Draft 6/23/99
Southern Indiana Gas and
Electric Company
Underwriting Agreement
To the Representatives of the
several Underwriters named in
the respective Pricing Agreements
hereinafter described.
________ __, 1999
Dear Sirs:
From time to time Southern Indiana Gas and Electric Company, an
Indiana corporation (the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
Senior Notes specified therein) certain of its Senior Notes (the "Senior
Notes"). Senior Notes specified in Schedule II to a Pricing Agreement are
hereinafter referred to as the "Designated Senior Notes" with respect to such
Pricing Agreement.
The Senior Notes are to be issued under a governing indenture
(together with any supplements, the "Senior Note Indenture") each between the
Company and ___________________, as Trustee (the "Senior Note Trustee"), in
substantially the form heretofore delivered to the Representatives. Until the
Release Date (as defined in the Senior Note Indenture), the Senior Notes will be
secured by one or more series of Senior Note First Mortgage Bonds (as defined in
the Senior Note Indenture) issued and delivered by the Company to the Senior
Note Trustee. On the Release Date, the Senior Notes will cease to be secured by
the Senior Note First Mortgage Bonds and will become unsecured obligations of
the Company. The Senior Note First Mortgage Bonds securing the Senior Notes will
be issued under the Company's Mortgage and Deed of Trust, dated as of April 1,
1932, with Bankers Trust Company, New York, New York, as Trustee (the "Mortgage
Trustee"), as heretofore supplemented and amended by
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Supplemental Indentures and as the same may be further supplemented by a
Supplemental Indenture relating to the Senior Note First Mortgage Bonds (such
Mortgage and Deed of Trust, as so supplemented and amended and as to be
supplemented and amended being hereinafter referred to as the "Mortgage" and
such Supplemental Indenture being referred to as the "Supplemental Indenture").
The terms and rights of the Senior Notes shall be as specified in the Pricing
Agreement relating thereto and specified in or pursuant to the Senior Note
Indenture.
1. Particular sales of Designated Senior Notes may be made from time
to time to the Underwriters of such Senior Notes for whom the firms designated
as representatives of the Underwriters of such Senior Notes in the Pricing
Agreement relating thereto will act as representatives (the "Representatives").
The term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to Underwriters who act without any firm
being designated as their representative. This Agreement shall not be construed
as an obligation of the Company to sell any of the Senior Notes to the
Underwriters or as an obligation of any of the Underwriters to purchase any of
the Senior Notes. The obligation of the Company to issue and sell any of the
Senior Notes and the obligation of any of the Underwriters to purchase any of
the Senior Notes shall be evidenced by the Pricing Agreement with respect to the
Designated Senior Notes specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Senior Notes, the public
offering price of such Designated Senior Notes, the purchase price to the
Underwriters of such Designated Senior Notes, the names of the Underwriters of
such Designated Senior Notes, the names of the Representatives of such
Underwriters and the principal amount of such Designated Senior Notes to be
purchased by each Underwriter, and shall set forth the date, time and manner of
delivery of such Designated Senior Notes and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Senior Note
Indenture, the Registration Statement (as defined in Section 2 hereof) and the
Prospectus (as defined in Section 2 hereof)) the terms of such Designated Senior
Notes. A Pricing Agreement shall be in the form of an executed writing (which
may be in counterparts), and may be evidenced by an exchange of telegraphic
communications or communications transmitted through any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement in respect of the Senior Notes has been
filed with the Securities and Exchange Commission (the "Commission"); such
registration statement
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and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding
exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus contained therein, to the
Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed, pursuant to rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to such registration statement
or document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission; and no stop order suspending
the effectiveness of such registration statement or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in such registration statement or filed
with the Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Act being hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement and the Rule
462(b) Registration Statement, if any, including all exhibits thereto and
the documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective but excluding Form T-1, each as amended at the time such
part of the Registration Statement became effective or such part of the
Rule 462(b) Registration Statement, if any, became effective, being
hereinafter called the "Registration Statement"; the prospectus relating
to the Senior Notes, in the form in which it has most recently been filed,
or transmitted for filing, with the Commission on or prior to the date of
this Agreement, being hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a)
or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in
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the Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Senior Notes in the
form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter of Designated Senior Notes through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Senior Notes;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939 (the "Trust Indenture Act")
and the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration
Statement and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter of
Designated Senior Notes through
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the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Senior Notes;
(d) Other than as set forth in or contemplated by the Prospectus,
(i) the Company has not sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business whether or
not insured against; and (ii) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been, and prior to the Time of Delivery (as defined in
Section 4 hereof) there will not be, any change in the capital stock,
long-term debt or long-term lease obligations or commitments of the
Company (other than as occasioned by shares of common stock having been
