Common Stock, Purchase Contracts, Trust
Preferred Securities, Debentures or such other securities, in cash
or otherwise, for a period of 90 days from the date hereof without
the prior written consent of Lehman Brothers Inc., other than (i)
pursuant to this Agreement, (ii) Treasury PIES or Corporate PIES to
be created or recreated upon
17
substitution of pledged securities or shares of Common Stock
issuable upon early settlement of the Corporate PIES or Treasury
PIES, (iii) any shares of Common Stock issued by the Company upon
exercise of an option, warrant, or the conversion of a security
described herein, (iv) any shares of Common Stock issued, or options
to purchase such shares granted, pursuant to existing employee
benefit plans described in the Final Prospectus, (v) any shares of
Common Stock issued pursuant to any non-employee director stock plan
or dividend reinvestment plan or (vi) any medium-term notes
registered under the Registration Statement as of the date hereof..
(j) To use their best efforts to complete the listing of the
Corporate PIES and the Common Stock to be issued and sold pursuant
to the Purchase Contracts on the New York Stock Exchange, Inc.,
subject only to official notice of issuance and evidence of
satisfactory distribution.
(k) To use the net proceeds received by it from the sale of
the PIES pursuant to this Agreement in the manner specified in the
Final Prospectus under the caption "Use of Proceeds."
7. Expenses. The Company and Capital Markets, jointly and severally,
agree to pay (a) the fees, disbursements and expenses of the Issuers' counsel
and accountants in connection with the registration of the PIES under the
Securities Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Interim Prospectus and
the Final Prospectus and amendments and supplements thereto; (b) the costs
incident to the authorization, issuance, sale and delivery of the Debentures,
Trust Securities, Guarantees, Purchase Contracts, Common Stock to be issued and
sold pursuant to the Purchase Contracts and PIES and any taxes payable in
connection therewith; (c) the costs incident to the preparation, printing and
filing under the Securities Act of the Registration Statement and any amendments
and exhibits thereto; (d) the costs of distributing the Registration Statement
as originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Interim Prospectus, the Final
Prospectus and any amendment or supplement to any such prospectus or any
document incorporated by reference therein, all as provided in this Agreement;
(e) the costs of reproducing and distributing this Agreement; (f) the costs of
distributing the terms of any agreement relating to the organization of the
underwriting syndicate and selling group to the members thereof by mail, telex
or other means of communication; (g) any applicable listing or other fees; (h)
the fees and expenses of qualifying the Debentures, Trust Preferred Securities,
Guarantees, Purchase Contracts, Common Stock, Corporate PIES and the obligations
of the Company pursuant to the Support Agreement under the securities laws of
the several jurisdictions as provided in Section 6(h) and of preparing, printing
and distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (i) the filing fees and any expenses of legal
counsel incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the PIES; (j) any fees
charged by securities rating services for rating the PIES (or any related
security); (k) the fees and expenses of the Purchase Contract Agent, the
Collateral Agent, the Securities Intermediary, the Indenture Trustee, the
Property Trustee, the Delaware Trustee and the Guarantee Trustee and their
respective counsel; (l) any transfer taxes payable in connection with the sale
of the PIES to the
18
Underwriters; and (m) all other costs and expenses incident to the performance
of the obligations of the Issuers under this Agreement; provided that, except as
provided in this Section 7 and in Section 12, the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the PIES which they may sell and the expenses of advertising
any offering of the PIES made by the Underwriters.
8. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Issuers
contained herein, to the performance by the Issuers of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Final Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof or
suspending the qualification of the Indenture, the Guarantee Agreement or
the Amended Declaration shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information in the
Registration Statement or the Final Prospectus or otherwise shall have
been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement
or the Final Prospectus or any amendment or supplement thereto contains
any untrue statement of a fact which, in the opinion of Simpson Thacher &
Bartlett, counsel for the Underwriters, is material or omits to state any
fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Indenture, the
Amended Declaration, the Guarantee Agreement, the Purchase Contract
Agreement, the Pledge Agreement, the Remarketing Agreement, the
Debentures, the Trust Securities, the Guarantees, the Purchase Contracts,
the Common Stock to be issued and sold pursuant to the Purchase Contracts,
the Support Agreement, the Registration Statement, any Interim Prospectus
and the Final Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and
the Issuers shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(d) Schiff Hardin & Waite shall have furnished to the Underwriters
its written opinion, as counsel to the Company and Capital Markets,
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) The Company and each Significant Subsidiary have
been duly incorporated and are validly existing as
corporations in good standing under
19
the laws of their respective jurisdictions of incorporation,
with respective power and authority (corporate and other) to
own their respective properties and conduct their businesses
as described in the Final Prospectus.
