<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1/A
(AMENDMENT NO. 25)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------
COLUMBIA ENERGY GROUP
(NAME OF SUBJECT COMPANY)
CEG ACQUISITION CORP.
NISOURCE INC.
(BIDDERS)
COMMON STOCK, $.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
197648108
(CUSIP NUMBER OF CLASS OF SECURITIES)
STEPHEN P. ADIK
SENIOR EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND TREASURER
NiSOURCE INC.
801 EAST 86TH AVENUE
MERRILLVILLE, INDIANA 46410-6272
(219) 853-5200
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
COPIES TO:
<TABLE>
<S> <C>
PETER V. FAZIO, JR., ESQ. ALAN G. SCHWARTZ, ESQ.
SCHIFF HARDIN & WAITE SIMPSON THACHER & BARTLETT
6600 SEARS TOWER 425 LEXINGTON AVENUE
CHICAGO, ILLINOIS 60606 NEW YORK, NEW YORK 10017
(312) 258-5500 (212) 455-2000
</TABLE>
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
- -------------------------------------------------------------------------------------------------
<S> <C>
$6,290,645,798 $1,258,130
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</TABLE>
* For purposes of calculating the filing fee only, based on the offer to
purchase all outstanding shares of Common Stock of the Subject Company for
$74 per share. The total number of shares of Common Stock reported as
outstanding in the Subject Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999 was 82,013,792, and the number of shares of
Common Stock subject to stock options reported as outstanding in the Subject
Company's Annual Report on Form 10-K for the year ended December 31, 1998 was
2,994,935.
** Pursuant to Rule 0-11(d), 1/50 of 1% of Transaction Valuation.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
AMOUNT PREVIOUSLY PAID: $1,165,338 FILING PARTY: NiSource Inc.
FORM OR REGISTRATION NO.: Schedule 14D-1 (005-10049) DATE FILED: June 25, 1999
</TABLE>
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<PAGE> 2
This Amendment No. 25 (this "Amendment") amends and supplements the Tender
Offer Statement on Schedule 14D-1, as amended (the "Schedule 14D-1"), originally
filed with the Securities and Exchange Commission on June 25, 1999 by CEG
Acquisition Corp., a Delaware corporation (the "Offeror") and a wholly owned
subsidiary of NiSource Inc., an Indiana corporation ("Parent"). The Schedule
14D-1 and this Amendment relate to a tender offer by the Offeror to purchase all
of the outstanding shares of common stock, par value $.01 per share (the
"Shares"), of Columbia Energy Group, a Delaware corporation (the "Company"), at
an amended purchase price of $74 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated June 25, 1999 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto, dated October 18, 1999, and in the
related Letter of Transmittal (which, as either may be amended or supplemented
from time to time, collectively constitute the "Offer"), copies of which are
filed with the Schedule 14D-1 as Exhibits (a)(1), (a)(38) and (a)(39),
respectively.
Unless otherwise indicated, all capitalized terms used but not defined
herein shall have the meanings assigned to them in the Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
Item 1 is hereby amended and supplemented as follows:
Item 1(b) The information set forth in the Introduction to the Supplement
is incorporated herein by reference.
Item 1(c) The information set forth in Section 2 ("Price Range of Common
Stock; Dividends") of the Supplement is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
Item 2 is hereby amended and supplemented as follows:
Items 2(a)-(d), (g) The information set forth in the Introduction, Section
4 ("Certain Information Concerning the Offeror and Parent") and Schedule I of
the Supplement is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Item 3 is hereby amended and supplemented as follows:
Item 3(b) The information set forth in Section 6 ("Background of the Offer;
Past Contacts with the Company") of the Supplement is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4 is hereby amended and supplemented as follows:
Items 4(a) and 4(b) The information set forth in Section 5 ("Source and
Amount of Funds") of the Supplement is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
Item 5 is hereby amended and supplemented as follows:
Items 5(a)-(e) The information set forth in the Introduction, Section 6
("Background of the Offer; Past Contacts with the Company") and Section 7
("Purpose of the Offer and the Proposed Merger; Plans for the Company; Certain
Considerations") of the Supplement is incorporated herein by reference.
2
<PAGE> 3
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
Item 6 is hereby amended and supplemented as follows:
Items 6(a) and 6(b) The information set forth in Section 3 ("Certain
Information Concerning the Company") and Section 6 ("Background of the Offer;
Past Contacts with the Company") of the Supplement is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended and supplemented as follows:
The information set forth in the Introduction, Section 3 ("Certain
Information Concerning the Company"), Section 6 ("Background of the Offer; Past
Contacts with the Company") and Section 7 ("Purpose of the Offer and the
Proposed Merger; Plans for the Company; Certain Considerations") of the
Supplement is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Item 9 is hereby amended and supplemented as follows:
The information set forth in Section 4 ("Certain Information Concerning the
Offeror and Parent") of the Supplement is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended and supplemented as follows:
Items 10(b) and 10(c) The information set forth in the Introduction,
Section 7 ("Purpose of the Offer and the Proposed Merger; Plans for the Company;
Certain Considerations") and Section 9 ("Certain Legal Matters; Required
Regulatory Approvals") of the Supplement is incorporated herein by reference.
Items 10(d) and 10(e) The information set forth in Section 9 ("Certain
Legal Matters; Required Regulatory Approvals") of the Supplement is incorporated
herein by reference.
Item 10(f) The information set forth in the Supplement is incorporated
herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(37) Letter dated October 18, 1999 from Gary L. Neale, Chairman,
President and Chief Executive Officer of Parent, to stockholders of the Company.
(a)(38) Supplement to the Offer to Purchase, dated October 18, 1999.
(a)(39) Letter of Transmittal.
(a)(40) Letter dated October 18, 1999, from Dealer Manager to brokers,
dealers, commercial banks, trust companies and other nominees.
(a)(41) Letter dated October 18, 1999, to be sent by brokers, dealers,
commercial banks, trust companies and other nominees to their clients.
(a)(42) Notice of Guaranteed Delivery.
(a)(43) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(44) Press Release issued by Parent on October 17, 1999.
(a)(45) Letter dated October 18, 1999 from Credit Suisse First Boston and
Barclays Bank PLC to the directors of the Company.
(b)(2) Amended and Restated Commitment Letter dated October 15, 1999 to
Parent from Credit Suisse First Boston and Barclays Bank PLC.
3
<PAGE> 4
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
CEG ACQUISITION CORP.
By: /s/ GARY L. NEALE
------------------------------------
Name: Gary L. Neale
Title: President
NISOURCE INC.
By: /s/ GARY L. NEALE
------------------------------------
Name: Gary L. Neale
Title: Chief Executive Officer
Date: October 18, 1999
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE NO.
- --------- ----------- --------
<C> <S> <C>
11(a)(1) Offer to Purchase, dated June 25, 1999.*....................
11(a)(2) Letter of Transmittal.*.....................................
11(a)(3) Letter dated June 25, 1999, from Credit Suisse First Boston
Corporation to brokers, dealers, commercial banks, trust
companies and other nominees.*..............................
11(a)(4) Letter dated June 25, 1999, to be sent by brokers, dealers,
commercial banks, trust companies and other nominees to
their clients.*.............................................
11(a)(5) Notice of Guaranteed Delivery.*.............................
11(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*.............................
11(a)(7) Form of Summary Advertisement, dated June 25, 1999.*........
11(a)(8) Press Release issued by Parent on June 24, 1999.*...........
11(a)(9) Form of letter dated June 28, 1999 from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to investors of the Company.*...............................
11(a)(10) Press Release issued by Parent on June 28, 1999.*...........
11(a)(11) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on July 2,
1999.*......................................................
11(a)(12) Form of letter dated July 2, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to directors of the Company.*...............................
11(a)(13) Press Release issued by Parent on July 6, 1999.*............
11(a)(14) Form of letter dated July 12, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to shareholders of Parent.*.................................
11(a)(15) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on July 14,
1999.*......................................................
11(a)(16) Press Release issued by Parent on July 14, 1999.*...........
11(a)(17) Press Release issued by Parent on July 19, 1999.*...........
11(a)(18) Press Release issued by Parent on July 20, 1999.*...........
11(a)(19) Form of letter dated July 21, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to directors of the Company.*...............................
11(a)(20) Form of letter dated July 26, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to stockholders of the Company.*............................
11(a)(21) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on July 26,
1999.*......................................................
11(a)(22) Information published by Parent on July 30, 1999, available
via the Internet at http://www.yes2nisource.com.*...........
11(a)(23) Press Release issued by Parent on July 30, 1999.*...........
11(a)(24) Press Release issued by Parent on August 9, 1999.* .........
11(a)(25) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on August 13,
1999.* .....................................................
11(a)(26) Form of letter dated August 13, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to directors of the Company.* ..............................
11(a)(27) Form of letter dated August 13, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to Oliver G. Richard III, Chairman, President and Chief
Executive Officer of the Company.* .........................
</TABLE>
5
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE NO.
- --------- ----------- --------
<C> <S> <C>
11(a)(28) Form of letter dated August 26, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to stockholders of the Company.* ...........................
11(a)(29) Opinion/editorial articles by Gary L. Neale, Chairman,
President and Chief Executive Officer of Parent, submitted
to various newspapers on September 9, 1999.* ...............
11(a)(30) Opinion/editorial articles by Gary L. Neale, Chairman,
President and Chief Executive Officer of Parent, submitted
to various newspapers on September 10, 1999.* ..............
11(a)(31) Opinion/editorial article by Gary L. Neale, Chairman,
President and Chief Executive Officer of Parent, submitted
to The Appalachian News-Express on September 13, 1999.* ....
11(a)(32) Opinion/editorial article by Gary L. Neale, Chairman,
President and Chief Executive Officer of Parent, submitted
to The Winchester Sun on September 14, 1999.* ..............
11(a)(33) Form of Letter dated September 23, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of Parent,
to officers, directors and managers of Parent.*.............
11(a)(34) "Energy News -- Oct. 1999" communication to customers of
Northern Indiana Public Service Company first issued by
Parent on October 1, 1999.*.................................
11(a)(35) Materials made available by Parent at a meeting among
officials of Parent, officials of the Kentucky Public
Service Commission and members of the public on October 5,
1999.*......................................................
11(a)(36) Letter dated October 5, 1999 from Gary L. Neale, Chairman,
President and Chief Executive Officer of Parent, to
shareholders of the Company.*...............................
11(a)(37) Letter dated October 18, 1999 from Gary L. Neale, Chairman,
President and Chief Executive Officer of Parent, to
shareholders of the Company. ...............................
11(a)(38) Supplement to the Offer to Purchase, dated October 18,
1999. ......................................................
11(a)(39) Letter of Transmittal. .....................................
11(a)(40) Letter dated October 18, 1999, from Credit Suisse First
Boston Corporation to brokers, dealers, commercial banks,
trust companies and other nominees. ........................
11(a)(41) Letter dated October 18, 1999, to be sent by brokers,
dealers, commercial banks, trust companies and other
nominees to their clients...................................
11(a)(42) Notice of Guaranteed Delivery. .............................
11(a)(43) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9. .............................
11(a)(44) Press Release issued by Parent on October 17, 1999. ........
11(a)(45) Letter dated October 18, 1999 from Credit Suisse First
Boston and Barclays Bank PLC to the directors of the
Company. ...................................................
11(b)(1) Commitment Letter dated June 23, 1999 to Parent from Credit
Suisse First Boston and Barclays Bank PLC.*.................
11(b)(2) Amended and Restated Commitment Letter dated October 15,
1999 to Parent from Credit Suisse First Boston and Barclays
Bank PLC. ..................................................
11(g)(1) Complaint in NiSource Inc. and CEG Acquisition Corp. vs.
Columbia Energy Group et al., Delaware Chancery Court, New
Castle County.*.............................................
11(g)(2) Complaint in NiSource Inc. and CEG Acquisition Corp. vs.
Columbia Energy Group et al., United States District Court,
District of Delaware.*......................................
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE NO.
- --------- ----------- --------
<C> <S> <C>
11(g)(3) First Amended Complaint in NiSource Inc. and CEG Acquisition
Corp. vs. Columbia Energy Group et al., United States
District Court, District of Delaware.*......................
11(g)(4) Complaint in NiSource Inc., NiSource Capital Markets Inc.
and CEG Acquisition Corp. vs. Columbia Energy Group et al.,
Delaware Chancery Court, New Castle County.*................
</TABLE>
- ---------------
* Previously filed.
7
<PAGE> 1
[NiSource Letterhead]
October 18, 1999
DEAR COLUMBIA ENERGY GROUP SHAREHOLDER:
Today, CEG Acquisition Corp., our wholly owned subsidiary, increased the
price in its tender offer for all outstanding shares of common stock of Columbia
Energy Group to $74 per share. We have enclosed a Supplement to the Offer to
Purchase, dated June 25, 1999, and various other documents related to the
revised tender offer. The tender offer has now been extended to 12:00 Midnight,
New York City time, on Friday, November 12, 1999, unless further amended.
The Supplement should be read in conjunction with the Offer to Purchase. If
you have not previously received an Offer to Purchase, you can obtain one from
Innisfree M&A Incorporated, the Information Agent in the tender offer, at the
addresses and telephone numbers set forth on the back cover of the Supplement,
or from brokers, dealers, commercial banks and trust companies.
Note that if you have already validly tendered shares pursuant to the
tender offer (including by using the original Letter of Transmittal which
references a price of $68 per share) and have not properly withdrawn such
shares, you need not take any further action in order to receive the increased
price of $74 per share pursuant to the amended tender offer. If you have not
already tendered your shares, we hope that you will give renewed consideration
to the increased tender offer.
Detailed instructions on procedures for tendering shares are contained in
the enclosed materials and the Offer to Purchase. Questions and requests for
assistance may be directed to Innisfree M&A Incorporated at (877) 750-5837 or to
Credit Suisse First Boston Corporation, the Dealer Manager for the tender offer,
at its address and telephone number set forth on the back cover of the
Supplement.
Sincerely,
/s/ GARY L. NEALE
GARY L. NEALE
<PAGE> 1
SUPPLEMENT TO OFFER TO PURCHASE DATED JUNE 25, 1999
CEG ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
NISOURCE INC.
HAS AMENDED ITS TENDER OFFER TO
INCREASE THE CASH PURCHASE PRICE FOR
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
COLUMBIA ENERGY GROUP
TO
$74 NET PER SHARE
THE OFFER HAS BEEN EXTENDED. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
NOVEMBER 12, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
THE OFFER IS SUBJECT TO THE CONDITIONS CONTAINED IN THE OFFER TO PURCHASE.
STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED AND NOT PROPERLY
WITHDRAWN THEIR SHARES PURSUANT TO THE OFFER ARE NOT REQUIRED TO TAKE ANY
FURTHER ACTION TO TENDER THEIR SHARES, EXCEPT AS MAY BE REQUIRED BY THE
GUARANTEED DELIVERY PROCEDURE IF SUCH PROCEDURE WAS UTILIZED. IF SHARES ARE
ACCEPTED FOR PAYMENT AND PAID FOR BY THE OFFEROR PURSUANT TO THE OFFER, SUCH
STOCKHOLDERS WILL RECEIVE, SUBJECT TO THE CONDITIONS OF THE OFFER, THE INCREASED
PRICE OF $74 PER SHARE. SEE SECTION 4 OF THE OFFER TO PURCHASE FOR THE
PROCEDURES FOR WITHDRAWING SHARES TENDERED PURSUANT TO THE OFFER.
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, including any required signature guarantees, and mail or deliver
the Letter of Transmittal (or a facsimile thereof) with the certificates for the
tendered Shares and all other required documents to the Depositary (as
hereinafter defined), (2) tender Shares pursuant to the procedures for book-
entry transfer set forth in Section 3 of the Offer to Purchase, or (3) request
the stockholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for the stockholder. Stockholders having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact the broker, dealer, commercial bank, trust
company or other nominee if they desire to tender Shares so registered.
Any stockholder who desires to tender Shares and whose certificates
representing Shares are not immediately available, or who cannot comply with the
procedures for book-entry transfer described in Section 3 of the Offer to
Purchase on a timely basis, must tender Shares by following the procedures for
guaranteed delivery set forth in Section 3 of the Offer to Purchase.
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Supplement. Additional copies of the Offer
to Purchase, this Supplement, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may also be obtained from the
Information Agent or the Dealer Manager.
The Dealer Manager for the Offer is:
[Credit Suisse First Boston Corporation Logo]
October 18, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION................................................ 1
1. TERMS OF THE OFFER; EXPIRATION DATE..................... 2
2. PRICE RANGE OF COMMON STOCK; DIVIDENDS.................. 2
3. CERTAIN INFORMATION CONCERNING THE COMPANY.............. 3
4. CERTAIN INFORMATION CONCERNING THE OFFEROR AND PARENT... 3
5. SOURCE AND AMOUNT OF FUNDS.............................. 4
6. BACKGROUND OF THE OFFER; PAST CONTACTS WITH THE
COMPANY................................................. 4
7. PURPOSE OF THE OFFER AND THE PROPOSED MERGER; PLANS FOR
THE COMPANY; CERTAIN CONSIDERATIONS..................... 9
8. CERTAIN CONDITIONS OF THE OFFER......................... 9
9. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.... 9
10. MISCELLANEOUS........................................... 10
</TABLE>
SCHEDULE I CERTAIN INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF PARENT AND THE OFFEROR
i
<PAGE> 3
To: The Stockholders of
Columbia Energy Group
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated June 25, 1999 (the "Offer to Purchase"), of CEG Acquisition Corp. (the
"Offeror"), a Delaware corporation and a wholly owned subsidiary of NiSource
Inc., an Indiana corporation ("Parent"). Pursuant to this Supplement, the
Offeror is now offering to purchase all of the outstanding shares of common
stock, par value $.01 per share (the "Shares"), of Columbia Energy Group, a
Delaware corporation (the "Company"), at a price of $74 per Share, net to the
seller in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, as amended and
supplemented by this Supplement, and in the related Letter of Transmittal
(which, as either may be amended or supplemented from time to time, collectively
constitute the "Offer"). Unless the context requires otherwise, all capitalized
terms used but not defined herein have the meanings ascribed to them in the
Offer to Purchase.