issued pursuant to the Company's Dividend Reinvestment and other stock
plans) or any material adverse change, or any development which the
Company has reasonable cause to believe will involve a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company;
(e) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Indiana
with full power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus and to execute and
deliver this Agreement and to perform its obligations hereunder and under
any Pricing Agreement, and the Company is not qualified as a foreign
corporation in any jurisdiction and the nature of its operations is such
that it is not required to be so qualified;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(g) The Company has good and marketable title in fee simple to all
of the principal plants and other important units of the Company's
property referred to in the Prospectus, except as to Unit Number Four
located in the Warrick Power Plant of Alcoa Generating Corporation in
which Unit the Company has good and marketable title in fee simple as a
tenant in common with Alcoa Generating Corporation, and except that the
Company's transmission and distribution lines and mains are constructed
principally either under indeterminate permits or other permits from
governmental authorities or on rights-of-way held by the Company in fee
simple title or by easement from apparent owners and, in addition to the
fee simple ownership of certain lands for gas storage purposes, the
Company owns rights of gas storage
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and other rights incidental thereto which other rights are in the nature
of easements only; the transmission and distribution lines and pipeline
and storage easements enjoyed by the Company are valid, subsisting and
enforceable easements with such exceptions as are not material and do not
interfere with the conduct of the business of the Company; substantially
all the physical property and franchises owned by the Company are subject
to the Mortgage; any property held under lease by the Company is held by
it under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be
made by the Company of any such property that is material to the business
of the Company; the gas purchase contracts referred to in the Prospectus
are valid and binding contracts in accordance with their terms; the
operating agreement with Alcoa Generating Corporation referred to in the
Prospectus is a valid and binding contract in accordance with its terms;
and except as otherwise set forth in the Prospectus, the Company possesses
all licenses, franchises, indeterminate permits, necessity certificates,
and other permits, authorizations, approvals, consents and orders of all
governmental authorities or agencies necessary for the ownership,
operation or lease of the properties owned, operated or leased by it and
for the operation of its business as described in the Registration
Statement and Prospectus; all such licenses, franchises, indeterminate
permits, necessity certificates, other permits, authorizations, approvals,
consents and orders are in full force and effect and contain no unduly
burdensome provisions and, except as otherwise set forth in the
Prospectus, there are no legal, governmental or administrative proceedings
pending or, to the knowledge of the Company, threatened that would result
in a material modification, suspension or revocation thereof;
(h) This Agreement has been duly and validly authorized, executed
and delivered on behalf of the Company; any Pricing Agreement, when
executed and delivered by the Company, will have been duly and validly
authorized, executed and delivered on behalf of the Company; the Senior
Notes and the Senior Note First Mortgage Bonds have been duly and validly
authorized, and, when issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect to such Designated Senior Notes, will
have been duly and validly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations, subject to the
qualifications noted below, of the Company entitled to the benefits
provided by the Senior Note Indenture and the Mortgage, respectively,
which will be substantially in the forms filed as an exhibit to the
Registration Statement; the Senior Note Indenture and the Mortgage have
been duly and validly authorized, and duly qualified under the Trust
Indenture Act, and constitute
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valid and legally binding instruments of the Company, enforceable in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Senior Note Indenture and the Mortgage conform and the
Designated Senior Notes will conform, to the descriptions thereof in the
Prospectus as amended or supplemented with respect to such Designated
Senior Notes;
(i) The Mortgage constitutes a legally valid and directly
enforceable first mortgage lien (except as enforceability of such lien may
be limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights) upon substantially all of
the Company's properties and franchises, free from all prior liens,
charges or encumbrances other than excepted encumbrances as defined
therein;
(j) The issuance and sale of the Senior Notes, the issuance of the
Senior Note First Mortgage Bonds and the compliance by the Company with
all of the provisions of the Senior Notes, Senior Note First Mortgage
Bonds, the Senior Note Indenture, the Mortgage, this Agreement and any
Pricing Agreement, and the consummation of the transactions contemplated
herein and therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or (except for liens created by the Mortgage) result in the
creation or imposition of any lien, charge or encumbrance upon any of the
property or assets of the Company pursuant to the terms of any statute,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is subject,
nor will such action result in the violation of the provisions of the
Company's Amended Articles of Incorporation or By-laws, or any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties; and no
consent, approval, authorization, order, registration or qualification of
or with any court or any such regulatory authority or other governmental
agency or body is required for the issue and sale of the Senior Notes or
the consummation by the Company of the other transactions contemplated by
this Agreement or any Pricing Agreement or the Senior Note Indenture or
the Mortgage except the order or orders of the Indiana Utility Regulatory
Commission which have been, or will have been prior to the Time of
Delivery, obtained and are or will be in full force and effect,
authorizing the issuance and sale of the Senior Notes and the Senior Note
First Mortgage Bonds, and such as may be required under the Act and the
Trust Indenture Act and such
8
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Senior Notes by the Underwriters;