(ii) The Company has an authorized capitalization as set
forth in the Final Prospectus, all of the issued capital
shares of the Company and each Significant Subsidiary have
been duly and validly authorized and issued and are fully paid
and non-assessable; and all of the issued common shares of
Northern Indiana and all of the issued capital shares of IWCR
(except for directors' qualifying shares and as set forth or
incorporated by reference in the Registration Statement) are
owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims.
(iii) The Company and each Significant Subsidiary has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any
such jurisdiction.
(iv) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, (A) any shares of Common Stock issuable
pursuant to the Purchase Contracts or (B) the Debentures
pursuant to the Company's or Capital Markets' charter or
by-laws or any agreement or other instrument known to such
counsel.
(v) To the best of such counsel's knowledge and other
than as set forth in the Final 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 or
asset of the Company or any of its subsidiaries is subject
which could reasonably be expected individually or in the
aggregate to have a material adverse effect on the
consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries;
and, to the best of such counsel's knowledge and other than as
set forth in the Final Prospectus, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others.
(vi) The Registration Statement was declared effective
under the Securities Act, and the Indenture, the Amended
Declaration and the Guarantee Agreement were qualified under
the Trust Indenture Act, as of the date and time specified in
such opinion, the Final Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion on the date
specified therein and, to the knowledge of such counsel, no
stop order suspending the effectiveness
20
of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(vii) Giving effect to the interpretations of the
requirements of the Securities Act reflected in the No-Action
Request and the Staff Response, the Registration Statement, as
of its effective date, and the Final Prospectus, as of its
date, and any further amendments or supplements thereto, as of
their respective dates, made by the Issuers prior to such
Delivery Date (other than the financial statements, related
schedules and other financial data contained therein, as to
which such counsel need express no opinion) complied as to
form in all material respects with the requirements of the
Securities Act and the Rules and Regulations and the Trust
Indenture Act; and the documents incorporated by reference in
the Final Prospectus and any further amendment or supplement
to any such incorporated document made by any of the Issuers
prior to such Delivery Date (other than the financial
statements, related schedules and other financial data
contained 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 Securities Act
or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and the Indenture,
the Amended Declaration and the Guarantee Agreement conform in
all material respects to the requirements of the Trust
Indenture Act and the applicable rules and regulations
thereunder.
(viii) The statements contained in the Final Prospectus
under the captions (A) "Description of the Debentures,"
"Description of the Preferred Securities," "Description of the
Guarantee," "Relationship Among the Preferred Securities, the
Debentures and the Guarantee," "Description of the Common
Shares," "Description of the Stock Purchase Contracts and
Stock Purchase Units" and "Description of the Support
Agreement" in the Basic Prospectus and (B) "Prospectus
Supplement SummaryyThe Offering," "Description of the PIES,"
"Description of the Purchase Contracts," "Certain Provisions
of the Purchase Contracts, the Purchase Contract Agreement and
the Pledge Agreement," "Description of the Preferred
Securities," "Description of the Debentures" and "Description
of the Guarantee" in the Prospectus Supplement insofar as they
purport to constitute summaries of certain terms of documents
referred to therein, constitute accurate summaries of the
terms of such documents in all material respects.
(ix) The unissued shares of Common Stock to be issued
and sold by the Company pursuant to the Purchase Contracts
have been duly and validly authorized and reserved for
issuance and when issued and delivered in accordance with the
provisions of the Purchase Contracts, will be duly and validly
issued, fully paid and non-assessable.
21
(x) The Corporate PIES have been duly authorized,
executed and delivered by the Company and (assuming due
execution by the Purchase Contract Agent as attorney-in-fact
of the holders thereof and due authentication by the Purchase
Contract Agent) upon payment therefor as set forth herein,
will be duly and validly issued and outstanding, and will
constitute valid and binding obligations of the Company
entitled to the benefits of the Purchase Contract Agreement
and enforceable against the Company in accordance with their
terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(xi) The Indenture has been duly authorized, executed
and delivered by the Company and Capital Markets and (assuming
due authentication, execution and delivery by the Indenture
Trustee) constitutes a valid and binding agreement of each of
the Company and Capital Markets enforceable against the
Company and Capital Markets in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and
fair dealing.