Procedures for tendering Shares are set forth in Section 3 of the Offer to
Purchase. Tendering stockholders may continue to use the original (blue) Letter
of Transmittal and the original (yellow) Notice of Guaranteed Delivery
previously circulated with the Offer to Purchase, or the revised (green) Letter
of Transmittal and the revised (grey) Notice of Guaranteed Delivery circulated
with this Supplement. While the Letter of Transmittal previously circulated with
the Offer to Purchase refers only to the Offer to Purchase, stockholders using
such document to tender their Shares will nevertheless receive $74 per Share for
each Share validly tendered and not properly withdrawn and accepted for payment
pursuant to the Offer, subject to the conditions of the Offer.
PARENT IS SEEKING TO NEGOTIATE WITH THE COMPANY WITH RESPECT TO THE
ACQUISITION OF THE COMPANY BY PARENT OR THE OFFEROR. THE OFFEROR RESERVES THE
RIGHT TO AMEND THE OFFER (INCLUDING AMENDING THE NUMBER OF SHARES TO BE
PURCHASED AND AMENDING THE PURCHASE PRICE) UPON ENTERING INTO A MERGER AGREEMENT
WITH THE COMPANY, OR TO NEGOTIATE A MERGER AGREEMENT WITH THE COMPANY NOT
INVOLVING A TENDER OFFER PURSUANT TO WHICH THE OFFEROR WOULD TERMINATE THE OFFER
AND THE SHARES WOULD, UPON CONSUMMATION OF SUCH MERGER, BE CONVERTED INTO CASH,
COMMON STOCK OF PARENT AND/OR OTHER SECURITIES IN SUCH AMOUNTS AS ARE NEGOTIATED
BY PARENT, THE OFFEROR AND THE COMPANY.
Except as otherwise set forth in this Supplement and in the revised Letter
of Transmittal, the terms and conditions previously set forth in the Offer to
Purchase remain applicable in all respects to the Offer, and this Supplement
should be read in conjunction with the Offer to Purchase.
THIS SUPPLEMENT DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FROM THE
COMPANY'S STOCKHOLDERS. ANY SOLICITATION OF PROXIES WHICH PARENT OR THE OFFEROR
MAY MAKE WILL BE MADE ONLY PURSUANT TO SEPARATE PROXY MATERIALS IN COMPLIANCE
WITH THE REQUIREMENTS OF SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED (THE "EXCHANGE ACT").
THE OFFER IS SUBJECT TO THE CONDITIONS CONTAINED IN THE OFFER TO PURCHASE.
THE MINIMUM CONDITION. The Offer is subject to the condition (the "Minimum
Condition") that there shall have been validly tendered and not properly
withdrawn prior to the Expiration Date (as defined below) a number of Shares
which, together with the Shares owned by Parent and its subsidiaries, represents
at least 51 percent of the voting power (determined on a fully diluted basis) on
the date of purchase of all securities of the Company entitled to vote generally
in the election of directors or in a merger.
<PAGE> 4
According to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 (the "Company Quarterly Report"), as of June 30, 1999, there
were 82,013,792 Shares outstanding and, according to the Company's Annual Report
on Form 10-K for the year ended December 31, 1998 (the "Company 1998 Annual
Report"), as of December 31, 1998, approximately 2,994,935 Shares were issuable
under then outstanding stock options. Based on the foregoing, and assuming that
no stock options were granted or exercised from January 1, 1999 through the date
hereof and no Shares were issued or acquired by the Company after June 30, 1999,
there would be approximately 85,008,727 Shares outstanding on a fully diluted
basis, and thus the Minimum Condition would be satisfied if at least 43,354,451
Shares were validly tendered pursuant to the Offer and not properly withdrawn
prior to the expiration of the Offer. However, the actual number of Shares
constituting the Minimum Condition will depend upon the facts as they exist on
the date of the purchase. The Offeror will make a determination as to whether
the Minimum Condition has been satisfied based on the best information available
to it at the time of determination.
THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE RELATED LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY IN THEIR
ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. The discussion set forth in
Section 1 of the Offer to Purchase is hereby amended and supplemented as
follows:
The price per Share to be paid pursuant to the Offer has been increased
from $68 per Share to $74 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions of the Offer. All
stockholders whose Shares are validly tendered and not properly withdrawn and
accepted for payment pursuant to the Offer (including Shares tendered prior to
the date of this Supplement and not properly withdrawn) will receive the
increased price.
The Offer has been extended. The Offer will expire at 12:00 Midnight, New
York City time, on Friday, November 12, 1999, unless and until the Offeror, in
its sole discretion, shall have further extended the period during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by the Offeror, shall expire.
This Supplement, the revised (green) Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares whose names appear
on the Company's stockholder list and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Company's stockholder list or, if applicable,
who are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares.
2. PRICE RANGE OF COMMON STOCK; DIVIDENDS. The discussion set forth in
Section 6 of the Offer to Purchase is hereby amended and supplemented as
follows:
The following table sets forth, for the periods indicated, the high and low
sale prices per Share as reported on the NYSE Composite Tape and reported in
published financial sources as well as the regular quarterly dividend paid per
Share.
<TABLE>
<CAPTION>
HIGH LOW DIVIDEND
---- --- --------
<S> <C> <C> <C>
1999:
Fourth Quarter (through October 15, 1999)................. 61 55 1/8
Third Quarter............................................. 64 3/4 54 1/4 .225
Second Quarter............................................ 64 1/4 43 7/8 .225
First Quarter............................................. 58 44 5/8 .200
</TABLE>
On October 15, 1999, the last full trading day before the first public
announcement of the Offer as amended by this Supplement, the closing sale price
of the Shares on the NYSE Composite Tape was $60 1/2 per Share. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
2
<PAGE> 5
3. CERTAIN INFORMATION CONCERNING THE COMPANY. The discussion set forth
in Section 8 of the Offer to Purchase is hereby amended and supplemented as
follows:
Set forth below is certain selected consolidated financial information with
respect to the Company excerpted or derived from financial information contained
in the Company 1998 Annual Report and the Company Quarterly Report. More
comprehensive financial information (including management's discussion and
analysis of financial condition and results of operations) is included in these
reports and other documents filed by the Company with the Commission, and the
following summary is qualified in its entirety by reference to reports and other
documents which have been filed with the Commission, including the financial
information and related notes contained therein. These reports and other
documents should be available for inspection and copies should be obtainable in
the manner set forth in Section 8 of the Offer to Purchase.
COLUMBIA ENERGY GROUP
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
(UNAUDITED) YEAR ENDED DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total Net Revenue.............................. $1,047.8 $1,008.1 $1,897.1 $1,915.5 $1,872.9
Operating Income............................... $ 336.9 $ 325.1 $ 540.0 $ 509.4 $ 478.2
Net Income..................................... $ 176.5 $ 170.3 $ 269.2 $ 273.3 $ 221.6
Basic Earnings Per Share of Common Stock*...... $ 2.13 $ 2.04 $ 3.23 $ 3.29 $ 2.75
Diluted Earnings Per Share of Common Stock*.... $ 2.12 $ 2.03 $ 3.21 $ 3.27 $ 2.74
Dividends Paid Per Share of Common Stock*...... $ 0.43 $ 0.37 $ 0.77 $ 0.60 $ 0.40
Basic Average Common Shares Outstanding
(000)*....................................... 82,809 83,299 83,382 83,100 80,681
Diluted Average Common Shares (000)*........... 83,153 83,690 83,748 83,594 80,919
BALANCE SHEET DATA (at end of period):
Total Assets................................... $7,202.6 $6,968.7 $6,612.3 $6,004.6
Long-Term Debt................................. $1,950.6 $2,003.1 $2,003.5 $2,003.8
Total Common Stock Equity...................... $2,071.0 $2,005.3 $1,790.7 $1,553.6
Book Value Per Share........................... $ 25.25 $ 24.01 $ 21.51 $ 18.74
</TABLE>
- ---------------
* All per share amounts, average common shares outstanding and diluted average
common shares have been restated to reflect a three-for-two common stock
split, in the form of a stock dividend, effective June 15, 1998.
4. CERTAIN INFORMATION CONCERNING THE OFFEROR AND PARENT. The discussion
set forth in Section 9 of the Offer to Purchase is hereby amended and
supplemented as follows:
Set forth below is certain selected historical consolidated financial
information with respect to Parent and its subsidiaries which has been excerpted
or derived from audited financial statements presented in Parent's Annual
Reports on Form 10-K for the years ended December 31, 1998 and December 31, 1997
and Parent's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1999. More comprehensive financial information is included in these reports and
other documents filed by Parent with the Commission. The financial information
summary set forth below is qualified in its entirety by reference to reports and
other documents which have been filed with the Commission, including the
financial information and related notes contained therein, which are
incorporated herein by reference. These reports and other documents may be
inspected at and copies may be obtained from the offices of the Commission or
the NYSE in the manner set forth in Section 8 of the Offer to Purchase.
3
<PAGE> 6
NISOURCE INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenues
Gas....................................... $ 862.5 $ 632.3 $ 637.1 $ 807.2 $ 799.4
Electric.................................. 541.1 667.8 1,430.0 1,186.3 1,022.2
Water..................................... 44.9 38.6 84.0 60.7 --
Products and Services..................... 123.7 93.1 781.7 532.2 166.3
-------- -------- -------- -------- --------
Total Operating Revenues.......... $1,572.2 $1,431.8 $2,932.8 $2,586.4 $1,987.9
Operating Margin............................ $ 740.6 $ 601.8 $1,240.4 $1,210.9 $1,116.0
Operating Income............................ $ 237.5 $ 196.2 $ 421.5 $ 410.6 $ 386.3
Net Income.................................. $ 99.5 $ 90.2 $ 193.9 $ 190.8 $ 176.7
Weighted Average Common Shares Outstanding
(000s).................................... 123,805 123,022 120,778 123,849 122,382
Basic Earnings per Weighted Average Common
Share..................................... $ 0.80 $ 0.73 $ 1.60 $ 1.54 $ 1.44
Diluted Earnings per Weighted Average Common
Share..................................... $ 0.80 $ 0.73 $ 1.59 $ 1.53 $ 1.43
Dividends Declared per Share................ $ 0.51 $ 0.48 $ 0.98 $ 0.92 $ 0.86
BALANCE SHEET DATA (at end of period):
Total Assets................................ $6,401.9 $4,986.5 $4,937.0 $4,288.9
Long Term Debt.............................. $1,844.4 $1,668.0 $1,667.9 $1,127.1
Preferred Stock............................. $ 485.8* $ 142.0 $ 144.5 $ 142.4
Total Common Stock Equity................... $1,369.1 $1,149.7 $1,264.8 $1,100.5
Book Value Per Share........................ $ 10.95 $ 9.78 $ 10.17 $ 9.20
</TABLE>
- ---------------
* Includes $345.0 of mandatorily redeemable preferred securities of a subsidiary
trust.
5. SOURCE AND AMOUNT OF FUNDS. The discussion set forth in Section 10 of
the Offer to Purchase is hereby amended and supplemented as follows:
The Offeror estimates that the total amount of funds required to acquire
the outstanding Shares pursuant to the Offer as amended and supplemented by this
Supplement and to pay related fees and expenses will be approximately $6.5
billion, assuming the purchase of all outstanding Shares. The Offeror expects to
obtain the funds required to consummate the Offer through capital contributions
or advances made by Parent or NiSource Capital Markets, Inc., a wholly owned
subsidiary of Parent.
On October 15, 1999, Parent and Credit Suisse First Boston, New York
Branch, an affiliate of the Dealer Manager, and Barclays Bank PLC amended their
existing Commitment Letter to provide for the additional funds required in
connection with the increase in the Offer. Other than increasing the amount of
the commitment to $6.5 billion, no changes were made to the Commitment Letter.
For a discussion of the terms of the Commitment Letter, see Section 10 of the
Offer to Purchase.
THE OFFER IS NOT CONDITIONED ON THE OFFEROR OBTAINING FINANCING.
6. BACKGROUND OF THE OFFER; PAST CONTACTS WITH THE COMPANY. The
discussion set forth in Section 11 of the Offer to Purchase is hereby amended
and supplemented as follows:
Since the commencement of the Offer, Parent has repeatedly attempted to
establish communication with the Company Board of Directors directly and through
the Company's financial advisors; in each case the Company has refused to meet
with Parent and has been unwilling to hear from Parent with respect to Parent's
stated willingness to increase its Offer above $68 per Share.
4
<PAGE> 7
On October 13, after meeting with its legal and financial advisors, Parent
decided to increase its offer and to confirm its willingness to work with the
senior management of the Company to help deliver value to the stockholders of
the Company and Parent. On October 17, 1999, Gary L. Neale, Chairman, President
and Chief Executive Officer of Parent, attempted to contact Oliver G. Richard
III, Chairman, President and Chief Executive Officer of the Company, to inform
Mr. Richard that the letter set forth in the press release below was being sent
to each of the directors of the Company; however, Mr. Neale was unable to reach
Mr. Richard. On October 17, 1999, Parent issued the following press release
containing the letter that was sent to each of the Company's directors on the
morning of October 17th.
NISOURCE INCREASES TENDER OFFER FOR COLUMBIA ENERGY TO $74 PER SHARE IN CASH
EXTENDS TENDER OFFER UNTIL NOVEMBER 12, 1999
MERRILLVILLE, IND., October 17 -- NiSource Inc. [NYSE: NI] today announced that
in connection with its tender offer to acquire all of the outstanding shares of
Columbia Energy Group [NYSE: CG], it has increased the consideration offered to
$74 per share in cash and extended the expiration date of the offer. The
enhanced price of $74 per share in cash, represents a 28% premium to the last
30-day daily average for Columbia's stock price and a 45% premium to the 30-day
daily average for the company's stock price before the NiSource offer was
originally announced. The offer is being extended until Midnight EST on Friday,
November 12, 1999.
NiSource noted that its previous $68 per share offer has received substantial
support from Columbia's shareholders. As of Midnight EDT on Friday, October 15,
1999, Columbia shareholders have tendered 44,448,778 shares pursuant to
NiSource's tender offer.
Gary L. Neale, chairman, president and chief executive officer of NiSource said,
"Today's offer is the right price for the right company at the right time. The
$74 cash per share we are offering is well above the value that Columbia, on its
own, in any reasonable time frame, could provide its shareholders and allows
Columbia shareholders to receive their share of the value created by the
combination of the two companies. Our offer is not subject to a financing
contingency since we have committed financing from Credit Suisse First Boston
and Barclays Bank PLC. We expect that we can close this transaction within 6-9
months.
"We have great respect for Rick Richard and the Columbia team. We believe their
skills and experience will be a valuable asset to the combined company. We are
inviting five Columbia board members including Mr. Richard, to join an expanded
board of directors and Mr. Richard to become Vice Chairman. We also would expect
to retain the heads of all critical operating units and the current headquarters
for those units," Neale said.
"In light of our revised offer, the time has come for us to reach a prompt
agreement to expedite this transaction," Mr. Neale concluded.
NOTE TO EDITORS: The full text of the letter from the NiSource Board of
Directors to the Columbia Board of Directors follows.
October 17, 1999
<TABLE>
<S> <C>
Richard F. Albosta J. Bennett Johnston
Robert H. Beeby Malcolm Jozoff
Wilson K. Cadman William E. Lavery
James P. Heffernan Gerald E. Mayo
Karen L. Hendricks Douglas E. Olesen
Malcolm T. Hopkins
</TABLE>
5
<PAGE> 8
Oliver G. Richard III
Columbia Energy Group
13880 Dulles Corner Lane
Herndon, Virginia 20171-4600
Madam and Gentlemen:
We, the directors of NiSource, Inc. ("NiSource"), were encouraged by the success
of our initial tender offer for the shares of Columbia Energy Group
("Columbia"). As you are aware, over 60.3% of your shares, including most of
your largest holders, demonstrated strong support for our offer during the
initial tender period. As of midnight on Friday, October 15, support for our
proposal continued at over 54% -- without any change in the offer price.
We have spent a great deal of time speaking with your shareholders, our own
shareholders and the Wall Street analyst community. We are now more convinced
than ever that the combination of our two companies will create significant
value for the shareholders, customers and employees of our respective companies.
IN AN EFFORT TO BRING THIS MATTER TO AN EXPEDITIOUS AND SUCCESSFUL CONCLUSION,
WE ARE REVISING OUR TENDER OFFER. WE ARE OFFERING TO ACQUIRE COLUMBIA IN A
MERGER TRANSACTION IN WHICH COLUMBIA SHAREHOLDERS WOULD NOW RECEIVE $74.00 PER
SHARE IN CASH.
Our proposal is not subject to any financing contingency, but only to customary
conditions, including the execution of a definitive merger agreement and usual
regulatory approvals. We believe negotiations can be completed very quickly, and
we are committed to dedicate all necessary resources to work with you. We are
willing to have your counsel prepare the first draft of the agreement if you
prefer.