(k) Except as set forth in the Prospectus, there are no legal,
governmental or administrative proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, which if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the general affairs, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries; and, except as so set forth, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(l) Arthur Andersen & Co., who have certified certain financial
statements of the Company, are independent public accountants as defined
in the Act and the rules and regulations of the Commission thereunder;
(m) The Company is a "holding company" as such term is defined under
the Public Utility Holding Company Act (the "1935 Act") and the Company is
exempt from all provisions of the 1935 Act except Section 9(A)(2); and
(n) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to which
the business or operations of the Company or any of its subsidiaries will
be affected by the Year 2000 Problem and has completed or is in the
process of completing measures which are designed to address the Year 2000
Problem. As a result of such review and such measures, the Company has no
reason to believe, and does not believe, that the Year 2000 Problem will
have a material adverse effect on the general affairs, management, the
current or future consolidated financial position, business prospects,
stockholders' equity or results of operations of the Company and its
subsidiaries or result in any material loss or interference with the
Company's business or operations. The "Year 2000 Problem" as used herein
means any significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of
dates or time periods occurring after December 31, 1999, function at least
as effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
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3. Upon the execution of the Pricing Agreement applicable to any
Designated Senior Notes and authorization by the Representatives of the release
of such Designated Senior Notes, the several Underwriters propose to offer such
Designated Senior Notes for sale upon the terms and conditions set forth in the
Prospectus as amended and supplemented.
4. Designated Senior Notes to be purchased by each Underwriter
pursuant to the Pricing Agreement relating thereto, in definitive form to the
extent practicable, and in such authorized denominations and registered in such
names as the Representatives may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company to the
Representatives at least forty-eight hours in advance, all at the place and time
and date specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such time
and date being herein called the "Time of Delivery" for such Senior Notes.
5. The Company agrees with each of the Underwriters of any
Designated Senior Notes:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Senior Notes in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Senior Notes or, if
applicable, such earlier time as may be required by Rule 424(b); to make
no further amendment or any supplement to the Registration Statement or
Prospectus as amended and supplemented after the date of the Pricing
Agreement relating to such Senior Notes and prior to the Time of Delivery
for such Senior Notes which shall be disapproved by the Representatives
for such Senior Notes promptly after reasonable notice thereof; to advise
the Representatives promptly of any such amendment or supplement after
such Time of Delivery and furnish the Representatives with copies thereof;
to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so
long as the delivery of a prospectus is required in connection with the
offering or sale of such Senior Notes, and during such same period to
advise the Representatives, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has become
effective or any amendment or supplement to the Prospectus or any amended
10
Prospectus has been filed, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any prospectus
relating to the Senior Notes, of the suspension of the qualification of
such Senior Notes 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 Prospectus or for additional information; and in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Senior
Notes or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Senior Notes for
offering and sale under the securities laws of such jurisdictions as the
Representatives 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 such Senior
Notes, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with copies of the Registration
Statement and of each amendment and supplement thereto and copies of the
Prospectus as amended and supplemented in such quantities as the
Representatives may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time in connection with the
offering or sale of any Designated Senior Notes and if at such time any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to so notify the
Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer
in Senior Notes as many copies as the Representatives may from time to
time reasonably request; and in case any Underwriter is required to
deliver a Prospectus in connection with sales of any Designated Senior
Notes at any
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time nine months or more after the time or issue of the Prospectus
relating to such Designated Senior Notes, upon the request of the
Representatives but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as the Representatives may
request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than 90 days after the close of
the period covered thereby, an earnings statement of the Company and its
subsidiaries, if any (which need not be audited), complying with Section
11(a) of the Act (including, at the option of the Company, Rule 158
thereunder) and covering (i) a twelve-month period beginning not later
than the first day of the fiscal quarter next following the date of the
Pricing Agreement and (ii) after the date of the post-effective amendment,
if any, to the Registration Statement next preceding the date of the
Pricing Agreement relating to the Designated Senior Notes;
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Senior Notes and continuing to and including
the earlier of (i) the termination of trading restrictions on such
Designated Senior Notes, as notified to the Company by the Representatives
and (ii) the Time of Delivery for such Designated Senior Notes, not to
offer, sell, contract to sell or otherwise dispose of any debt Senior
Notes of the Company which mature more than one year after such Time of
Delivery and which are substantially similar to such Designated Senior
Notes, without the prior written consent of the Representatives; and
(f) To apply the net proceeds from the sale of the Senior Notes in
the manner set forth under "Use of Proceeds" in the Prospectus.