(xii) The Debentures have been duly authorized, executed
and delivered by Capital Markets and (assuming due
authentication by the Indenture Trustee) upon payment therefor
as set forth herein, will constitute valid and binding
obligations of Capital Markets entitled to the benefits of the
Indenture and enforceable in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and
fair dealing.
(xiii) The Amended Declaration has been duly authorized,
executed and delivered by Capital Markets.
(xiv) The Guarantee Agreement has been duly authorized,
executed and delivered by Capital Markets and (assuming due
execution and delivery by the Guarantee Trustee) constitutes a
valid and binding agreement of Capital Markets enforceable
against Capital Markets in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether
22
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(xv) The Purchase Contract Agreement and the Pledge
Agreement have been duly authorized, executed and delivered by
the Company and (assuming due execution and delivery by the
Purchase Contract Agent and, in the case of the Pledge
Agreement, the Securities Intermediary and the Collateral
Agent) constitute valid and binding agreements of the Company
enforceable against the Company in accordance with their
respective terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing provided, however,
that based on a review of applicable case law, upon the
occurrence of a Termination Event, Section 365(e)(1) of the
Bankruptcy Code (11 U.S.C. ss.ss. 101-1330, as amended) should
not substantively limit the provisions of Sections 3.15 and
5.8 of the Purchase Contract Agreement and Section 5.4 of the
Pledge Agreement that require termination of the Purchase
Contracts and release of the Collateral Agent's security
interest in the Trust Preferred Securities, the Debentures,
the Applicable Ownership Interest (as specified in clause (A)
of the definition thereof in the Amended Declaration) of the
Treasury Portfolio or the Treasury Securities.
(xvi) This Agreement and the Remarketing Agreement have
been duly authorized, executed and delivered by the Company
and Capital Markets.
(xvii) The Support Agreement has been duly authorized,
executed and delivered by the Company and Capital Markets and
constitutes a valid and binding agreement of the Company and
Capital Markets enforceable in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and
fair dealing; the Debentures and the Guarantee will be
entitled to the benefits of the Support Agreement, the
obligations of Capital Markets under the Debentures and the
Guarantees will be deemed to be "Debt" for purposes of the
Support Agreement and the holders of the Debentures and the
Guarantee will be entitled to the rights of "Lenders" under
the Support Agreement.
(xviii) The Transactions will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under,
23
any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which
the Trust, the Company or any of the Significant Subsidiaries
is a party or by which the Trust, the Company or any of the
Significant Subsidiaries is bound or to which any of the
properties or assets of the Trust, the Company or any of the
Significant Subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or
by-laws of the Company or any of the Significant Subsidiaries
or the Amended Declaration or Certificate of Trust of the
Trust or any statute, rule or regulation or any order known to
such counsel of any court or governmental agency or body
having jurisdiction over the Trust, the Company or any of the
Significant Subsidiaries or any of their properties or assets;
and, except for the registration of the Debentures, the Trust
Preferred Securities, the Guarantees, the Purchase Contracts,
the Common Stock to be issued and sold pursuant to the
Purchase Contracts, the Company's obligations under the
Support Agreement and the PIES under the Securities Act, the
qualification of the Indenture, the Amended Declaration and
the Guarantee Agreement under the Trust Indenture Act, and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the
purchase of the PIES by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the Transactions.
(xix) The provisions of the Pledge Agreement are
effective to create, in favor of the Collateral Agent for the
benefit of the Company, a valid and perfected security
interest under the Uniform Commercial Code as in effect on the
date of such opinion in the State of New York (the "New York
UCC") in the Pledged Preferred Securities, Pledged Debentures,
Applicable Ownership Interests (as specified in clause (A) of
the definition thereof in the Amended Declaration) of the
Treasury Portfolio and Pledged Treasury Securities from time
to time credited to the Collateral Account in accordance with
the Pledge Agreement. For purposes of such counsel's opinion,
capitalized terms used in this clause (xix) shall have the
meanings ascribed to such terms in the Pledge Agreement.
(xx) The issuance and sale of the PIES do not contravene
the Commodity Exchange Act or the regulations of the Commodity
Futures Trading Commission.