Our success in building our business has been predicated upon employing the
skills and experience of the management team and employee base present within
the companies with which we have merged. WE, THEREFORE, ARE INVITING FIVE OF
YOU, INCLUDING MR. RICHARD, TO JOIN AN EXPANDED BOARD OF DIRECTORS AND MR.
RICHARD TO BECOME VICE CHAIRMAN OF THE MERGED COMPANIES. We also would expect to
retain the heads of all critical operating units and the current headquarters
for those units.
RIGHT COMPANY
We have the highest respect for Rick Richard, his management team and your
employees. We recognize that Columbia has taken major strides in turning the
company around after the bankruptcy in the early 1990s. However, we believe that
scale and geography are critical to success in the evolving competitive energy
industry. The combination of Columbia and NiSource will create a super-regional
energy company with the size and scope necessary to compete and win.
The Columbia and NiSource assets and market areas are complementary -- with no
overlap. Together, they create a powerful platform within the region which
extends from the Gulf, through the Midwest and into the Northeast. This corridor
accounts for over 40% of all energy consumed within the U.S. The combined
Columbia/NiSource will have over 4.1 million gas, electric, water and propane
customers in 9 states. It will be the second largest gas company in the U.S., in
throughput, and the largest east of the Rockies.
6
<PAGE> 9
RIGHT PRICE
We believe that $74.00 is the right price for Columbia. The price we are
offering is fully competitive with similar transactions in the industry. Based
upon extensive conversations with your shareholders, we are confident that this
offer reflects the strategic premium expected for Columbia's assets.
Furthermore, given the fact that more than 60% of your shareholders accepted our
previous offer, we fully expect your shareholders to be overwhelmingly
supportive of our revised offer.
As the enclosed letter indicates, we have fully committed financing for our
offer. There is no financing risk for Columbia's shareholders. Our financing
plan has been reviewed by the credit rating agencies, and they have affirmed
that the Columbia and NiSource credit ratings, pro forma for the transaction,
would be solid investment grade.
Further, we note that your stock was trading, immediately prior to our initial
offer, at $55.75 and as a result of that offer increased to $64.50. Since then,
Columbia has spent considerable time articulating its strategic plan to the
market, including announcing the sale of its trading and marketing business,
headcount reductions in its unregulated operations and an expanded stock
repurchase plan. Despite all of these efforts, Columbia's stock price
subsequently dropped back to $55.38. Only recently has it rebounded, presumably
in anticipation of a possible increase in our offer.
RIGHT TIME
The $74.00 per share offer price is well above the value that Columbia, on its
own, could provide its shareholders in any reasonable time frame. Our offer
allows your shareholders to receive, much sooner, their share of the value
created by the combination of our two companies. This is the right time for
Columbia to pursue this transaction.
Change is rapidly occurring in our industry. Many large business transactions
have been announced over the past year, including a convergence transaction
involving one of your closest competitors, CNG. The Dominion/CNG merger is
progressing rapidly and confirms our belief that a NiSource/Columbia merger
would obtain the necessary regulatory approvals on a timely basis. We have had
this offer fully reviewed by four leading regulatory experts, who are former
state utility commissioners, and they are confident that a combination of our
two companies would obtain all the necessary regulatory approvals within 6-9
months and that our proposed financing plan creates no incremental regulatory
risk.
We trust that you will act in the best interests of your shareholders and
promptly commence a dialogue with us. We look forward to hearing from you and
will be available
7
<PAGE> 10
to respond to questions you may have about our proposal and our plans for a
combined NiSource/Columbia.
Sincerely,
<TABLE>
<S> <C>
/s/ STEVEN C. BEERING /s/ IAN M. ROLLAND
- ---------------------------------- ----------------------------------
Steven C. Beering Ian M. Rolland
/s/ ARTHUR J. DECIO /s/ JOHN W. THOMPSON
- ---------------------------------- ----------------------------------
Arthur J. Decio John W. Thompson
/s/ DENNIS E. FOSTER /s/ ROBERT J. WELSH
- ---------------------------------- ----------------------------------
Dennis E. Foster Robert J. Welsh
/s/ JAMES T. MORRIS /s/ CAROLYN Y. WOO
- ---------------------------------- ----------------------------------
James T. Morris Carolyn Y. Woo
/s/ GARY L. NEALE /s/ ROGER A. YOUNG
- ---------------------------------- ----------------------------------
Gary L. Neale Roger A. Young
</TABLE>
NiSource Inc. is a holding company with a market capitalization of approximately
$3.6 billion whose primary business is the distribution of electricity, natural
gas and water in the Midwest and Northeast United States. The company also
markets utility services and customer-focused resource solutions along a
corridor stretching from Texas to Maine. Further information on the company's
offer for Columbia may found on the Internet at www.yes2nisource.com and about
the company at www.nisource.com.
This release is neither an offer to purchase nor a solicitation of an offer to
sell shares of common stock of Columbia Energy Group. Such a offer is made
solely by the Offer to Purchase, dated June 25, 1999, as amended, and the
related Letter of Transmittal. It is not being made to, and tenders will not be
accepted from, holders of shares of Columbia common stock in any jurisdiction in
which making or accepting such offer would not comply with law. In any
jurisdiction where a licensed broker or dealer must make such offer, it shall be
deemed made on behalf of NiSource Inc. by Credit Suisse First Boston or other
registered brokers or dealers licensed in such jurisdiction. The offer may be
extended beyond its November 12, 1999 expiration date. Any extension will be
publicly announced no later than 9:00 a.m., New York City time, on the next
business day. This release does not constitute a solicitation of proxies from
Columbia Energy Group's stockholders. Any such solicitation will be made only by
separate proxy materials in compliance with Section 14(a) of the Securities
Exchange Act.
<TABLE>
<S> <C>
INVESTOR CONTACT: MEDIA CONTACT:
NiSource Inc. NiSource Inc.
Dennis Senchak Maria Hibbs
(219) 647-6085 (219) 647-6201
</TABLE>
Abernathy MacGregor Frank
Joele Frank/Dan Katcher
(212) 371-5999
Also included with the Parent Board's letter to the Company Board was the
following letter from Credit Suisse First Boston and Barclays Bank PLC attaching
a copy of the amended Commitment Letter dated October 15, 1999 referred to in
Section 5 of this Supplement.
8
<PAGE> 11
<TABLE>
<S> <C>
Credit Suisse First Boston Barclays Bank PLC
Eleven Madison Avenue 222 Broadway
New York, New York 10010 New York, New York 10038
</TABLE>
October 18, 1999
Board of Directors
Columbia Energy Group
13880 Dulles Corner Lane
Herndon, Virginia 20171-4600
Members of the Board:
As you are aware, Credit Suisse First Boston and Barclays Bank PLC have
committed to provide NiSource all of the funds necessary to consummate its
tender offer at $74.00 per share for all of the outstanding shares of Columbia.
For your information, we have attached a copy of our executed commitment letter,
dated October 15, 1999.
Our commitment is subject to the terms and conditions detailed in the
commitment letter. We believe, and are confident your advisors will agree, that
these terms and conditions are customary for a transaction of this type. As
NiSource has stated and as reflected in the NiSource offer to your shareholders,
based on our commitment, NiSource's offer is not subject to financing.
Very truly yours,
<TABLE>
<S> <C>
/s/ BRUCE LING /s/ ERIC CHILTON
- --------------------------------------------- ---------------------------------------------
Bruce Ling Eric Chilton
Managing Director Managing Director
Head of Syndicated Finance Barclays Capital
Credit Suisse First Boston Barclays Bank PLC
</TABLE>
Attachment
9
<PAGE> 12
[Attachment: Amended and Restated Commitment Letter filed as Exhibit
11(b)(2)]
7. PURPOSE OF THE OFFER AND THE PROPOSED MERGER; PLANS FOR THE COMPANY;
CERTAIN CONSIDERATIONS. The discussion set forth in Section 12 of the Offer to
Purchase is hereby amended and supplemented as follows:
Except as indicated in the Offer to Purchase and this Supplement, neither
Parent nor the Offeror has any present plans or proposals which relate to or
would result in an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries,
a sale or transfer of a material amount of assets of the Company or any of its
subsidiaries or any material change in the Company's capitalization or dividend
policy or any other material changes in the Company's corporate structure or
business, or the composition of the Company Board or management.
8. CERTAIN CONDITIONS OF THE OFFER. The discussion set forth in Section
14 of the Offer to Purchase is hereby amended and supplemented as follows:
The waiting period under the HSR Act expired at 11:59 p.m., New York City
time, on August 4, 1999.
9. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. The discussion
set forth in Section 15 of the Offer to Purchase is hereby amended and
supplemented as follows:
ANTITRUST COMPLIANCE
Domestic Antitrust Compliance. The waiting period under the HSR Act
expired at 11:59 p.m., New York City time, on August 4, 1999.
PUBLIC UTILITY REGULATION
1935 Act. The purchase of Shares pursuant to the Offer and the
consummation of the Proposed Merger require approval under the 1935 Act. On
September 20, 1999, Parent and the Offeror filed an application with the
Commission seeking necessary approval under the 1935 Act to purchase Shares
pursuant to the Offer and to consummate the Proposed Merger.
STATE TAKEOVER LAWS
In connection with litigation concerning the Company's share repurchase
program, the Company has committed to tender to the Offeror any Shares acquired
by the Company pursuant to its share repurchase program to the extent that such
Shares will enable Parent and the Offeror to satisfy the 85% ownership threshold
of Section 203 of the Delaware General Corporation Law and to the extent the
other conditions to the Offer have been satisfied. In the litigation, Parent and
the Offeror have maintained that this commitment is not sufficient to eliminate
the harm that is the subject of the litigation, on the grounds that the
commitment may not be enforceable and that it would not be free from subsequent
shareholder challenge.
CERTAIN LITIGATION
Commencing on June 7, 1999, various stockholders filed five purported class
action lawsuits in the Delaware Court of Chancery against the Company and each
of its directors. The complaints alleged that the directors (i) breached their
fiduciary duties by refusing to negotiate with Parent and (ii) acted to protect
their positions and to entrench themselves at the Company. The plaintiffs seek,
among other things, an injunction ordering the Company and its directors to
cooperate fully with any person or entity with a bona fide interest in a
possible business combination that would maximize stockholder value. On June 18,
1999, plaintiff Ellis Investments filed a First Amended Class Action Complaint
against the Company and its directors adding an additional count alleging that
the directors violated the Company's Certificate of Incorporation and Bylaws by
wrongfully depriving stockholders of their right to elect the minimum number of
directors required by the Certificate of Incorporation and Bylaws and seeking an
order directing the defendants to reopen the 1999 annual meeting of stockholders
for consideration of any business properly brought before the meeting, including
the election of an additional director. On July 9, 1999, the Chancery Court
entered an order consolidating the five separate shareholder actions and
coordinating in all respects Count II of the
10
<PAGE> 13
consolidated shareholder complaint (alleging that the Company and its directors
failed to ensure that the stockholders elected the minimum number of directors
required by the Company's Certificate of Incorporation and Bylaws) with the June
24, 1999 Chancery Court action filed by NiSource Capital Markets, Inc., a wholly
owned subsidiary of Parent ("NiSource Capital Markets"), which is discussed
below. Plaintiffs subsequently filed a second amended complaint in the
consolidated action on July 30, 1999 to address the Company's implementation of
a share repurchase program and various "golden parachute" agreements entered
into with the Company's senior management. On September 8, 1999, the defendants
answered the second amended complaint.
On June 24, 1999, Parent and the Offeror filed an action in the Federal
District Court for the District of Delaware against the Company and each of its
directors. The complaint alleges, among other things, that the directors
violated the federal securities laws by making certain false, misleading and
disparaging statements concerning the Proposed Merger and have breached their
fiduciary duties by not acting to exempt the Offer from the operation of Section
203 of the Delaware General Corporation Law, which governs certain business
combinations with interested stockholders. Plaintiffs seek, among other things,
declaratory and injunctive relief requiring the Company and its directors to
exempt the Offer from the restrictions of Section 203 of the Delaware General
Corporation Law and to enjoin the directors from taking any action to improperly
impede the Proposed Merger. Plaintiffs filed an amended complaint on July 8,
1999, further delineating the bases for their claims. On July 22, 1999,
defendants moved to dismiss plaintiffs' complaint and to stay discovery pending
a determination of the motion to dismiss. The court denied defendants' motion to
stay discovery by order dated August 20, 1999. Discovery began on September 3,
1999, when the parties exchanged certain documents. Depositions began on
September 28, 1999.
On June 24, 1999, NiSource Capital Markets filed an action in the Delaware
Court of Chancery against the Company and each of its directors. The complaint
alleged that the directors breached their fiduciary duties and violated the
legal and contractual rights of the Company's stockholders to vote to elect the
minimum number of directors required by the Company's Certificate of
Incorporation and Bylaws. Plaintiff sought, among other things, an order (i)
enforcing plaintiff's legal and contractual rights as a stockholder to vote for
the minimum number of directors, and (ii) requiring the defendants to reconvene
the 1999 annual meeting of the Company's stockholders for the purpose of
electing an additional director and for the conduct of such other business as
may be properly brought before the meeting. On September 22, 1999, the Chancery
Court orally denied the joint motion of NiSource Capital Markets and the
shareholder plaintiffs for judgment as a matter of law and dismissed the
complaint. Any notice of appeal must be filed within 30 days of the date on
which the Court enters a written judgment dismissing the complaint.
On July 12, 1999, plaintiffs John Lannis, Mary Ann Walton and Ellis
Investments filed a complaint in the Federal District Court for the District of
Delaware against the Company and each of its directors asserting claims similar
to those contained in the federal action filed by Parent and the Offeror on June
24, 1999. On July 22, 1999, defendants moved to dismiss plaintiffs' complaint
and to stay discovery. The Federal District Court denied defendants' motion to
stay discovery by order dated August 20, 1999. Discovery began on September 3,
1999, when the parties exchanged certain documents. Depositions began on
September 28, 1999.
On July 29, 1999, Parent, NiSource Capital Markets and the Offeror filed an
action in the Delaware Court of Chancery against the Company and each of its
directors. The complaint seeks preliminary and permanent injunctive relief
enjoining defendants from carrying out a share buyback program approved by the
board of the Company. The complaint alleges that the program constitutes an
invalid and illegal defensive measure in response to the tender offer announced
by Parent and the Offeror. On August 23, 1999, defendants moved to dismiss the
complaint or, in the alternative, to stay the action. Discovery began on
September 3, 1999, when the parties exchanged certain documents. Depositions
began on September 28, 1999. A preliminary injunction hearing and a hearing on
defendants' motion to dismiss has been scheduled by the court for December 9,
1999.
11
<PAGE> 14
10. MISCELLANEOUS. The discussion set forth in Section 17 of the Offer to
Purchase is hereby amended and supplemented as follows:
Parent and the Offeror have filed with the Commission amendments to the
Tender Offer Statement on Schedule 14D-1 pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act furnishing certain additional
information with respect to the Offer, and may file further amendments thereto.
The Tender Offer Statement on Schedule 14D-1 and any and all amendments thereto,
including exhibits, may be examined and copies may be obtained at the same
places and in the same manner as set forth with respect to the Company in
Section 8 of the Offer to Purchase (except that the amendments will not be
available at the regional offices of the Commission).
Except as modified by this Supplement, the terms and conditions set forth
in the Offer to Purchase remain applicable in all respects to the Offer, and
this Supplement should be read in conjunction with the Offer to Purchase and the
related Letter of Transmittal.
No person has been authorized to give any information or make any
representation on behalf of the Offeror or Parent other than as contained in the
Offer to Purchase, this Supplement or in the Letter of Transmittal, and, if any
information or representation is given or made, it should not be relied upon as
having been authorized by the Offeror or Parent.
CEG ACQUISITION CORP.
October 18, 1999
12
<PAGE> 15
SCHEDULE I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF PARENT AND THE OFFEROR
Schedule I to the Offer to Purchase is hereby amended and supplemented as
follows:
2. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT.
Since April 1999, James K. Abcouwer also has served as President of
EnergyUSA, Inc., a subsidiary of Parent.
Denis E. Ribordy is no longer a director of Parent.
In August 1999, Dennis E. Foster became a director of Parent. Mr. Foster's
present principal occupation or employment and five-year employment history are
as follows:
Vice Chairman of ALLTEL Corporation, Little Rock, Arkansas, since July
1998. ALLTEL is a full service telecom and information services
provider. President and Chief Executive Officer of 3608 Communications
Company from March 1996 to July 1998 and President and Chief Operating
Officer of Sprint Cellular, Sprint Corporation from 1993 to 1996. Mr.
Foster is also a director of ALLTEL and Salient 3 Communications, Inc.
<PAGE> 16
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or By Overnight
(for Eligible Institutions Courier:
Tender & Exchange Department Only)
P.O. Box 11248 (212) 815-6213 Tender & Exchange Department
Church Street Station For Confirmation Telephone: 101 Barclay Street
New York, New York 10286-1248 (212) 815-6173 Receive and Deliver Window
New York, New York 10286
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth below. Additional copies of this Supplement, the Offer to Purchase,
the Letter of Transmittal and other tender offer materials may be obtained from
the Information Agent as set forth below, and will be furnished promptly at the
Offeror's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokerage Firms Call Collect: (212) 750-5833
All Others Call Toll Free: (877) 750-5837
The Dealer Manager for the Offer is:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free: (800) 881-8320
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
COLUMBIA ENERGY GROUP
PURSUANT TO THE OFFER TO PURCHASE DATED JUNE 25, 1999
AND THE SUPPLEMENT THERETO DATED OCTOBER 18, 1999
BY
CEG ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY
OF
NISOURCE INC.
