EXHIBIT A
PROMISSORY NOTE
FOR LONG-TERM LOANS
$37,500,000 September 1, 2003
FOR VALUE RECEIVED, Indiana Gas Company, Inc., an Indiana corporation
and an Ohio corporation ("Borrower") hereby promises to pay to VECTREN UTILITY
HOLDINGS, INC., an Indiana corporation ("Lender"), in same day funds at its
principal offices in Evansville, Indiana, or at such other place Lender may from
time to time designate, the principal sum of Thirty-seven Million, Five Hundred
Thousand Dollars ($37,500,000), together with interest thereon from the date
hereof until paid in full, all without relief from valuation or appraisement
laws. Interest shall be charged on the unpaid outstanding balance of this Note
at a rate per annum equal to the rate paid and to be paid by Lender with respect
to the borrowings it made in order to provide funds to Borrower hereunder.
Interest on borrowings shall be due and payable in immediately available funds
on the same business day on which Lender must pay interest on the borrowings it
made in order to provide funds to the Borrower hereunder. The principal hereof
shall be due and payable hereunder at such times and in such amounts and in such
installments hereunder as Lender must pay with respect to the borrowings it made
in order to provide funds to Borrower hereunder. Lender has provided Borrower
with a copy of the documentation evidencing the borrowings made by Lender in
order to provide funds to Borrower hereunder. Borrower's share under this Note
of the Lender borrowings represents 37.5% of the underlying 5.75% VUHI Senior
Notes due August 1, 2018 and net proceeds approximate $37.1 million. In the
absence of manifest error, such documentation and the records maintained by
Lender of the amount and term, if any, of borrowings hereunder shall be deemed
conclusive.
The terms and conditions of the borrowings made by Lender in order to
provide funds to Borrower hereunder, such documentation of which is attached
hereto, are hereby incorporated by reference and made a part hereof; provided,
however, that the principal sum under this Note shall be in such amount as set
forth in this Note. In the event of any conflict or inconsistency between the
terms of this Note and the terms of the borrowings made by Lender in order to
provide funds to Borrower hereunder, the terms of this Note shall govern.
Presentment, notice of dishonor and demand, protest and diligence and
collection and bringing suit are hereby severally waived by Borrower and each
endorser hereby consents that the time for payment of this Note or any
installment hereunder may be extended from time to time without notice by
Lender. No waiver of any default or failure or delay to exercise any right or
remedy by Lender shall operate as a waiver of any other default or of the same
default in the future or as a waiver of any right or remedy with respect to the
same or any other occurrence. No single or partial exercise by Lender of any
right or remedy shall preclude other or further exercises thereof or of any
other right or remedy.
This Note inures to the benefit of Lender and binds Borrower and
Lender's and Borrower's respective successors and assigns, and the terms
"Lender" and Borrower" whenever occurring herein shall be deemed and construed
to include such respective successors and assigns.
This Note shall be construed according to, and governed by, the laws of
the State of Indiana.
This Note is one of the promissory notes referred to in the Financial
Services Agreement, dated January 5th, 2001, and subsequently amended on January
22, 2003, between Lender, Borrower and certain other public utility subsidiaries
of Lender to which reference is made for a statement of additional rights and
obligations of the parties hereto.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as
of the date and the year first hereinabove written.
INDIANA GAS COMPANY, INC.
By: /s/ Robert L. Goocher
----------------------------------
Robert L. Goocher
Vice President and Treasurer
Principal Amount
Underwriter of Initial Underwritten Securities
----------------------------------------
Principal Amount of Principal Amount of
5.25% Senior Notes 5.75% Senior Notes
------------------- -------------------
ABN AMRO Incorporated............... $ 34,000,000 $ 34,000,000
Banc One Capital Markets, Inc....... 34,000,000 34,000,000
Wachovia Capital Markets, LLC....... 12,000,000 12,000,000
BNY Capital Markets, Inc............ 5,000,000 5,000,000
Fifth Third Securities, Inc......... 5,000,000 5,000,000
NatCity Investments, Inc............ 5,000,000 5,000,000
U.S. Bancorp Piper Jaffray Inc...... 5,000,000 5,000,000
----------- -----------
Total $100,000,000 $100,000,000
The Underwritten Securities shall
have the following terms:
Title: 5.25% Senior Notes due 2013
5.75% Senior Notes due 2018
Rank: Unsecured senior indebtedness
Guarantees: Guaranteed by Indiana Gas Company, Inc.,
Southern Indiana Gas and Electric Company
and Vectren Energy Delivery of Ohio, Inc.
Ratings: "Baa1" by Moody's Investors Service, Inc.
"A-" by Standard & Poor's Ratings Services
Aggregate principal amount: 5.25% Senior Notes: $100,000,000
5.75% Senior Notes: $100,000,000
Denominations: $1,000 and integral multiples thereof
Currency of payment: United States dollars
Interest rate or formula: 5.25% Senior Notes: 5.25% per annum
5.75% Senior Notes: 5.75% per annum
Interest payment dates: February 1 and August 1 of each year,
commencing February 1, 2004
Regular record dates: The 15th calendar day of the month
immediately preceding the month in which
each Interest Payment Date falls
Stated maturity date: 5.25% Senior Notes: August 1, 2013
5.75% Senior Notes: August 1,2018
Redemption provisions: The Notes are redeemable at any time at the
option of the Company in whole or in part,
upon not less than 30 calendar days and not
more than 60 calendar days prior written
notice at a price equal to the greater of
100% of the principal amount to be redeemed,
and the sum of the present values of the
remaining scheduled payments of principal
and interest on the Notes, discounted to the
redemption date on a semi-annual basis at
the Treasury Rate plus 20 basis points, in
the case of the 5.25% Senior Notes, and 25
basis points, in the case of the 5.75%
Senior Notes, plus in each case unpaid
interest accrued to the redemption date.
Sinking fund requirements: The Notes will not have the benefit of, or
be subject to, any sinking fund.
Defeasance provisions: The Notes are subject to defeasance and
covenant defeasance as provided in Article 8
of the Indenture.
Fixed or Variable Price Offering: 5.25% Senior Notes: 99.746% of the principal
amount, plus accrued interest, if any, from
July 29, 2003.
5.75% Senior Notes: 99.177% of the principal
amount, plus accrued interest, if any, from
July 29, 2003.
Purchase price: 5.25% Senior Notes: 99.096% of the principal
amount.
5.75% Senior Notes: 98.477% of the principal
amount.
Over-allotment option: None
Form: Book-entry
Listing: None
Lock-Up Agreements: During the period of 90 days from July 29,
2003 the Company will not sell, offer to
sell, grant any option for the sale of, or
otherwise dispose of any additional Notes,
any security convertible into or
exchangeable into or exercisable for Notes
or any debt securities substantially similar
to the Notes or any security convertible
into, exchangeable into or exercisable for
any such debt securities, without the prior
written consent of the Underwriters.
Other terms and conditions: None
Closing date and location: July 29, 2003 at Sidley Austin Brown & Wood,
LLP, 787 Seventh Avenue, New York,
New York 10019.
All of the provisions contained in the document attached as Annex I
hereto entitled "Vectren Utility Holdings, Inc.--Debt Securities--Underwriting
Agreement" are hereby incorporated by reference in their entirety herein and
shall be deemed to be a part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein. Terms defined in such
document are used herein as therein defined.