(xxi) None of the Trust nor the Company or any of its
subsidiaries is, and upon the issuance and sale of the PIES as
herein contemplated and the application of the net proceeds
therefrom as described in the Final Prospectus will not be, an
"investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the 1940
Act.
24
(xxii) Based upon current law and the assumptions stated
or referred to therein: (i) the Trust will be classified as a
grantor trust for United States federal income tax purposes
and not as an association taxable as a corporation; (ii) the
Debentures will be classified as indebtedness of Capital
Markets and (iii) the statements set forth in the Final
Prospectus under the caption "Certain United States Federal
Income Tax Consequences" insofar as they purport to constitute
summaries of matters of United States federal tax laws and
regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein
in all material respects.
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of the
United States of America and the laws of the State of Indiana and
New York (with respect to clause (xi)) and (ii) rely (to the extent
such counsel deems proper and specifies in its opinion), as to
matters involving the application of the laws of the State of
Massachusetts upon the opinion of William D. MacGillivray, Esq. Such
counsel shall also advise the Underwriters that although such
counsel is not passing upon and assumes no responsibility or
liability for the accuracy, completeness or fairness of the
statements contained in the documents incorporated by reference in
the Final Prospectus or any further amendment or supplement thereto
made by the Company or Capital Markets prior to such Delivery Date,
they have no reason to believe that any of such documents (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion), when such documents
became effective or were filed with the Commission, as the case may
be, contained, in the case of a registration statement which became
effective under the Securities Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein necessary to make the statements therein not
misleading, or, in the case of other documents which were filed
under the Securities 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 light of
the circumstances under which they were made when such documents
were so filed, not misleading. Such counsel shall also advise the
Underwriters that although such counsel is not passing upon and,
except as set forth in clauses (viii) and (xxii) above, assumes no
responsibility or liability for the accuracy, completeness or
fairness of the statements contained in the Registration Statement
and the Final Prospectus and any further amendments and supplements
thereto made by the Company or Capital Markets prior to such
Delivery Date, they have no reason to believe that, as of its
effective date, the Registration Statement or any further amendment
thereto made by the Company or Capital Markets prior to such
Delivery Date (other than the financial statements and related
schedules 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 or that, as of its date, the
Final Prospectus or any further amendment or supplement thereto made
by the Company or Capital Markets prior to such Delivery
25
Date (other than the financial statements and related schedules
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 necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading or
that, as of such Delivery Date, either the Registration Statement or
the Final Prospectus or any further amendment or supplement thereto
made by the Company or Capital Markets prior to such Delivery Date
(other than the financial statements and related schedules 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
necessary to make the statements therein, in 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 of 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 Final Prospectus
or required to be described in the Registration Statement or the
Final Prospectus which were not filed or incorporated by reference
or described as required.
(e) Richards, Layton & Finger, P.A. shall have furnished to
the Underwriters its written opinion, as special Delaware counsel to
the Issuers, addressed to the Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Underwriters, to the
effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Trust Act. Under the Delaware Trust Act and the
Amended Declaration, the Trust has the business trust power
and authority to own property and to conduct its business as
described in the Final Prospectus and to enter into and
perform its obligations under this Agreement and the Trust
Securities.
(ii) The Common Securities have been duly authorized by
the Amended Declaration and, when issued and delivered by the
Trust to Capital Markets against payment therefor in
accordance with the terms of the Amended Declaration and as
described in the Final Prospectus, will be validly issued and
(subject to the terms in this paragraph) fully paid undivided
beneficial interests in the assets of the Trust (such counsel
may note that the holders of Common Securities will be subject
to the withholding provisions of Section 10.4 of the Amended
Declaration, will be required to make payment or provide
indemnity or security as set forth in the Amended Declaration
and will be liable for the debts and obligations of the Trust
to the extent provided in Section 9.1(b) of the Amended
Declaration); under the Delaware Trust Act and the Amended
Declaration, the issuance of the Common Securities is not
subject to preemptive rights.