THE OFFER HAS BEEN EXTENDED. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
NOVEMBER 12, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or By Overnight Courier:
(for Eligible Institutions Only)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station For Confirmation Telephone: Receive and Deliver Window
New York, New York 10286-1248 (212) 815-6173 New York, New York 10286
</TABLE>
YOU MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE
THE SUBSTITUTE FORM W-9 PROVIDED BELOW. PLEASE READ THIS ENTIRE LETTER OF
TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS, CAREFULLY BEFORE
COMPLETING THIS LETTER OF TRANSMITTAL.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
SHARE CERTIFICATE OF SHARES NUMBER
NUMBER(S) REPRESENTED BY OF SHARES
TENDERED* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Number
of Shares
- ------------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each certificate delivered to the
Depositary are being tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE VALID DELIVERY. DELIVERIES TO THE OFFEROR, PARENT OR THE DEALER
MANAGER WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT
CONSTITUTE VALID DELIVERY. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
This Letter of Transmittal is to be completed by stockholders of Columbia
Energy Group if certificates evidencing shares of common stock, par value $.01
per share, of Columbia Energy Group (the "Shares") are to be forwarded herewith
or, unless an Agent's Message (as defined below) is used, if a tender of Shares
is to be made by book-entry transfer to the account of The Bank of New York, as
Depositary (the "Depositary"), at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase (as defined below).
WHILE THE ORIGINAL (BLUE) LETTER OF TRANSMITTAL PREVIOUSLY CIRCULATED WITH
THE OFFER TO PURCHASE DATED JUNE 25, 1999 REFERS ONLY TO SUCH OFFER TO PURCHASE,
STOCKHOLDERS USING SUCH DOCUMENT TO TENDER THEIR SHARES (AS DEFINED ABOVE) WILL
NEVERTHELESS RECEIVE $74 PER SHARE FOR EACH SHARE VALIDLY TENDERED AND NOT
PROPERLY WITHDRAWN AND ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER (AS DEFINED
BELOW), SUBJECT TO THE CONDITIONS OF THE OFFER. STOCKHOLDERS WHO HAVE PREVIOUSLY
VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN THEIR SHARES PURSUANT TO THE OFFER
ARE NOT REQUIRED TO TAKE ANY FURTHER ACTION TO RECEIVE, SUBJECT TO THE
CONDITIONS OF THE OFFER, THE INCREASED TENDER PRICE OF $74 PER SHARE IF SHARES
ARE ACCEPTED FOR PAYMENT AND PAID FOR BY THE OFFEROR (AS DEFINED BELOW) PURSUANT
TO THE OFFER.
Holders of Shares whose certificates are not immediately available, or who
are unable to deliver their certificates and all other documents required by
this Letter of Transmittal to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Supplement (as defined below)) or who cannot
complete the procedure for delivery by book-entry transfer prior to the
Expiration Date must tender their Shares pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution
Account Number
Transaction Code Number
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
Date of Execution of Notice of Guaranteed Delivery
Window Ticket Number (if any)
Name of Institution Which Guaranteed Delivery
If delivery is by book-entry transfer:
Name of Tendering Institution
Account Number
Transaction Code Number
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificates representing
Shares tendered hereby. The certificates and the number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes.
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to CEG Acquisition Corp., a Delaware
corporation (the "Offeror") and a wholly owned subsidiary of NiSource Inc., an
Indiana corporation ("Parent"), the above described shares of common stock, par
value $.01 per share (the "Shares"), of Columbia Energy Group, a Delaware
corporation (the "Company"), pursuant to the Offeror's offer to purchase all
outstanding Shares, at a purchase price of $74 per Share, net to the seller in
cash, without interest thereon (such price or such higher price per Share as may
be paid in the Offer (as defined below), is referred to herein as the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated June 25, 1999 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto, dated October 18, 1999 (the
"Supplement"), receipt of which are hereby acknowledged, and in this Letter of
Transmittal (which, as either may be amended or supplemented from time to time,
collectively constitute the "Offer"). The undersigned understands that the
Offeror reserves the right to transfer or assign, in whole or from time to time
in part, to one or more of its affiliates, the right to purchase all or any
portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, the acceptance for payment of the Shares
tendered herewith in accordance with the terms and subject to the conditions of
the Offer (including, if the Offer is extended or amended, the terms and
conditions of such extension or amendment), the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Offeror, all right, title
and interest in and to all of the Shares tendered hereby and any and all
dividends, distributions (including, without limitation, distributions of
additional Shares) and rights declared, issued, paid or distributed in respect
of such Shares on or after June 25, 1999 and payable or distributable to the
undersigned on a date prior to the transfer to the name of the Offeror (or
nominee or transferee of the Offeror) on the Company's stock transfer records of
the Shares tendered herewith (collectively "Distributions") and irrevocably
constitutes and appoints designees of the Offeror as the true and lawful agents
and attorneys-in-fact of the undersigned with respect to such Shares and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (i) deliver
certificates evidencing such Shares and all Distributions or transfer ownership
of such Shares and all Distributions on the account books maintained by the
Book-Entry Transfer Facility, together, in either case, with all accompanying
evidences of transfer and authenticity, to the Depositary for the account of the
Offeror, (ii) present certificates evidencing such Shares and all Distributions
for transfer on the books of the Company and (iii) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares and all
Distributions, all in accordance with the terms and subject to the conditions of
the Offer.
If, on or after the date of the Offer to Purchase, the Company should
declare or pay any dividend on the Shares, other than the $.225 regular
quarterly dividend, or make any distribution (including, without limitation, the
issuance of additional Shares pursuant to a stock dividend or stock split, the
issuance of other securities or the issuance of rights for the purchase of any
securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of the
Offeror or its nominee or transferee on the Company's stock transfer records of
the Shares purchased pursuant to the Offer, then, without prejudice to the
Offeror's rights under Sections 1 and 14 of the Offer to Purchase: (i) the Offer
Price per Share payable by the Offeror pursuant to the Offer will be reduced by
the amount of any such cash dividend or cash distribution and (ii) any such
non-cash dividend, distribution or right to be received by the tendering
stockholders will be received and held by such tendering stockholders for the
account of the Offeror and will be required to be promptly remitted and
transferred by each such tendering stockholder to the Depositary for the account
of the Offeror, accompanied by appropriate documentation of transfer. Pending
such remittance and subject to applicable law, the Offeror will be entitled to
all rights and privileges as owner of any such non-cash dividend, distribution
or right and may withhold the entire purchase price or deduct from the Offer
Price the amount or value thereof, as determined by the Offeror in its sole
discretion.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints designees of the Offeror and each of them as such stockholder's
attorneys-in-fact and proxies, each with full power of substitution, in the
manner set forth in this Letter of Transmittal, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by the Offeror (and with respect to any and all other
Shares or other securities or rights issued or issuable in respect of such
Shares on or after the date hereof). All such powers of attorney and proxies
shall be considered irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
the Offeror accepts such Shares for payment. Upon such acceptance for payment,
all prior powers of attorney and proxies given by such stockholder with respect
to such Shares or other securities or rights will, without further action, be
revoked and no subsequent powers of attorney and proxies may be given nor any
3
<PAGE> 4
subsequent written consents executed (and, if given or executed, will not be
deemed effective). The designees of the Offeror will, with respect to the Shares
and other securities or rights for which such appointment is effective, be
empowered to exercise all voting and other rights of such stockholder as they,
in their sole judgment, deem proper in respect of any annual or special meeting
of the Company's stockholders, or any adjournment or postponement thereof, or by
consent in lieu of any meeting or otherwise. The Offeror reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the Offeror's acceptance for payment of such Shares, the Offeror or its
designee must be able to exercise full voting and other rights with respect to
such Shares and other securities or rights issued or issuable in respect of such
Shares, including voting the Shares at any meeting of stockholders (whether
annual or special or whether or not adjourned).
The undersigned hereby represents and warrants to the Offeror that: (i) the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby (and any Distributions), (ii) the undersigned owns
the Shares tendered hereby within the meaning of Rule 14e-4 promulgated under
the Securities Exchange Act of 1934, as amended ("Rule 14e-4"), and that such
tender of Shares complies with Rule 14e-4 and (iii) when and to the extent such
Shares are accepted for payment by the Offeror, the Offeror will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, claims, encumbrances, conditional sales arrangements or
other obligations relating to the sale or transfer thereof and that none of such
Shares and Distributions will be subject to any adverse claim. The undersigned,
upon request, shall execute and deliver all additional documents deemed by the
Depositary or the Offeror to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions. In
addition, the undersigned shall promptly remit and transfer to the Depositary
for the account of the Offeror all Distributions in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer; and,
pending such remittance and transfer or appropriate assurance thereof, the
Offeror shall be entitled, subject to applicable law, to all rights and
privileges as the owner of each such Distribution and may withhold the entire
Offer Price or deduct from the Offer Price the amount or value of such
Distribution as determined by the Offeror in its sole discretion.
The undersigned represents and warrants that the undersigned has read and
agrees to all of the terms and conditions of the Offer. All authority herein
conferred or agreed to be conferred shall not be affected by and shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as described in Section 4 of
the Offer to Purchase, tenders of Shares made pursuant to the Offer are
irrevocable.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 2 of the Offer to Purchase, and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. The undersigned recognizes that, under certain
circumstances set forth in the Offer to Purchase and the Supplement, the Offeror
may not be required to accept for payment any of the Shares tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the Offer Price for all Shares
purchased, and return any certificates for Shares not tendered or not accepted
for payment, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
Offer Price for all Shares accepted for payment, and return any certificates for
any Shares not tendered or not accepted for payment (and accompanying documents,
as appropriate), to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." If the boxes entitled "Special Delivery
Instructions" and "Special Payment Instructions" are both completed, please
issue the check for the Offer Price for all Shares accepted for payment and
return any certificates for Shares not tendered or not accepted for payment in
the name(s) of, and deliver said check and/or certificate(s) to, the person(s)
so indicated. Unless otherwise indicated in the box entitled "Special Payment
Instructions," in the case of a book-entry delivery of Shares, please credit the
account maintained at the Book-Entry Transfer Facility with any Shares not
purchased. The undersigned recognizes that the Offeror has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from the
name(s) of the registered holder(s) thereof if the Offeror does not accept for
payment any of the Shares tendered hereby.
4
<PAGE> 5
The undersigned understands that acceptance of Shares by the Offeror for
payment will constitute a binding agreement between the undersigned and the
Offeror upon the terms and subject to the conditions of the Offer.
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the Offer Price of Shares purchased
or certificates for Shares not tendered or not purchased are to be issued
in the name of someone other than the undersigned.
Issue [ ] Check [ ] Certificate(s) to:
Name
----------------------------------------------------
(Please Print)
Address
--------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------
(Tax ID or Social Security No.)
(See Substitute Form W-9)
------------------------------------------------------------
(Book-Entry Facility Account Number)
(if applicable)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the Offer Price of Shares purchased
or certificates for Shares not tendered or not purchased are to be sent to
someone other than the undersigned or to the undersigned at an address
other than that shown under "Description of Shares Tendered."
Mail [ ] Check [ ] Certificate(s) to:
Name
----------------------------------------------------
(Please Print)
Address
--------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------
(Tax ID or Social Security No.)
(see Substitute Form W-9)
------------------------------------------------------------
5
<PAGE> 6
PLEASE SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S)
Dated:
- --------------------------- , 1999
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share certificate(s) or by person(s) authorized to become registered holder(s)
by certificates and documents transmitted herewith. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, please
set forth full title and see Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDING ZIP CODE)
<TABLE>
<S> <C>
- ---------------------------------------------------------- ----------------------------------------------------------
(AREA CODE AND TELEPHONE NO.) (TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
</TABLE>
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE OVER THE BELOW INFORMATION.
Authorized Signature
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Name of Firm
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- --------------------------------------------------------------------------------
Dated:
- --------------------------- , 1999
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if (i) this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of the Shares tendered
herewith, unless such holder(s) have completed either the box entitled "Special
Delivery Instructions" or "Special Payment Instructions" on this Letter of
Transmittal; or (ii) such Shares are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a member in good standing of in the Security Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program or the Stock Exchange Medallion Program or a bank, broker,
dealer, credit union, savings association or other entity which is an "eligible
guarantor institution," as such term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended (each such entity, an "Eligible
Institution"). In all other cases, all signatures on this Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by stockholders if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined below) is used, if
tenders are to be made pursuant to the procedures for delivery by book-entry
transfer set forth in Section 3 of the Offer to Purchase. Certificates
evidencing all tendered Shares or timely confirmation of a book-entry transfer
(a "Book-Entry Confirmation") into the Depositary's account at the Book-Entry
Transfer Facility of all Shares delivered by book-entry transfer, together with
a properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) with all required signature guarantees, or an Agent's Message in
connection with a book-entry transfer, and any other documents required by this
Letter of Transmittal must be received by the Depositary at the address set
forth herein prior to the Expiration Date (as defined in the Supplement), or the
tendering stockholder must comply with the guaranteed delivery procedures set
forth below. If certificates are forwarded to the Depositary in multiple
deliveries, this Letter of Transmittal (or a facsimile hereof) properly
completed and duly executed with all required signature guarantees must
accompany each such delivery.
Stockholders whose certificates for Shares are not immediately available,
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer prior to the Expiration Date may tender their
Shares pursuant to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase. Pursuant to such procedures, (i) such tender must be made
by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Offeror, must be received by the Depositary, either by hand delivery, mail
or facsimile transmission, prior to the Expiration Date and (iii) the
certificates (or Book-Entry Confirmation) representing all tendered Shares, in
proper form for transfer, together with this Letter of Transmittal (or a
facsimile hereof) properly completed and duly executed with all required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message, and any other documents required by this Letter of Transmittal, must be
received by the Depositary within three New York Stock Exchange Inc. trading
days after the date of the execution and delivery to the Depositary of the
Notice of Guaranteed Delivery.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility who is tendering the Shares that the participant has received
and agrees to be bound by the terms of the related Letter of Transmittal and
that the Offeror may enforce the agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATES FOR
SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING
STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED FOR SUCH DOCUMENTS TO REACH THE DEPOSITARY. EXCEPT AS
OTHERWISE PROVIDED IN THIS INSTRUCTION 2, DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE DEPOSITARY.
7
<PAGE> 8
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile hereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the certificate numbers, the number of Shares
evidenced by such certificates and the number of Shares tendered should be
listed on a separate signed schedule and attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER.) If fewer than all the Shares evidenced by any certificate
delivered to the Depositary herewith are to be tendered, fill in the number of
Shares that are to be tendered in the box entitled "Number of Shares Tendered."
In such case, as soon as practicable after the Expiration Date, new
certificate(s) evidencing the remainder of the Shares that were evidenced by the
certificates delivered to the Depositary herewith will be sent to you, unless
otherwise provided in the box entitled "Special Delivery Instructions." All
Shares represented by certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the certificates without alteration, enlargement or any other change whatsoever.
DO NOT SIGN THE BACK OF THE CERTIFICATES.
If any Share tendered hereby is held of record by two or more holders, all
such holders must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in names of different
holders, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment is to be made to, or certificates for Shares not
tendered or not purchased are to be issued in the name of, a person other than
the registered holder(s), in which case the certificate(s) tendered hereby must
be endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such
certificate(s), with such signatures guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares tendered hereby, the certificates tendered
hereby must be endorsed or accompanied by appropriate stock powers, in either
case signed as the name(s) of the registered holder(s) appear(s) on such
certificates. Signatures on such certificates and stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Offeror of such person's authority to so act must be
submitted.
6. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the Offer
Price of any Shares tendered hereby, or certificate(s) for Shares not tendered
or not accepted for payment, are to be issued in the name of a person other than
the person(s) signing this Letter of Transmittal, or if such check or any such
certificate is to be sent to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal but
at an address other than that shown in the box entitled "Description of Shares
Tendered," the appropriate boxes on this Letter of Transmittal must be
completed. Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at the Book-Entry Transfer Facility from which such transfer
was made.
7. STOCK TRANSFER TAXES. Except as set forth in this Instruction 7, the
Offeror will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of the purchased Shares to it, or to its order, pursuant
to the Offer. If, however, payment of the Offer Price of any Shares purchased is
to be made to, or certificate(s) for Shares not tendered or not purchased are to
be issued in the name of, a person other than the registered owner(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any
8
<PAGE> 9
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the Offer Price of the Shares purchased, unless evidence
satisfactory to the Offeror of the payment of such taxes or exemption therefrom
is submitted.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the certificates evidencing tendered
Shares.
8. WAIVER OF CONDITIONS. The conditions of the Offer may be waived, in
whole or in part, at any time and from time to time in Offeror's sole
discretion.
9. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct taxpayer identification number ("TIN"), generally
the stockholder's social security or federal employer identification number, and
with certain other information on the Substitute Form W-9, which is provided
under "Important Tax Information" below, and to certify, under penalties of
perjury, that such number is correct and that the stockholder is not subject to
backup withholding of federal income tax. If a tendering stockholder has been
notified by the Internal Revenue Service that such stockholder is subject to
backup withholding, such stockholder must cross out item (2) of the
Certification box (Part 2) of the Substitute Form W-9, unless such stockholder
has since been notified by the Internal Revenue Service that such stockholder is
no longer subject to backup withholding. Failure to provide the information on
the Substitute Form W-9 may subject the tendering stockholder to 31% federal
income tax withholding on the payment of the Offer Price of all Shares purchased
from such stockholder. The box in Part 3 of the Substitute Form W-9 may be
checked if the tendering stockholder has not been issued a TIN and has applied
for a TIN or intends to apply for a TIN in the near future. If the box in Part 3
is checked and the Depositary is not provided with the TIN within 60 days, the
Depositary will withhold 31% on all payments of the Offer Price to such
stockholder until a TIN is provided to the Depositary.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed. To expedite
this process, you may call the transfer agent for the Company, Harris Trust and
Savings Bank, at (312) 461-2121.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests
for assistance may be directed to the Information Agent or the Dealer Manager at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, the Supplement, this Letter of Transmittal, the
Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained from the
Information Agent or the Dealer Manager at the addresses set forth below or from
brokers, dealers, commercial banks or trust companies. Such materials will be
furnished at the Offeror's expense.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's current TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder or other payee
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such stockholder or other payee with respect
to Shares purchased pursuant to the Offer may be subject to backup withholding
of 31%.
9
<PAGE> 10
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual or a foreign entity to qualify
as an exempt recipient, that stockholder must submit to the Depositary a
properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed
under penalties of perjury, attesting to that individual's exempt status. A Form
W-8 can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payment made to the stockholder or other payee. Backup withholding is not
an additional tax. Rather, the federal income tax liability of persons subject
to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made to a stockholder or other
payee with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of the stockholder's current TIN (or the TIN
of any other payee) by completing the form below, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such stockholder is awaiting
a TIN), and that (1) the stockholder has not been notified by the Internal
Revenue Service that the stockholder is subject to backup withholding as a
result of failure to report all interest or dividends or (2) the Internal
Revenue Service has notified the stockholder that the stockholder is no longer
subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares tendered hereby. If the Shares are registered in more than one name or
are not registered in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
10
<PAGE> 11
ALL TENDERING STOCKHOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: The Bank of New York
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE
PART 1 -- Please provide your TIN in the box at Social Security Number
FORM W-9 the right and certify by signing and dating
DEPARTMENT OF THE TREASURY below. (For most individuals, this is your or
INTERNAL REVENUE SERVICE social security number, see Obtaining a Number
in the enclosed Guidelines for Certification of Employer Identification Number
Taxpayer Identification Number of Substitute ----------------------------
Form W-9.) Note: If the account is in more than
one name see the chart in the enclosed
Guidelines to determine which number to give
payer.
---------------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of perjury, I certify that:
PAYER'S REQUEST FOR TAXPAYER (1) The number shown on this form is my correct TIN (or I am waiting for a number
IDENTIFICATION NUMBER ("TIN") to be issued to me) and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
(the "IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
Certification Instructions -- You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup withholding
because of under-reporting interest or dividends on your tax return. However,
if after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS that you are no longer subject
to backup withholding, do not cross out such item (2).
- --------------------------------------------------------------------------------------------------------------------------
SIGN HERE Signature ------------------------------------- PART 3 --
Date-------------------, 1999 Awaiting TIN [ ]
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
11
<PAGE> 12
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld.
Signature Date ________________, 1999
Name (please print)
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and locations
listed below. Additional copies of the Offer to Purchase, the Supplement, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from
the Information Agent at its address and telephone numbers set forth below.
Holders of Shares may also contact their broker, dealer, commercial bank or
trust company or other nominee for assistance concerning the Offer.
12
<PAGE> 13
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokerage Firms Call Collect: (212) 750-5833
All Others Call Toll Free: (877) 750-5837
The Dealer Manager for the Offer is:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010
Call Toll Free: (800) 881-8320
<PAGE> 1
[Credit Suisse First Boston Corporation Letterhead]
CEG ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
NISOURCE INC.
HAS AMENDED ITS TENDER OFFER TO
INCREASE THE CASH PURCHASE PRICE FOR
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
COLUMBIA ENERGY GROUP
TO
$74 NET PER SHARE
THE OFFER HAS BEEN EXTENDED. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
NOVEMBER 12, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
October 18, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by CEG Acquisition Corp., a Delaware corporation
(the "Offeror") and a wholly owned subsidiary of NiSource Inc., an Indiana
corporation ("Parent"), to act as Dealer Manager in connection with the
Offeror's offer to purchase all outstanding shares of common stock, par value
$.01 per share (the "Shares"), of Columbia Energy Group, a Delaware corporation
(the "Company"), at a purchase price of $74 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Offeror's Offer to Purchase, dated June 25, 1999 (the "Offer to
Purchase"), as amended and supplemented by the Supplement thereto, dated October
18, 1999 (the "Supplement"), and in the related Letter of Transmittal (which, as
either may be amended or supplemented from time to time, collectively constitute
the "Offer") enclosed herewith.
The Offer is conditioned upon, among other things: (1) there being validly
tendered and not properly withdrawn prior to the expiration of the Offer that
number of Shares which, together with the Shares owned by Parent and its
subsidiaries, represents at least 51 percent of the voting power of the Company
(determined on a fully diluted basis); (2) the Offeror being satisfied that the
restrictions on business combinations contained in Section 203 of the Delaware
General Corporation Law would not apply to the Offeror or Parent in connection
with the Offer or the Proposed Merger (as defined in the Offer to Purchase) (as
a result of action by the Company's Board of Directors, the ownership by the
Offeror upon consummation of the Offer of at least 85% of the outstanding voting
stock of the Company (other than Shares held by directors who are also officers
and certain employee stock plans of the Company) or otherwise); and (3) all
required federal, state and local public utility regulatory consents and
approvals having been received and become Final Orders (as defined in the Offer
to Purchase) and such Final Orders not imposing terms or conditions which would
have, or would be reasonably likely to have, a material adverse effect on the
business, assets, condition (financial or
<PAGE> 2
otherwise), prospects or results of operations of Parent and the Company and
their respective subsidiaries on a consolidated basis. The Offer is also subject
to other terms and conditions set forth in the Offer to Purchase. The Offer is
not conditioned on obtaining financing. See the Introduction and Sections 10,
12, 14 and 15 of the Offer to Purchase and Sections 5, 7, 8 and 9 of the
Supplement.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Supplement dated October 18, 1999.
2. The revised (green) Letter of Transmittal to tender the Shares for
your use and for the information of your clients (facsimile copies of the
Letter of Transmittal may be used to tender such Shares).
3. The revised (grey) Notice of Guaranteed Delivery to be used to
accept the Offer if a stockholder's certificates evidencing such Shares are
not immediately available, if time will not permit certificates for Shares
and all other required documents to be delivered to The Bank of New York
(the "Depositary") by the Expiration Date (as defined in the Supplement) or
if the procedures for book-entry transfer cannot be completed prior to the
Expiration Date.
4. A revised form of letter which may be sent to your clients for
whose accounts you hold Shares in your name or in the name of a nominee,
with space provided for obtaining such clients' instructions with regard to
the Offer.
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
6. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 12, 1999, UNLESS THE OFFER IS
FURTHER EXTENDED.
Your attention is invited to the following:
1. The offer price is $74 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer.
2. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, November 12, 1999, unless the Offer is further
extended.
3. The Offer is being made for all Shares outstanding.
4. Except as set forth in Instruction 7 of the Letter of Transmittal,
tendering stockholders will not be obligated to pay stock transfer taxes on
the purchase of Shares by the Offeror pursuant to the Offer. However,
federal income tax backup withholding at a rate of 31% may be required,
unless an exemption is applicable or unless the required taxpayer
identification information is provided. See Instruction 9 to the Letter of
Transmittal.
5. Notwithstanding any other provision of the Offer, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (i) certificates evidencing,
or timely Book-Entry Confirmation (as defined in the Offer to Purchase)
with respect to, such Shares and (ii) the Letter of Transmittal (or
facsimile thereof) properly completed and duly executed with all required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase), together with any other documents required by the Letter of
Transmittal. See Section 3 -- "Procedure for Tendering Shares" of the Offer
to Purchase.
If holders of Shares wish to tender their Shares, but it is impracticable
for them to forward their certificates prior to the Expiration Date or to comply
with the book-entry transfer procedures on a timely basis,
2
<PAGE> 3
a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 -- "Procedure for Tendering Shares" of the Offer to
Purchase.
Neither Parent nor the Offeror nor any officer, director, stockholder,
agent or other representative of Parent or the Offeror will pay any fees or
commissions to any broker, dealer, or other person (other than the Dealer
Manager, the Information Agent and the Depositary as described in the Offer to
Purchase and the Supplement) in connection with the solicitation of tenders of
Shares pursuant to the Offer. The Offeror will, however, upon request, reimburse
you for customary mailing and handling expenses incurred by you in forwarding
any of the enclosed materials to your clients.
The Offeror will pay or cause to be paid all stock transfer taxes
applicable to the purchase of Shares pursuant to the Offer, except as set forth
in Instruction 7 of the Letter of Transmittal.
Any inquiries you have with respect to the Offer should be addressed to
Credit Suisse First Boston Corporation, the Dealer Manager, or Innisfree M&A
Incorporated, the Information Agent, at their respective addresses and telephone
numbers set forth on the back cover of the Offer to Purchase and the Supplement.
Additional copies of the enclosed material may be obtained from the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover page of the Offer to Purchase and the Supplement.
Very truly yours,
Credit Suisse First Boston Corporation
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
OTHER PERSON AS THE AGENT OF THE OFFEROR, PARENT, THE DEALER MANAGER, THE
DEPOSITARY, THE INFORMATION AGENT OR OF ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER, EXCEPT FOR STATEMENTS
EXPRESSLY MADE IN THE ENCLOSED DOCUMENTS.
3
<PAGE> 1
CEG ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
NISOURCE INC.
HAS AMENDED ITS TENDER OFFER TO
INCREASE THE CASH PURCHASE PRICE FOR
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
COLUMBIA ENERGY GROUP
TO
$74 NET PER SHARE
THE OFFER HAS BEEN EXTENDED. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
NOVEMBER 12, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
October 18, 1999
To Our Clients:
Enclosed for your consideration is a Supplement, dated October 18, 1999
(the "Supplement"), to the Offer to Purchase, dated June 25, 1999 (the "Offer to
Purchase"), and a revised Letter of Transmittal related thereto (which, as
either may be amended or supplemented from time to time, collectively constitute
the "Offer"), in connection with the offer by CEG Acquisition Corp., a Delaware
corporation (the "Offeror") and a wholly owned subsidiary of NiSource Inc., an
Indiana corporation ("Parent"), to purchase all of the outstanding shares of
Common Stock, par value $.01 per share (the "Shares"), of Columbia Energy Group,
a Delaware corporation (the "Company"), at a purchase price of $74 per Share,
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in the Offer.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED AND NOT PROPERLY
WITHDRAWN THEIR SHARES PURSUANT TO THE OFFER ARE NOT REQUIRED TO TAKE ANY
FURTHER ACTION TO TENDER THEIR SHARES EXCEPT AS MAY BE REQUIRED BY THE
GUARANTEED DELIVERY PROCEDURE IF SUCH PROCEDURE WAS UTILIZED. IF SHARES ARE
ACCEPTED FOR PAYMENT AND PAID FOR BY THE OFFEROR PURSUANT TO THE OFFER, SUCH
STOCKHOLDERS WILL RECEIVE, SUBJECT TO THE CONDITIONS OF THE OFFER, THE INCREASED
TENDER PRICE OF $74 PER SHARE. SEE SECTION 4 OF THE OFFER TO PURCHASE FOR THE
PROCEDURES FOR WITHDRAWING SHARES TENDERED PURSUANT TO THE OFFER.
Your attention is directed to the following:
1. The offer price is $74 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer.
2. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, November 12, 1999, unless the Offer is further
extended.
<PAGE> 2
3. The Offer is being made for all Shares outstanding. The Offer is
conditioned upon, among other things: (1) there being validly tendered and
not properly withdrawn prior to the expiration of the Offer that number of
Shares which, together with the Shares owned by Parent and its
subsidiaries, represents at least 51 percent of the voting power of the
Company (determined on a fully diluted basis); (2) the Offeror being
satisfied that the restrictions on business combinations contained in
Section 203 of the Delaware General Corporation Law would not apply to the
Offeror or Parent in connection with the Offer or the Proposed Merger (as
defined in the Offer to Purchase) (as a result of action by the Company's
Board of Directors, the ownership by the Offeror upon consummation of the
Offer of at least 85% of the outstanding voting stock of the Company (other
than Shares held by directors who are also officers and certain employee
stock plans of the Company) or otherwise); and (3) all required federal,
state and local public utility regulatory consents and approvals having
been received and become Final Orders (as defined in the Offer to Purchase)
and such Final Orders not imposing terms or conditions which would have, or
would be reasonably likely to have, a material adverse effect on the
business, assets, condition (financial or otherwise), prospects or results
of operations of Parent and the Company and their respective subsidiaries
on a consolidated basis. The Offer is also subject to other terms and
conditions. The Offer is not conditioned on obtaining financing. See the
Introduction and Sections 10, 12, 14 and 15 of the Offer to Purchase and
Sections 5, 7, 8 and 9 of the Supplement.
4. Except as set forth in Instruction 7 of the Letter of Transmittal,
tendering stockholders will not be obligated to pay stock transfer taxes on
the purchase of Shares by the Offeror pursuant to the Offer. However,
federal income tax backup withholding at a rate of 31% may be required,
unless an exemption is applicable or unless the required taxpayer
identification information is provided. See Instruction 9 to the Letter of
Transmittal.
5. Notwithstanding any other provision of the Offer, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (i) certificates evidencing,
or timely Book-Entry Confirmation (as defined in the Offer to Purchase)
with respect to, such Shares and (ii) the Letter of Transmittal (or
facsimile thereof) properly completed and duly executed with all required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase), together with any other documents required by the Letter of
Transmittal. See Section 3 -- "Procedure for Tendering Shares" of the Offer
to Purchase.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction
form contained in this letter. An envelope in which to return your
instructions to us is enclosed. If you authorize the tender of your Shares,
all your Shares will be tendered unless otherwise specified in your
instructions. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE OF
THE OFFER.
The Offer is made solely by the Offer to Purchase, the Supplement and
the related Letter of Transmittal and is being made to all holders of
Shares. The Offeror is not aware of any jurisdiction in which the making of
the Offer or the acceptance of Shares pursuant thereto is prohibited by
administrative or judicial action pursuant to any valid state statute. If
the Offeror becomes aware of any valid state statute prohibiting the making
of the Offer or the acceptance of Shares pursuant thereto, the Offeror will
make a good faith effort to comply with any such state statute. If, after
such good faith effort, the Offeror cannot comply with any such state
statute, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares residing in any such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Offeror by Credit Suisse First Boston
Corporation or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK
OF COLUMBIA ENERGY GROUP
The undersigned acknowledges receipt of your letter, the Offer to Purchase,
dated June 25, 1999, the enclosed Supplement thereto, dated October 18, 1999,
and the related Letter of Transmittal (which, as either may be amended or
supplemented from time to time, collectively constitute the "Offer") in
connection with the offer by CEG Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of NiSource Inc., an Indiana corporation, to purchase
all outstanding shares of common stock, par value $.01 per share (the "Shares"),
of Columbia Energy Group, a Delaware corporation, at a purchase price of $74 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer.
This will instruct you to instruct your nominee to tender the number of
Shares indicated below (or, if no number is indicated below, all Shares) that
are held for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
<TABLE>
<CAPTION>
- --------------------------------------------- --------------------------------------------------------------
<S> <C>
Number of Shares to be Tendered:* ------------------------------------------------------------
------------------------------------------------------------
Signature(s)
________ Shares of Common Stock
------------------------------------------------------------
------------------------------------------------------------
Please Type or Print Name(s)
------------------------------------------------------------
------------------------------------------------------------
Please Type or Print Address
------------------------------------------------------------
Area Code and Telephone Number
Dated: , 1999 ------------------------------------------------------------
Taxpayer Identification or Social Security Number
- --------------------------------------------- --------------------------------------------------------------
</TABLE>
* Unless otherwise indicated, it will be assumed that all your Shares held by us
for your account are to be tendered.
3
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
COLUMBIA ENERGY GROUP
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially equivalent hereto,
must be used to accept the Offer (as defined below) if (i) certificates
evidencing shares of common stock, par value $.01 per share (the "Shares"), of
Columbia Energy Group, a Delaware corporation (the "Company"), are not
immediately available; (ii) if the procedure for book-entry transfer cannot be
completed prior to the Expiration Date (as defined in the Offer to Purchase) or
(iii) time will not permit certificates evidencing Shares and all required
documents to reach the Depositary prior to the Expiration Date. This Notice of
Guaranteed Delivery may be delivered by hand, facsimile transmission or mail to
the Depositary and must include a signature guarantee by an Eligible Institution
in the form set forth herein. See Section 3 -- "Procedure for Tendering Shares"
of the Offer to Purchase, dated June 25, 1999 (the "Offer to Purchase").
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
(for Eligible Institutions
Tender & Exchange Department Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 For Confirmation Telephone: New York, New York 10286
(212) 815-6173
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to CEG Acquisition Corp., a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, as amended and supplemented by the Supplement thereto, dated
October 18, 1999, and in the related Letter of Transmittal (which, as either may
be amended or supplemented from time to time, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares of the
Company indicated below pursuant to the guaranteed delivery procedure set forth
in Section 3 -- "Procedure for Tendering Shares" of the Offer to Purchase.