(g) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the
date of this Agreement, and the Company shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Senior Notes under the Act and all other
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expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
(except as otherwise expressly provided in Section 5(c) hereof) amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing any Agreement among
Underwriters, this Agreement, any Pricing Agreement, any Mortgage, any Senior
Note Indenture, any Blue Sky and Legal Investment Memoranda and any other
documents in connection with the offering, purchase, sale and delivery of the
Senior Notes; (iii) all expenses in connection with the qualification of the
Senior Notes for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with Blue
Sky and legal investment surveys; (iv) any fees charged by securities rating
services for rating the Senior Notes or the Senior Note First Mortgage Bonds;
(v) any filing fees incident to any required review by the National Association
of Securities Dealers, Inc., of the terms of the sale of the Senior Notes; (vi)
the cost of printing, preparing and delivering the Senior Notes; (vii) the fees
and expenses of any Senior Note Trustee or Mortgage Trustee and any agent of any
Senior Note Trustee or Mortgage Trustee and the fees and disbursements of
counsel for any Senior Note Trustee in connection with any Mortgage or Senior
Note Indenture and the Senior Notes or the Senior Note First Mortgage Bonds;
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section; and (ix) any advertising expenses connected with the offering and sale
of the Senior Notes so long as such advertising expenses have been approved by
the Company. It is understood, however, that, except as provided in this
Section, Section 8 and Section 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Senior Notes by them, and any advertising expenses
connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Senior
Notes under the Pricing Agreement relating to such Designated Senior Notes shall
be subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Senior Notes are, at and as of the Time of Delivery for such Designated Senior
Notes, true and correct, the condition that the Company shall have performed all
of its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Senior Notes shall have been filed with the
Commission pursuant to Rule 424(b)
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within the applicable time period prescribed for such filing by the rules
and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to the Representatives such opinion or opinions, dated the
Time of Delivery for such Designated Senior Notes, with respect to such
matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Bamberger, Foreman, Oswald and Hahn, counsel for the Company,
shall have furnished to the Representatives their written opinion, dated
the Time of Delivery for such Designated Senior Notes, in form and
substance satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Indiana, with full power and authority (corporate and
other) to own its properties and conduct its business as described
in the Prospectus as amended or supplemented; to the best of such
counsel's knowledge, the Company is not qualified as a foreign
corporation in any jurisdiction and the nature of its operations is
such that it is not required to be so qualified;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented, and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(iii) The Company has good and marketable title in fee simple
to all of the principal plants and other important units of the
Company's property referred to in the Prospectus, except as to Unit
Number Four located in the Warrick Power Plant of Alcoa Generating
Corporation in which Unit the Company has good and marketable title
in fee simple as a tenant in common
14
with Alcoa Generating Corporation, and except that the Company's
transmission and distribution lines and mains are constructed
principally either under indeterminate permits or other permits from
governmental authorities or on rights-of-way held by the Company in
fee simple title or by easement from apparent owners and, in
addition to the fee simple ownership of certain lands for gas
storage purposes, the Company owns rights of gas storage and other
rights incidental thereto which other rights are in the nature of
easements only; and the Indenture constitutes, as security for the
Senior Note First Mortgage Bonds, and other First Mortgage Bonds, a
first lien on substantially all the physical property and franchises
owned by the Company, subject only to excepted encumbrances, as
therein defined, and upon the acquisition hereafter by the Company
of similar property, will, subject to liens existing thereon at the
time of acquisition and to the due recordation of the Supplemented
Indenture in the counties in which property is located, create such
lien thereon;
(iv) Except as otherwise set forth in or contemplated by the
Prospectus, the Company possesses all licenses, franchises,
indeterminate permits, necessity certificates, and other permits,
authorizations, approvals, consents and orders of all governmental
authorities or agencies necessary for the ownership, operation or
lease of the properties owned, operated or leased by it and for the
operation of its business as described in the Registration Statement
and Prospectus, all such licenses, franchises, indeterminate
permits, necessity certificates, other permits, authorizations,