26
(iii) The Trust Preferred Securities have been duly
authorized by the Amended Declaration and, when issued and
delivered in accordance with the terms of the Amended
Declaration against payment therefor as set forth herein, the
Trust Preferred Securities will be validly issued and (subject
to the terms in this paragraph) fully paid and non-assessable
undivided beneficial interests in the assets of the Trust, the
Holders of the Trust Preferred Securities will be entitled to
the benefits of the Amended Declaration (subject to the
limitations set forth in clause (v) below) and will be
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware
(such counsel may note that the holders of Trust Preferred
Securities will be subject to the withholding provisions of
Section 10.4 of the Amended Declaration and will be required
to make payment or provide indemnity or security as set forth
in the Amended Declaration); under the Delaware Trust Act and
the Amended Declaration, the issuance of the Trust Preferred
Securities is not subject to preemptive rights.
(iv) Under the Delaware Trust Act and the Amended
Declaration, all necessary trust action has been taken to duly
authorize the execution, delivery and performance by the Trust
of the Underwriting Agreement and the Remarketing Agreement.
(v) Assuming the Amended Declaration has been duly
authorized by Capital Markets and has been duly executed and
delivered by Capital Markets and the Regular Trustees, and
assuming due authorization, execution and delivery of the
Amended Declaration by the Property Trustee and the Delaware
Trustee, the Amended Declaration constitutes a valid and
binding obligation of Capital Markets and the Regular
Trustees, enforceable against Capital Markets and the Regular
Trustees in accordance with its terms, except to the extent
that enforcement thereof may be limited by (i) bankruptcy,
insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance or transfer and other
similar laws relating to or affecting the rights and remedies
of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at
law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution.
(vi) The issuance and sale by the Trust of the Trust
Securities, the purchase by the Trust of the Debentures, the
execution, delivery and performance by the Trust of the
Underwriting Agreement, the consummation by the Trust of the
transactions contemplated by the Underwriting Agreement and
compliance by the Trust with its obligations thereunder do not
violate
27
any of the provisions of the Certificate of Trust or the
Amended Declaration or any applicable Delaware law or
administrative regulation.
(vii) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware Trustee as
required by the Delaware Trust Act and the filing of documents
with the Secretary of State of Delaware) or employees in the
State of Delaware, no filing with, or authorization, approval,
consent, license, order, registration, qualification or decree
of, any Delaware court or Delaware governmental authority or
agency (other that as may be required under the securities or
blue sky laws of the state of Delaware, as to which such
counsel need express no opinion) is necessary or required to
be obtained by the Trust solely in connection with the due
authorization, execution and delivery by the Trust of the
Underwriting Agreement or the offering, issuance, sale or
delivery of the Trust Preferred Securities.
(f) Kelley Drye & Warren LLP shall have furnished to the
Underwriters its written opinion, as counsel to The Chase Manhattan
Bank, as Property Trustee and Guarantee Trustee, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Underwriters, to the effect that:
(i) Each of the Property Trustee and the Guarantee
Trustee is duly incorporated as a New York banking corporation
with all necessary power and authority to execute and deliver
and perform their respective obligations under the terms of
the Amended Declaration and the Guarantee Agreement.
(ii) The execution, delivery and performance by the
Property Trustee of the Amended Declaration and the execution,
delivery and performance by the Guarantee Trustee of the
Guarantee Agreement have been duly authorized by all necessary
corporate action on the part of the Property Trustee and the
Guarantee Trustee, respectively. The Amended Declaration has
been duly executed and delivered by the Property Trustee and
the Guarantee Agreement has been duly executed and delivered
by the Guarantee Trustee and each constitutes the valid and
binding agreement of the Property Trustee and the Guarantee
Trustee, respectively, enforceable against the Property
Trustee and the Guarantee Trustee, respectively, in accordance
with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
28
(iii) The execution, delivery and performance of the
Amended Declaration and the Guarantee Agreement by the
Property Trustee and the Guarantee Trustee, respectively, do
not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee and the Guarantee Trustee,
respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any New York or federal
banking authority is required for the execution, delivery or
performance by the Property Trustee and the Guarantee Trustee
of the Amended Declaration and the Guarantee Agreement,
respectively.
(g) Richards, Layton & Finger, P.A. shall have furnished to
the Underwriters its written opinion, as counsel to Chase Manhattan
Bank Delaware, as Delaware Trustee, addressed to the Underwriters
and dated such Delivery Date, in form and substance satisfactory to
the Underwriters, to the effect that:
(i) The Delaware Trustee has been duly incorporated and
is validly existing as a banking corporation in good standing
under the laws of the State of Delaware with all necessary
power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of the Amended
Declaration.