Number of Shares:
--------------------------------------
Certificate No(s). (if available):
-----------------------------------------------------------
-----------------------------------------------------------
If Securities will be tendered by
book-entry transfer:
--------------------------------------
Name of Tendering Institution:
-----------------------------------------------------------
Account No.:
----------------------------------------- at
Dated:
---------------, 1999
SIGNATURE(S) OF HOLDER(S):
Name(s) of Holder(s):
- -----------------------------------------------------------
- -----------------------------------------------------------
(Please Print)
Address:
- -------------------------------------------------
- -----------------------------------------------------------
(Zip Code)
Area Code & Telephone No.:
- -----------------------------------------------------------
DELIVERY GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit
union, savings association or other entity which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, guarantees the delivery to the Depositary of
the Shares tendered hereby, in proper form for transfer, or a confirmation
that the Shares tendered hereby have been delivered pursuant to the procedures
for book-entry transfer set forth in the Offer to Purchase into the
Depositary's account at the Book-Entry Transfer Facility, together with a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) and any other required documents, or an Agent's Message (as defined
in the Offer to Purchase) in the case of a book-entry delivery of Shares, all
within three New York Stock Exchange trading days of the date hereof.
Name of Firm:
------------------------------------------
-----------------------------------------------------------
Authorized Signature
Address:
-------------------------------------------------
-----------------------------------------------------------
(Zip Code)
Name:
- ---------------------------------------------------
Please Print
Title:
- -----------------------------------------------------
Area Code & Tel. No.:
- ----------------------------------
Dated:
- ---------------, 1999
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER NAME AND IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer Identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the name and
number to give the payer.
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT GIVE THE NAME AND
SOCIAL SECURITY
NUMBER OF--
- ---------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust under
State law
5. Sole proprietorship account The owner(3)
- ---------------------------------------------------------------
- ---------------------------------------------------------------
GIVE THE NAME AND
FOR THIS TYPE OF ACCOUNT EMPLOYER
IDENTIFICATION
NUMBER OF--
- ---------------------------------------------------------------
6. Sole proprietorship account The owner(3)
7. A valid trust, estate, or pension The legal entity(4)
trust
8. Corporate account The corporation
9. Association, club, religious, The organization
charitable, educational or other
tax-exempt organization account
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ---------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your Social Security Number or
Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the identifying number of the personal representative or
trustee unless the legal entity itself is not designated in the account
title.)
NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
1
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees specifically exempted from backup withholding
depending upon the type of payment (see below):
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA or a
custodial account under section 403(b) (7).
(3) The United States or any agency or instrumentality thereof.
(4) A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
(5) A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
(6) An international organization or any agency or instrumentality thereof.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the U.S. or
a possession of the U.S.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
For interest and dividends, all listed payees are exempt except Item (9). For
broker transactions, payees listed in Items (1) through (13) and a person
registered under the Investment Advisers Act of 1940 who regularly acts as a
broker are exempt.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART I OF THE FORM, AND RETURN IT TO
THE PAYER. If you are a nonresident alien or a foreign entity not subject to
backup withholding, give the payer a completed Form W-8, Certificate of Foreign
Status.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish
your correct taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
2
<PAGE> 1
On October 13, after meeting with its legal and financial advisors, Parent
decided to increase its offer and to confirm its willingness to work with the
senior management of the Company to help deliver value to the stockholders of
the Company and Parent. On October 17, 1999, Gary L. Neale, Chairman, President
and Chief Executive Officer of Parent, attempted to contact Oliver G. Richard
III, Chairman, President and Chief Executive Officer of the Company, to inform
Mr. Richard that the letter set forth in the press release below was being sent
to each of the directors of the Company; however, Mr. Neale was unable to reach
Mr. Richard. On October 17, 1999, Parent issued the following press release
containing the letter that was sent to each of the Company's directors on the
morning of October 17th.
NISOURCE INCREASES TENDER OFFER FOR COLUMBIA ENERGY TO $74 PER SHARE IN CASH
EXTENDS TENDER OFFER UNTIL NOVEMBER 12, 1999
MERRILLVILLE, IND., October 17 -- NiSource Inc. [NYSE: NI] today announced that
in connection with its tender offer to acquire all of the outstanding shares of
Columbia Energy Group [NYSE: CG], it has increased the consideration offered to
$74 per share in cash and extended the expiration date of the offer. The
enhanced price of $74 per share in cash, represents a 28% premium to the last
30-day daily average for Columbia's stock price and a 45% premium to the 30-day
daily average for the company's stock price before the NiSource offer was
originally announced. The offer is being extended until Midnight EST on Friday,
November 12, 1999.
NiSource noted that its previous $68 per share offer has received substantial
support from Columbia's shareholders. As of Midnight EDT on Friday, October 15,
1999, Columbia shareholders have tendered 44,448,778 shares pursuant to
NiSource's tender offer.
Gary L. Neale, chairman, president and chief executive officer of NiSource said,
"Today's offer is the right price for the right company at the right time. The
$74 cash per share we are offering is well above the value that Columbia, on its
own, in any reasonable time frame, could provide its shareholders and allows
Columbia shareholders to receive their share of the value created by the
combination of the two companies. Our offer is not subject to a financing
contingency since we have committed financing from Credit Suisse First Boston
and Barclays Bank PLC. We expect that we can close this transaction within 6-9
months.
"We have great respect for Rick Richard and the Columbia team. We believe their
skills and experience will be a valuable asset to the combined company. We are
inviting five Columbia board members including Mr. Richard, to join an expanded
board of directors and Mr. Richard to become Vice Chairman. We also would expect
to retain the heads of all critical operating units and the current headquarters
for those units," Neale said.
"In light of our revised offer, the time has come for us to reach a prompt
agreement to expedite this transaction," Mr. Neale concluded.
NOTE TO EDITORS: The full text of the letter from the NiSource Board of
Directors to the Columbia Board of Directors follows.
October 17, 1999
<TABLE>
<S> <C>
Richard F. Albosta J. Bennett Johnston
Robert H. Beeby Malcolm Jozoff
Wilson K. Cadman William E. Lavery
James P. Heffernan Gerald E. Mayo
Karen L. Hendricks Douglas E. Olesen
Malcolm T. Hopkins
</TABLE>
5
<PAGE> 2
Oliver G. Richard III
Columbia Energy Group
13880 Dulles Corner Lane
Herndon, Virginia 20171-4600
Madam and Gentlemen:
We, the directors of NiSource, Inc. ("NiSource"), were encouraged by the success
of our initial tender offer for the shares of Columbia Energy Group
("Columbia"). As you are aware, over 60.3% of your shares, including most of
your largest holders, demonstrated strong support for our offer during the
initial tender period. As of midnight on Friday, October 15, support for our
proposal continued at over 54% -- without any change in the offer price.
We have spent a great deal of time speaking with your shareholders, our own
shareholders and the Wall Street analyst community. We are now more convinced
than ever that the combination of our two companies will create significant
value for the shareholders, customers and employees of our respective companies.
IN AN EFFORT TO BRING THIS MATTER TO AN EXPEDITIOUS AND SUCCESSFUL CONCLUSION,
WE ARE REVISING OUR TENDER OFFER. WE ARE OFFERING TO ACQUIRE COLUMBIA IN A
MERGER TRANSACTION IN WHICH COLUMBIA SHAREHOLDERS WOULD NOW RECEIVE $74.00 PER
SHARE IN CASH.
Our proposal is not subject to any financing contingency, but only to customary
conditions, including the execution of a definitive merger agreement and usual
regulatory approvals. We believe negotiations can be completed very quickly, and
we are committed to dedicate all necessary resources to work with you. We are
willing to have your counsel prepare the first draft of the agreement if you
prefer.
Our success in building our business has been predicated upon employing the
skills and experience of the management team and employee base present within
the companies with which we have merged. WE, THEREFORE, ARE INVITING FIVE OF
YOU, INCLUDING MR. RICHARD, TO JOIN AN EXPANDED BOARD OF DIRECTORS AND MR.
RICHARD TO BECOME VICE CHAIRMAN OF THE MERGED COMPANIES. We also would expect to
retain the heads of all critical operating units and the current headquarters
for those units.
RIGHT COMPANY
We have the highest respect for Rick Richard, his management team and your
employees. We recognize that Columbia has taken major strides in turning the
company around after the bankruptcy in the early 1990s. However, we believe that
scale and geography are critical to success in the evolving competitive energy
industry. The combination of Columbia and NiSource will create a super-regional
energy company with the size and scope necessary to compete and win.
The Columbia and NiSource assets and market areas are complementary -- with no
overlap. Together, they create a powerful platform within the region which
extends from the Gulf, through the Midwest and into the Northeast. This corridor
accounts for over 40% of all energy consumed within the U.S. The combined
Columbia/NiSource will have over 4.1 million gas, electric, water and propane
customers in 9 states. It will be the second largest gas company in the U.S., in
throughput, and the largest east of the Rockies.
6
<PAGE> 3
RIGHT PRICE
We believe that $74.00 is the right price for Columbia. The price we are
offering is fully competitive with similar transactions in the industry. Based
upon extensive conversations with your shareholders, we are confident that this
offer reflects the strategic premium expected for Columbia's assets.
Furthermore, given the fact that more than 60% of your shareholders accepted our
previous offer, we fully expect your shareholders to be overwhelmingly
supportive of our revised offer.
As the enclosed letter indicates, we have fully committed financing for our
offer. There is no financing risk for Columbia's shareholders. Our financing
plan has been reviewed by the credit rating agencies, and they have affirmed
that the Columbia and NiSource credit ratings, pro forma for the transaction,
would be solid investment grade.
Further, we note that your stock was trading, immediately prior to our initial
offer, at $55.75 and as a result of that offer increased to $64.50. Since then,
Columbia has spent considerable time articulating its strategic plan to the
market, including announcing the sale of its trading and marketing business,
headcount reductions in its unregulated operations and an expanded stock
repurchase plan. Despite all of these efforts, Columbia's stock price
subsequently dropped back to $55.38. Only recently has it rebounded, presumably
in anticipation of a possible increase in our offer.
RIGHT TIME
The $74.00 per share offer price is well above the value that Columbia, on its
own, could provide its shareholders in any reasonable time frame. Our offer
allows your shareholders to receive, much sooner, their share of the value
created by the combination of our two companies. This is the right time for
Columbia to pursue this transaction.
Change is rapidly occurring in our industry. Many large business transactions
have been announced over the past year, including a convergence transaction
involving one of your closest competitors, CNG. The Dominion/CNG merger is
progressing rapidly and confirms our belief that a NiSource/Columbia merger
would obtain the necessary regulatory approvals on a timely basis. We have had
this offer fully reviewed by four leading regulatory experts, who are former
state utility commissioners, and they are confident that a combination of our
two companies would obtain all the necessary regulatory approvals within 6-9
months and that our proposed financing plan creates no incremental regulatory
risk.
We trust that you will act in the best interests of your shareholders and
promptly commence a dialogue with us. We look forward to hearing from you and
will be available
7
<PAGE> 4
to respond to questions you may have about our proposal and our plans for a
combined NiSource/Columbia.
Sincerely,
<TABLE>
<S> <C>
/s/ STEVEN C. BEERING /s/ IAN M. ROLLAND
- ---------------------------------- ----------------------------------
Steven C. Beering Ian M. Rolland
/s/ ARTHUR J. DECIO /s/ JOHN W. THOMPSON
- ---------------------------------- ----------------------------------
Arthur J. Decio John W. Thompson
/s/ DENNIS E. FOSTER /s/ ROBERT J. WELSH
- ---------------------------------- ----------------------------------
Dennis E. Foster Robert J. Welsh
/s/ JAMES T. MORRIS /s/ CAROLYN Y. WOO
- ---------------------------------- ----------------------------------
James T. Morris Carolyn Y. Woo
/s/ GARY L. NEALE /s/ ROGER A. YOUNG
- ---------------------------------- ----------------------------------
Gary L. Neale Roger A. Young
</TABLE>
NiSource Inc. is a holding company with a market capitalization of approximately
$3.6 billion whose primary business is the distribution of electricity, natural
gas and water in the Midwest and Northeast United States. The company also
markets utility services and customer-focused resource solutions along a
corridor stretching from Texas to Maine. Further information on the company's
offer for Columbia may found on the Internet at www.yes2nisource.com and about
the company at www.nisource.com.
This release is neither an offer to purchase nor a solicitation of an offer to
sell shares of common stock of Columbia Energy Group. Such a offer is made
solely by the Offer to Purchase, dated June 25, 1999, as amended, and the
related Letter of Transmittal. It is not being made to, and tenders will not be
accepted from, holders of shares of Columbia common stock in any jurisdiction in
which making or accepting such offer would not comply with law. In any
jurisdiction where a licensed broker or dealer must make such offer, it shall be
deemed made on behalf of NiSource Inc. by Credit Suisse First Boston or other
registered brokers or dealers licensed in such jurisdiction. The offer may be
extended beyond its November 12, 1999 expiration date. Any extension will be
publicly announced no later than 9:00 a.m., New York City time, on the next
business day. This release does not constitute a solicitation of proxies from
Columbia Energy Group's stockholders. Any such solicitation will be made only by
separate proxy materials in compliance with Section 14(a) of the Securities
Exchange Act.
<TABLE>
<S> <C>
INVESTOR CONTACT: MEDIA CONTACT:
NiSource Inc. NiSource Inc.
Dennis Senchak Maria Hibbs
(219) 647-6085 (219) 647-6201
</TABLE>
Abernathy MacGregor Frank
Joele Frank/Dan Katcher
(212) 371-5999
Also included with the Parent Board's letter to the Company Board was the
following letter from Credit Suisse First Boston and Barclays Bank PLC attaching
a copy of the amended Commitment Letter dated October 15, 1999 referred to in
Section 5 of this Supplement.
8
<PAGE> 1
Exhibit (a)(45)
Credit Suisse First Boston Barclays Bank PLC
Eleven Madison Avenue 222 Broadway
New York, New York 10010 New York, New York 10038
October 18, 1999
Board of Directors
Columbia Energy Group
13880 Dulles Corner Lane
Herndon, Virginia 20171-4600
Members of the Board:
As you are aware, Credit Suisse First Boston and Barclays
Bank PLC have committed to provide NiSource all of the funds necessary to
consummate its tender offer at $74.00 per share for all of the outstanding
shares of Columbia. For your information, we have attached a copy of our
executed commitment letter, dated October 15, 1999.
Our commitment is subject to the terms and conditions
detailed in the commitment letter. We believe, and are confident your advisors
will agree, that these terms and conditions are customary for a transaction of
this type. As NiSource has stated and as reflected in the NiSource offer to
your shareholders, based on our commitment, NiSource's offer is not subject to
financing.
Very truly yours,
/s/Bruce Ling /s/ Eric Chilton
_________________________ ___________________________
Bruce Ling Eric Chilton
Managing Director Managing Director
Head of Syndicated Finance Barclays Capital
Credit Suisse First Boston Barclays Bank PLC
Attachment
<PAGE> 2
[Attachment: Amended and Restated Commitment Letter filed as Exhibit 11(b)(2)]
<PAGE> 1
CREDIT SUISSE FIRST BOSTON BARCLAYS BANK PLC
ELEVEN MADISON AVENUE 222 BROADWAY
NEW YORK, NY10010 NEW YORK, NY10038
October 15, 1999
NiSource Inc.
801 East 86th Avenue
Merrillville, Indiana 46410
Amended and Restated
Senior Credit Facility
Commitment Letter
Ladies and Gentlemen:
You have advised Credit Suisse First Boston ("CSFB") and
Barclays Bank PLC ("Barclays") (CSFB and Barclays, together, in their capacities
of providing their respective commitments hereunder, the "Underwriters") that
NiSource Inc. ("NiSource" or "you") intends to acquire, directly or through a
newly formed wholly owned subsidiary ("Acquico"), all of the outstanding shares
(the "Shares") of capital stock of Columbia Energy Group (the "Company") by
means of a merger, or by means of a tender offer (the "Tender Offer") and
subsequent merger, of the Company with Acquico and of the surviving entity of
such merger with NiSource (the "Acquisition") pursuant to such acquisition
agreements as may be necessary in connection with the Acquisition (collectively,
the "Acquisition Agreement"). In connection with the Acquisition, the Company
will refinance (the "Refinancing") an amount of its existing indebtedness to be
determined after further analysis of the documents relating to that
indebtedness.
You have advised us that bank financing is required to
consummate the Tender Offer, if any, the Acquisition and the Refinancing and to
pay related fees and expenses and that the bank financing will be in the form of
a 364-day revolving credit facility with a 364-day term out option in the
principal amount of $6,500,000,000 (Six Billion Five Hundred Million Dollars)
(the "Credit Facility"). You have further advised us that the Credit Facility
may be used to support a commercial paper program (the "CP Program"). A summary
of preliminary terms and conditions of the Credit Facility are set forth in
Exhibit A hereto (the "Term Sheet"). The (i) Acquisition, (ii) Refinancing, and
(iii) borrowings under the Credit Facility are collectively referred to herein
as the "Transactions".
You have requested that (i) the Underwriters commit to provide
the Credit Facility, (ii) that CSFB and Barclays act as lead arrangers and
co-syndication agents for the Credit Facility and agree to structure, arrange
and syndicate the Credit Facility (CSFB and Barclays, together, in such
capacities, the "Arrangers"), (iii) that CSFB serve as administrative agent in
respect thereto, and (iv) that Barclays serve as documentation agent in respect
thereto.