approvals, consents and orders are in full force and effect and
contain no unduly burdensome provisions and, except as otherwise set
forth in the Prospectus, there are no legal or governmental
proceedings pending or, to the knowledge of such counsel, threatened
that would result in a material modification, suspension or
revocation thereof;
(v) To the best of such counsel's knowledge after due inquiry
there are no legal or governmental proceedings pending to which the
Company is a party or of which property of the Company is the
subject, other than as set forth in the Prospectus as amended or
supplemented and except for proceedings incident to the kind of
business conducted by the Company which individually and in the
aggregate are not material to the Company; and to the best of such
counsel's knowledge no such proceedings are threatened or
15
contemplated by governmental authorities or threatened by others;
(vi) This Agreement and the Pricing Agreement with respect to
the Designated Senior Notes have been duly authorized, executed and
delivered by the Company;
(vii) The Designated Senior Notes have been duly authorized,
executed, authenticated, issued and delivered and constitute valid
and legally binding obligations of the Company entitled (subject to
the qualifications noted in Paragraph (viii) below) to the benefits
provided by the Senior Note Indenture; and the Designated Senior
Notes and the Senior Note Indenture conform to the description
thereof in the Prospectus as amended or supplemented;
(viii) The Senior Note Indenture has been duly authorized,
executed and delivered by the parties thereto and constitutes a
valid and legally binding instrument, enforceable in accordance with
its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; the Senior Note Indenture has been duly qualified under
the Trust Indenture Act, and all taxes and fees required to be paid
with respect to the execution and delivery of the Senior Note
Indenture, the filing and recording of the Senior Note Indenture and
the issuance of the Senior Notes have been paid;
(ix) The Senior Note First Mortgage Bonds have been duly
authorized, executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the Company
entitled (subject to the qualifications noted in Paragraph (x)
below) to the benefits provided by the Mortgage;
(x) The Mortgage has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms,
[except as the same may be limited by laws of the States of Indiana
and Kentucky, where the property covered thereby is located,
relating to or affecting the remedies for the enforcement of the
security provided therein, which laws do not, in the opinion of such
counsel, make inadequate the remedies necessary for the realization
of the benefits of such security,] or as the same may be limited by
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
16
general equity principles; the Indenture has been duly qualified
under the Trust Indenture Act, and all taxes and fees required to be
paid with respect to the execution and delivery of the Mortgage, the
filing and recording of the Mortgage and the issuance of the Senior
Note First Mortgage Bonds have been paid;
(xi) The issuance and sale of the Designated Senior Notes and
the Senior Note First Mortgage Bonds and the compliance by the
Company with all of the provisions of the Designated Senior Notes,
the Senior Note Indenture, the Senior Note First Mortgage bonds, the
Mortgage, this Agreement and the Pricing Agreement with respect to
the Designated Senior Notes and the Senior Note First Mortgage Bonds
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, or (except for liens created by the Mortgage) result
in the creation or imposition of any lien, charge or encumbrance
upon any of the property or assets of the Company pursuant to the
terms of any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which the Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject, nor
will such action result in the violation of the provisions of the
Company's Amended Articles of Incorporation or By-Laws, or any
statute or any order, rule or regulation of any court or
governmental agency or entity having jurisdiction over the Company
or any of its properties;
(xii) The Indiana Utility Regulatory Commission has duly
authorized the issuance and sale of the Senior Notes and the Senior
Note First Mortgage Bonds as contemplated by this Agreement, such
approval is in full force and effect and the time to appeal has
expired, and no further consent, approval, authorization or order of
or registration or qualification with any court or governmental
agency or body is required for the issue and sale of the Senior
Notes or the Senior Note First Mortgage Bonds or the consummation by
the Company of the transactions contemplated by this Agreement or
any Pricing Agreement or the Mortgage or the Senior Note Indenture,
except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Senior Notes by the Underwriters;
17
(xiii) Such counsel has no reason to believe that any of the
documents incorporated by reference in the Prospectus (other than
the financial statements and other financial data therein, as to
which such counsel need express no opinion), when they were filed
with the Commission, failed to comply as to form in all material
respects with the requirements of the Act, the Exchange Act and the
Trust Indenture Act, as applicable, and the rules and regulations of
the Commission thereunder, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading; and
(xiv) Such counsel has no reason to believe that, as of the
Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and such counsel does not know 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 Prospectus or required to be
described in the Registration Statement or the Prospectus which are
not filed or incorporated by reference or described as required;
(d) Winthrop, Stimson, Putnam & Roberts, counsel to the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery for such Designated Senior Notes in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing in good standing under the laws of the State of Indiana,
with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus
as amended or supplemented;
(ii) The Designated Senior Notes have been duly authorized,
executed, authenticated, issued and delivered and constitute valid
and legally binding obligations of the Company entitled (subject to
the qualifications noted in Paragraph (iii) below) to the benefits
provided by the Senior Note Indenture; and the Designated Senior
Notes and the Senior Note Indenture
18
conform to the description thereof in the Prospectus as amended or
supplemented;
(iii) The Senior Note Indenture has been duly authorized,
executed and delivered by the parties thereto and constitutes a
valid and legally binding instrument, enforceable in accordance with
its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Senior Note Indenture has been duly qualified
under the Trust Indenture Act, and all taxes and fees required to be
paid with respect to the execution and delivery of the Senior Note
Indenture, the filing and recording of the Senior Note Indenture and
issuance of the Senior Notes have been paid;
(iv) The Senior Note First Mortgage Bonds have been duly
authorized, executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the Company
entitled (subject to the qualifications noted in Paragraph (v)
below) to the benefits provided by the Mortgage; and the Senior Note
First Mortgage Bonds and the Mortgage conform to the description
thereof in the Prospectus as amended or supplemented;
(v) The Mortgage has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, except
as the same may be limited by laws of the States of Indiana and
Kentucky, where the property covered thereby is located, relating to
or affecting the remedies for the enforcement of the security
provided for therein, or as the same may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Mortgage has been duly qualified under the Trust
Indenture Act, and all taxes and fees required to be paid with
respect to the execution and delivery of the Mortgage, the filing
and recording of the Mortgage and issuance of the Senior Note First
Mortgage Bonds have been paid;
(vi) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
other financial data 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
19
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and they have no reason to
believe that any of such documents, when they became effective or
were so filed, as the case may be, contained 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; and
(vii) The Registration Statement has become effective under
the Act and to the best knowledge of such counsel no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or,
to the knowledge of such counsel, threatened by the Commission; and
(viii) The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the
Designated Senior Notes (other than the financial statements and
other financial data therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder; they have no reason to believe that, as
of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the Time of Delivery
(other than the financial statements and other financial data
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
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and other financial data
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 in which they were made, not misleading or that,
as the Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and other financial data
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
20
necessary to make the statement therein, in light of the
circumstances in which they were made, not misleading; and they do
not know of any amendment to the Registration Statement required to
be filed or any contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or required
to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which are not
filed or incorporated by reference or described as required;
(ix) The terms of the Senior Notes conform as to legal matters
to the descriptions thereof and the statements in regard thereto
contained in the Registration Statement and the Prospectus as
amended or supplemented;
(x) The Indiana Utility Regulatory Commission has duly
authorized the issuance and sale of the Senior Notes and the Senior
Note First Mortgage Bonds as contemplated by this Agreement, such
approval is in full force and effect and the time to appeal has
expired, and no further consent, approval, authorization or order of
or registration or qualification with any court or governmental
agency or body is required for the issue and sale of the Senior
Notes or the Senior Note First Mortgage Bonds or the consummation by
the Company of the transactions contemplated by this Agreement of
any Pricing Agreement, the Mortgage or the Senior Note Indenture,
except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Senior Notes by the Underwriters; and
(xi) This Agreement and the Pricing Agreement relating to such
Designated Senior Notes have been duly authorized, executed and
delivered by the Company.