(ii) The execution, delivery and performance by the
Delaware Trustee of the Amended Declaration has been duly
authorized by all necessary corporate action on the part of
the Delaware Trustee. The Amended Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes
the valid and binding agreement of the Delaware Trustee
enforceable against the Delaware Trustee in accordance with
its terms, subject to (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or
affecting the rights and remedies of creditors generally, (ii)
principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied
in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
(iii) The execution, delivery and performance of the
Amended Declaration by the Delaware Trustee do not conflict
with or constitute a breach of the charter or by-laws of the
Delaware Trustee.
(iv) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal
banking authority is required for the
29
execution, delivery or performance by the Delaware Trustee of
the Amended Declaration.
(h) Kelley Drye & Warren LLP shall have furnished to the
Underwriters its written opinion, as counsel to The Chase Manhattan
Bank, as Purchase Contract Agent, addressed to the Underwriters and
dated such Delivery Date, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) The Purchase Contract Agent is duly incorporated as
a New York banking corporation with all necessary power and
authority to execute, deliver and perform its obligations
under the Purchase Contract Agreement and the Pledge
Agreement.
(ii) The execution, delivery and performance by the
Purchase Contract Agent of the Purchase Contract Agreement and
the Pledge Agreement, and the authentication and delivery of
the PIES have been duly authorized by all necessary corporate
action on the part of the Purchase Contract Agent. The
Purchase Contract Agreement and the Pledge Agreement have been
duly executed and delivered by the Purchase Contract Agent,
and constitute the valid and binding agreements of the
Purchase Contract Agent, enforceable against the Purchase
Contract Agent in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(iii) The execution, delivery and performance of the
Purchase Contract Agreement and the Pledge Agreement by the
Purchase Contract Agent does not conflict with or constitute a
breach of the charter or by-laws of the Purchase Contract
Agent.
(iv) No consent, approval or authorization of, or
registration with or notice to, any state or federal
governmental authority or agency is required for the
execution, delivery or performance by the Purchase Contract
Agent of the Purchase Contract Agreement and the Pledge
Agreement.
(i) With respect to the letter of Arthur Andersen LLP
delivered to the Underwriters concurrently with the execution of
this Agreement (the "initial letter"), the Issuers shall have
furnished to the Underwriters a letter (the "bring-down letter") of
such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission,
30
(ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is
given in the Final Prospectus, as of a date not more than five days
prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and
other matters covered by the initial letter and (iii) confirming in
all material respects the conclusions and findings set forth in the
initial letter.
(j) With respect to the letter of KPMG Peat Marwick, LLP
delivered to the Underwriters concurrently with the execution of
this Agreement (the "initial KPMG letter"), the Issuers shall have
furnished to the Underwriters a letter (the "bring-down letter") of
such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Final Prospectus, as of a date
not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the conclusions
and findings set forth in the initial KPMG letter.
(k) Each of the Company and Capital Markets shall have
furnished to the Underwriters a certificate, dated such Delivery
Date, of, (i) with respect to the Company, (A) Gary L. Neale, its
Chairman of the Board and President, or Patrick J. Mulchay, its
Executive Vice President, and (B) Stephen P. Adik, its chief
financial officer, and (ii) with respect to Capital Markets, Stephen
P. Adik, its President, and Francis P. Girot, Jr., its chief
financial officer, stating that:
(i) The representations, warranties and agreements of
the Company and Capital Markets in Sections 1 and 2 are true
and correct as of such Delivery Date; the Company and Capital
Markets have complied with all its agreements contained
herein; and the conditions set forth in Section 8(a) have been
fulfilled;
(ii) (A) 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 Final
Prospectus 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, which could,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, otherwise than as set forth or
contemplated in the Final Prospectus and (B) since the
respective
31
dates as of which information is given in the Final
Prospectus, there has not been any material change in the
consolidated share capital or long-term debt of the Company
and its subsidiaries or the consolidated share capital or
long-term debt of any Significant Subsidiary 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 (taken as a whole), otherwise than as set
forth or contemplated in the Final Prospectus; and
(iii) They have carefully examined the Registration
Statement and the Final Prospectus and, in their opinion (A)
the Registration Statement, as of its effective date, and the
Final Prospectus, as of its date, did not include any untrue
statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since such
dates, no event has occurred which should have been set forth
in a supplement or amendment to either of the Registration
Statement or the Final Prospectus.
(l) (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 Final
Prospectus 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 Final Prospectus or (ii) since such date 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, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as
set forth or contemplated in the Final Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in the
judgment of the Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or
the delivery of the PIES being delivered on such Delivery Date on
the terms and in the manner contemplated in the Final Prospectus.
(m) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's or any Significant Subsidiary'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) of
the Rules and Regulations 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
or any Significant Subsidiary's debt securities.
32
(n) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission,
by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall have
been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war
by the United States or (iv) there shall have occurred such a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the
financial markets in the United States shall be such) as to make it,
in the judgment of a majority in interest of the several
Underwriters, impracticable or inadvisable to proceed with the
public offering or delivery of the PIES being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Final Prospectus.
(o) The New York Stock Exchange, Inc. shall have approved the
Corporate PIES for listing, subject only to official notice of
issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
9. Indemnification and Contribution.
(a) The Issuers, jointly and severally, shall indemnify and hold
harmless each Underwriter, its officers and employees and each person, if any,
who controls any Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of PIES), to which that
Underwriter, officer, employee or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in the Registration Statement,
any Interim Prospectus or the Final Prospectus, or in any amendment or
supplement thereto, or (B) in any blue sky application or other document
prepared or executed by any Issuer (or based upon any written information
furnished by the Issuers) specifically for the purpose of qualifying any or all
of the Debentures, the Trust Preferred Securities, the Guarantees, the Purchase
Contracts, the Common Stock or the Corporate PIES under the securities laws of
any state or other jurisdiction (any such application, document or information
being hereinafter called a "Blue Sky Application"), or (ii) the omission or
alleged omission to state in the Registration Statement, any Interim Prospectus
or the Final Prospectus, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading
33
and shall reimburse each Underwriter and each such officer, employee and
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, officer, employee or controlling person
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that none of the Issuers shall be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any Interim Prospectus
or the Final Prospectus, or in any such amendment or supplement, or in any Blue
Sky Application in reliance upon and in conformity with the written information
furnished to the Issuers by any Underwriter specifically for inclusion therein
and described in Section 9(e); and provided further, that as to any Interim
Prospectus this indemnity agreement shall not inure to the benefit of any
Underwriter, its officers or employees or any person controlling that
Underwriter on account of any loss, claim, damage, liability or action arising
from the sale of PIES to any person by that Underwriter if that Underwriter
failed to send or give a copy of the Final Prospectus, as the same may be
amended or supplemented, to that person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in such
Interim Prospectus was corrected in the Final Prospectus, unless such failure
resulted from non-compliance by the Company with Section 6(c). For purposes of
the last proviso to the immediately preceding sentence, the term "Final
Prospectus" shall not be deemed to include the documents incorporated therein by
reference, and no Underwriter shall be obligated to send or give any supplement
or amendment to any document incorporated by reference in any Interim Prospectus
or the Final Prospectus to any person other than a person to whom such
Underwriter had delivered such incorporated document or documents in response to
a written request therefor. The foregoing indemnity agreement is in addition to
any liability which the Issuers may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company and Capital Markets, their officers and employees,
each of their directors, the Trust and each Trustee and each person, if any, who
controls any of the Issuers within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such director or officer, the Trust
or any Trustee or such controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in the Registration Statement,
any Interim Prospectus or the Final Prospectus, or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in the Registration Statement, any Interim Prospectus
or the Final Prospectus, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with the written
information furnished to the Issuers by that Underwriter specifically for
inclusion therein and described in Section 9(e), and shall reimburse the Company
and Capital Markets and any such director or officer, the Trust or any Trustee
or any such controlling
34
person for any legal or other expenses reasonably incurred by the Company or
Capital Markets or any such director or officer, the Trust or any Trustee or any
such controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which any Underwriter may otherwise have to the Company or Capital
Markets or any such director or officer, the Trust or any Trustee or any such
controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Underwriters shall have the right to employ counsel to represent jointly the
Underwriters and their respective officers, employees and controlling persons
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Issuers under this
Section 9 if, in the reasonable judgment of the Underwriters, it is advisable
for the Underwriters and their respective officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Issuers. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss of
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 9 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 9(a) or 9(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein,
35
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the Issuers on the one hand and the Underwriters on the other from
the offering of the PIES or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Issuers on the one hand and the Underwriters on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Issuers
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the PIES purchased under this Agreement (before deducting expenses)
received by the Issuers, on the one hand, and the total compensation received by
the Underwriters with respect to the PIES purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the PIES under
this Agreement, in each case as set forth on the cover page of the Final
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Issuers
or the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Issuers and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 9(d) were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 9(d)
shall be deemed to include, for purposes of this Section 9(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the PIES
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 9(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the PIES set forth on the cover page of, and
under the caption "Underwriting" in, the Final Prospectus are correct and
constitute the only information furnished in writing to the Company by or on
behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Final Prospectus.
10. Defaulting Underwriters.
36
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the PIES which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm PIES set forth opposite the
name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to
the total number of Firm PIES set forth opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the PIES on such Delivery Date if the total number of the PIES which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of PIES to be purchased on such Delivery
Date, and any remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the number of PIES which it agreed to purchase on
such Delivery Date pursuant to the terms of Section 5. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Underwriters who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the PIES to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Underwriters do not elect to purchase the PIES which the defaulting Underwriter
or Underwriters agreed but failed to purchase on such Delivery Date, this
Agreement (or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company to sell, the Option PIES) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Issuers, except that the Company and Capital Markets will continue to be liable
for the payment of expenses to the extent set forth in Section 7. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 10, purchases Firm PIES or
Option PIES which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Issuers for damages caused by its default. If
other underwriters are obligated or agree to purchase the PIES of a defaulting
or withdrawing Underwriter, either the Underwriters or the Company may postpone
the First Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Final
Prospectus or in any other document or arrangement.
11. Termination.
The obligations of the Underwriters hereunder may be terminated by
the Underwriters by notice given to and received by the Company prior to
delivery of and payment for the Firm PIES if, prior to that time, any of the
events described in Sections 8(l), 8(m) or 8(n) shall have occurred or if the
Underwriters shall decline to purchase the PIES for any reason permitted under
this Agreement.
12. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the PIES for delivery to the Underwriters for any reason
permitted under this Agreement, or
37
(b) the Underwriters shall decline to purchase the PIES for any reason permitted
under this Agreement (including the termination of this Agreement pursuant to
Section 11 other than in accordance with Section 10 as a result of the default
by any Underwriter), the Company shall reimburse the Underwriters for the fees
and expenses of their counsel and for such other out-of-pocket expenses as shall
have been incurred by them in connection with this Agreement and the proposed
purchase of the PIES, and upon demand the Company shall pay the full amount
thereof to the Underwriters. If this Agreement is terminated pursuant to Section
10 by reason of the default of one or more Underwriters, the Company shall not
be obligated to reimburse any defaulting Underwriter on account of those
expenses.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Lehman Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: 212-528-8822);
(b) if to the Company, Capital Markets or to the Trust, shall
be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement,
Attention: Treasurer (Fax: 219-853-5352);
provided, however, that any notice to an Underwriter pursuant to Section 9(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to Lehman Brothers
Inc., which address will be supplied to any other party hereto by Lehman
Brothers Inc. upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Issuers shall be entitled
to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by Lehman Brothers Inc.
14. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Issuers and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Issuers contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of each Underwriter and the person or persons, if any, who control
each Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 9(b) of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Issuers and any person controlling the Issuers within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 14, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Issuers and the Underwriters contained in this
Agreement or made by or on behalf
38
of them, respectively, pursuant to this Agreement, shall survive the delivery of
and payment for the PIES and shall remain in full force and effect, regardless
of any investigation made by or on behalf of any of them or any person
controlling any of them.
16. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
39
If the foregoing correctly sets forth the agreement among the
Company, Capital Markets, the Trust, and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
NIPSCO INDUSTRIES, INC.
By:
-------------------------------
Title:
NIPSCO CAPITAL MARKETS, INC.
By:
-------------------------------
Title:
NIPSCO CAPITAL TRUST I
By: NIPSCO Capital Markets, Inc., as
Sponsor
By:
-------------------------------
Title:
Accepted:
LEHMAN BROTHERS INC.
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
By: LEHMAN BROTHERS INC.
By:
-------------------------
Authorized Representative
SCHEDULE 1
Number of
Firm
Underwriters PIES
------------ ---------
Lehman Brothers Inc. ....................................... 3,300,000
Goldman, Sachs & Co. ....................................... 1,350,000
Morgan Stanley & Co. Incorporated .......................... 1,350,000
---------
Total ................................................ 6,000,000
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