<PAGE> 2
In connection with the foregoing, (i) CSFB and Barclays are
pleased to advise you that they are willing to act as lead arrangers and
co-syndication agents for the Credit Facility, (ii) CSFB is pleased to advise
you that it is willing to act as administrative agent for the Credit Facility,
(iii) Barclays is pleased to advise you that it is willing to act as
documentation agent for the Credit Facility, and (iv) the Underwriters are
pleased to advise you of their respective commitments to provide $6,500,000,000
aggregate principal amount of the Credit Facility, in the respective amounts set
forth opposite their names on the signature page hereof, upon the terms and
subject to the conditions set forth in this commitment letter (the "Commitment
Letter") and in the Term Sheet and Annex II hereto (the "Conditions").
As consideration for our commitments hereunder and our
agreement to perform the services described herein, you agree to pay the
nonrefundable fees set forth in the Term Sheet and in the amended and restated
fee letter dated the date hereof and delivered herewith (the "Fee Letter").
Our commitments hereunder and agreements to perform the
services described herein are subject to the satisfaction of each of the
Conditions. It is understood and agreed that each of the Arrangers shall have
the right to participate any or all of its commitment hereunder to other
underwriters without restriction.
You agree that CSFB and Barclays will act as the lead
arrangers and co-syndication agents in respect to the Credit Facility, CSFB will
act as the sole and exclusive administrative agent in respect to the Credit
Facility, Barclays will act as the sole and exclusive documentation agent in
respect to the Credit Facility, and each of CSFB and Barclays will be awarded
their respective titles set forth in the Term Sheet and will, in such
capacities, perform the duties and exercise the authority set forth in the Term
Sheet and as customarily performed and exercised by them in such roles. You
agree that no other agents, advisors, co-agents or arrangers will be appointed,
no other titles will be awarded and no compensation (other than that expressly
contemplated by the Term Sheet and the Fee Letter) will be paid in connection
with the Credit Facility unless each of the Arrangers shall so agree. We reserve
the right to employ the services of our respective affiliates in providing the
services contemplated by this Commitment Letter and to allocate, in whole or in
part, to such affiliates certain fees payable to us in such manner as we and our
respective affiliates may agree in our and their sole discretion. You
acknowledge that we may share with any of our respective affiliates, and such
affiliates may share with us, any information relating to NiSource, the Company
and your and its respective subsidiaries and affiliates (including, without
limitation, any non-public information regarding NiSource, the Company and your
and its respective subsidiaries and affiliates), subject to our maintaining the
confidential treatment of such confidential information.
We intend to syndicate the Credit Facility to a group of
financial institutions (together with us, the "Lenders") identified by us in
consultation with you. We intend to commence syndication efforts following the
earlier of (i) receipt by each of the Arrangers of your written request to us to
commence syndication, and (ii) one month after the Acquisition Agreement has
been executed and delivered by all parties thereto.
2
<PAGE> 3
Our commitments hereunder are conditioned upon our having no less than eight
weeks to complete syndication, measured from the time we commence syndication to
the date definitive credit documents are executed and delivered by all parties
thereto. You agree to assist, and use your best efforts to cause the Company to
assist, us in completing a syndication satisfactory to us. Your assistance shall
include (i) your using commercially reasonable efforts, and your using best
efforts to cause the Company to use commercially reasonable efforts, to ensure
that the syndication efforts benefit materially from your and its respective
existing lending relationships, (ii) direct contact between your senior
management and advisors and the proposed Lenders (and your using best efforts to
cause direct contact between senior management and advisors of the Company and
the proposed Lenders), (iii) assistance by you and your using best efforts to
cause assistance by the Company in the preparation of a Confidential Information
Memorandum and other marketing materials to be used in connection with the
syndication, and (iv) the hosting, with the Arrangers, of one or more meetings
with prospective Lenders. Additionally, you agree that prior to the Arrangers'
determination that the syndication of the Credit Facility has been completed, or
the earlier termination of this Commitment Letter, there shall be no competing
issues of debt securities or commercial bank facilities of NiSource or any of
its subsidiaries other than (i) a $150 million debt facility to be incurred for
the purposes of refinancing existing indebtedness incurred in connection with
the acquisition of TPC Corporation and UGTI d/b/a Underground Technologies, Inc,
and (ii) debt incurred to refinance outstanding debt incurred by the Borrower
for working capital purposes.
It is understood and agreed that the Arrangers shall be
entitled, after consultation with you and prior to the effectiveness of the
Credit Facility, to change the pricing, terms and structure of the Credit
Facility if the Arrangers determine that such changes are advisable to ensure
the successful syndication of the Credit Facility. We shall be entitled to
terminate our respective commitments hereunder and agreements to perform the
services described herein if there shall have occurred after the date hereof any
material adverse change in banking or capital market conditions that has had or
reasonably could have a material adverse effect on the syndication of bank
credit facilities and any of the Arrangers determines that such change makes it
impracticable to consummate the syndication of the Credit Facility.
The Arrangers will manage all aspects of the syndication, in
consultation with you, including decisions as to the selection of institutions
to be approached and when they will be approached, when their commitments will
be accepted, which institutions will participate, what titles (if any) they will
be awarded, the allocations of the commitments among the Lenders and the amount
and distribution of fees among the Lenders. To assist us in our syndication
efforts, you agree promptly to prepare and provide to us all information with
respect to the Company and the Transactions and the other transactions
contemplated hereby, including all financial information and projections (the
"Projections") as we may reasonably request in connection with the arrangement
and syndication of the Credit Facility. You hereby represent and covenant that
(i) all information and data other than the Projections (the "Information") that
has been or will be made available to us by you or your representatives in
connection with the Transactions is or will be, at the time such Information is
made available, complete and
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<PAGE> 4
correct in all material respects and does not or will not, at the time such
Information is made available, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made and (ii) the Projections that have been or will
be made available to us by you or your representatives in connection with the
Transactions have been or will be prepared in good faith based upon what you
believe to be reasonable assumptions. You agree to supplement the Information
and the Projections from time to time until the completion of the syndication so
that the representation and covenant in the preceding sentence remains correct
in all material respects without regard to when such Information and Projections
were furnished. You understand that the Arrangers in arranging and syndicating
the Credit Facility may use and rely on the Information and Projections without
responsibility for independent verification thereof.
You agree to reimburse us and our respective affiliates, upon
request made from time to time, for their reasonable fees and expenses incurred
in connection with the Credit Facility and the preparation, execution and
delivery of any related documentation (including, without limitation, this
Commitment Letter, the Fee Letter and the definitive financing documentation) or
the administration, amendment, modification or waiver thereof and the activities
thereunder or contemplated thereby, including, without limitation, due diligence
expenses, syndication expenses, consultants' fees, travel expenses and the
reasonable fees and expenses of counsel (except for our internal counsel) to us
and our respective affiliates, whether incurred before or after the execution of
this letter.
You hereby agree to indemnify and hold harmless each of us and
our respective affiliates and the respective officers, directors, employees,
advisors and agents of each (each, an "indemnified person"), so long as the
indemnified person co-operates with you in resolving the matters that could lead
to or are associated with Losses (as hereinafter defined) from and against any
and all losses, claims, damages and liabilities (collectively, "Losses") to
which any such indemnified person may become subject arising out of or in
connection with this Commitment Letter, the Credit Facility, the use of the
proceeds thereof, the Transactions or any related transaction (including,
without limitation, any acquisition or attempted acquisition by the Company of
any person or entity or any interest in any person or entity) or any claim,
litigation, investigation or proceeding relating to any of the foregoing
("Proceedings"), regardless of whether any indemnified person is a party
thereto, and to reimburse each indemnified person upon demand for any reasonable
legal or other expenses incurred in connection with investigating, defending or
participating in any of the foregoing; provided, however, that the foregoing
indemnity will not, with respect to any indemnified person, apply to Losses to
the extent they are found by a court of competent jurisdiction to have resulted
from the willful misconduct or gross negligence of such indemnified person.
Promptly after receipt by an indemnified person of notice of the commencement of
any Proceedings, such indemnified person will, if a claim in respect thereof is
to be made against you, notify you in writing of the commencement thereof;
provided, however, that the omission so to notify you will not relieve you from
any liability which you may have hereunder except to the extent you have been
materially prejudiced by such failure.
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<PAGE> 5
This Commitment Letter and our commitments hereunder shall not
be assignable by you without the prior written consent of each of the Arrangers
(and any purported assignment without such consent shall be null and void), is
intended to be solely for the benefit of the parties hereto and is not intended
to confer any benefits upon, or create any rights in favor of, any person other
than the parties hereto; provided, however, that we may perform any of our
respective duties hereunder through any of our respective affiliates and you
will owe any related duties hereunder to such affiliate. This Commitment Letter
may not be amended or waived except by an instrument in writing signed by you
and each of the Arrangers. This Commitment Letter may be executed in any number
of counterparts, each of which shall be an original, and all of which, when
taken together, shall constitute one agreement. Delivery of an executed
signature page of this Commitment Letter by facsimile transmission shall be as
effective as delivery of a manually executed counterpart hereof. This Commitment
Letter and the Fee Letter set forth our entire understanding with respect to the
subject matter hereof and thereof.
This Commitment Letter shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
conflicts of laws principles thereof. EACH OF THE PARTIES HERETO IRREVOCABLY
AGREES TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS
COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER. You irrevocably and
unconditionally submit to the exclusive jurisdiction of any state or federal
court sitting in the City of New York over any suit, action or proceeding
arising out of or relating to this Commitment Letter. Service of any process,
summons, notice or document by registered mail addressed to you at your address
set forth above shall be effective service of process against you for any such
suit, action or proceeding brought in any such court. You irrevocably and
unconditionally waive any objection to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding has been brought in an inconvenient forum. A final judgment
in any such suit, action or proceeding brought in any such court may be enforced
in any other courts to whose jurisdiction you are or may be subject, by suit
upon judgment.
This Commitment Letter is delivered to you on the
understanding that neither this Commitment Letter nor the Fee Letter nor any of
their terms or substance shall be disclosed, directly or indirectly, to any
other person except (i) on a confidential basis to your respective officers,
agents and advisors who are directly involved in the consideration of the
Transactions or (ii) as may be compelled in a judicial or administrative
proceeding or as otherwise required by law or by any regulatory body, and with
respect to the Commitment Letter (but not the Fee Letter or its terms or
substance), as may be requested by any regulatory body (and in each case you
agree to inform us promptly thereof); provided, however, that you may disclose
this Commitment Letter and its terms and substance (but not the Fee Letter or
its terms and substance) (i) if required in any regulatory filings in connection
with the Transactions, including filings with the Securities and Exchange
Commission, the Federal Energy Regulatory Commission and the state public
service commissions having jurisdiction over NiSource, the Company, their
respective subsidiaries or the Transactions, and (ii) on a confidential basis,
to the
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<PAGE> 6
Company and its directors, officers, employees, agents and advisors. If this
Commitment Letter is not accepted by you as provided below, you are directed to
immediately return this letter, and the related documentation (and any copies
hereof or thereof) to CSFB.
By acceptance of this Commitment Letter, you acknowledge that
not every provision imposing duties and liabilities on you to be contained in
definitive credit documentation with respect to the Credit Facility can be fully
set forth in this Commitment Letter or the Term Sheet and Conditions. This
Commitment Letter shall be superseded by, and shall terminate upon the execution
of, definitive credit documentation with respect to the Credit Facility. The
reimbursement, indemnification and confidentiality provisions contained herein
and in the Fee Letter shall remain in full force and effect regardless of
whether definitive financing documentation shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or our commitments
hereunder.
This Commitment Letter amends, restates and supersedes in its
entirety the commitment letter among the parties hereto dated as of June 23,
1999 (the "Original Commitment Letter"). Upon your acceptance of this Commitment
Letter, the Original Commitment Letter shall be terminated.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Fee Letter by returning
to us executed counterparts hereof and of the Fee Letter, not later than 5:00
p.m., New York City time, on October 15, 1999. Our commitments and agreements
contained herein will expire at such time in the event CSFB has not received
such executed counterparts in accordance with the immediately preceding
sentence. In the event that (a) the initial borrowing under the Credit Facility
does not occur on or before 364 days after the date the Original Commitment
Letter was executed and delivered by you or (b) the Tender Offer expires or is
withdrawn by NiSource, then this Commitment Letter and our commitments and
undertakings hereunder shall automatically terminate unless each of us shall, in
our sole discretion, agree to an extension.
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<PAGE> 7
We are pleased to have been given the opportunity to assist
you in connection with this important financing.
Very truly yours,
Amount of Commitment
CREDIT SUISSE FIRST BOSTON $3,250,000,000
By: /s/ Bruce Ling
- -------------------------------
Title: Managing Director
By: /s/ James Moran
- -------------------------------
Title: Director
BARCLAYS BANK PLC $3,250,000,000
By: /s/ John Michael Brennan
- -------------------------------
Title: Managing Director
By: /s/ Peter Harrington
- -------------------------------
Title: Director
7
<PAGE> 8
Accepted and agreed to as
of the date first written
above by:
NISOURCE INC.
By: /s/ Stephen P. Adik
- -------------------------------
Title: Senior Executive Vice President
8
<PAGE> 9
CONFIDENTIAL EXHIBIT A
October 15, 1999
Senior Credit Facility
Summary of Principal Terms and Conditions
Borrower: NiSource Capital Markets, Inc., a wholly
owned subsidiary of NiSource Inc.
Lead Arrangers: CSFB and Barclays Bank PLC ("Barclays")
will act as lead arrangers for the Credit
Facility and will perform the duties
customarily associated with such roles
(CSFB and Barclays, together, the
"Arrangers").
Co-Syndication Agents: CSFB and Barclays.
Administrative Agent: CSFB will act as administrative agent for
the Credit Facility (the "Administrative
Agent"), and will perform the duties
customarily associated with such role.
Documentation Agent: Barclays will act as documentation agent
for the Credit Facility (the
"Documentation Agent"), and will perform
the duties customarily associated with
such role.
Lenders: CSFB, Barclays and a syndicate of other
financial institutions (the "Lenders")
reasonably acceptable to the Arrangers.
Required Lenders: Lenders holding 51% of the Commitments (as
defined below), with standard exceptions
requiring the consent of all the Lenders.
Type of Facility: Senior revolving credit facility in the
amount of $6,500,000,000 (the "Credit
Facility").
Availability and Maturity: The Credit Facility will be available on a
revolving basis during the period
commencing on the date of execution and
delivery by all parties of definitive
documentation relating to the Credit
Facility (the "Credit Documents") and
ending on the earlier of (a) 364 days
after the execution and delivery by all
parties of the Original Commitment Letter
and (b) the date that the Tender Offer
expires or is withdrawn by NiSource (the
"Termination Date") and, at the option of
the Borrower, amounts outstanding on the
Termination Date may on the Termination
Date be converted to a term loan with a
maturity of one year,
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<PAGE> 10
subject to the satisfaction at such time
of conditions precedent to the making of
all Loans under the Credit Facility. The
commitment under the Credit Facility
(whether relating to revolving loans or a
term loan, the "Commitment") will be
reduced from time to time pursuant to
provisions described under "Mandatory
Prepayments and Permanent Reductions in
Commitments."
Termination of Commitment: The Commitment will terminate in its
entirety on the Termination Date, if the
initial funding under the Credit Facility
to finance the Acquisition does not occur
on or prior to the Termination Date.
Purpose: On each of (i) the date on which the
Tender Offer is closed, if any, and (ii)
the date on which the Acquisition is
closed (the "Closing Date"), proceeds from
borrowing under the Credit Facility will
be used by means of one or more loans or
advances, on terms and conditions
satisfactory to the Lenders, to NiSource,
Acquico or the Company to finance the
Tender Offer, if any, the Acquisition and
the Refinancing and to pay related fees
and expenses. The (a) Tender Offer, if
any, (b) Acquisition, (c) Refinancing, and
(d) borrowings under the Credit Facility
are collectively referred to herein as the
"Transactions." The Credit Facility may be
used to provide liquidity support for the
CP Program, provided the net proceeds of
the commercial paper are used entirely to
finance or refinance the Transactions.
Interest Rates and Fees: Base Rate or Eurodollar Rate Loans, with
the Applicable Margins determined
according to a ratings grid based on the
Borrower's senior unsecured debt rating,
as set forth on Annex I. Eurodollar Rate
Loans will have interest periods of 1, 2,
3 or 6 months. All interest will be
payable at the end of the applicable
interest period or quarterly, whichever is
earlier.
In addition, a money market bid option
will be provided on terms and conditions
usual for bid options of this type.
Facility fees on the full amount of the
Commitment will be determined according to
a ratings grid based on the Borrower's
senior unsecured debt rating, as set forth
on Annex I. Facility Fees will accrue from
the earlier of (i) the date of first
disbursement of a Loan (the "First
Disbursement Date") and (ii) the date that
the CP Program is issued, and be payable
quarterly in arrears and upon the
termination of any Commitment and on the
final maturity of the term loan, if the
Borrower exercises the term loan
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<PAGE> 11
conversion option, in each case for the
actual number of days elapsed in a 360-day
year.
Other fees will be payable in accordance
with the separate Fee Letter.
Interest will accrue on overdue amounts at
the higher of (i) the applicable
pre-default interest rate plus 2.0% per
annum, and (ii) the Base Rate plus 2.0%
per annum.
Increased Costs: The Credit Documents will include
customary protective provisions for such
matters as increased costs, costs incurred
in connection with capital adequacy
requirements of the Lenders, funding
losses, illegality, taxes and "breakage"
costs.
Mandatory Permanent Reductions in The Commitment will be permanently reduced
Commitments: in the amount of proceeds from any debt or
equity securities issuances by NiSource or
any of its subsidiaries, except for the
proceeds of any CP Program and to the
extent that the proceeds from issuances of
debt securities of any such subsidiary are
used to refinance existing debt or to fund
certain capital expenditures, with
exceptions to be agreed upon.