It is understood that in rendering such opinion, Winthrop, Stimson,
Putnam & Roberts may rely as to matters of Indiana and Kentucky law upon the
opinion of Bamberger, Foreman, Oswald and Hahn;
(e) At the Time of Delivery for such Designated Senior Notes, the
independent accountants of the Company who have certified the financial
statements of the Company and its subsidiaries, if any, included or
incorporated by reference in the Registration Statement shall have
furnished to the
21
Representatives a letter dated such Time of Delivery in form and substance
satisfactory to the Representatives, to the effect set forth in Annex II
hereto and as to such other matters as the Representatives may reasonably
request;
(f) Other than as set forth or contemplated in the Prospectus as
amended or supplemented (i) the Company shall not have sustained since the
date of the latest audited financial statements included or incorporated
by reference in the Prospectus as amended or supplemented any loss or
interference with its business whether or not insured against, and (ii)
since the respective dates as of which information is given in the
Prospectus as amended or supplemented there shall not have been any change
in the capital stock, long-term debt or long-term lease obligations or
commitments of the Company (other than occasioned by shares of common
stock having been issued pursuant to the Company's Dividend Reinvestment
and other stock plans) 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, the effect of which in any such case described in Clause (i) or
(ii) is in the judgment of the Representatives so material and adverse as
to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Senior Notes on the terms and
in the manner contemplated in the Prospectus as amended or supplemented;
(g) On or after the date of the Pricing Agreement relating to the
Designated Senior Notes, (i) no downgrading shall have occurred in the
rating accorded the Company's [senior] debt securities by any "nationally
recognized statistical rating organization," as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Senior Notes there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the outbreak or escalation
of hostilities involving the United States or the declaration by the
United States of a national emergency or war if the effect of any such
event specified in this Clause (iii) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Senior Notes on
22
the terms and in the manner contemplated in the Prospectus as amended or
supplemented;
(i) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(j) The Company shall have furnished or caused to be furnished to
the Representatives at the Time of Delivery for the Designated Senior
Notes a certificate or certificates of officers of the Company
satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of this
Section and as to such other matters as the Representatives may reasonably
request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Senior Notes, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Senior Notes, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Senior Notes through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Senior Notes; and
provided further, that the Company shall not be liable to any Underwriter under
the indemnity agreement in this subsection (a) with respect to any Preliminary
Prospectus to the extent that any such loss, claim, damage or liability of such
Underwriter results from the fact
23
that such Underwriter sold Designated Senior Notes to a person as to whom it
shall be established that there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus in any case where
such delivery is required by the Act if such Underwriter failed to make
reasonable efforts generally consistent with the then prevailing industry
practice and the Company has previously furnished copies thereof in sufficient
quantity and on a timely basis to such Underwriter and the loss, claim, damage
or liability of such Underwriter results from an untrue statement or omission of
a material fact contained in the Preliminary Prospectus which was identified in
writing to such Underwriter and corrected in the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Senior Notes, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Senior Notes, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under Subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel
24
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Underwriters of the
Designated Senior Notes on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations, including relative benefit. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Underwriters on the other, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Subsection (d) were 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 account of the
equitable considerations referred to above in this Subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
Subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Senior Notes
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be
25
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Senior
Notes in this Subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Senior Notes and not
joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Designated Senior Notes which it has agreed to purchase under the
Pricing Agreement relating to such Designated Senior Notes, the Representatives
may in their discretion arrange for themselves or another party or other parties
to purchase such Designated Senior Notes on the terms contained herein. If
within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Designated Senior Notes,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Senior Notes on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Company that they have so arranged for the purchase of such Designated
Senior Notes, or the Company notifies the Representatives that it has so
arranged for the purchase of such Designated Senior Notes, the Representatives
or the Company shall have the right to postpone the Time of Delivery for such
Designated Senior Notes for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section 9 with like effect as if such person had originally been a
party to the Pricing Agreement relating to such Designated Senior Notes.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Senior Notes of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in Subsection (a) above, the
aggregate
26
principal amount of such Designated Senior Notes which remains unpurchased does
not exceed one-eleventh of the aggregate principal amount of the Designated
Senior Notes, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated Senior
Notes which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Senior Notes and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Senior Notes which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Senior Notes of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Senior Notes of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in Subsection (a) above, the
aggregate principal amount of Designated Senior Notes which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated Senior
Notes, as referred to in Subsection (b) above, or if the Company shall not
exercise the right described in Subsection (b) above to require non-defaulting
Underwriters to purchase Designated Senior Notes of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Senior
Notes shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Senior Notes.