Voluntary Permanent Reductions in The unutilized portion of the Commitment
Commitments: may be permanently reduced at any time at
the option of the Borrower and loans
(other than money market loans) may be
repaid at any time at the option of the
Borrower, in a minimum principal amount
and in multiples to be agreed upon,
without premium or penalty (except
breakage costs).
Mandatory Prepayments: The outstanding principal of Loans under
the Credit Facility will be subject to
mandatory prepayment to the extent
required to cause such outstanding
principal never to exceed the amount of
the Commitment at any time.
Conditions Precedent to Initial Usual for facilities and transactions of
Loan: this type and such additional conditions
precedent as are appropriate under the
circumstances, including, but not limited
to the conditions set forth on Annex II.
Conditions to All Loans: Each Loan under the Credit Facility will
be subject to the (i) absence of any
Default or Event of Default, (ii)
continued accuracy in all material
respects of representations and warranties
(except representations and warranties
which are made only as of a prior date)
and (iii) absence of any Material Adverse
Effect.
Representations and Warranties: Usual for facilities and transactions of
this type and such additional
representations and warranties as are
appropriate under the circumstances,
including, but not limited to,
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corporate existence; corporate power and
authority; enforceability of credit
documents, including the Support Agreement
in place from time to time between
NiSource and the Borrower (the "Support
Agreement"); accuracy of financial
statements and information; no material
adverse change; absence of litigation and
contingent liabilities; no violation of
organizational documents, agreements or
instruments; compliance with laws
(including the Public Utility Holding
Company Act of 1935); payment of taxes;
ownership of properties; solvency; no
governmental or third party approvals and
consents required (except as have been
obtained and are in full force and
effect); labor matters; environmental
matters; no Default or Event of Default;
not an investment company or, prior to the
Acquisition, a public utility holding
company; Year 2000 compliance.
Affirmative Covenants: Usual for facilities and transactions of
this type (including with respect to their
application to the Borrower, NiSource and
its subsidiaries as appropriate) and such
additional affirmative covenants as are
appropriate under the circumstances,
including, but not limited to, maintenance
of corporate existence and rights;
performance of obligations; delivery of
audited financial statements, other
financial information and notices of
default and litigation; visitation and
inspection rights; maintenance of
properties in good working order;
maintenance of insurance; compliance with
laws, including environmental; regulatory
compliance; inspection of books and
properties; payment of taxes; Support
Agreement in effect at all times;
consummation of the Acquisition within 180
days after the date the Tender Offer, if
any, is closed. In addition, the Borrower
shall maintain at all times long-term
senior unsecured debt ratings by Moody's
and Standard & Poor's.
Negative Covenants: Usual for facilities and transactions of
this type (including with respect to their
application to the Borrower, NiSource and
its subsidiaries as appropriate) and such
additional negative covenants as are
appropriate under the circumstances,
including, but not limited to, limitations
on restricted payments by NiSource, such
as dividends on, and redemptions and
repurchases of, capital stock of NiSource
unless, (i) at the time of such payment
declaration and following such payment,
the Borrower's senior unsecured long-term
debt rating established by Standard &
Poor's shall be not less than BBB- and by
Moody's shall be not less than Baa3 and
(ii) no Event of Default then exists or
would occur after giving effect to such
restricted payment;
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<PAGE> 13
limitations on prepayments, redemptions or
repurchases of other indebtedness of the
Borrower; limitations on incurrence of
indebtedness and issuance of preferred
stock; limitations on liens and
sale-leaseback transactions; limitations
on loans and investments; limitations on
mergers, acquisitions and material asset
sales; limitations on transactions with
affiliates; limitations on dividend and
other restrictions affecting subsidiaries;
limitations on issuance of subsidiary
capital stock limitations on changes in
business; limitations on capital
expenditures (other than by operating
subsidiaries of NiSource); no restrictions
on NiSource providing funds to the
Borrower as contemplated by the Support
Agreement.
Selected Financial Covenants: Usual for facilities and transactions of
this type and others to be agreed upon,
including, but not limited to, minimum
interest coverage ratio and maximum
leverage ratio.
Events of Default: Usual for facilities and transactions of
this type (including with respect to their
application to the Borrower, NiSource and
its subsidiaries as appropriate) and such
additional Events of Default as are
appropriate under the circumstances,
including, but not limited to, nonpayment
of principal, interest, fees and other
amounts when due (subject, other than in
the case of principal, to customary grace
periods); violation of covenants (subject
to customary grace periods for certain
covenants, where appropriate);
incorrectness of representations and
warranties in any material respect; cross
default; bankruptcy; material judgments;
ERISA; change of control or ownership.
Assignments and Participations: The Borrower may not assign its rights or
obligations under the Credit Facility
without the prior written consent of the
Lenders. Lenders will be permitted to
assign loans and commitments to other
Lenders (or their affiliates) without
restriction or to other financial
institutions with the consent of the
Arrangers and NiSource (not to be
unreasonably withheld) and subject to
customary limitations on minimum size of
assignment or participation. The
Administrative Agent will receive a
customary processing and recordation fee,
payable by the assignor and/or the
assignee, with each assignment.
Assignments will be by novation.
Lenders will be permitted to participate
loans and commitments to other financial
institutions without restriction. Voting
rights of participants shall be limited to
matters in respect of (i) reductions of
principal, interest or
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<PAGE> 14
fees; and (ii) extensions of maturity.
Expenses and Indemnification: All out-of-pocket expenses of the Lenders
for enforcement costs and documentary
taxes associated with the Credit Facility
are to be paid by the Borrower.
The Borrower will indemnify the
Administrative Agent, the Documentation
Agent, the Arrangers, the Lenders and
their respective officers, directors,
employees, affiliates, agents and
controlling persons and hold them harmless
from and against all costs and expenses
(including fees, disbursements and other
charges of counsel) and all liabilities of
any such indemnified person arising out of
or relating to any claim or any litigation
or other proceedings (regardless of
whether any such indemnified person is a
party thereto) that relate to the Credit
Documents or any documents related
thereto, any extension of credit
thereunder, the Transactions or any
transactions connected therewith
(including, without limitation, any
acquisition or attempted acquisition by
the Company of any person or entity or any
interest in any person or entity);
provided, however, that no indemnified
person will be indemnified for costs,
expenses or liabilities determined by a
court of competent jurisdiction in a final
non-appealable judgment to have resulted
from its own gross negligence or willful
misconduct.
Governing Law and Forum: New York.
Waiver of Jury Trial: In customary form.
Counsel to Arrangers and Agents: Dewey Ballantine LLP.
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<PAGE> 15
Annex I
PRICING GRID
The "Applicable Margin" and "Applicable Facility Fee Rate" for
any day are the respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on such day:
<TABLE>
<CAPTION>
Status Level I Level II Level III Level IV Level V Level VI
------ ------- -------- --------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Applicable Margin -
Eurodollar Rate Loans 52.5 62.5 85 105 120 150
(basis points)
Applicable Margin -
Base Rate Loans 0 0 0 0 0 100
(basis points)
Applicable Facility Fee
Rate (basis points) 10 12.5 15 20 40 50
</TABLE>
For purposes of this Schedule, the following terms have the
following meanings (as modified by the provisos below):
"Level I Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated either A- or higher by S&P
or A3 or higher by Moody's.
"Level II Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated either BBB+ or higher by S&P
or Baa1 or higher by Moody's.
"Level III Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated either BBB or higher by S&P
or Baa2 or higher by Moody's.
"Level IV Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated either BBB- or higher by S&P
or Baa3 or higher by Moody's.
"Level V Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated either BB+ or higher by S&P
or Ba1 or higher by Moody's.
"Level VI Status" exists at any date if, at such date, no
other Status exists.
"Status" refers to the determination which of Level I Status,
Level II Status, Level III Status, Level IV Status, Level V Status or Level VI
Status exists at any date.
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<PAGE> 16
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Borrower
without third-party credit enhancement (other than from NiSource pursuant to the
Support Agreement), and any rating assigned to any other debt security of the
Borrower shall be disregarded. The rating in effect at any date is that in
effect at the close of business on such date.
Provided, if the Borrower is split-rated and the ratings differential is one
level, the higher rating will apply. If the Borrower is split-rated and the
differential is two levels or more, the rating at the midpoint will apply. If
there is no midpoint rating, the higher of the two intermediate ratings will
apply.
Provided, further, Level I Status will apply in the event that the Borrower is
rated at or above either of the Moody's or Standard & Poor's ratings set out in
Level I Status above. Level VI Status will apply in the event that the Borrower
is rated at or below both the Moody's and Standard & Poor's ratings set out in
Level VI Status above.
Unless 90% or more of the Shares are purchased pursuant to the Tender Offer,
from the First Disbursement Date, if the Acquisition Agreement has not been
executed and delivered by all parties by such date, until the date that the
Acquisition Agreement is executed and delivered by all parties thereto, Level V
Status shall apply at any time that the Borrower's senior unsecured long-term
debt maintains any of the Moody's or Standard & Poor's ratings set out in Level
I Status through Level V Status above.
From (i) the date that the Acquisition Agreement is executed and delivered by
all parties thereto or (ii) the date that 90% or more of the Shares are
purchased pursuant to the Tender Offer, whichever first occurs, until the
Closing Date, Level III Status shall apply at any time that the Borrower's
senior unsecured long-term debt maintains any of the Moody's or Standard &
Poor's ratings set out in Level I Status through Level III Status above.
Until the Commitment (or outstanding borrowings under the term loan, if
applicable) under the Credit Facility is permanently reduced to an amount not
exceeding 50% of the original Commitment under the Credit Facility, Level II
Status shall apply at any time that the Borrower's senior unsecured long-term
debt maintains any of the Moody's or Standard & Poor's ratings set out in Level
I Status through Level II Status above.
A Utilization Fee will become payable while 25% or more of the Commitment has
been borrowed under the Credit Facility. The Utilization Fee will be calculated
on the outstanding principal amount under the Credit Facility and determined in
accordance with the pricing grid as follows (in basis points): Level I Status -
12.5, Level II Status - 12.5, Level III Status - 25, Level IV Status - 25, Level
V Status - 40, Level VI Status - 50.
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<PAGE> 17
Annex II
CONDITIONS
The commitment of Credit Suisse First Boston ("CSFB") and
Barclays Bank PLC ("Barclays") (CSFB and Barclays, together, the "Arrangers")
pursuant to the Amended and Restated Senior Credit Facility Commitment Letter
dated October 15, 1999 (the "Commitment Letter"), between the Arrangers and
NiSource Inc. ("NiSource"), shall be subject to the following conditions
(capitalized terms used but not defined herein shall, unless otherwise
specified, have the meanings assigned to such terms in the Commitment Letter):
(i) after the date of the Commitment Letter, no information or
other matter relevant to the Transactions becomes known to any of the
Arrangers that such Underwriter in good faith believes is inconsistent
in a material and adverse manner with (a) any information or other
matter relevant to the Transactions disclosed to the Arrangers prior to
the date of the Commitment Letter or (b) any information or other
matter relevant to the Transactions obtained by the Arrangers during
their respective due diligence investigations;
(ii) there shall not have occurred, exist or become known to
any of the Arrangers any event, condition or change in or affecting
NiSource, the Borrower, Acquico or the Company that, singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect;
(iii) the preparation, execution and delivery of definitive
documentation satisfactory to each of the Arrangers, in connection with
the Credit Facility, and compliance with, and satisfaction of, all
terms and conditions to be performed at or prior to the first Loan
under the Credit Facility;
(iv) The sources and uses of funds necessary to consummate the
Transactions are satisfactory to each of the Arrangers, in their sole
judgment;
(v) if the Acquisition is effected by means of a Tender Offer,
the terms, conditions and structure of the Acquisition, including any
documentation therefor, shall be in form and substance reasonably
satisfactory to the Arrangers and the Lenders. All Shares tendered
pursuant to the Tender Offer (and no less than 51% of the Shares) shall
have been accepted for payment in accordance with the terms of the
Tender Offer. The Tender Offer and the financing therefor shall be in
compliance with all laws and regulations, including any state
anti-takeover law regulating the Acquisition, or the Arrangers shall
have determined such to be inapplicable to the Acquisition. The
Arrangers shall have received copies, certified by NiSource, of all
filings made with any governmental authority in connection with the
Transactions;
(vi) as of the Closing Date, the Transactions shall have been
consummated in accordance with documents in form and substance
reasonably satisfactory to each of the Arrangers, which documents shall
contain no terms
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<PAGE> 18
and conditions which have not been satisfied and no material term
thereof shall have been amended, supplemented, otherwise modified in
any material respect or waived except with the consent of the Lenders
and the Administrative Agent;
(vii) The Arrangers shall be reasonably satisfied as to
compliance by NiSource, the Borrower, Acquico and the Company with all
applicable regulations, including regulations of public utility
commissions;
(viii) all requisite governmental authorities and third
parties shall have approved or consented to the Transactions and the
other transactions contemplated by the Commitment Letter to the extent
required (without the imposition of any materially burdensome or
adverse conditions), and all such approvals shall be in full force and
effect. All applicable waiting periods shall have expired without any
action being taken by any competent authority which restrains, prevents
or imposes materially adverse conditions upon the Transactions;
(ix) the Borrower shall on the First Disbursement Date and the
Closing Date have (A) a senior unsecured short-term debt rating
established by Moody's of not less than A2 and by Standard & Poor's of
not less than P2, and (B) a senior unsecured long-term debt rating
established by Moody's of not less than Baa2 and by Standard & Poor's
of not less than BBB;
(x) the Support Agreement between NiSource and the Borrower
which provides the basis for the Borrower's debt ratings shall be in
full force and effect and shall relate to the Credit Facility in a
manner satisfactory to the Arrangers;
(xi) customary closing conditions for transactions similar to
the Credit Facility, as applicable, including, without limitation, (a)
the accuracy in all material respects of all representations and
warranties, (b) the absence of any defaults, prepayment events or
creation of liens under debt instruments or other agreements as a
result of the Transactions and the other transactions contemplated by
the Commitment Letter, (c) the absence of any change in the capital,
corporate and organizational structure of NiSource, the Borrower,
Acquico or the Company which would be materially adverse to the Lenders
in their reasonable determination, (d) compliance with applicable laws
and regulations (including employee health and safety, margin
regulations, public utility regulations and environmental laws), (e)
evidence of reasonably satisfactory insurance, (f) evidence of
authority, (g) consents of all relevant persons, (h) delivery of
historical and pro forma financial statements, and (i) the receipt by
the Arrangers of satisfactory legal opinions (including, without
limitation, the opinion of Simpson Thacher & Bartlett as to no
violation of Regulation U of the Board of Governors of the Federal
Reserve System);
(xii) there shall not exist any threatened or pending action,
proceeding or counterclaim by or before any court or governmental,
administrative or
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regulatory agency or authority, domestic or foreign, (a) challenging
the consummation of the Transactions or which would restrain, prevent
or impose burdensome conditions on the Transactions, individually or in
the aggregate, or any other transaction contemplated hereunder, (b)
seeking to prohibit the ownership or operation by NiSource, the
Borrower, Acquico or the Company or any of their subsidiaries of all or
a material portion of any of their business or assets, or (c) seeking
to obtain, or having resulted in the entry of, any judgment, order or
injunction that (i) would restrain, prohibit or impose adverse
conditions on the ability of the Lenders to make the Loans under the
Credit Facility, (ii) could reasonably be expected to affect the
legality, validity or enforceability of any Credit Document or the
ability of any party thereto to perform its obligations thereunder,
(iii) would be materially inconsistent with the stated assumptions
underlying the projections provided to the Arrangers and the Lenders,
or (iv) is seeking any material damages as a result thereof;
(xiii) there shall not have occurred after the date of the
Commitment Letter (a) any general suspension (other than temporary
"circuit breakers") of trading in, or limitation on prices for,
securities on any national securities exchange or in the
over-the-counter market in any Applicable Jurisdiction, (b) the
declaration of a banking moratorium or any suspension of payments in
respect of banks in any Applicable Jurisdiction, (c) the commencement
of a war, armed hostilities or other international or national calamity
or emergency, directly or indirectly involving any Applicable
Jurisdiction, which makes it, in each of the Arrangers' discretion,
impracticable or inadvisable to provide the Credit Facility, (d) any
limitations (whether or not mandatory) imposed by any governmental
authority on the nature or extension of credit or further extension of
credit by banks or other lending institutions, which makes it, in each
of the Arrangers' discretion, impracticable or inadvisable to provide
the Credit Facility, or (e) in the case of the foregoing clauses (c)
and (d), a material escalation or worsening thereof, which makes it,
each of the Arrangers' discretion, impracticable or inadvisable to
provide the Credit Facility; and
(xiv) payment of fees and expenses, including reasonable fees
and expenses of the Arrangers' counsel.
"Material Adverse Effect" shall mean a material adverse
change, or any condition or event that, in the judgment of the Arrangers, could
reasonably be expected to result in a material adverse change, in (i) the
business, assets, operations, condition (financial or otherwise) or prospects of
(a) the Company and its subsidiaries taken as a whole, or (b) NiSource and its
subsidiaries taken as a whole, or (ii) the validity or enforceability of any of
the documents entered into in connection with the Transactions or the other
transactions contemplated by the Commitment Letter or the rights, remedies and
benefits available to the parties thereunder or the ability of NiSource, the
Borrower or the Company to consummate the Transactions.
"Applicable Jurisdiction" means the United States and any
State thereof.
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