11. If any Pricing Agreement shall be terminated pursuant to Section
9 hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Senior Notes covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason Designated Senior Notes are not delivered by or on behalf of the Company
as provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket
27
expenses approved in writing by the Representatives, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Senior
Notes, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Senior Notes except as provided in
Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Senior Notes shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if any,
as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail or
facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
registered mail to such Underwriter at its address provided to the Company for
the purpose of notices pursuant to such Section 8(c).
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 8 and Section 10 hereof, the officers and directors
of the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Senior Notes
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business. As used herein, "New York Business Day"
shall mean any day when the New York Stock Exchange is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in
28
any number of counterparts, each of which shall be deemed to be an original, but
all such respective counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us 5 counterparts hereof.
Very truly yours,
Southern Indiana Gas and
Electric Company
By:
-------------------------------
Name:
Title:
- -----------------------------
ANNEX I
PRICING AGREEMENT
[Date]
Dear Sirs:
Southern Indiana Gas and Electric Company (the "Company") proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated 1999 (the "Underwriting Agreement"), between the Company, on
the one hand, and you, on the other hand, to issue and sell to you the Senior
Notes specified in Schedule I hereto (the "Designated Senior Notes"). Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each of the
representations and warranties set forth in Section 2 of the Underwriting
Agreement with respect to the Prospectus or the information contained in the
Prospectus shall constitute a representation or warranty thereof (a) as of the
date of the Underwriting Agreement with respect to the Prospectus (as therein
defined), and also (b) as of the date of this Pricing Agreement with respect to
the Prospectus as amended or supplemented relating to the Designated Senior
Notes which are the subject of this Pricing Agreement. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein; terms defined in the Underwriting Agreement are used herein as
therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Senior Notes, in the
form heretofore delivered to you is now proposed to be filed, or in the case of
a supplement mailed for filing, with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to you, and you agree to purchase from the Company, at the time
and place and at
2
a purchase price to you set forth in Schedule I hereto, the principal amount of
Designated Senior Notes set forth on Schedule I.
3
If the foregoing is in accordance with your understanding, please
sign and return to us 5 counterparts hereof, and upon acceptance by you, this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding agreement
between you and the Company.
Very truly yours,
Southern Indiana Gas and
Electric Company
By
---------------------------------
Accepted as of the date hereof:
- ------------------------------
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish a letter to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representative of the Underwriters (the
"Representatives");
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial position
of the company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where applicable)
in the audited consolidated financial statements for five such fiscal
years which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting
2
matters and such other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused them to believe
that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as it
applies to Form 10-Q and the related published rules and regulations
thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with the basis for the audited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included or incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
3
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated
net current assets or net assets or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E) there were any
decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in
each case for increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(v) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (iv) above, they have
carried out certain specified procedures, not constituting an examination
in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain of
such amounts, percentages and financial information with the accounting
4
records of the Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Senior Notes for purposes of the letter delivered at the Time of Delivery for
such Designated Senior Notes.
SCHEDULE I
Principal
Underwriter Amount
- ----------- ---------
Total
=========
2
SCHEDULE II
Title of Designated Senior Notes:
Senior Notes, ____% Series Due
___________
Aggregate principal amount:
$
Price to Public:
____% of the principal amount of
the Designated Senior Notes, plus accrued
interest from ________ to the
Time of Delivery
Purchase Price by Underwriters:
_____% of the principal amount of
the Designated Senior Notes, plus accrued
interest from ________ to the
Time of Delivery
Indenture:
Maturity:
________
Interest Rate:
_____%
Interest Payment Dates:
________ and ________ of each year,
commencing ________
Redemption Provisions:
Sinking Fund Provisions:
Time of Delivery:
10:00 a.m.
[Closing Date]
Closing Location: